Cautionary Statement Regarding Forward-looking Statements.

This Interim Report on Form 10-Q contains, in addition to historical information, certain forward-looking statements regarding Non-Invasive Monitoring Systems, Inc. (the "Company" or "NIMS," also referred to as "us", "we" or "our"). These forward-looking statements represent our expectations or beliefs concerning the Company's operations, performance, financial condition, business strategies, and other information and that involve substantial risks and uncertainties. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. The Company's actual results of operations, some of which are beyond the Company's control, could differ materially from the activities and results implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to the Company's: history of operating losses and accumulated deficit; need for additional financing; dependence on management; risks related to proprietary rights; other factors described herein as well as the factors contained in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended July 31, 2022. We do not undertake any obligation to update forward-looking statements, except as required by applicable law. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance.





Overview

We previously were engaged in the development, manufacture and marketing of non-invasive, whole body periodic acceleration ("WBPA") therapeutic platforms, which are motorized platforms that move a subject repetitively head to foot. The Company discontinued operations in May 2019, accordingly, certain liabilities are classified as discontinued operations.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to income taxes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. A more detailed discussion on the application of these and other accounting policies can be found in Note 2 in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K. While we believe that the factors we evaluate provide us with a meaningful basis for establishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate. Since the determination of these estimates requires the exercise of judgment, actual results could differ from such estimates.





Results of Operations

We have discontinued operations in May 2019. The Company is assessing potential mergers, acquisitions, strategic collaborations and liquidation.

Three and six months ended January 31, 2023 compared to three and six months ended January 31, 2022

General and administrative costs and expenses. General and administrative ("G&A") costs and expenses were $40,000 and $105,000 for the three and six months ended January 31, 2023, respectively, as compared to $36,000 and $93,000 for the three and six months ended January 31, 2022, respectively. The $4,000 and $12,000 increase for the three and six months ended January 31, 2023, respectively, was primarily due to professional fees.





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Total operating costs and expenses. Total operating costs and expenses were $40,000 and $105,000 for the three and six months ended January 31, 2023, respectively, as compared to $36,000 and $93,000 for the three and six months ended January 31, 2022, respectively. The $4,000 and $12,000 increase for the three and six months ended January 31, 2023, respectively, was primarily due to professional fees.

Interest expense. Net interest expense was $8,000 and $14,000 for the three and six months ended January 31, 2023, respectively, as compared to $5,000 and $6,000 for the three and six months ended January 31, 2022. The interest expense is related to the Promissory Notes described in Note 7 to the accompanying unaudited condensed consolidated financial statements.

Net loss. Net loss was $48,000 and $119,000 for the three and six months ended January 31, 2023, respectively, as compared to $41,000 and $99,000 for the three and six months ended January 31 2021, respectively. The $7,000 and $20,000 increase for the three and six months ended January 31, 2023, respectively, was primarily due to professional fees and interest expense on related party notes payable (see Note 7).

Liquidity and Capital Resources

The Company's operations have been primarily financed through private sales of its equity securities and advances under promissory notes. At January 31, 2023, we had approximately $31,000 of cash and working capital deficit of approximately $532,000. We believe that the cash on hand at January 31, 2023 is not sufficient to meet our anticipated cash requirements for the next 12 months. No assurance can be given that such additional financing will be available on acceptable terms or at all.

We expect to incur losses for the foreseeable future. It is likely that we will be required to obtain additional external financing through public or private equity offerings, debt financings from shareholders or collaborative agreements. No assurance can be given that such additional financing will be available on acceptable terms or at all.

Current economic conditions have been, and continue to be, volatile and continued instability in these market conditions may limit our ability to access the capital in a timely manner. Additionally, the sales of equity or convertible debt securities may result in dilution to our stockholders.

Net cash used in operating activities was $134,000 and $138,000 for six months ended January 31, 2023 and 2022, respectively. This $4,000 decrease in cash used in operating was primarily due to increases in prepaid expenses, offset by increases in accounts payable and accrued expenses.

Net cash provided by financing activities was $150,000 and $150,000 for six months ended January 31, 2023 and 2022, respectively. This $150,000 in each six month period was primarily due to the proceeds from Promissory Notes described in Note 7 to the accompanying unaudited condensed consolidated financial statements.

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