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Item 1. Financial Statements

2023-05-12 compared with 2022-11-14 · 455 added, 694 removed, 130 unchanged (90% of the section changed)

Financial Statements

THERAPEUTICS CORP.

CONSOLIDATED BALANCE SHEETS

September 30,

PASITHEA THERAPEUTICS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2023

December 31, 2022

Current assets:

Cash and cash equivalents

Due from related party

Prepaid expenses

Other current assets

Current assets of discontinued operations

Total current assets

Property and equipment

Property and equipment, net

Right of use asset- operating lease

Intangibles, net

Non-current assets of discontinued operations

LIABILITIES AND STOCKHOLDERS’ EQUITY

2 unchanged sentences

Lease liability- short term portion

Current liabilities of discontinued operations

Total current liabilities

2 unchanged sentences

Warrant liabilities

Non-current liabilities of discontinued operations

Total non-current liabilities

Total liabilities

Commitments and Contingencies (Note 4)

Stockholders’ equity:

2 unchanged sentences

Common stock, par value $ 0.0001 , 495,000,000 shares authorized;

26,548,688 and 23,008,371 shares issued and outstanding as of September 30, 2022, and December 31, 2021, respectively

and 26,043,406 shares issued and outstanding as of March 31, 2023, and December 31, 2022, respectively

Additional paid-in capital

5 unchanged sentences

Total liabilities and stockholders’ equity

accompanying notes are in integral part of these unaudited condensed consolidated financial statements.

THERAPEUTICS CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

The accompanying notes are in integral part of these

unaudited condensed consolidated financial statements.

PASITHEA THERAPEUTICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

For the Three Months Ended

For the Nine Months Ended

September 30,

Cost of services

Operating expenses:

4 unchanged sentences

( 2,078,878 )

( 9,735,444 )

( 2,551,156 )

Other income (expense):

Change in fair value of warrant liabilities

Gain on forgiveness of accounts payable

Other income (expense)

Interest expense, net

Other (expense) income, net

Loss before income taxes

1 unchanged sentence

( 1,293,581 )

Provision for income taxes

Net loss from continuing operations

$ ( 3,265,810 )

$ ( 1,293,581 )

Provision for income taxes

Net loss from discontinued operations

$ ( 271,869 )

3 unchanged sentences

Weighted-average common shares outstanding, basic and diluted

Basic and diluted net loss per common share

Basic and diluated loss per share from continuing operations

Basic and diluted loss per share from discontinuing operations

Comprehensive loss:

1 unchanged sentence

$ ( 1,574,240 )

$ ( 8,818,764 )

$ ( 2,803,664 )

Foreign currency translation

Comprehensive loss

( 1,574,240 )

$ ( 1,527,558 )

Comprehensive loss

$ ( 3,540,162 )

$ ( 3,148,480 )

accompanying notes are in integral part of these unaudited condensed consolidated financial statements.

THERAPEUTICS CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

The accompanying notes are in integral part of these

unaudited condensed consolidated financial statements.

PASITHEA THERAPEUTICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

Comprehensive

Stockholders’

Balance at December 31, 2020

Issuance of common stock for cash

Balance at March 31, 2021

Stock-based compensation expense

Share adjustment

Foreign currency translation

Balance at June 30, 2021

( 1,318,540 )

Stock-based compensation

Shares issued for services

Sale of 4,800,000 Units, net of underwriting discounts and offering costs

Issuance of 4,800,000 Public Warrants

( 3,600,000 )

Issuance of 240,000 Representatives’ Warrants

Foreign currency translation

( 1,526,108 )

Balance at September 30, 2021

$ ( 2,844,648 )

Balance at December 31, 2021

Balance at January 1, 2022

$ ( 2,214,505 )

Stock-based compensation expense

-restricted share units

-restricted stock

Foreign currency translation

3 unchanged sentences

$ ( 3,788,745 )

Stock-based compensation expense

Shares issued for services

Warrants issued for acquisition

Common share issued for acquisition

Foreign currency translation

( 2,658,394 )

Balance at June 30, 2022

Balance at January 1, 2023

$ ( 19,356,880 )

Stock-based compensation expense

Shares issued for services

Stock-based compensation:

-restricted share units

Foreign currency translation

1 unchanged sentence

( 3,537,679 )

Balance at September 30, 2022

Balance at March 31, 2023

( 22,894,559 )

accompanying notes are in integral part of these unaudited condensed consolidated financial statements.

THERAPEUTICS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

The accompanying notes are in integral part of these

unaudited condensed consolidated financial statements.

PASITHEA THERAPEUTICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization expense

Stock-based compensation

Value of shares issued for services

Change in fair value of warrant liabilities

Changes in operating assets and liabilities:

Changes in prepaid expenses

Changes in other assets

Changes in accounts payable and accrued liabilities

Changes in lease liabilities

Due from related party

Prepaid expenses

Accounts payable and accrued liabilities

Net cash used in operating activities

3 unchanged sentences

Purchase of property and equipment

Acquisition of business, net of cash acquired

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash proceeds from sale of Units

Cash proceeds from issuance of common stock

Payment of offering costs

( 1,307,400 )

Note payable proceeds

Principal payments on note payable

Net cash provided by financing activities

Effect of foreign currency translation on cash

Net cash used in operating activities of discontinued operations

Net cash used in investing activities of discontinued operations

Net cash used in financing activities of discontinued operations

NET CHANGE IN CASH

$ ( 3,173,801 )

$ ( 2,676,419 )

Cash - Beginning of period

Cash - End of period

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Lease liabilities arising from obtaining right-of-use assets

accompanying notes are in integral part of these unaudited condensed consolidated financial statements.

THERAPEUTICS CORP.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

1 – NATURE OF THE ORGANIZATION AND BUSINESS

Therapeutics Corp.

(“Pasithea” or the “Company”) was incorporated in the State of Delaware on May 12, 2020.

Company is a biotechnology company focused on the discovery research and development of innovative treatments for central nervous system

(CNS) disorders.

The Company’s primary operations focus on developing drugs that target the pathophysiology underlying such disorders

rather than symptomatic treatments, with the goal of developing new pharmacological agents that display significant advantages over conventional

therapies with respect to efficacy and tolerability.

September 17, 2021, the Company sold 4,800,000 Units in an Initial Public Offering (the “Initial Public Offering”) at a price

of $ 5.00 per Unit for a total of $ 24,000,000 .

The Company incurred offering costs of $ 3,445,200 , consisting of $ 2,137,800 of underwriting

fees and expenses and $ 1,307,400 of costs related to the Initial Public Offering.

Company’s secondary operations are focused on providing business support services to anti-depression clinics in the U.K.

the United States.

The accompanying notes are in integral part of these

unaudited condensed consolidated financial statements.

PASITHEA THERAPEUTICS CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS

Pasithea Therapeutics

(“Pasithea” or the “Company”) was incorporated in the State of Delaware on May 12, 2020 and completed an

Initial Public Offering (the “Initial Public Offering”) on September 17, 2021.

The Company is a biotechnology company focused

on the discovery, research and development of innovative treatments for central nervous system (CNS) disorders and other diseases.

Company is leveraging its expertise in the fields of neuroscience, translational medicine, and drug development to advance new molecular

entities that target the pathophysiology underlying such diseases with the goal of bringing life-changing therapies to patients.

The Company’s

therapeutic pipeline currently consists of four programs.

The Company’s lead product candidate, PAS-004, is a next-generation macrocyclic

mitogen-activated protein kinase, or MEK inhibitor that the Company believes may address the limitations and liabilities associated with

existing drugs targeting a similar mechanism of action.

The remaining three programs are in the discovery stage, which the Company believes

address limitations in the treatment paradigm of the indications the Company plans to address with these programs, which are currently

amyotrophic lateral sclerosis (“ALS”), multiple sclerosis (“MS”) and schizophrenia.

Through December

31, 2022, the Company operated a Clinics business that was focused on providing business support services to anti-depression clinics in

and in the United States.

Its operations in the U.K.

involve providing business support services to registered healthcare providers who assess

patients and, if appropriate, administer intravenous infusions of ketamine.

Its operations in the United States involve providing business

support services to entities that furnish similar services to patients who personally pay for those services.

Operations are expected

to initially take place across the United States and the U.K.

through partnerships with healthcare companies.

involved providing business support services to registered healthcare providers

who assess patients and, if appropriate, administer intravenous infusions of ketamine.

Its operations in the United States involved providing

business support services to entities that furnish similar services to patients who personally pay for those services.

Operations in the

and the United States were conducted through partnerships with healthcare providers and the Company did not provide professional

medical services or psychiatric assessments.

During the first

quarter of 2023, we discontinued our at-home services in New York, NY as well as our services in the U.K.

In addition, we discontinued

our clinical operations in Los Angeles, CA and are actively exploring options for the disposal of related property.

Accordingly, as of

the date of this Quarterly Report on Form 10-Q, we have discontinued the operations of our Clinics segment.

this report, the terms “our,” “we,” “us,” and the “Company” refer to Pasithea Therapeutics

and its subsidiaries, Pasithea Therapeutics Limited (U.K.), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, Pasithea

Clinics Corp, and Alpha 5 Integrin, LLC (See Note 7- Acquisition).

Pasithea Therapeutics Limited (U.K.) is a private limited Company,

registered in the United Kingdom (U.K.).

Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda is a private limited Company, registered

and its subsidiaries, Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, Pasithea Clinics Corp, Alpha-5 Integrin, LLC, and

AlloMek Therapeutics, LLC.

Pasithea Therapeutics Limited (U.K.) is a private limited Company, registered in the United Kingdom (U.K.).

Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda is a private limited Company, registered in Portugal.

Pasithea Clinics Corp.

1 unchanged sentence

Alpha-5 Integrin, LLC is Delaware limited liability company.

of Presentation

The accompanying unaudited

condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted

in the United States of America (“U.S.

GAAP”) for interim financial information and are unaudited.

In the opinion of management,

such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair

presentation of the Company’s financial position at such dates and the operating results and cash flows for such periods.

information and disclosures normally included in consolidated financial statements prepared in accordance with U.S.

GAAP have been condensed

The condensed consolidated balance sheet as of December 31, 2021 was derived from our audited financial statements but does

not include all disclosures required by U.S.

Accordingly, these unaudited condensed consolidated financial statements should be

read in conjunction with the Company’s audited consolidated financial statements and related notes included in its annual report

on Form 10-K, as filed with the Securities and Exchange Commission on March 30, 2022.

Certain prior

period amounts have been reclassified for consistency with current period presentation.

These reclassifications had no effect on the totals

presented in the condensed consolidated statement of operations or cash flows.

The results of operations for the three and nine

months ended September 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022 or for any future

AlloMek Therapeutics, LLC is Delaware limited

liability company.

The accompanying

unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally

accepted in the United States of America (“U.S.

Growth Company

Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our

Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements

is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business

Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements

that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required

to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations

regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding

advisory vote on executive compensation and approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1)

of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until

private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class

of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging

growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition

period which means that when a standard is issued or revised and it has different application dates for public or private companies,

the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised

This may make comparison of the Company’s condensed consolidated financial statements with another public company which

is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult

or impossible because of the potential differences in accounting standards used.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS

of Consolidation

Company evaluates the need to consolidate affiliates based on standards set forth in Accounting Standards Codification (“ASC”)

810, “Consolidation,” (“ASC 810”).

The condensed consolidated financial statements include the accounts of the

Company and its wholly owned subsidiaries, Pasithea Therapeutics Limited (U.K.), Pasithea Clinics Corp.

to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding

executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory

vote on executive compensation and approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the

JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private

companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities

registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides

that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth

companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which

means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as

an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

may make comparison of the Company’s condensed consolidated financial statements with another public company which is neither an

emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible

because of the potential differences in accounting standards used.

and Capital Resources

31, 2023, the Company had approximately $ 29.9 million of cash and cash equivalents and working capital of approximately $ 29.2 million.

The Company’s major sources of cash have been comprised of proceeds from various private offerings, the Initial Public Offering

and exercise of warrants.

The Company is dependent on obtaining additional working capital funding from the sale of equity and/or

debt securities to continue to execute its development plans and continue operations.

Based on the foregoing, management believes

that the Company will have sufficient working capital to meet its needs through twelve months from the date of these condensed consolidated

financial statements.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

Principles of Consolidation

The Company evaluates the need to consolidate affiliates

based on standards set forth in Accounting Standards Codification (“ASC”) 810, “Consolidation,” (“ASC 810”).

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Pasithea Therapeutics

Limited (U.K.) and Pasithea Clinics Corp.

(“Pasithea Clinics”).

Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda (“Pasithea Portugal”), and Alpha 5 Integrin, LLC.

All significant

intercompany transactions and balances have been eliminated in consolidation.

condensed consolidated financial statements are presented in U.S.

preparation of financial statements in conformity with U.S.

GAAP requires the Company’s management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statement and the reported amounts of revenues and expenses during the reporting period.

All significant intercompany transactions and balances have

been eliminated in consolidation.

These condensed consolidated financial statements

are presented in U.S.

Use of Estimates

The preparation

of financial statements in conformity with U.S.

GAAP requires the Company’s management to make estimates and assumptions that affect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement

and the reported amounts of revenues and expenses during the reporting period.

estimates requires management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of

a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating

its estimate, could change in the near term due to one or more future confirming events.

One of the more significant accounting estimates

included in these condensed consolidated financial statements is the determination of fair value of the warrant liabilities.

the actual results could differ significantly from those estimates.

Research and Development

Research and development

costs are charged to operations when incurred and are included in operating expense, except for goodwill related to intellectual

It is at least reasonably possible that the estimate of the effect

of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered

in formulating its estimate, could change in the near term due to one or more future confirming events.

Management regularly makes

estimates related to the fair value of warrant liabilities;

the recoverability of long-lived assets;

the fair values and useful

lives of intangible assets acquired in business combinations;

the potential impairment of goodwill;

and income taxes.

bases its estimates on historical experience and on various assumptions that are believed to be reasonable, the results of which

form the basis for the amounts recorded in the condensed consolidated financial statements.

As appropriate, the Company obtains

reports from third-party valuation experts to inform and support estimates related to fair value measurements.

and Development

development costs are charged to operations when incurred and are included in operating expense, except for goodwill related to intellectual

property & patents.

10 unchanged sentences

factors and adjusts estimates accordingly.

and cash equivalents

Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company had no cash equivalents as of September 30, 2022 and December 31, 2021.

and Equipment

Cash and cash equivalents

The Company considers all short-term investments

with an original maturity of three months or less when purchased to be cash equivalents.

The Company had $ 10.0 million of cash equivalents

consisting of marketable securities in U.S.

government money market funds as of March 31, 2023, and did not have any cash equivalents

as of December 31, 2022.

Property and Equipment

Property and equipment is recorded at cost.

Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the related assets.

Expenditures that enhance the useful lives of the assets are capitalized and depreciated.

is computed using straight-line and accelerated methods over the estimated useful lives of the related assets.

Expenditures that enhance

the useful lives of the assets are capitalized and depreciated.

Maintenance and repairs are expensed as incurred.

When properties are retired or otherwise disposed of, related costs and related accumulated depreciation are removed from the accounts.

As of September 30, 2022 and December 31, 2021, the Company had total fixed assets (property and equipment) of $ 374,182 and $ 21,503 , respectively, with accumulated depreciation of $ 33,670 , and $ 1,379 , respectively.

Depreciation expense was $ 16,670 and $ 32,471 for the three and nine months ended September 30, 2022, and zero for the three and nine months ended September 30, 2021, respectively.

costs consist of professional fees, filing, regulatory and other costs incurred through the balance sheet date that are directly related

to the Initial Public Offering.

In September 2021, the Company recognized offering costs of $ 3,445,200 , consisting of $ 2,137,800 of underwriting

fees and expenses and $ 1,307,400 of costs related to the Initial Public Offering.

Offering costs are allocated to the separable financial

instruments issued in the Initial Public Offering based on the relative fair value basis compared to total proceeds received.

Company accounts for its Public and Representative Warrants (each, the “Public Warrants” and “Representative Warrants”

When properties are

retired or otherwise disposed of, related costs and related accumulated depreciation are removed from the accounts.

Warrant Liability

accounts for its Public and Representative Warrants (each, the “Public Warrants” and “Representative Warrants”

and, collectively, the “IPO Warrants”) in accordance with the guidance contained in ASC 815, “Derivatives and Hedging,”

3 unchanged sentences

change in fair value is recognized in the Company’s condensed consolidated statement of operations and comprehensive loss.

fair value of the Public and Representative Warrants was initially measured at the end of each reporting period, using a Black-Scholes

option pricing model.

As of September 30, 2022, the fair value of the Public Warrants was measured using quoted market prices, and the

fair value of the Representative Warrants was based on an estimate of the relative fair value to the Public Warrants, accounting for

a small difference in the exercise price.

Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax

assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured

using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included

the enactment date.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be

As of September 30, 2022, the Company had deferred tax assets related to certain net operating losses.

A valuation allowance

was established against these deferred tax assets at their full amount, resulting in a zero balance of deferred tax assets on the condensed

consolidated balance sheets as of September 30, 2022.

740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions

taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more likely than not to be

sustained upon examination by taxing authorities.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits

as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30,

2022 and December 31, 2021.

The Company is currently not aware of any issues under review that could result in significant payments,

accruals or material deviation from its position.

The Company is subject to income tax examinations by major taxing authorities since

Concentration

of Credit Risk

instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,

which, at times, may exceed the Federal Depository Insurance Coverage of $ 250,000 .

As of September 30, 2022, the Company has not experienced

losses on this account and management believes the Company is not exposed to significant risks on such account.

Value of Financial Instruments

the exception of liabilities related to the IPO Warrants, described in the table below, the fair value of the Company’s assets

and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates

the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

Value Measurements

value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction

between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs

used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets

or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

value of the Public and Representative Warrants was initially measured at the end of each reporting period, using a Black-Scholes option

pricing model.

As of March 31, 2023, the fair value of the Public Warrants was measured using quoted market prices, and the fair value

of the Representative Warrants was based on an estimate of the relative fair value to the Public Warrants, accounting for a small difference

in the exercise price.

Concentration of Credit Risk

Financial instruments that potentially subject the

Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal

Depository Insurance Coverage of $ 250,000 .

As of March 31, 2023, the Company has not experienced losses on this account and management

believes the Company is not exposed to significant risks on such account.

Fair Value of Financial Instruments

Except for liabilities related to the IPO Warrants, described in the

table below, the fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair

Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed consolidated balance

sheets, primarily due to their short-term nature.

Fair Value Measurements

Fair value is defined as the price that would be received

for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The hierarchy gives the

highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the

lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted

prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,

such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis and indicates

the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Fair value measurements at reporting date using:

Quoted prices in active markets for identical liabilities (Level 1)

Significant other observable inputs

Significant unobservable inputs

Public Warrant liabilities, September 30, 2022

Representative Warrant liabilities, September 30, 2022

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following table presents information about the

Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of

the valuation inputs the Company utilized to determine such fair value:

for identical

Cash equivalents

Public warrant liabilities, March 31, 2023

Representative warrant liabilities, March 31, 2023

Public warrant liabilities, December 31, 2022

Representative warrant liabilities, December 31, 2022

fair value of the liability associated with the Public Warrants as of September 30, 2022 was based on the quoted closing price on The

Nasdaq Capital Market and is classified as Level 1.

The fair value of the liability associated with the Representative Warrants as of

September 30, 2022 was based on an estimate of the relative fair value to the Public Warrants, accounting for a small difference in the

exercise price, and is classified as Level 3.

The change of the Public Warrant liability from Level 3 to Level 1 was the only change

between levels of the fair value hierarchy from December 31, 2021 to September 30, 2022.

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input

that is significant to the fair value measurement.

Company accounts for revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers.”

Company currently derives all its revenue from its operations providing business support services to registered healthcare providers

who assess patients, and if appropriate, administer intravenous infusions of ketamine.

Under the business support services agreements,

the Company, among other things, markets the treatments to the extent permitted under law, arranges and pays for the fit-out of the consulting

room, provides equipment necessary for the treatments, develops, operates and maintains a booking website for the treatments, makes bookings

and takes payments, and employs or engages customer service advisers to liaise with clinical staff and pay certain staff costs.

of the treatments are fixed amounts jointly established by the Company and the healthcare providers.

The Company collects 100 % of the

payment in advance from the patients, who personally pay for the services.

The Company retains 30 % of revenues from ketamine infusion

treatments, less certain clinical staff costs which result from the provision of the treatments.

The Company has determined that it acts

as an agent under the business support services agreements and recognizes the net revenues retained from ketamine infusion treatments

in the unaudited condensed consolidated statement of operations and comprehensive loss.

Company also may arrange psychotherapy sessions with independent therapy professionals for patients.

In such cases, the Company acts

as a principal and recognizes the gross amount of revenue earned from such sessions, with the cost paid to the independent therapy professionals

recognized in cost of services in the unaudited condensed consolidated statement of operations and comprehensive loss.

Company’s performance obligation is satisfied when the services are rendered to the customer.

There were no contract assets or

liabilities as of September 30, 2022 or December 31, 2021.

All sales have fixed pricing and there are currently no variable components

included in the Company’s revenue.

Loss Per Share

loss per share is computed by dividing net loss by the weighted average number of shares of common stock par value $ 0.0001 (the “Common

Stock”) outstanding during the reporting period.

Diluted earnings per share is computed similar to basic earnings per share, except

the weighted average number of shares of Common Stock outstanding are increased to include additional shares from the assumed exercise

of share options, if dilutive.

The following outstanding shares issuable upon exercise of stock options and warrants and vesting of restricted

stock units were excluded from the computation of diluted net loss per share for the periods presented because including them would have

had an anti-dilutive effect:

Nine Months Ended

September 30,

The following

table presents a reconciliation of the Level 3 representative warrant liabilities for December 31, 2021 through March 31, 2022:

Representative warrant liabilities, December 31, 2021

Change in fair value

Representative warrant liabilities, March 31, 2022

The following

table presents a reconciliation of the Level 3 representative warrant liabilities for December 31, 2022 through March 31, 2023:

Representative warrant liabilities, December 31, 2022

Change in fair value

Representative warrant liabilities, March 31, 2023

The change in

fair value of the representative warrant liabilities is recorded in change in fair value of warrant liabilities on the condensed consolidated

statement of operations and comprehensive loss.

The fair value

of the cash equivalents is based on the fair value of marketable securities invested in U.S.

government money market funds.

The fair value

of the liability associated with the Public Warrants as of March 31, 2023 was based on the quoted closing price on The Nasdaq Capital

Market and is classified as Level 1.

The fair value of the liability associated with the Representative Warrants as of March 31, 2023

was based on an estimate of the relative fair value to the Public Warrants, accounting for a small difference in the exercise price, and

is classified as Level 3.

In some circumstances,

the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

In those instances, the

fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant

to the fair value measurement.

Net Loss Per Share

Net loss per share is computed by dividing net loss

by the weighted average number of common shares outstanding during the reporting period.

Diluted earnings per share is computed similar

to basic earnings per share, except the weighted average number of common shares outstanding are increased to include additional shares

from the assumed exercise of share options, if dilutive.

The following outstanding shares issuable upon exercise of stock options and

warrants and vesting of restricted stock units were excluded from the computation of diluted net loss per share for the periods presented

because including them would have had an anti-dilutive effect:

Three months ended

Stock options

Restricted stock units

Currency Translations

Company’s functional and reporting currency is the U.S.

All transactions initiated in other currencies are translated into

dollars using the exchange rate prevailing on the date of transaction.

Monetary assets and liabilities denominated in foreign currencies

are translated into the U.S.

dollar at the rate of exchange in effect at the balance sheet date.

Unrealized exchange gains and losses

arising from such transactions are deferred until realization and are included as a separate component of stockholders’ equity

(deficit) as a component of comprehensive income or loss.

Upon realization, the amount deferred is recognized in income in the period

when it is realized.

of Foreign Operations

financial results and position of foreign operations whose functional currency is different from the Company’s presentation currency

are translated as follows:

and liabilities are translated at period-end exchange rates prevailing at that reporting date;

is translated at historical exchange rates;

and expenses are translated at average exchange rates for the period.

differences arising on translation of foreign operations are transferred directly to the Company’s accumulated other comprehensive

loss in the condensed consolidated financial statements.

Transaction gains and losses arising from exchange rate fluctuation on transactions

denominated in a currency other than the functional currency are included in the condensed consolidated statements of operations and

comprehensive loss.

relevant translation rates are as follows:

September 30,

2022 December 31,

Closing rate, British Pound (GBP) to US$ at period end 1.117 1.348

Average rate, GBP to US$ for the period ended 1.257 1.371

Closing rate, Euro (EUR) to US$ at period end 0.980 1.132

Average rate, EUR to US$ for the period ended 1.062 1.143

Comprehensive

Income (Loss)

220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income (loss) and its components

in a full set of general-purpose financial statements.

As of September 30, 2022 and December 31, 2021, the Company had no items impacting

other comprehensive income (loss) except for the foreign currency translation adjustment.

Acquisitions,

Intangible Assets and Goodwill

condensed consolidated financial statements reflect the operations of an acquired business beginning as of the date of acquisition.

acquired and liabilities assumed are recorded at their fair values at the date of acquisition;

goodwill is recorded for any excess of

the purchase price over the fair values of the net assets acquired.

Significant judgment is required to determine the fair value of certain

tangible and intangible assets and in assigning their respective useful lives.

Accordingly, we typically obtain the assistance of third-party

valuation specialists for significant tangible and intangible assets.

The fair values are based on available historical information and

on future expectations and assumptions deemed reasonable by management but are inherently uncertain.

The Company typically employs an

income method to measure the fair value of intangible assets, which is based on forecasts of the expected future cash flows attributable

to the respective assets.

Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace

participants and include the amount and timing of future cash flows (including expected growth rates and profitability), the underlying

product or technology life cycles, economic barriers to entry and the discount rate applied to the cash flows.

Unanticipated market or

macroeconomic events and circumstances could affect the accuracy or validity of the estimates and assumptions.

Determining the useful

life of an intangible asset also requires judgment.

Intangible assets are amortized over their estimated lives.

Any intangible assets

associated with acquired in-process research and development activities (“IPR&D”) are not amortized until a product is

available for sale.

of Long-Lived Assets and Goodwill

and amortizable intangible assets are assessed annually for impairment or sooner should impairment indicators exist.

Significant events

or changes in business circumstances indicate that the carrying value of the assets may not be recoverable.

Such circumstances may include

a significant decrease in the market price of an asset, a significant adverse change in the manner in which the asset is being used or

in its physical condition or a history of operating or cash flow losses associated with the use of an asset.

An impairment loss is recognized

when the carrying amount of an asset exceeds the anticipated future undiscounted cash flows expected to result from the use of the asset

and its eventual disposition.

The amount of the impairment loss is the excess of the asset’s carrying value over its fair value.

There were no charges related to impairments of long-lived assets for all periods presented.

represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination.

is assessed for impairment annually during the fourth quarter, or more frequently if impairment indicators exist.

Impairment exists when

the carrying amount of goodwill exceeds its implied fair value.

The Company may elect to assess goodwill for impairment using a qualitative

or a quantitative approach, to determine whether it is more likely than not that the fair value of goodwill is greater than its carrying

There were no charges related to goodwill impairment for all periods presented.

Company’s has leases related to office space.

The Company determines whether a contract is or contains a lease at the time of the

contract’s inception based on the presence of identified assets and the Company’s right to obtain substantially all the economic

benefit from or to direct the use of such assets.

When the Company determines a lease exists, it records a right-of-use (“ROU”)

asset and corresponding lease liability on its balance sheet.

ROU assets represent the Company’s right to use an underlying asset

for the lease term.

Lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

are recognized at the lease commencement date at the present value of the remaining future lease payments the Company is obligated for

under the terms of the lease.

Lease liabilities are recognized concurrent with the recognition of the ROU asset and represent the present

value of lease payments to be made under the lease.

These ROU assets and liabilities are adjusted for any prepayments, lease incentives

received, and initial direct costs incurred.

As the discount rate implicit in the lease is not readily determinable in most of the Company’s

leases, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining

the present value of lease payments.

If the Company’s lease terms include an option to extend the lease for a set period, the Company

evaluates the renewal option and should it be reasonably certain that the Company will exercise that option, adjust the ROU asset and

liability accordingly.

Accounting Pronouncements

June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03,

Fair Value Measurement (Topic 820) (“ASU 2022-03”).

The amendments in ASU 2022-03 clarify that a contractual restriction

on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered

in measuring fair value.

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual

sale restriction.

The amendments in this Update also require additional disclosures for equity securities subject to contractual sale

restrictions.

The provisions in this Update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company does not expect to early adopt this ASU.

The Company is currently evaluating the impact of adopting this guidance on the

consolidated balance sheets, results of operations and financial condition.

Company does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would

have a material effect on the Company’s financial statements.

3 – INITIAL PUBLIC OFFERING

to the Initial Public Offering, on September 17, 2021, the Company sold 4,800,000 Units at a price of $ 5.00 per Unit for a total of $ 24,000,000 .

The Company incurred offering costs of $ 3,445,200 , consisting of $ 2,137,800 of underwriting fees and expenses and $ 1,307,400 of costs

related to the Initial Public Offering.

Unit consisted of one share of Common Stock and one Public Warrant.

Each redeemable Public Warrant entitles the holder to purchase one

share of Common Stock at a price of $6.25 per share, will be exercisable upon issuance and will expire five years from issuance.

Company classifies each Public Warrant as a liability at its fair value and the Public Warrants were allocated a portion of the proceeds

from the issuance of the Units equal to its fair value determined by the Black-Scholes model.

Office Lease – West Hollywood, California

March 2022, the Company entered into an agreement to lease a medical office in West Hollywood, California.

The lease commenced on April

The lease has a 60-month term, and the Company has an option to extend the term for one 5-year renewal period at the prevailing

market rate that the landlord is then obtaining from tenants for comparable space in the building.

The lease has a base monthly rent

of $8,336 per month for the first 12 months, with the base monthly rent increasing by 4% on the first anniversary of the lease commencement

date and every 12 months thereafter.

In addition to the base monthly rent, commencing on the first anniversary of the lease commencement

date, the Company will pay its share of certain direct operating and tax expenses incurred by the landlord in maintaining the building.

lease was accounted for under ASC 842, Leases, which resulted in the recognition of a right of use asset (“ROU asset”) and

liability of $ 431,000 at inception.

The ROU asset is recorded as a component of non-current assets and the liability a component of current

and non-current liabilities on the Company’s Condensed Consolidated Balance Sheets.

The Company discounted the future lease payments

of this lease using the prevailing collateralized lending rate which would be extended to the Company based on its credit profile relative

to the period of inception, and the duration of the lease from inception.

The interest rate used in calculating the fair value listed

above was 7.8 %

Foreign Currency Translations

The Company’s functional and reporting currency

All transactions initiated in other currencies are translated into U.S.

dollars using the exchange rate prevailing

on the date of transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the U.S.

dollar at the

rate of exchange in effect at the balance sheet date.

Unrealized exchange gains and losses arising from such transactions are deferred

until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income

Upon realization, the amount deferred is recognized in income in the period when it is realized.

Translation of Foreign Operations

The financial results and position of foreign operations

whose functional currency is different from the Company’s presentation currency are translated as follows:

assets and liabilities are translated at period-end exchange rates prevailing at that reporting date;

equity is translated at historical exchange rates;

income and expenses are translated at average exchange rates for the period.

Exchange differences arising on translation of foreign

operations are transferred directly to the Company’s accumulated other comprehensive loss in the condensed consolidated financial

Transaction gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the

functional currency are included in the condensed consolidated statements of operations and comprehensive loss.

The relevant translation rates are as follows:

Closing rate, British Pound (GBP) to $USD at period end

Average rate, GBP to $USD for the period ended

Closing rate, Euro (EUR) to $USD at period end

Average rate, EUR to $USD for the period ended

Comprehensive Income (Loss)

ASC 220, “Comprehensive Income,” establishes

standards for reporting and display of comprehensive income (loss) and its components in a full set of general-purpose financial statements.

As of March 31, 2023 and December 31, 2022, the Company had no material items of other comprehensive income (loss) except for the foreign

currency translation adjustment.

Recent Accounting Pronouncements

Management does not believe that any recently issued,

but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial

Instruments - Credit Losses, which requires entities to estimate all expected credit losses for financial assets measured at amortized

cost basis, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable

and supportable forecasts.

The Company adopted this guidance on March 31, 2023.

The adoption of this accounting standard did not have

a material impact to the Company’s condensed consolidated financial statements.

NOTE 3 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

Leasehold improvements

Medical equipment

Office equipment

Property and equipment, gross

accumulated depreciation

Property and equipment, net

NOTE 4 – LEASES

Lease – South San Francisco, California

August 2022, the Company, as a lessee, entered into an amended sublease agreement to sublease laboratory and office space in South San

Francisco, California.

In August 2022,

the Company, as a lessee, entered into an amended sublease agreement to sublease laboratory and office space in South San Francisco, California.

The lease commenced on August 15, 2022.

The term of this sublease is for a period of thirty-nine and one-fourth

(39.25) months commencing on the effective date, until May 15,2024.

The lease has a gross monthly rent of $ 15,700 per month to December

Starting January 1, 2023, the monthly rent will increase by 3 % annually, to $ 16,171 per month in 2023, and $ 16,656 in 2024.

lease was accounted for as an operating lease under ASC 842, Leases, which resulted in the recognition of a right of use asset (“ROU

asset”) and liability of $ 568,972 at inception.

The ROU asset is recorded as a component of non-current assets and the liability

a component of current and non-current liabilities on the Company’s Condensed Consolidated Balance Sheets.

The Company discounted

the future lease payments of this lease using the prevailing collateralized lending rate which would be extended to the Company based

on its credit profile relative to the period of inception, and the duration of the lease from inception.

The interest rate used in calculating

the fair value listed above was 7.8 %

5 – STOCKHOLDERS’ EQUITY

Company is authorized to issue an aggregate of 500,000,000 shares.

The authorized capital stock is divided into:

(i) 495,000,000 shares

of common stock having a par value of $0.0001 per share and (ii) 5,000,000 shares of preferred stock having a par value of $0.0001 per

April 8, 2021, the Company amended its certificate of incorporation to effect a 1-for-20 reverse stock split of our outstanding shares

of Common Stock.

No fractional shares were issued as a result of the reverse stock split.

Any fractional shares resulting from the reverse

stock split were paid in cash.

The reverse stock split did not otherwise affect any of the rights currently accruing to holders of our

Common Stock.

All share information presented in these financial statements has been retroactively adjusted to reflect the reduced number

of shares of Common Stock outstanding.

2021, the Company entered into various subscription agreements in connection with a private placement seeking to raise up to $ 1 million

through the sale of 625,000 shares of Common Stock, at a price of $ 1.60 per share, with a closing date for accepted subscriptions of

The term of this sublease is for a period of thirty-nine and one-fourth (39.25) months commencing

on the effective date, until May 15, 2024.

The lease has a gross monthly rent of $ 16,171 per month, which will increase to $ 16,656 beginning

January 1, 2024.

The Company issued a total of 395,625 shares of Common Stock for aggregate proceeds received of approximately $ 633,000

related to such private placement.

2021, the Company entered into various subscription agreements in connection with a second private placement seeking to raise up to $ 5

million through the sale of 2,083,333 shares of Common Stock, at a price of $ 2.40 per share, with a closing date for accepted subscriptions

of June 30, 2021.

The Company issued a total of 239,969 shares of Common Stock for aggregate proceeds received of approximately $ 576,000

related to such second private placement.

2021 Private Placement

November 24, 2021, the Company entered into a purchase agreement (the “November 2021 Purchase Agreement”) with institutional

investors to issue 8,680,000 shares of Common Stock (the “PIPE Shares”) and warrants to purchase up to 8,680,000 shares of

Common Stock (the “PIPE Warrants”) in a private placement (the “November 2021 Private Placement”).

purchase price for one PIPE Share and one PIPE Warrant was $ 3.50 .

The PIPE Warrants are immediately exercisable, expire five years

from the date of issuance and have an exercise price of $ 3.50 per share, subject to adjustment as set forth in the PIPE Warrants.

investors may exercise the PIPE Warrants on a cashless basis if the shares of Common Stock underlying the PIPE Warrants are not then

registered pursuant to an effective registration statement.

The investors have contractually agreed to restrict their ability to exercise

the PIPE Warrants such that the number of shares of Common Stock held by the investors and any of their affiliates after such exercise

does not exceed either 4.99 % or 9.99 % of the Company’s then issued and outstanding shares of Common Stock, at the investor’s

connection with the November 2021 Purchase Agreement, the Company entered into a registration rights agreement (the “November 2021

Registration Rights Agreement”) with the investors.

Pursuant to the November 2021 Registration Rights Agreement, the Company is

required to file a resale registration statement with the Securities and Exchange Commission (the “SEC”) to register for

resale the shares and the warrant shares and to have such registration statement declared effective within 60 days after the date of

the Purchase Agreement, or 90 days of the date of the November 2021 Purchase Agreement in the event the registration statement is subject

to a “full review” by the SEC.

The Company is obligated to pay certain cash liquidated damages to the investor if it fails

to file the resale registration statement when required, fail to cause the registration statement to be declared effective by the SEC

when required, or if it fails to maintain the effectiveness of the registration statement.

The registration statement was declared effective

by the SEC on December 16, 2021.

to a placement agent agreement (the “Placement Agent Agreement”), dated as of November 24, 2021, by and between us and EF

Hutton, division of Benchmark Investments, LLC (“EF Hutton”), the Company engaged EF Hutton to act as its exclusive placement

agent in connection with the November 2021 Private Placement.

Pursuant to the Placement Agent Agreement, the Company paid EF Hutton a

cash fee of 9.0 % of the gross proceeds raised in the November 2021 Private Placement, and a cash fee equal to 1.0 % of the gross proceeds

raised in the November 2021 Private Placement for non-accountable expenses, and also reimbursed EF Hutton $ 70,000 for accountable expenses,

including “road show”, diligence, and reasonable legal fees and disbursements for EF Hutton’s counsel.

Additionally,

the Company granted EF Hutton a right of first refusal following the closing of the November 2021 Private Placement, whereby EF Hutton

shall have an irrevocable right of first refusal (the “Right of First Refusal”) until November 29, 2022, to act as sole investment

banker, sole book-runner, and/or sole placement agent, at EF Hutton’s sole discretion, for each and every future public and private

equity and debt offering, including all equity linked financing.

November 29, 2021, the Company consummated the November 2021 Private Placement, pursuant to which it issued 8,680,000 PIPE Shares and

PIPE Warrants to purchase up to 8,680,000 shares of Common Stock to institutional investors.

The offering price per PIPE Share and accompanying

PIPE Warrant was $ 3.50 , resulting in aggregate gross proceeds of $ 30,380,000 and net proceeds to the Company, net of underwriter discounts

and fees, or approximately $ 27 million.

As of September 30, 2022, no PIPE Warrants have been exercised.

total of 8,680,000 PIPE Warrants remain outstanding as of September 30, 2022.

No liability accounting or valuation is deemed necessary

for these warrants.

option activity for the nine months ended September 30, 2022 was as follows:

was accounted for as an operating lease under ASC 842, Leases, which resulted in the recognition of a right of use asset (“ROU

asset”) and liability of approximately $ 569,000 at inception.

The ROU asset is recorded as a component of non-current

assets and the liability a component of current and non-current liabilities on the Company’s condensed consolidated balance

The Company discounted the future lease payments of this lease using the prevailing collateralized lending rate which would

be extended to the Company based on its credit profile relative to the period of inception, and the duration of the lease from

The interest rate used in calculating the fair value listed above was 7.8 %.

Medical Office

Lease – West Hollywood, California

In March 2022,

the Company entered into an agreement to lease a medical office in West Hollywood, California.

The lease commenced on April 1, 2022.

lease is attributable to the Clinics segments which was discontinued as of March 31, 2023.

See Note 10, Discontinued Operations for more information related.

31, 2023, the Company recognized total ROU assets and lease liabilities as follows:

Non-current leases

- right of use assets

Current liabilities - operating

lease liabilities

Non-current liabilities -

operating lease liabilities

Operating lease expense

Cash paid for amounts included

in the measurement of operating lease liabilities

The following table summarizes the maturity of the

Company’s operating lease payments as of March 31, 2023:

2023 (remaining)

Total future minimum lease payments

Amount representing interest

Present value of net future minimum lease payments

NOTE 5 – INTANGIBLE ASSETS AND GOODWILL

Intangible assets,

net consists of the following:

In-process research

and development

and intellectual property

$ ( 157,541 )

31, 2023, future expected amortization expense of Intangible assets was as follows:

Remaining future amortization expense

There were no changes to goodwill for the three months

ended March 31, 2023.

NOTE 6 – STOCKHOLDERS’ EQUITY

The Company had 26,126,740 and 26,043,406 shares of

its Common Stock issued and outstanding at March 31, 2023 and 2022, respectively.

Common Stock Issuances for the Three Months Ended

March 31, 2023

During the three months ended March 31, 2023, the

Company issued 83,334 shares of common stock due to the vesting of restricted stock units, and recognized approximately $ 24,000 of stock-based

compensation expense related to its outstanding restricted stock units.

Stock-based compensation expense related to the Company’s

restricted stock units is recognized within selling, general and administrative expense.

As of March 31, 2023, remaining unamortized RSU

stock-based compensation expense was approximately $ 165,500 .

The Company did not grant any restricted stock units

or restricted stock during the three months ended March 31, 2023.

NOTE 7 – STOCK OPTIONS

During the three months ended March 31, 2023, the

Company issued stock options under the 2021 Plan to employees, to purchase an aggregate of 880,000 shares of Common Stock with a strike

price equal to $ 0.491 per share and a term of ten years .

One-third of these options vest on the one-year anniversary of the employee hire

date and then the remaining stock options vest in equal quarterly installments over the remaining two years .

These options had a total

fair value of approximately $ 288,000 , as calculated using the Black-Scholes model with a volatility assumption of 68.64 %.

During the three months ended March 31, 2023, stock

options to purchase an aggregate of 16,667 shares of Common Stock, subject to time-based milestone vesting conditions, vested.

For the three

months ended March 31, 2023 and 2022, total stock-based compensation expense related to the Company’s stock options was approximately

$ 153,000 and approximately $ 95,000 , respectively.

For the three months ended March 31, 2023, the Company recognized approximately

$ 131,000 of stock-based compensation related to its options within Selling, general and administrative expense, and approximately $ 22,000

within Research and development expense.

For the three months ended March 31, 2022, all stock-based compensation expense was recorded

within Selling, general and administrative expense.

The following

table summarizes the activity related to the Company’s stock options for the three months ended March 31, 2023:

(in thousands)

Outstanding, January

Outstanding, September 30, 2022

Exercisable, September 30, 2022

options had a weighted average remaining life of 9.22 years and an aggregate intrinsic value of $ 0 as of September 30, 2022.

recognized $ 0.1 million and $ 0.3 million of stock-based compensation expense for stock options for the three and nine months ended September

30, 2022, respectively, and $ 0.03 million for the nine months ended September 30, 2021.

As of September 30, 2022 remaining unamortized

stock option compensation expense was $ 0.4 million.

Company uses the Black-Scholes option pricing model to value their employee stock options.

The weighted average grant date fair value

for those options granted during 2022 was $ 0.45 .

The weighted average of assumptions used to calculate these values was as follows:

40.4 %, risk-free rate 3.2 %, and holding period 6.5 years.

the terms of Dr.

Marques’ 2021 Employment Agreement, Dr.

Marques was granted 200,000 RSUs on December 20, 2021 with a grant date

fair value of $ 1.44 per share.

The Company has no other RSU awards outstanding.

The Company recognized $ 24,000 and $ 72,000 of stock-based

compensation expense for RSUs for the three and nine months ended September 30, 2022 and had unamortized RSU compensation remaining of

$ 216,000 as of September 30, 2022.

There were no RSUs issued in 2021.

The Company recognized $ 0.02 million of stock-based

compensation expense for restricted stock awards for the three months ended September 30, 2022, and $ 0.4 million for the nine months ended

September 30, 2022.

three-month period ending September 30, 2022, the Company discovered shares issued for services were incorrectly accounted for during

the three-month period ending June 30, 2022.

The error has been retrospectively corrected by reducing common shares outstanding by 150,000

shares and adjusting additional-paid-in capital and compensation expenses by $ 151,500 .

On June 21, 2022, the Company issued warrants

to purchase 1,000,000 shares of Common Stock to certain sellers in connection with the acquisition of Alpha-5 Integrin, LLC, (“Alpha

These warrants have an exercise price of $ 1.88 per share and are exercisable for five years .

At the time of the transaction

these warrants had a fair value of $ 0.35 , for a total value of $ 0.4 million which was recorded as an increase to additional paid-in capital.

The $ 0.35 value per warrant was based on a Black- Scholes model valuation.

The assumption used in this calculation were as follows:

duration five years ;

and a risk-free rate of 3.38 %.

This amount was included as part of the consideration

paid for the Alpha 5 acquisition and included as part of the purchase price allocation accordingly.

Expired/Cancelled

March 31, 2023

Exercisable, March 31, 2023

As of March 31, 2023, remaining unamortized stock-based

compensation expense related to the stock options was approximately $ 776,000 .

NOTE 8 – WARRANTS

As of March 31, 2023, the fair value of the Public

Warrants was approximately $ 0.04 per Public Warrant based on the closing price of the warrants on The Nasdaq Capital Market.

value of the Representative Warrants was approximately $ 0.042 per Representative Warrant which was based on the relative fair value to

the Public Warrants.

The following table summarizes the Company’s

outstanding warrants:

Exercise Price

contractual term

average exercise

No warrants were granted during the three months

ended March 31, 2023.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

and Regulatory Environment

The healthcare

industry is subject to numerous laws and regulations of federal, state and local governments.

These laws and regulations include, but

are not limited to, matters such as licensure, accreditation, government healthcare program participation requirement, reimbursement for

patient services and Medicare and Medicaid fraud and abuse.

Government activity has increased with respect to investigations and allegations

concerning possible violations of fraud and abuse statutes and regulations by healthcare providers.

of these laws and regulations could result in expulsion from government healthcare programs, together with the imposition of significant

fines and penalties, as well as significant repayments for patient services previously billed.

Management believes that the Company is

in compliance with fraud and abuse regulations, as well as other applicable government laws and regulations.

While no material regulatory

inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation, as

well as regulatory actions unknown or unasserted at this time.

NOTE 10 – DISCONTINUED OPERATIONS

three months ended March 31, 2023, we discontinued our at-home services in New York, NY as well as our services in the U.K.

we discontinued our clinical operations in Los Angeles, CA and are actively exploring options for the disposal of related property.

as of the date of this Quarterly Report on Form 10-Q, we have discontinued the operations of our Clinics segment.

We have separately reported the assets and liabilities

of the discontinued operations in the condensed consolidated balance sheets.

The assets and liabilities have been

reflected as discontinued operations in the condensed consolidated balance sheets as of March 31, 2023, and consist of

the following:

Current assets of discontinued operations:

Cash and cash equivalents

Due from related party

Prepaid expenses

Other current assets

Total current assets of discontinued operations

Non-current assets of discontinued operations

Property and equipment, net

Right of use asset- operating lease

Intangibles, net

Total non-current assets of discontinued operations

Current liabilities of discontinued operations:

Accounts payable and accrued liabilities

Lease liability- short term portion

Total current liabilities of discontinued operations

Non-current liabilities of discontinued operations:

Lease liability

Warrant liabilities

Company evaluated the IPO Warrants as either equity-classified or liability-classified instruments based on an assessment of the IPO

Warrants’ specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity”

(“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”).

The assessment considers whether

the IPO Warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480,

and whether the IPO Warrants meet all of the requirements for equity classification under ASC 815, including whether the IPO Warrants

are indexed to the Company’s own common stock, among other conditions for equity classification.

Pursuant to such evaluation, the

Company further evaluated the IPO Warrants under ASC 815-40 , Derivatives and Hedging — Contracts in Entity’s Own Equity ,

and concluded that the IPO Warrants do not meet the criteria to be classified in stockholders’ equity.

November 2021, 1,120,000 Public Warrants were exercised at a price of $ 6.25 per share for total proceeds of $ 7,000,000 .

As of September

30, 2022 and December 31, 2021, 3,680,000 Public Warrants and 240,000 Representative Warrants remain outstanding.

of September 30, 2022, the fair value of the Public Warrants was approximately $ 0.148 per Public Warrant based on the closing price of

the warrants on The Nasdaq Capital Market.

The fair value of the Representative Warrants was approximately $ 0.152 per Representative

Warrant which was based on the relative fair value to the Public Warrants.

of December 31, 2021, the fair value of the Public Warrants was approximately $ 0.37 per Public Warrant which was determined using the

Black-Scholes option pricing model with the following assumptions:

exercise price of $ 6.25 , dividend yield of 0 %, term of 5 years, volatility

of 61.1 %, and risk-free rate of 1.22 %.

The fair value of the Representative Warrants was approximately $ 0.38 per Representative Warrant

which was determined using the Black-Scholes option pricing model with the following assumptions:

exercise price of $ 6.00 , dividend yield

of 0 %, term of 5 years, volatility of 61.1 %, and risk-free rate of 1.22 %.

7– BUSINESS COMBINATION

June 21, 2022, the Company entered into a membership purchase agreement (the “Alpha 5 Agreement”) with Alpha 5 to purchase

100 % of Alpha 5’s outstanding membership interests.

One of the sellers of Alpha 5, Lawrence Steinman, is the Executive Chairman

and Co-Founder of the Company, and as such is considered a related party to the Company.

Alpha 5 was a preclinical-stage company developing

a monoclonal antibody (mAbs) for the treatment of amyotrophic lateral sclerosis (“ALS”) and other neuroinflammatory disorders,

such as Multiple Sclerosis.

Alpha 5 Integrin is based in Charlottesville, Virginia.

In connection with the transaction, the Company issued

to the Alpha 5 sellers 3,260,870 shares of Common Stock, which had a market value of $ 1.01 on the date of the transaction, and warrants

to acquire 1,000,000 shares of Common Stock at an exercise price of $ 1.88 per share, for a period of five years from the acquisition

date, the aggregate fair value of which was $ 0.4 million at the date of acquisition.

addition, the Alpha 5 Agreement allows for an earnout to be paid as part of the consideration due to the sellers.

As any future sales

are predicated upon FDA approval, no amounts will be due the sellers in the absence of that approval.

Should FDA approval be obtained

the amount of the earnout payment is dependent on the attainment of certain financial targets.

The terms of the earnout contain three

performance target thresholds that trigger three different payout amounts depending on which of the three targets is achieved.

generated after the drug is no longer subject to any patent protection or regulatory exclusivity are excluded from the earnout calculation

The earnout is deemed part of the consideration paid for the acquisition, in the form of contingent consideration.

However, as of September

30, 2022, this amount has not yet been determined.

Alpha 5 acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations.

The preliminary fair

values of the acquired assets and liabilities as of the acquisition date were:

Prepaid assets

Total assets acquired

Accounts payable & accrued expenses

Total liabilities assumed

Consideration

preliminary purchase price allocation is based on estimates of the fair values of the tangible and intangible assets acquired and liabilities

The Company will utilize recognized valuation techniques as part of its final valuation of the Alpha 5 acquisition.

purchase price allocation is preliminary and subject to change as the Company may further refine the determination of certain assets

during the measurement period of one year.

The goodwill recognized is largely attributable

to the potential leveraging of Alpha 5’s scientific expertise in the integrin space.

The Company believes the acquisition of Alpha

5 will help in its efforts to move the treatment forward and increase its potential to have a positive impact on the treatment of ALS.

This goodwill is expected to be deductible for income tax purposes.

Expenses incurred in relation to this acquisition totalled to $ 311,065 .

Pro forma Financial Information

following pro forma financial information presents the combined results of operations for the Company and gives effect to the business

combination discussed above as if it had occurred on January 1, 2022.

The pro forma financial information is presented for illustrative

purposes only and is not necessarily indicative of the results of operations that would have been realized if the business combination

had been completed on January 1, 2022, nor does it purport to project the results of operations of the combined company in future periods.

The pro forma financial information does not give effect to any anticipated integration costs related to the acquired company.

Forma Condensed Consolidated Statement of Operations

the Three and Six Months Ended June 30, 2022

Three Months Ended June 30, 2022

INTEGRIN, LLC

Cost of services

Operating expenses:

Selling, general and administrative

Loss from operations

( 3,080,094 )

( 3,512,926 )

Other income:

Change in fair value of warrant liabilities

Foreign currency exchange gain/(loss)

Gain on forgiveness of accounts payable

Loss before income taxes

( 2,658,394 )

( 3,091,053 )

Provision for income taxes

$ ( 2,658,394 )

$ ( 432,659 )

$ ( 3,091,053 )

Weighted-average common shares outstanding, basic and diluted

Basic and diluted net loss per common share

Six Months Ended June 30, 2022

INTEGRIN, LLC

Total non-current liabilities of discontinued operations

Total liabilities of discontinued operations

The results of operations from discontinued operations for

the three months ended March 31, 2023 and 2022, have been reflected as discontinued operations in the condensed consolidated

statements of operations and consist of the following:

Three Months Ended

Cost of services

Operating expenses:

Selling, general and administrative

Loss from operations

( 5,484,631 )

( 6,462,854 )

Other income:

Change in fair value of warrant liabilities

Interest expense

Interest income

Foreign currency exchange gain/(loss)

Gain on forgiveness of accounts payable

Loss before income taxes

( 4,232,634 )

( 5,215,741 )

Provision for income taxes

$ ( 4,232,634 )

Loss from discontinued operations

$ ( 271,869 )

1 unchanged sentence

Weighted-average common shares outstanding, basic and diluted

Basic and diluted net loss per common share

pro forma balance sheet was excluded from this disclosure as the transaction is already reflected in the June 30, 2022 condensed consolidated

balance sheets, given there were minimal adjustments to the June 20, 2022 Alpha 5 closing balance sheet.

8 – SUBSEQUENT EVENTS

of AlloMek Therapeutics, LLC

October 11, 2022, the Company entered into a Membership Interest Purchase Agreement, whereby it acquired 100 % of the issued and outstanding

equity interests of AlloMeK Therapeutics, LLC (“AlloMek”) from the holders thereof on a cash free, debt-free basis.

Therapeutics, LLC was a pre-clinical biotechnology company focused on developing CIP-137401, the first macrocyclic MEK Inhibitor with

a unique potency, safety and pharmacokinetic profile.

The Company acquired all issued and outstanding equity interests of AlloMek in exchange

(i) an aggregate of

2,700,000 shares of the Company’s common stock, par value $0.0001 per share, (ii) an aggregate of 1,000,000 warrants to purchase

shares of the Company’s Common Stock at an exercise price of $1.88 per share, which may be exercised on a cashless basis, for a

period of five years commencing on the date of issuance, (iii) a cash payment in the amount of $1,050,000, (iv) the right to certain milestone

payments in an amount up to $5,000,000, and (v) the right to contingent earn-out payments ranging from 3% to 5% of net sales of the Drug

depending on the amount of such net sales in the applicable measurement period.

Closing of the transactions contemplated in the

Agreement occurred on October 11, 2022 (the “Closing Date”).

In connection with the Agreement, each of the Sellers entered

into a two-year Lock-up Agreement with the Company regarding the shares of Common Stock received by the Sellers pursuant to the Agreement.

On the one-year anniversary of the Closing Date, the restrictions contained in the Lock-Up Agreements will terminate for 1,350,000 Restricted

Shares, and then in each subsequent month, the restrictions will cease for 112,500 Restricted Shares.

Basic and diluated loss per share from discontinued operations

In accordance with accounting principles generally accepted in the

United States (“GAAP”), only expenses specifically identifiable and related to a business to be disposed may be allocated

to discontinued operations.

As such, the selling, general and administrative and research and development expenses recorded in discontinued

operations include corporate costs incurred directly in support of the Clinics business.

NOTE 11 – Note Payable

Directors and Officer ’ s Liability Insurance

On January 9, 2023, the Company entered into a 9-month financing

agreement for its directors and officer’s liability insurance in the amount of approximately $ 392,000 that bears interest at an

annual rate of 7.8 %.

Monthly payments, including principal and interest, are approximately $ 45,000 per month.

The balance due

under this financing agreement was approximately $ 264,000 and $ 0 at March 31, 2023 and December 31, 2022, respectively.

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 1. Financial Statements