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, that we believe, if cleared, authorized, or approved by the U.S. Food and Drug Administration ("FDA"), can provide a solution to this market need with rapid, laboratory quality results in approximately 24 minutes, in the clinic, Intensive Care Unit ("ICU"), Emergency Room ("ER") and other hospital and clinical setting settings where rapid and reliable results are required. Currently, testing is generally performed in a laboratory, and the transportation and logistics of transporting the samples to the lab and obtaining the result takes between 8-48 hours. Our platform is a sample-to-result system that has been shown in a clinical study to provide results in 24 minutes. Our business model is to generate revenue from the sale of the table-top Symphony system, and from the sale of single-use indication specific cartridges that are used by the Symphony system for the diagnostic test. Once the test material (generally a small volume blood sample) is transferred to a single-use indication specific 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 $2.0 million and $194,000 for the three months ended March 31, 2022 and 2021, respectively. We had $17.1 million in cash and cash equivalents and a $9.7 million accumulated deficit at March 31, 2022, with net cash used in operating activities of approximately $1.9 million for the three months ended March 31, 2022.





Results of Operations

Comparison of the Three Month Periods Ended March 31, 2022 and 2021

The following table sets forth our results of operations for the three month periods ended March 31, 2022 and 2021:





                                                                       Three Months Ended
                                                                            March 31,
                                                                       2022            2021
Operating expenses:
Research and development                                           $    694,757     $   24,183
General and administrative                                            1,319,819        139,911
Marketing and business development                                       53,685         69,104
Total operating expenses                                              2,068,261        233,198

Operating loss                                                       (2,068,261 )     (233,198 )

Other income
Derivative warrant liability gain                                             -          6,111
Interest income, net of amortization of premium                               -         27,051
Gain on forgiveness of note payable, paycheck protection program              -          5,000
Other income                                                             54,858            848
Total other income, net                                                  54,858         39,010
Net loss                                                           $ (2,013,403 )   $ (194,188 )




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Research and Development

Research and development expenses for the three months ended March 31, 2022 were approximately $695,000, as compared to approximately $24,000 for the comparable period in 2021. The increase in research and development expenses is due to continued clinical studies and scale-up manufacturing of the Symphony IL-6 Test.





General and Administrative

General and administrative expenses for the three months ended March 31, 2022 were approximately $1.3 million, as compared to approximately $140,000 for the comparable period in 2021. The increase in general and administrative was expected, as the Company invested in scalable infrastructure designed to support its growing operations and $498,000 related to expenses incurred for public company operations due to the completion of our initial public offering in November 2021.

Marketing and Business Development

Marketing and business development expenses for the three months ended March 31, 2022 were approximately $54,000 as compared to approximately $69,000 for the comparable period in 2021. These expenses will be limited while we are pre-revenue, with the expectation to increase the investment in this area commensurate with the growth of our commercial operations.

Liquidity and Capital Commitments





Liquidity

We have funded our operations through net proceeds from our IPO on November 10, 2021. As of March 31, 2022, the Company had approximately $17.1 million in unrestricted cash and cash equivalents. We believe that our available cash resources will be sufficient to fund our planned operations and capital expenditure requirements for at least twelve months.

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