What changed in this filing

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Item 1. Financial Statements

2023-05-15 compared with 2022-11-08 · 435 added, 425 removed, 325 unchanged (73% of the section changed)

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CONSOLIDATED BALANCE SHEETS

OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

OF MARCH 31, 2023 AND DECEMBER 31, 2022

thousands, except share and per share data)

September 30,

receivable, net

expenses and other current assets

current assets

Cash and cash equivalents

Marketable securities

Accounts receivable, net

Prepaid expenses and other current assets

Total current assets

Intangibles, net

Property and equipment, net

Operating lease - right of use asset

LIABILITIES AND STOCKHOLDERS’ EQUITY

and equipment, net

lease - right of use asset

AND STOCKHOLDERS’ EQUITY

expenses and other current liabilities

payable, current portion

lease liability, current portion

current liabilities

Accounts payable

Accrued expenses and other current liabilities

Convertible notes payable

Notes payable, current portion

Warrant liability

Operating lease liability, current portion

Total current liabilities

Long-Term Liabilities:

Operating lease liability, net of current portion

Notes payable, net of current portion

Total long-term liabilities

Total liabilities

Commitments and Contingencies (Note 14)

Preferred Stock, par value $ 0.001 per share, 5,000,000 shares authorized, no shares issued and outstanding

Common Stock, par value $ 0.001 per share, 25,000,000 shares authorized;

5,572,234 shares issued and outstanding as of both September 30, 2022 and December 31, 2021

Additional paid-in capital

Accumulated deficit

lease liability, net of current portion

payable, net of current portion

and Contingencies (Note 15)

Preferred stock,

par value $ 0.001 per share, 5,000,000 shares authorized, no shares issued and outstanding

Common stock, par

value $ 0.001 per share, 25,000,000 shares authorized;

5,614,028 and 5,577,916 shares issued and outstanding as of March 31, 2023

and December 31, 2022, respectively

paid-in capital

NexGel stockholders’ equity

Non-controlling

interest in joint venture

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

liabilities and stockholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

thousands, except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

Revenues, net

Cost of revenues

Gross (loss)/profit

and development

general and administrative

operating expenses

Research and development

Selling, general and administrative

Total operating expenses

Loss from operations

Other expense, net

Interest expense

Loss on debt extinguishment

Warrant modification expense

Debt discount costs

Gain on investments in marketable securities

Changes in fair value of warrant liability

Total other expense, net

Loss before income taxes

Income tax expense

Net loss per common share - basic

Net loss per common share - diluted

Weighted average shares used in computing net loss per common share - basic

Weighted average shares used in computing net loss per common share – diluted

from operations

income (expense)

income (expense), net

on debt extinguishment

in fair value of warrant liability and warrant modification expense

Gain on investment in marketable securities

other income (expense), net

before income taxes

Income attributable to non-controlling interest in joint venture

loss attributable to NexGel stockholders

loss per common share - basic

loss per common share - diluted

average shares used in computing net loss per common share - basic

average shares used in computing net loss per common share – diluted

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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

THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

thousands, except share data)

Stockholders’

Balance, January 1, 2022

Stock-based compensation

Balance, March 31, 2022

Stock-based compensation

Restricted stock vesting

Balance, June 30, 2022

Stock-based compensation

Restricted stock vesting

Balance, September 30, 2022

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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

thousands, except share data)

January 1, 2023

stock vesting

Exercise of warrants

Non-controlling

interest in JV

income (loss)

March 31, 2023

Non- controlling

Stockholders’

Balance, January 1, 2021

Stock-based compensation

Restricted stock vesting

Issuances of common stock, net of issuance costs

Warrants issued for debt issuance

Beneficial conversion and warrant features of convertible debt

Balance, March 31, 2021

Stock-based compensation

Restricted stock vesting

Balance, June 30, 2021

Stock-based compensation

Restricted stock vesting

Beneficial conversion and warrant features of convertible debt

Balance, September 30, 2021

January 1, 2022

income (loss)

March 31, 2022

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Nine Months Ended September 30,

Operating Activities

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

Depreciation and amortization

Changes in ROU asset and operating lease liability

Share-based compensation

Changes in fair value of warrant liability

Amortization of deferred financing costs

Warrant modification expense

Loss on extinguishment of debt

Gain on investments in marketable securities

Forgiveness of debt

Beneficial conversion feature in excess of face value

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

Accounts payable

Accrued expenses and other current liabilities

Deferred revenue

Net Cash Used in Operating Activities

Investing Activities

Investment in marketable securities

Proceeds from sale of marketable securities

Capital expenditures

Net Cash Used in Investing Activities

Financing Activities

Issuance of common stock, net of issuance costs

Proceeds from notes payable

Principal payment of notes payable

Proceeds from notes payable (PPP)

Proceeds from convertible notes

Payment of financing costs

Principal payment on convertible notes

Net Cash Provided by (Used In) Financing Activities

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents – Beginning of period

Cash and Cash Equivalents – End of period

Supplemental Disclosure of Cash Flows Information

Cash paid during the year for:

Supplemental Non-cash Investing and Financing Activities

Fair value of beneficial conversion and warrant features of convertible notes payable

Original issue discounts recognized on convertible notes payable

Warrants issued for debt and equity financing costs

Operating lease, ROU assets and liabilities

THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Months Ended March 31,

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

attributable to non-controlling interest in joint venture

and amortization

in ROU asset and operating lease liability

Gain on investment in marketable securities

in fair value of warrant liability and warrant modification

of deferred financing costs

on extinguishment of debt

in operating assets and liabilities:

expenses and other assets

expenses and other current liabilities

Cash Used in Operating Activities

from sales of marketable securities

Cash Provided by Investing Activities

payment of notes payable

Cash Used in Financing Activities

Decrease in Cash

Cash – Beginning

Disclosure of Cash Flows Information

paid during the year for:

Non-cash Investing and Financing activities

and equipment contributed as capital investment to JV

asset and operating lease liabilities recognized upon consolidation of JV

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

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thousands, except share and per share data)

Description of Business, the Spin-off and Basis of Presentation

Description of Business, Stock Split and Basis of Presentation

(“NexGel” or the “Company”) manufactures high water content, electron beam cross-linked, aqueous polymer

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NexGel has historically served as a contract manufacturer, supplying

our gels to third parties who incorporate them into their own products, and have recently began producing the Company’s own consumer

our gels to third parties who incorporate them into their own products, and has recently began producing the Company’s own consumer

products using our gels focused on proprietary branded products and white label opportunities.

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on November 14, 2019.

condensed consolidated financial statements include the accounts of the Company and its consolidated wholly-owned subsidiary, NexGelRx,

March 1, 2023, the Company acquired a 50 % interest in a newly formed joint venture (“JV”), CG Converting and Packaging,

LLC, with C.G.

Laboratories Inc.

(“CG Labs”) for its converting and packaging business.

The agreement is effective March

As a result of this transaction, the Company owns 50 % of the JV, with the remaining 50 %

held by CG Labs.

November 29, 2021, the Company effected a 1-for-35 reverse stock split of our issued and outstanding common stock (the “Reverse

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of Presentation

accompanying interim unaudited condensed financial statements and footnotes of NexGel have been prepared in accordance with generally

accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions

to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”).

Accordingly, they do not include

all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, these unaudited

consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair

presentation of the results of the interim periods, but are not necessarily indicative of the results of operations to be anticipated

for the full year ending December 31, 2022 .

These financial statements should be read in conjunction with the audited financial

statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

accompanying interim unaudited condensed consolidated financial statements and footnotes of NexGel have been prepared in accordance

with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information

and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”).

they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion

of management, these unaudited consolidated financial statements contain all adjustments, consisting of normal recurring

adjustments, considered necessary for a fair presentation of the results of the interim periods, but are not necessarily

indicative of the results of operations to be anticipated for the full year ending December 31, 2023 .

These consolidated

financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the

Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

of Consolidation

The accompanying

consolidated financial statements include the accounts of the Company and its consolidated wholly-owned subsidiary, NexGelRx, Inc.

the JV (see Note 11).

Going Concern

of September 30, 2022, the Company had a cash balance of $ 1.4 million (including cash equivalents) and $ 6.0 million of marketable securities

of March 31, 2023, the Company had a cash balance of $ 787 thousand (including cash equivalents) and $ 5.0 million of marketable securities

(see Note 3 for details of our marketable securities).

For the nine months ended September 30, 2022, the Company incurred a net loss

of $ 4.1 million and had a net usage of cash in operating activities of $ 2.3 million.

In addition, the Company had a working capital

of $ 7.2 million as of September 30, 2022.

Additionally, we believe we have sufficient cash and marketable securities to operate our business

plan through 2024.

December 27, 2021, the Company sold an aggregate of 2,585,000 units at a price to the public of $ 5.50 per unit (the “Offering”),

each unit consisting of one share of the Company’s common stock, par value $ 0.001 per share (the “Common Stock”), and

a warrant to purchase one share of Common Stock at an exercise price of $ 5.50 per share (the “Warrants”), for net proceeds

of $ 14.2 million.

from the Offering are expected to be used for working capital, new product development and testing, and general business operations.

For the three months ended March 31, 2023, the Company incurred a net loss of $ 814

thousand and had a net usage of cash in operating activities of $ 709 thousand.

In addition, the Company had a working capital of $ 5.8

million as of March 31, 2023.

We believe we have sufficient cash and marketable securities to operate our business plan through 2025.

is exploring new product channel sales in adjacent industries, such as cosmetics, athletic products, and proprietary medical devices.

The Company has increased focused on sales and developing a sales pipeline for potential customers.

This customer base expansion will

enable us to provide financial stability for the foreseeable future, expand our current processes, and position us for long-term shareholder

The Company has increased focus on sales and developing a sales pipeline for potential customers.

This customer base expansion will enable

us to provide financial stability for the foreseeable future, expand our current processes, and position us for long-term shareholder

value creation.

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These estimates and assumptions include

an allowances for doubtful accounts, inventory reserves, deferred taxes, share-based compensation and related valuation allowances and

fair value of long-lived assets.

allowances for doubtful accounts, inventory reserves, deferred taxes, share-based compensation and related valuation allowances and fair

value of long-lived assets.

Actual results could differ from the estimates.

Reclassifications

have reclassified, combined or separately disclosed certain amounts in the prior years’ condensed consolidated financial statements

and accompanying footnotes to conform with the current period’s presentation.

and Cash Equivalents

and cash equivalents is comprised of cash in banks and highly liquid investments, including U.S.

treasury bills purchased with an original

maturity of three months or less.

Cash equivalents consist of investments in money market funds for which the carrying amount approximates

fair value, due to the short maturities of these investments.

is comprised of cash in banks and highly liquid investments, including U.S.

treasury bills purchased with an original maturity of three

months or less as well as investments in money market funds for which the carrying amount approximates fair value, due to the short maturities

of these investments.

Company classifies its marketable securities as held-to-maturity, which include U.S.

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than three months.

These securities are carried at cost.

The total unrecognized gain related to the marketable securities was inconsequential

during the nine months ended September 30, 2022.

These securities are carried at fair value with any change in fair value recorded as an unrealized gain (loss) in

the statement of operations of the year in which such change occurs.

The total unrealized gain related to the marketable securities was

inconsequential during the three months ended March 31, 2023.

Company had the following marketable securities as of March 31, 2023 and December 31, 2022:

of Marketable Securities

September 30, 2022

Marketable Securities

United States treasury bills (due December 29, 2022)

United States treasury bills (due February 23, 2023)

United States treasury bills (due June 15, 2023)

United States treasury bills (due July 13, 2023)

United States treasury bills (due August 10, 2023)

States treasury bills (due February 23, 2023)

States treasury bills (due April 27, 2023)

States treasury bills (due June 15, 2023)

States treasury bills (due July 13, 2023)

States treasury bills (due August 10, 2023)

Receivable, net

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when it is probable that the receivable will not be recovered.

The allowance for doubtful accounts was $ 10 thousand as of September 30,

The allowance for doubtful accounts was $ 19 thousand as of March 31, 2023

and $ 9 thousand as of December 31, 2022.

and Cost of Revenues

and Cost of Goods Sold

is stated at the lower of cost, the value determined by the first-in, first-out method, or net realizable value.

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value of inventory to estimated net realizable value.

balance is made up of raw materials, work-in-progress, and finished goods of $ 285 thousand, $ 87 thousand, and $ 27 thousand on September

30, 2022, respectively, and the balance was made up of raw materials, work-in-progress, and finished goods of $ 266 thousand, $ 0 , and

$ 25 thousand on December 31, 2021, respectively.

Inventory is maintained at the Company’s warehouse and at an Amazon fulfillment

Company produces proprietary branded products and white label opportunities in our manufacturing of consumer products.

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manufacturing, the Company builds its products based on customer orders and immediately ships the products upon completion of the production

“Cost of Revenues” line item in the consolidated statements of operations is comprised of the book value of inventory sold

to customers during the reporting period.

balance is made up of raw materials, work-in-progress, and finished goods.

Inventory is maintained primarily at the Company’s

warehouse and at an Amazon fulfillment center.

“Cost of revenues” line item in the consolidated statements of income is comprised of the book value of inventory sold to

customers during the reporting period.

When circumstances dictate that we use net realizable value as the basis for recording inventory,

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and Handling Revenue and Expense

and handling revenue and expense are included in our consolidated statements of operations in Revenue and Cost of revenues, respectively.

and handling revenue and expense are included in our consolidated statements of operations in revenues and cost of revenues, respectively.

This is primarily through shipping fees incurred in the Amazon marketplace.

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resulting gains and losses are included in the results of operations during the same period.

of Long-Lived Assets

Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison

of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset.

If such assets

are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds

the fair value of the asset.

Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs

and Intangible Assets

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whenever indicators of impairment exist.

The fair value of intangible assets are compared with their carrying values, and an impairment

The fair value of intangible assets is compared with their carrying values, and an impairment

loss would be recognized for the amount by which a carrying amount exceeds its fair value.

Company performed the annual assessment and concluded it is more likely than not that the fair value exceeds the carrying value.

Company performed the annual assessment and concluded it is more likely than not that the fair value exceeds the carrying value and no

impairments were recognized in the year ended December 31, 2022.

Expenses and Other Current Assets

expenses and other current assets is recorded at historical cost and is primarily made up of $ 98

thousand and $ 23

thousand of prepaid insurance, and $ 141

thousand and $ 54

thousand general prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021, respectively.

assets is recorded at historical costs, and as of September 30, 2022 and December 31, 2021, the balance is primarily made up of spare

parts for manufacturing equipment.

Spare parts are stated at cost and are not subject to depreciation, until such time that they are

placed into service and the part that is being replaced is disposed.

expenses and other current assets is recorded at historical cost and is primarily made up of $ 28 thousand and $ 63 thousand of prepaid

insurance, and $ 101 thousand and $ 109 thousand general prepaid expenses and other current assets as of March 31, 2023 and December 31,

2022, respectively.

assets are recorded at historical costs, and as of March 31, 2023 and December 31, 2022, the balance is primarily comprised of spare parts

for manufacturing equipment.

Other assets are not subject to depreciation, until such time that they are placed

into service and the part that is being replaced is disposed.

Value Measurements

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of Fair Value of Financial Assets

September 30, 2022

States treasury bills

December 31, 2022

Marketable securities:

United States treasury bills

to purchase common stock were issued in connection with equity financing raises, which occurred on September 2, 2021, March 11, 2021,

February 3, 2021, December 24, 2020, March 18, 2020, September 10, 2019 and November 6, 2019.

The fair values of the warrants are estimated

as of the date of issuance and again at each period end using a Black-Scholes option valuation model.

At issuance, the fair values of

the warrants are recognized as an equity issuance cost within additional paid-in-capital.

Fair value adjustments to the warrant liability

are recognized in other income (expense) in the statements of operations.

to purchase common stock were issued in connection with equity financing raises, which occurred during 2019 through 2021.

values of the warrants are estimated as of the date of issuance and again at each year end using a Black-Scholes option valuation

At issuance, the fair values of the warrant are recognized as an equity issuance cost within additional paid-in-capital.

value adjustments to the warrant liability are recognized in other income (expense) in the accompanying condensed consolidated

statements of operations.

January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with

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a cumulative-effect adjustment was not required.

Company currently recognizes revenue predominately from three types of revenue, contract manufacturing, custom and white label finished

goods manufacturing and our branded products.

Revenues from manufactured products are recognized at the point where the customer obtains

control of the goods and the Company satisfies its performance obligation, which generally is at the time the customer receives the product.

Company currently recognizes revenue predominately from three types of revenue, contract manufacturing, custom and white label

finished goods manufacturing and our branded products.

Revenues from manufactured and branded products are recognized at the point

where the customer obtains control of the goods and the Company satisfies its performance obligation, which generally is at the time

the customer receives the product.

Company’s customers consist of other life sciences companies and Amazon retail customers.

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Revenue by Sales Type

Three months ending

September 30,

Contract manufacturing

Custom and white label finished goods manufacturing

NexGel branded consumer products

Nine months ending

September 30,

Contract manufacturing

Custom and white label finished goods manufacturing

NexGel branded consumer products

of September 30, 2022 and December 31, 2021, the Company did not have any contract assets or contract liabilities from contracts with

As of September 30, 2022 and December 31, 2021, there were no remaining performance obligations that the Company had not satisfied.

manufacturing

and white label finished goods manufacturing

branded consumer products

of March 31, 2023 and December 31, 2022, the Company did not have any contract assets or contract liabilities from contracts with customers.

As of March 31, 2023 and December 31, 2022, there were no remaining performance obligations that the Company had not satisfied.

Company has four distinct lines of business;

Contract Manufacturing, Custom & White Label, Consumer Branded Products, and Medical

Manufacturing

order rolls of gel (“rollstock”).

The rollstock is shipped to our customers, which they package into finished goods.

Historically,

this has been the Company’s primary source of revenue.

& White Label

products often infuse various ingredients into our base gel to develop unique product offerings to satisfy market demand (e.g.

into the gel for a beauty mask).

The rollstock is converted and packaged into salable units.

The finished goods are shipped to the customer,

who is ultimately responsible for product distribution.

Frequently these products started as development deals, in which the customer

paid the Company a small fee to develop a specific product.

Once completed, the customer places a large order for newly developed product.

Branded Products

products are finished goods marketed and sold directly to the customer by the Company through online and retail channels.

is responsible for sales, marketing, and distribution.

These products carry the Company’s brand names.

Devices are a hybrid business, combining elements of Custom & White Label and Consumer Branded Products.

Medical Devices, which are

not yet marketed, are expected to be distributed through strategic partnerships.

The Company will manufacture and possibly convert/package

the device while the strategic partner brings the product to market.

Small market Medical Devices could be launched by the Company, but

also be offered to a distributor to reach the full scale of the market.

August 28, 2019, the Company adopted the 2019 Long-Term Incentive Plan, as amended (the “2019 Plan”).

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Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

standard is effective for the Company on January 1, 2020.

standard was effective for the Company on January 1, 2020.

The Company early adopted this new standard in the third quarter of 2019 and

it did not have material impact to its consolidated financial statements.

it did not have a material impact to its consolidated financial statements.

taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for

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tax laws and rates.

benefits are recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon

examination by a tax authority and based upon the technical merits of the tax position.

The tax benefit recognized in the consolidated

financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement.

An unrecognized tax benefit, or a portion thereof, is presented in the financial statements as a reduction to a deferred tax asset for

a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the

event the uncertain tax position is disallowed.

842 requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities.

ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s

obligation to make lease payments arising from the leases.

Operating lease ROU assets and operating lease liabilities are recognized

based on the present value and future minimum lease payments over the lease term at commencement date.

As the Company’s leases

do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available at commencement

date in determining the present value of lease payments.

A number of the lease agreements contain options to renew and options to terminate

the leases early.

The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that

are deemed reasonably certain to be exercised.

Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing

operating leases longer than twelve months.

The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances

of accrued and prepaid rent, and unamortized lease incentives provided by lessors.

Operating lease cost is recognized as a single lease

cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses.

Variable lease payments

for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in

facts and circumstances on which the variable lease payments are based occur.

The Company has elected not to separate lease and non-lease

components for all property leases for the purposes of calculating ROU assets and lease liabilities.

Company operates in one business segment as a contract manufacturer of aqueous polymer hydrogels.

As a result, the Company’s operations

are a single reportable segment, which is consistent with the Company’s internal management reporting.

Issued Accounting Standards

time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by us as of the specified

effective date.

Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material

impact on our financial position or results of operations upon adoption.

June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic

time to time, new accounting pronouncements are issued by FASB, or other standard setting

bodies and adopted by us as of the specified effective date.

Unless otherwise discussed, the impact of recently issued standards that

are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

June 2016, FASB issued Accounting Standards Update (“ASU”) 2016-13,

Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

ASU 2016-13 significantly changes the impairment model for most financial

assets and certain other instruments.

ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over

the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans

and other financial instruments.

ASU 2016-13 is effective for the Company’s fiscal year beginning January 1, 2023 and subsequent

interim periods.

The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on the Company’s consolidated

financial statements.

January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment.

ASU 2017-04 simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill

impairment test.

Under the amendments in ASU 2017-04, an entity should (1) perform its annual or interim goodwill impairment test by

comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which

the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed

the total amount of goodwill allocated to that reporting unit.

Additionally, ASU 2017-04 requires any reporting unit with a zero or negative

carrying amount to perform Step 2 of the goodwill impairment test.

We adopted ASU 2017-04 effective January 1, 2021.

December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which simplifies

the accounting for income taxes.

This guidance will be effective for entities for the fiscal years, and interim periods within those

fiscal years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted.

We adopted ASU 2019-12 effective

January 1, 2021 and the adoption of this guidance did not have a material impact on our consolidated financial statements.

ASU 2016-13 significantly changes

the impairment model for most financial assets and certain other instruments.

ASU 2016-13 will require immediate recognition of estimated

credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition

of allowances for credit losses on loans and other financial instruments.

ASU 2016-13 is effective for the Company’s fiscal year

beginning March 1, 2023 and subsequent interim periods.

The Company is currently evaluating the impact the adoption of ASU 2016-13 will

have on the Company’s consolidated financial statements.

Company has one operating lease for a commercial manufacturing facility and administrative offices located in Langhorne, Pennsylvania

that runs through January 2031.

There are two options that can extend the lease term for five years each.

The exercise of the lease options

to renew is solely at the Company’s discretion.

following table presents information about the amount and timing of the liability arising from the Company’s operating lease as

of September 30, 2022 ($ in thousands):

of March 31, 2023 ($ in thousands):

of Future Minimum Lease Payments

Maturity of Lease Liability

of Lease Liability

Total undiscounted operating lease payments

Imputed interest

Present value of operating lease liability

Present value of operating

lease liability

Weighted average remaining lease term

Weighted average discount rate

operating lease expense for the nine months ending September 30, 2022 and 2021 was $ 155 thousand and $ 192 thousand, respectively, and

is recorded in cost of revenues and selling, general and administrative expenses on the statement of operations.

operating lease expense for the three months ending March 31, 2023 and 2022, was $ 65

thousand and $ 61

thousand, respectively, and is recorded in cost of goods sold and selling, general and administrative expenses in the accompanying

condensed consolidated statement of operations.

cash flows information related to leases was as follows ($ in thousands):

1 unchanged sentence

Cash Flows Information Related to Leases

paid for amounts included in the measurement of lease liability:

cash flows from operating lease

Cash paid for amounts included in the measurement

of lease liability:

Operating cash flows from operating

consists of the following ($ in thousands):

Raw materials

Work-in-progress

Finished goods

Inventory, gross

Inventory reserve for excess and slow moving inventory

is maintained at the Company’s warehouse and at an Amazon fulfillment center.

The Company builds its contract manufacturing products

based on customer orders and immediately ships the products upon completion of the production process.

Inventory reserve

for excess and slow moving inventory

is maintained at the Company’s warehouse, an outsourced third-party contract manufacturing vendor, and at Amazon fulfillment centers.

The Company builds its contract manufacturing products based on customer orders and immediately ships the products upon completion of

the production process.

Property and Equipment, Net

1 unchanged sentence

and Equipment

September 30,

Machinery and equipment

Office furniture and equipment

Leasehold improvements

Construction in progress

and equipment

furniture and equipment

Property and equipment, gross

accumulated depreciation and amortization

Property and equipment, net

expense for the nine months ended September 30, 2022 and 2021 was $ 74 thousand and $ 75 thousand, respectively.

and equipment, net

expense for the three months ended March 31, 2023 and 2022 was $ 27 thousand and $ 25 thousand, respectively.

Intangible Assets

following provides a breakdown of identifiable intangible assets as of September 30, 2022 and December 31, 2021 ($ in thousands):

following provides a breakdown of identifiable intangible assets as of March 31, 2023 and December 31, 2022:

of Breakdown of Identifiable Intangible Assets

September 30,

Product/Technology Related

Identifiable intangible assets, gross

intangible assets, gross

Accumulated amortization

Product/Technology related identifiable intangible assets, net

Product/Technology Related

identifiable intangible assets, net

Marketing Related

Customer related intangible asset, gross

Tradename related intangible asset, gross

Accumulated amortization

Marketing related identifiable intangible assets, net

Total identifiable intangible assets, net

connection with the acquisition of Sport Defense in 2020, the Company identified intangible assets of $ 55

thousand representing technology related and customer related intangibles.

These assets are being amortized on a straight-line basis

over their weighted average estimated useful life of 3.7

years and amortization expense amounted to $ 10

thousand for each of the nine months periods ended September 30, 2022 and 2021.

of September 30, 2022, the estimated annual amortization expense for each of the next five fiscal years is as follows ($ in thousands):

Customer related intangible

Tradename related intangible

related identifiable intangible assets, net

Identifiable intangible assets, net

connection with the May 29, 2020 acquisition of Sports Defense, the Company identified intangible assets of $ 55 thousand representing

technology related and customer related intangibles.

These assets are being amortized on a straight-line basis over their weighted average

estimated useful life of 5.7 years and amortization expense amounted to $ 4 thousand and $ 3 thousand for the three months ended March

31, 2023 and 2022, respectively.

of March 31, 2023, the estimated annual amortization expense for each of the next five fiscal years is as follows:

of Estimated Annual Amortization Expense

(reminder of the year)

in thousands):

Accrued Expenses and Other Current Liabilities

1 unchanged sentence

Expenses and Other Current Liabilities

benefits, and incentive compensation

accrued expenses and other current liabilities

connection with the Offering on December 27, 2021, the Company sold an aggregate of 2,585,000 units at a price to the public of

$ 5.50 per unit, each unit consisting of one share of our common stock, and a warrant to purchase one share of our common stock at an

exercise price of $ 5.50

In addition, the Company granted the underwriter with respect to the Offering a 45 -day

option to purchase up to 387,750

additional shares of our common stock, and/or 387,750

additional warrants, to cover over-allotments in connection with the Offering, which the Underwriter partially exercised to purchase 387,750

warrants on December 27, 2021.

January 1, 2021 through March 31, 2021, the Company entered into Securities Purchase Agreements with certain accredited investors whereby

we sold 101,800 shares of our common stock at a price per share equal to $ 2.80 for an aggregate purchase price of $ 285 thousand.

September 30, 2022, the Company has reserved common stock for issuance in relation to the following:

Salaries, benefits, and incentive

Franchise tax accrual

Total accrued expenses

and other current liabilities

March 31, 2023, the Company has reserved common stock for issuance in relation to the following:

of Reserved Common Stock For Issuance in Relation

11 unchanged sentences

to 571,429 shares of common stock, all of which may be delivered pursuant to incentive stock options.

Subject to adjustments pursuant

to the 2019 Plan, the maximum number of shares of common stock with respect to which stock options or SARs may be granted to an executive

officer during any calendar year is 14,286 shares of common stock.

March 23, 2023, the board of directors of the Company approved an increase of the number of shares to be reserved under the Company’s

2019 Plan by 300,000 shares of common stock, or from an aggregate number of 571,429 to 871,429 shares of common stock

(the “2019 Plan Increase”).

The Company expects the 2019 Plan Increase to satisfy the Company’s anticipated equity

incentive award requirements for at least two years.

to adjustments pursuant to the 2019 Plan, the maximum number of shares of common stock with respect to which stock options or SARs may

be granted to an executive officer during any calendar year is 14,286 shares of common stock.

stock options

following table contains information about the 2019 Plan as of September 30, 2022:

March 8, 2023, the Company granted a contractor, an option to purchase up to 17,532 shares of the Company’s common stock at a per

share exercise price of $ 2.00 under the Company’s 2019 Plan.

This option award vests over a period of 12 months.

following table contains information about the 2019 Plan as of March 31, 2023:

of Information about Incentive Plan

Available for

following table summarizes the Company’s incentive stock option activity and related information for the period ended September

Schedule of Incentive Stock Option Activity

Outstanding at January 1, 2022

Outstanding at September 30, 2022

Exercisable at September 30, 2022

of September 30, 2022, vested outstanding stock options had $ 169 thousand intrinsic value as the exercise price is greater than the estimated

fair value of the underlying common stock.

As of September 30, 2022, there was approximately $ 85 thousand of total unrecognized share-based

compensation related to unvested stock options, which the Company expects to recognize over the next 12 months.

& Outstanding

granted outside of the 2019 Plan (2)

incentive stock options and restricted stock units discussed below.

Includes shares of restricted common stock granted outside of the 2019

Plan to our Chief Executive Officer, Adam Levy.

following table summarizes the Company’s incentive stock option activity and related information for the period ended March 31,

of Incentive Stock Option Activity

at January 1, 2023

at March 31, 2023

of March 31, 2023, vested outstanding stock options had $ 129 thousand intrinsic value as the exercise price is greater than the estimated

fair value of the underlying common stock, respectively.

As of March 31, 2023, there was approximately $ 23 thousand of total unrecognized

share-based compensation related to unvested stock options, which the Company expects to recognize over the next 11 months excluding

options fully contingent upon certain sales-based milestones being achieved within 18 to 36 months of commercial release.

Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award.

1 unchanged sentence

The following assumptions were used to calculate share-based compensation expense

for year ended September 30, 2022:

for the period ending March 31, 2023:

of Assumptions used in Share-based Compensation

171.12 %- 183.48

interest rate

8 unchanged sentences

size, stage of life cycle, and financial leverage.

as of August 1, 2022, the Company granted a restricted stock award of 84,750

shares of the Company’s common stock to

the certain officers and employees, all of which shares vest in four equal installments on each of January 1, 2023, January 1, 2024,

January 1, 2025 and January 1, 2026.

Under ASC 718, Compensation-Stock Compensation (“ASC 718”) , the Company

has measured the value of the 84,750

shares granted based on the closing price of

the Company’s stock at the grant date of the RSU Grant ($ 1.82

as of January 1, 2022, the Company granted a restricted stock award of 11,364 shares of the Company’s common stock to Adam

Levy for his service as our Chief Executive Officer pursuant to the terms of his Executive Employment Agreement dated November 4, 2021,

all of which shares vested monthly from January 1, 2022 through December 31, 2022.

Under ASC 718, the Company has measured the value of the 11,364 shares granted based on the closing price of the Company’s

stock at the grant date of the RSU Grant ($ 4.40 per share).

March 8, 2021, the Company granted a restricted stock award of 39,524 shares of the Company’s common stock to Adam Levy for his

service as our Chief Executive Officer and Chief Financial Officer from October 1, 2020 through September 30, 2021, all of which shares

vested immediately.

Under ASC 718, the Company has measured the value of the 39,524 shares granted based on the closing price of the

Company’s stock at the grant date of the RSU Grant ($ 2.10 per share).

of Restricted Stock Units Grant

Outstanding at January 1, 2022

Exercised and converted to common shares

Outstanding at September 30, 2022

Exercisable at September 30, 2022

following table shows a summary of common stock warrants through September 30, 2022:

Summary of Common Stock Warrants

Term in Years

Outstanding at January 1, 2022

Outstanding at September 30, 2022

Exercisable at September 30, 2022

of September 30, 2022, vested outstanding warrants had $ 158 thousand intrinsic value as the exercise price is greater than the estimated

fair value of the underlying common stock.

as of August 1, 2022, the Company granted a restricted stock award of 84,750 shares of the Company’s common stock to certain officers

and employees, all of which shares vest in four equal installments on each of January 1, 2023, January 1, 2024, January 1, 2025 and January

Under ASC 718, Compensation-Stock Compensation (“ASC 718”), the Company has measured the value of the 84,750

shares granted based on a closing price of the closing price of the Company’s stock at the grant date of the RSU Grant ($ 1.82 per

as of January 1, 2022, the Company granted a restricted stock award of 11,364 shares of the Company’s common stock to Adam Levy

for his service as our Chief Executive Officer pursuant to the terms of his Executive Employment Agreement dated November 4, 2021, all

of which shares vested monthly from January 1, 2022 through December 31, 2022.

Under ASC 718, the Company has measured the value of the

11,364 shares granted based on the closing price of the Company’s stock at the grant date of the RSU Grant ($ 4.40 per share).

as of January 3, 2023, the Company granted a restricted stock award of 37,037 shares of the Company’s common stock to Adam Levy

for his service as our Chief Executive Officer pursuant to the terms of his Executive Employment Agreement dated December 30, 2022, all

of which shares vested monthly from January 3, 2023 through December 31, 2023.

Under ASC 718, the Company has measured the value of the

37,037 shares granted based on the closing price of the Company’s stock at the grant date of the RSU Grant ($ 1.35 per share).

of Restricted Stock Units Granted

at January 1, 2023

and converted to common shares

at March 31, 2023

expense will be recognized ratably over the total vesting schedule.

The Company will periodically adjust the cumulative compensation

expense for forfeited awards.

Stock based compensation of $ 24 thousand and $ 55 thousand has been recorded for the year ended March 31,

2023 and 2022, respectively.

As of March 31, 2023, there was $ 116 thousand unrecognized share-based compensation related to unvested

RSUs, which the Company expects to recognize over the next 3 years.

following table shows a summary of common stock warrants through March 31, 2023:

of Common Stock Warrants

at January 1, 2023

Outstanding at March

Exercisable at March

of March 31, 2023, vested outstanding warrants had $ 90 thousand intrinsic value as the exercise price is greater than the estimated fair

value of the underlying common stock.

Noncontrolling Interest in Joint Venture

March 1, 2023, the Company acquired a 50 % interest in

a newly formed joint venture (“JV”), named CG Converting and Packaging, LLC, with C.G.

Laboratories Inc.

for its converting and packaging business.

The JV is owned 50 % by the Company and 50 % by CG Labs.

CG Labs contributed its existing converting

and packaging division to the JV, including, but not limited to, its facilities, equipment, employees, and customers.

The Company will

contribute $ 500,000 to the JV, on a schedule to be determined, to be used for equipment and facility upgrades as well as general corporate

As of March 31, 2023, the Company has contributed $ 100,000 of its $ 500,000 commitment.

JV is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance.

A VIE must be

consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s

activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or

the right to receive benefits from the VIE.

All major decisions related to the JV that most significantly impact its economic performance,

including but not limited to operating procedures with respect to business affairs.

Therefore, we have consolidated the JV.

Notes Payable

April 22, 2020, the Company, entered into a promissory note with PNC Bank, N.A.

(the “PNC Bank”), which provides for a

loan in the amount of $ 147,300

(the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security

On March 4, 2021, the Company received a second PPP Loan in the amount of $ 127,400

thousand under Phase II of the Paycheck Protection Program.

On June 2, 2021, the Company received notice from PNC Bank that its

initial loan of $ 147,300

had been forgiven in its entirety by the Small Business Administration (“SBA”).

On November 16, 2021, the Company

received notice from PNC Bank that its second PPP loan of $ 127,400

had been forgiven in its entirety by the SBA.

Injury Disaster Loan

8 unchanged sentences

The balance of principal and interest is payable thirty years from the date of the SBA Note.

In connection therewith, the Company received an $ 8 thousand advance, which does not have to be repaid.

In connection therewith, the Company received an $ 8,000 advance, which does not have to be repaid.

On March 26, 2021, the SBA announced

that all EIDL loans issued in 2020 will start repayment 24 months from the date of the SBA Note.

The SBA has since extended the repayment

start to 30 months from the date of the SBA Note.

The balances of the principal and accrued interest amounted to $ 283 thousand and $ 276

thousand as of September 30, 2022 and December 31, 2021, respectively.

SBA has since extended the repayment start to 30 months from the date of the SBA Note.

The Company made its first payment in December

The balances of the principal and accrued interest amounted to $ 281 thousand and $ 283 thousand as of March 31, 2023 and December

31, 2022, respectively.

future annual principal amounts and accrued interest to be paid as of March 31, 2023 are as follows:

of Debt Instruments

the year ending December 31 ($ in thousands):

(remainder of the year)

Convertible Notes Payable

December 24, 2020, the Company issued a $ 100

Secured Convertible Promissory Note which was convertible into shares of the Company’s common stock at a price per share of

The note was fully repaid (including all accrued but unpaid interest) on March 14, 2021.

January 19, 2021, the Company issued a $ 15

thousand Secured Convertible Promissory Note which was convertible into shares of the Company’s common stock at a price per

share of $ 1.05 .

The note was fully repaid (including all accrued but unpaid interest) on March 14, 2021.

Fund Financing

March 11, 2021, the Company and Auctus Fund, LLC, a Delaware limited liability company (“Auctus”) entered into a senior

secured convertible promissory note in the principal amount of $ 1,680

thousand , which includes $ 180

thousand of interest which was deemed fully

earned as of the issuance date (the “Auctus Note”).

The Auctus Note was fully repaid (including all principal and

interest) on March 15, 2022 with a one-time cash payment of $ 1,680 thousand .

Private Placement Offering

September 2, 2021, the Company closed a private placement offering with twenty accredited investors (the “September 2

Investors”) whereby the Company issued to the September 2 Investors subordinated secured convertible promissory notes in the

aggregate principal amount of $ 1,814

thousand , which includes $ 194

thousand of interest which was deemed fully

earned as of the issuance date (the “September 2 Notes”).

January 25, 2022, the Company repaid a September 2 Investor in full with a one-time cash payment of $ 300 thousand

of outstanding principal and accrued but unpaid interest.

The Company did incur a 105 %

pre-payment penalty of $ 16,800

with respect to the repayment of the investor’s note and the repayment extinguished the note in its entirety.

September 6, 2022, the September 2 Notes remaining outstanding balance was repaid in full which consisted of principal and interest

of $ 1,478 thousand .

March 11, 2021, the Company issued Auctus Fund, LLC, a Delaware limited liability company a one-year senior secured convertible promissory

note in the principal amount of $ 1.68 million, which included $ 180 thousand of interest which was deemed fully earned as of the issuance

date (the “Auctus Note”).

The Auctus Note was fully repaid (including all principal and interest) on March 15, 2022 with

a one-time cash payment of $ 1.68 million.

September 2, 2021, the Company issued to certain holders one-year subordinated secured convertible promissory notes in the aggregate

principal amount of $ 1,814 thousand, which included $ 194 thousand of interest which was deemed fully earned as of the issuance date (the

“September 2 Notes”).

On January 25, 2022, the Company repaid one of the September 2 Notes in full with a one-time cash payment

of $ 300 thousand of outstanding principal and accrued but unpaid interest.

The Company incurred pre-payment penalty of $ 17 thousand with

respect to the repayment of the note and the remaining unamortized debt discount in the amount of $ 133 thousand was written off and both

amounts were recorded as a loss on extinguishment of debt of $ 150 thousand in accompany statement of operations during 2022.

The repayment

extinguished the note in its entirety.

On September 6, 2022, the outstanding balance on the remaining September 2 Notes’ was repaid

in full which consisted of principal of $ 1,478 thousand.

Warrant Liability

8 unchanged sentences

share offering.

Management also determined that the warrants required classification as a liability pursuant to ASC 815, Derivatives

and Hedging .

In accordance with the accounting guidance, the outstanding warrants are recognized as a warrant liability on the balance

sheet and are measured at their inception date fair value and subsequently re-measured at each reporting period with changes being recorded

as a component of other expense, net in the statement of operations.

September 6, 2022, the Company agreed to extend the September 10, 2019 and November 6, 2019 warrants an additional six months until March

9, 2023 and May 5, 2023, respectively.

The warrants were remeasured as of September 6, 2022 and consequently resulted in a warrant modification

expense of $ 57 thousand.

Management also determined that the warrants required classification as a liability pursuant to ASC 815.

In accordance

with the accounting guidance, the outstanding warrants are recognized as a warrant liability on the balance sheet and are measured at

their inception date fair value and subsequently re-measured at each reporting period with changes being recorded as a component of other

income in the statement of operations.

warrants outstanding and fair values at each of the respective valuation dates are summarized below:

Schedule of Warrant Liability

Warrant Liability

Fair Value as of period ending 12/31/2021

Modification of warrants

Change in fair value of warrant liability

Fair Value as of period ending 9/30/2022

of Warrant Liability

Value per Share

value as of year ended 12/31/2022

Exercise of warrants

in fair value of warrant liability

value as of year ended 3/31/2023

warrant liabilities are considered Level 3 liabilities on the fair value hierarchy as the determination of fair value includes various

assumptions about future activities and the Company’s stock prices and historical volatility of other comparable public companies

used as inputs.

As of September 30, 2022, none of the warrants have been exercised.

assumptions about of future activities and the Company’s stock prices and historical volatility of Guideline Public Companies as

Commitments and Contingencies

2 unchanged sentences

of any matters that will have a material effect on the financial position, results of operations, or cash flows of the Company.

March 21, 2023, the Company entered into a Services Agreement with GlaxoSmithKline Consumer Healthcare Holdings (US) LLC (“Haleon”)

to supply material for a consumer product to be developed and released in the future.

There can be no guaranty that a consumer product

will be released or, if released, that it will be successful.

GlaxoSmithKline Consumer Healthcare Holdings (US) LLC is a Haleon group

Concentrations of Risk

Company’s revenues are concentrated in a small group of customers with some individually having more than 10% of total revenues.

from two customers that exceeded 10% of total revenues for the nine months ended September 30, 2022 were 39 % and 27 %.

The accounts receivable

from the top two customers by revenue were 6 %, and 53 %, respectively, as well as 17 % and 19 % from two other customers of the total accounts

receivable as of September 30, 2022.

from three customers that exceeded 10% of total revenues for the nine months ended September 30, 2021 were 33 %, 38 %, and 24 %.

receivable from the top three customers by revenue were 16 %, 17 %, and 0 %, respectively, as well as 18 % from one other customer of the

total accounts receivable as of September 30, 2021.

from three customers that exceeded 10% of total revenues for the three months ended March 31, 2023 were 52 %, 21 %, and 13 %.

receivable from the top three customers were 0 %, 25 %, and 31 % as well as 10 % from one other customer of the total accounts receivable

as of March 31, 2023.

from three customers that exceeded 10% of total revenues for the three months ended March 31, 2022 were 52 %, 12 %, and 12 %.

receivable from the top three customers were 0 %, 0 %, and 40 % as well as 16 % and 22 % from two other customers of the total accounts receivable

as of March 31, 2022.

Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash, cash equivalents and

5 unchanged sentences

limit of $ 250 thousand.

As of September 30, 2022, the total amount exceeding such limit was $ 1,156 thousand.

As of March 31, 2023, the total amount exceeding such limit was $ 335 thousand.

The Company has not experienced

9 unchanged sentences

securities and performs periodic evaluations of the credit standing of such institutions.

Related Party Transactions

Promissory Note

September 2, 2021, the Company issued three Secured Convertible Promissory Notes to members of the board of directors in an aggregate

amounts of $ 150,000 to Mr.

Stein, $ 150,000 to Mr.

Stefansky (Bezalel Partners, LLC), and $ 50,000 to Dr.

Zeldis as part of the September

The notes were repaid in full in 2022.

Jerome Zeldis, a member of the Company board of directors, has an outstanding balance due of $ 40,000 for services as of March 31, 2023

and December 31, 2022, included in accounts payable in the accompanying consolidated balance sheets.

Subsequent Events

of the Company has performed a review of events and transactions occurring after the consolidated balance sheet date to determine if

there were any such events or transactions requiring adjustment to or disclosure in the accompanying consolidated financial statements.

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