What changed in this filing

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Item 1. Financial Statements

2023-11-20 compared with 2023-09-22 · 466 added, 443 removed, 993 unchanged (48% of the section changed)

1 unchanged sentence

Balance Sheet

September 30,

Current Assets:

17 unchanged sentences

Notes payable

Notes payable - convertible notes, net of unamortized discount of $ 4,421,424 and $ 3,327,213 as of June 30, 2023 and December 31, 2022

Notes payable - convertible notes, net of unamortized discount of $ 0 and $ 3,327,213 as of September 30, 2023 and December 31, 2022

Customer deposits

Share liabilities

Derivative liabilities

7 unchanged sentences

Commitments and contingencies (see note 14)

Stockholders’ Deficit

Stockholders’ Equity (Deficit)

Convertible Series A Preferred stock, $ 0.001 par value;

1,000,000 shares authorized;

506,637 issued and outstanding as of June 30, 2023 and December 31, 2022

0 issued and outstanding as of September 30, 2023 and 506,637 as of December 31, 2022

Convertible Series Seed Preferred Stock, $ 0.001 par value;

120,000 shares authorized;

115,477 issued and outstanding as of June 30, 2023 and December 31, 2022

0 issued and outstanding as of September, 2023 and 115,477 as of December 31, 2022

Preferred Stock, value

1 unchanged sentence

100,000,000 shares authorized;

1,963,322 issued and outstanding as of June 30, 2023 and December 31, 2022

5,149,340 issued and outstanding as of September, 2023 and 1,963,322 as of December 31, 2022

Additional paid in capital

1 unchanged sentence

( 43,244,806 )

( 33,931,428 )

Total stockholders’ deficit

( 9,982,635 )

Total stockholders’ equity (deficit)

( 1,061,087 )

Total Liabilities and Stockholders’ Deficit

The accompanying notes

are an integral part of these unaudited condensed financial statements.

Total Liabilities and Stockholders’ Equity (Deficit)

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

Statements of Operations (Unaudited)

For the Three Months Ended

For the Six Months Ended

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Cost of Goods Sold

6 unchanged sentences

( 5,041,290 )

( 2,386,012 )

Other Income (Expense):

Financing charges

( 1,473,892 )

Interest expense

Interest income

Change in fair value of warrant liability

2 unchanged sentences

( 1,331,030 )

( 4,881,622 )

Extinguishment of debt liabilities

( 1,058,062 )

Other expense

11 unchanged sentences

Basic and diluted

The accompanying notes are an integral part of these unaudited

condensed financial statements.

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

of Stockholders’ Deficit

For the Three and Six Months Ended June 30, 2022

the Three and Nine Months Ended September 30, 2022

Convertible Series A Preferred Stock

1 unchanged sentence

Additional Paid In

Stockholder’s

Stockholder’s Equity

Balances, January 1, 2022

14 unchanged sentences

$ ( 3,487,242 )

For the Three and Six Months Ended June 30, 2023

Stock based compensation

Common stock issued upon signing of notes payable

( 2,079,682 )

Balances, September 30, 2022

$ ( 33,917,800 )

$ ( 5,561,409 )

the Three and Nine Months Ended September 30, 2023

Convertible Series A Preferred Stock

1 unchanged sentence

Additional Paid In

Stockholder’s

Stockholder’s Equity

Balance, January 1, 2023

6 unchanged sentences

$ ( 7,747,021 )

Balance, value

( 2,235,614 )

Balances, June 30, 2023

$ ( 38,340,450 )

$ ( 9,982,635 )

Balances, June 30, 2023

$ ( 38,340,450 )

$ ( 9,982,635 )

Balances, value

Common stock issued upon initial public offering, net

Common stock issued upon preferred stock conversion

Common stock issued upon debt conversion

Common stock issued from agreements

$ ( 4,904,356 )

The accompanying notes are an integral part of these unaudited

condensed financial statements.

Balances, September 30, 2023

$ ( 43,244,806 )

$ ( 1,061,087 )

$ ( 43,244,806 )

$ ( 1,061,087 )

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

Statement of Cash Flows (Unaudited)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash Flows from Operating Activities

1 unchanged sentence

$ ( 4,766,433 )

Adjustments to reconcile net loss to net

cash used by operating activities:

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

Amortization of debt discount and issuance cost

2 unchanged sentences

Non-cash lease expense

Non-cash interest expense

Stock based compensation

Extinguishment of debt liability

( 1,129,498 )

Extinguishment of derivative liability

Issuance of common stock for non-cash consideration

Finance charges

Change in fair value of derivative liabilities

Change in fair value of debt liabilities

Change in fair value of warrant liabilities

3 unchanged sentences

Accounts payable

( 1,025,467 )

Accrued expenses

9 unchanged sentences

Cash Flows from Financing Activities

Proceeds from issuance of common stock, net of issuance costs

Offering costs in advance of sale of common stock

( 2,417,185 )

Principal payments on notes payable

2 unchanged sentences

Proceeds from convertible notes, net of fees

Offering costs paid

Net cash used in financing activities

Net Decrease in Cash and Cash Equivalents

Net cash provided (used) by financing activities

Net Increase (decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Period

6 unchanged sentences

Fair value of derivative liabilities of conversion feature from convertible notes

The accompanying notes are an integral part of these unaudited

condensed financial statements.

Relative fair value of shares issued with convertible notes

Deferred offering costs in accounts payable

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

Basis of Presentation, Organization and Other Matters

22 unchanged sentences

All share amounts have been retroactively restated to give effect to these changes.

August 11, 2023, the Company consummated the IPO, conducted on a firm commitment basis, pursuant to which it sold 1,098,667 shares of

its common stock at a price of $ 6.00 per share, resulting in gross proceeds to the Company of approximately $ 6.6 million.

to the Company, after deducting underwriting discounts and commissions and offering expenses paid by the Company, were approximately

$ 5.5 million.

All shares sold in our IPO were registered pursuant to a registration statement on Form S-1 (File No.

333- 269179), as

amended, declared effective by the SEC on August 8, 2023.

Alexander Capital L.P.

(“Alexander”) acted as sole book-running

manager for the offering and Spartan Capital Securities, LLC acted as co-manager for the offering.

The underwriters did not exercise

their option to purchase up to an additional 164,801 shares of common stock.

The Company paid the underwriters an underwriting discount

of seven percent ( 7 %) of the amount raised in the offering.

In addition, we also paid the underwriters a non-accountable expense allowance

in the amount of 1 % (such 8 % in commissions and fees amounted to a total of $ 527 thousand) at closing, as well as $ 175 thousand for the

reimbursement of certain of the underwriters’ expenses.

Additionally, as partial consideration for services rendered in connection

with the offering, the Company issued Alexander unregistered warrants to purchase an aggregate of 65,921 shares of Company common stock,

representing 6.0 % of the aggregate shares sold in the offering.

The warrants have an initial exercise price of $ 7.20 per share (equal

to 120 % of the offering price per share), have a term of five years from the commencement of sales in the offering, and are exercisable

Company is headquartered in Carmel, Indiana.

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is presented to assist in understanding the Company’s financial statements.

The financial statements and notes are representations of the Company’s management, who is responsible for their integrity and

The financial statements and notes are representations of the Company’s management, who are responsible for their integrity and

These accounting policies conform to U.S.

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Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

did not hold any cash equivalents as of June 30, 2023 and December 31, 2022.

did not hold any cash equivalents as of September 30, 2023 and December 31, 2022.

Accounts Receivable

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based on the best available facts and circumstances, to record an allowance to reduce the receivable to the amount expected to be collected.

The allowance for doubtful accounts was $ 15,989 and $ 31,275 at June 30, 2023 and December 31, 2022, respectively.

The allowance for doubtful accounts was $ 24,895 and $ 31,275 at September 30, 2023 and December 31, 2022, respectively.

The Company recorded

bad debt expense for the three and six months ended June 30, 2023 of $ 7,714 and $ 3,927 , respectively, and for the three and six months

ended June 30, 2022 of $ 21,307 and $ 29,580 , respectively.

credit losses for the three and nine months ended September 30, 2023 of $ 9,996 and $ 13,923 , respectively, and for the three and nine

months ended September 30, 2022 of $ 13,216 and $ 42,795 , respectively.

deposits consists of billings, payments, and returned devices from clients in advance of revenue recognition.

1 unchanged sentence

the customer deposits over the next year.

As of June 30, 2023, and December 31, 2022, the Company had customer deposits of $ 61,317 and

$ 59,174 , respectively.

As of September 30, 2023, and December 31, 2022, the Company had customer deposits of $ 68,972

and $ 59,174 , respectively.

are valued at the lower of cost or net realizable value.

Cost is determined using the weighted average method.

The inventory is

comprised of finished medical devices on hand.

Certain components within the devices have an expiration date that are removed from

current inventory and expensed at the date of expiration.

For the six months ended June 30, 2023 there was no expired inventory, and

for the year ended December 31, 2022, there was $ 10,026 .

The inventory is comprised

of finished medical devices on hand.

Certain components within the devices have an expiration date that are removed from current inventory

and expensed at the date of expiration.

There was no expired inventory for the three and nine months ended September 30, 2023 and September

Offering Costs

2 unchanged sentences

the underwriting discounts and commissions, will be charged to additional paid in capital upon completion of the proposed public offering.

As of June 30, 2023 and December 31, 2022, the Company had deferred offering costs of $ 941,143 and $ 736,736 , respectively.

As of September 30, 2023, and December 31, 2022, the Company had deferred offering costs of $ 0 and $ 736,736 , respectively.

and Equipment

5 unchanged sentences

Classification

Leasehold Improvements

and Equipment

expense was $ 7,589 and $ 14,817 during the three and six months ended June 30, 2023, respectively, and was $ 7,830 and $ 15,725 during the

three and six months ended June 30, 2022, respectively.

expense was $ 7,609 and $ 22,426 during the three and nine months ended September 30, 2023, respectively, and was $ 7,868 and $ 23,592 during

the three and nine months ended September 30, 2022, respectively.

and Development

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Company entered into an agreement for a trademark related to the Company’s name on July 11, 2022.

The agreement called for an initial

payment of $ 10,000 upon execution of the agreement.

A second and final payment of $ 40,000 is contingent upon the completion of the Company’s

planned initial public offering.

The second payment has not been recorded in these financial statements.

The trademark does not have

a determinate life and therefore the cost is not being amortized.

See Note 17 Subsequent Events.

The agreement called for an

initial payment of $ 10,000

upon execution of the agreement.

A second and final payment of $ 40,000

was contingent upon the completion of the Company’s planned initial public offering.

The second payment has been accrued and

is recorded in accounts payable and intangible assets on the balance sheet.

The trademark does not have a determinate life and therefore the cost is not being

Company entered into an option agreement on April 12, 2023 to enter into a royalty-bearing licensing agreement to bring the optionor’s

3 unchanged sentences

not have a determinate life and therefore the cost is not being amortized.

review intangible assets for impairment annually or when events or circumstances indicate that their carrying amount may not be

During the three and six months ended June 30, 2023 and 2022, the Company recorded no impairment charges for intangible

expense was $ 2,621 and $ 5,243 during the three and six months ended June 30, 2023, respectively, and was $ 485 and $ 970 during the three

and six months ended June 30, 2022, respectively.

review intangible assets for impairment annually or when events or circumstances indicate that their carrying amount may not be recoverable.

During the three and nine months ended September 30, 2023 and 2022, the Company recorded no impairment charges for intangible assets.

expense was $ 2,621 and $ 7,864 during the three and nine months ended September 30, 2023, respectively, and was $ 485 and $ 1,455 during

the three and nine months ended September 30, 2022, respectively.

Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in

13 unchanged sentences

on the results of management’s evaluation, adoption of the rules did not have a material effect on the Company’s financial

Further, no interest or penalties have been accrued or charged to expense as of June 30, 2023 and 2022 and for the six months

Further, no interest or penalties have been accrued or charged to expense as of September 30, 2023 and 2022 and for the nine

months then ended.

Company’s income tax returns are subject to examination by the taxing authorities until the expiration of the related statutes

1 unchanged sentence

In general, the federal and state income tax return have a three-year statute of limitations.

of June 30, 2023, the following tax years are subject to examination:

of September 30, 2023, the following tax years are subject to examination:

Years for Filed Returns

costs are expensed as incurred and amounted to $ 24,986 and $ 32,986 for the three and six months ended June 30, 2023, respectively, and

$ 3,300 and $ 11,600 for the three and six months ended June 30, 2022, respectively.

costs are expensed as incurred and amounted to $ 21,730 and $ 54,716 for the three and nine months ended September 30, 2023, respectively,

and $ 3,300 and $ 14,900 for the three and nine months ended September 30, 2022, respectively.

Company accounts for derivative financial instruments as either equity or liabilities in accordance with ASC Topic 815, Derivatives

3 unchanged sentences

on the date of issuance.

Derivative instrument liabilities are classified in the balance sheets as current or non-current

based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Derivative instrument liabilities are classified in the balance sheets as current or non-current based on whether

or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

evaluates all of the Company’s financial instruments, including issued Warrants to purchase its Class A common stock, to determine

2 unchanged sentences

at the end of each reporting period.

Company utilizes a Monte Carlo simulation model for warrants that have an option to convert at a variable number of shares to

compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date.

inputs utilized in the application of the Monte Carlo model included a starting stock price, an expected remaining term of each

warrant as of the valuation date, estimated volatility, drift, and a risk-free rate.

The Company records the change in the fair

value of the derivative as other income or expense in the statements of operations.

Company utilizes a Monte Carlo simulation model for warrants that have an option to convert at a variable number of shares to compute

the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date.

The inputs utilized

in the application of the Monte Carlo model included a starting stock price, an expected remaining term of each warrant as of the valuation

date, estimated volatility, drift, and a risk-free rate.

The Company records the change in the fair value of the derivative as other

income or expense in the statements of operations.

Value Measurements

19 unchanged sentences

Company’s Level 1 assets/liabilities include cash, accounts receivable, accounts payable, prepaids, and other current assets.

believes the estimated fair value of these accounts on June 30, 2023 approximate their carrying value as reflected in the balance sheets

due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

believes the estimated fair value of these accounts on September 30, 2023 approximate their carrying value as reflected in the balance

sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

Company’s Level 3 assets/liabilities include derivative and warrant liabilities.

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following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on

recurring basis as of June 30, 2023 and December 31, 2022:

recurring basis as of September 30, 2023 and December 31, 2022:

of Unobservable Inputs for Level 3 Assets and Liabilities

1 unchanged sentence

As of Fair Value

September 30 2023

December 31 2022

5 unchanged sentences

Project simulated cash flows

were no transfers between any of the levels during the three and six months ended June 30, 2023 and year ended December 31, 2022.

addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company’s assets and liabilities

were no transfers between any of the levels during the three and nine months ended September 30, 2023 and year ended December 31, 2022.

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company’s assets and liabilities

are also subject to nonrecurring fair value measurements.

Generally, assets are recorded at fair value on a nonrecurring basis as a

result of impairment charges.

Generally, assets are recorded at fair value on a nonrecurring basis as a result

of impairment charges.

and Diluted Net Income (Loss) per Share

1 unchanged sentence

number of shares of common stock outstanding during the period.

Basic weighted average shares for the quarter ended June 30, 2023 includes

40,000 vested warrants to purchase common shares.

As the shares underlying these warrants can be purchased for little to no consideration

($ 0.01 per share exercise price), they are included in the computation of basic earnings per share.

Diluted EPS is computed by dividing

net income (loss) by the weighted average of all potentially dilutive shares of common stock that were outstanding during the periods

Preferred stock dividends (not declared or paid) were $ 2,569,405 and $ 2,190,102 as of June 30, 2023 and December 31, 2022,

Basic weighted average shares for the quarter ended September 30, 2023

includes 40,000 vested warrants to purchase common shares.

As the shares underlying these warrants can be purchased for little to no

consideration ($ 0.01 per share exercise price), they are included in the computation of basic earnings per share.

Diluted EPS is computed

by dividing net income (loss) by the weighted average of all potentially dilutive shares of common stock that were outstanding during

the periods presented.

Preferred stock dividends (not declared or paid) were $ 0 and $ 2,190,102 as of September 30, 2023 and December

31, 2022, respectively.

4 unchanged sentences

In periods when losses are reported, which

is the case for June 30, 2023 and 2022 presented in these financial statements, the weighted-average number of common shares outstanding

is the case for September 30, 2023 and 2022 presented in these financial statements, the weighted-average number of common shares outstanding

excludes common stock equivalents because their inclusion would be anti-dilutive.

Company had the following potentially dilutive common stock equivalents at June 30, 2023 and 2022:

Company had the following potentially dilutive common stock equivalents at September 30, 2023 and 2022:

of Dilutive Common Stock Equivalents

3 unchanged sentences

Preferred Stock

Convertible Bridge Debt

following table shows the calculation of the basic and diluted net loss per share and the effect of preferred stock dividends.

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

$ ( 4,904,356 )

8 unchanged sentences

( 5,338,531 )

Weighted-average shares of common stock

outstanding - basic and diluted

Weighted-average shares of common stock outstanding - basic

Basic and diluted net loss per share

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that collection of the amount due is assured.

following table disaggregates the Company’s revenue based on the customer’s location by state for the three months ended June

following table disaggregates the Company’s revenue based on the customer’s location by state for the three months ended

September 30:

of Disaggregation of Revenue

1 unchanged sentence

All other states

The following table disaggregates the Company’s revenue based on the customer’s location by state for

the six months ended June 30:

following table disaggregates the Company’s revenue based on the customer’s location by state for the nine months ended September

All other states

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consist of unsecured amounts due from customers.

As of June 30, 2023, accounts receivable from two customers with balances due in excess

of 10 % of total accounts receivable were approximately 13 %, and 13 %, respectively.

As of December 31, 2022, accounts receivable from three

customers with balances due in excess of 10 % of total accounts receivable was 23 %, 15 %, and 12 %, respectively.

table below sets forth the Company’s customers that accounted for greater than 10% of its revenues for the three months ended

June 30, 2023 and 2022, respectively.

As of September 30, 2023, accounts receivable from two customers with balances due in

excess of 10 % of total accounts receivable were approximately 15 %, and 14 %, respectively.

As of December 31, 2022, accounts receivable

from three customers with balances due in excess of 10 % of total accounts receivable was 23 %, 15 %, and 12 %, respectively.

table below sets forth the Company’s customers that accounted for greater than 10 % of its revenues for the three months ended September

30, 2023 and 2022, respectively.

of Customers Accounted Revenues

Percentage of Sales

The table below sets forth the Company’s customers that accounted for greater than 10% of its revenues for

the six months ended June 30, 2023 and 2022, respectively.

Percentage of Sales

table below sets forth the Company’s customers that accounted for greater than 10 % of its revenues for the nine months ended September

30, 2023 and 2022, respectively.

time to time, the Company’s bank balances may exceed the FDIC limit of $ 250,000 ;

1 unchanged sentence

a material impact on the financial condition.

At June 30, 2023 and December 31, 2022, the Company’s uninsured cash balances totaled

At September 30, 2023 and December 31, 2022, the Company’s uninsured cash balances

totaled $ 261,239 , and $ 0 , respectively.

have incurred losses since inception and have funded our operations primarily with a combination of sales, debt, and the sale of capital

As of June 30, 2023, we had a stockholders’ deficit of approximately $ 10.0 million.

At June 30, 2023, we had short-term

outstanding borrowings of approximately $ 1.5 million, net of discounts of $ 4,421,424 .

As of June 30, 2023, we had cash of approximately

$ 51 thousand and a working capital deficit of approximately $ 11.0 million.

As of September 30, 2023, we had a stockholders’ deficit of approximately $ 1.1 million.

At September 30, 2023, we had short-term

outstanding borrowings of approximately $ 194 thousand.

As of September 30, 2023, we had cash of approximately $ 761 thousand and a working

capital deficit of approximately $ 1.3 million.

August 11, 2023, the Company consummated its initial public offering (the “IPO”), conducted on a firm commitment basis, pursuant

71 unchanged sentences

Since repayment is not assured, the Company provided an allowance for the entire balance of principal and interest as of December 31,

The current allowance is $ 1,128,989 as of June 30, 2023.

The current allowance is $ 1,141,441 as of September 30, 2023.

The current loan balances are as follows:

of Related Party Transactions

June 30, 2023

Shareholder 1

Shareholder 2

Allowance for Collection Risk

for Collection Risk

( 1,012,800 )

December 31, 2022

Shareholder 1

Shareholder 2

Allowance for Collection Risk

for Collection Risk

( 1,012,800 )

3 unchanged sentences

of Related Party Loans payable to shareholder

June 30, 2023

Shareholder 1

Other Convertibles

December 31, 2022

Shareholder 1

Other Convertibles

Company’s Chief Financial Officer, John Seale, CPA.CITP, is contracted for services through RBSK Partners PC (RBSK).

2 unchanged sentences

continuous basis.

Fees paid to RBSK for services were $ 64,931 and $ 47,895 for the six months ended June 30, 2023 and 2022, respectively.

The Company owed RBSK for open invoices of $ 196,293 and $ 68,142 that are included in accounts payable as of June 30, 2023 and December

Fees paid to RBSK for services were $ 304,158 and $ 78,593 for the nine months ended September 30, 2023 and 2022, respectively.

The Company owed RBSK for open invoices of $ 29,831 and $ 68,142 that are included in accounts payable as of September 30, 2023 and December

31, 2022, respectively.

2 unchanged sentences

of Property And Equipment

Furniture and fixtures

Computer hardware

Leasehold improvements

Machinery and equipment

Total property and equipment

and equipment

property and equipment

accumulated depreciation

Property and equipment, net

expense was $ 7,589 and $ 7,830

for the three months ended June 30, 2023 and June 30, 2022, respectively, and was $ 14,817 and $ 15,725 for the six months ended June 30, 2023 and June 30, 2022, respectively.

and equipment, net

expense was $ 7,609 and $ 7,868 for the three months ended September 30, 2023 and September 30, 2022, respectively, and was $ 22,426 and

$ 23,592 for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Intangible Assets

1 unchanged sentence

of Intangible Assets

Software Implementation

Total intangible assets

Implementation

intangible assets

accumulated amortization

Intangible assets, net

expense was $ 2,621

for the three months ended June 30, 2023 and June 30, 2022, respectively, and was $ 5,243 and $ 970 for the six months ended June 30, 2023 and June 30, 2022, respectively.

and $ 485 for the three months ended September 30, 2023 and September 30, 2022, respectively, and was $ 7,864

for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Accrued Expenses

1 unchanged sentence

of Accrued Expenses

Employee benefits

Capital raise fees

Property taxes

Related party interest

Total accrued expenses

party interest

accrued expenses

Notes Payable

5 unchanged sentences

the Company receiving a financing in the minimum of $ 3,000,000 .

On August 14, 2023, The Company used proceeds from the initial public

offering to pay the promissory note back in full, including interest in the amount of $ 52,858 .

Company borrowed $ 250,000 on December 16, 2021, from Channel Partners Capital.

10 unchanged sentences

The principal

outstanding at June 30, 2023 was $ 235,586 .

The Company believes that the advancement of additional funds is a minor modification to the

terms of the existing loan since the difference in present value of the cash flows under the terms of the new loan is less than 10% of

the present value of the remaining cash flows under the terms of the original loan.

As a result, the modification was accounted for as

a modification of debt.

outstanding at September 30, 2023 was $ 194,248 .

The Company believes that the advancement of additional funds is a minor modification

to the terms of the existing loan since the difference in present value of the cash flows under the terms of the new loan is less than

10% of the present value of the remaining cash flows under the terms of the original loan.

As a result, the modification was accounted

for as a modification of debt.

lender was granted and assigned a continuing security interest in all the Company’s personal property assets including, but not

2 unchanged sentences

future minimum principal payments to be paid in 2023 and 2024 are $ 46,187 and $ 148,062 , respectively.

March to June of 2023 the Company conducted multiple closings of a private placement offering to accredited investors for aggregate gross

March to July of 2023 the Company conducted multiple closings of a private placement offering to accredited investors for aggregate gross

principal of $ 6,066,667 or net proceeds of $ 4,995,750 .

notes consisted of (a) a Convertible Promissory Note that accrues interest at 12 %

that can be paid in cash or PIK.

The notes automatically convert into common shares at a 30 %

discount to the IPO.

The notes mature on the sooner of the six-month anniversary date from issuance or a successful IPO on primary exchange

(b) a five-year warrant to purchase common stock equal to fifty percent (50%) of the shares into which the 2023 Convertible

Notes can be converted into at issuance.

The warrants have a strike price at a 25 %

premium to the Conversion Price subject to anti-dilution, issuable on a pro rata basis at each funding.

notes consisted of (a) a Convertible Promissory Note that accrues interest at 12 % that can be paid in cash or PIK.

The notes automatically

convert into common shares at a 30 % discount to the IPO.

The notes mature on the sooner of the six-month anniversary date from issuance

or a successful IPO on primary exchange in the U.S.

(b) a five-year warrant to purchase common stock equal to fifty percent (50%) of

the shares into which the 2023 Convertible Notes can be converted into at issuance .

The warrants have a strike price at a 25 % premium

to the Conversion Price subject to anti-dilution, issuable on a pro rata basis at each funding.

facilitators to the notes Signature Bank and Alexander Capital, L.P.

will receive certain fees.

have received certain fees.

Signature Bank received a $ 6,000

escrow fee from the first round of funding.

Alexander Capital, L.P.

has and will continue to receive (i) a cash commission of ten

percent (10%) of the proceeds raised in the offering from investors introduced to the Company by the Placement Agent;

granting to the Placement Agent of a warrant for the purchase of a number of shares of Common Stock equal to 6% of the number of

Underlying Securities;

and (iii) the other matters set forth in the engagement letter between the Company and the Placement Agent

dated April 13, 2022.

As of June 30, 2023, Alexander Capital, L.P., has received fees totaling $ 338,250

which is recorded in debt discounts on the balance sheet and will receive 94,370

warrants which are recorded at fair value in warrant liability and debt discounts on the balance sheet.

Capital, L.P.

has received (i) a cash commission of ten percent (10%) of the proceeds raised in the offering from investors introduced

to the Company by the Placement Agent;

(ii) the granting to the Placement Agent of a warrant for the purchase of a number of shares of

Common Stock equal to 6% of the number of Underlying Securities;

and (iii) the other matters set forth in the engagement letter between

the Company and the Placement Agent dated April 13, 2022.

As of September 30, 2023, Alexander Capital, L.P., has received fees totaling

which were recorded in debt discounts and received

warrants which were recorded at fair value in

warrant liability and debt discounts on the balance sheet.

After the closing of the initial public offering on August 14, 2023, The Company

converted the notes payable plus $ 226,391

in interest into 1,498,332

shares of common stock.

The shares were to be

issued at a discounted price of $ 4.20 per share resulting in a loss to the Company which is recorded in extinguishment of derivative

As of September 30, 2023, 3,973 shares of converted stock from this raise have not been issued and are recorded at fair

value on the balance sheet in share liability.

See Note 12 Share Liabilities

the year ended December 31, 2022, the Company conducted multiple closings of a private placement offering to accredited investors for

aggregate gross amount of $ 3,555,556 and net proceeds of $ 3,070,000 .

2022 Convertible Notes signed from June 3, 2022 to November 30, 2022 have aggregate gross amounts of $ 3,333,333 and net proceeds of $ 2,870,000

and consisted of (a) a Convertible Promissory Note that accrues interest at the greater of Prime rate plus 8.5% or 12%.

The notes convert

into common shares at the lower of $ 9.44 or 30 % discount to the price per share of any subsequent offering.

2022 Convertible Notes signed from June 3, 2022 to November 30, 2022 have aggregate gross amounts of $ 3,333,333

and net proceeds of $ 2,870,000

and consisted of (a) a

Convertible Promissory Note that accrues interest at the greater of Prime rate plus 8.5% or 12% .

The notes convert into common shares at the lower of $ 9.44

discount to the price per share of any subsequent offering.

The notes mature on the one -year

anniversary date from issuance.

(b) a five-year warrant to purchase common stock equal to one hundred percent (100%) of the shares into

which the 2022 Convertible Notes can be converted into at issuance.

The warrants have an exercise price at the lower of $ 11.80 per share

or a 12.5 % discount to the price per share of any subsequent offering.

the principal amount of these notes, at a value per share equal to the conversion price.

The 35,318 shares of common stock issued to

investors had a relative fair value of $ 4,789 .

five-year warrant to purchase common stock equal to one hundred percent (100%) of the shares into which the 2022 Convertible Notes can

be converted into at issuance .

The warrants have

an exercise price at the lower of $ 11.80

per share or a 12.5 %

discount to the price per share of any subsequent offering.

of the principal amount of these notes, at a value per share equal to the conversion price.

shares of common stock issued to inves tors

had a relative fair value of $ 4,789 .

Due to the second prong of the conversion equation after the IPO an additional 44,048 commitment shares are to be issued.

are to be issued at a discounted price of $ 4.20

per share resulting in a loss to the Company

which is recorded in extinguishment of derivative liabilities.

As of September 30, 2023, these shares have not been issued and are recorded

at fair value on the balance sheet in share liability.

See Note 12 Share Liabilities

an additional incentive for entering into the convertible note offering, the Company offered an original issue discount equal to 10 %

of the principal amount of the notes.

The Company also paid $ 130,000

to law firms related to the convertible note offering.

The Company also paid $ 130,000 to law firms related to the convertible note offering.

March of 2023, the Company used borrowings from the 2023 convertible notes to pay the principal balance of some of the notes totaling,

1 unchanged sentence

Upon payment, the terms for the remaining balance of those notes were also updated.

The remaining balance accrues interest

The remaining balance accrued interest

at 8 % per annum without maturity or default rights.

1 unchanged sentence

27.5 % discount to the per share offering price in the Company’s initial public offering or $ 4.35 per share.

2022 Convertible Notes signed on December 19, 2022 have aggregate gross proceeds of $ 200,000

or net proceeds of $ 222,222

and consisted of an original issue discount of 10 %

of the principal amount and have an interest rate of 12 %

The notes will mature at the earlier of (i) twelve (12) months from the issue date or (ii) the date upon which the

Company completes a registered public offering of shares of the Company, which encompasses the closing of the IPO.

The notes are

convertible into shares of common stock at the higher of (i) $ 9.44

per share, or (ii) the price per share of common stock issued pursuant to the next registered public offering of shares of the

Company made prior to the conversion of any portion of the note.

After the closing of

the initial public offering on August 14, 2023, the Company converted the notes payable plus $ 173,205 in interest into 107,509 shares

of common stock.

The shares are to be issued at a discounted price of $ 4.35 per share resulting in a loss to the Company which is

recorded in extinguishment of derivative liabilities.

As of September 30, 2023, 107,509 shares of converted stock from this raise have

not been issued and are recorded at fair value on the balance sheet in share liability.

See Note 12 Share Liabilities

remaining investors did not convert their notes and, as such the Company used proceeds from the initial public offering to pay the remaining

promissory notes back in full, including interest in the amount of $ 445,554 .

2022 Convertible Notes signed on December 19, 2022 have aggregate gross proceeds of $ 200,000 or net proceeds of $ 222,222 and consisted

of an original issue discount of 10 % of the principal amount and have an interest rate of 12 % per annum.

The notes will mature at the

earlier of (i) twelve (12) months from the issue date or (ii) the date upon which the Company completes a registered public offering

of shares of the Company, which encompasses the closing of the IPO.

The notes are convertible into shares of common stock at the higher

of (i) $ 9.44 per share, or (ii) the price per share of common stock issued pursuant to the next registered public offering of shares

of the Company made prior to the conversion of any portion of the note.

Interest accrues on the aggregate principal amount (which includes

original issue discount) and is payable on the maturity date, at the Company’s election, in cash or in-kind.

The holders of

the notes are entitled to piggyback registration rights on any registration statement filed by the Company, other than any

registration statement filed on Form S-4 or Form S-8.

The warrants and conversion shares are subject to anti-dilution adjustments

outlined in the Agreement.

The holders of the

notes are entitled to piggyback registration rights on any registration statement filed by the Company, other than any registration statement

filed on Form S-4 or Form S-8.

The warrants and conversion shares are subject to anti-dilution adjustments outlined in the Agreement.

Company has applied ASC 815 and ASC 480, due to the potential for settlement in a variable quantity of shares.

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value of the incentives given to investors totaled $ 11,728,912 .

Since the value of the incentives given to certain investors was in excess of the principal value of the notes, the Company

recognized $ 8,070,952

as debt discount and expensed the remaining $ 2,324,988

as financing fees.

Since the value of the incentives given to certain investors was in excess

of the principal value of the notes, the Company recognized $ 9,403,924 as debt discount and expensed the remaining $ 2,324,988 as financing

The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

As of June 30, 2023, the Company has amortized $ 3,649,528

of the debt discount at effective interest rates ranging from 73.857 %

to 2,149.621 %.

The remaining balance of $ 4,421,424

will be accreted over the remaining life of the notes.

the periods ended June 30, 2023 and December 31, 2022, the Company accrued interest to these convertible notes of $ 289,319

and $ 107,544 ,

respectively, included in accrued expenses on the balance sheet.

On August 14,

2023, The Company amortized the remaining debt discount as the notes were all either paid off or converted pursuant to the initial public

As of September 30, 2023, 1,231,772 shares of converted stock have not been issued and are recorded at fair value

on the balance sheet in share liability.

See Note 12 Share Liabilities

the periods ended September 30, 2023 and December 31, 2022, the Company accrued interest to these convertible notes of $ 399,597 and $ 107,544 ,

respectively, which was paid or converted into common stock as mentioned above.

Company’s leases are comprised of operating leases for office space.

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The Company did not have any finance

leases at June 30, 2023 and December 31, 2022.

leases at September 30, 2023 and December 31, 2022.

Company had three leases primarily consisting of office space in Versailles and Carmel Indiana.

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and real estate taxes, which are recorded as expenses when incurred.

the periods ended June 30, 2023 and December 31, 2022, the Company recognized $ 23,704 and $ 47,571 of operating lease expense, including

the periods ended September 30, 2023 and December 31, 2022, the Company recognized $ 35,678 and $ 47,571 of operating lease expense, including

short-term lease expense and variable lease costs, which are immaterial.

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of Operating Leases

June 30, 2023

December 31, 2022

Operating lease right-of-use assets

Other current liabilities

Operating lease liabilities

Weighted-average remaining lease term (in years)

Weighted-average discount rate

of June 30, 2023, the maturities of the Company’s operating lease liabilities were as follows:

lease right-of-use assets

current liabilities

lease liabilities

Weighted-average

remaining lease term (in years)

Weighted-average

discount rate

of September 30, 2023, the maturities of the Company’s operating lease liabilities were as follows:

of Maturities Operating Lease Liabilities

Total lease payments

lease payments

imputed interest

Total present value of lease payments

present value of lease payments

Common Stock and Warrants

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connection with a bridge loan, the Company issued a warrant to a shareholder, Brian Hannasch, on September 18, 2018.

allows the holder to purchase common stock from the Company at a share price of $ 4.38

The number of shares was based on a formula tied to the final amount of loans made by the holder of $ 375,000 , multiplied by 150 %, and divided by $ 70.03 .

The number of shares

based on this formula is 12,852 .

The warrant allows

the holder to purchase common stock from the Company at a share price of $ 4.38 per share.

The number of shares was based on a formula

tied to the final amount of loans made by the holder of $ 375,000 , multiplied by 150 %, and divided by $ 70.03 .

The number of shares based

on this formula is 12,852 .

The warrant contains certain rights in the event of liquidation, merger, or consolidation of the Company.

If the fair market value

of one share is greater than the warrant price, the holder may elect to receive a number of shares equal to the value of the

If the exercise is in connection with the sale of the Company, the holder may, at its option, condition its exercise of the

warrant upon the consummation of such transaction.

The warrant expires on September

18, 2028 and can be exercisable either in whole or from time to time in part prior to the expiration date.

If the fair market value of one share is greater than the warrant price, the holder may elect to receive a number of shares equal to

the value of the warrant.

If the exercise is in connection with the sale of the Company, the holder may, at its option, condition its

exercise of the warrant upon the consummation of such transaction.

The warrant expires on September 18, 2028 and can be exercisable either

in whole or from time to time in part prior to the expiration date.

Company issued a second warrant to Brian Hannasch on September 6, 2019, under similar terms.

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This warrant was pre-funded in the amount of $ 2,734,340 .

The warrant allows the holder to purchase 289,779

shares of Series A Preferred Stock at $ 9.44

per share and is subject to adjustment for certain equity events.

The warrant contains certain rights in the event of liquidation,

merger, or consolidation of the Company.

There will be no additional purchase price for the Warrants.

In the event that all

outstanding shares of Series A Preferred Stock are converted, automatically or by action of the holders thereof, into Common Stock,

including, without limitation, in connection with the Company’s initial, underwritten public offering and sale of its Common

Stock pursuant to an effective registration statement under the Act, then from and after the date on which

all outstanding shares of Series A Preferred Stock have been so converted, this Warrant shall be exercisable for such number of

shares of Common Stock into which the Warrant Shares would have been converted had the Warrant Shares been outstanding on the date

of such conversion, and the Exercise Price shall equal the Exercise Price in effect as of immediately prior to such conversion

divided by the number of shares of Common Stock into which one share of Series A Preferred Stock would have been converted, all

subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.

allows the holder to purchase 289,779 shares of Series A Preferred Stock at $ 9.44 per share and is subject to adjustment for certain

equity events.

The warrant contains certain rights in the event of liquidation, merger, or consolidation of the Company.

There will be

no additional purchase price for the Warrants.

In the event that all outstanding shares of Series A Preferred Stock are converted, automatically

or by action of the holders thereof, into Common Stock, including, without limitation, in connection with the Company’s initial,

underwritten public offering and sale of its Common Stock pursuant to an effective registration statement under the Act, then from and

after the date on which all outstanding shares of Series A Preferred Stock have been so converted, this Warrant shall be exercisable

for such number of shares of Common Stock into which the Warrant Shares would have been converted had the Warrant Shares been outstanding

on the date of such conversion, and the Exercise Price shall equal the Exercise Price in effect as of immediately prior to such conversion

divided by the number of shares of Common Stock into which one share of Series A Preferred Stock would have been converted, all subject

to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.

On August 14, 2023 the warrant

was converted to be exercisable for 289,779 shares of common stock as described above.

2022, the Company issued 793,655 five-year warrants to purchase common stock equal to one hundred percent (100%) of the shares into which

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The warrants have an exercise price of $ 5.25 per share.

following is a summary of warrant activity for common stock during the periods ended June 30, 2023 and December 31, 2022:

August 14, 2023, the Company issued 65,921 five-year warrants to purchase common stock pursuant to the agreement with underwriter upon

closing of the Company’s initial public offering.

The warrants have an exercise price of $ 7.20 per share.

following is a summary of warrant activity for common stock during the periods ended September 30, 2023 and December 31, 2022:

of Warrant Activity for Common Stock

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Weighted-Avg.

Contractual Life

Outstanding as of December 31, 2021

as of December 31, 2021

Cancelled/Expired

Outstanding as of December 31, 2022

as of December 31, 2022

Prefunded Warrants

Cancelled/Expired

Outstanding as of June 30, 2023

following is a summary of warrant activity for preferred stock during the periods ended June 30, 2023 and December 31, 2022:

as of September 30, 2023

following is a summary of warrant activity for preferred stock during the periods ended September 30, 2023 and December 31, 2022:

of Warrant Activity for Preferred Stock

Weighted-Avg.

Preferred Stock

Outstanding as of December 31, 2021

as of December 31, 2021

Cancelled/Expired

Outstanding as of December 31, 2022

as of December 31, 2022

Cancelled/Expired

Outstanding as of June 30, 2023

following table summarizes the Company’s warrants outstanding and exercisable as of June 30, 2023.

to Common Stock Warrant

as of September 30, 2023

following table summarizes the Company’s warrants outstanding and exercisable as of September 30, 2023.

of Warrants outstanding and Exercisable

Brian Hannasch W-01

September 18, 2028

Brian Hannasch W-02

September 6, 2029

Masimo Corporation PSA-01

Hannasch W-01

Hannasch W-02

Corporation PSA-01

Convertible Notes

Company is a party to two investment banking and advisory agreements with a consulting firm engaged in connection with listing our

common stock for trading on NYSE.

Pursuant to the first advisory agreement, dated March 3, 2022, the Company agreed to pay the

consulting firm a monthly consulting fee of $ 5,000

and a final payment of $ 50,000

upon a successful NYSE listing, and, also upon such listing, to issue the consulting firm shares of our common stock representing 1.5 %

of our outstanding shares after giving effect to the initial public offering and to issue the consulting firm five-year warrants to

purchase shares of our common stock representing 2.0 %

of our outstanding shares, after giving effect to the initial public offering, on a fully-diluted basis with an exercise price per

share representing the public offering price per share.

Pursuant to the second advisory agreement with consulting firm, dated June

20, 2022, and amended December 20, 2022, the Company agreed to pay fees in the aggregate of up to $ 136,166

for advice in connection with communication and other related matters leading up to, and in connection with, the initial public offering and to

issue the consulting firm 25,000

shares of common stock upon a successful NYSE listing.

The Company agreed to piggyback registration rights with respect to all

shares issued to the consulting firm under both advisory agreements, including shares issuable upon exercise of the warrants.

Company evaluated the agreements and determined that the shares will not be recorded and valued until the performance condition is

Underwriter’s

Company is a party to two investment banking and advisory agreements with a consulting firm engaged in connection with listing our common

stock for trading on NYSE.

Pursuant to the first advisory agreement, dated March 3, 2022, the Company agreed to pay the consulting firm

a monthly consulting fee of $ 5,000 and a final payment of $ 50,000 upon a successful NYSE listing, and, also upon such listing, to issue

the consulting firm shares of our common stock representing 1.5 % of our outstanding shares after giving effect to the initial public

offering and to issue the consulting firm five-year warrants to purchase shares of our common stock representing 2.0 % of our outstanding

shares, after giving effect to the initial public offering, on a fully-diluted basis with an exercise price per share representing the

public offering price per share.

Pursuant to the second advisory agreement with consulting firm, dated June 20, 2022, and amended December

20, 2022, the Company agreed to pay fees in the aggregate of up to $ 136,166 for advice in connection with communication and other related

matters leading up to, and in connection with, the initial public offering and to issue the consulting firm 125,000 shares of common

stock upon a successful NYSE listing.

The Company agreed to piggyback registration rights with respect to all shares issued to the consulting

firm under both advisory agreements, including shares issuable upon exercise of the warrants.

The Company evaluated the agreements and

determined that the shares will not be recorded and valued until the performance condition is satisfied.

Preferred Stock

Company has authorized 1,120,000 shares of preferred stock of which 1,000,000 has been designated Series A Preferred and 120,000 has

been designated Series Seed Preferred, of which 506,637 shares of Series A Preferred and 115,477 shares of Series Seed Preferred are

issued and outstanding as of June 30, 2023 and December 31, 2022.

The Company has authorized 1,120,000

shares of preferred stock of which 1,000,000

has been designated Series A Preferred and 120,000

has been designated Series Seed Preferred, of which 0

and 506,637 shares of Series A Preferred and 0 and 115,477

shares of Series Seed Preferred are issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

aggregate purchase price of the Series A Preferred Stock was $ 9,321,165 , of which $ 7,692,664 was comprised of cash and the remaining

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valuation and at a 120 % share premium.

As of June 30, 2023 and December 31, 2022, there were 97,702 common shares converted into 115,477

As of September 30, 2023 and December 31, 2022, there were 97,702 common shares converted into

115,477 shares of Series Seed Preferred shares that have no par value and are outstanding.

stock has all converted pursuant to the initial public offering.

See Note 17 Subsequent Events.

As of September 30, 2023, 1,076,242 shares of converted preferred stockhave not been issued and are recorded at fair

value on the balance sheet in share liability.

See Note 12 Share Liabilities

Stock Options and Awards

following is a summary of stock option activity for the periods ended June 30, 2023 and December 31, 2022:

following is a summary of stock option activity for the periods ended September 30, 2023 and December 31, 2022:

of Stock Option Activity

Weighted Avg.

Contractual Life

Weighted Avg.

Exercise Price

Intrinsic Value

Outstanding as of December 31, 2021

as of December 31, 2021

Cancelled/Expired

Outstanding as of December 31, 2022

as of December 31, 2022

Cancelled/Expired

Outstanding as of June 30, 2023

Vested and Exercisable as of June 30, 2023

as of September 30, 2023

and Exercisable as of September 30, 2023

compensation expense is classified in the Company’s statements of operations as general and administrative expense.

were $ 0 and $ 24,121 for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, there was no unrecognized compensation

expense related to unvested options granted under the Company’s share-based compensation plans.

were $ 0 and $ 27,319 for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, there was no unrecognized

compensation expense related to unvested options granted under the Company’s share-based compensation plans.

Share Liabilities

As of September 30, 2023, the

Company had not issued 1,231,772 shares of its common stock, representing a total amount of $ 934,256 , due to administrative delays related

to the initial public offering (IPO) that took place on August 11, 2023.

These shares are classified as share liabilities as they have

been authorized but not yet issued as of the reporting date.

The Company expects to issue

these shares to the respective shareholders as soon as the administrative delays are resolved.

These shares will be recorded as issued

and outstanding upon their issuance, and the corresponding share liability will be reclassified to shareholders’ equity.

The administrative delays are

not expected to have any material impact on the financial position or results of operations of the Company.

Management’s best estimate is that the administrative delays will be resolved

within the next fiscal quarter, at which point the share liabilities will be eliminated, and the shares will be issued.

However, the timing

of resolution is subject to various factors, and actual timing may vary.

Share liability consists of the following:

of Share Liability

Series A Shares Unissued

Series Seed Shares Unissued

Shares Unissued

Warrant Liabilities

Company has evaluated financial instruments arising from an adjustable exercise price for warrants that are issued and outstanding as

of June 30, 2023 and December 31, 2022.

of September 30, 2023 and December 31, 2022.

Company utilizes a Monte Carlo simulation model for warrants that have an option to convert at a variable number of shares to compute

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The Company’s remaining term is based on the remaining contractual maturity of the warrants.

following are the changes in the warrant liabilities during the quarter ended June 30, 2023 and year ended December 31, 2022.

following are the changes in the warrant liabilities during the quarter ended September 30, 2023 and year ended December 31, 2022.

of Changes in Warrant Liabilities

Warrant liabilities as of January 1, 2022

Changes in fair value of warrant liabilities

Warrant liabilities as of January 1, 2023

Changes in fair value of warrant liabilities

Warrant liabilities as of March 31, 2023

Changes in fair value of warrant liabilities

Warrant liabilities as of June 30, 2023

liabilities as of January 1, 2022

in fair value of Warrant liabilities

liabilities as of January 1, 2023

in fair value of Warrant liabilities

liabilities as of March 31, 2023

in fair value of Warrant liabilities

liabilities as of June 30, 2023

in fair value of Warrant liabilities

Extinguishment

of Warrant liabilities

( 3,721,007 )

liabilities as of September 30, 2023

Derivative Liabilities

Company has identified derivative instruments arising from the conversion shares discussed in the Convertible Notes section of Note 7

as of June 30, 2023 and December 31, 2022.

as of September 30, 2023 and December 31, 2022.

Company utilizes a Monte Carlo simulation model for commitment shares that have an option to convert at a variable number of shares to

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The Company’s remaining term is based on the remaining contractual maturity of the warrants.

following are the changes in the warrant liabilities during the quarter ended June 30, 2023 and year ended December 31, 2022.

following are the changes in the warrant liabilities during the quarter ended September 30, 2023 and year ended December 31, 2022.

of Changes in Derivative Liabilities

Derivative liabilities as of January 1, 2022

Changes in fair value of Derivative liabilities

Derivative liabilities as of January 1, 2023

Changes in fair value of Derivative liabilities

Extinguishment of Derivative liabilities

liabilities as of January 1, 2022

in fair value of Derivative liabilities

liabilities as of January 1, 2023

in fair value of Derivative liabilities

Extinguishment

of Derivative liabilities

( 1,129,498 )

Derivative liabilities as of March 31, 2023

Changes in fair value of Derivative liabilities

Derivative liabilities as of June 30, 2023

liabilities as of March 31, 2023

in fair value of Derivative liabilities

liabilities as of June 30, 2023

in fair value of Derivative liabilities

Extinguishment

of Derivative liabilities

( 2,783,029 )

liabilities as of September 30, 2023

Retirement Plan

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There was an expense of $ 3,657 and

$ 8,554 for six months ended June 30, 2023 and 2022, respectively.

$ 13,058 for nine months ended September 30, 2023 and 2022, respectively.

Commitments and Contingencies

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termination notice to the other party within 180 days prior to the end of the then-current term.

July 11, 2022, the Company entered into an agreement for a trademark related to the Company’s name.

An initial payment of $ 10,000

was paid upon execution of the agreement.

A second and final payment of $ 40,000 is contingent upon the completion of the Company’s

planned initial public offering.

The second payment has not been recorded in these financial statements.

See Note 17 Subsequent Events.

Company entered into an agreement for a trademark related to the Company’s name on July 11, 2022.

The agreement called for an

initial payment of $ 10,000

upon execution of the agreement.

A second and final payment of $ 40,000

was contingent upon the completion of the Company’s planned initial public offering.

The second payment has been accrued and

is recorded in accounts payable and intangible assets on the balance sheet.

The trademark

does not have a determinate life and therefore the cost is not being amortized.

Employment Agreements

10 unchanged sentences

That accrued amount for backpay was $ 417,390 and has been recorded and is reflected in the

financial statements at June 30, 2023.

financial statements at September 30, 2023.

are seven key employees that have stock options of the Company totaling 2,477,424 shares.

7 unchanged sentences

There are additional provisions to cover termination and change of control events.

April 2023, the Company amended the employee agreements to, among other things, clarify that the special one-time incentive payment

and the deferred bonus are contingent upon the effective date of the planned initial public offering.

The amendment also sets

forth a process for executives to exercise the stock options in accordance with the terms of the stock option agreement in effect as

of the date of the employment agreement and to clarify that there is no modification to the stock option agreements.

April 2023, the Company amended the employee agreements to, among other things, clarify that the special one-time incentive payment and

the deferred bonus are contingent upon the effective date of the planned initial public offering.

The amendment also sets forth a process

for executives to exercise the stock options in accordance with the terms of the stock option agreement in effect as of the date of the

employment agreement and to clarify that there is no modification to the stock option agreements.

Company has recorded the backpay portion of the incentive bonus noted above.

The balance of the incentive bonuses of $ 694,056

and the special options bonuses of $ 14.82

million that are contingent upon a successful

initial public offering have not been record ed.

The balance of the incentive bonuses of $ 694,056 and the

special options bonuses of $ 14.82 million were contingent upon a successful initial public offering.

The incentive bonuses have been

paid in full while the special options bonuses will be recorded when paid.

time to time in the normal course of our business operations, we may become subject to litigation that may result in liability material

9 unchanged sentences

any claims could adversely affect our business, financial condition and the results of our operations.

February 6, 2019, plaintiff Ritu Bharnbhani, M.D., initiated a lawsuit against Innovative Health Solutions, Inc.

February 6, 2019, plaintiff Ritu Bhambhani, M.D., initiated a lawsuit against Innovative Health Solutions, Inc.

and others in the United

18 unchanged sentences

the appeal and that it would address those arguments at the same time that it addressed the substantive merits of the case.

5, 2023, the parties have submitted their appellate briefs to the Fourth Circuit.

3, 2023, the parties had submitted their appellate briefs to the Fourth Circuit.

No date has been set for either oral argument or for

16 unchanged sentences

damages when Medicare administrative contractors declined to pay plaintiffs for their use of the device.

September 28, 2022, the Company has filed a motion to dismiss all claims, but no ruling has been issued.

No date had been established

for the court to rule on that motion.

While it is too early to predict the ultimate outcome of this matter, we believe we have meritorious

defenses and intend to defend this matter vigorously.

September 28, 2022, the Company has filed a motion to dismiss all claims.

On May 25, 2023, the Court issued an Order and a Memorandum

Opinion which dismissed the plaintiffs’ claims related to the RICO Act.

The remining claims are still pending and no trial date has been set for

While it is too early to predict the ultimate outcome of

this matter, we believe the Company has meritorious defenses and intend to defend this matter vigorously.

July 25, 2023, the court entered a scheduling order that set the deadline to file dispositive motions as March 11, 2024.

No trial date

has been scheduled.

Counsel for NeurAxis and counsel for the Plaintiffs

in both of the above-described cases have agreed to try to resolve the disputes in both cases through an independent third-party mediator.

No date has been set yet for that mediation.

Health Benefit Plan

9 unchanged sentences

the stop loss policy.

The Company paid premiums of $ 117,122 and $ 90,752 for the six months ended June 30, 2023 and 2022, respectively.

The Company paid premiums of $ 175,616 and $ 136,428 for the nine months ended September 30, 2023 and 2022, respectively.

Company is responsible for the monthly premiums, as established, and nothing further.

6 unchanged sentences

Company evaluated subsequent events through the date of issuance.

The following changes occurred subsequent to June 30, 2023:

Borrowing – The Company borrowed additional funds subsequent to June 30, 2023, and up through the date of this report.

July 15, 2023 the Company conducted multiple closings of a private placement offering to accredited investors for aggregate gross principal

of $ 1,333,333 or net proceeds of $ 1,080,000 .

notes consisted of (a) a Convertible Promissory Note that accrues interest at 12 % that can be paid in cash or PIK.

The notes automatically

convert into common shares at a 30 % discount to the IPO.

The notes mature on the sooner of the six-month anniversary date from issuance

or a successful IPO on primary exchange in the U.S.

(b) a five-year warrant to purchase common stock equal to fifty percent (50%) of

the shares into which the 2023 Convertible Notes can be converted into at issuance.

The warrants have a strike price at a 25 % premium

to the Conversion Price subject to anti-dilution, issuable on a pro rata basis at each funding.

facilitators to the notes Alexander Capital, L.P.

will receive certain fees.

Alexander Capital, L.P.

has and will continue to receive

(i) a cash commission of ten percent (10%) of the proceeds raised in the offering from investors introduced to the Company by the Placement

(ii) the granting to the Placement Agent of a warrant for the purchase of a number of shares of Common Stock equal to 6% of the

number of Underlying Securities;

and (iii) the other matters set forth in the engagement letter between the Company and the Placement

Agent dated April 13, 2022.

At the close of the round, Alexander Capital, L.P., has received $ 458,250 and 120,235 warrants.

Public Offering - On August 11, 2023, the Company consummated the IPO, conducted on a firm commitment basis, pursuant to which

it sold 1,098,667 shares of its common stock at a price of $ 6.00 per share, resulting in gross proceeds to the Company of

approximately $ 6.6 million.

Net proceeds to the Company, after deducting underwriting discounts and commissions and offering

expenses paid by the Company, were approximately $ 6.1 million.

All shares sold in our IPO were registered pursuant to a registration

statement on Form S-1 (File No.

333- 269179), as amended, declared effective by the SEC on August 8, 2023.

Alexander Capital L.P.

(“Alexander”) acted as sole book-running manager for the offering and Spartan Capital Securities, LLC acted as

co-manager for the offering.

The underwriters did not exercise their option to

purchase up to an additional 164,801 shares of common

stock The Company paid the underwriters an underwriting discount of seven percent ( 7 %) of the amount raised in the

In addition, we also paid the underwriters a non-accountable expense allowance in the amount of 1 % (such 8 % in commissions

and fees amounted to a total of $ 527 thousand)

at closing, as well as $ 175 thousand

for the reimbursement of certain of the underwriters’ expenses.

Additionally, as partial consideration for services rendered

in connection with the offering, the Company issued Alexander unregistered warrants to purchase an aggregate of 65,921 shares

of Company common stock, representing 6.0 %

of the aggregate shares sold in the offering.

The warrants have an initial exercise price of $ 7.20 per

share (equal to 120 %

of the offering price per share), have a term of five

years from the commencement of sales in the

offering, and are exercisable at any time.

- The Company entered into an agreement for a trademark related to the Company’s name on July 11, 2022.

The agreement called

for an initial payment of $ 10,000 upon execution of the agreement.

A second and final payment of $ 40,000 was contingent upon the completion

of the Company’s planned initial public offering.

The second payment was recognized and recorded as of the date of the IPO

subsequent to these financial statements.

The trademark does not have a determinate life and therefore the cost is not being amortized.

Debt Conversion – Pursuant to the IPO, all the convertible debt including interest from 2022 and 2023 was

either converted into common stock or paid back.

$ 6,760,708 of principal and interest was converted into 1,605,841 shares of common stock

at the exercise price of $ 4.20 per share.

During August 2023, $ 737,453 of principal and interest was repaid in full.

These actions extinguished

the remaining derivative liabilities, warrant liabilities, and debt discount.

Stock Conversion – Masimo Corporation, being the requisite holder of our outstanding Series A Preferred Stock and Series Seed

Preferred Stock delivered a consent, dated December 22, 2022, to automatically convert all shares of preferred stock into shares of common

stock upon consummation of the initial public offering.

As such, upon closing of the IPO, all Series A Preferred

Stock and Series Seed Preferred Stock was converted into 1,244,228 shares of common stock.

The Series A Preferred Stock was converted

before any dividends were declared or paid.

Employment Agreements – On May 4, 2023, the Company amended the Executive Employment Agreements dated August 9, 2022 to

state that the deferred bonuses and one-time incentive bonuses will be contingent upon the public offering.

As such, upon closing of

the IPO, the one-time inventive payments totaling $ 1.1

million became due immediately.

The closing of the IPO also triggered the deferred bonus program to exercise stock options granted

The Company will give each employee a cash reimbursement to exercise their options.

cash reimbursement will be in an amount equal to (i) the aggregate of the strike price or exercise price of all Stock Options, as

defined hereinafter plus (ii) a tax gross-up payment on the Aggregate Strike Price reasonably calculated by the Company at the

highest marginal rates so that after payment of all ordinary income taxes on such Aggregate Strike Price, there remains an amount

sufficient to pay such ordinary income taxes.

The cash reimbursement will be issued 20% equally during the years 2024 –

The employee must exercise the options on or before the annual deferral bonus payment date to receive the bonus.

are a total of 1,238,712

options pertaining to these agreements with an exercise price of $ 6.94 .

The following changes occurred subsequent to September 30, 2023:

B Preferred Stock – The Company signed an agreement on November 8, 2023 with an investor to sell shares of Series B Preferred Stock.

The aggregate purchase price of $ 3,000,000 for 1,260,504 shares is payable by the investor to the Company in fifteen equal monthly installments

of $ 200,000 each.

The first installment is due on January 10, 2024, with subsequent installments payable on or before the tenth day of

each succeeding month.

All payments are to be made by wire transfer of immediately available funds to an account of the Company as designated

in writing by the Company to the Investor.

Company shall use the proceeds from the issuance of the Series B Preferred Stock solely for the Company’s working capital and general

corporate purposes.

The Company shall not use any of such proceeds to pay any dividends or distributions or to pay or advance any funds

to any of its officers, directors, or affiliates.

The Company is using the investment to support and accelerate the Company’s sales

and marketing efforts.

Between October 1, 2023 and November 20, 2023, the

Company issued 113,693 of the previously unissued shares recorded in share liability.

The remaining 1,118,079 shares will be issued during

the fourth quarter of 2023.

See Note 12 Share Liability.

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