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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-03-31 · 232 added, 95 removed, 34 unchanged (91% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Annual Report.

This discussion and analysis contain forward-looking statements that are based on our management’s current beliefs and assumptions, which statements are subject to substantial risks and uncertainties.

Our actual results may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” in Item 1A of this Annual Report.

Please also see “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factor Summary” at the beginning of this Annual Report.

We are developing a thermo-acoustic medical device designed specifically for accurate liver fat measurement for metabolic disease detection and management and GLP-1 drug eligibility and management.

Our goal is to create the next-generation enhanced ultrasound technology platform designed to establish key biomarkers for metabolic diseases management and emerging GLP-1 therapies.

Our business model will primarily be a low barrier-to-entry, multi-year, subscription-based business model with monthly recurring revenue (MRR), while also offering a traditional product sale with annual upgrade and maintenance fees.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

The following discussion of our financial condition

and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere

in this Annual Report.

This discussion and analysis contain forward-looking statements that are based on our management’s current

beliefs and assumptions, which statements are subject to substantial risks and uncertainties.

Our actual results may differ materially

from those expressed or implied by these forward-looking statements as a result of many factors, including those discussed in “Risk

Factors” in Item 1A of this Annual Report.

Please also see “Cautionary Note Regarding Forward-Looking Statements” and

“Risk Factor Summary” at the beginning of this Annual Report.

We are developing a thermo-acoustic medical device

designed specifically for accurate liver fat measurement for metabolic disease detection and management and GLP-1 drug eligibility and

Our goal is to create the next-generation enhanced ultrasound technology platform designed to establish key biomarkers for

metabolic diseases management and emerging GLP-1 therapies.

Our business model will primarily be a low barrier-to-entry,

multi-year, subscription-based business model with monthly recurring revenue (MRR), while also offering a traditional product sale with

annual upgrade and maintenance fees.

These sales are expected to be made by a direct sales force to four markets:

Pharmaceutical Companies and Clinical Research Organizations (“CROs”) - to assist them in the efficient screening & monitoring subjects for new GLP-1, NASH/MASH and Insulin Sensitizers clinical trials.

High-End Primary Care Clinics - to assist them screening patients for obesity, diabetes and liver disease as well as monitor response to lifestyle changes and drug therapies.

Bariatric and Metabolic Clinics - for obesity and other metabolic diseases detection and therapies response monitoring

Primary & Internal Medicine at Large - to screen patients for obesity, diabetes and liver disease and monitor response to lifestyle change and drug therapy

Each of our solutions will require regulatory approvals before we are able to sell or license the application.

Based on certain factors, such as the installed base of ultrasound systems, availability of other imaging technologies, such as CT and MRI, economic strength and applicable regulatory requirements, we intend to seek initial approval of our applications for sale in the European Union and the United States.

Pharmaceutical Companies and Clinical Research Organizations

(“CROs”) - to assist them in the efficient screening & monitoring subjects for new GLP-1, NASH/MASH and Insulin Sensitizers

clinical trials.

High-End Primary Care Clinics - to assist them screening

patients for obesity, diabetes and liver disease as well as monitor response to lifestyle changes and drug therapies.

Bariatric and Metabolic Clinics - for obesity and other metabolic

diseases detection and therapies response monitoring

Primary & Internal Medicine at Large - to screen patients

for obesity, diabetes and liver disease and monitor response to lifestyle change and drug therapy

Each of our solutions will require regulatory

approvals before we are able to sell or license the application.

Based on certain factors, such as the installed base of ultrasound systems,

availability of other imaging technologies, such as CT and MRI, economic strength and applicable regulatory requirements, we intend to

seek initial approval of our applications for sale in the European Union and the United States.

In 2026, we implemented cost reduction measures,

including a reduction in headcount and prioritization of development activities over clinical ones, to extend our operating runway and

focus resources on product improvements and regulatory strategy for our TAEUS liver application.

These actions are expected to impact

the timing of certain development activities, including delaying the timing of a future De Novo submission to the U.S.

Food and Drug Administration

(“FDA”) relating to our TAEUS liver application.

Financial Operations Overview

No revenue has been generated by our TAEUS technology, which we have not commercially sold as of December 31, 2024.

No revenue has been generated by our TAEUS technology, which we have

not commercially sold as of December 31, 2025.

Research and Development Expenses

Our research and development expenses primarily include wages, fees and equipment for the development of our TAEUS technology platform.

Additionally, we incur certain costs associated with the protection of our products and inventions through a combination of patents, licenses, applications and disclosures.

These costs and expenses include:

employee-related expenses, such as salaries, bonuses and benefits, consultant-related expenses such as consultant fees and bonuses, stock-based compensation, overhead related expenses and travel-related expenses for our research and development personnel;

expenses incurred under agreements with CROs, contract manufacturing organizations (“CMOs”) as well as consultants that support the implementation of our clinical and non-clinical studies;

Our research and development expenses primarily

include wages, fees and equipment for the development of our TAEUS technology platform.

Additionally, we incur certain costs associated

with the protection of our products and inventions through a combination of patents, licenses, applications and disclosures.

and expenses include:

● employee-related expenses, such as salaries, bonuses and benefits, consultant-related expenses such as consultant fees and bonuses,

stock-based compensation, overhead related expenses and travel-related expenses for our research and development personnel;

● expenses incurred under agreements with CROs, contract manufacturing organizations (“CMOs”) as well as consultants that

support the implementation of our clinical and non-clinical studies;

● manufacturing and packaging costs in connection with conducting clinical trials;

1 unchanged sentence

● costs for sponsored research.

We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of TAEUS and pursue FDA approval.

At this time, due to the inherently unpredictable nature of clinical development and regulatory approvals, we are unable to estimate with certainty the costs we will incur and the timelines we will require in our continued development efforts.

We plan to incur research and development expenses

for the foreseeable future as we expect to continue the development of TAEUS and pursue FDA approval.

At this time, due to the inherently

unpredictable nature of clinical development and regulatory approvals, we are unable to estimate with certainty the costs we will incur

and the timelines we will require in our continued development efforts.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of headcount and consulting costs, and marketing and tradeshow expenses.

Currently, our sales and marketing efforts are primarily business development - generating awareness through meetings with research institutions, our website and attendance of key industry meetings and conferences.

As of December 31, 2024, we had a full-time sales engineer in France and a part-time, contracted, business development executive in Germany.

Upon FDA approval, we will expand our sales & marketing efforts, primarily by adding a direct sales force and related expenses and costs.

Sales and marketing expenses consist primarily

of headcount and consulting costs.

We have significantly reduced our sales and marketing expenses as part of our cost reduction measures.

In the event we obtain FDA approval of our TAEUS liver device, we will seek to expand our sales & marketing efforts, primarily by

adding a direct sales force and related expenses and costs.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related expenses for our management and personnel, and professional fees, such as for accounting, consulting and legal services.

In 2024, general and administrative expenses also included a $2.4 million inventory reserve discussed further in Results of Operations.

Excluding this one-time charge, we anticipate that our general and administrative expenses will increase in the future as we support our continued research and development activities, expand our sales and marketing operations, and continue as a public company.

These increases would likely include increased costs related to the hiring of personnel, including compensation and employee-related expenses, including stock-based compensation, and fees to outside consultants, lawyers and accountants, among other expenses.

Additionally, we anticipate continued costs associated with being a public company, including expenses related to services associated with maintaining compliance with The Nasdaq Capital Market and SEC requirements, directors and officers insurance, increased legal and accounting costs and investor relations costs.

General and administrative expenses consist primarily

of salaries and related expenses for our management and personnel, and professional fees, such as for accounting, consulting and legal

We anticipate continued costs associated with

being a public company, including expenses related to services associated with maintaining compliance with The Nasdaq Capital Market and

SEC requirements, directors and officers insurance, increased legal and accounting costs and investor relations costs.

Critical Accounting Policies and Estimates

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

The preparation of the financial statements in

conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that

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

and the reported amounts of expenses during the reporting period.

Actual results could differ from those estimates.

Management makes estimates that affect certain accounts including inventory reserve, deferred income tax assets, accrued expenses, fair value of equity instruments, warrant liability and reserves for any other commitments or contingencies.

Any adjustments applied to estimates are recognized in the period in which such adjustments are determined.

Management makes estimates that affect certain

accounts including deferred income tax assets, accrued expenses, fair value of equity instruments, warrant liability and reserves for

any other commitments or contingencies.

Any adjustments applied to estimates are recognized in the period in which such adjustments are

Share-based Compensation

The Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan”) permits the grant of stock options and other stock awards to our employees, consultants and non-employee members of our board of directors.

Each January 1 the pool of shares available for issuance under the Omnibus Plan automatically increases by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares) and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board.

On January 1, 2025, the pool of shares issuable under the Omnibus Plan automatically increased by 178,033 shares from 1,738 shares to 179,474 shares.

As of December 31, 2024, prior to such increase, there were 1,441 shares of common stock remaining available for issuance under the Omnibus Plan.

We record share-based compensation in accordance with the provisions of the Share-based Compensation Topic of the FASB Codification.

The guidance requires the use of option-pricing models that require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends, and the resulting charge is expensed using the straight-line attribution method over the vesting period.

Stock compensation expense recognized during the period is based on the value of share-based awards that were expected to vest during the period adjusted for estimated forfeitures.

The estimated fair value of grants of stock options and warrants to non-employees is charged to expense, if applicable, in the financial statements.

The Company’s 2016 Omnibus Incentive Plan

(the “Omnibus Plan”) permits the grant of stock options and other stock awards to our employees, consultants and non-employee

members of our board of directors.

Each January 1 the pool of shares available for issuance under the Omnibus Plan automatically increases

by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus

Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares

of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares)

and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board.

In addition, on December 9,

2025, the stockholders approved the Second Amendment to the Omnibus Plan (the “Omnibus Plan Amendment The Omnibus Plan Amendment

increased the pool of shares available for issuance by 3,200,000 shares of common stock.

Due to these increases, the pool of shares issuable

under the Omnibus Plan shares increased from 1,738 shares to 3,048,799 shares as of December 31, 2025.

In light of the increase effected

by the Omnibus Plan Amendment, no automatic increase to the pool was effected as of January 1, 2026.

We record share-based compensation in accordance

with the provisions of the Share-based Compensation Topic of the FASB Codification.

The guidance requires the use of option-pricing models

that require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model which uses

certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends,

and the resulting charge is expensed using the straight-line attribution method over the vesting period.

Stock compensation expense recognized during the

period is based on the value of share-based awards that were expected to vest during the period adjusted for estimated forfeitures.

estimated fair value of grants of stock options and warrants to non-employees is charged to expense, if applicable, in the financial statements.

Recent Accounting Pronouncements

See Note 2 of the accompanying financial statements for a discussion of recently issued accounting standards.

See Note 2 of the accompanying financial statements for a discussion

of recently issued accounting standards.

Results of Operations

Years ended December 31, 2025 and 2024

We had no revenue during the years ended December 31, 2024 and 2023.

We had no revenue during the years ended December

31, 2025 and 2024.

Cost of Goods Sold

We had no cost of goods sold during the years ended December 31, 2024 and 2023.

We had no cost of goods sold during the years

ended December 31, 2025 and 2024.

Research and Development

Research and development expenses were $3,190,293 for the year ended December 31, 2024, as compared to $5,003,695 for the year ended December 31, 2023, a decrease of $1,813,402 or 36%.

Research and development expenses were $1,849,996

for the year ended December 31, 2025, as compared to $3,190,293 for the year ended December 31, 2024, a decrease of $1,340,297 or 42%.

The costs include primarily wages, fees, consultants, contractors and equipment for the development of our TAEUS product line.

Research and development expenses decreased from the prior year as we completed development of our initial TAEUS product and began focusing our spending on ensuring the clinical trials.

and development expenses decreased from the prior year as we completed development of our initial TAEUS product and began focusing our

spending on small trials to test our results.

Sales and Marketing

Sales and marketing expenses were $571,040 for the year ended December 31, 2024, as compared to $820,554 for the year ended December 31, 2023, a decrease of $249,514, or 30%.

The costs include primarily headcount and pre-selling activities for our TAEUS product line.

Sales and marketing expenses decreased largely due to the reduction of Sales & Marketing personnel until the clinical trials are complete.

Sales and marketing expenses were $189,470 for

the year ended December 31, 2025, as compared to $571,040 for the year ended December 31, 2024, a decrease of $381,570, or 67%.

include primarily headcount and pre-selling activities for our TAEUS product line.

Sales and marketing expenses decreased largely due

to the reduction of Sales & Marketing personnel until the clinical trials are complete.

General and Administrative

Our general and administrative expenses for the year ended December 31, 2024 were $7,055,814, compared to $4,696,486 for the year ended December 31, 2023, an increase of $2,359,328, or 50%.

The primary driver of this increase was our inventory reserve.

In 2024, in connection with a strategic shift under the direction of our new management team, we determined that we needed to redesign our TAEUS liver system to require less space, be simpler to use and be more cost effective.

As a result, we performed a thorough assessment of the valuation of inventory as of December 31, 2024 and determined to record a non-cash charge to reserve against all inventory, as it may not be usable in connection with our redesigned system.

Our general and administrative expenses for the

year ended December 31, 2025 were $3,723,635, compared to $7,055,814 for the year ended December 31, 2024, a decrease of $3,332,179, or

The primary driver of this decrease was our inventory

In 2024, in connection with a strategic shift under the direction of our new management team, we determined that we needed to

redesign our TAEUS liver system to require less space, be simpler to use and be more cost effective.

As a result, we performed a thorough

assessment of the valuation of inventory as of December 31, 2024 and determined to record a non-cash charge to reserve against all inventory,

as it may not be usable in connection with our redesigned system.

This reserve totaled $2,525,179 as of December 31, 2024.

Our reserve was $138,045 as of December 31, 2023.

Also included in general and administrative expenses for the years ended December 31, 2024 and 2023 were wages and related expenses of $1,365,860 and $1,554,670, respectively, and professional fees of $2,177,046 and $1,980,464, respectively.

was $0 as of December 31, 2025.

Also included in general and administrative expenses

for the years ended December 31, 2025 and 2024 were wages and related expenses of $1,197,556 and $1,365,860, respectively, and professional

fees of $1,728,107 and $2,177,046, respectively.

Other Expenses

Other expenses were $690,800 for the year ended December 31, 2024 primarily driven by non-cash warrant expense, changes in fair value of warrant liability and gain on settlement on warrant exercise.

For the year ended December 31, 2023, we had other income of $460,485 which was primarily the result of the Employer Retention Tax Credit for employee retention in 2021 and 2022

As a result of the foregoing, for the year ended December 31, 2024, we recorded a net loss of $11,507,947, compared to a net loss of $10,060,250 for the year ended December 31, 2023.

Other expenses were $1,264,309 for the year ended

December 31, 2025 primarily driven by changes in fair value of digital assets, non-cash warrant expense, changes in fair value of warrant

liability and gain on settlement on warrant exercise.

For the year ended December 31, 2024, we had other

expense of $690,800 primarily driven by non-cash warrant expense, changes in fair value of warrant liability and gain on settlement on

warrant exercise.

As a result of the foregoing, for the year ended

December 31, 2025, we recorded a net loss of $7,027,410, compared to a net loss of $11,507,947 for the year ended December 31, 2024.

Near-Term Liquidity and Capital Resources

Since inception, we have incurred losses and expect to continue to incur losses for the foreseeable future.

As of December 31, 2024, we had an accumulated deficit of $103,438,099 and had $3,229,480 in cash.

To date we have funded our operations through private and public sales of our securities and will need to raise additional funds in order to execute on our business plan, fully commercialize our TAEUS technology, and generate revenues.

If we are unable to obtain adequate financing or financings in the near term on terms satisfactory to us, or at all, we may be forced to undertake additional measures, which may include delaying or reducing our product development programs and commercialization efforts, materially curtailing or eliminating our operations, selling or disposing of our rights or assets, pursuing sale or other strategic transactions, or undergoing restructuring or insolvency proceedings.

We need additional capital to allow us to continue to execute our clinical trials and commercialization plans through the 2025 and beyond.

We are considering potential financing options that may be available to us, including sales of our common stock through our at-the-market sales program (the “ATM Program”) with Ascendiant Capital Markets, LLC.

Except for the ATM Program, we have no commitments to obtain any additional funds, and there can be no assurance funds will be available in sufficient amounts or on acceptable terms.

If we are unable to obtain sufficient additional financing in a timely fashion and on terms acceptable to us, our financial condition and results of operations may be materially adversely affected and we may not be able to continue operations or execute our stated commercialization plan.

The consolidated financial statements included in this Form 10-K have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

As reflected in the accompanying consolidated financial statements, during the year ended December 31, 2024, we incurred net losses of $11,507,947 and used cash in operations of $7,400,547.

In light of our cash balance as of December 31, 2024, we will need to raise additional capital in order to fund operations through the next twelve months.

Since inception, we have incurred losses and expect

to continue to incur losses for the foreseeable future.

As of December 31, 2025, we had an accumulated deficit of $110,465,509 and had

$762,365 in cash.

To date we have funded our operations through private and public sales of our securities and will need to raise additional

funds in order to execute on our business plan, fully commercialize our TAEUS technology, and generate revenues.

In 2026, we implemented

cost reduction measures, including a reduction in headcount and prioritization of development activities over clinical ones, to extend

our operating runway and focus resources on product improvements and regulatory strategy for our TAEUS liver application.

These actions

are expected to impact the timing of certain development activities, including delaying the timing of a future De Novo submission to the

FDA relating to our TAEUS liver application.

Additionally, in March 2026, we announced that the Board had initiated a process to evaluate

a range of strategic alternatives including, but not limited to strategic investments, mergers, business combinations, in-licensing or

collaboration arrangements, asset sales, or sale or merger of the Company.

If we are unable to obtain adequate financing

or financings in the near term or if the strategic alternatives review process does not result in any transaction or other strategic outcome,

we will be forced to undertake additional measures, which may include materially curtailing or eliminating our operations, or undergoing

restructuring or insolvency proceedings.

We need additional capital to allow us to continue

to execute our clinical trials and commercialization plans through 2026 and beyond.

We are considering potential financing options that

may be available to us, including sales of our common stock through our at-the-market sales program (the “ATM Program”) with

Lucid Capital Markets, LLC, which are limited due to registration statement rules relating to public float.

Except for the ATM Program,

we have no commitments to obtain any additional funds, and there can be no assurance funds will be available in sufficient amounts or

on acceptable terms.

If we are unable to obtain sufficient additional financing in a timely fashion and on terms acceptable to us, our

financial condition and results of operations may be materially adversely affected and we may not be able to continue operations or execute

our stated commercialization plan.

The consolidated financial statements included

in this Form 10-K have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the

settlement of liabilities and commitments in the normal course of business.

As reflected in the accompanying consolidated financial statements,

during the year ended December 31, 2025, we incurred net losses of $7,027,410 and used cash in operations of $5,182,558.

In light of our

cash balance as of December 31, 2025, we will need to raise additional capital in order to fund operations through the next twelve months.

The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Operating Activities

During the year ended December 31, 2024, we used $7,400,547 of cash in operating activities primarily as a result of our net loss of $11,507,947, offset by a non-cash charge for inventory reserve of $2,387,134, share-based compensation of $571,924, the net effect of warrants of $799,284 (which includes warrant expense of $7,323,685, changes in fair value of warrant liability of ($3,447,737) and gain on settlement on warrant exercise of ($3,076,664)), amortization of right of use assets of 159,683, depreciation expense of $46,489, fixed assets write-off of $8,808, and net changes in operating assets and liabilities of $134,079.

During the year ended December 31, 2023, we used $9,548,775 of cash in operating activities primarily as a result of our net loss of $10,060,250, offset by share-based compensation of $996,430, amortization of right of use assets of $151,725, inventory reserve of $138,045, depreciation expense of $123,726, fixed assets write-off of $24,868, and net changes in operating assets and liabilities of $(923,319).

During the year ended December 31, 2025, we used

$5,182,558 of cash in operating activities primarily as a result of our net loss of $7,027,410, offset by share-based compensation of

$329,409, change in fair value of warrant liability of ($319,537), fair value of vested advisory warrants of $665,030, digital asset staking

compensation of ($5,121), changes in fair value of digital assets of $995,161, amortization of right of use assets of $113,249, depreciation

expense of $44,045, and net changes in operating assets and liabilities of $22,616.

During the year ended December 31, 2024, we used

$7,400,547 of cash in operating activities primarily as a result of our net loss of $11,507,947, offset by a non-cash charge for inventory

reserve of $2,387,134, share-based compensation of $571,924, the net effect of warrants of $799,284 (which includes warrant expense of

$7,323,685, changes in fair value of warrant liability of ($3,447,737) and gain on settlement on warrant exercise of ($3,076,664)), amortization

of right of use assets of $159,683, depreciation expense of $46,489, fixed assets write-off of $8,808, and net changes in operating assets

and liabilities of $134,079.

Investing Activities

During the year ended December 31, 2024, we used $16,000 in investing activities related to purchases of fixed assets, and received $3,204 in proceeds from sale of fixed assets.

During the year ended December 31, 2023, we used $33,844 in investing activities related to purchases of fixed assets, and received $9,163 in proceeds from sale of fixed assets.

During the year ended December 31, 2025, we used

$17,280 in investing activities related to purchases of fixed assets, and purchased $3,000,000 of digital intangible assets.

During the year ended December 31, 2024, we used

$16,000 in investing activities related to purchases of fixed assets, and received $3,204 in proceeds from sale of fixed assets.

Financing Activities

During the year ended December 31, 2024, our financing activities provided $1,148,470 in proceeds from issuances of common stock and warrants, $6,688,930 in proceeds from warrant issuances and exercises.

During the year ended December 31, 2025, our financing

activities provided $4,514,482 in proceeds from fundraising activities, $1,218,241 in proceeds from issuances of common stock for cash.

During the year ended December 31, 2024, our financing

activities provided $1,148,470 in proceeds from issuances of common stock and warrants, $6,688,930 in proceeds from warrant issuances

and exercises.

We also used $28,484 to repay a loan from TD Bank under the Canadian Emergency Business Account.

During the year ended December 31, 2023, our financing activities provided $6,483,393 in proceeds from issuances of common stock and warrants, $1,014,859 in proceeds from warrant exercises and $20,053 in proceeds from issuances of common stock warrants.

Long-Term Liquidity

We have not completed the commercialization of any of our TAEUS technology platform applications.

We expect to continue to incur significant expenses for the foreseeable future.

We anticipate that our expenses may increase as we:

We have not completed the commercialization of

any of our TAEUS technology platform applications.

To the extent we continue the development and commercialization of our TAEUS technology,

we would expect to continue to incur significant expenses for the foreseeable future.

We anticipate that our expenses may increase as

● advance the engineering design and development of our TAEUS technology;

● acquire parts and build finished goods inventory of the TAEUS system;

complete regulatory filings required for marketing approval in the United States, including clinical studies to support our planned De Novo application with the FDA;

● complete regulatory filings required for marketing approval in the United States, including clinical studies to support our planned

De Novo application with the FDA;

● seek to hire a sales and marketing team to market and sell our products;

● advance development of other applications;

add operational, financial and management information systems and personnel, including personnel to support our product development, planned commercialization efforts and our operation as a public company.

It is possible that we will not achieve the progress that we expect because the actual costs and timing of completing the development and regulatory approvals for a new medical device are difficult to predict and are subject to substantial risks and delays.

We have no committed external sources of funds except for the February 2024 ATM Agreement, the use of which is limited due to registration statement rules relating to public float.

We do not expect that our existing cash will be sufficient for us to complete the commercialization of our TAEUS application or to complete the development of any other TAEUS application and we will need to raise additional capital for those purposes.

As a result, we will need to finance our future cash needs through public or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in the Risk Factors section of this Annual Report on Form 10-K.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Until we can generate a sufficient amount of revenue from our TAEUS platform applications, if ever, we expect to finance future cash needs through public or private equity offerings, debt financings or corporate collaborations and licensing arrangements.

Additional funds may not be available when we need them on terms that are acceptable to us, or at all.

If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our research or development programs or our commercialization efforts or perhaps even cease the operation of our business.

To the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional dilution, and debt financing, if available, may involve restrictive covenants.

To the extent that we raise additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to our technologies or applications or grant licenses on terms that may not be favorable to us.

We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.

● add operational, financial and management information systems and personnel, including personnel to support our product development,

planned commercialization efforts and our operation as a public company.

It is possible that we will not achieve the progress

that we expect because the actual costs and timing of completing the development and regulatory approvals for a new medical device are

difficult to predict and are subject to substantial risks and delays.

We have no committed external sources of funds except for the ATM

Program, the use of which is limited due to registration statement rules relating to public float.

We do not expect that our existing

cash will be sufficient for us to complete the commercialization of our TAEUS application or to complete the development of any other

TAEUS application and we will need to raise additional capital for those purposes.

As a result, we will need to finance our future cash

needs through public or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing

alternatives.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a

forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including

the factors discussed in the Risk Factors section of this Annual Report on Form 10-K.

We have based this estimate on assumptions that

may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Until we can generate a sufficient amount of revenue

from our TAEUS platform applications, if ever, we expect to finance future cash needs through public or private equity offerings, debt

financings or corporate collaborations and licensing arrangements.

Additional funds may not be available when we need them on terms that

are acceptable to us, or at all.

If adequate funds are not available, we may be required to cease the operation of our business.

extent that we raise additional funds by issuing equity securities, our stockholders may experience additional dilution, and debt financing,

if available, may involve restrictive covenants.

To the extent that we raise additional funds through collaborations and licensing arrangements,

it may be necessary to relinquish some rights to our technologies or applications or grant licenses on terms that may not be favorable

We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate

need for additional capital at that time.

As described above under “Near-Term Liquidity and Capital Resources,” the Board

initiated a process to review strategic alternatives for the Company.

Off-Balance Sheet Transactions

At December 31, 2024, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

At December 31, 2025, the Company did not have any transactions, obligations

or relationships that could be considered off-balance sheet arrangements.

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-K

Item 7. Management’s Discussion and Analysis