What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-06-14 compared with 2022-03-15 · 123 added, 65 removed, 149 unchanged (56% of the section changed)

51 unchanged sentences

Recent Funding

Private Placement

On February 2, 2022, we entered into an agreement

to raise money through a private investment in a public entity.

We offered up to 14,285,714 Units (the “Units”), each Unit

consisting of one share of our common stock (the “Share”) and one-half of an accompanying warrant (the “Investor Warrants”)

exercisable for one share of our common stock.

The Units will be sold at a price of $0.35 per Unit (the “Offering”).

To date, we have issued a total of 4,058,372 Units

for gross proceeds to us of $1,420,430.

No additional sales will be made pursuant to this agreement.

See Notes 10 and 13 of Notes to Financial Statements

for additional information.

2022, we received a donation in the amount of $500,000 in partnership with the Erase PTSD Now organization and the Glenn Greenberg and

13 unchanged sentences

per annum and are due March 31, 2022.

The notes have been extended to September 30, 2022.

LPC Securities Purchase Agreement

4 unchanged sentences

LPC Purchase Agreement Draws

During the six months ended January 31, 2022,

LPC purchased a total of 974,482 shares of our common stock for total proceeds of $367,035 pursuant to the August 14, 2020 LPC Purchase

As of January 31, 2022, LPC had purchased a total of 3,127,808 shares of our common stock pursuant to the agreement and remaining

purchase availability was $8,411,489 and remaining shares available were 16,143,556.

During the nine months ended April 30, 2022, LPC

purchased a total of 1,174,482 shares of our common stock for total proceeds of $467,236 pursuant to the August 14, 2020, LPC Purchase

As of April 30, 2022, LPC had purchased a total of 4,121,610 shares of our common stock for total proceeds of $1,938,711 and

remaining purchase availability was $8,311,289 and remaining shares available were 15,943,556.

Tysadco Partners

1 unchanged sentence

Purchase Agreement (the “SPA”) with Tysadco Partners (“Tysadco”) pursuant to which we entered into a $250,000

face value convertible promissory note which bears interest at a one-time rate of 8.0% applied to the face value and is due March 1, 2022.

We received $250,000 net cash from the issuance of the promissory note and issued 200,000 shares of common stock with a fair value of

$17,718 which is being expensed over the life of the note as a component of interest expense.

The conversion rate of the note is $0.30

for a total of 900,000 shares of our common stock if converted in full, including interest.

face value convertible promissory note which bears interest at a one-time rate of 8.0% applied to the face value and had an original maturity

date of March 1, 2022.

We received $250,000 net cash from the issuance of the promissory note and issued 200,000 shares of common stock

with a fair value of $17,718 which is being expensed over the life of the note as a component of interest expense.

The conversion rate

of the note is $0.30 for a total of 900,000 shares of our common stock if converted in full, including interest.

On March 31, 2022, the SPA was amended to extend

the maturity date to March 1, 2023, and, as consideration, $25,000 was added to the principal.

On October 18, 2021, we entered into a Securities

Purchase Agreement (the “SPA”) with Tysadco pursuant to which we received $250,000 in cash from Tysadco and Tysadco received

(i) 1,500,000 restricted shares of our common stock, and (ii) 833,333 warrants exercisable at $0.50 per common share expiring in five

Purchase Agreement with Tysadco pursuant to which we received $250,000 in cash from Tysadco and Tysadco received (i) 1,500,000 restricted

shares of our common stock, and (ii) 833,333 warrants exercisable at $0.50 per common share expiring in five years.

Going Concern

5 unchanged sentences

our clinical trial in Australia.

In addition, the COVID-19 outbreak has adversely affected the U.S.

The COVID-19 outbreak has adversely affected the U.S.

and global economies and financial

2 unchanged sentences

Significant Accounting Policies and Use of

During the six months ended January 31, 2022,

there were no significant changes to our significant accounting policies and estimates are described in Note 2.

Summary of Significant

Accounting Policies included in Part II, Item 8.

of our Annual Report on Form 10-K for the year ended July 31, 2021, which was filed

with the Securities and Exchange Commission on October 29, 2021.

During the nine months ended April 30, 2022, there

were no significant changes to our significant accounting policies and estimates are described in Note 2.

Summary of Significant Accounting

Policies included in Part II, Item 8.

of our Annual Report on Form 10-K for the year ended July 31, 2021, which was filed with the

Securities and Exchange Commission on October 29, 2021.

Results of Operations

We do not currently sell or market any products

and we did not have any revenue in the three or six month periods ended January 31, 2022 or 2021.

We will commence actively marketing

products after the products and drugs in development have been FDA cleared or approved, but there can be no assurance, however, that we

will be successful in obtaining FDA clearance or approval for our products.

Three Months Ended January 31,

Research and development expense

and we did not have any revenue in the three or nine-month periods ended April 30, 2022 or 2021.

We will commence actively marketing products

after the products and drugs in development have been FDA cleared or approved, but there can be no assurance, however, that we will be

successful in obtaining FDA clearance or approval for our products.

Three Months Ended April 30,

Nine Months Ended April 30,

Research and development

General and administrative expense

In-process research and development

Loss from operations

Interest expense

Other income, net

(12,094,320 )

Basic and diluted net loss per share

Six Months Ended January 31,

Research and development expense

General and administrative expense

Loss from operations

(13,253,380 )

Interest expense

Other income, net

Other income (expense), net

Net loss and comprehensive loss

$ (3,099,271 )

1 unchanged sentence

$ (6,438,258 )

$ (13,982,504 )

Basic and diluted net loss per share

Shares used for basic and diluted net loss per share

Research and Development Expense

1 unchanged sentence

expenses related to our current projects and include, clinical research, design and manufacturing, formulation, regulatory and consultants.

The increases in Research and development were due to expenses related to our PRV-002 drug device combination.

Research and development

expense was offset in the three and six month periods ended January 31, 2022 by research and development rebates from the government of

Australia in the amount of $6,219 and $220,339, respectively, for clinical work performed in Australia related to our Phase 1 human trial

for safety and efficacy for the treatment of concussed individuals.

Three months ended

April 30, 2022

three months ended

April 30, 2021

Nine months ended

April 30, 2022

nine months ended

April 30, 2021

Increase (decrease) in:

Drug development

Phase 1 clinical trial

Australian research and development rebate

Prototype phase

The decrease in consultants for the three months

ended April 30, 2022, compared to the same period of the prior year was the result of the completion of several phases of research and

development related primarily to PRV-002.

The decrease in drug development expenses for

the three months ended April 30, 2022, compared to the same period of the prior year was the result of completion of initial drug development

for PRV-002 in the second quarter of fiscal 2022.

The increases in Phase I clinical trial expenses

for the three and nine months ended April 30, 2022, compared to the same periods of the prior year were the result of increased study costs

as the trial progresses.

The decrease in prototype phase expenses for the

three months ended April 30, 2022, compared to the same period of the prior year was the result of completion of Phase 1 prototype costs

for the PRV-002 device used in the clinical trials in the second quarter of fiscal 2022.

The increases in consultants, drug development

and Phase 1 clinical trial expense for the nine months ended April 30, 2022, compared to the same period of the prior year were the result

of expenses incurred to develop the drug and start the Phase 1 clinical trial with PRV-002.

General and Administrative Expense

2 unchanged sentences

well as stock-based compensation, costs related to maintaining compliance as a public company and legal and professional fees.

The increases in General and administrative expense

The changes in General and administrative expense

were due to the following:

Three months ended January 31, 2022 compared to three months ended

January 31, 2021

Six months ended January 31, 2022 compared to six months ended

January 31, 2021

Three months ended

April 30, 2022

three months ended

April 30, 2021

Nine months ended

April 30, 2022

nine months ended

April 30, 2021

Increase (decrease) in:

5 unchanged sentences

Legal and professional fees

The increases in board and stock expense were

due to the vesting of restricted stock units and the increases in wages was due to the bonus granted to our executive officers in 2022.

The increases in business development and investor

relations in both periods related to the 3,000,000 shares of our common stock with a value of $1,610,000 issued to a consultant for investor

relations, partially offset by decreases in non-recurring investor relations expense.

The decrease in board and stock expense for the

three months ended April 30, 2022, compared to the same period of the prior year was due to the lower price of our common stock on the

date grants were issued, resulting in lower stock-based compensation.

The decrease in wages for the three months ended

April 30, 2022, compared to the same period of the prior year was due to a $20,000 signing bonus issued in the prior year quarter.

The increase in board and stock expense for the

nine months ended April 30, 2022, compared to the same period of the prior year was due to the higher price of our common stock on the

date grants were issued, resulting in higher stock-based compensation.

The increase in wages in the nine-month period

ended April 30, 2022, compared to the same period of the prior year was due to bonuses totaling $400,000 granted to our executive officers

in the 2022 period and additional employees hired in the third quarter of 2021.

In-Process Research and Development

In-process research and development in the three

and nine month periods ended April 30, 2021, related to the Prevacus Asset Purchase Agreement that closed on March 1, 2021.

Interest Expense

3 unchanged sentences

was as follows:

Three Months Ended January 31,

Six Months Ended January 31,

Three Months Ended April 30,

Nine Months Ended April 30,

Weighted average debt outstanding

1 unchanged sentence

The increases in interest expense for the three

and six-month periods ended January 31, 2022 compared to the same periods of 2021 were due to LGH and Tysadco investments in April 2021

and October 2021, respectively, and the issuance of promissory notes in December 2021.

and nine-month periods ended April 30, 2022, compared to the same periods of 2021 were due to LGH and Tysadco notes issued in April 2021

and October 2021 and amended in February and March 2022, respectively, and the issuance of promissory notes in December 2021.

Other Income, net

Other income, net includes a donation

in the amount of $500,000 in partnership with the Erase PTSD Now organization and the Glenn Greenberg and Linda Vester Foundation and

foreign exchange gains and losses related to invoices denominated and paid in foreign currencies.

Net loss increased in the three and six months

ended January 31, 2022, compared to the same periods of the prior year due to increased research and development expense, general and

administrative expense and interest expense as discussed above.

Other income, net in the nine-month period ended

April 30, 2022, includes a donation in the amount of $500,000 in partnership with the Erase PTSD

Now organization and the Glenn Greenberg and Linda Vester Foundation and foreign exchange gains and losses related to invoices

denominated and paid in foreign currencies.

Other income, net in the 2021 periods represents the forgiveness of our SBA Paycheck Protection

Program Loan.

Net loss decreased in the three and nine months

ended April 30, 2022, compared to the same periods of the prior year due to the in-process research and development charge in the prior

year periods, partially offset by increased research and development expense, general and administrative expense and interest expense

in the current year periods as discussed above.

Liquidity and Capital Resources

The following table sets forth the primary sources and uses of cash:

Six Months Ended January 31,

Nine Months Ended April 30,

Net cash used in operating activities

$ (2,554,811 )

$ (2,461,232 )

Net cash used in investing activities

11 unchanged sentences

Cash used in investing activities in the first

six months of fiscal 2022 were primarily for a patent related to our PRV-002 drug device combination.

nine months of fiscal 2022 were for a patent related to our PRV-002 drug device combination.

The following notes payable were outstanding:

January 31, 2022

Note issued to Labrys due August 14, 2021 with an interest rate of 12%

Convertible note issued to LGH due February 5, 2022 with an interest rate of 8.0% and convertible at $1.00 per share (1)

Promissory notes issued to officers and directors due March 31, 2022 with an interest rate of 8.0%

Tysadco convertible promissory note payable due March 1, 2022 with an interest rate of 8.0% and convertible at $0.30 per share (2)

April 30, 2022

Convertible note issued to LGH due May 31, 2022 with a fixed interest rate of 8.0% over the term of the note (annual interest rate of 12.1%) and convertible at $1.00 per share

Promissory notes issued to officers and directors due September

30, 2022 with a fixed interest rate of 8.0% per annum (see Note 13)

Tysadco convertible promissory note payable due March 1, 2023 with a fixed interest rate of 8.0% over the term of the note (annual interest rate of 15.2%) and convertible at $0.30 per share

Unamortized debt discount and closing costs

(1) Effective February 1, 2022, the maturity date of this note was extended to May 31, 2022 and $200,000 was

added to the principal.

See Note 13 of Notes to Financial Statements for additional information.

(2) As of March 15, 2022, the loan has not been repaid or converted.

Inflation did not have a material impact on our

7 unchanged sentences

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