What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-09 compared with 2024-05-20 · 112 added, 76 removed, 102 unchanged (65% of the section changed)

21 unchanged sentences

our inception, we have incurred significant operating losses.

Our net loss was $2,120,651 and $2,173,410 for the three months ended March

31, 2024 and 2023, respectively.

Our auditors have expressed substantial doubt about our ability to continue as a going concern in their

audit opinion.

We expect to incur significant expenses and operating losses for the foreseeable future as we continue to pursue widespread

insurance coverage of our IB-Stim device and seek FDA clearance of our device for other indications.

There are a number of milestones

and conditions that we must satisfy before we will be able to generate sufficient revenue to fund our operations, including FDA clearance

of our IB-Stim device to treat future indications.

Our net loss was $2,917,710 and $2,235,614 for the three months ended June

30, 2024 and 2023, respectively, and $5,038,361 and $4,409,022 for the six months ended June 30, 2024 and 2023, respectively.

30, 2024, we had an accumulated deficit of $5,258,382.

Our auditors have expressed substantial doubt about our ability to continue as

a going concern in their audit opinion.

We expect to incur significant expenses and operating losses for the foreseeable future as we

continue to pursue widespread insurance coverage of our IB-Stim device and seek FDA clearance of our device for other indications.

are a number of milestones and conditions that we must satisfy before we will be able to generate sufficient revenue to fund our operations,

including FDA clearance of our IB-Stim device to treat future indications.

Affecting our Business and Results of Operations

35 unchanged sentences

write it off.

We had no expired inventory for the three months ended March 31, 2024 and 2023.

Expired inventory has not been material

to our results, averaging 1% or less of revenue over the last four years.

We have a fixed-price contract with the manufacturer of our

IB-Stim device to produce the device.

We expect production costs to remain relatively constant and only nominal inventory expirations

in the foreseeable future.

We had no expired inventory for the three and six months ended June 30, 2024 and 2023.

Expired inventory has not been material to our results.

We have a fixed-price

contract with the manufacturer of our IB-Stim device to produce the device.

We expect production costs to remain relatively constant

and only nominal inventory expirations in the foreseeable future.

core selling expenses primarily consist of commissions and shipping costs.

7 unchanged sentences

of Operations

following table presents our statements of operations for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

Cost of goods sold

Selling expenses

Research and development

General and administrative

Operating loss

Other (expense) income, net:

Financing charges

Interest expense

Change in fair value of warrant liability

Change in fair value of derivative financial instruments

Amortization of debt discount and issuance cost

Extinguishment of debt liabilities

following table presents our statements of operations for the three and six months ended June 30, 2024 and 2023, respectively:

Months Ended June 30,

of goods sold

and development

and administrative

(expense) income:

in fair value of warrant liability

in fair value of derivative financial instruments

of debt discount and issuance costs

Extinguishment

of debt liabilities

other expense, net

Total other (expense) income, net

$ (2,917,710 )

$ (2,235,614 )

sales declined $158,475, or 19.7%, to $646,635 for the three months ended March 31, 2024 due to (i) management’s focus on gaining

further insurance coverage for our products and capital funding and (ii) fewer shipments to certain customers as they transition to the

insurance reimbursement process which requires alignment with physician protocols, billing and coding, partially offset by growth in

our patient assistance program that provides discounts to patients without insurance coverage.

$ (5,038,361 )

$ (4,409,022 )

sales decreased $34,521, or 5.3%, from $646,021 for the three months ended June 30, 2023, to $611,500 for the three months ended June

Net sales decreased $192,996, or 13.3%, from $1,451,131 for the six months ended June 30, 2023, to $1,258,135 for the six months

ended June 30, 2024.

The decreases were primarily due to (i) management’s focus on gaining further insurance coverage for our products

and capital funding and (ii) fewer shipments to certain customers as they transition to the insurance reimbursement process which requires

alignment with physician protocols, billing and coding, partially offset by growth in our financial assistance programs that provide

discounts to patients without insurance coverage.

Profit and Gross Margin

profit declined $137,656, or 19.4%, to $571,554 for the three months ended March 31, 2024 due to lower sales volume, partially

offset by an increase in our gross margin of 30 bps to 88.4% for the three months ended March 31, 2024 from 88.1% for the three

months ended March 31, 2023, due to growth in our patient assistance program at lower discounts to patients without insurance

expenses declined $27,902, or 25.9%, to $80,030 for the three months ended March 31, 2024 due to lower sales volume.

profit decreased $40,166, or 6.9%, from $578,208 for the three months ended June 30, 2023, to $538,042 for the three months ended June

gross margin was 88.0% and 89.5% for the three months ended June 30, 2024 and 2023, respectively.

Gross profit decreased $177,822,

or 13.8%, from $1,287,418 for the six months ended June 30, 2023, to $1,109,596 for the six months ended June 30, 2024;

was 88.2% and 88.7% for the six months ended June 30, 2024 and 2023, respectively.

The decreases were due to (i) lower sales volume to

certain customers as they transition through the full reimbursement insurance process and (ii) lower gross margin due to growth in our

financial assistance programs that are discounted to patients without insurance coverage.

expenses decreased $16,517, or 21.0%, from $78,791 for the three months ended June 30, 2023, to $62,274 for the three months ended June

Selling expenses decreased $44,419, or 23.8%, from $186,723 for the six months ended in the six months ended June 30, 2023,

to $142,304 for the six months ended June 30, 2024.

The decreases were due to lower sales volume.

and Development

and development expense declined $11,227, or 66.8%, to $5,570 for the three months ended March 31, 2024 due to more patient trials conducted

in the three months ended March 31, 2023 as the Company prepared for more FDA submissions.

and development expenses decreased $55,477, or 50.5%, from $109,789 for the three months ended June 30, 2023, to $54,312 for the three

months ended June 30, 2024.

Research and development expenses decreased $66,704, or 52.7%, from $126,586 for the six months ended June

30, 2023 to $59,882 for the six months ended June 30, 2024.

The decreases were due to more patient trials conducted in 2023 as the

company prepared for more FDA submissions.

and Administrative

and administrative expense increased $837,319, or 56.5%, to $2,318,074 for the three months ended March 31, 2024 due to (i)

incremental headcount to build out the market access, sales and finance teams including recruiting costs, (ii) higher legal,

insurance, investor relations and board of director costs as a publicly-held entity that the Company did not incur previously, (iii)

one-time non-cash advisory costs of $50,000, (iv) one-time non-cash stock compensation charges of $237,000 for a hiring grant of

stock and (v) higher advertising costs in order to expand market awareness.

operating loss increased $935,846, or 104.4%, to $1,832,120 for the three months ended March 31, 2024 primarily due to lower sales volume

and higher general and administrative expenses including $287,000 of one-time non-cash charges.

(Expense) Income

expense decreased $988,605, or 77.4%, to $288,531 for the three months ended March 31, 2024 primarily due to (i) the full

conversion of the convertible notes upon the IPO on August 9, 2023 that eliminated any further debt discount, issuance cost, debt

extinguishment and derivative fair valuation net charges and (ii) lower interest expense and issuance cost amortization from a lower debt

burden, partly offset by finance charges incurred to settle a 2023 convertible note dispute.

net loss improved $52,759, or 2.4%, to $2,120,651 for the three months ended March 31, 2024 primarily due to the

elimination of debt discount, issuance cost, debt extinguishment and derivative fair valuation net charges due to conversion of the

convertible notes upon the IPO on August 9, 2023, partly offset by lower sales volume, higher general and administrative expenses

(inclusive of $287,000 of one-time non-cash charges) and the settlement of a 2023 convertible note dispute.

and administrative expenses increased $1,121,119, or 74.4%, from $1,507,169 for the three months ended June 30, 2023, to $2,628,288 for

the three months ended June 30, 2024 primarily due to (i) higher legal, insurance, investor relation and board of director costs as a

publicly held entity that the Company did not incur prior to its IPO, (ii) incremental headcount to build out the market access, sales

and finance teams including recruiting costs, (iii) a severance charge related to the Company’s prior Chief Operating Officer,

(iv) one-time non-cash advisory costs of $105,600, (v) expenses related to the introduction of an annual short-term incentive bonus program,

and (vi) higher advertising costs in order to expand market awareness.

and administrative expenses increased $1,958,439, or 65.5%, from $2,987,923 for the six months ended June 30, 2023, to $4,946,362 for

the six months ended June 30, 2024 primarily due to (i) higher legal, insurance, investor relation and board of director costs as a

publicly held entity that the Company did not incur prior to its IPO, (ii) incremental headcount to build out the market access, sales

and finance teams including recruiting costs, (iii) a severance charge related to the Company’s prior Chief Operating Officer,

(iv) one-time non-cash advisory costs of $155,600, (v) a one-time non-cash stock compensation charge of $227,000 for a hiring grant of

stock, (vi) expenses related to the introduction of an annual short-term incentive bonus program, and (vii) higher advertising costs

in order to expand market awareness.

operating loss increased $1,089,291, or 97.5%, from $1,117,541 for the three months ended June 30, 2023, to $2,206,832 for the three

months ended June 30, 2024.

Our operating loss increased $2,025,138, or 100.6%, from $2,013,814 for the six months ended June 30,

2023, to $4,038,952 for the six months ended June 30, 2024.

The increases were primarily due to lower sales volume, lower gross

margin as the Company’s discounted financial assistance program grows and higher general and administrative

(Expense) Income, Net

expense decreased $407,195, or 36.4%, from $1,118,073 for the three months ended June 30, 2023, to $710,878 for the three months

ended June 30, 2024 primarily due to (i) the full conversion of the convertible notes upon the IPO on August 9, 2023, that

eliminated any further debt discount, issuance cost and fair value derivative valuation net charges and (ii) lower interest expense

and issuance cost amortization from a lower debt burden, partially offset the settlement of certain claims of pre-IPO Series A

Preferred Stock shareholders.

expense decreased $1,395,799, or 58.3%, from $2,395,208 for the six months ended June 30, 2023, to $999,409 for the six months ended

June 30, 2024 primarily due to (i) the full conversion of the convertible notes upon the IPO on August 9, 2023, that eliminated any further

debt discount, issuance cost, debt extinguishment and fair value derivative valuation net charges and (ii) lower interest expense and

issuance cost amortization from a lower debt burden, partially offset by finance charges incurred to settle a 2023 convertible note dispute

and other expense to settle certain claims of pre-IPO Series A Preferred Stock shareholders.

net loss increased $682,096, or 30.5%, from $2,235,614 for the three months ended June 30, 2023, to $2,917,710 for the three months ended

June 30, 2024.

Our net loss increased $629,339, or 14.3%, from $4,409,022 for the six months ended June 30, 2023, to $5,038,361 for the

six months ended June 30, 2024.

The increases were primarily due to (i) higher general and administrative expenses and (ii) the settlements

of a 2023 convertible note dispute and certain pre-IPO Series A Preferred Stock shareholders claims, partially offset

by the elimination of debt discount, issuance costs, debt extinguishment and derivative fair valuation net charges.

and Capital Resources

had cash on hand of $81,752 and $45,463 as March 31, 2024 and 2023, respectively.

had cash on hand of $1,765,274 and $51,440 as June 30, 2024 and 2023, respectively.

We maintained a working capital deficit of $5,482,316

and $8,755,744 as of March 31, 2024 and 2023, respectively.

The increase in working capital was primarily due to (i) the conversion of

notes payable upon the IPO on August 9, 2023 along with the corresponding elimination or reduction of the fair value liability of warrants

and derivatives and (ii) payments of employee bonuses and vendors with proceeds from the IPO.

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

As of March 31, 2024, we had a stockholders’ deficit of $3,184,454 and short-term borrowings of $1,396,175.

and $1,643,058 as of June 30, 2024 and December 31, 2023, respectively.

The decrease in working capital was primarily due to the issuance

of $4,935,000 of convertible notes during the six months ended June 30, 2024, net of cash on hand as of June 30, 2024.

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

capital stock.

As of June 30, 2024, we had a stockholders’ deficit of $5,258,382 and short-term borrowings of $4,767,335, net

of financing fees.

future capital requirements will depend upon many factors, including progress with developing, manufacturing, and marketing our technologies,

18 unchanged sentences

the amount of time our management has to implement our business plan and may delay our anticipated growth plans.

following table summarizes our cash flow from operating, investing and financing activities for the three months ended March 31, 2024

Three Months Ended March 31,

Net cash used in operating activites

following table summarizes our cash flow from operating, investing and financing activities for the six months ended June 30, 2024 and

Six Months Ended June 30,

Net cash used in operating activities

$ (2,947,295 )

$ (1,248,137 )

Net cash used in investing activities

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Activities – Net cash used in operating activities decreased $709,248, or 113.9% for the three months ended March 31, 2024

compared to the three months ended March 31, 2023 primarily due to lower sales volume, higher general and administrative expenses

and payment of past due vendors.

Activities – Net cash used in investing activities increased $7,114, or 93.5%, for the three months ended March 31, 2024

compared to the three months ended March 31, 2023 due to purchases of equipment.

Activities – Net cash provided by financing activities increased $927,790, or 219.7%, for the three months ended March

31, 2024 compared to the three months ended March 31, 2023 primarily due to proceeds from the issuance of convertible notes whereas

the proceeds from convertible notes issued during the three months ended March 31, 2023 were used to repay previously issued notes

Activities – Net cash used in operating activities increased $1,699,158, or 136.1% for the six months ended June 30, 2024 compared

to the six months ended June 30, 2023 primarily due to lower sales volume, higher general and administrative expenses and payments of

past due vendors.

Activities – Net cash used in investing activities increased $10,341, or 79.1%, for the six months ended June 30, 2024

compared to the six months ended June 30, 2023 due to purchases of equipment.

Activities – Net cash provided by financing activities increased $3,598,472, or 339.8%, for the six months ended June 30, 2024

compared to the six months ended June 30, 2023 primarily due to proceeds from the issuance of convertible notes whereas the proceeds

from convertible notes issued during the six months ended June 30, 2023 were used to repay previously issued notes payable.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis