You should read the following discussion and analysis of our financial condition
and results of operations in conjunction with the unaudited condensed
consolidated financial statements and the related notes appearing elsewhere in
this Form 10-Q. This discussion contains forward-looking statements reflecting
our current expectations that involve risks and uncertainties. Actual results
and the timing of events could differ materially from those discussed in our
forward-looking statements as a result of many factors, including those set
forth under "Risk Factors" and elsewhere in this Form 10-Q.



Overview




We are a medical diagnostics company focused on improving patient outcomes
through cost efficient, rapid, near-patient products for triage and monitoring
of disease progression. We believe there is a market need for an on-site and
rapid diagnostic system that can be employed for testing and monitoring. Our
diagnostic system, which we refer to as "Symphony," is an exclusively licensed,
patented, low-cost, system that consists of a small footprint instrument and
single-use indication specific test cartridges.. We believe, if cleared,
authorized, or approved by the U.S. Food and Drug Administration ("FDA"), the
Symphony System can provide a solution to this market need with rapid,
laboratory quality results in the Intensive Care Unit ("ICU"), Emergency Room
("ER"), and other hospital and clinical settings . Currently, testing is
generally performed in a laboratory, and the transportation and logistics of
transporting the samples to the lab and obtaining the results takes 8-48 hours.
Our platform is a sample-to-result system that has been shown in a clinical
study to provide results in approximately 20 minutes. Our business model is to
generate revenue from the sale of the portable Symphony System, and from the
sale of single-use indication specific cartridges used for the diagnostic test.
Once the test material, a small volume whole blood sample, is transferred to a
Symphony Cartridge, no additional sample preparation or pre-processing is
required.



Since inception, we have incurred net losses from operations each year and we
expect to continue to incur losses for the foreseeable future, at least until we
are cleared, authorized or approved by the FDA. We incurred net losses of
approximately $4.0 million and $834,000 for the six months ended June 30, 2022
and 2021, respectively. We had $15.3 million in cash and cash equivalents and a
$11.7 million accumulated deficit at June 30, 2022, with net cash used in
operating activities of approximately $3.6 million for the six months ended
June
30, 2022.



                                       14





Results of Operations

Comparison of the Three Months and Six Months Ended June 30, 2022 and 2021

The following table sets forth our results of operations for the three and six months ended June 30, 2022 and 2021:





                                               Three Months Ended               Six Months Ended
                                                    June 30,                        June 30,
                                               2022            2021            2022            2021
Revenue                                    $    249,040     $        -     $    249,040     $        -
Cost of sales                                   200,129              -          200,129              -
Gross Profit                                     48,911              -           48,911              -

Operating expenses:
Research and development                        756,283        225,992        1,451,040        250,175
General and administrative                    1,196,996        389,830        2,516.815        529,741
Sales and marketing                              81,357         50,250          135,042        119,354
Total operating expenses                      4,102,897        666,072        4,102,897        899,270

Operating loss                               (1,985,725 )     (666,072 )     (4,053,986 )     (899,270 )

Other income
Interest income, net of amortization of
premium                                               -        (59,167 )              -        (32,116
Grant income                                          -         75,000                -         75,000
Other income                                     48,323         10,006          103,181         21,965
Total other income, net                          48,323         25,839          103,181         64,849
Net loss                                   $ (1,937,402 )   $ (640,233 )   $ (3,950,805 )     (834,421 )




Revenue and Gross Profit



Revenue and gross profit increased approximately $249,000 and $49,000
respectively, for the three and six month periods ended June 30, 2022, as
compared to the same periods in 2021. The increase was due to a minor sale of
five Symphony analyzers to our business partner, Toray. Future sales to Toray
are not currently anticipated.



Research and Development



Research and development expenses for the three and six months ended June 30,
2022 were approximately $756,000 and $1.5 million, respectively, as compared to
approximately $226,000 and $250,000, respectively, for the comparable periods in
2021. The increase in research and development expenses is due to the
advancement of our clinical studies and to support the scale-up manufacturing of
the Symphony IL-6 Test.



General and Administrative




General and administrative expenses for the three and six months ended June 30,
2022 were approximately $1.2 million and $2.5 million, respectively, as compared
to approximately $390,000 and $530,000, respectively, for the comparable periods
in 2021. The increase in general and administrative reflects the Company's
investment in scalable infrastructure, as well as expenses to support public
company operations due to the completion of our initial public offering in
November 2021.



Sales and Marketing



Sales and marketing expenses for the three and six months ended June 30, 2022
were approximately $81,000 and $135,000, respectively, as compared to
approximately $50,000 and $119,000, respectively, for the comparable periods in
2021. While these expenses have been limited to date, we expect to increase
these efforts when appropriate to support our commercial growth.



                                       15

Liquidity and Capital Commitments





Liquidity

We have funded our operations primarily through the net proceeds from our IPO on November 10, 2021. As of June 30, 2022, the Company had approximately $15.3 million in unrestricted cash and cash equivalents. We expect that our cash position will be sufficient to fund operations for at least twelve months, inclusive of executing our plan for regulatory approval and initial commercialization of our Symphony IL-6 Test.

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