What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-01-10 compared with 2024-08-19 · 102 added, 97 removed, 172 unchanged (54% of the section changed)

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the following Management Discussion and Analysis of the Consolidated Financial Condition, Results of Operations, Stockholders’ Equity

and Cash Flow for the quarterly periods ended June 30, 2024 and 2023 gives effect to our acquisition of OXYS Corporation (“ OXYS ”)

and Cash Flow for the quarterly periods ended September 30, 2024 and 2023 gives effect to our acquisition of OXYS Corporation (“ OXYS ”)

on July 28, 2017.

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Results of Operations for the Three Months

Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023 (Unaudited)

For the three months ended June 30, 2024, we did

not earn any revenues and did not incur related cost of sales.

Our operating expenses were $104,672 which included payroll costs of $50,000,

amortization of intangible assets of $12,341, legal and professional fees of $33,241, and general and administrative expenses of $9,090.

We recorded net other expense of $300,928 consisting of loss of $264,887 due to change in fair market value of derivative liability, loss

on a derivative of $324 on Series C Convertible Preferred Stock, and interest expense of $35,717.

Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023 (Unaudited)

For the three months ended September 30, 2024,

we did not earn any revenues and did not incur related cost of sales.

Our operating expenses were $155,831 which included payroll costs

of $50,000, amortization of intangible assets of $12,477, legal and professional fees of $84,279, and general and administrative expenses

We recorded net other income of $51,155 consisting of gain of $63,503 due to change in fair market value of derivative liability,

and interest expense of $12,348.

We also recorded $21,523 as preferred stock dividend on convertible preferred stock for the three months

ended September 30, 2024.

As a result, we incurred a net loss of $126,199 for the three months ended September 30, 2024.

For the three months ended September 30, 2023,

we earned revenues of $19,714 and incurred related cost of sales of $4,871.

Our operating expenses were $102,272 which included professional

fees of $13,861, payroll costs of $53,825, amortization of intangible assets of $12,477, and general and administrative expenses of $22,109.

We recorded net other income of $42,138 consisting of gain of $122,089 due to change in fair market value of derivative liability, interest

income on note receivable of $8,205, gain on a derivative of $321 and interest expense of $14,077.

We also recorded $17,383 as preferred

stock dividend on convertible preferred stock for the three months ended June 30, 2024.

stock dividend on convertible preferred stock for the three months ended September 30, 2023.

As a result, we incurred a net loss of $62,674

for the three months ended June 30, 2024.

For the three months ended June 30, 2023, we earned

revenues of $35,289 and incurred related cost of sales of $8,495.

Our operating expenses were $130,080 which included professional fees

of $61,505, payroll costs of $54,151, amortization of intangible assets of $12,342, and general and administrative expenses of $2,082.

We recorded net other expenses of $163,473 consisting of interest expense of $13,996, a loss due to change in fair market value of derivative

liability of $155,398, offset by interest income on note receivable of $5,921.

We also recorded $16,299 as preferred stock dividend on

convertible preferred stock for the three months ended June 30, 2023.

As a result, we incurred a net loss of $283,058 for the three months

ended June 30, 2023.

for the three months ended September 30, 2023.

During the current and prior period, we did not

record an income tax benefit due to the uncertainty associated with the Company’s ability to utilize the deferred tax assets.

Results of Operations for the Six Months

Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023 (Unaudited)

For the six months ended June 30, 2024, we earned

revenues of $2,500 and recorded related cost of sales of $2,125.

Our operating expenses were $171,354 which included payroll costs of

$100,518, amortization of intangible assets of $24,682, legal and professional fees of $45,046, and general and administrative expenses

We recorded net other expense of $436,039 consisting of loss of $346,126 due to change in fair market value of derivative liability,

gain on a derivative of $27,833 on Series C Convertible Preferred Stock, and interest expense of $117,746.

We also recorded $40,363 as

preferred stock dividend on convertible preferred stock for the six months ended June 30, 2024.

As a result, we incurred a net loss of

$647,381 for the six months ended June 30, 2024.

For the six months ended June 30, 2023, we earned

revenues of $78,572 and incurred related cost of sales of $25,459.

Our operating expenses were $308,485 which included professional fees

of $124,167, payroll costs of $140,258, amortization of intangible assets of $24,547, and general and administrative expenses of $19,513.

We recorded net other expenses of $173,437 consisting of interest expense of $28,524, and a loss due to change in fair market value of

derivative liability of $156,690, offset by interest income on note receivable of $11,777.

We also recorded $32,419 as preferred stock

dividend on convertible preferred stock for the six months ended June 30, 2023.

As a result, we incurred a net loss of $461,228 for the

six months ended June 30, 2023.

Results of Operations for the Nine Months

Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023 (Unaudited)

For the nine months ended September 30, 2024,

we earned revenues of $2,500 and recorded related cost of sales of $2,125.

Our operating expenses were $327,186 which included payroll

costs of $150,518, amortization of intangible assets of $37,159, legal and professional fees of $129,325, and general and administrative

expenses of $8,204.

We recorded net other expense of $384,883 consisting of loss of $282,623 due to change in fair market value of derivative

liability, gain on a derivative of $27,833 on Series C Convertible Preferred Stock, and interest expense of $130,093.

We also recorded

$61,886 as preferred stock dividend on convertible preferred stock for the nine months ended September 30, 2024.

As a result, we incurred

a net loss of $773,580 for the nine months ended September 30, 2024.

nine months ended September 30, 2023, we earned revenues of $98,286 and incurred related cost of sales of $30,330.

Our operating expenses

were $410,757 which included professional fees of $138,027, payroll costs of $194,083, amortization of intangible assets of $37,023, and

general and administrative expenses of $41,623.

We recorded net other expenses of $131,297 consisting of a loss $34,600 due to change

in fair market value of derivative liability, gain on a derivative of $321, interest income on note receivable of $19,983, interest expense

of $117,001 on the convertible promissory notes.

We also recorded preferred stock dividend on convertible preferred stock of $49,803 for

the nine months ended September 30, 2023.

As a result, we incurred a net loss of $523,901 for the nine months ended September 30, 2023.

During the current and prior period, we did not

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Revenue growth for the rest of 2024 will be challenging given the difficulty

in raising additional capital to fuel sales and drive marketing efforts.

Potential future revenue growth depends on our ability to raise

said capital and the following factors:

Our DOT Bridge Monitoring Contract ended in December 2023 but our Structural Health Monitoring (“ SHM ”) vertical is the foundation of our future revenue stream.

Discussions continue with our main contractor to the DOT for extension and expansion contracts.

Additional prospects with our current DOT state and DOT contacts in two other northeast states continue to be pursued but may not convert to contracts for another 10-12 months.

Projects with local municipalities in our current northeast state also continue to be prospected and may convert to contracts before the end of 2024, as they are based on potential state grants and not dependent on state or municipal budget cycles.

Our Smart Manufacturing vertical is another potential source of future revenue based on the strong use case developed from our CNC POC and SaaS contracts over the past year.

Although the SaaS contract ended in May 2024, the tool cost savings exceeded our projections, and we believe the customer will continue to benefit from the insights we provided.

The customer will continue to endorse our capabilities and services, including promotional video material previously released and pending.

in raising additional capital to fuel sales and marketing efforts.

Potential future revenue growth depends on our ability to raise said

capital and the following factors:

· Our DOT Bridge Monitoring Contract ended in December 2023 but

we believe our Structural Health Monitoring (“SHM”) vertical is the foundation of our future revenue stream.

continue with our main contractor to the DOT for extension and expansion contracts.

Additional prospects with our current DOT state,

and DOT contacts in two other northeast states continue to be pursued but may not convert to contracts for another six to nine months.

Projects with local municipalities in our current northeast state also continue to be prospected and may convert to contracts in early

2025, as they are based on potential state grants and not dependent on state or municipal budget cycles.

· Our Smart Manufacturing vertical is another potential source

of future revenue based on the strong use case developed from our CNC POC and SaaS contracts over the past year.

Although the SaaS contract

ended in May 2024, the tool cost savings exceeded our projections, and we believe the customer will continue to benefit from the insights

The customer will continue to endorse our capabilities and services, including promotional video material previously released

We believe their endorsement and promotional videos are valuable collateral to prospect future Smart Manufacturing CNC business.

Additional POCs for other discrete manufacturing processes, including metal stamping, plastic injection molding, plastic extrusion, and automated assembly and test are also potential avenues of future revenue streams.

Additional POCs for other discrete manufacturing processes, including metal stamping, plastic injection molding, plastic extrusion, and

automated assembly and test are also potential avenues of future revenue streams.

· Our strategic partnership continues to be our greatest asset.

The strength of our Aingura IIoT, S.L.

partnership provides supplemental expertise, equipment and software, which ensures our ability to bring value to our prospective customers.

partnership provides supplemental expertise, equipment and software, which ensures our ability

to bring value to our prospective customers.

Despite these positive factors, we continue to

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funds has severely limited sales and marketing efforts.

Our management has secured limited funding from our lead investor to pay for ongoing

expenses and our leadership team is considering our options for both the short and long term.

Given the current challenges in raising

adequate funds, management is pursuing options including vetting suitable companies to merge with or acquire us.

Our management continues to secure limited funding from our lead investor to pay

for ongoing expenses and our leadership team is considering our options for both the short and long term.

Given the current challenges

in raising adequate funds, management is pursuing options including vetting suitable companies to merge with or acquire us.

We believe we’ve created valuable assets

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The global smart manufacturing (also

known as Industry 4.0) was $108.9 billion in 2023 and will reach $241 billion by 2028 (CAGR 17.2%), 1 and the worldwide SHM

industry is $2.5 billion in 2024 and will reach $4.1 billion by 2029 (CAGR of 10.4%).

known as Industry 4.0) was $108.9 billion in 2023 and will reach $241 billion by 2028 (CAGR 17.2%), and the worldwide SHM industry is

$2.5 billion in 2024 and will reach $4.1 billion by 2029 (CAGR of 10.4%).

Given the valuable real-world data we have collected,

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Liquidity and Capital Resources for the

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023 (Unaudited)

At June 30, 2024, we reported a cash balance of

$8,262 as a result of an increase of $7,618 from $644 cash balance at December 31, 2023.

This increase was primarily as a result of net

cash of $17,600 provided by financing activities.

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1 https://www.marketsandmarkets.com/Market-Reports/industry-4-market-102536746.html

2 https://www.marketsandmarkets.com/Market-Reports/structural-health-monitoring-market-101431220.html

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023 (Unaudited)

At September 30, 2024, we reported a cash balance

of $3,181 as a result of an increase of $2,537 from $644 cash balance at December 31, 2023.

This increase was primarily as a result of

net cash of $17,600 provided by financing activities from the sale of Series B preferred stock.

Operating Activities

Net cash flows provided by operating activities

for the six months ended June 30, 2024 was $9,982, primarily attributed to the net loss of $647,381, amortization of intangible assets

of $24,682, and net increase in operating assets and liabilities of $612,717.

The Company recorded changes in operating assets and liabilities

primarily attributable to decrease in accounts receivable of $5,460, increase in accounts payable of $41,937, increase in accrued liabilities

of $90,084, increase in derivative liabilities of $407,117, increase in shares payable to related parties of $1,148, and increase in salaries

payable to related parties of $66,971.

Net cash flows used in operating activities for

the six months ended June 30, 2023 was $78,551, primarily attributed to the net loss of $461,228, stock compensation expense of $825,

discount received on note receivable of $1,860, and amortization of intangible assets of $24,547.

The Company recorded changes in operating

assets and liabilities of $359,166 primarily attributable to decrease in accounts receivable of $3,588, increase in prepaid expenses and

other current assets of $4,987, increase in accounts payable of $81,559, increase in accrued liabilities of $80,574, increase in derivative

liabilities of $156,690, decrease in unearned interest of $2,932, increase in shares payable to related parties of $3,006, and increase

in salaries payable to related parties of $41,667.

the nine months ended September 30, 2024 was $15,063, primarily attributed to the net loss of $773,580, amortization of debt discount

on notes payable and preferred stock of $4,000, amortization of intangible assets of $37,159, and net increase in operating assets and

liabilities of $717,358.

The Company recorded changes in operating assets and liabilities primarily attributable to decrease in accounts

receivable of $5,460, increase in accounts payable of $145,234, increase in accrued liabilities of $114,498, increase in derivative liabilities

of $343,615, increase in shares payable to related parties of $1,980, and increase in salaries payable to related parties of $106,571.

Net cash flows used in operating activities for

the nine months ended September 30, 2023 was $129,417, primarily attributed to the net loss of $523,901, stock compensation expense of

$825, discount received on note receivable of $2,805, amortization of debt discount on notes payable and preferred stock of $12,400, and

amortization of intangible assets of $37,023.

The Company recorded changes in operating assets and liabilities of $347,041 primarily attributable

to decrease in accounts receivable of $18,021, increase in prepaid expenses and other current assets of $10,028, decrease in accounts

payable of $38,108, increase in accrued liabilities of $125,434, increase in derivative liabilities of $96,279, decrease in unearned interest

of $5,151, increase in shares payable to related parties of $3,870, and increase in salaries payable to related parties of $156,724.

Investing Activities

Net cash used in investing activities for the

six months ended June 30, 2024 and 2023 was $0.

nine months ended September 30, 2024 and 2023 was 0.

Financing Activities

Net cash provided by financing activities for

the six months ended June 30, 2024 was $17,600 due to cash received of $20,000 from equity financing of convertible preferred stock, net

of cash payment of $2,400 in fees paid in connection with the capital raise.

Net cash provided by financing activities for the six months

ended June 30, 2023 was $53,111, primarily due to sales of our common stock of $54,195 and paying $1,084 in costs incurred in raising

the nine months ended September 30, 2024 was $17,600 due to cash received of $20,000 from equity financing of convertible preferred stock,

net of cash payment of $2,400 in fees paid in connection with the capital raise.

Net cash provided by financing activities for the nine

months ended September 30, 2023 was $113,871 primarily due to sales of our common stock of $54,195, Series B convertible preferred stock

of $62,000 and paid $2,324 in costs for raising capital.

As a result of the above activities, the Company

recorded an increase of $7,618 in cash for the six months ended June 30, 2024, and a decrease of $25,440 in cash for the six months ended

June 30, 2023, respectively.

recorded an increase of $2,537 in cash for the nine months ended September 30, 2024, and a decrease of $15,546 in cash for the nine months

ended September 30, 2023, respectively.

The accompanying condensed consolidated financial

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As shown in the accompanying financial statements,

the Company has suffered continuing operating losses, has a working capital deficit of $2,687,848, net loss incurred for the six months

ended June 30, 2024 of $647,381, and has an accumulated deficit of $11,090,978 as of June 30, 2024.

These factors, among others, raise

substantial doubt about the Company’s ability to continue as a going concern.

If the Company is unable to obtain adequate capital,

it could be forced to cease operations.

The accompanying condensed financial statements do not include any adjustments to reflect the

recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company

the Company has suffered continuing operating losses, has a working capital deficit of $2,801,570, net loss incurred for the nine months

ended September 30, 2024 of $773,580, and has an accumulated deficit of $11,217,177 as of September 30, 2024.

These factors, among others,

raise substantial doubt about the Company’s ability to continue as a going concern.

If the Company is unable to obtain adequate

capital, it could be forced to cease operations.

The accompanying condensed financial statements do not include any adjustments to reflect

the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company

be unable to continue as a going concern.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis