The following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. The information and financial data discussed below is only a summary and should be read in conjunction with the historical financial statements and related notes contained elsewhere in this 10-K. The financial statements contained elsewhere in this 10-K fully represent the Company's financial condition and operations; however, they are not indicative of the Company's future performance. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this 10-K.





11

Cautionary Notice Regarding Forward Looking Statements

The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

This filing contains a number of forward-looking statements which reflect management's current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words "believe," "expect," "intend," "anticipate," "estimate," "may," variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

Readers should not place undue reliance on these forward-looking statements, which are based on management's current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks discussed in prior filings, in press releases and in other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below.

Impairment of Other Intangible and Long-Lived Assets

The Company accounts for its intangible assets under the provisions of ASC 350, "Intangibles - Goodwill and Other". In accordance with ASC 350, intangible assets with a definite life are analyzed for impairment under ASC 360-10-05 "Property, Plant and Equipment" and intangible assets with an indefinite life are analyzed for impairment under ASC 360 annually, or more often if circumstances dictate. The Company performs its annual simplified impairment test in the fourth quarter of each year. The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. If impairment is indicated, the asset is written down to its estimated fair value.





12







Use of estimates

Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. The significant estimates were made for the fair value of common stock issued for services, with notes payable arrangements, in connection with note extension agreements, and as repayment for outstanding debt, in estimating the useful life used for depreciation and amortization of our long-lived assets, in the valuation of the derivative liability, and the valuation of deferred income tax assets. Actual results and outcomes may differ from management's estimates and assumptions.

Recently Issued Accounting Pronouncements

The Company has evaluated all the recent accounting pronouncements and determined that there are no accounting pronouncements that will have a material effect on the Company's financial statements.





Results of Operations Year Ended December 31, 2022, vs. Year Ended December 31,
2021



                          Year Ended December 31,           Favorable
                           2022              2021         (Unfavorable)          %

Revenue                $     135,355     $     73,105             62,250           85.2
Cost of revenue                9,990           14,985              4,995           33.3
Gross profit                 125,365           58,120             67,245          115.7

Operating expenses         3,389,705        2,284,667         (1,105,038 )        (48.4 )

Loss from operations (3,264,340 ) (2,226,547 ) (1,037,793 ) (46.6 )



Other expense            (15,210,495 )       (878,347 )      (14,332,148 )     (1,631.8 )

Net loss               $ (18,474,835 )   $ (3,104,894 )   $  (15,369,941 )       (495.0 )




Revenue

Revenue of the Company's SofPulse® product during the current year increased by $62,250 or 85.2% compared to the previous year.

Revenues for sales of our SofPulse® product is typically recognized at the time the product is shipped, at which time the title passes to the customer, and there are no further performance obligations. During the year ended December 31, 2022, the Company also recognized $113,620 in royalty/licensing revenue from a former related party.

We anticipate that revenue will increase in future periods as the roll out of the SofPulse® product continues. The Company is looking to partner with global participants in the medical device market to spur its expansion. The Company expects such investment alternatives to include partnerships, joint ventures, distribution, and licensing agreements for the PEMF medical technology. The Company also look to expand on current initiatives with the Department of Defense, the Department of Veterans Affairs, and other surgical and pain management markets.





Cost of Revenue

Cost of revenue decreased by $4,995 or 33.3% from the previous year to $9,990 during the current year compared to $14,985 during the previous year. Cost of revenue is recognized on those sales recorded as gross for which we are the principal in the transaction as opposed to net sales which reflect no cost of revenue. It is anticipated that cost of revenue will increase in future periods as the roll out of the SofPulse® product continues.





13







Operating Expenses

Our operating expenses increased by $1,105,038 or 48.4% to $3,389,705 in 2022 compared to $2,284,667 in 2021. The operating expenses were comprised primarily of consulting fees, professional fees, and stock-based compensation. This change was due primarily to an increase in stock-based compensation of approximately $1.2 million.





Depreciation and Amortization

We incur depreciation and amortization expenses for costs related to our patents. Our depreciation and amortization expense was $646,912 in 2022 compared to $648,492 in 2021. The Company has not impaired its finite-lived intangible as of December 31, 2022 and 2021.





Other Expense

Other expense was $15,210,495 in 2022 compared to $878,347 in 2021. Other Expense includes interest expense, change in fair value of derivative liability, amortization of debt issuance cost, gain on extinguishment of debt and make-good expense.

The increase in other expense during our fiscal year 2022 was primarily the result of re-valuation of the derivative liability embedded in the convertible notes issued with variable conversion rates. The Change in fair value of the Company's derivative liability resulted in an expense of $14 million in 2022 compared to a gain of approximately $41,000 in 2021, resulting from changes to the inputs to the fair value option pricing model. The Company also incurred an increase in interest expense of approximately $380,000 and approximately $225,000 of additional expenses attributed to the make good provision embedded in the fixed rate convertible notes, offset by an increase of approximately $340,700 of gain from debt extinguishment in 2022.

Liquidity and Capital Resources





                                As of December 31,              Increase
                              2022              2021           (Decrease)
Working Capital

Current assets            $      15,822     $      94,855     $    (79,033 )

Current liabilities 33,381,760 17,701,710 15,680,050 Working capital deficit $ (33,365,938 ) $ (17,606,855 ) $ 15,759,083



Long-term debt            $      79,825     $      79,825     $          -

Stockholders' deficit     $ (32,180,319 )   $ (15,774,324 )   $ 16,405,995




                                          For Years Ended December 31,            Increase
                                            2022                 2021            (Decrease)
Statements of Cash Flows Select
Information

Net cash provided (used) by:
Operating activities                   $     (678,838 )     $     (986,584 )   $     (307,746 )
Financing activities                   $      593,000       $    1,059,100     $     (466,100 )




                                               As of December 31,           Increase
                                              2022            2021         (Decrease)

Balance Sheet Select Information



Cash                                       $        98     $    85,936     $   (85,838 )

Accounts payable and accrued liabilities $ 8,869,451 $ 7,078,283 $ 1,791,168






14

Since January 2022 and through December 31, 2022, the Company has raised approximately $0.6 million in equity and debt transactions. These funds have been used to advance the operations of the Company, build its bio-medical platform, and general corporate development. Our accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these consolidated financial statements. However, the Company has incurred substantial losses. Our current liabilities exceed our current assets and available cash is not sufficient to fund the expected future operations. The Company is raising additional capital through debt and equity securities to continue the funding of its ongoing operations and fund the various business initiatives. However, there is no assurance that the Company can raise enough funds or generate sufficient revenues to pay its obligations as they become due, which raises substantial doubt about our ability to continue as a going concern. To reduce the risk of not being able to continue as a going concern, management has implemented its business plan to materialize revenues from sales and future license agreements, and also in February 2023 secured a reseller agreement with Academy Medical, Inc., a Service-Disabled Veteran-Owned Small Business, thereby providing priority procurement benefits to the Company. The relationship with Academy Medical is intended ensure availability of SofPulseâto the Veterans Health Administration (VHA) and Department of Defense (DoD). To date no revenue has been realized under this contract. The Company is also continuing its efforts to raise capital through the sale of its common stock and has engaged an Investment Banker to raise additional capital. Although, uncertainty exists as to whether the Company will be able generate enough cash from operations to fund the Company's working capital needs or raise sufficient capital to meet the Company's obligations as they become due, no adjustments have been made to the carrying value of assets or liabilities as a result of this uncertainty. Our cash on hand at December 31, 2022 was less than $1,000. This will not be sufficient to fund operations if additional capital is not raised. The Company raised an aggregate of $0.225 million through the sale of equity and debt securities since January 1, 2023, through the date of this report.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guaranteed contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.





Seasonality

Management does not believe that our current business segment is seasonal to any material extent.

Securities Authorized for Issuance under Equity Compensation Plans

We do not have in effect any compensation plans under which our equity securities are authorized for issuance.





15

Unregistered Sales of Equity Securities





During the year ended December 31, 2022, we issued the following unregistered
equity securities:


  Number of
Common Shares                  Source of
   Issued                       Payment                      Amount
   25,850,000   Conversion of notes and accrued interest   $   517,000
    2,428,777              Settlement of debt              $    46,147
   66,500,000                   Services                   $ 1,316,900
    3,450,000              Commitment shares               $    46,793
   15,000,000              Issuance for cash               $   142,000
   25,500,000        Conversion of preferred stock         $         -

The above issuances were exempt from registration pursuant to Section 4(2), and/or Regulation D promulgated under the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance of securities by us did not involve a public offering. The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a "public offering." Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

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