What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-03-22 compared with 2023-12-15 · 151 added, 105 removed, 104 unchanged (71% of the section changed)

35 unchanged sentences

channels, including third parties.

We plan to develop potentially life-saving technologies:

the CardioMap® heart monitoring and screening

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.

We have two different technologies in research and development;

the CardioMap® heart monitoring

and screening device, and the Save a Life choking rescue device.

To date, none of our product candidates have received regulatory clearance

or approval for commercial sale.

Currently no research and development activities are being incurred on the CardioMap® or the Save

a Life devices.

On October 4, 2023, we entered into an Asset Purchase

Agreement (the “Purchase Agreement”) with Oragenics, Inc.

(“Oragenics” the “Purchaser”).

to the Purchase Agreement, we have agreed to sell and assign certain assets and certain liabilities related to a segment of our business

focused on developing medical products that treat brain related illnesses and diseases (the “Purchased Assets”) to Oragenics.

See below and Note 4 of Notes to Consolidated Financial Statements for additional information.

On October 4, 2023, we entered into an Asset

Agreement (the “Agreement”) with Oragenics, Inc.

(“Oragenics”).

Pursuant to the Agreement, we sold certain

assets and certain liabilities related to a segment of our business focused on developing medical products that treat brain

related illnesses and diseases (the “Assets”) to Oragenics.

The closing was completed on December 28, 2023.

and Note 4 of Notes to Condensed Consolidated Financial Statements for additional information.

We plan to license, improve, and develop our products

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LPC Purchase Agreement Draws

During the three months ended October 31, 2023, LPC purchased

a total of 500,000 shares of our common stock for total proceeds of $45,820 pursuant to the August 14, 2020, LPC Purchase Agreement.

LPC had purchased a total of 7,882,518 shares of our common stock for total proceeds of $2,646,306, the remaining purchase availability

was $7,603,694 and the remaining shares available were 11,388,846.

Asset Purchase Agreement with Oragenics,

On October 4, 2023, we entered into an Asset Purchase

Agreement (the “Purchase Agreement”) with Oragenics, Inc.

(“Oragenics” the “Purchaser”).

to the Purchase Agreement, we have agreed to sell and assign certain assets and certain liabilities related to a segment of our business

focused on developing medical products that treat brain related illnesses and diseases (the “Purchased Assets”) to Oragenics

in exchange for (i) $1,000,000 in cash and 8,000,000 shares of convertible Series F Preferred Stock.

The Purchased Assets include drug

candidates for treating mild traumatic brain injury (mTBI), also known as concussion, and for treating Niemann Pick Disease Type C (NPC),

as well as our proprietary powder formulation and its nasal delivery device.

During the six months ended January 31, 2024,

LPC purchased a total of 600,000 shares of our common stock for total proceeds of $55,620 pursuant to the August 14, 2020, LPC Purchase

At December 31, 2023, the LPC Purchase Agreement expired.

Asset Agreement with Oragenics, Inc.

On October 4, 2023, we entered into an Asset Agreement

with Oragenics, which closed on December 7, 2023.

Pursuant to the Agreement, we sold the segment of our business and related assets focused

on developing medical products that treat brain related illnesses and diseases (the “Assets”) to Oragenics in exchange for

(i) $1,000,000 in cash;

(ii) 8,000,000 shares of convertible Series F preferred stock;

and (iii) the assumption of $325,672 of our accounts

The total value of consideration received was $16,400,687.

The in-process research and development Assets

include drug candidates for treating mild traumatic brain injury (“mTBI”), also known as concussion, and for treating Niemann

Pick Disease Type C (“NPC”), as well as our proprietary powder formulation and its nasal delivery device.

We received $500,000 upon the execution of the

Purchase Agreement on October 4, 2023 and will receive the additional $500,000 upon the earlier of (a) the closing of the Purchase Agreement

(the “Closing”), (b) within three business days after the date that we have obtained our stockholders’ approval for

the transaction or (c) immediately upon the Purchasers’ wrongful termination of the Purchase Agreement in breach of the Purchase

The closing is expected to be at the end of the

fourth calendar quarter of 2023.

At the closing, Oragenics will issue 8,000,000

shares of convertible Series F Preferred Stock to us.

A number equal to 19.9% of Oragenics shares of common stock outstanding will be

automatically converted into common stock at that time.

As of December 14, 2023, Oragenics common stock traded at $5.43 per share.

The remaining shares of convertible Series F

Preferred Stock will convert upon certain listing and change in control criteria being achieved.

See Note 4 of Notes to Consolidated Financial

Statements for additional information.

Agreement on October 4, 2023, and received the additional $500,000 on December 11, 2023, upon our stockholder approval for the sale of

Following the closing of the Agreement on December 28, 2023, we received 8,000,000 shares of Series F preferred stock.

receipt, 511,308 shares of the Series F preferred stock, which represented 19.9% of the then outstanding shares of Oragenics common stock,

converted into 511,308 shares of Oragenics common stock.

At the closing, we were required to obtain the

consent of Mast Hill to consummate the closing of the Asset Agreement.

As part of the consent, we entered into a pledge agreement with

Mast Hill granting a security interest in 154,545 of the total preferred shares, and collectively with all of the common shares or other

securities into which the preferred shares are converted or exchanged into common shares, until the Mast Hill debt is paid.

The remaining shares of convertible Series F preferred

stock will convert upon Oragenics shareholder approval and upon certain listing and change in control criteria being achieved.

at our option, we are allowed to convert additional shares of the Series F preferred stock as long as we do not own a total of more than

19.9% of the then outstanding Oragenics common stock.

See Note 4 of Notes to Condensed

Consolidated Financial Statements for additional information.

Promissory Note

On February 13, 2024, we entered into a six-month

promissory note for $50,000, with Jonathan Lutz, an accredited investor, with an interest rate of 10% per annum and due August 11, 2024.

Accredited Investor Note Payable

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on August 15, 2023, at which time the additional $350,000 was received.

See Note 6 of Notes to Consolidated Financial

Statements for additional information.

See Note 6 of Notes to Condensed

Consolidated Financial Statements for additional information.

Going Concern

See Note 1 of Notes to Consolidated Financial Statements.

See Note 1 of Notes to Financial Statements.

Significant Accounting Policies and Use of

During the three months ended October 31, 2023,

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

During the six months ended January 31, 2024,

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

Summary of Significant

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of our Annual Report on Form 10-K for the year ended July 31, 2023, which was filed

with the SEC on October 30, 2023.

with the Securities and Exchange Commission on October 30, 2023.

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, 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

Research and development

and we did not have any revenue in the three or six-month periods ended January 31, 2024 or 2023.

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

Stock-based compensation

General and administrative

General and administrative expense

Loss from operations

Gain on sale of asset

Investment revaluation

Interest expense

Other expense, net

Basic and diluted net loss per share

Research and Development

Our Research and development includes expenses

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

The change in Research and development was due

to the following:

Three months ended

October 31, 2023

October 31, 2022

Other income, net

Net income (loss)

Deemed dividend

Net income (loss) attributable to common stockholders

$ (1,671,728 )

Basic net income (loss) per share

Diluted net income (loss) per share

Six Months Ended January 31,

In-process research and development expense

Research and development expense

Stock-based compensation

General and administrative expense

Loss from operations

Gain on sale of asset

Investment revaluation

Interest expense

Other income, net

Net income (loss)

Deemed dividend

Net income (loss) attributable to common stockholders

$ (3,821,308 )

Basic net income (loss) per share

Diluted net income (loss) per share

In-Process Research and Development

In-process research and development in the three

and six-month periods ended January 31, 2024, related 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 changes in Research and development expense

were due to the following:

January 31, 2024

compared to three

January 31, 2023

January 31, 2024

compared to six

January 31, 2023

Increase (decrease) in:

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Australian research and development rebate

The decreases in the Phase I clinical trial is

the result of the completion of the dosing of subject in the first quarter of 2022, offset by the Australian research and development

Phase II clinical trial

The decrease in the Phase I clinical trial as

well as the Australian research and development rebate in the six months ended January 31, 2024 compared to the six months ended January

31, 2023 is the result of the completion of the dosing of subject in the first quarter of fiscal 2023.

Stock-Based Compensation

The decrease in stock-based compensation was due to

the decrease in stock option expense for directors, officers, employees and consultants from $625,576 in the three months ended October

31, 2022 compared to $37,229 expensed in the three months ended October 31, 2023 due to a $83,066 stock option recapture of options forfeited,

offset by an increase of $131,255 of RSUs expense in the first quarter of 2023 related to directors, officers and employees.

The decrease in Stock-based compensation for the

six months ended January 31, 2024 was due to fewer unvested awards outstanding.

General and Administrative Expense

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administrative costs related to maintaining compliance as a public company.

The change in General and administrative expense

was due to the following:

Three months ended October 31, 2023 compared to three months ended October 31, 2022

The decreases in General and administrative expense

were due to the following:

January 31, 2024

compared to three

January 31, 2023

January 31, 2024

compared to six

January 31, 2023

Increase (decrease) in:

1 unchanged sentence

Consulting fees

Insurance expense

Legal and professional fees

The decrease in the three months ended October

31, 2023, was primarily a result of the decrease in business development activities due to limited resources.

Public Company Expense

The decreases in the current fiscal year periods

compared to the prior fiscal year were primarily a result of the decreases in business development activities due to limited resources.

Gain on Sale of Asset

The increase in the gain on sale of asset is the

result of the non-refundable fee of $500,000 received upon the execution of the Oragenics Asset Purchase Agreement.

The Gain on sale of asset in the fiscal 2024

periods was the result of the sale of assets pursuant to the Oragenics Asset Sale Agreement.

See Note 4 of Notes to Condensed

Consolidated Financial Statements.

Interest Expense

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outstanding was as follows:

Three Months Ended October 31,

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 convertible debt agreements entered into with Mast Hill in the second quarter of fiscal 2023 and two accredited investors in

the first quarter of fiscal 2024.

Net loss decreased in the three-month period ended

October 31, 2023 compared to the same period of 2022 primarily due to the $331,214 decrease in research and development due to the completion

of dosing of patients in the Phase I clinical trial in the first quarter of fiscal 2023, and the $809,355 decrease in stock expense and

business development and investor relations activities in the first quarter of fiscal 2024 compared to the same quarter of fiscal 2023.

The decrease in the weighted average debt outstanding

for the three months ended January 31, 2024 was due to the conversion of convertible debt agreements with Mast Hill, ClearThink and the

two accredited investors.

The increase in the weighted average debt outstanding quartering the first six months of fiscal 2024 was due

to convertible debt agreements entered into with two accredited investors, offset by conversions of convertible debt.

We generated Net income in the fiscal 2024 periods

due to the Gain on sale of assets as well as lower operating expenses compared to the fiscal 2023 periods as discussed above.

Liquidity and Capital Resources

See Recent Funding above for a discussion of our recent financings.

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

Net cash used in investing activities

$ (1,188,602 )

Net cash provided by (used in) investing activities

Net cash provided by financing activities

Historically, we have financed our operations

primarily through debt financing, limited sales of our common stock and recently through the sale of our neurological asset for upfront

non-refundable fees.

Our ability to continue to access capital could be affected adversely by various factors, including general market

and other economic conditions, interest rates, the perception of our potential future earnings and cash distributions, any unwillingness

on the part of lenders to make loans to us, and any deterioration in the financial position of lenders that might make them unable to

meet their obligations to us.

If these conditions continue and we cannot raise funds through a public or private debt financing, or an

equity offering, our ability to grow our business may be negatively affected.

In such case, we may need to suspend the creation of new

products until market conditions improve.

Historically, we have financed our

operations primarily through debt financing, limited sales of our common stock and recently through the sale of our neurological

assets to Oragenics as discussed in Note 4 of Notes to Condensed Consolidated Financial Statements.

Our ability to continue to

access capital could be affected adversely by various factors, including general market and other economic conditions, interest

rates, the perception of our potential future earnings and cash distributions, any unwillingness on the part of lenders to make

loans to us, and any deterioration in the financial position of lenders that might make them unable to meet their obligations to us.

If these conditions continue and we cannot raise funds through a public or private debt financing, or an equity offering, our

ability to grow our business may be negatively affected.

In such case, we may need to suspend the creation of new products until

market conditions improve.

The following notes payable were outstanding:

October 31, 2023

January 31, 2024

July 31, 2023

Convertible note issued to LGH due December 31, 2023, with a set interest amount of $84,000 through July 7, 2023, then an interest rate of 8.0% per annum of the then outstanding principal of $1,055,000 and convertible at $0.12 per share

Promissory notes issued to officers and directors due January 31, 2024, with an interest rate of 8.0% per annum

Convertible note issued to LGH due June 30, 2024, with a set interest amount of $84,000 through July 7, 2023, then an interest rate of 8.0% per annum of outstanding principal and convertible at $0.12 per share

Promissory notes issued to officers and directors due July 31,

2024, with an interest rate of 8.0% per annum and convertible at $0.12 per share

Note purchase agreement issued to two accredited investors due August 15, 2024, with an interest rate of 12% per annum

ClearThink convertible promissory note due December 31, 2023, with a set interest amount of $20,000 and convertible at $0.20 per share

Mast Hill convertible promissory note due June 13, 2024, with an interest rate of 10% per annum and convertible at $0.12 per share

Mast Hill convertible promissory note due December 13, 2024, with an interest rate of 10% per annum and convertible at $0.072 per share

Unamortized beneficial conversion feature, debt discount and closing costs

Australian Research and Development Rebate

In the first quarter of fiscal 2024, we incurred

In the first six months of fiscal 2024, we incurred

$43,092 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 $12,534, which was recorded as an offset to research and development expense during

the quarter ended October 31, 2023.

research and development rebate for a rebate due of $20,900, which was recorded as an offset to Research and development expense.

Inflation did not have a material impact on our

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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