What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-27 compared with 2024-03-29 · 186 added, 212 removed, 261 unchanged (60% of the section changed)

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To date, we have generated no revenue.

We have incurred net losses of $9,841,638 and $4,639,662 for the years ended December

31, 2023 and 2022, respectively.

Substantially all of our net losses resulted from costs incurred in connection with our research and

development efforts, payroll and consulting fees, stock compensation and general and administrative costs associated with our operations,

including costs incurred for being a public company since April 14, 2022.

See below Initial Public

Offering, Liquidity and Capital Resources and Notes to Consolidated Financial Statements

We have incurred net losses of $9,296,202 and $9,841,638 for the years ended December 31, 2024 and 2023,

respectively.

Substantially all of our net losses resulted from costs incurred in connection with our research and development efforts,

payroll and consulting fees, stock compensation and general and administrative costs associated with our operations, including costs

incurred for being a public company since April 14, 2022.

See below Initial Public Offering, Liquidity and Capital Resources and Notes

to Consolidated Financial Statements

classify our operating expenses as research and development, and general and administrative expenses.

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located in Melville, New York, but employees and consultants in the US work remotely and will continue to do so indefinitely.

2020, in connection with the agreement to acquire Safegard, a syringe manufacturing facility in Hungary, which was completed on

July 6, 2022, we were contractually provided the exclusive use of the facility for research and development and testing in exchange for

payment of the seller’s operating costs, including among others, use of Safegard’s work force, utility costs and other services.

order to compete in the market, we must build inventory.

Commencing in the 4 th Quarter of 2022 started building

We require commercial quantities of inventory to secure orders.

Delivery is expected shortly after receiving

2020, in connection with the agreement to acquire Safegard, a syringe manufacturing facility in Hungary, which was completed on July

6, 2022, we were contractually provided the exclusive use of the facility for research and development and testing in exchange for payment

of the seller’s operating costs, including among others, use of Safegard’s work force, utility costs and other services.

To remain competitive, we must build inventory.

We began this process in

the 4 th Quarter of 2022.

To secure orders we require commercial quantities of inventory with delivery expected shortly after

and Development

and development expense consists of expenses incurred while performing research and development activities for our various syringe products.

Research and development expense consists of expenses incurred while performing

research and development activities for our various syringe products.

We recognize research and development expenses as they are incurred

Our research and development expense primarily consist of:

Manufacturing and testing

costs and related supplies and materials;

Consulting fees paid for

our Chief Technology Officer;

Operating costs paid to

Safegard, through the acquisition date for use of Safegard’s workforce, utilities and other services, relating to the facility

being utilized;

Third-party costs, including

engineering, incurred for development and design.

Substantially

all of our research and development expenses to date have been incurred in connection with our syringe products.

We expect our research

and development expenses to increase for the foreseeable future as we continue to enhance our products to meet the market requirements

for our Sharps syringe product line for its various intended uses throughout the world.

Substantially all of our research and development expenses to date have been incurred in connection with our syringe products.

our research and development expenses to increase for the foreseeable future as we continue to enhance our products to meet the market

requirements for our Sharps syringe product line for its various intended uses throughout the world.

Public Offering

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net proceeds to repay the Note Payable of $2 million.

September 29, 2022, the Company entered into an agreement (the “NPC Agreement”) with Nephron Pharmaceuticals Corporation

(“NPC”) and various affiliates of NPC, including InjectEZ, LLC.

The NPC Agreement intended to support several areas of

the Company’s development and growth.

The Company and NPC intended to supplement the NPC Agreement by entering into a manufacturing

supply agreement, a sales and distribution agreement and a pharma services program to support growth, and a future agreement to support

manufacturing expansion.

As noted below, the sales and distribution agreement was terminated on March 8, 2024 and replaced.

manufacturing supply agreement, noted above, will be replaced as part of the Asset Purchase Agreement, entered into on September 22,

2023 (see below) and the Pharma Services agreement continues to be in place, but no activities have occurred to date.

The Company is currently working to amend the terms of this NPC Agreement.

based on the below September 22, 2023

Asset Purchase Agreement.

Pharma Services Program (PSP) with Nephron is intended to create new business development growth opportunities for both companies.

opportunities will include the development and sale of next generation drug delivery systems that will be produced by the Company and can

be purchased by the healthcare industry, pharmaceutical markets, as well as by Nephron.

September 29, 2022, the Company also entered into an agreement (the “Nephron Agreement”) with InjectEZ, LLC

(“InjectEZ”), Nephron Pharmaceuticals Corporation (“NPC”), Nephron SC, Inc.

(“NSC”), and Nephron

Sterile Compounding Center LLC (“Sterile”) (NPC, NSC, and Sterile are sometimes collectively referred to as

“Nephron”), pursuant to which the Company was to provide technical advice and assistance to support manufacturing by

InjectEZ, purchase certain quantities of syringes as they may order or require, and collaborate with Nephron on certain related

business endeavors.

The Company is currently working to amend the terms of the Nephron Agreement

based on the below September 22, 2023 Asset Purchase Agreements.

September 22, 2023, the Company entered into a series of agreements with Nephron and Nephron’s wholly owned subsidiary InjectEZ, LLC.

The Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) to purchase certain equipment and leasehold

improvements at Nephron’s facility (the “Facility”) in West Columbia, South Carolina.

The Company continues to work

with Nephron towards the purchase of the Nephron facility pursuant to the Asset Purchase Agreement dated September 22, 2023.

Purchase Agreement, when closed, will supercede the manufacturing and supply agreement entered into in connection with the NPC Agreement

on September 29, 2022.

The closing of the Asset Purchase Agreement is contingent on obtaining the necessary financing and there can be no

assurance that the closing of the asset sale will occur.

January 29, 2025, the Company closed on an offering the (“2025 Offering”) and received gross proceeds of approximately $20.0

million, before deducting underwriting fees and other offering expenses payable by the Company.

The net proceeds were approximately $18.2M,

of which $4.2M was used to repay the outstanding Notes.

2025 Offering consisted of 14,285,714 units consisting of 9,029,814 Common Units with gross proceeds of $12.6M and 5,255,900 Pre-Funded

Units with gross proceeds of $7.4M, with each unit consisting of one share of Common Stock.

In addition, each unit includes;

Series A Registered Common Warrant to purchase one share of Common Stock per warrant at an exercise price of $1.75 (“2025 Series

A Warrant”) and (ii) one Series B Registered Common Warrant to purchase one share of Common Stock per warrant at an exercise price

of $1.75 or pursuant to an alternative cashless exercise option (“2025 Series B Warrant”), collectively, the 2025 Warrants.

The public offering price per Common Unit was $1.40 or $1.3999 for each Pre-Funded Unit, which is equal to the public offering price

per Common Unit sold in the offering minus an exercise price of $0.0001 per Pre-Funded Warrant.

The Pre-Funded Warrants are immediately

exercisable and may be exercised at any time until exercised in full.

Immediately after closing 4,980,900 of the Pre-funded units were

exercised and the Company received $498 in proceeds.

The 2025 Series A Warrants are exercisable immediately and expire 60 months after

stockholder approval.

The number of securities issuable under the 2025 Series A Warrants is subject to adjustment.

The 2025 Series B

Warrants are exercisable immediately and expire 30 months after stockholder approval.

The number of securities issuable under the 2025

Series B Warrants is subject to adjustment.

Company granted Aegis Capital Corp.

(“Aegis”) an overallotment, being a 45-day option to purchase additional shares of Common

Stock and/or Warrants of (i) up to 15.0% of the number of shares of Common Stock sold in the offering, (ii) up to 15.0% of the number

of 2025 Series A Warrants sold in the offering and (iii) up to 15.0% of the number of 2025 Series B Warrants sold in the offering.

purchase price per additional share of Common Stock is equal to the public offering price of one Common Unit (less $0.00001 allocated

to each full Warrant), less the underwriting discount.

The purchase price per additional 2025 Warrant is $0.00001.

On January 29, 2025,

Aegis exercised its over-allotment option with respect to 2,142,857, 2025 Series A Warrants and 2,142,857, 2025 Series B Warrants and

the Company received net proceeds of approximately $43.

2025 Offering was made pursuant to an effective registration statement on Form S-1 (No.

333-284237) previously filed with the U.S.

and Exchange Commission (SEC) and declared effective by the SEC on January 27, 2025.

December 5, 2024, the Company, entered into subscription agreements with certain institutional investors, pursuant to which the Company

agreed to issue and sell to the investors 248,430 shares (the “Shares”) of Common Stock, par value $0.0001 per share of the

Company at a price of $1.95 per share for gross proceeds to the Company of $484,438 before deducting placement agent fees and commissions

of $84,671 with net proceeds, after reflecting par value, have been recorded in Additional Paid in Captial of $399,742.

The Shares issued

in the offering were offered at-the-market under Nasdaq rules and pursuant to the Company’s Form 1-A (the “Offering Statement”),

initially filed by the Company with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933 (the

“Securities Act”), as most recently amended on November 18, 2024, and qualified on December 3, 2024.

September 20, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) and a

Senior Secured Note (the “Note”) for an aggregate principal amount of $4,375,000, including OID interest of $875,000 maturing

on January 31, 2025, with certain purchasers (the “Purchasers”), and the issuance of approximately 259,091 (pre reverse -

5,700,006 ) unregistered shares of the Company’s Common Stock.

The aggregate gross proceeds to the Company were approximately $3.5

million, before deducting fees to the placement agent and other offering expenses payable by the Company of $514,700 and an escrow deposit

of $250,000 required until certain security liens are filed.

The Note and the common stock were recorded at the relative fair values

of $2.6M and $852,000, respectively, in accordance with ASC 470-20-25-2.

The aforementioned expenses were allocated based on the aforementioned

fair values as a reduction to the carrying amount of the debt and a reduction of the equity in accordance with ASC 505-10.

ended December 31, 2024, the Company recorded accreted interest and fees of 1,705,014 In connection

with the Securities Purchase Agreement and Note, the Company entered into a Registration Rights Agreement with the Purchasers (the “Registration

Rights Agreement”), requiring the Company to file a resale registration statement (the “Registration Statement”) with

Securities and Exchange Commission (the “Commission”) to register the unregistered shares of Common Stock.

forty-five (45) calendar days following the filing date, which is thirty (30) days after the closing date.

The Company filed the required

resale registration statement on October 23, 2024.

March 4, 2024 (the “Effective Date”) the Company entered into a cooperative sales and distribution agreement (the “Agreement)

with Roncadelle Operations s.r.l (“ Roncadelle”)).

In conjunction with the execution of the Agreement, Roncadelle appointed

the Company as its exclusive distributor of Roncadelle products in the United States, Canada, Central and South America and their territories.

The Company appointed Roncadelle as its exclusive distributor of Sharps products in Europe, Middle East, APAC, South Africa and Australia

and their territories.

The Company and Roncadelle agreed to bear their own separate costs and expenses, including fees and other expenses,

relating to external advisors and the preparation, negotiation, execution and performance of this Agreement and any related documents.

The Agreement is effective as of the Effective Date for the initial period of one (1) year (the “Initial Term”).

Upon expiration

of the Initial Term, the term of the Agreement shall automatically renew for additional successive one year terms, unless either party

provides written notice of non-renewal at least ninety (90) days prior to the end of the then-current term, unless any renewal term is

terminated earlier pursuant to the terms of the Agreement or applicable law.

(See “Recent Developments”)

March 8, 2024, the Company and Nephron Pharmaceuticals Corporation terminated their distribution agreement dated December 8, 2022.

Nephron distribution agreement has been partially replaced by the aforementioned Agreement with Roncadelle on the foreign sales side

and plans to use other parties to distribute for the US domestic market.

The Company entered into a new logistics services agreement

on the warehousing side with Owens and Minor (“O&M”) to replace Nephron’s distribution services.

The Company had

no revenues from the Nephron Distribution Agreement and does not believe that the cancellation is material.

The Company is currently

negotiating its contract with O&M to provide 3PL services for both the Company and Roncadelle products, in North and South America,

beginning in the third quarter of 2024.

The Company and Nephron continue to maintain the Pharma Services Program that focuses on the

creation of new business development and growth opportunities for both companies.

These opportunities will include the development and

sale of next generation drug delivery systems that will be produced by the Company and can be purchased by the healthcare industry, pharmaceutical

markets, and Pharma companies such as Nephron and others.

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

net proceeds from the Offering of 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 $.64, as adjusted down from $1.56 as per terms of the warrants.

The warrants have a term of five

years from the issuance date.

(See Notes 8 and 10 to the Consolidated Financial Statements)

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 per share.

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.

( See Notes 8 and 10 to the Consolidated

Financial Statements)

with Roncadelle Operations s.r.l..

The Agreement was effective as of the Effective Date for the initial period of one (1) year (the “Initial

Upon expiration of the Initial Term, the term of the Agreement shall automatically renew for additional successive one

year terms, unless either party provides written notice of non-renewal at least ninety (90) days prior to the end of the then-current

term, unless any renewal term is terminated earlier pursuant to the terms of the Agreement or applicable law.

On February 5, 2025, the

parties reassessed the Agreement and mutually agreed to terminate the Agreement.

The Company obtained no economic benefit with the Agreement

and has other distribution efforts.

The Company incurred no liability on terminationof the Agreement.

March 12, 2025, the Company received a notification letter from The Nasdaq Stock Market advising that, for 30 consecutive business days

preceding the notification letter, the Company did not meet the minimum $1.00 per share bid price requirement for continued inclusion

on The Nasdaq Capital Market pursuant to Nasdaq Marketplace Listing Rule 5550(a)(2).

Normally, a company would be afforded a 180-calendar

day period to demonstrate compliance with the Minimum Bid Price Requirement.

However, pursuant to Listing Rule 5810(c)(3)(A)(iv) the

Company is not eligible for any compliance period specified in Rule 5810(c)(3)(A) because the Company has effected a reverse stock split

over the prior one-year period or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio

of 250 shares or more to one.

Accordingly, the Company’s securities are subject to delisting from Nasdaq.

The Company timely requested

an appeal of the determination and is awaiting the notice of the hearing date.

Accounting Policies and Significant Judgments and Estimates

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Technology, Inc.

(“Sharps” or the “Company”) is a pre-revenue medical device company that has designed and patented

various safety syringes and is seeking commercialization by manufacturing and distribution of its products.

(“Sharps” or the “Company”) is a medical device company that has designed and patented various

safety syringes and has note safety syringe products that were acquired and is seeking commercialization by manufacturing and distribution

of its products.

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

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(See Capital Structure and Note 8 to the Consolidated Financial Statements)

March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic.

This contagious disease outbreak has adversely

affected workforces, economies, and financial markets globally leading to an economic downturn in certain industries and countries.

is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s

business or ability to raise funds.

Management continues to monitor the situation but has not experienced a significant disruption to

its product development efforts.

of Significant Accounting Policies

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

Company operates as one operating segment.

The Company’s chief operating decision maker (“CODM”) is its Chief Executive

Officer and Chief Financial Officer.

The CODM manages operations and business as one operating segment for the purposes of allocating

resources, making operating decisions and evaluating financial performance.

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

At December 31, 2024

and 2023, the Company had no cash equivalents.

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

1 unchanged sentence

consist of material, labor, and manufacturing overhead.

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.

31, 2023 and 2022, 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, 2024 and 2023, inventory is comprised of raw materials, components and finished

Value Measurements

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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 statement of operations and comprehensive loss (See Notes 7, 8 and 10 to the Consolidated Financial

in the Company’s Consolidated Statement of Operations (See Notes 8 and 10

to the Consolidated Financial Statements).

and Diluted Loss Per Share

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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.

EPS includes in 2023 153,703 of pre-funded warrants (see Note 8).

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, 2024, there were 852,994 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

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

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of the Years Ended December 31, 2024 and, 2023.

December 31, 2024

December 31, 2023

Research and development

General and administrative

Interest expense (income)

Net Interest expense (income)

FMV gain adjustment for derivatives

Foreign currency Loss

Other Expense

Deferred Tax (Benefit)

1 unchanged sentence

and Development

the year ended December 31, 2023, Research and Development (“R&D”) expenses decreased to $1,605,547 compared to $2,280,933

the year ended December 31, 2024, Research and Development (“R&D”) expenses increased decreased to $2,471,762 compared to

$1,605,547 for the year ended December 31, 2023.

The decrease of $675,386 was due to decreased R&D costs incurred at the Safegard facility which

transitioned principally from R&D activities to manufacturing.

The decrease occurred in materials and general operating costs of approximately

$1M, of which, a) $575,000 related to cost incurred prior to the acquisition in July 2022 for utilization of the facility, which included

Safegard’s workforce and facility operating cost and b) decreases in material and other operating of $426,000 from $545,000 in

2022 to $119,000 in 2023.

Further, we had decreases in labor related costs of $224,000 specifically related to decreases in stock compensation

of $83,000 from $97,000 in 2022 to $14,000 in 2023, decreases in engineering and other labor costs of $141,000 from $492,000 in 2022

to $351,000 in 2023 and other decreases of $10,000.

The overall decrease was partially offset by $560,000 charge in 2023 for an impairment

of certain molds.

The increase of $866,215 was due to a) an increase in asset machinery impairments in 2024 of $1,210,000, representing

an impairment of machinery of $1,770,000 in 2024 as compared to an asset impairment of $560,000 in 2023 b) lower depreciation expense

of $178,100 and d.) lower R&D labor, consulting and materials of $165,600 given the shift from R&D activities to manufacturing.

and Administrative

the year ended December 31, 2023, General and Administrative (“G&A”) expenses were $8,521,103 as compared to $6,457,860

for the year ended December 31, 2022.

The increase of $2,063,243 was primarily attributable to increases in payroll and related of:

payroll and consulting fees of $1,530,000 from $1,630,000 in 2022 to $3,160,000 in 2023, primarily due to increased amounts of payroll,

increased staffing and higher usage of various consulting services and ii) increase in stock compensation expense, due to timing of option

awards and vesting, of approximately $34,000 from $916,000 in 2022 to $950,000 in 2023.

In addition, we had increases in G&A for

the year ended December 31, 2023, of approximately $498,000 principally from increased:

professional fees $318,000, depreciation $238,000,

general operating costs $251,000, insurance $126,000, technology related costs, including implementation of new ERP system $128,000 and

separation expense of $375,000 for former officer.

These were partially offset by lower public company costs and investor relations $818,000,

travel $90,000 and patent fees $31,000.

For the year ended December 31, 2024, General and Administrative (“G&A”)

expenses were $7,154,948 as compared to $8,521,103 for the year ended December 31, 2023.

The decrease of $1,366,155 was primarily attributable

to a decrease of $187,100 in payroll and related of:

i) payroll and consulting fees higher by $245,100 from $3,163,400 in 2023 to $3,408,500

in 2024, primarily due to increased amounts of payroll associated with higher average staffing levels throughout the year

and higher usage of various consulting services offset by ii) a decrease in stock compensation expense, due to timing of option awards

and vesting, of approximately $433,000 from $950,000 in 2023 to $517,000 in 2024.

All other G&A expenses decreased $1,179,000 primarily

lower marketing, public company and investor relation costs ($549,900), a settlement in 2023 for ($375,000), lower travel ($105,000),

lower insurance costs ($117,500), lower rent ($36,800), lower computer costs ($21,600), lower professional fees ($11,000), lower general

operating costs ($74,400), lower patent fees ($9,700), partially offset by higher board costs ($52,000) and depreciation ($69,900).

expense (income)

income, net of interest expense, was $138,118 for the year ended December 31, 2023, compared to interest expense of $1,320,416 for the

year ended December 31, 2022.

Interest improved, net by $1,458,534 due to a) interest earned on invested cash in 2023 of $138,118 as

compared to $42,900 in 2022 and b) the decrease in interest expense and accreted interest of approximately $1,363,316 was primarily relating

to the financing entered in December 2021which was repaid at the IPO closing with net proceeds.

Net Interest expense,

was $1,664,712 for the year ended December 31, 2024, compared to interest income of $138,118 for the year ended December 31, 2023.

Interest changed, by $1,802,829 due to a) interest earned on invested cash in 2024 of $40,303 as compared to $138,118 in 2023 b) higher

interest expense of $1,705,014 for the accreted interest

on the debt financing that originated in the third quarter of 2024.

Other expenses increased $1,001,665 primarily due to a forfeiture of a

$1M escrow deposit associated with an asset acquisition agreement that was terminated due to delay in obtaining financing.

Adjustment for Derivatives

value of the Note Warrants requires the Fair Market Value (“FMV”) to be remeasured at each reporting date while outstanding

with recognition of the changes in fair value to other income or expense in the statement of operations and comprehensive loss.

years ended December 31, 2023, and 2022 the Company recorded a $169,583 and $5,392,911 FMV gain adjustment respectively to reflect the

decrease in the Note Warrants and Warrants liabilities issued.

(See Notes 7, 8 and 10 to the Consolidated Financial Statements)

value of the Note Warrants requires the Fair Market Value (“FMV”) to be remeasured at each reporting date while

outstanding with recognition of the changes in fair value to other income or expense in the Consolidated Statement of Operations.

For the years ended December 31, 2024, and 2023 the Company recorded a FMV gain adjustment of $3,016,936 and $169,583, respectively to reflect the decrease in the Note Warrants and Warrants liabilities outstanding.

(See Notes 7, 8 and 10 to the

Consolidated Financial Statements)

and Capital Resources

December 31, 2024, and 2023, we had a cash balance of $864,041 and $3,012,908, respectively.

The Company has working capital of $1,145,569

as of December 31, 2023, vs working capital of $2,416,928, as of December 31, 2022.

The decrease in our working capital, after net proceeds from offerings of $8,029,628, was primarily

related to the use of cash of $9,205,577 in operations and investing in fixed assets purchased.

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.

April 13, 2022, we completed its IPO which was declared effective by the SEC, and the Company’s common stock and warrants began

trading on the Nasdaq Capital Market or Nasdaq on April 14, 2022 and which closed on April 19, 2022.

The net proceeds from the IPO were

approximately $14.2 million of which $5,778,750 was attributed to the warrant liability (See Notes 8 and 10 to the Consolidated Financial

February 3, 2023, we completed a securities purchase agreement) - (See Recent Developments-Offering).

On September 29, 2023, the Company

completed two simultaneous offerings (See Recent Developments – Shelf Offering and Private Placement Offering)

The Company has a working capital

deficit of $2,011,678 as of December 31, 2024, as compared to working capital of $1,145,569, as of December 31, 2023.

in our working capital, after net proceeds from offerings in 2024 of $5,907,407, was primarily related to the use of cash of

$8,092,681 in operations, investing in fixed assets purchased and the $1M forfeited escrow deposit.

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.

Subsequent to December 31, 2024, the Company closed an Offering and received net proceeds

of $18.2M of which $4.2M was used to repay the short-term Note.

The Company intends to finance its future development and

commercialization activities and its working capital needs with the recent offering proceeds and further with 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.

See Note 7,8 and 16 to the Consolidated Financial Statements.

In 2024 and 2023, the Company completed various offerings

and private placements.

(“Financings”) The proceeds from such Financings was used to fund working capital to build inventory,

fund capital expenditure and operating costs.

Cash Used in Operating Activities

Company used cash of $6,929,545 and $8,507,300 in operating activities for the year ended December 31, 2024 and 2023, respectively.

increase in cash used was principally due to the Company incurring additional G&A expenses, buildup of inventory partially offset by lower R&D activities as described above

during year ended December 31, 2022.

in cash used was principally due to the Company incurring G&A expenses, increase in inventory partially offset by lower

R&D activities, excluding non-cash items, as described above during year ended December 31, 2024.

Cash Used in Investing Activities

the year ended December 31, 2024 and 2023, the Company used cash in investing activities of $1,163,137 and $698,277, respectively.

both years, cash was used to acquire or pay deposits for machinery and equipment of $698,277 and $542,662, respectively.

ended December 31, 2022, the Company used $2,365,576, for the acquisition of Safegard or related escrow payments.

years, cash was used to acquire or pay deposits for machinery and equipment of $163,137 and $698,277 respectively.

In 2024, the Company incurred a $1,000,000 forfeiture cost under an agreement, as described in other expense above.

Cash Provided by Financing Activities

the year ended December 31, 2023 and 2022, the Company provided cash from financing activities of $8,029,628 and $12,235,475 respectively.

the year ended December 31, 2024 and 2023, the Company provided cash from financing activities of $5,907,407 and $8,029,628

respectively.

In the 2024 period, the cash provided was from the net proceeds from the Offerings in May and September 2024.

In the 2023 period, the cash provided was from the net proceeds from the Offerings in February and September 2023

In the 2022 period,

the cash provided was primarily from the IPO net proceeds of $14,202,975, prior to the effect of recording the liability attributed to

the warrants from the IPO, less the Notes repayment of $2,000,000.

Sheet Arrangements

39 unchanged sentences

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What changed 10-K

Item 7. Management’s Discussion and Analysis