What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-29 compared with 2023-03-31 · 584 added, 425 removed, 473 unchanged (68% of the section changed)

1 unchanged sentence

of Independent Registered Public Accounting Firm

the Stockholders and Board of Directors

Technology, Inc.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheet of Sharps Technology, Inc.

(the “Company”) as of December 31, 2023,

and the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the year ended

December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion,

the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles

generally accepted in the United States of America.

Concern Uncertainty

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 2 to the consolidated financial statements, the Company has not generated revenue or cash flow from operations since inception,

and does not have an established source of funding sufficient to cover its operating costs.

These conditions raise substantial doubt

about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due

to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

that our audit provides a reasonable basis for our opinion.

have served as the Company’s auditor since December 20, 2023.

York, New York

O’CONNOR DAVIES LLP

Park Avenue, New York, NY 10167 I Tel:

212.867.8000 or 212.286.2600 I Fax:

212.286.4080 I www.pkfod.com

O’Connor Davies LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept

any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Stockholders and the Board of Directors of Sharps Technology Inc.

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We believe that our audits provide a reasonable basis for our opinion.

Manning Elliott LLP

PROFESSIONAL ACCOUNTANTS

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BALANCE SHEETS

December 31, 2022

December 31, 2021

Current Assets

Prepaid expenses and other current assets

Inventories (Note 3)

Inventories, Net ( Note 3 )

Current Assets

Fixed Assets, net of

accumulated depreciation (Notes 4 and 5)

Fixed Assets, net of accumulated depreciation (Notes 4 and 5)

Other Assets (Notes 5 and 6)

Current Liabilities

Accounts payable and accrued liabilities (Note 4)

Notes payable, net of discount (Note 7)

Contingent stock liability (Notes 7 and 8)

Contingent warrant liability ( Notes 7, 8 and 10)

Accounts payable (Note 4)

Accrued expenses and other

Warrant liability (Notes 8 and 10)

Total Current Liabilities

Tax Liability

Commitments and Contingencies

Deferred Tax Liability ( Note 12 )

Total Liabilities

Commitments and Contingencies (Note 15)

Subsequent Events (Note 16)

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15,274,457 shares issued and outstanding and (2022:

Common stock subscription receivable

Additional paid-in capital

8 unchanged sentences

STATEMENTS OF OPERATIONS

December 31, 2022

December 31, 2021

For the year ended

Operating expenses:

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Foreign currency and other

Net loss Before Provision for Taxes

$ ( 9,871,638 )

$ ( 4,639,662 )

Deferred Tax Benefit

( 9,841,638 )

( 4,639,662 )

Net loss per share, basic and diluted

3 unchanged sentences

STATEMENTS OF COMPREHENSIVE LOSS

December 31, 2022

December 31, 2021

For the year ended

$ ( 9,841,638 )

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THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Preferred Stock

Comprehensive

Stockholders’

– December 31, 2020

Balance – December 31, 2021

$ ( 10,667,704 )

loss for the year ended December 31, 2021

Net loss for the year ended December 31, 2022

( 4,639,662 )

compensation charges

of common stock for services

of common stock from subscriptions

of common stock for acquisition

of common stock for equipment order

– December 31, 2021

Shares issued in Initial Public Offering

Issuance of shares for contingent stock liability

Share-based compensation charges

Fractional share adjustment

Issuance of common stock for services

Foreign currency translation

Collection of stock subscription

Balance – December 31, 2022

$ ( 15,307,366 )

loss for the year ended December 31, 2022

Net loss for the year ended December 31, 2023

( 9,841,638 )

issued in Initial Public Offering

of shares for contingent stock liability

compensation charges

share adjustment

of common stock for services

currency translation

of stock subscription

– December 31, 2022

( 9,841,638 )

Share-based compensation charges

Shares issued in Offering

Shelf Registration Offering – see Note 8

Private Placement Offering – see Note 8

Foreign currency translation

Balance – December 31, 2023

$ ( 25,149,004 )

accompanying notes are an integral part of these financial statements.

1 unchanged sentence

STATEMENTS OF CASH FLOWS

For the year ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

FLOWS FROM OPERATING ACTIVITIES:

$ ( 9,841,638 )

$ ( 4,639,662 )

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

Depreciation and amortization

Stock-based compensation

Issuance of common stock for services

Accretion of debt discount

FMV for adjustment for contingent stock

FMV adjustment for Contingent warrants and warrants

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

and amortization

of common stock for services

of debt discount

for adjustment for contingent stock

adjustment for Contingent warrants and warrants

( 5,211,911 )

IPO issuance costs relating to warrants

Foreign exchange loss

Changes in operating assets

Prepaid expenses

Accounts payable and accrued liabilities

Net cash used in operating activities

Fixed asset impairment

Deferred tax benefit

issuance costs relating to warrants

exchange loss

in operating assets

( 1,441,462 )

payable and accrued liabilities

cash used in operating activities

( 8,507,300 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Deposits paid on fixed assets and components

Purchase of fixed assets

( 6,433,159 )

Other assets – escrow deposit

Asset acquisition

FLOWS FROM INVESTING ACTIVITIES:

paid on fixed assets and components

of fixed assets

( 2,365,576 )

Net cash used in investing activities

cash used in investing activities

( 3,117,916 )

FLOWS FROM FINANCING ACTIVITIES:

proceeds from Initial Public Offering and additional offerings

of note payable

( 2,000,000 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from common stock issued, net of subscription receivable

Net proceeds from Initial Public Offering Units

Net proceeds from notes payable, contingent stock liability, contingent warrant liability

Repayment of note payable

from subscriptions receivable

cash provided by financing activities

of exchange rate changes on cash

INCREASE (DECREASE) IN CASH

( 1,157,989 )

Proceeds from subscriptions receivable

Net cash provided by financing activities

Effect of exchange rate changes on cash

NET INCREASE (DECREASE) IN CASH

CASH — BEGINNING OF YEAR

CASH — END OF YEAR

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for interest

Cash paid for taxes

Non-cash investing and financing activity:

FMV for Common stock issued for contingent shares

FMV for Warrants issued for contingent warrants

Common stock issued and vested stock options for fixed assets acquired

Common stock issued and vested stock options issued as consideration for acquisition

— BEGINNING OF YEAR

— END OF YEAR

DISCLOSURE OF CASH FLOW INFORMATION:

paid for interest

paid for taxes

investing and financing activity:

for Common stock issued for contingent shares

for Warrants issued for contingent warrants

stock issued and vested stock options for fixed assets acquired

stock issued and vested stock options issued as consideration for acquisition

accompanying notes are an integral part of these financial statements.

1 unchanged sentence

TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2022 AND 2021

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Description of Business

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accompanying consolidated financial statements include the accounts of Sharps Technology, Inc.

and its wholly owned subsidiary,

Safegard Medical (Hungary) KFT, collectively referred to as the “Company.” All intercompany transactions and balances have been

and its wholly owned subsidiaries, Safegard

Medical (Hungary) KFT, collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated.

Company’s fiscal year ends on December 31.

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(“GAAP”) in the United States (“U.S.”) and are expressed in U.S.

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

has not generated revenue or cash flow from operations since inception.

As of December 31, 2023, the Company used cash in operations

of $ 8,507,300 and has cash of $ 3,012,908 which is not sufficient to fund the Company’s planned operations for the next 12 months.

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

The Company’s ability

to continue as a going concern is dependent upon the Company’s ability to raise sufficient financing to acquire or commercialize

its products into a profitable business.

The Company intends to finance its future development and commercialization activities and its

working capital needs largely from the sale of equity securities and/or with additional funding from other traditional financing sources

until such time that funds provided by operations are sufficient to fund working capital requirements.

The financial statements of the

Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications

of liabilities that might be necessary should the Company be unable to continue as a going concern.

preparation of financial statements in conformity with U.S.

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Cash and cash equivalents are maintained with various financial institutions.

At December 31,

2023 and 2022, the Company had no cash equivalents.

Company values inventory at the lower of cost (average cost) or net realizable value.

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consist of material, labor, and manufacturing overhead.

Net realizable value is the estimated selling price in the ordinary course

of business, less reasonably predictable costs of completion, disposal, and transportation.

A reserve is established for any excess

or obsolete inventories or they may be written off.

At December 31, 2022 and 2021, inventory is comprised of raw materials,

components and finished goods.

Net realizable value is the estimated selling price in the ordinary course of

business, less reasonably predictable costs of completion, disposal, and transportation.

A reserve is established for any excess or obsolete

inventories or they may be written off.

At December 31, 2023 and 2022, inventory is comprised of raw materials, components and finished

TECHNOLOGY, INC.

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used to measure fair value.

Company’s outstanding warrants are fair valued on a recurring basis with the trading price which could cause fluctuations in

operating results at the reporting periods.

Company’s outstanding warrants are fair valued on a recurring basis with the trading price or FMV using Black Sholes which

could cause fluctuations in operating results at the reporting periods.

1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

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The Company’s fixed

assets consist of land, building, machinery and equipment, molds and website.

assets consist of land, building, machinery and equipment, molds, computer system and website.

Depreciation is calculated using the straight-line

method commencing on the date the asset is operating in the way intended by management over the following useful lives:

– 20 years, Machinery and Equipment – 3 - 10 years and Website – 3 years.

The expected life for Molds is based

lesser of the number of parts that will be produced based on the expected mold capability or 5 years.

20 years, Machinery and Equipment – 3 - 10 years and Computer systems and Website – 3 years.

The expected life for Molds is

based lesser of the number of parts that will be produced based on the expected mold capability or 5 years.

of Long-Lived Assets

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measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from

were no impairment losses recognized during the years ended December 31, 2022 and 2021.

Company recorded an impairment of $ 560,000 during the year ended December 31, 2023 and no

impairment during the year ended December 31, 2022.

TECHNOLOGY, INC.

2 unchanged sentences

Summary of Significant Accounting Policies (continued)

and Purchased Identified Intangible Assets

applicable, goodwill will be recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the

fair value of the net tangible and identified intangible assets acquired under a business combination.

Goodwill also includes acquired

assembled workforce, which does not qualify as an identifiable intangible asset.

The Company reviews impairment of goodwill annually

in the third quarter, or more frequently if events or circumstances indicate that the goodwill might be impaired.

The Company first assesses

qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test.

If, after assessing the

totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit

is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary.

If, based on the qualitative assessment,

it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company

proceeds to perform the quantitative goodwill impairment test.

The Company first determines the fair value of a reporting unit using

weighted results derived from an income approach and a market approach.

The income approach is estimated through the discounted cash

flow method based on assumptions about future conditions such as future revenue growth rates, new product and technology introductions,

gross margins, operating expenses, discount rates, future economic and market conditions, and other assumptions.

The market approach

estimates the fair value of the Company’s equity by utilizing the market comparable method which is based on revenue multiples

from comparable companies in similar lines of business.

The Company then compares the derived fair value of a reporting unit with its

carrying amount.

If the carrying value of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount

equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

Identified Intangible Assets

Intangible Assets

Company’s identified intangible assets are amortized on a straight-line basis over their estimated useful lives of 5 years.

The Company makes judgments about the recoverability of finite-lived intangible assets whenever facts and circumstances indicate

that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable.

facts and circumstances exist, the Company assesses recoverability by comparing the projected undiscounted net cash flows associated

with the related asset or group of assets over their remaining lives against their respective carrying amounts.

Impairments, if any,

are based on the excess of the carrying amount over the fair value of those assets.

If the useful life is shorter than originally

estimated, the Company would accelerate the rate of amortization and amortize the remaining carrying value over the new shorter

The Company evaluates the carrying value of indefinite-lived intangible assets on an annual basis, and an impairment

charge would be recognized to the extent that the carrying amount of such assets exceeds their estimated fair value.

Company makes judgments about the recoverability of finite-lived intangible assets whenever facts and circumstances indicate that the

useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable.

If such facts and circumstances

exist, the Company assesses recoverability by comparing the projected undiscounted net cash flows associated with the related asset or

group of assets over their remaining lives against their respective carrying amounts.

Impairments, if any, are based on the excess of

the carrying amount over the fair value of those assets.

If the useful life is shorter than originally estimated, the Company would accelerate

the rate of amortization and amortize the remaining carrying value over the new shorter useful life.

The Company evaluates the carrying

value of finite-lived intangible assets on an annual basis, and an impairment charge would be recognized to the extent that the carrying

amount of such assets exceeds their estimated fair value.

Compensation Expense

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at the fair value of the consideration received or the fair value of the equity instruments issued, whichever can be more reliably measured.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Summary of Significant Accounting Policies (continued)

Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of

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quarterly period end date while the warrants are outstanding.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Summary of Significant Accounting Policies (continued)

their issuance date and as of December 31, 2022, the warrants (see Notes 8 and 10) were accounted for as liabilities as these instruments

their issuance date and as of December 31, 2023, certain warrants (see Notes 8 and 10) are accounted for as liabilities as these instruments

did not meet all of the requirements for equity classification under ASC 815-40 based on the terms of the aforementioned warrants.

resulting warrant liabilities are re-measured at each balance sheet date until their exercise or expiration, and any change in fair value

is recognized in the Company’s consolidated statements of operations and comprehensive loss.

is recognized in the Company’s consolidated statements of operations.

Currency Translation/Transactions

Company has determined that the functional currency for its foreign subsidiary is the local currency.

For financial reporting

purposes, assets and liabilities denominated in foreign currencies are translated at current exchange rates and profit and loss

accounts are translated at weighted average exchange rates.

Resulting translation gains and losses are included as a separate

component of stockholders’ equity as accumulated other comprehensive income or loss.

Gains or losses resulting from

transactions entered into in other than the functional currency are recorded as foreign exchange gains and losses in the

consolidated statements of operations and comprehensive loss.

For financial reporting purposes,

assets and liabilities denominated in foreign currencies are translated at current exchange rates and profit and loss accounts are translated

at weighted average exchange rates.

Resulting translation gains and losses are included as a separate component of stockholders’

equity as accumulated other comprehensive income or loss.

Gains or losses resulting from transactions entered into in other than the

functional currency are recorded as foreign exchange gains and losses in the consolidated statements of operations.

Comprehensive

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income (loss) consists of the Company’s consolidated net loss and foreign currency translation adjustments related to its subsidiary.

Foreign currency

translation adjustments included in comprehensive loss were not tax effected as the Company has a full valuation allowance at

December, 2022 and 2021.

Foreign currency translation adjustments included in comprehensive loss were not tax effected as the Company has a full valuation allowance

at December 31, 2023 and 2022.

Accumulated other comprehensive income (loss) is a separate component of stockholders’ equity and

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ASC 260 requires presentation of both basic and diluted

earnings per share (EPS) on the face of the consolidated statement of operations and comprehensive loss.

Basic EPS is computed by dividing

net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during

Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method

and convertible preferred stock using the if-converted method.

In computing diluted EPS, the average stock price for the period is used

in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.

Diluted EPS excludes all

dilutive potential shares if their effect is anti-dilutive.

As at December 31, 2022, there were 10,405,916 stock options and warrants

that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS because to do so would

have been antidilutive for the periods presented.

earnings per share (EPS) on the face of the consolidated statements of operations.

Basic EPS is computed by dividing net income (loss)

available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.

EPS includes the 3,381,479 of pre-funded warrants (see Note 8).

Diluted EPS gives effect to all dilutive potential common shares outstanding

during the period using the treasury stock method and convertible preferred stock using the if-converted method.

In computing diluted

EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of

stock options or warrants.

Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

As of December 31, 2023,

there were 22,950,155 stock options and warrants that could potentially dilute basic EPS in the future that were not included in the

computation of diluted EPS because to do so would have been anti-dilutive for the periods presented.

Company must make certain estimates and judgments in determining income tax expense for financial statement purposes.

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in a subsequent period.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Summary of Significant Accounting Policies (continued)

provision for income taxes was comprised of the Company’s current tax liability and changes in deferred income tax assets and liabilities.

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Such amounts are recognized as an expense as the related goods are delivered or the services are performed.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Summary of Significant Accounting Policies (continued)

Contingencies

Liabilities for lo ss

contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recognized when it is probable

that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Gain contingencies are evaluated and

not recognized until the gain is realizable or realized.

for loss contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recognized when it is

probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Gain contingencies are evaluated

and not recognized until the gain is realizable or realized.

Accounting Pronouncements

March 2020, the FASB issued ASC Topic 848, Reference Rate Reform .

ASC Topic 848 provides relief for impacted areas as it relates

to impending reference rate reform.

ASC Topic 848 contains optional expedients and exceptions for applying GAAP to debt arrangements,

contracts, hedging relationships, and other areas or transactions that are impacted by reference rate reform.

This guidance is effective

upon issuance for all entities and elections of certain optional expedients are required to apply the provisions of the guidance.

August 5, 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

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The ASU’s amendments are effective for smaller public business entities fiscal years beginning after December 15, 2023.

continues to assess all potential impact of the standard and will disclose the nature and reason for any elections that the Company makes.

is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements and does not expect the adoption of this amended

guidance to have a material impact on the Company’s consolidated financial statements.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) :

Improvements to Income Tax Disclosures .

The new guidance

requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a quantitative

The new guidance is effective for public companies for annual reporting periods beginning after December 15, 2024, and for

non-public companies for annual reporting periods beginning after December 15, 2025, with early adoption permitted for both.

will adopt the new standard in the annual reporting period beginning after December 15, 2025 and is currently evaluating the impacts of the

new guidance on its disclosures within the consolidated financial statements.

Company does not expect the adoption of any accounting pronouncements to have a material impact on the consolidated financial statements.

reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be significant

to the accounting for our operations.

Company reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be

significant to the accounting for our operations.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

net consisted of the following at December 31, 2023 and 2022:

Schedule of Inventories

December 31, 2022

December 31, 2021

Raw materials

3 unchanged sentences

Schedule of Property, Plant and Equipment

December 31, 2022

December 31, 2021

Machinery and Equipment

Fixed asset, gross

Computer and Website

Total Fixed Assets

accumulated depreciation

( 1,215,786 )

Fixed asset, net

expense of fixed assets for the year ended December 31, 2022 and 2021 was $ 647,690

and $ 28,699 ,

respectively.

Substantially, all of the Company’s fixed assets are located at the Company’s Hungary location.

expense of fixed assets for the year ended December 31, 2023 and 2022 was $ 876,064 and $ 647,690 , respectively.

Substantially, all of

the Company’s fixed assets are located at the Company’s Hungary location.

the fourth quarter of 2023, the Company recorded, in Research and Development expenses, an asset impairment of $ 560,000

relating to Molds, which were included in Machinery and Equipment, due to a decision to discontinue usage of certain

the year ended December 2022, the Company recorded $ 63,612 in fixed asset costs relating to the estimated fair market value for options

2 unchanged sentences

which is included in accounts payable.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Asset Acquisition

June 2020, the Company entered into a Share Purchase Agreement (“Agreement”) with Safegard Medical

(“Safegard”) and amendments to the Agreement, collectively, the Agreements, to purchase either the stock or certain

assets of a manufacturing facility for $ 2.5 M

in cash, plus additional consideration of 28,571

shares of common stock with an estimated fair market value of $ 7.00 , 35,714

stock options with an exercise price of $ 7.00

stock options with an exercise price of $ 4.25 .

The purchase price includes the fair market value of the common stock of $ 200,000

and the vested options of $ 183,135 .

The Agreements provided the Company various periods for due diligence and post due diligence, requirements for escrow payments

through the closing date (“Closing Date”).

June 2020, the Company entered into a Share Purchase Agreement (“Agreement”) with Safegard Medical (“Safegard”)

and amendments to the Agreement, collectively, the Agreements, to purchase either the stock or certain assets of a manufacturing facility

for $ 2.5 M in cash, plus additional consideration of 28,571 shares of common stock with an estimated fair market value of $ 7.00 , 35,714

stock options with an exercise price of $ 7.00 and 50,000 stock options with an exercise price of $ 4.25 .

The purchase price includes the

fair market value of the common stock of $ 200,000 and the vested options of $ 183,135 .

The Agreements provided the Company various periods

for due diligence and post due diligence, requirements for escrow payments through the closing date (“Closing Date”).

the Closing Date, the Agreements provided the Company with the exclusive use of the facility in exchange for payment of the facility’s

2 unchanged sentences

comprised of the seller’s workforce costs, materials and other recurring monthly operating cost.

the year ended December 31, 2022 and 2021, the Company had remitted $ 594,000 and $ 770,000 , respectively for the aforementioned Operating

The remittance of operating costs was discontinued after the Closing Date.

These costs were included in research and development

expense in the consolidated statement of operations and comprehensive loss as the activities at the facility in 2022 and 2021 were related

to design and testing of the Company’s products.

acquisition of Safegard, which closed on July 6, 2022, did not meet the definition of a business pursuant to ASC 805- 10 ,

and accordingly was accounted for as an asset acquisition in accordance with ASC 805-50.

The cost of the

acquisition was $ 2,936,712 ,

including transaction costs of $ 53,576 ,

with the allocation to the assets acquired on a relative fair value basis.

The intangibles relate to permits and a limited workforce

the year ended December 31, 2022, the Company had remitted $ 594,000 , respectively for the aforementioned Operating Costs.

The remittance

of operating costs was discontinued after the Closing Date.

These costs were included in research and development expense in the consolidated

statement of operations as the activities at the facility in 2022 were related to design and testing of the Company’s products.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Asset Acquisition (continued)

acquisition of Safegard, which closed on July 6, 2022, did not meet the definition of a business pursuant to ASC 805-10, and accordingly

was accounted for as an asset acquisition in accordance with ASC 805-50.

The cost of the acquisition was $ 2,936,712 , including transaction

costs of $ 53,576 , with the allocation to the assets acquired on a relative fair value basis.

The intangibles relate to permits and a

limited workforce acquired.

Under ASC 805-50, no goodwill is recognized.

The operating results for Safegard are included in the consolidated balance

sheet and consolidated statements of operations and comprehensive loss for the period beginning after the closing on July 6,

The operating results for Safegard are included in the consolidated

balance sheet and consolidated statements of operations for the period beginning after the closing on July 6, 2022.

relative fair value of the assets acquired and related deferred tax liability is as follows:

8 unchanged sentences

Schedule of Other Assets

Acquisition (see Note 5)

Intangibles, net

3 unchanged sentences

31, 2023 was $ 15,184 .

Note Purchase Agreement

December 14, 2021, the Company entered into a Note Purchase Agreement (“NPA”) with three unrelated third-party purchasers

(“Purchasers”).

The Purchasers provided financing to the Company in the form of bridge financing, aggregating principal of

$ 2,000,000 (the “Notes”).

The principal under the Notes shall be payable on the earlier of (i) December 14, 2022, and (ii)

the date on which the Company consummates an initial public offering (“IPO”), herein referred to as the “Maturity Date”.

The Notes bore interest at 8 % with interest payments due monthly.

The Company and the Purchasers had entered into a Security Agreement

whereby the Notes were collateralized by substantially all the assets of the Company, both tangible and intangible both currently owned

with stated exclusions, as defined, and any future acquired with stated exclusions, as defined.

TECHNOLOGY, INC.

1 unchanged sentence

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Note Purchase Agreement

December 14, 2021, the Company entered into a Note Purchase Agreement (“NPA”) with three unrelated third-party

purchasers (“Purchasers”).

The Purchasers provided financing to the Company in the form of bridge financing, aggregating

principal of $ 2,000,000

(the “Notes”).

The principal under the Notes shall be payable on the earlier of (i) December 14, 2022, and (ii) the date

on which the Company consummates an initial public offering (“IPO”), herein referred to as the “Maturity

The Notes bore interest at 8 %

with interest payments due monthly.

The Company and the Purchasers had entered into a Security Agreement whereby the Notes were

collateralized by substantially all the assets of the Company, both tangible and intangible both currently owned with stated

exclusions, as defined, and any future acquired with stated exclusions, as defined.

Note Purchase Agreement (continued)

NPA provided for covenants that until all of the Notes have been converted, exchanged, redeemed or otherwise satisfied in accordance

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dispose of assets other than in the ordinary course of business, or f) engage in different line of business.

additional consideration to the Purchasers for providing the financing, the Company also agreed to a) issue each Purchaser a number

of shares of the Company’s Common Stock equal to 50% of the original principal amount of each Purchaser’s Note (the

“Contingent Stock”) and b) issue each Purchaser a number of warrants, which would allow the Purchasers to purchase

additional shares of the Company’s Common Stock, equal to 50% of the original principal amount each Purchaser’s Note for

a term of 5.0 years (the “Contingent Warrants”) .

additional consideration to the Purchasers for providing the financing, the Company also agreed to a) issue each Purchaser a number of

shares of the Company’s Common Stock equal to 50% of the original principal amount of each Purchaser’s Note (the “Contingent

Stock”) and b) issue each Purchaser a number of warrants, which would allow the Purchasers to purchase additional shares of the

Company’s Common Stock, equal to 50% of the original principal amount each Purchaser’s Note for a term of 5.0 years (the

“Contingent Warrants”).

both the Contingent Stock and the Contingent Warrants, the number of shares and warrants that each Purchaser will be issued was unknown

at the time of the NPA and was determined based on a formula of 50% of the original principal amount divided by a “Subsequent

Offering Price” based on the valuation in a future offering of Common stock or other equity interest in the Company (such offering

referred to as a “Consummated Offering”) during the period beginning on December 14, 2021 through and including the date

the Company consummates an initial public offering (“IPO”) (such period referred to as the “Subsequent Offering Period”).

at the time of the NPA and was determined based on a formula of 50% of the original principal amount divided by a “Subsequent Offering

Price” based on the valuation in a future offering of Common stock or other equity interest in the Company (such offering referred

to as a “Consummated Offering”) during the period beginning on December 14, 2021 through and including the date the Company

consummates an initial public offering (“IPO”) (such period referred to as the “Subsequent Offering Period”).

accordance with ASC 480-10-25-14, a fixed monetary amount exists at inception for the total value of Contingent Stock that may be issued

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such the FMV of Contingent Warrants at inception was $ 585,000 , which was recorded as debt discount.

The Company incurred $ 197,500

of debt issuance costs associated with the NPA.

The Company incurred $ 197,500 of

debt issuance costs associated with the NPA.

The debt issuance costs were allocated between the Notes, Contingent Stock and Contingent

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Contingent Stock and Contingent Warrant liabilities were measured at FMV on the date of issuance (based on the Black-Scholes valuation

inception, the Notes were recorded at the net amount of approximately $ 665,000 ,

after adjusting for debt discounts of approximately $ 1,335,000

inception, the Notes were recorded at the net amount of approximately $ 665,000 , after adjusting for debt discounts of approximately $ 1,335,000

relating to the debt issuance costs, Contingent Stock and Contingent Warrants.

Management calculates the effective interest rate

(“EIR”) to consider the potential repayment at redemption date by reference to the face value amount after taking into

account the stated 8 %

Management calculates the effective interest rate (“EIR”)

to consider the potential repayment at redemption date by reference to the face value amount after taking into account the stated 8 %

interest rate.

In 2022, through the repayment date, the Company recorded interest expense of $ 39,111

(2021 - $ nil )

and accreted interest of $ 1,299,895

(2021 - $ nil )

and repaid the $ 2,000,000

in Notes with proceeds from the IPO that closed on April 19, 2022.

In 2022, through the repayment date, the Company recorded interest expense of $ 39,111 and accreted interest of $ 1,299,895

and repaid the $ 2,000,000 in Notes with proceeds from the IPO that closed on April 19, 2022.

value of the Contingent Stock and Contingent Warrants is required to be re-measured at FMV at each reporting date, using either the Black-Scholes

valuation model or other valuation method, if deemed more appropriate, with recognition of the changes in fair value to other income

or expense in the consolidated statement of operations in accordance with ASC 480, Debt and Equity.

On April 19, 2022, the Company issued

235,295 shares of Common Stock to settle the Contingent Stock liability, re-measured the liability at its estimated FMV based on the

stock’s trading price and reclassified $ 496,000 to Common Stock Par Value and Additional Paid in Capital.

connection with the closing of the IPO, 235,295 warrants were issued to settle the Contingent Warrant liability (“Note Warrants”)

with an exercise price of $ 4.25 adjusted to $ 0.64 at September 29, 2023, based on anti-dilution terms in the warrants.

The terms of the

Note Warrants continue to require classification as a liability under ASC 815 with recognition of the changes in fair value to other

income or expense in the consolidated statement of operations in accordance with ASC 480 Debt and Equity.

(See Notes 8 and 10)

TECHNOLOGY, INC.

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THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Note Purchase Agreement (continued)

value of the Contingent Stock and Contingent Warrants is required to be re-measured at FMV at each reporting date, using either the

Black-Scholes valuation model or other valuation method, if deemed more appropriate, with recognition of the changes in fair value

to other income or expense in the consolidated statement of operations in accordance with ASC 480, Debt and Equity.

2022, the Company issued 235,295

shares of Common Stock to settle the Contingent Stock liability, re-measured the liability at its estimated FMV based on the

stock’s trading price and reclassified $ 496,000

to Common Stock Par Value and Additional Paid in Capital.

connection with the closing of the IPO, 235,295

warrants were issued to settle the Contingent Warrant liability (“Note Warrants”) with an exercise price of $ 4.25 .

The terms of the Note Warrants continue to require classification as a liability under ASC 815 with recognition of the

changes in fair value to other income or expense in the consolidated statement of operations in accordance with ASC 480 Debt and

During the year ended December 31, 2022, the Company recorded a FMV income adjustment of $ 554,412

to reduce the Warrant liability from $ 585,000

at December 31, 2021 to $ 30,588

at December 31, 2022.

(See Notes 8 and 10)

Stockholders’ Equity

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stock decreased from $ 0.001 to $ 0.0001 per share.

September 29, 2023, the Company completed two simultaneous offerings and received aggregate gross proceeds of approximately $ 5.6 million,

before expenses to the placement agent and other offering expenses of $ 716,000 .

first offering, the securities purchase agreement offering (the “Shelf Offering”) with institutional investors and the

Company resulted in the Company receiving net proceeds from the Shelf Offering and the sale of pre-funded warrants of approximately

$ 2.5 million,

includes the value of the pre-funded warrants recorded in Additional Paid in Capital, net of $ 362,000

in fees relating to the placement agent and other offering expenses.

The Shelf Offering was priced at the market under Nasdaq rules.

In connection with the Shelf Offering, the Company issued 3,618,521

shares of common at a purchase price of $ 0.64

per unit and 800,000

pre-funded warrants at $ 0.639

per pre-funded warrants.

The exercise price of the pre-funded warrants will be $ 0.001

The second offering, the

securities purchase agreement offering (“Private Placement”) with institutional investors and the Company received net

proceeds from the Private Placement of approximately $ 2.4 million, net of $ 354,000 in fees relating to the placement agent and other

offering expenses.

In connection with the Private Placement, the Company issued:

(i) 2,581,479 PIPE Shares (or PIPE Pre-Funded Warrants

in lieu thereof) and (ii) PIPE Warrants (non-trading) to purchase 8,750,003 shares of our common stock, at a combined purchase price

of $ 1.074 per unit (or $1.073 per pre-funded unit).

The PIPE Warrants have a term of five and one-half ( 5.5 ) years from the issuance

date and are exercisable for one share of common stock at an exercise price of $ 0.64 .

The net proceeds, after reflecting par value,

has been recorded in Additional Paid in Capital of $ 1.6 million and with respect to the PIPE Warrants recorded as a liability under

ASC 815 of $ 985,204 .

On October 16, 2023, the Company filed an S-1 (Resale) Registration Statement in connection with the Private

Placement and on October 26, 2023 the S-1 went effective.

At December 31, 2023 the warrant liability is $ 1,036,875 .

February 3, 2023, the Company completed a securities purchase agreement (“Offering”) with institutional investors and received

net proceeds from the Offering were approximately $ 3.2 million, net of $ 600,000 in fees relating to the placement agent and other offering

The Offering was priced at the market under Nasdaq rules.

In connection with the Offering, the Company issued 2,248,521 units

at a purchase price of $ 1.69 per unit.

Each unit consists of one share of common stock and one non-tradable warrant exercisable for one

share of common stock at a price of $ 1.56 , adjusted to $ 0.64 at September 29, 2023, based on anti-dilution terms in the warrants.

warrants have a term of five years from the issuance date.

On February 13, 2023, the Company filed an S-1 (Resale) Registration Statement

in connection with the Offering.

April 13, 2022, the Company’s initial public offering (“IPO”) was declared effective by the SEC pursuant to which the

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to 1,125,000 warrants on April 19, 2022.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Stockholders’ Equity (continued)

Company’s common stock and warrants began trading on the Nasdaq Capital Market or Nasdaq on April 14, 2022.

The net proceeds

from the IPO, prior to payments of certain listing and professional fees were approximately $ 14.2

The net proceeds, after reflecting par value, has been recorded in Additional Paid in Capital of $ 9.0 million and with

respect to the Warrants as a liability under ASC 815 of $ 5.2 M.

The net proceeds from

the IPO, prior to payments of certain listing and professional fees were approximately $ 14.2 million.

The net proceeds, after reflecting

par value, has been recorded in Additional Paid in Capital of $ 9.0 million and with respect to the Warrants as a liability under ASC

815 of $ 5.2 M.

(See Note 10)

2 unchanged sentences

Purchase agreement.

2021, the Company completed stock subscriptions through a private placement for 487,204 shares of common stock at $ 7.00 per share.

Company received cash proceeds of $ 3,377,929 and had a subscription receivable of $ 32,500 which was received in January 2022.

the Company issued 71,429 shares with an estimated fair value of $ 500,000 to a vendor for engineering and design services provided for

equipment and for partial payments for equipment begin manufactured (See Note 4), 28,571 shares related to an acquisition (See Note 5)

and 2,857 shares for services with an estimated fair value of $ 20,000 .

In connection with a one-year advisory services arrangement entered into in April 2023, the Company issued 495,000

warrants during the year ended December 31, 2023 at an exercise price of $ 1.56 .

The warrants have a three-year term and were fully vested on issuance.

The FMV of the warrants recorded for the year end ended

December 31, 2023 was $ 42,915

as computed using the Black Sholes valuation model.

The assumptions for the year ended December 31, 2023 were:

a) expected term

years, b) expected volatility – 24.49 %

c) risk free rate- 3.58 %

and d) dividend rate – 0 %.

In connection with the Private Placement in September 2023, the Company issued 8,750,003 non-trading PIPE Warrants as a component

of the Unit as noted in Common Stock above.

The PIPE Warrants were recorded at the FMV, computed using the Black Sholes valuation

The PIPE Warrant’s liability requires remeasurement at each reporting period.

The PIPE Warrants are classified as a

liability based on ASC 815.

At the issuance date and December 31, 2023, the liability was $ 985,204 and $ 1,036,875 , respectively and

for the year ended December 31, 2023 a FMV loss adjustment of $ 51,671 was recorded (See Note 10).

In connection with the Offering in February 2023, the Company issued 2,248,521 non-trading warrants Offering Warrants as a component

of the Unit as noted in Common Stock above.

The Offering Warrant’s liability requires remeasurement at each reporting period.

The Offering Warrants were recorded at the FMV, computed using the Black Sholes valuation method.

The Offering Warrants are classified

as a liability based on ASC 815.

At the issuance date and at December 31, 2023 the liability was $ 455,326 and $ 234,072 , respectively.

During the year ended December 31, 2023, the Company recorded a FMV gain adjustment of $ 221,254 .

(See Note 10).

In connection with the IPO in April 2022, the Company issued 7,500,000

warrants (Trading Warrants) as a component of the Units and 1,125,000

warrants to the underwriter (Overallotment Warrants), as noted in Common Stock above.

The Trading and Overallotment Warrants were

recorded at the FMV, being the trading price of the warrants, on the IPO effective date and the Warrants are classified as a

Liability based on ASC 815.

The Warrant liability requires remeasurement at each reporting period.

At December 31, 2023 and 2022,

the liability was $ 1,121,250 .

During years ended December 31, 2023 and 2022, the Company recorded a FMV loss (gain) adjustment of $ 0

and $( 4,784,559 ), respectively

(See Note 10).

TECHNOLOGY, INC.

2 unchanged sentences

Stockholders’ Equity (continued)

connection with the IPO in April 2022, the Company issued 7,500,000

warrants (Trading Warrants) as a component of

the Units and 1,125,000

warrants to the underwriter (Overallotment Warrants),

as noted in Common Stock above.

The Trading and Overallotment Warrants were recorded at the FMV, being the trading price of the warrants,

on the IPO effective date and the Warrants are classified as a Liability based on ASC 815.

The Warrant liability requires remeasurement

at each reporting period.

At the IPO, the liability was $ 5,778,750

and at December 31, 2022 the liability was $ 1,121,250 .

During year ended December 31, 2022, the Company recorded a FMV gain adjustment of $ 4,657,500 ,

(See Note 10).

The Company has issued 235,295

Warrants (“Note Warrants”) to the Purchasers of the Notes on April 19, 2022.

The Note Warrants have an exercise

price of $ 4.25 and a term of five years .

At the issuance date, the liability was $ 157,647 During the year ended December 31, 2022,

the Company recorded a FMV gain of 127,058 .

The Note Warrants have an exercise price of

and a term of five years .

At December 31,2023 and 2022, the liability was $ 30,588 .

During the years ended December 31, 2023 and 2022, the Company recorded a FMV loss (gain) of $ 0

and ($ 127,059 ),

respectively.

(See Note 10)

1 unchanged sentence

warrants in connection with the IPO for a nominal cost of $ 11,250 .

The Warrants have an exercise price of $ 5.32 and are exercisable

after October 9, 2022.

The FMV at the date of issuance was $ 228,750 computed using the Black Sholes valuation model with the following

a) volatility of 93.47 %, five-year term, risk free interest rate 2.77 % and 0 % dividend rate.

The estimated FMV was classified

as additional issuance costs.

The Warrants have an exercise price of $ 5.32

and are exercisable after October 9, 2022.

The FMV at the date of issuance was $ 228,750

computed using the Black Sholes valuation model with the following assumptions:

a) volatility of 93.47 %, five -year

term, risk free interest rate 2.77 %

dividend rate.

These warrants were recorded in Equity at the estimated FMV and classified as additional issuance

Preferred Stock

8 unchanged sentences

as in effect upon completion of the IPO, will entitle the holder to 10 % of the total purchase price.

(See Note 15)

Warrant Liability

2 unchanged sentences

The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in

fair value presented within the consolidated statement of operations and comprehensive loss.

fair value presented within the consolidated statement of operations, The non-trading warrants, related to the February 2023 and September

2023 offerings, are valued using the Black-Scholes pricing model.

The assumptions for the year ended December 31, 2023 were as follows:

(See Notes 7 and 8)

Warrant liability at December 31, 2022 was as follows:

of Fair Value of Warrant

Expected term (years)

Expected volatility

45.30 % to 70.44 %

Risk-free interest rate

3.53 % to 4.54 %

Dividend rate

Warrant liability at December 31, 2023 and 2022 was as follows:

of Warrant Liability

Note Warrants

Trading and Overallotment Warrants

Warrant liability

Warrants outstanding at December 31, 2022 were as follows:

of Warrant Outstanding

Note Warrants

Offering Warrants – February 2023

Offering Warrants – September 2023

Total Warrant Liability

Warrants outstanding at December 31, 2023 and 2022 were as follows:

of Warrant Outstanding

Trading and Overallotment Warrants

Warrant outstanding

following table presents the changes in the Warrant liability of the Level 1 warrants issued on April 14, 2022, the effective date of

the IPO measured at fair value:

of Changes in the Warrant Liability

FMV of Note Warrants, at issuance

FMV of Trading and Overallotment Warrants, at issuance

Change in fair value of warrant liability, issuance through December 31, 2022

( 4,784,559 )

Fair Value at December 31, 2022

Note Warrants

Offering Warrants – February 2023

Offering Warrants – September 2023

Warrants issued for services arrangement

Total Warrants Outstanding

TECHNOLOGY, INC.

1 unchanged sentence

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Warrant Liability (continued)

the years ended December 31, 2023 and 2022 the FMV loss (gain) adjustment, which is reflected in the FMV adjustment on Warrants in the

Consolidated Statements of Operations was ($ 169,583 ) and ($ 4,784,559 ), respectively.

Stock Options

On January 24, 2023, the Company’s Board of Directors initially adopted the 2023 Equity Incentive Plan (the

“2023 Plan”), to provide for the issuance of up to 1,400,000 options and/or shares of restricted stock be available for issuance

to officers, directors, employees and consultants.

The 2023 Plan was subsequently updated to provide for the issuance of up to 3,500,000

options and/or shares of restricted stock.

The 2023 Plan was approved by shareholders at the annual meeting

summary of options granted and outstanding is presented below.

3 unchanged sentences

Exercisable at end of year

the years ended December 31, 2022 and 2021, the estimated weighted-average grant-date fair value of options granted was $ 1.63 per share

and $ 4.55 per share, respectively.

As of December 31, 2022 and 2021, there was $ 475,097 and $ 1,260,990 , respectively, of unrecognized

stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period sixteen

months as of December 31, 2022.

During the year ended December 31, 2023, the Company granted five -year options (the “Options”) to purchase a total of:

shares of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”) to its directors, executive

officers, employees and consultants pursuant to the Company’s.

2022 and 2023 Equity Incentive Plans.

The Options are exercisable

at $ 1.37 per share which was the closing price on January 25, 2023.

shares of the Company’s Common Stock in connection with an employment or consulting agreements at the exercise price, representing

the closing price on the grant date ranging from $ 0.82 to $ 1.30 .

During the year ended December 31, 2023, 660,000 Options have been granted under the 2023 Equity Incentive Plan and the remaining 405,000 Options were issued under the 2022 Equity Incentive Plan.

At December 31, 2023, 1,748,836 Options are outstanding under the 2022 Equity Incentive Plan.

the years ended December 31, 2023 and 2022, the estimated weighted-average grant-date fair value of options granted was $ .80

per share and $ 1.63

per share, respectively.

As of December 31, 2023 and 2022, there was $ 498,454

and $ 475,097 ,

respectively, of unrecognized stock-based compensation related to unvested stock options with a weighted average fair value of $ .94 and $ 2.05 per share, respectively, which is expected to be recognized over a

weighted-average period sixteen months as of December 31, 2023.

following table summarizes information about options outstanding at December 31, 2023:

1 unchanged sentence

Intrinsic Value

Weighted Average

Contractual Life

Intrinsic Value

on Exercisable

aggregate intrinsic values of stock options outstanding and exercised December 31, 2022 were calculated as the difference between the

exercise price of the options and the fair value of the Company’s common stock on December 31, 2022.

December 31,2023, the stock options outstanding and the options exercisable have exercise prices that exceed the stock market price at

December 31, 2023 and as such no intrinsic value exist.

Intrinsic value is defined as the difference between the exercise price of the

options and the market price of the Company’s common stock.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Stock Options (continued)

2023 and 2022, the Company recognized stock-based compensation expense of $ 920,108 , of which $ 906,745 and $ 13,363 was recorded in general

and administrative and research and development expenses, respectively and $ 1,195,819 , of which $ 1,091,227 and $ 105,592 was recorded

in general and administrative and research and development expenses, respectively.

Further, in 2022, the Company recorded stock-based

charges of $ 63,612 relating to purchase of machinery (See Note 4) and $ 60,435 relating to an Acquisition.

(See Note 5) and in 2021, the

Company recorded stock-based charges relating to consideration for purchase of machinery of $ 253,337 (see Note 4) and relating to an

Acquisition for $ 122,701 (see Note 5).

and administrative and research and development expenses, respectively and $ 1,012,592 , of which $ 915,797 and $ 96,795 was recorded in

general and administrative and research and development expenses, respectively.

Further, in 2022, the Company recorded stock-based charges

of $ 63,612 relating to purchase of machinery (See Note 4) and $ 60,435 relating to an Acquisition.

(See Note 5.)

fair value of stock option awards accounted for under ASC 718 was estimated at the date of grant using a Black-Scholes option-pricing

1 unchanged sentence

of Fair Value of Stock Option Awards

Expected term (years)

Expected volatility

75.40 % to 89.93

100.81 % to 110.74

Risk-free interest rate

3.71 % to 4.27

2.90 % to 3.47

Dividend rate

reconciliation of the Federal statutory rate of 21 % and 28 % in the years ended December 31, 2023 and 2022, respectively to the total

effective rate applicable to income (loss) is as follows:

of Reconciliation of Federal Statutory Rate to Total Effective Rate

December 31, 2023

December 31, 2022

interest rate

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2022 AND 2021

reconciliation of the Federal statutory rate ( 28 % ) to the total effective rate applicable to income (loss) is as follows:

of Reconciliation of Federal Statutory Rate to Total Effective Rate

Expected benefit at statutory federal tax rate

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$ ( 281,073 )

$ ( 268,594 )

Research and development expenses

Stock-based compensation

Charitable Contributions

Net operating losses - federal

2 unchanged sentences

Research credit

Deferred tax assets gross

Less valuation allowance

3 unchanged sentences

$ ( 162,000 )

$ ( 192,000 )

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Income Taxes (continued)

authoritative guidance requires the asset and liability method of accounting for deferred income taxes.

5 unchanged sentences

tax asset will not be realized.

A review of all available positive and negative evidence needs to be considered, including a

company’s current and past performance, the market environment in which the company operates, length of carryback and

carryforward periods and existing contracts that will result in future profits.

After reviewing all the evidence, the company has

recorded a full valuation allowance.

A review of all available positive and negative evidence needs to be considered, including a company’s

current and past performance, the market environment in which the company operates, length of carryback and carryforward periods and

existing contracts that will result in future profits.

After reviewing all the evidence, the company has recorded a full valuation allowance.

of December 31, 2023, the Company had U.S.

federal net operating loss carryforwards of approximately $ 21,222,000 of which $ 241,000 , if

not fully utilized, expires by 2038 and which $ 20,981,000 do not expire.

The Company has foreign net operating loss carryforwards of

$ 2,590,000 , if not fully utilized, expire through 2028.

Utilization is dependent on generating sufficient taxable income prior to expiration

of the tax loss carryforwards.

geographical components of loss before income taxes consisted of the following for the years ended December 31:

of Geographical Components of Loss Before Income Taxes

United Stated Operations

$ ( 8,173,807 )

$ ( 3,978,832 )

International Operations

( 1,667,831 )

(Loss) Income before taxes

( 9,871,638 )

( 4,639,662 )

Related Party Transactions and Balances

of December 31, 2022 and 2021, accounts payable and accrued liabilities include $ 105,667

and $ 59,375 ,

respectively, payable to officers and directors of the Company.

The amounts are unsecured, non-interest bearing and are due on

demand (See Note 15) .

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEAR ENDED DECEMBER 31, 2022 AND 2021

of December 31, 2023 and 2022, accounts payable and accrued liabilities include $ 32,974 and $ 105,667 , respectively, payable to officers,

and directors of the Company.

The amounts are unsecured, non-interest bearing and are due on demand (See Note 15).

Fair Value Measurements

3 unchanged sentences

similar instruments, respectively.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Fair Value Measurements (continued)

of December 31, 2023, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the

5 unchanged sentences

Total liabilities measured at fair value

of December 31, 2022, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the

Company’s consolidated balance sheet:

Fair Value Measurements Using

Total assets measured at fair value

Warrant liability

Total liabilities measured at fair value

Commitments and Contingencies

Assets and Other

December 31, 2022, the Company has outstanding orders to purchase equipment, molds and component parts for research and development of

$ 609,953 of which advance payments of $ 209,678 have been made and recorded in Other Assets (See Note 6) .

December 31, 2023, the remaining amounts due under outstanding orders of $ 56,874 is recorded in Accounts Payable.

At December 31, 2022,

the Company has outstanding orders to purchase equipment, molds and component parts for research and development of $ 609,953 of which

advance payments of $ 209,678 have been made and recorded in Other Assets (See Note 6).

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Commitments and Contingencies (continued)

Contingencies

16 unchanged sentences

change in control as such the 2 % royalty remains in place.

August 1, 2022, the Company cancelled the consulting agreement with Alan Blackman, Co- Chairman and Chief Operating Officer and entered

into an Employment Agreement which provides for annual salary of $ 256,000 , which provides for increases, and provisions compensation

adjustments, expense and tax differential reimbursements, benefits and bonuses.

As of September 1, 2022, the annual salary is $ 320,000 .

At June 30, 2022, the Company approved and accrued a $ 250,000 bonus to Mr.

Blackman for services provided in 2022, of which $ 65,000 was

paid subsequent to December 31, 2022.

The Company terminated Mr.

Blackman’s Employment Agreement effective May 1, 2023.

continued to serve as the Co-Chairman and a member of the Board of Directors.

Subsequent to June 30, 2023, the Company and Mr.

entered into a separation agreement whereby, Mr.

Blackman will be paid severance payments of approximately $ 346,000 , which was recorded

as an expense and an accrued expense as of June 30, 2023, over thirteen months, continue his medical benefits for such period with a

cost of approximately $ 29,000 which has been accrued at June 30, 2023.

At December 31, 2023, the outstanding balance due Mr.

is $ 218,000 , which is recorded in accrued expenses.

Further, all unvested options were fully vested and the Company recorded a charge

of $ 60,000 .

In connection with the separation agreement, Mr.

Blackman no longer serves as Co-Chairman or Board member and has agreed

to vote his Series A Preferred Stock in favor of the election, reelection, and/or designation of each individual nominated to serve as

a director on the Board of Director as shall be identified in an applicable proxy statement filed by the Company for such election of

Once the payments due Mr.

Blackman are fully paid, the Series A Preferred Stock shall be deemed immediately cancelled and

forfeited and without further consideration.

The Series A Preferred shall at such time be returned to the status of an authorized but

unissued share of preferred stock of the Company.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE YEAR ENDED DECEMBER 31, 2022 AND 2021

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Commitments and Contingencies (continued)

August 1, 2022, the Company cancelled the consulting agreement with Alan Blackman, Co- Chairman and Chief Operating Officer and entered

into an Employment Agreement which provides for annual salary of $ 256,000 ,

which provides for increases, and provisions compensation adjustments, expense and tax differential reimbursements, benefits and bonuses.

As of September 1, 2022, the annual salary is $ 320,000 .

At June 30, 2022, the Company approved and accrued a $ 250,000

Blackman for services provided in

2022, of which $ 65,000

was paid subsequent to December 31, 2022.

September 30, 2022, the Company entered into a formal employment agreement, effective on such date and will continue until

terminated by either party, subject to the terms of the agreement, with Andrew R.

Crescenzo who has been serving as the

Company’s Chief Financial Officer on a contract services basis for the last three years.

The agreement provided for annual

compensation of $ 225,000 and plus a one-time $ 18,750 incentive payment upon the commencement of the agreement.

During the course of

the term, Mr.

Crescenzo will be eligible for (i) performance bonuses to be granted at the discretion of the Company’s

Compensation Committee and (ii) to participate in the Company’s 2022 Equity Incentive Plan.

The agreement contains customary

employment terms and conditions.

October 2022, the Company entered into a service agreement (“Service Agreement”) with an unrelated third-party for

marketing and investor relations services.

The Service Agreement, which has a term of one year, has various deliverables and

provides payments to the third party as follows;

a) an initial fee of $ 90,000 ,

b) monthly fees through the term of $ 12,500 ,

shares of restricted common stock and d) $ 300,000

specifically related to digital marketing activities.

As stated in Note 8, the 200,000

shares of restricted common stock were valued at $ 230,000 ,

representative of the trading price on the issuance.

September 30, 2022, the Company entered into a formal employment agreement, effective on such date and will continue until terminated

by either party, subject to the terms of the agreement, with Andrew R.

Crescenzo who has been serving as the Company’s Chief Financial

Officer on a contract services basis for the last three years.

The agreement provided for annual compensation of $ 225,000 and plus a

one-time $ 18,750 incentive payment upon the commencement of the agreement.

During the course of the term, Mr.

Crescenzo will be eligible

for (i) performance bonuses to be granted at the discretion of the Company’s Compensation Committee and (ii) to participate in

the Company’s 2022 Equity Incentive Plan.

The agreement contains customary employment terms and conditions.

October 2022, the Company entered into a service agreement (“Service Agreement”) with an unrelated third-party for marketing

and investor relations services.

The Service Agreement, which has a term of one year, has various deliverables and provides payments

to the third party as follows;

a) an initial fee of $ 90,000 , b) monthly fees through the term of $ 12,500 , c) 200,000 shares of restricted

common stock and d) $ 300,000 specifically related to digital marketing activities.

As stated in Note 8, the 200,000 shares of restricted

common stock were valued at $ 230,000 , representative of the trading price on the issuance.

February 9, 2023, the Company, appointed Justin Page, as Vice President of Technical Operations with a start date of February 15, 2023.

The agreement provides for annual compensation of $ 235,000 and Options to purchase 50,000 shares of Common Stock at the exercise price

of $ 1.30 , the closing price on the grant date.

During the course of the term, Mr.

Paige will be eligible for (i) performance bonuses

to be granted at the discretion of the Company’s Compensation Committee and (ii) to participate in the Company’s Equity Incentive

The agreement contains customary employment terms and conditions and provides for severance of six months if a change in control

occurs, as defined.

November 10, 2023, the Company executed an Employment Agreement with Robert Hayes, its Chief Executive Officer amending the employment

letter dated September 6, 2021.

The agreement term automatically renews for successive one-year terms as of the commencement date unless

prior written notice by either party within ninety days prior to end of the current term.

The agreement provides for termination of employment

and severance benefits under stated conditions and restrictive covenants.

The agreement provides for annual compensation retroactive

to June 1, 2023 of $ 600,000 from $ 400,000 and a stated increase with the successful acquisition of InjectEZ and other terms of the acquisition

agreement (See Note 5).

The agreement provides for bonus compensation for:

(i) closing the Nephron acquisition agreement, (ii) long-term

incentives for achieving revenue targets and market caps for the Company’s stock and (iii) other Company achievements.

the agreement provides for benefits and paid time off.

Subsequent Events

January 25, 2023, the Company granted five-year options (the “Options”) to purchase a total of 975,000

shares of the Company’s common stock, par

value $ 0.0001

per share (the “Common Stock”) to

its directors, executive officers, employee and consultants pursuant to the Company’s.

2022 and 2023 Equity Incentive Plans.

Options are exercisable at $ 1.37

per share which was the closing price on January

Of the Options granted, Options to purchase an aggregate of 495,000

shares of Common Stock were issued to executive

officers Options to purchase an aggregate of 455,000

shares of Common Stock were issued to directors

and Options to purchase an aggregate of 75,000

shares of Common Stock to employees and a consultant.

January 25, 2023, the Company’s Board of Directors adopted the 2023 Equity Incentive Plan (the “2023 Plan”).

Plan provides for the issuance of up to 1,400,000

options and/or shares of restricted stock to

be available for issuance to officers, directors, employees and consultants.

The 2023 Plan is subject to shareholder approval at

the annual meeting.

February 09, 2023, the Company, appointed Justin Paige , as Vice President

of Technical Operations with a start date of February 15, 2023.

The agreement provides for annual compensation of $ 235,000 and

Options to purchase 50,000 shares of Common Stock at the exercise price of $ 1.30 , the closing price on the grant date.

During the course

of the term, Mr.

Paige will be eligible for (i) performance bonuses to be granted at the discretion of the Company’s Compensation

Committee and (ii) to participate in the Company’s Equity Incentive Plan.

The agreement contains customary employment terms

and conditions and provides for severance of six months if a change in control occurs, as defined.

February 3, 2023, the Company completed a securities purchase agreement (“Offering”) with institutional investors and

received net proceeds from the Offering were approximately $ 3.2

million, net of $ 600,000

in fees relating to the placement agent and other offering expenses.

The Offering was priced at the market under Nasdaq rules.

connection with the Offering, the Company issued 2,248,521

units at a purchase price of $ 1.69

Each unit consists of one share of common stock and one non-tradable warrant exercisable for one share of common stock at

a price of $ 1.56 .

The warrants have a term of five

years from the issuance date.

On February 13, 2023, the Company filed an S-1 (Resale) Registration Statement in connection with the Offering.

January 2024, the holders of 398,441

of pre-funded warrants exercised their warrants

at the exercise price of $ .001 .

Changes in and Disagreements with Accountants

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-K

Item 8. Financial Statements and Supplementary Data