What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-03-17 compared with 2022-12-14 · 119 added, 116 removed, 108 unchanged (69% of the section changed)

10 unchanged sentences

identifying words.

We have based these forward-looking statements on

our current expectations and projections about future events.

We have based these forward-looking statements

on our current expectations and projections about future events.

Although we believe that the expectations underlying our forward-looking

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the CardioMap® heart monitoring and screening

the Save A Life choking rescue device, a unique neurosteroid drug compound intended to treat concussions and a unique drug compound

device, the Save A Life choking rescue device, a unique neurosteroid drug compound intended to treat concussions and a unique drug compound

to treat rare brain disorders in partnership with Prevacus, Inc.

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Mast Hill Fund L.P.

On December 13, 2022, we entered into a Securities Purchase Agreement

(the “SPA”) with Mast Hill Fund, L.P.

On December 13, 2022, we entered into a Securities

Purchase Agreement (the “SPA”) with Mast Hill Fund, L.P.

(“Mast Hill”).

Pursuant to the SPA, we sold Mast Hill (i) an $870,000 face

value, one-year, 10% per annum Promissory Note convertible into shares of our common stock at $0.12 per share, (ii) a five-year share

purchase warrant entitling Mast Hill to acquire 2,000,000 shares of our common stock at $0.20 per share (the “Warrant”), and

(iii) a five-year warrant for 4,000,000 shares of our common stock at $0.20 per share issuable in the event of default.

Net proceeds after

original discount, fees and expenses, was $723,868.

Pursuant to the SPA, we sold Mast Hill

(i) an $870,000 face value, one-year, 10% per annum Promissory Note convertible into shares of our common stock at $0.12 per share, (ii)

a five-year share purchase warrant entitling Mast Hill to acquire 2,000,000 shares of our common stock at $0.20 per share (the “Warrant”),

and (iii) a five-year warrant for 4,000,000 shares of our common stock at $0.20 per share issuable in the event of default.

after original discount, fees and expenses, was $723,868.

LPC Purchase Agreement Draws

During the three months ended October 31, 2022, LPC

purchased a total of 1,133,591 shares of our common stock for total proceeds of $240,710 pursuant to the August 14, 2020, LPC Purchase

Subsequent to October 31, 2022, LPC purchased an additional 1,100,000 shares for total proceeds of $200,320 and, as of December

14, 2022, LPC had purchased a total of 5,982,518 shares of our common stock for total proceeds of $2,461,296 and the remaining purchase

availability was $7,788,704 and the remaining shares available were 13,288,846.

During the six months ended January 31, 2023,

LPC purchased a total of 2,233,591 shares of our common stock for total proceeds of $441,030 pursuant to the August 14, 2020, LPC Purchase

Subsequent to January 31, 2023 and through March 17, 2023, we sold an additional 1,100,000 shares of our common stock to LPC

for total proceeds of $115,270.

As of March 17, 2023, LPC had purchased a total of 7,082,518 shares of our common stock for total proceeds

of $2,576,566 and the remaining purchase availability was $7,673,433 and the remaining shares available were 12,188,846.

Promissory Note

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note for $30,000 with a consultant for investor relations services with an interest rate of 8% per annum and a due date of December 31,

On December 30, 2022, this promissory note was amended to extend the maturity date to January 31, 2023.

On January 31, 2023, the

note was extended to June 30, 2023.

Going Concern

We did not recognize any revenues for the year ended

July 31, 2022, or the three months ended October 31, 2022, and we had an accumulated deficit of $56,327,534 as of October 31, 2022.

the foreseeable future, we expect to experience continuing operating losses and negative cash flows from operations.

Cash available at

October 31, 2022, of $50,499 may not provide enough working capital to meet our current operating expenses through December 14, 2023.

The operating deficit indicates substantial doubt

about our ability to continue as a going concern.

Our continued existence depends on the success of our efforts to raise additional capital

necessary to meet our obligations as they come due and to obtain sufficient capital to execute our business plan.

We may obtain capital

primarily through issuances of debt or equity or entering into collaborative arrangements with corporate partners.

There can be no assurance

that we will be successful in completing additional financing or collaboration transactions or, if financing is available, that it can

be obtained on commercially reasonable terms.

If we are not able to obtain the additional financing on a timely basis, we may be required

to further scale down or perhaps even cease operations.

The issuance of additional equity securities could

result in a significant dilution in the equity interests of our current stockholders.

Obtaining commercial loans, assuming those loans

would be available, would increase our liabilities and future cash commitments.

Our financial statements do not include adjustments that

might result from the outcome of this uncertainty.

If we are unable to raise additional capital by December

14, 2023, we will adjust our business plan.

Due to the unknown and volatile nature of the stock price and trading volume of our common

stock, is it is difficult to predict the timing and amount of availability pursuant to our equity line of credit with LPC.

Given our recurring

losses, negative cash flow, accumulated deficit and the impact of COVID-19, there is substantial doubt about our ability to continue as

a going concern.

Impact of COVID-19

The COVID-19 global pandemic has had an unfavorable

impact on our business operations.

The pandemic has impacted our ability to get financing, engage third-party vendors and the timing of

our clinical trial in Australia.

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

and global economies and financial markets, which

may result in a long-term economic downturn that could negatively affect future performance and our ability to secure additional debt

or equity funding.

Significant Accounting Policies and Use of Estimates

During the three months ended October 31, 2022, there

were no significant changes to our significant accounting policies and estimates as 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, 2022, which was filed with the

SEC on October 31, 2022.

See Note 1 of Notes to Financial Statements.

Significant Accounting Policies and Use of

During the six months ended January 31, 2023,

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, 2022, which was filed

with the Securities and Exchange Commission on October 31, 2022.

Results of Operations

We do not currently sell or market any products and

we did not have any revenue in the three-month periods ended October 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

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, 2023 or 2022.

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,

In-process research and development expense

Research and development expense

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Interest expense

Other expense, net

Other income, net

$ (1,671,728 )

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Basic and diluted net loss per share

Six Months Ended January 31,

In-process research and development expense

Research and development expense

Our Research and development expense includes expenses

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

Three months ended

October 31, 2022

three months ended

October 31, 2021

General and administrative expense

Loss from operations

Interest expense

Other income, net

$ (3,821,308 )

$ (3,338,987 )

Basic and diluted net loss per share

In-Process Research and Development

In-process research and development in the three

and six-month periods ended January 31, 2023, relates to the value of the 1,000,000 shares of our Common Stock with a value of $0.17 per

share issued to Prevacus in connection with the November 2022 Option Agreement.

Research and Development Expense

Our Research and development expense includes

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

The decreases in Research and development expense

were due to the following:

January 31, 2023 compared to three months ended

January 31, 2022

January 31, 2023 compared to six

January 31, 2022

Increase (decrease) in:

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Prototype phase

The decreases in drug development, consultants and

prototype phase were the result of the completion of the development of the concussion drug in the fourth quarter of fiscal 2022.

increase in Phase I clinical trial relates to our concussion drug device trial.

The decreases in drug development, consultants

and prototype phase were the result of the completion of the development of the concussion drug in the fourth quarter of fiscal 2022.

The decrease in the three month ended January 31, 2023, as compared to the increase in the six months ended January 31, 2023, is the result

of the completion of dosing patients the Phase I clinical trial of our concussion drug device trial in first quarter of fiscal 2023.

General and Administrative Expense

Our general and administrative expense includes salaries

and related benefits for employees in finance, accounting, sales, administrative and research and development activities, as well as stock-based

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

Our General and administrative expense includes

salaries and related benefits for employees in finance, accounting, sales, administrative and research and development activities, as

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

The changes in General and administrative expense

were due to the following:

Three months ended

October 31, 2022

October 31, 2021

January 31, 2023 compared to three months ended

January 31, 2022

January 31, 2023 compared to six

January 31, 2022

Increase (decrease) in:

3 unchanged sentences

Financing fees

Insurance expense

Legal and professional fees

The increase in board and stock expense and business

development and investor relations was due to the granting of stock and stock options to the board, officers, employees and consultants.

The increases in board and stock expense were

due to the vesting of restricted stock units.

The increases in business development and investor relations were a result of increased

activities related to business development.

The decreases in wages were due to the $400,000 bonus granted to our executive officers January

Interest Expense

Interest expense includes interest on debt outstanding,

as well as the amortization of unamortized beneficial conversion feature, debt issuance costs and debt closing costs.

Certain information

regarding debt outstanding was as follows:

Three Months Ended October 31,

as well as the amortization of unamortized debt issuance costs and debt closing costs.

Certain information regarding debt outstanding

was as follows:

Three Months Ended January 31,

Six Months Ended January 31,

Weighted average debt outstanding

Weighted average interest rate

The increase in the weighted average debt outstanding

was due to the addition of principal to both the LGH and Tysadco notes in exchange for extending the maturity date of the notes.

we issued a $30,000 promissory note during the first quarter of fiscal 2023.

The decrease in the weighted average interest rate

was due to the extension of maturity dates on the LGH and Tysadco notes that have flat interest rates.

Net loss increased in the three-month period ended

October 31, 2022 compared to the same period of 2021 primarily due to increased stock-based compensation.

The increases in the weighted average debt outstanding

were due to the addition of principal to both the LGH and Tysadco notes in exchange for extending the maturity date of the notes.

we issued a $30,000 promissory note during the first quarter of fiscal 2023 and an $870,000 promissory note during the second quarter

of fiscal 2023.

The decreases in the weighted average interest

rates were due to the extension of maturity dates on the LGH and Tysadco notes that have flat interest rates.

Other Income, net

Other income, net in the three and six months

ended January 31, 2022, included a donation in the amount of $500,000 in partnership with the Erase

PTSD Now organization and the Glenn Greenberg and Linda Vester Foundation.

Other income, net in all periods includes foreign exchange

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

Net loss decreased in the three months ended January

31, 2023, compared to the same period of the prior year due to decreased research and development expense, general and administrative

expense and interest expense as discussed above.

Net loss increased in the six months ended January 31, 2023, compared to the same period

of the prior year due to increased general and administrative expense, partially offset by decreased research and development expense

and interest expense as discussed above.

Liquidity and Capital Resources

See Recent Funding above for a discussion of our recent debt and equity

See Recent Funding above for a discussion of our

recent debt and equity financings.

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

Three Months Ended October 31,

Six Months Ended January 31,

Net cash used in operating activities

$ (1,188,602 )

$ (1,584,793 )

Net cash used in investing activities

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The following notes payable were outstanding:

October 31, 2022

January 31, 2023

July 31, 2022

Convertible note issued to LGH due December 31, 2022 with a flat interest rate of 8.0% of the original principal of $1,050,000 and convertible at $0.20 per share

Promissory notes issued to officers and directors due December 31, 2022 with a fixed interest rate of 8.0% per annum (see Note 10)

Promissory note with an interest rate of 8% per annum due December 31, 2022

Tysadco convertible promissory note payable due March 1, 2022 with a flat interest rate of 8.0% of the original principal of $250,000 and convertible at $0.30 per share

Convertible note issued to LGH due March 31, 2023 with a flat interest rate of 8.0% of the original principal of $1,050,000 and convertible at $0.20 per share

Promissory notes issued to officers and directors due March 31, 2023 with a fixed interest rate of 8.0% per annum (see Note 10)

Promissory note with an interest rate of 8% per annum due June 31, 2023

Tysadco convertible promissory note payable due December 31, 2023 with a flat interest rate of 8.0% of the original principal of $250,000 and convertible at $0.30 per share (see Note 11)

Mast Hill convertible promissory note due

December 13, 2023 with a fixed interest rate of 10% per annum and convertible at $0.12 per share

Unamortized debt discount and closing costs

Australian Research and Development Rebate

In the first quarter of fiscal 2023, we incurred $663,436

of expenses related to our Phase I clinical trial of our concussion drug device combination that are eligible for the Australian research

and development rebate for a rebate due of $322,671, which was recorded as an offset to research and development expense during the quarter

ended October 31, 2022.

On November 18, 2022, we received a research and development

rebate from the government of Australia in the amount of $313,709 for clinical work performed in Australia related to our Phase I human

clinical trial during the fiscal year ended July 31, 2022.

In the first six months of fiscal 2023, we incurred

$658,962 of expenses related to our Phase I clinical trial of our concussion drug device combination that are eligible for the Australian

research and development rebate for a rebate due of $323,263, which was recorded as an offset to Research and development expense.

On November 18, 2022, we received a research and

development rebate from the government of Australia in the amount of $313,709 for clinical work performed in Australia related to our

Phase I human clinical trial during the fiscal year ended July 31, 2022.

On December 8, 2022, we received a goods and service

1 unchanged sentence

related to our Phase I human clinical trial during July, August and September 2022.

Inflation did not have a material impact on our business

and results of operations during the periods being reported on.

Inflation did not have a material impact on our

business and results of operations during the periods being reported on.

Off Balance Sheet Arrangements

We do not have any material off balance sheet arrangements.

We do not have any material off balance sheet

arrangements.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company and are not required to provide information

under this item.

We are a smaller reporting company and are not required to provide

information under this item.

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