As filed with the Securitiesand Exchange Commission on August 11, 2022

Registration No. 333-             

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIESACT OF 1933

6700 Professional Parkway

Lakewood Ranch, FL 34240

(917) 388-1578

(Address, including zip code, and telephonenumber, including

area code, of registrant’s principal executiveoffices)

Bonnie-Jeanne Gerety

Chief Financial Officer

6700 Professional Parkway

Lakewood Ranch, FL 34240

(917) 388-1578

(Name, address, including zip code, andtelephone

number, including area code, of agent for service)

With copies to:

If any of the securities being registered onthis Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the followingbox. ☐

If this Form is filed to register additionalsecurities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registrationstatement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filedpursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number ofthe earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filedpursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number ofthe earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrantis a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registrationstatement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment whichspecifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the SecuritiesAct, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a),may determine.

The information in this preliminary prospectusis not complete and may be changed. We and the selling stockholders  may notsell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminaryprospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is notpermitted.

BRAIN SCIENTIFIC INC.

_______ Units

Each Unit Consisting of One Share of CommonStock and

One Warrant to Purchase One Share of CommonStock

We are offering _______ units(each a “Unit” and collectively, the “Units”) of Brain Scientific Inc. (the “Company,” “BrainScientific,” “we,” “our” or “us”) with each Unit consisting of one share of our common stock,par value $0.001 per share, which we refer to as the “Common Stock,” and one warrant (a “Warrant”) to purchaseone share of Common Stock. The Warrants included in the Units are exercisable immediately, will expire ___ years from the date of issuanceand have an exercise price of $___ per share ( ___% of the price per Unit sold in this offering).

The Unitshave no stand-alone rights and will not be certificated or issued in stand-alone form. Purchasers will receive only shares of commonstock and warrants. The shares of Common Stock and Warrants may be transferred separately, immediately upon issuance. The offering alsoincludes the shares of Common stock issuable from time to time upon exercise of the Warrants.

In addition, the selling stockholdersidentified herein (the “Selling Stockholders”) are offering 41,534,495 shares of Common stock, consisting of (i) 22,638,000shares of Common Stock issuable upon conversion of the PPO Debentures (as defined herein) and (ii) 18,896,495 shares of Common Stock underlyingthe PPO Warrants (as defined herein). The 41,534,495 shares of Common Stock offered by the Selling Stockholders are defined herein asthe “Selling Stockholder Shares.”

Our Common Stock is presently traded on the PinkTier of the OTC Markets Group, Inc. (“OTC Markets”), under the symbol “BRSF.” On August 9, 2022, the last reportedsale price of our Common Stock was $0.12. We intend to apply to list our Common Stock and Warrants on the Nasdaq Capital Market underthe symbols “BRSF” and “BRSFW”, respectively. No assurance can be given that our application will be approvedor that the trading prices of our Common Stock on the over-the-counter market will be indicative of the prices of our Common Stock ifour Common Stock were traded on the Nasdaq Capital Market. If our listing application is not approved by the Nasdaq Stock Market, we willnot be able to consummate this offering. The public offering price per Unit will be determined at the time of pricing and may be at adiscount to the current market price of our Common Stock. The recent market price of our Common Stock used throughout this prospectusmay not be indicative of the final offering price of the Units. Prior to this offering, there has been no trading market for the Warrants.

Unless otherwise noted and other than in our historicalfinancial statements and the notes thereto, the share and per share information in this prospectus reflects the proposed reverse splitof the outstanding Common Stock at an assumed [●]-for-[●] ratio to occur prior to the closing of the offering.

Investing in our securities involves ahigh degree of risk. See “Risk Factors” beginning on page 14 of this prospectus. You should carefully consider theserisk factors, as well as the information contained in this prospectus, before purchasing any of the securities offered by thisprospectus.

Neither the Securities and Exchange commissionnor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.Any representation to the contrary is a criminal offense.

We have granted a 45-day option to the representativeof the underwriters to purchase up to ______ additional shares of our Common Stock and/or up to _________ additional Warrants, solelyto cover over-allotments, if any, which we refer to herein as the “Underwriters’ Over-Allotment Option.” The securities issuableupon exercise of the Underwriters’ Over-Allotment Option will be identical to those offered by this prospectus and have been registeredunder the registration statement of which this prospectus forms a part.

The underwriters expect to deliver theshares of Common Stock and Warrants against payment in New York, New York on or about                        ,2022.

Sole Book-Running Manager

JOSEPH GUNNAR & CO. LLC

The date of this prospectus is        ,2022

TABLE OF CONTENTS  

We have not authorized anyone to provide anyinformation or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared.We take no responsibility for and can provide no assurance as to the reliability of, any other information that others may give you. Thisprospectus is an offer to sell only the Units offered hereby, but only under circumstances and in jurisdictions where it is lawful todo so. The information contained in this prospectus is current only as of its date.

For investors outside the United States: We havenot, the Selling Stockholders have not, and the underwriters have not, done anything that would permit this offering or possession ordistribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. Persons outsideof the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to,the offering of the Units and the distribution of this prospectus outside of the United States.

Market and Other Industry Data

Unless otherwise indicated, market data and certainindustry forecasts used throughout this prospectus were obtained from various sources, including internal surveys, market research, consultantsurveys, publicly available information and industry publications and surveys. Industry surveys, publications, consultant surveys andforecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that theaccuracy and completeness of such information is not guaranteed. We have not independently verified any of the data from third-party sourcesnor have we ascertained the underlying economic assumptions relied upon therein. Similarly, internal surveys, industry forecasts and marketresearch, which we believe to be reliable based upon our management’s knowledge of the industry, have not been independently verified.The future performance of the industry and markets in which we operate and intend to operate is necessarily subject to a high degree ofuncertainty and risk due to a variety of factors, including those described in the sections titled “Risk Factors” and “SpecialNote Regarding Forward-looking Statements” and elsewhere in this prospectus. These and other factors could cause results to differmaterially from those expressed in these publications and reports.

 

PROSPECTUS SUMMARY

 

This summary highlights selected informationcontained elsewhere in this prospectus and does not contain all the information that you should consider before making your investmentdecision. Before investing in our Units, you should carefully read this entire prospectus, including the information set forth under the“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”sections of this prospectus and our consolidated financial statements and the accompanying notes included in this prospectus. Except asotherwise indicated herein or as the context otherwise requires, references in this prospectus to “Brain Scientific,” the“Company,” “we,” “us,” and “our” refer to Brain Scientific Inc. and its wholly-owned subsidiaries,Piezo Motion Corp., a Delaware corporation, Memory MD, Inc., a Delaware corporation, Discovery Technology International, Inc., a Delawarecorporation, Memory MD Russia, a Russian corporation, Memory MD Europe, a Polish corporation, and Lilya (Ukraine), a Ukraine corporation.

 

Overview

 

We are a MedTech company with two innovativeproduct lines: neurology and motion products. Since October 1, 2021, we have had two direct subsidiaries, each of which is focused onone of our complimentary product lines.

 

The products of our subsidiary MemoryMD, Inc., hereinafter referred to as the Neurology Products, are medical devices designed for the neurology market. The products of oursubsidiary Piezo Motion Corp., hereinafter referred to as the Motion Products, are small piezoelectric motors which are designed for andexpected to have valuable and beneficial uses as motors within medical devices and devices outside of the MedTech industry.

 

Since the merger between Brain ScientificInc. and Piezo Motion Corp., we have focused on building an experienced team and platform to grow revenues from existing products andintroduce new technologies to the market while leveraging our store of intellectual property.

 

To date, substantially all of our revenues have been derived from ourRussian subsidiary, Memory MD Russia, which has operated as a distributor of third-party medical devices within Russia. The Russian invasionof Ukraine in February 2022 negatively impacted the operation of our Russian subsidiary. With the uncertainty raised due to the continuedRussian invasion of Ukraine, we do not anticipate having these medical device sales restart in Russia in the foreseeable future. No decisionhas been made as to winding down operations.

 

Products

 

The two lines of productsthat we currently sell are (i) Neurology Products and (ii) Motion Products.

 

Neurology Products

 

The Neurology Products of our subsidiary MemoryMD, Inc. are medical devices and software products designed for the neurology market. We believe our Neurology Products represent a stepforward in EEG technology and may be used in a wider range of applications beyond the traditional hospital or neurologist office.

 

Electroencephalography, or EEG, is a method toidentify and to evaluate the electrical activity of the brain. An EEG could be beneficial, when used with other tools in the diagnosisof brain-related issues, including epilepsy, brain activity after a stroke, and sleep disorders. An EEG may also be used to determinethe electrical activity of a comatose individual.

 

Our initial Neurology Products are intended toallow for simplifying and making more ambulatory the completion of EEG. Further, the NeuroCap™ and NeuroEEG™ Products, both510K FDA cleared and available for sale, are focused on providing efficient tools to the EEG medical market. Our technology allows a miniature,wireless, clinical device capable of recording an EEG and provides the data to medical staff without the bulky hardware or necessitatinga neurology technician to place the cap. The NeuroEEG™ amplifier and desktop software used to store and analyze data captured fromthe NeuroCap™ are anticipated to have strong margins, utilizing a distribution network to provide access to hospitals, neurologists,and general practitioners as well as the various telehealth and tele-neurology companies.

 

 

NeuroCap™

 

 

NeuroHub™, fka NeuroNet Cloud, is beingdeveloped to collect and aggregate data from current and future Company devices like the NeuroCap™ and NeuroEEG™ and fromexternal sources such as research and medical data banks, 3rd-party devices, and clinical-use applications. We believe that NeuroHub™will allow for comprehensive monitoring and facilitate collaborative diagnosis, analysis, research, treatment, and prevention by employingsophisticated Artificial Intelligence or AI and machine learning or ML algorithms utilizing historical and current patient, device andplatform data.

 

We anticipate that NeuroHub™ will allowwhite-labeling to provide facilities, physicians, and patients with a HIPAA-compliant branded portal for Tele-neurology/Tele-medicineservices, enabling secure access to patient data for evaluation and assessment by internal and external clinical specialists and neurologists.The platform will also integrate with Electronic Medical Records or EMRs and other external medical record databases to ensure up-to-dateand complete access to patient information.

 

We anticipate that NeuroHub™ will allowusers to access patient and clinical data to evaluate patient conditions remotely. We believe that such an infrastructure removes theneed for direct contact with the patient, opening up underserved geographic locations with an undersupply of physicians to meet the growingdemand for neurological care as aging patient populations continue to grow.

 

NeuroHub™ remains in development and isnot currently integrated into our NeuroCap™ or NeuroEEG™.

 

Motion Products

 

Piezo Motion is a provider of piezo motor technologywith significant investment in research and development of affordable piezoelectric motors to meet, and exceed, the needs of today’s globalmarkets. We are committed to the development of innovative piezoelectric technology and motion products that enhance their functionalityin a multitude of applications. We work with startups, OEMs, research institutions and industrial companies from around the world empoweringthe visionaries behind their products.

 

Piezo Motion’s piezoelectric motors arecurrently divided into two main series (the Blue Series and the Imperial Series) based on design and construction methodology.

 

Blue Series

 

LCS

RBS

LAS

RAS

 

ImperialSeries

 

PM-22R

LPM-50

 

 

Piezo Motion has recently completed an extensiveengineering program culminating in the development and initial launch of a unique line of small rotary and linear piezo motor productshereinafter referred to as the Blue Series, control electronics and associated software. Piezo Motion’s motor product line utilizesengineering polymers making them suitable for equipment and for high volume OEM applications. While there are several types of piezo motorson the market, the design and technology employed by Piezo Motion is new and combines what we perceive to be key advantages, such as superiorprecision and power density with affordability and ease-of-manufacture.

 

Piezo Motion’s Blue Series piezo motorsare available in a variety of sizes and configurations and are divided into twelve core motor platforms which include rotary motors (ModelsRBS, RAS) and linear motors (Models LCS, LBS and LAS). These core motor models differ in output specification and are further dividedinto variants/versions which include versions having hollow-shaft and solid-shaft rotors, versions having integrated magnetic and/or opticalencoders and versions which are non-magnetic and suitable for use within medical MRI. For each motor product line Piezo Motion has developedhardware control electronics together with motion control software including firmware and operating software. 

 

RISK FACTORS

Investing in our securitiesinvolves a high degree of risk. Before you invest in the Units, the Warrants and the Common Stock, you should carefully consider the followingrisks, as well as general economic and business risks, and all of the other information contained in this registration statement. Anyof the following risks could harm our business, operating results and financial condition and cause the trading price of our Common Stockto decline, which would cause you to lose all or part of your investment. When determining whether to invest, you should also refer tothe other information contained in this prospectus, including our financial statements and the related notes thereto.

Risks Relating to our Business

We are a developmental stage medical devicecompany and have a history of significant operating losses; we expect to continue to incur operating losses, and we may never achieveor maintain profitability.

We are a development stagecompany and have incurred losses from inception and had an accumulated deficit of $24,438,861 as of March 31, 2022 and a working capitaldeficit of $3,612,721 as of March 31, 2022. We had an accumulated deficit of $22,278,923 as of December 31, 2021 and a working capitaldeficit of $2,874,735 as of December 31, 2021. We expect to continue to incur significant expenses and increasing operating and net lossesfor the foreseeable future. To date, we have financed our operations primarily through debt and equity financings. To date, our primaryactivities have been limited to, and our limited resources have been dedicated to, performing business and financial planning, raisingcapital, recruiting personnel, negotiating with business partners and the licensors of our intellectual property and conducting developmentactivities, including the commercialization of our products.

We have never been profitableand do not expect to be profitable in the foreseeable future. Any profitability in the future will be dependent upon the successful developmentof our business model, of which we can give no assurance of success. We expect our expenses to increase as we pursue our objectives. Theextent of our future operating losses and the timing of profitability are highly uncertain, and we expect to continue incurring significantexpenses and operating losses over the next several years. Our prior losses have had, and will continue to have, an adverse effect onour stockholders’ equity and working capital. Any additional operating losses may have an adverse effect on our stockholders’ equity,and we cannot assure you that we will ever be able to achieve profitability. Even if we achieve profitability, we may not be able to sustainor increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our companyand could impair our ability to raise capital, expand our business, maintain our development efforts, obtain regulatory approvals or continueour operations. Accordingly, we are a highly speculative venture involving significant financial risk.

We have generated limited revenues to dateand substantially all of our revenues have been generated from our Russian subsidiary.

We have generated only limitedrevenues from our two product lines. For the year ended December 31, 2021, Brain Scientific Inc. and Piezo Motion Corp had a combined$790,069 in revenues. Memory MD Russia, operating as a distributor of third-party medical devices, accounted for 87.8% of all such revenues.With the uncertainty raised due to the continued Russian invasion of Ukraine, we do not anticipate having these medical device sales restartin Russia in the foreseeable future and no decision has been made as to winding down operations. Piezo Motion Corp had $36,651 in revenues(4.6%) and Memory MD US had $60,651 (7.6%) of the revenues generated in fiscal 2021. The NeuroCap™ and NeuroEEG™ are bothready for commercial availability within our Neurology Products. The Blue Series, Imperial Series and engineered customized motors arealso ready for commercial availability within our Motion Products. In 2022, manufacture of the NeuroCap™ has started at our outsourcedmanufacturing partner. Our Lakewood Ranch office can handle the manufacture of the Motion Products for the foreseeable future. Distributionpartners are in place for both products.

If we do not gain the marketacceptance for either the Neurology or Motion Products, we will not be capable of generating the revenues required for sustaining ourbusiness.

In 2019, we commenced actingas a distributor of third-party medical devices in Russia, which resulted in substantially all of our revenue for 2020 and 2021.The Russian invasion of Ukraine on February 24, 2022 impacted the operation of our Russian subsidiary. With the uncertainty raised dueto the continued Russian invasion of Ukraine, we do not anticipate having sales restart in Russia in the foreseeable future. No decisionhas been made as to winding down operations.

Investors are subject to allthe risks incident to the creation and development of a new business and each investor should be prepared to withstand a complete lossof his, her or its investment. Furthermore, the accompanying financial statements have been prepared assuming that we will continue asa going concern. We have not emerged from the development stage and may be unable to raise further equity. These factors raise substantialdoubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result fromthe outcome of this uncertainty.

The Company has limited experiencein medical device and piezoelectric motor development and commercialization. Our ability to become profitable depends primarily on ourability to develop our products, our successful completion of all necessary pre-clinical testing and clinical trials on such products,our ability to obtain approval for such products and, if approved, successfully commercialize such products, our ongoing research anddevelopment efforts, the timing and cost of clinical trials, our ability to identify personnel with the necessary skill sets or enterinto favorable alliances with third-parties who can provide substantial capabilities in clinical development, regulatory affairs, sales,marketing and distribution and our ability to obtain and maintain necessary intellectual property rights to such products. Our limitedexperience in piezoelectric motor and medical device development may make it more difficult for us to complete these tasks.

Even if we successfully developand market our products, we may not generate sufficient or sustainable revenue to achieve or sustain profitability, which could causeus to cease operations and cause you to lose all of your investment. Because we are subject to these risks, you may have a difficult timeevaluating our business and your investment in our Company.

Our ability to continue our operations requiresthat we raise additional capital, and our operations could be curtailed if we are unable to obtain the additional funding as or when needed.As a result, our registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a goingconcern in its report on our audited financial statements included in this prospectus. We will need to raise substantial additional fundsin the future, and these funds may not be available on acceptable terms or at all. A failure to obtain this necessary capital when neededcould force us to delay, limit, scale back or cease some or all operations.

Upon the completion of theaudit of our financial statements for the year ended December 31, 2021, we concluded there was substantial doubt about our ability tocontinue as a going concern. As a result, our independent registered public accounting firm included an explanatory paragraph regardingthis uncertainty in its report on those financial statements.

The continued growth of ourbusiness, including the development, regulatory approval and commercialization of our products, will significantly increase our expensesgoing forward, regardless of our revenues. As a result, we are required to seek substantial additional funds to continue our business.Our future capital requirements will depend on many factors, including:

We may not be able to raiseadditional capital on terms acceptable to us, or at all. Any failure to raise additional capital could compromise our ability to executeon our business plan, and we may be forced to liquidate our assets. In such a scenario, the values we receive for our assets in liquidationor dissolution could be significantly lower than the values reflected in our financial statements.

If we issue equity or debtsecurities to raise additional funds, our existing stockholders may experience dilution, and the new equity or debt securities may haverights, preferences and privileges senior to those of our existing stockholders. In addition, if we raise additional funds through collaborations,licensing, joint ventures, strategic alliances, partnership arrangements or other similar arrangements, it may be necessary to relinquishvaluable rights to our potential future products or proprietary technologies or grant licenses on terms that are not favorable to us.

The amount of future financing which wemay require will depend on several factors, many of which are beyond our control. Our results of operations, financial condition and stockprice are likely to be adversely affected if our funding requirements increase or are otherwise greater than we expect.

Our future funding requirements will depend onmany factors, including, but not limited to:

If any of these factors cause our funding needsto be greater than expected, our operations, financial condition, ability to continue operations and stock price may be adversely affected.

Our future cash requirements may differsignificantly from our current estimates.

Our cash requirements may differ significantlyfrom our estimates from time to time, depending on a number of factors, including:

If we fail to raise additional funds on a timelybasis, we will need to scale back our business plans, which would adversely affect our business, financial condition, and stock price,and we may even be forced to discontinue our operations and liquidate our assets.

COVID-19 continues to evolve and has thepotential to disrupt business United States and many other parts of the world and may continue to adversely affect our businessoperations, supply chains, employee availability, financial condition, liquidity and cash flow for an extended period of time.

COVID-19 has receded as amajor disruption of business operations. However, if the virus continues to mutate, a risk exists of more shut-downs or disruption ofbusiness operations and supply chains. It is impossible to predict the effect and ultimate impact of the COVID-19 pandemic as the situationcontinues to evolve. 

Ongoing significant reductions inbusiness related activities could result in further loss of sales and profits, as well as other material adverse effects. Theextent of the impact of COVID-19 worldwide on our business, financial results, liquidity and cash flows will depend largely on futuredevelopments, which are highly uncertain and cannot be predicted.

Quality problems with, and product liabilityclaims in connection with our products could lead to recalls or safety alerts, harm to our reputation, or adverse verdicts or costlysettlements, and could have a material adverse effect on our financial condition and business operations.

Quality is extremely importantto us and our customers due to the serious and costly consequences of product failure and our business exposes us to potential productliability risks that are inherent in the design, manufacture, and marketing of our products. Component failures, manufacturing defects,design flaws, off-label use, or inadequate disclosure of product-related risks or product-related information with respect to our products,could result in an unsafe condition or injury to, or death of, a user of our products. These problems could lead to the recall of, orissuance of a safety alert relating to, our products, and could result in unfavorable judicial decisions or settlements arising out ofproduct liability claims and lawsuits, including class actions, which could negatively affect our financial condition and business operations.In particular, a material adverse event involving one of our products could result in reduced market acceptance and demand for all productsoffered under our brand and could harm our reputation and ability to market products in the future.

High quality products arecritical to the success of our business. If we fail to meet the high standards we set for ourselves and which our customers expect, andour products are the subject of recalls, safety alerts, or other material adverse events, our reputation could be damaged, we could losecustomers, and our revenue and results of operations could decline. Our success also depends generally on our ability to manufacture toexact tolerances precision-engineered components, subassemblies, and finished devices from multiple materials. If our components failto meet these standards or fail to adapt to evolving standards, our reputation, competitive advantage and market share could be negativelyimpacted. In certain situations, we may undertake a voluntary recall of products or temporarily shut down product production lines ifwe determine, based on performance relative to our own internal safety and quality monitoring and testing data, that we have or may bein danger of failing to meet the high-quality standards we have set for ourselves and which our customers expect. Such recalls or cessationof services or product manufacturing may also negatively impact our business.

Any product liability claimbrought against us, with or without merit, could be costly to defend and resolve. Any of the foregoing problems, including product liabilityclaims or product recalls in the future, regardless of their ultimate outcome, could harm our reputation and have a material adverse effecton our financial condition and business operations.

We are dependent on patent and other proprietaryrights and our failure to protect such rights or to be successful in litigation related to our rights or the rights of others may resultin our payment of significant monetary damages. This would negatively impact our ability to sell current or future products or prohibitus from enforcing our patent and other proprietary rights against others.

We are and will continue tobe materially dependent on a combination of patents, trade secrets, and trademarks, non-disclosure and non-competition agreements, andother intellectual property protections which will enable us to maintain our proprietary competitiveness. We also operate in an industrycharacterized by extensive patent litigation. Patent litigation against us can result in significant damage awards and injunctions thatcould prevent our manufacture and sale of affected products or require us to pay significant amounts in order to continue to manufactureor sell affected products. At any given time, we could potentially be involved as a plaintiff and/or as a defendant in a number of patentinfringement and/or other contractual or intellectual property related actions, the outcomes of which may not be known for prolonged periodsof time. While it is not possible to predict the outcome of such litigation, we acknowledge the possibility that any such litigation couldresult in our payment of significant monetary damages and/or royalty payments, negatively impact our ability to sell current or futureproducts or prohibit us from enforcing our patent and proprietary rights against others, which would have a material adverse effect onthe financial condition of our business and on our business operations.

While we intend to defendagainst any threats to our intellectual property, including our patents, trade secrets, and trademarks, and while we intend to defendagainst any actual or threatened breaches of our non-disclosure and non-competition agreements, may not adequately protect our intellectualproperty or enforce such agreements. Further, patent or trademark applications currently pending that are owned by us may not result inpatents or trademarks being issued to us, patents or trademarks issued to or licensed by us in the past or in the future may be challengedor circumvented by competitors and such patents or trademarks may be found invalid, unenforceable or insufficiently broad to protect ourproprietary advantages.

In addition, the laws of certaincountries in which we market, or intend to market, some or all of our products do not protect our intellectual property rights to thesame extent as the laws of the United States, which could make it easier for competitors to capture market position in such countriesby utilizing technologies and other intellectual property that are similar to those developed or licensed by us. Competitors may alsoharm our sales by designing products or offering services that mirror the capabilities of our products, or the technology contained therein,without infringing our intellectual property rights. If we are unable to protect our intellectual property in these countries, it couldhave a material adverse effect on our financial condition and business operations.

In addition to patented technology,we rely on our unpatented technology, trade secrets and know-how. We generally seek to protect this information by confidentiality, non-disclosureand assignment of invention agreements with our officers, employees, contractors and other service providers and with parties with whichwe do business. These agreements may be breached, which breach may result in the misappropriation of such information, and we may nothave adequate remedies for any such breach. We cannot be certain that the steps we have taken will prevent unauthorized use or reverseengineering of our technology.

Moreover, our trade secretsmay be disclosed to or otherwise become known or be independently developed by competitors. To the extent that our officers, employees,contractors, other service providers, or other third parties with whom we do business use intellectual property owned by others in theirwork for us, disputes may arise as to the rights in related or resulting know-how and inventions. If, for any of the above reasons, ourintellectual property is disclosed or misappropriated, it would harm our ability to protect our rights and have a material adverse effecton our business, financial condition, and results of operations.

If we experience decreasing prices for our NeurologyProducts and we are unable to reduce our expenses, our financial condition and business operations may suffer.

We may experience decreasingprices for our Neurology Products due to pricing pressure experienced by our customers from managed care organizations and other third-partypayers, increased market power of our customers as the medical device industry consolidates, and increased competition among medical engineeringand manufacturing service providers. If the prices for our Neurology Products decrease and we are unable to reduce our expenses, our resultsof operations will be adversely affected.

Our research and development efforts relyupon investments and investment collaborations, and we cannot guarantee that any previous or future investments or investment collaborationswill be successful. 

Our commercialization strategyrequires a wide variety of technologically advanced and capable products. The rapid pace of technological development in the MedTech industryand the specialized expertise required in different areas of medicine make it difficult for one company alone to develop a broad portfolioof technological solutions. In addition to internally generated growth through our research and development efforts, we anticipate theneed to rely upon investments and investment collaborations to provide us access to new technologies both in areas served by our contemplatedbusinesses as well as in new areas. A failure to establish such collaborations may harm our financial condition and business operations.

Going forward, we expect tomake future investments where we believe that we can stimulate the development or acquisition of new technologies, Products to furtherour strategic objectives and strengthen our existing business ventures. Investments and investment collaborations in and with medicaltechnology companies are inherently risky, and we cannot guarantee that any of our previous or future investments or investment collaborationswill be successful or will not have a materially adverse effect our financial condition and business operations.

Our ability to offer new products and continuethe development of our existing products, depends upon us maintaining strong relationships with health care professionals.

If we fail to maintain ourworking relationships with health care professionals, many of our products may not be developed and offered in line with the needs andexpectations of the professionals who use and support our products, which could cause a decline in our earnings and profitability. Theresearch, development, marketing, and sales of our products is expected to be dependent upon our maintaining working relationships withsuch health care professionals, and the use of our products is expected to often require the participation of health care professionals.In addition, health care professionals are the primary customer groups we expect to market and sell our products directly to, furtherhighlighting the importance of our relationship with such health care professionals. If we are unable to maintain our relationships withthese professionals, we may lose our primary customer base, our products may not be utilized correctly or to their full potential, andour ability to develop, manufacture, and market future products may be significantly stunted.

We operate in a highly competitive industriesand we may be unable to compete effectively.

We expect to compete domesticallyand internationally in the neurology, diagnostic imaging and MedTech markets and the motion control market. These markets are characterizedby rapid change resulting from technological advances and scientific discoveries. In the product lines and offered services in which wecompete, we face a mixture of competitors ranging from large manufacturers with multiple business lines to small manufacturers that offera limited selection of niche products. Development by other companies of new or improved products, processes, technologies, or the introductionof reprocessed products or generic versions when our proprietary products lose their patent protection may make our existing productsor proposed products less competitive. Competitive factors include product reliability, product performance, product technology, productquality, breadth of product lines, product services, customer support, price, and reimbursement approval from health care insurance providers.

We also face competition formarketing, distribution, and collaborative development agreements, for establishing relationships health care professionals, medical associations,and academic and research institutions, and for licenses to intellectual property. In addition, academic institutions, governmental agenciesand other public and private research organizations also may conduct research, seek patient protection and establish collaborative arrangementsfor discovery, research, clinical development and marketing of products similar to ours. These companies, professionals, and institutionscompete with us in recruiting and retaining qualified scientific and management personnel, as well as in acquiring necessary product technologies.

Technological breakthroughs in electricmotors could render our Motion Products obsolete.

The electric motor marketis subject to rapid technological change and product innovation. Our electric motors are based on its proprietary technology, but severalcompanies are pursuing new technologies, including sensing technologies for electric engines. Any technological breakthroughs could renderour Motion Products obsolete, would have a material adverse effect on our business, financial condition and results of operations andcould result in our shareholders losing their entire investment.

Any failure to attract and retain skilleddirectors, executives, employees and consultants could impair our product development and commercialization activities.

Our business depends on theskills, performance, and dedication of our current directors, executive officers and key engineering and technical advisors. We may needto recruit additional directors, executive management employees, and advisers, particularly engineering, scientific and technical personnel,which will require additional financial resources. In addition, there is currently intense competition for skilled directors, executivesand employees with relevant engineering, scientific and technical expertise, and this competition is likely to continue. If we are unableto attract and retain persons with sufficient engineering, scientific, technical and managerial experience, we may be forced to limitor delay our product development activities or may experience difficulties in successfully conducting our business, which would adverselyaffect our operations and financial condition.

Our growth could suffer if the markets intowhich we sell our products and services decline.

Our growth depends in parton the growth of the markets which we serve. Any decline or lower than expected growth in our served markets could diminish demand forour products and services, which would adversely affect us and our financial results. Certain of our businesses operate in industriesthat may experience periodic, cyclical downturns. Demand for our products and services will also be sensitive to changes in our currentand future customer order patterns, which may be affected by announced price changes, changes in incentive programs, new product introductionsand customer inventory levels. Any of these factors could adversely affect our growth and results of operations in any given period.

We have limited internal research and developmentpersonnel, making us dependent on consulting relationships.

We consider research and developmentto be an important part of the process of designing, developing, obtaining regulatory required approvals and the commercialization ofour products. We expect to continue to incur substantial costs related to research and development.

We will need to outsource and rely on thirdparties for various aspects relating to the development, manufacture, sales and marketing of our products as well as in connection withassisting us in the preparation and filing of our FDA submissions, and our future success will be dependent on the timeliness and effectivenessof the efforts of these third parties.

We are dependent on consultantsfor important aspects of our product development strategy. We do not have the required financial resources and personnel to carry outindependently the development of our product candidate, and do not have the capability or resources to manufacture our current productcandidates in-house. As a result, we contract with and rely on third parties for important functions, including in connection with thedevelopment and finalization of our products, the preparation and filing of our FDA submissions and eventual manufacturing and commercializationof our product candidates. If problems develop in our relationships with third parties, or if such parties fail to perform as expected,it could lead to delays or lack of progress in obtaining FDA clearance, significant cost increases, changes in our strategies, and evenfailure of our product initiatives.

We expect to rely on third-party manufacturersand will be dependent on their quality and effectiveness.

Our products requires precise,high-quality manufacturing. The manufacturing process of NeuroCap™ is outsourced to a third-party, while the piezo electric motorsare currently manufactured in-house, by the Company. The failure to achieve and maintain high manufacturing standards, including failureto detect or control anticipated or unanticipated manufacturing errors or the frequent occurrence of such errors, could result in userinjury or death, discontinuance or delay of ongoing or planned clinical studies, delays or failures in product testing or delivery, costoverruns, product recalls or withdrawals and other problems that could seriously hurt our business. Contract medical device manufacturersoften encounter difficulties involving production yields, quality control and quality assurance and shortages of qualified personnel.These manufacturers are subject to stringent regulatory requirements, including the FDA’s current good-manufacturing-practices regulations.If our contract manufacturers fail to maintain ongoing compliance at any time, the production of our products could be interrupted, resultingin delays or discontinuance of our clinical studies, additional costs and loss of potential revenues.

We may be subject to potential product liabilityand other claims that could materially impact our business and financial condition.

The development and sale ofour products exposes us to the risk of significant damages from product liability and other claims, and the use of our product candidatesmay result in adverse effects. We cannot predict all the possible harms or adverse effects that may result. We maintain a modest amountof product liability insurance to provide some protection from claims. Nonetheless, we may not have sufficient resources to pay for anyliabilities resulting from a personal injury or other claim, even if it is partially covered by insurance. In addition to the possibilityof direct claims, we may be required to indemnify third parties against damages and other liabilities arising out of our development,commercialization and other business activities, which would increase our liability exposure. If third parties that have agreed to indemnifyus fail to do so, we may be held responsible for those damages and other liabilities as well.

Our competitors may develop products thatare more effective and less expensive than ours.

We are engaged in the developmentof Neurology Products and Motion Products, the marketing and sale of which is intensely competitive. Our competitors may:

If our competitors marketNeurology Products or Motion Products that are less expensive or more effective than our products, or that gain or maintain greater marketacceptance, we may not be able to compete effectively.

We may not be able to successfully scale-upmanufacturing of our products in sufficient quality and quantity.

In order to conduct larger-scalecommercialization of our products, we will need to manufacture our products in substantially larger quantities. We may not be able tosuccessfully increase the manufacturing capacity for our products in a timely or cost-effective manner, or at all. In addition, qualityissues may arise during scale-up activities. If we are unable to successfully scale up the manufacture of our products in sufficient qualityand quantity, the further development of our products and expected sales will be delayed, which could significantly harm our business.

A reduction or interruption in our supplyof raw materials coupled with an inability to develop alternative sources for such raw materials, and other similar supply chain managementdifficulties, may adversely affect our ability to manufacture our products.

The manufacture of our Productsrequires the timely delivery of sufficient amounts of quality components and materials and is highly exacting and complex, due in partto strict regulatory requirements, and we cannot guarantee that our efforts to secure quality components and materials in a timely, costeffective manner will be successful. Other problems in the manufacturing process, including equipment malfunction, failure to follow specificprotocols and procedures, defective raw materials and environmental factors, could lead to launch delays, product shortage, unanticipatedcosts, lost revenues and damage to our reputation. A failure to identify and address manufacturing problems prior to the release of Productsto our customers may also result in quality or safety issues.

Our operating results could be negativelyimpacted if we are unable to capitalize on research and development spending.

We have and intend to continueto spend a significant amount of time and resources on research and development projects to develop and validate new and innovative products.We believe these projects will result in the commercialization of new products and will create additional future sales. However, factorsincluding regulatory delays, safety concerns or patent disputes could delay the introduction or marketing of new products. Additionally,unanticipated issues may arise in connection with current and future clinical studies that could delay or terminate a product’sdevelopment prior to regulatory approval. We may experience an unfavorable impact on our financial condition and business operations ifwe are unable to capitalize on those efforts by attaining the proper FDA approval or to successfully market new products.

We rely on third-party suppliers to provideequipment, components and services, which creates certain risks and uncertainties that may adversely affect our business.

Our business requires thatwe buy equipment, components and services from third parties. Our reliance on third-party suppliers involves certain risks, includingpoor quality or an unreliable supply chain, which could (i) adversely affect the reliability and reputation of our products; (ii) resultin changes in the cost of these purchases due to inflation, exchange rates, tariffs, or other factors; and (iii) result in shortages ofcomponents, commodities or other materials, which could adversely affect our manufacturing efficiencies and our ability to make timelydelivery. Any of these uncertainties could adversely affect our profitability and ability to compete.

Certain materials and components used inour products are required and qualified to be sourced from a single or a limited number of suppliers.

Because of any number of domesticor global factors, certain materials used by us in our products, specifically ceramics associated with our piezo motion products for whichwe rely on only two suppliers could become in short supply resulting in limited availability and/or increased costs. Although we believethat alternative suppliers are available to supply materials and components to replace those currently used, doing so may require thatwe redesign work and would require having those new sources qualified within our systems prior to making use of those new alternatives.Any interruption in the supply from any supplier that serves as a sole source could delay product shipments and have a material adverseeffect on our business, financial condition and results of operations. Our profits may decline if the price of raw materials rise andwe cannot recover the increases from our then customers.

We use various raw materials, such as piezoceramic,steel and plastics, in our manufacturing operations.

The raw materials used byus to manufacture our products may become subject to volatility. As a result, it may be necessary for us to increase our product salesprice which could have a negative impact on our unit volume, revenue and potential operating income. We are also subject to risks associatedwith United States and foreign legislation and regulations relating to imports, including quotas, duties, tariffs or taxes, and othercharges or restrictions on imports, which could adversely affect our operations and our ability to import raw materials and componentsat current or increased levels. We cannot predict whether additional United States and foreign customs quotas, duties, tariffs, taxesor other charges or restrictions, requirements as to where raw materials must be purchased, or other restrictions on our imports willbe imposed upon the importation of our products in the future or adversely modified, or what effect such actions would have on our costsof operations.

The Russian-Ukrainian Conflict may adversely affect our business,financial condition and results.

In February 2022, the RussianFederation commenced a military action with the country of Ukraine. The specific impact on our operations in Ukraine and Russia is notfully determinable. No decision has been made as to winding down operations.

Our research and developmentoperation in Ukraine have had to work remotely on a periodic basis. The team from Kyiv work from the office and remotely. We do not knowwhen they will have consistent access to the office. Further, we have engineering resources capable of performing the work done in Kyivfrom the United States.

The potential financial condition,results of operations and cash flows is not determinable as of the date hereof. However, to the extent that such military action spreadsto other countries, intensifies, or otherwise remains active, such action could have a material adverse effect on our financial condition,results of operations, and cash flows.

Security vulnerabilities in our systemscould lead to reduced revenues and claims against us.

Our operations may dependupon our ability to withstand cyber-attacks. Third parties may develop and deploy viruses, worms, and other malicious software programs,some of which may be designed to attack our systems or networks. Our operations also involve the storage and transmission of proprietaryinformation which may be the target of cyber-attacks. Hardware and software that we produce or procure from third parties also may containdefects in manufacture or design, including bugs and other problems, which could compromise their ability to withstand cyber-attacks.

The costs to us to eliminateor alleviate security vulnerabilities can be significant, and our efforts to address these problems may not be successful and could resultin interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution,or other critical functions, as well as potential liability to the company. The risk that these types of events could seriously harm ourbusiness is likely to increase as we expand our operations.

If we or our third-party service providersexperience a security breach or unauthorized parties otherwise obtain access to our network, our data or our cloud services may be perceivedas not being secure, our reputation may be harmed, demand for our products may be reduced, and we may incur significant liabilities.

Our operations involve thestorage and transmission of data, and security breaches could result in the loss of this information, litigation, indemnity obligationsand other liability. We may become the target of cyber-attacks by third parties seeking unauthorized access to our data or users’data or to disrupt our ability to provide service. While we have taken steps to protect the confidential information that we have accessto, including confidential information we may obtain through our customer support services or customer usage of our cloud services, oursecurity measures or those of our third-party service providers could be breached or we could suffer data loss. Computer malware, viruses,social engineering (predominantly spear phishing attacks), and general hacking have become more prevalent in our industry, particularlyagainst cloud services. If our security measures are or are believed to have been breached as a result of third-party action, employeeerror, malfeasance or otherwise, our reputation could be damaged, our business may suffer, and we could incur significant liability.

We also process, store, andtransmit our own data as part of our business and operations. This data may include personally identifiable, confidential, or proprietaryinformation. There can be no assurance that any security measures that we or our third-party service providers have implemented will beeffective against current or future security threats. While we have developed systems and processes to protect the integrity, confidentialityand security of our data, our security measures or those of our third-party service providers could fail and result in unauthorized accessto or disclosure, modification, misuse, loss or destruction of such data.

Because there are many differentsecurity breach techniques and such techniques continue to evolve, we may be unable to anticipate attempted security breaches and implementadequate preventative measures. Any security breach or other security incident, or the perception that one has occurred, could resultin damage to our brand, disrupt normal business operations, require us to spend material resources to investigate or correct the breach,expose us to legal liabilities, including litigation, regulatory enforcement, and indemnity obligations, and adversely affect our revenuesand operating results. These risks may increase as we continue to grow the number and scale of our cloud services, and process, store,and transmit increasingly large amounts of data.

Regulatory and Legal Risks

Motian product and medical device developmentinvolves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing,or ultimately be unable to complete, the development and commercialization of any product.

Before obtaining marketingapproval from regulatory authorities for the sale of our Neurology Products under development in the United States or elsewhere, we mustcomplete all pre-clinical testing, clinical trials and other regulatory requirements necessitated by the FDA and foreign regulatory bodiesand demonstrate the performance and safety of our products. Clinical testing is expensive, difficult to design and implement, can takemany years to complete and is inherently uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing.Further, the outcomes of completed clinical trials may not be predictive of the success of later clinical trials, and interim resultsof a clinical trial do not necessarily predict final results. Clinical data is often susceptible to varying interpretations and analyses,and many companies that have believed their products performed satisfactorily in clinical trials have nonetheless failed to obtain marketingapproval. We have limited resources to complete the expensive process of medical device development, pre-clinical testing and clinicaltrials, putting us at a disadvantage, particularly compared to some of our larger and established competitors, and we may not have sufficientresources to commercialize our products under development in a timely fashion, if ever.

We may experience numerousunforeseen events during or as a result of clinical trials that could delay or prevent our ability to receive marketing approval or commercializeour products, including:

If we are required to conductadditional clinical trials or other testing of our products under development beyond those that we contemplate, if we are unable to successfullycomplete clinical trials of our products under development or other testing, if the results of these trials or tests are not favorableor if there are safety concerns, we may:

Our development costs willalso increase if we experience delays in testing or marketing approvals. We do not know whether any of our clinical trials will beginas planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could allowour competitors to bring innovative products to market before we do and impair our ability to successfully commercialize our products.

We are subject to costly and complex lawsand governmental regulations and any adverse regulatory action may materially adversely affect our financial condition and business operations.

Our medical devices are subjectto regulation by numerous government agencies, including the FDA and comparable agencies outside of the United States. To varying degrees,each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing,and distribution of our products. We cannot guarantee that we will be able to obtain or maintain marketing clearance for our new products,or enhancements or modifications to existing products, and the failure to maintain approvals or obtain approval or clearance could havea material adverse effect on the financial condition of our business and our business operations. Even if we are able to obtain such approvalor clearance, it may take a significant amount of time, require the expenditure of substantial resources, involve stringent clinical andpre-clinical testing, require increased post-market surveillance, involve modifications, repairs, or replacements of our products, andresult in limitation on the proposed uses of our products.

Both before and after a productis commercially released or offered, we have ongoing responsibilities under FDA regulations. Many of our facilities and procedures andthose of our suppliers are also subject to periodic inspections by the FDA to determine compliance with the FDA’s requirements,including the quality system regulations and medical device reporting regulations. The results of these inspections can include inspectionalobservations on FDA’s Form-483, warning letters, or other forms of enforcement. If the FDA were to conclude that we are not in compliancewith applicable laws or regulations, or that any of our medical devices are ineffective or pose an unreasonable health risk, the FDA couldban such medical devices, detain or seize adulterated or misbranded medical devices, order a recall, repair, replacement, or refund ofsuch devices, refuse to grant pending pre-market approval applications or require certificates of non-U.S. governments for exports, and/orrequire us to notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health.The FDA may also assess civil or criminal penalties against us, our officers or employees and impose operating restrictions on a company-widebasis or enjoin and/or restrain certain conduct resulting in violations of applicable law. The FDA may also recommend prosecution to theU. S. Department of Justice. Governmental agencies comparable to the FDA which operate in foreign jurisdictions may also require us tocomply with regulations similar to those required by the FDA and failing to do so may result in material adverse ramifications similarto those caused by a failure to comply with FDA regulations. Any adverse regulatory action, depending on its magnitude, may restrict usfrom effectively marketing and selling our Products and limit our ability to obtain future pre-market clearances or approvals, and couldcause result in a substantial modification to our business practices and operations.

In addition, the FDA has takenthe position that device manufacturers are prohibited from promoting their products other than for the uses and indications set forthin the approved product labeling. A number of enforcement actions have been taken against manufacturers that promote products for “off-label”uses, including actions alleging that federal health care program reimbursement of products promoted for “off-label” usesconstitute false and fraudulent claims to the government. The failure to comply with “off-label” promotion restrictions canresult in significant civil or criminal exposure, administrative obligations and costs, and/or other potential penalties from, and/oragreements with, the federal government.

Governmental regulations outsidethe United States have become increasingly stringent and more common, and we may become subject to more rigorous regulation by governmentalauthorities in the future in the event we determine to conduct business internationally. In the European Union, for example, a new MedicalDevice Regulation was published in 2017 which, when it enters into full force, will impose significant additional premarket and post-marketrequirements. Penalties for a company’s non-compliance with governmental regulation could be severe, including fines and revocationor suspension of a company’s business license, mandatory price reductions and criminal sanctions. Any governmental law or regulationimposed in the future may have a material adverse effect on us.

Legislative, regulatory, or medical costreimbursement changes may adversely impact our business.

New laws, regulations andjudicial decisions, or new interpretations of existing laws, regulations and decisions, that relate to the health care system in the U.S.and in other jurisdictions may change the nature of and regulatory requirements relating to innovations in medical devices, testing andregulatory approvals, limit or eliminate payments for medical procedures and treatments, or subject the pricing of medical devices togovernment control. In addition, third-party payors in the U.S. are increasingly attempting to contain health care costs by limiting bothcoverage and the level of reimbursement of new products. Consequently, significant uncertainty exists as to the reimbursement status ofnewly approved health care products. Significant changes in the health care system in the U.S. or elsewhere, including changes resultingfrom adverse trends in third-party reimbursement programs, could have a material adverse effect on our projected future operating resultsand our ability to raise capital, commercialize products, and remain in business.

Healthcare reform laws could adversely affectour product candidate and financial condition.

In the United States, therehave been, and continue to be, a number of legislative initiatives to contain healthcare costs. In March 2010, the Patient Protectionand Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (ACA), was enacted in the UnitedStates, which made a number of substantial changes in the way healthcare is financed by both governmental and private insurers. Amongother ways in which it may affect our business, the ACA implemented payment system reforms, including a national pilot program on paymentbundling to encourage hospitals, physicians, and other providers to improve the coordination, quality, and efficiency of certain healthcareservices through bundled payment models and expanded the eligibility criteria for Medicaid programs.

Since its enactment, therehave been judicial, executive, and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissedthe most recent judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA. Prior to the Supreme Court’sdecision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15,2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmentalagencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexaminingMedicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtainingaccess to health insurance coverage through Medicaid or the ACA. It is unclear how other healthcare reform measures of the Biden administrationor other efforts, if any, to challenge, repeal, or replace the ACA will impact the ACA or our business.

In addition, other legislativechanges have been proposed and adopted since the ACA was enacted. On August 2, 2011, the Budget Control Act of 2011 was signed into law,which, among other things, reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequentlegislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension implemented undervarious COVID-19 relief legislation from May 1, 2020 through the end of 2021, unless additional Congressional action is taken. On January2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments toseveral providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments toproviders from three to five years.

Further, the Bipartisan BudgetAct of 2018 among other things, amended the Medicare statute, effective January 1, 2019, to reduce the coverage gap in most Medicare drugplans, commonly known as the “donut hole,” by raising the manufacturer discount under the Medicare Part D coverage gap discountprogram to 70%. It is unclear how the ACA and its implementation, as well as efforts to repeal or replace, or invalidate, the ACA, orportions thereof, will affect our insulin pump or our business. Additional legislative changes, regulatory changes, and judicial challengesrelated to the ACA remain possible. It is possible that the ACA, as currently enacted or as it may be amended in the future, and otherhealthcare reform measures that may be adopted in the future, could have an adverse effect on our industry generally and on our abilityto commercialize our insulin pump and achieve profitability.

Following FDA clearance or approval, ourproducts will still be subject to recalls, which would harm our reputation, business operations and financial results.

Following FDA clearance orapproval of our products, the FDA has the authority to require the recall of a product if we commence manufacturing of such product andwe or any contract manufacturers we retain fail to comply with relevant regulations pertaining to manufacturing practices, labeling, advertisingor promotional activities, or if new information is obtained concerning the safety or efficacy of the device. A government-mandated recallcould occur if the FDA finds that there is a reasonable probability that a device would cause serious, adverse health consequences ordeath. A voluntary recall by us could occur as a result of manufacturing defects, labeling deficiencies, packaging defects or other failuresto comply with applicable regulations. Any recall would divert management’s attention and financial resources and harm our reputationwith customers. A recall involving one or more of our products would be harmful to our business, financial condition and results of operations.

We are subject to environmental laws andregulations and the risk of environmental liabilities, violations and litigation.

We are subject to numerousUnited States federal, state, local and non-U.S. environmental, health and safety laws and regulations concerning, among other things,the health and safety of our employees, the generation, storage, use and transportation of hazardous materials, emissions or dischargesof substances into the environment, investigation and remediation of hazardous substances or materials at various sites, chemical constituentsin medical products and end-of-life disposal and take-back programs for medical devices. Our operations involve the use of substancesregulated under such laws and regulations, primarily those used in manufacturing and sterilization processes. If we violate these environmentallaws and regulations, we could be fined, criminally charged or otherwise sanctioned by regulators.

In addition, certain environmentallaws assess liability on current or previous owners or operators of real property for the costs of investigation, removal or remediationof hazardous substances or materials at their properties or at properties which they have disposed of hazardous substances. Liabilityfor investigative, removal and remedial costs under certain U.S. federal and state laws are retroactive, strict and joint and several.In addition to cleanup actions brought by governmental authorities, private parties could bring personal injury or other claims due tothe presence of, or exposure to, hazardous substances. The ultimate cost of site cleanup and timing of future cash outflows is difficultto predict, given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations,and alternative cleanup methods.

We may in the future be subjectto additional environmental claims for personal injury or cleanup based on our past, present or future business activities (includingthe past activities of companies we may acquire). The costs of complying with current or future environmental protection and health andsafety laws and regulations, or liabilities arising from past or future releases of, or exposures to, hazardous substances, may exceedour estimates, or have a material adverse effect on the financial condition of our business and our business operations.

Our failure to comply with laws and regulationsrelating to reimbursement of health care goods and services may subject us to penalties and adversely impact our reputation, financialcondition, and business operations.

Our neurology products areexpected to be purchased primarily by medical professionals and organizations that typically bill various third-party payers, such asgovernmental programs (e.g., Medicare, Medicaid and comparable non-U.S. programs), private insurance plans and managed care plans, forthe healthcare services provided to their patients. The ability of our customers to obtain appropriate reimbursement for products fromthird-party payers is critical because it affects which products customers purchase and the prices they are willing to pay for such products.As a result, our products are subject to regulation regarding quality and cost by the U.S. Department of Health and Human Services, includingthe Centers for Medicare & Medicaid Services or CMS as well as comparable state and non-U.S. agencies responsible for reimbursementand regulation of health care goods and services. The principal U.S. federal laws implicated include those that prohibit (i) the filingof false or improper claims for federal payment, known as the false claims laws, (ii) unlawful inducements for the referral of businessreimbursable under federally-funded health care programs, known as the anti-kickback laws, and (iii) health care service providers fromseeking reimbursement for providing certain services to a patient who was referred by a physician who has certain types of direct or indirectfinancial relationships with the service provider, known as the Stark Law. Many states have similar laws that apply to reimbursement bystate Medicaid and other funded programs as well as in some cases to all payers. Insurance companies can also bring a private cause ofaction claiming treble damages against a manufacturer for causing a false claim to be filed under the federal Racketeer Influenced andCorrupt Organizations Act. In addition, if we were to become a manufacturer of FDA-approved devices reimbursable by federal healthcareprograms, we would be subject to the Physician Payments Sunshine Act, which would require us to annually report certain payments and othertransfers of value we make to U.S.-licensed physicians or U.S. teaching hospitals.

Our anticipated domestic andinternational operations may be subject to risks relating to changes in government and private medical reimbursement programs and policies,and changes in legal regulatory requirements in the U.S. and around the world. Implementation of further legislative or administrativereforms to the reimbursement system in the U.S. and outside of the U.S., or adverse decisions relating to our Products or services byadministrators of these systems in coverage or reimbursement, could significantly reduce reimbursement or result in the denial of coverage,which could have an impact on the acceptance of and demand for our Products and the prices that our customers are willing to pay for them.

The laws and regulations ofhealthcare related products that are applicable to us, including those described herein, are subject to evolving interpretations and enforcementdiscretion. If a governmental authority were to conclude that we are not in compliance with applicable laws and regulations, we and ourofficers and employees could be subject to severe criminal and civil penalties, including, for example, exclusion from participation asa supplier of products or services to beneficiaries covered by CMS. Any failure to comply with laws and regulations relating to reimbursementand healthcare products could adversely affect our financial condition and business operations.

We are subject to federal, state and foreignhealthcare regulations related to anti-bribery and anti-corruption laws and could face substantial penalties if we fail to fully complywith such regulations and laws.

The relationships that weand our potential distributors and others that market or may market our products have with healthcare professionals, such as physiciansand hospitals, are subject to scrutiny under various federal, state, foreign laws often referred to collectively as healthcare fraud andabuse laws. In addition, U.S. and foreign government regulators have increased the enforcement of the Foreign Corrupt Practices Act andother anti-bribery laws. We also must comply with a variety of other laws that protect the privacy of individually identifiable healthcareinformation and impose extensive tracking and reporting related to all transfers of value provided to certain healthcare professionals.These laws and regulations are broad in scope and are subject to evolving interpretation and we could be required to incur substantialcosts to monitor compliance or to alter our practices if we are found not to be in compliance. Violations of these laws may be punishableby criminal or civil sanctions, including substantial fines, imprisonment of current or former employees and exclusion from participationin governmental healthcare programs, all of which could have a material adverse effect on our financial condition and business operations.

Our international operations expose it tolegal, political and regulatory risks, which could have a material effect on its business.

We have operations in Russiaand Ukraine. Memory MD Russia, a subsidiary of Memory MD Inc., has operated as a medical distribution company in Russia. Piezo MotionCorp.’s research and development operations are located in Kyiv, Ukraine. The Russian invasion of Ukraine in February, 2022 exposesour operations in both counties to risks. No decision has been made as to winding down operations. Moreover, we are required to complywith various import laws and export control and economic sanctions laws, which may affect our transactions with certain customers, businesspartners and other persons and dealings between our employees and subsidiaries. In certain circumstances, export control and economicsanctions regulations or embargos may prohibit the export of certain products, services and technologies. In other circumstances, we maybe required to obtain an export license before exporting the controlled item. Compliance with the various import laws that apply to ourbusinesses can restrict our access to, and increase the cost of obtaining, certain products and at times can interrupt our supply of importedinventory. In addition to government regulations regarding sale and export, we are subject to other regulations regarding our products.For example, the SEC has adopted disclosure rules for companies that use conflict minerals in their products, with substantial supplychain verification requirements in the event that the materials come from, or could have come from, the Democratic Republic of the Congoor adjoining countries. These rules and verification requirements impose additional costs on us and on our suppliers and may limit thesources or increase the cost of materials used in our products. Further, if we are unable to certify that are products are conflict free,we may face challenges with our customers that could place us at a competitive disadvantage, and our reputation may be harmed.

We subject to a variety oflegal and regulatory proceedings in the course of our business that could adversely affect our financial results. For example, the rawpiezoceramic material used throughout our Motion Products is presently included as an exemption to the European Union’s Directive2011/65/EU dealing with hazardous substance use in industrial, commercial, and consumer applications. One exemption (exemption 7-C) concerningthe use of lead (Pb) in piezoelectric ceramics presently exists allowing lead (Pb) to be used in the manufacture of PZT (lead-zirconate-titanate)type piezoelectric ceramic products, which is the type of material we use in our Motion Products. European Union laws with respect tothe exemption could change in the future making it difficult to sell our products containing such materials within the European Union,which would impact our revenues.

Risks Related to our Securities

There is not now, and there may never be,an active market for our Common Stock and Warrants. We cannot assure you that our Common Stock and Warrants will become liquid.

There currently is no liquidmarket for our Common Stock and no market for our Warrants. An investor may find it difficult to obtain accurate quotations as to themarket value of our Common Stock and Warrants and trading of our Common Stock and Warrants may be extremely sporadic. An active marketfor our Common Stock and Warrants may never develop. In addition, if we failed to meet the criteria set forth in SEC regulations, variousrequirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accreditedinvestors. Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affectits liquidity. This would also make it more difficult for us to raise additional capital.

The price of our Common Stock might fluctuatesignificantly, and you could lose all or part of your investment.

Volatility in the market priceof our Common Stock may prevent you from being able to sell your shares of our Common Stock at or above the price you paid for your shares.The trading price of our Common Stock may be volatile and subject to wide price fluctuations in response to various factors, including:

These and other factors mightcause the market price of our Common Stock to fluctuate substantially, which may negatively affect the liquidity of our Common Stock.In addition, from time to time, the stock market experiences price and volume fluctuations, some of which may be significant. This volatilityhas had a significant impact on the market price of securities issued by many companies across many industries. The changes frequentlyappear to occur without regard to the operating performance of the affected companies. Accordingly, the price of our Common Stock couldfluctuate based upon factors that have little or nothing to do with us, and these fluctuations could materially reduce our share price.

Securities class action litigationhas often been instituted against companies following periods of volatility in the overall market and in the market price of a company’ssecurities. This litigation, if instituted against us, could result in substantial costs, divert our management’s attention and resources,and harm our business, operating results and financial condition.

We are a smaller reporting company, andthe reduced reporting requirements applicable to smaller reporting companies may make our Common Stock less attractive to investors.

We are a “smaller reportingcompany” as defined in Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For as longas we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicableto other public companies that are not smaller reporting companies, including not being required to comply with the auditor attestationrequirements of Section 404 of Sarbanes-Oxley Act of 2002 (“SOX”), reduced disclosure obligations regarding executive compensationin our periodic reports and proxy statements, and exemptions from the requirements of holding nonbinding advisory votes on executive compensation,and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our CommonStock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, theremay be a less active trading market for our Common Stock and our stock price may be more volatile.

Our Common Stock is subject to the “pennystock” rules of the SEC, which makes transactions in our stock cumbersome and may reduce the value of an investment in our Units.

The SEC has adopted regulationswhich generally define a “penny stock” as an equity security that has a market price of less than $5.00 per share, subject tospecific exemptions. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt fromthe rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the pennystock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensationof the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stockheld in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs,the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receivethe purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers tosell our common stock and may affect the ability of investors to sell their shares, until our common stock no longer is considered a pennystock.

Concentration of ownership of our CommonStock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significantcorporate decisions.

Our executive officers, directors,principal stockholders and their affiliates, in the aggregate, beneficially own approximately 56.0% of our outstanding common stock asof August 9, 2022. As a result, these persons, acting together, would be able to significantly influence all matters requiring stockholderapproval, including the election and removal of directors, any merger, consolidation, sale of all or substantially all of our assets,or other significant corporate transactions.

Some of these persons or entitiesmay have interests different than yours. For example, they may be more interested in selling our company to an acquirer than other investors,or they may want us to pursue strategies that deviate from the interests of other stockholders.

We intend to issue more shares to raisecapital, which will result in substantial dilution.

Our certificate of incorporationcurrently authorizes the issuance of a maximum of 200,000,000 shares of Common Stock and 10,000,000 shares of “blank check”preferred stock but the Company has received authorization from the board of directors and majority stockholders to increase the amountof authorized Common Stock to 750,000 shares. Any additional financings effected by us may result in the issuance of additional securitieswithout stockholder approval and the substantial dilution in the percentage of common stock held by our then existing stockholders. Moreover,the securities issued in any such transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting inan additional reduction in the percentage of Common Stock held by our current stockholders on an as converted, fully-diluted basis. Ourboard of directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extentthat additional shares of Common Stock or other securities convertible into or exchangeable for Common Stock are issued in connectionwith a financing, dilution to the interests of our stockholders will occur and the rights of the holder of Common Stock might be materiallyand adversely affected.

Anti-takeover provisions that may be inour charter and bylaws may prevent or frustrate attempts by stockholders to change the board of directors or current management and couldmake a third-party acquisition of us difficult.

Our certificate of incorporationand bylaws may contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control that stockholdersmay consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisionscould limit the price that investors might be willing to pay in the future for shares of our Common Stock.

We do not intend to pay cash dividends onour Common Stock in the foreseeable future.

We have never declared orpaid cash dividends on our capital stock. Subject to any series of preferred stock we may issue in the future, we intend to retain allavailable funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividendson our Common Stock in the foreseeable future. Accordingly, you may have to sell some or all of your shares of our Common Stock in orderto generate cash flow from your investment. You may not receive a gain on your investment when you sell shares and you may lose the entireamount of the investment.

Our articles of incorporation allow forour board of directors to create new series of preferred stock without further approval by our shareholders, which could adversely affectthe rights of the holders of our Common Stock.

Our board of directors has the authority to fixand determine the relative rights and preferences of preferred stock. Currently, our board of directors has the authority to designateand issue up to 10,000,000 shares of our preferred stock without further shareholder approval. In the future, our board of directors couldauthorize the issuance of one or more series of preferred stock that would grant to holders, among other rights, the preferred right toour assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of Common Stock andthe right to the redemption of our preferred shares acquired by such persons, together with a premium, prior to the redemption of ourCommon Stock. In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater votingpower than our Common Stock or that is convertible into our Common Stock, which could decrease the relative voting power of our CommonStock or result in dilution to our existing shareholders.

Failure to establish and maintain an effectivesystem of internal controls could result in material misstatements of our financial statements or cause us to fail to meet our reportingobligations or fail to prevent fraud in which case, our stockholders could lose confidence in our financial reporting, which would harmour business and could negatively impact the price of our stock. 

We have assessed the effectivenessof our internal control over financial reporting as of December 31, 2021. In making this assessment, we used the criteria set forth bythe Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based onthis assessment, management believes that, as of December 31, 2021, the Company did not maintain effective internal control over financialreporting because of the effect of material weaknesses in our internal control over financial reporting. Specifically, we identified materialweaknesses in our internal control over financial reporting related to (i) limited policies and procedures that cover recording and reportingof financial transactions associated with the foreign subsidiary; and (ii) lack of sufficient personnel in the accounting function dueto our limited resources resulting in lack of segregation of duties. The Company engages a third-party consultant to ensure the completeand proper application of generally accepted accounting principles, particularly as it relates to valuation of warrants and other complexdebt /equity transactions. We plan to remediate those material weaknesses by (i) improving the effectiveness of the accounting group byaugmenting our existing resources with additional internal accounting staff to assist in the analysis and recording of transaction andfor improved segregation of duties. We plan to mitigate this identified deficiency by hiring additional accounting staff once we generatesignificantly more revenue or raise significant additional working capital; and (ii) improving desired segregation procedures by strengtheningcross approval of various functions including quarterly internal audit procedures where appropriate.

Continued ineffective internalcontrol regarding our financial reporting could have an adverse effect on our business and financial results and the price of our CommonStock could be negatively affected. This could also make it more difficult or more costly for us to obtain certain types of insurance,including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantiallyhigher costs to obtain the same or similar coverage. Any system of internal controls, however well designed and operated, is based inpart on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failureor circumvention of the controls and procedures or failure to comply with regulation concerning control and procedures could have a materialeffect on our business, results of operation and financial condition. Any of these events could result in an adverse reaction in the financialmarketplace due to a loss of investor confidence in the reliability of our financial statements, which ultimately could negatively affectthe market price of our shares, increase the volatility of our stock price and adversely affect our ability to raise additional funding.The effect of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directorsand as executive officers.

Our reporting obligationsas a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeablefuture. If we fail to timely achieve and maintain the adequacy of our internal control over financial reporting, we may not be able toproduce reliable financial reports or help prevent fraud. Our failure to achieve and maintain effective internal control over financialreporting could prevent us from filing our periodic reports on a timely basis which could result in the loss of investor confidence inthe reliability of our financial statements, harm our business and negatively impact the trading price of our common stock.

A significant portion of our total outstandingshares are restricted from immediate resale but may be sold into the market in the future. This could cause the market price of our CommonStock to drop significantly, even if our business is doing well.

Sales of a substantial numberof shares of our Common Stock in the public market could occur at any time. If our stockholders sell, or the market perceives that ourstockholders intend to sell, substantial amounts of our Common Stock in the public market, the market price of our Common Stock coulddecline significantly.

Of the 105,401,858 sharesof our Common Stock issued and outstanding as of August 9, 2022, approximately 6,091,662 shares are freely tradable without restrictionby stockholders who are not our affiliates. We issued or are deemed to have issued an aggregate of approximately 15.6 million shares ofour Common Stock to the former Memory MD, Inc. stockholders and to the holders of convertible promissory notes upon their conversion,At the completion of the Piezo Merger, we issued approximately 29.5 million shares of our Common Stock to the former Piezo Motion shareholders,approximately 11.8 million shares of our Common Stock to the holders of Piezo Motion convertible promissory notes upon their conversion,approximately 19.3 million shares of our Common Stock to holders of BSI convertible promissory notes upon their conversion which wereissued at or post the Piezo Merger or to the debt which was invested at closing For these issuances,  among other issuances, in eachcase, pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, or the Securities Act, andsuch shares are also “restricted securities” as defined in Rule 144. Most if not all of these shares are expected to be availableto register for resale in 2022, thus allowing the holders to sell their shares on the open market without restriction. In any event, substantiallyall of these restricted securities may be publicly resold under Rule 144.

If securities or industry analysts do notpublish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and tradingvolume could decline.

The trading market for ourCommon Stock will be influenced by the research and reports that securities or industry analysts publish about us and our business. Securitiesor industry analysts may elect not to provide coverage of our Common Stock, and such lack of coverage may adversely affect the marketprice of our Common Stock. In the event we do not secure additional securities or industry analyst coverage, we will not have any controlover the analysts or the content and opinions included in their reports. The price of our stock could decline if one or more securitiesor industry analysts downgrade our stock or issue other unfavorable commentary or research. If one or more securities or industry analystsceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could causeour stock price or trading volume to decline.

Medicare, Medicaid,health maintenance organizations and other third-party payors are increasingly attempting to contain healthcare costs by limiting bothcoverage and the level of reimbursement of new medical devices, and, as a result, their coverage policies may be restrictive, or theymay not cover or provide adequate payment for our products.

Medicare, Medicaid, healthmaintenance organizations and other third-party payors are increasingly attempting to contain healthcare costs by limiting both coverageand the level of reimbursement of new medical devices, and, as a result, their coverage policies may be restrictive, or they may not coveror provide adequate payment for our products. In order to obtain reimbursement arrangements, we may have to agree to a net sales pricelower than the net sales price we might charge in other sales channels. Our revenue may be limited by the continuing efforts of governmentand third-party payors to contain or reduce the costs of healthcare through various increasingly sophisticated means, such as requiringprospective reimbursement and second opinions, purchasing in groups, or redesigning benefits. Our future dependence on the commercialsuccess of our technologies makes us particularly susceptible to any cost containment or reduction efforts. Accordingly, unless the governmentand other third-party payors provide adequate coverage and reimbursement for our products and the related insertion and removal procedures,our financial performance may be limited.

General Risks

We are a development stage company witha limited operating history, making it difficult for you to evaluate our business and your investment.

Our operations are subjectto all of the risks inherent in the establishment of a new business enterprise, including but not limited to the absence of an operatinghistory, lack of fully-developed or commercialized products, insufficient capital, expected substantial and continual losses for the foreseeablefuture, limited experience in dealing with regulatory issues, lack of manufacturing and marketing experience, need to rely on third partiesfor the development and commercialization of our existing and proposed products, a competitive environment characterized by well-establishedand well-capitalized competitors and reliance on key personnel.

We may not be successful incarrying out our business objectives. The revenue and income potential of our proposed business and operations are unproven as the lackof operating history makes it difficult to evaluate the future prospects of our business. There is nothing at this time on which to basean assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Accordingly,we have no track record of successful business activities, strategic decision-making by management, fund-raising ability, and other factorsthat would allow an investor to assess the likelihood that we will be successful in our business. There is a substantial risk that wewill not be successful in fully implementing our business plan, or if initially successful, in thereafter generating material operatingrevenues or in achieving profitable operations.

Foreign currency exchange rates may adverselyaffect our financial results.

Sales and purchases in currenciesother than the United States. dollar expose us to fluctuations in foreign currencies relative to the United States dollar and may adverselyaffect our financial results. Increased strength of the United States dollar increases the effective price of our products sold in UnitedStates dollars into other countries, which may require us to lower its prices or adversely affect sales to the extent we do not increaselocal currency prices. Decreased strength of the United States dollar could adversely affect the cost of materials, products and serviceswe purchase from non-United States denominated locations. Sales and expenses of our non-United States businesses are also translated intoUnited States dollars for SEC reporting purposes and the strengthening or weakening of the United States dollar could result in unfavorabletranslation effects. We also face exchange rate risk from our investments in subsidiaries owned and operated in foreign countries.

Current economic and political conditionsmake tax rules in any jurisdiction subject to significant change.

We are subject to income taxesas well as non-income based taxes, in both the U.S. and ultimately various jurisdictions outside the U.S. where we intend to operate.We cannot predict the overall impact that changes or revisions to any such tax laws and regulations, whether in in the United States orin jurisdictions outside the United States, may have on our business. We may be subject to ongoing tax audits in various jurisdictions,and the tax authorities conducting such audits may disagree with certain taxation positions we have taken and assess additional taxes.Although we intend to regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax obligations,there can be no assurance that we will accurately predict the outcomes of these audits, and the actual outcomes of these audits couldhave a material adverse effect on our financial condition and business operations.

Economic and political instability aroundthe world could adversely affect our financial condition and business operations.

Economic and political instabilityaround the world may adversely affect our ability to develop, manufacture, market, and sell our products. Our customers and suppliersmay experience financial difficulties or be unable to borrow money to fund their operations which may adversely impact their ability topurchase our products or services or to pay for our products on a timely basis, if at all. As with our customers and suppliers, theseeconomic conditions make it more difficult for us to accurately forecast and plan our future business activities. In addition, a significantamount of our trade receivables are with national health care systems in the United States and in many foreign countries. Repayment ofthese receivables is dependent upon the political and financial stability of those countries. In light of domestic and global economicfluctuations, we continue to monitor the creditworthiness of customers located both inside and outside the United States. Failure to receivepayment of all or a significant portion of these receivables could adversely affect our financial condition and business operations.

Risks Related to This Offering

We may be unable to list our Common Stockand Warrants on the Nasdaq Capital Market.

Prior to this offering, there has been a limitedpublic market for our Common Stock and no public market for our Warrants. We intend to apply to list our Common Stock and Warrants onthe Nasdaq Capital Market concurrently with the closing of the offering. However, we may not meet or maintain certain qualifying requirementsfor Nasdaq. If we are unable to meet these requirements, we may be limited to trading conducted on OTC Markets and we may elect to notproceed with this offering.

There can be no assurance that we will be able to comply withthe continued listing standards of the Nasdaq Capital Market, a failure of which could result in a de-listing of our Common Stock.

The Nasdaq Capital Market requires that the tradingprice of its listed stocks remain above one dollar in order for the stock to remain listed. If a listed stock trades below one dollarfor more than 30 consecutive trading days, then it is subject to delisting from the Nasdaq Capital Market. In addition, to maintain alisting on the Nasdaq Capital Market, we must satisfy minimum financial and other continued listing requirements and standards, includingthose regarding director independence and independent committee requirements, minimum stockholders’ equity, and certain corporategovernance requirements. If we are unable to satisfy these requirements or standards, we could be subject to delisting, which would havea negative effect on the price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish todo so. In the event of a delisting, we would expect to take actions to restore our compliance with the listing requirements, but we canprovide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market priceor improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the minimum bid price requirement, or preventfuture non-compliance with the listing requirements.

Holders of our Warrantswill have no rights as a common stockholder until they acquire our Common Stock.

The Warrants included in theUnits in this offering do not confer any rights of Common Stock ownership on their holders, such as voting rights or the right to receivedividends, but rather merely represent the right to acquire shares of our Common Stock at a fixed price for a limited period of time.Specifically, commencing on the date of issuance, holders of the Warrants may exercise their right to acquire the Common Stock and paythe exercise price per share, prior to ___ years from the date of issuance, after which date any unexercised Warrants will expire andhave no further value. Until holders of the Warrants acquire Common Stock upon exercise of the Warrants, the holders will have no rightswith respect to the Common Stock issuable upon exercise of the Warrants. Upon exercise of the Warrants, the holder will be entitled toexercise the rights of a stockholder as to the security exercised only as to matters for which the record date occurs after the exercise.There can be no assurance that the market price of the Common Stock will ever equal or exceed the exercise price of the Warrants, andconsequently, whether it will ever be profitable for holders of the Warrants to exercise the Warrants.

Provisions of the Warrants offered by thisprospectus could discourage an acquisition of us by a third party.

In addition to the discussion of the provisionsof our governing organizational documents, certain provisions of the Warrants offered by this prospectus could make it more difficultor expensive for a third party to acquire us. The Warrants prohibit us from engaging in certain transactions constituting “fundamentaltransactions” unless, among other things, the surviving entity assumes our obligations under the Warrants. These and other provisionsof the Warrants offered by this prospectus could prevent or deter a third party from acquiring us even where the acquisition could bebeneficial to you.

As we have broad discretion in how we usethe proceeds from this offering, we may use the proceeds in ways with which you disagree.

We have not allocated the net proceeds from thisoffering for any specific purpose, except as generally set forth under “Use of Proceeds.” As set forth therein, our managementwill have significant flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our managementabout the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether theproceeds are being used in ways you would agree with or ways which are likely to increase the value of your investment. Because of thenumber and variability of factors that will determine our use of our net proceeds from this offering, their ultimate use may vary substantiallyfrom their currently intended use. It is possible that the net proceeds will be invested in a way that does not yield a favorable, orany, return for our company or your investment. The failure of our management to use such funds effectively could have a material adverseeffect on our business, financial condition, operating results and cash flow.

There is a limited market for our securities,which may make it more difficult to dispose of our securities and we may fail to sustain trading on Nasdaq, which could make it more difficultfor investors to sell their shares.

Our Common Stock is quoted on the Pink Tier ofOTC Markets, under the symbol “BRSF,” and, to date, has traded on a limited basis. We have applied to list our Common Stockand Warrants on Nasdaq under the symbols “BRSF” and “BRSFW”, respectively. In the event our Common Stock and Warrantsbegin trading on the Nasdaq, there can be no assurance that trading of the Common Stock and Warrants on such market will be sustained.In the event that the Common Stock and Warrants are not listed on Nasdaq or if we do not sustain such listing, our Common Stock and Warrantscould be quoted only on the OTC Markets. Under such circumstances, you may find it significantly more difficult to trade, or to obtainaccurate quotations for our Common Stock and Warrants and our Common Stock and Warrants may become substantially less attractive to certainpurchasers, such as financial institutions, hedge funds, and other similar investors.

An active market for our Common Stock and Warrantsmay never develop, and we are under no obligation to seek out a more active market for our Common Stock and Warrants.

If there is a thin trading market or “float”for our Common Stock and Warrants, the market price for our Common Stock and Warrants may fluctuate significantly more than the stockmarket as a whole. Without a large float, our Common Stock and Warrants would be less liquid than the stock and warrants of companieswith broader public ownership and, as a result, the trading prices of our Common Stock and Warrants may be more volatile. In addition,in the absence of an active public trading market, investors may be unable to liquidate their investment in us. Furthermore, the stockmarket is subject to significant price and volume fluctuations, and the price of our Common Stock and Warrants could fluctuate widelyin response to several factors, including, but not limited to:

The stock market has experienced extreme priceand volume fluctuations in recent years that have significantly affected the quoted prices of the securities of many companies, includingcompanies in our industry. The changes may not be possible to predict and often appear to occur without regard to specific operating performance.The price of our Common Stock and Warrants could fluctuate based upon factors that have little or nothing to do with our company and thesefluctuations could materially reduce our stock price.

If you purchase our securities in this offering,you may incur immediate and substantial dilution in the book value of your shares. You will experience further dilution if we issue additionalequity or equity-linked securities in the future. 

The public offering price per Unit may be substantiallyhigher than the net tangible book value per share of our Common Stock immediately prior to the offering. After giving effect to the saleof $_________ of our Units in this offering, at the assumed public offering price of $______ per share, which is the last reported saleprice of our Common Stock on the OTCQB Market on _____, 2022, and after deducting the estimated underwriting discounts and commissionsand estimated offering expenses payable by us, purchasers of our Units in this offering will incur immediate dilution of $______ per sharein the net tangible book value of the Common Stock they acquire. For a further description of the dilution that investors in this offeringmay experience, see “Dilution.”

If we issue additional shares of Common Stock(including pursuant to the exercise of outstanding stock options or warrants), or securities convertible into or exchangeable or exercisablefor shares of Common Stock, our stockholders, including investors who purchase shares of Common Stock in this offering, will experienceadditional dilution, and any such issuances may result in downward pressure on the price of our Common Stock. We also cannot assure youthat we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than theprice per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rightssuperior to existing stockholders.

Sales of a significant number of sharesof our Common Stock in the public markets, or the perception that such sales could occur, could depress the market price of our CommonStock.

Sales of a substantial number of shares of ourCommon Stock in the public markets could depress the market price of our Common Stock and impair our ability to raise capital throughthe sale of additional equity securities. We, our directors and our executive officers have agreed not to sell, dispose of or hedge anyCommon Stock or securities convertible into or exchangeable for shares of Common Stock during the period from the date of this prospectuscontinuing through and including the date 180 days after the date of this prospectus, subject to certain exceptions. The underwritersmay, in their discretion, release the restrictions on any such shares at any time without notice. See “Underwriting.” We cannotpredict the effect that future sales of our Common Stock would have on the market price of our Common Stock.

We may issue preferred stock, the termsof which could adversely affect the voting power or value of our common stock.

Our certificate of incorporation authorizes usto issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences,limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directorsmay determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our commonstock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on thehappening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidationpreferences we might assign to holders of preferred stock could affect the residual value of our common stock.

If securities analysts were to downgradeour stock, publish negative research or reports or fail to publish reports about our business, our competitive position could suffer,and our stock price and trading volume could decline.

The trading market for our common stock will,to some extent, depend on the research and reports that securities analysts may publish about us, our business, our market or our competitors.We do not have any control over these analysts. We do not currently have and may never obtain research coverage by securities analysts.If no or few securities analysts commence coverage of us, the trading price of our stock would likely decrease. Even if we do obtain analystcoverage, if one or more of the analysts who cover us should downgrade our stock or publish negative research or reports, cease coverageof our company or fail to regularly publish reports about our business, our competitive position could suffer, and our stock price andtrading volume could decline.

Risks Related to Our Reverse Stock Split 

On or prior to the completion of the offeringwe intend to implement a 1-for-____ reverse stock split, however, we cannot assure you that we will be able to comply with the minimumbid price requirement of Nasdaq.

There can be no assurance that the market priceof our Common Stock following the reverse stock split will remain at the level required for us to comply with the minimum bid pricerequired for Nasdaq to approve the listing of our Common Stock. It is not uncommon for the market price of a company’s Common Stockto decline in the period following a reverse stock split. If the market price of our Common Stock declines following the effectuationof the reverse stock split, the percentage decline may be greater than would occur in the absence of the reverse stock split.In any event, other factors unrelated to the number of shares of our Common Stock outstanding, such as negative financial or operationalresults, could adversely affect the market price of our Common Stock and jeopardize our ability to meet or maintain Nasdaq’s minimumbid price requirement. In addition to specific listing and maintenance standards, Nasdaq has broad discretionary authority over the initialand continued listing of securities, which it could exercise with respect to the listing of our Common Stock.

Even if the reverse stock split increasesthe market price of our Common Stock, there can be no assurance that we will be able to comply with other initial listing standards ofNasdaq.

Even if the market price of our Common Stock increasessufficiently so that we comply with the minimum bid price requirement, we cannot assure you that we will be able to comply with the otherstandards that we are required to meet in order to list our Common Stock on the Nasdaq. Our failure to meet these requirements may resultin our Common Stock not being listed on the Nasdaq, irrespective of our compliance with the minimum bid price requirement.

Following the reverse stock split,the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy theinvesting requirements of those investors. Consequently, the trading liquidity of our Common Stock may not improve.

Although we believe that a higher market priceof our Common Stock may help generate greater or broader investor interest, there can be no assurance that the reverse stock split willresult in a share price that will attract new investors, including institutional investors. In addition, there can be no assurance thatthe market price of our Common Stock will satisfy the investing requirements of those investors. As a result, the trading liquidity ofour Common Stock may not necessarily improve.

The liquidity of the shares of our Common Stockmay be affected adversely by the reverse stock split given the reduced number of shares that are outstanding following the reversestock split, especially if the market price of our Common Stock does not increase as a result of the reverse stock split. In addition,the reverse stock split may increase the number of stockholders who own odd lots (less than 100 shares) of our Common Stock, creatingthe potential for such stockholders to experience an increase in the cost of selling their shares and greater difficulty effecting suchsales.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statementswithin the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to as the Securities Act, and Section 21Eof the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, that relate to future events or to our futureoperations or financial performance. Any forward-looking statement involves known and unknown risks, uncertainties and other factors thatmay cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels ofactivity, performance or achievements expressed or implied by such forward-looking statement.

Words such as, but not limited to, “believe,”“expect,” “anticipate,” “estimate,” “forecast,” “intend,” “may,”“plan,” “potential,” “predict,” “project,” “targets,” “likely,”“will,” “would,” “could,” “should,” “continue,” “scheduled” andsimilar expressions or phrases, or the negative of those expressions or phrases, are intended to identify forward-looking statements,although not all forward-looking statements contain these identifying words. Although we believe that we have a reasonable basis for eachforward-looking statement contained in this registration statement, we caution you that these statements are based on our estimates orprojections of the future that are subject to known and unknown risks and uncertainties and other important factors that may cause ouractual results, level of activity, performance, experience or achievements to differ materially from those expressed or implied by anyforward-looking statement. Actual results, level of activity, performance, experience or achievements may differ materially from thoseexpressed or implied by any forward-looking statement as a result of various important factors, including our critical accounting policiesand risks and uncertainties relating, to:

USE OF PROCEEDS

We estimate that our net proceedsfrom this offering will be approximately $________($_____ if the Underwriters’ Over-Allotment Option is fully exercised ), basedon an assumed public offering price of $_____ per Unit, which is the last reported sale price of our common stock on OTC Markets on _____,2022, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive anyof the proceeds from the sale of Common Stock in this offering by the Selling Stockholders identified in this prospectus or from any cashexercise of the PPO Warrants by the Selling Stockholders.

As of _________, 2022, we had cash and cash equivalentsof approximately $_______. We currently expect that to use the net proceeds from this offering, together with the $_____of cash and cashequivalents, primarily for the following purposes:

Notwithstanding the above, we may be requiredto use up to $_____ of net proceeds (assuming accrued interest through ______ __, 2022) to repay PPO Debentures pursuant to the QualifiedOffering Redemption Option which may be exercised by holders of the PPO Debentures. Any portion of exercise of this option will reduceamounts intended for sales , marketing and administrative capabilities and organization, on a pro rata basis.

We believe that our existing cash and cash equivalents,along with the net proceeds from this offering and any proceeds from the exercise of Warrants, together with interest on cash balances,will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months. The amountand timing of our actual expenditures and actual use of the net proceeds of the offering will depend upon numerous factors, includingspeed of market uptake of our products, market driven product development, progress of our continuing product research and developmentactivities, our ability to expand our outsourced manufacturing operations, and our ability to add the required staff to execute our businessplan, any collaborations that we may enter into with third parties, and any unforeseen delays or cash needs.

Our expected use of the net proceeds from thisoffering represents our current intentions based upon our present plans and business conditions. As a result, our management will havebroad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of thenet proceeds of this offering. In addition, we might decide to postpone or not pursue certain of these activities if the net proceedsfrom this offering and the other sources of cash are less than, or do not last as long as, expected. We have no current understandings,agreements or commitments for any material acquisitions or licenses of any products, businesses or technologies.

Pending their use, we plan to invest the net proceedsfrom this offering in high-quality, short-term interest-bearing obligations, investment-grade instruments, certificates of deposit ordirect or guaranteed obligations of the U.S. government.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERMATTERS

Market Information

Since March 18, 2020, our Common Stock has tradedon the Pink Tier of OTC Markets Group, Inc. under the trading symbol “BRSF” on a very limited basis. We have applied to listour Common Stock and Warrants on Nasdaq under the symbols “BRSF” and “BRSFW”, respectively.

Immediately following the offering, we expectto have one class of common stock and no other classes of stock outstanding.

As of August 9, 2022,there were approximately 141 registered holders of record of our Common Stock, and the last reported sale price of our Common Stock onthe OTC Markets on such date was $0.12 per share.

Any OTC Markets quotations of our Common Stockreflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

DIVIDEND POLICY

We have never declared nor paid any cash dividendson our capital stock. We do not intend to pay cash dividends on our Common Stock for the foreseeable future, and currently intend to retainany future earnings to fund our operations and the development and growth of our business. Any future determination to declare and paydividends will be made at the discretion of our board of directors and will depend on various factors, including applicable laws, ourresults of operations, our financial condition, our capital requirements, general business conditions, our future prospects and otherfactors that our board of directors may deem relevant. Investors should not purchase our Common Stock with the expectation of receivingcash dividends.

CAPITALIZATION

The following table sets forth our cash and cashequivalents and capitalization as of March 31, 2022.

The as adjusted information below is illustrativeonly and our capitalization following the closing of this offering will be adjusted based on the actual public offering price and otherterms of this offering determined at pricing. You should read this information together with our financial statements and the relatednotes thereto included elsewhere in this prospectus and the information set forth under the heading “Management’s Discussionand Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

Each $1.00 increase (decrease) in the assumedpublic offering price of $______ per Unit would increase (decrease) the as adjusted amount of cash and cash equivalents, additional paid-incapital, total stockholders’ equity (deficit) and total capitalization by approximately $______, assuming that the number of Unitsoffered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discountsand commissions and estimated offering expenses payable by us. We may also increase or decrease the number of Units we are offering. Eachincrease (decrease) of 100,000 Units in the number of Units we are offering would increase (decrease) the as adjusted amount of cash andcash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $_______, assumingthat the assumed public offering price remains the same, and after deducting the estimated underwriting discounts and commissions andestimated offering expenses payable by us. The as adjusted information discussed above is illustrative only and will be adjusted basedon the actual public offering price and other terms of this offering determined at pricing.

The number of shares of ourCommon Stock to be outstanding after this offering is based on 50,578,003 shares of our Common Stock outstanding as of March 31, 2022,and excludes:

DILUTION

Each Unit,with an assumed public offering price of $______ per Unit, which is the last reported sale price of our Common Stock on OTC Marketson ________, 2022, consists of one share of Common Stock and a Warrant to purchase one share ofCommon Stock.

If you invest in our Units, your interest willbe diluted immediately to the extent of the difference between the offering price per share of our Common Stock that is part of the Unitand the as adjusted net tangible book value per share of our Common Stock immediately after giving effect to this offering.

As of March 31, 2022, our historical net tangiblebook value was $(14,130,333 ) or $(0.28) per share of Common Stock. Historical net tangible book value per share represents the amountof our total tangible assets reduced by total liabilities, divided by 50,578,003, the number of shares of Common Stock outstanding onMarch 31, 2022.

After giving effect to the sale of ______ Units,at the assumed offering price of $___ per Unit, which is the last reported sale price of our Common Stock on OTC Markets on ____, 2022,after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and (ii) our net tangiblebook value as of March 31, 2022 would have been $_____ or $_____ per share of Common Stock. This amount represents an immediate increasein net tangible book value of $______ per share to our existing stockholders. Investors purchasing our Common Stock in this offering willhave paid $_______ more than the as adjusted net tangible book value per share of Common Stock after this offering.

The following table illustrates this dilutionon a per share basis:

Sales by the SellingStockholders in this Offering will cause the number of shares held by existing stockholders to be reduced to             shares,or           % of the total number of shares of our capital stock outstanding followingthe completion of this Offering and will increase the number of shares held by new investors to             shares,or               % of the total number of shares of our capitalstock outstanding following the completion of this Offering.

Each $1.00 increase (decrease) in the assumedpublic offering price of $____ per share would increase (decrease) our net tangible book value after this offering by approximately $_____per share, and increase (decrease) the dilution per share to new investors by approximately $_____ per share, after deducting the estimatedunderwriting discounts and commissions and estimated offering expenses payable by us full.

The number of shares of our Common Stock to beoutstanding after this offering is based on 50,578,003 shares of our Common Stock outstanding as of March 31, 2022, and excludes, as ofsuch date:

If the shares described above that are reservedfor issuance to the holders of our outstanding warrants, options, and promissory notes and under our 2018 Plan are issued, or we otherwiseissue additional shares of Common Stock in the future, there could be further dilution to investors participating in this offering. Inaddition, we anticipate needing to raise additional capital before generating positive cash flows and we may choose to raise additionalcapital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current orfuture operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of thesesecurities could result in further dilution to our stockholders.

MANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Conditionand Results of Operations

You should read the following discussion andanalysis in conjunction with our unaudited condensed consolidated financial statements and the notes to those financial statements forthe three months ended March 31, 2022 and March 31, 2021 and consolidated financial statements and notes to those financial statementsfor the years ended December 31, 2021 and December 31, 2020 included elsewhere in this prospectus. This discussion contains forward-lookingstatements based upon current expectations that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.”Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Company Overview 

We are a MedTech company with two innovativeproduct lines: neurology and motion products. Since October 1, 2021, we have had two direct subsidiaries, each of which is focused onone of our complimentary product lines.

The products of our subsidiary MemoryMD, Inc., hereinafter referred to as the Neurology Products, are medical devices designed for the neurology market. The products of oursubsidiary Piezo Motion Corp., hereinafter referred to as the Motion Products, are small piezoelectric motors which are designed for andexpected to have valuable and beneficial uses as motors within medical devices and devices outside of the MedTech industry

Since the merger between Brain ScientificInc. and Piezo Motion Corp., we have focused on building an experienced team and platform to grow revenues from existing products andintroduce new technologies to the market while leveraging our store of intellectual property.

Historically, we have financed our operationsprincipally through the issuance of convertible debt. Based on our current operating plan, substantial doubt about our ability to continueas a going concern for a period of at least one year from the date that the financial statements included in this prospectus are issuedexists. Our ability to continue as a going concern depends on our ability to raise additional capital, through the sale of equity or debtsecurities, to support our future operations. If we are unable to secure additional capital, we will be required to curtail our operationsand take additional measures to reduce costs. We have provided additional disclosure in Note 1 to the condensed consolidated financialstatements in and under Liquidity below.

We were initially organized on November 18, 2013as a Nevada limited liability company under the name Global Energy Express LLC. On December 18, 2015, we converted from a Nevada limitedliability company to a Nevada corporation under the name All Soft Gels Inc. On September 18, 2018, we changed our name from All Soft GelsInc. to Brain Scientific Inc. and changed our ticker symbol on the OTC Pink market to “BRSF”.

On September 21, 2018, we entered into a mergeragreement (the “Merger Agreement”) with Memory MD, Inc. and AFGG Acquisition Corp. to acquire Memory MD, Inc. (the “Acquisition”).The transactions contemplated by the Merger Agreement were consummated on September 21, 2018 and, pursuant to the terms of the MergerAgreement, all outstanding shares of Memory MD were exchanged for shares of Common Stock. Accordingly, we acquired 100% of Memory MD,Inc. in exchange for the issuance of shares of Common Stock and Memory MD, Inc. became our wholly-owned subsidiary. In conjunction withthe Acquisition, we ceased all direct operations and assigned all of our assets and liabilities from prior to the Acquisition, and assumedand commenced the business of Memory MD as our sole business.

On June 11, 2021, we entered into another mergeragreement (the “Piezo Merger Agreement”) with Piezo Motion Corp. and BRSF Acquisition Corp. to acquire Piezo Motion Corp.(the “Piezo Acquisition”). The transactions contemplated by the Piezo Merger Agreement were consummated on October 1, 2021.Pursuant to the terms of the Piezo Merger Agreement, all outstanding shares of Piezo Motion Corp. were exchanged for shares of CommonStock. Accordingly, we acquired 100% of Piezo Motion Corp.in exchange for the issuance of shares of Common Stock and Piezo Motion Corp.became our wholly-owned subsidiary.

Our financial statements are based upon the PiezoMotion Corp. financials up until the Piezo Acquisition. The combined company financials are provided inclusive of the operations of theCompany unrelated to Piezo Motion Corp. for the fourth quarter of 2021. The accounting is based upon reverse merger accounting due tothe majority of outstanding shares after the Piezo Acquisition were with the Piezo shareholders.

The majority of our revenuein 2021was from 4^th quarter sales from our subsidiary which operates as a distributor of third-party medical devices in Russia(except for $38,309 from Piezo Motion Corp. sales and $6,194 of sales from Memory MD in the U.S.). Sales of $93,664 in 2020 were basedupon sale of piezoelectric motors, including non-recurring engineering consulting and software licensing revenue. The Russian invasionof Ukraine on February 24, 2022 has impacted our Russian operations for the foreseeable future. With the uncertainty raised due to thecontinued Russian invasion of Ukraine, we do not anticipate having sales restart in Russia in the foreseeable future. No decision hasbeen made as to winding down operations.

We have limited resources. To date, our primaryactivities have been limited to, and our limited resources have been dedicated to, commercializing our piezoelectric motors, NeuroCap™and NeuroEEG. performing business and financial planning, raising capital, recruiting personnel, and conducting development activities,although we have acted as a distributor of third-party medical devices in Russia (which has generated revenue for us in 2021. Both ourNeurology Products and Motion Products are production ready for manufacture and sale. For all our products we have commenced some non-recurring,initial sales.

Impacts of COVID-19

The global outbreak of the coronavirus disease2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020.This has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation,resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets.The full extent of the COVID-19 impact on our operational and financial performance will depend on future developments, including, withoutlimitation, the duration and spread of the pandemic and related actions taken by U.S. and foreign government agencies to prevent diseasespread, all of which are uncertain, out of our control, and cannot be predicted.

We remain diligent in continuing to identify andmanage risks to our business given the changing uncertainties related to COVID-19. We may not be able to address the risks in a timelymanner, which could negatively impact our business, results of operations, financial condition and cash flows.

The continued spread of COVID-19 has also ledto disruption and volatility in the global capital markets. We will need to raise additional capital to support our operations in thefuture. We may be unable to access the capital markets or additional capital may only be available to us on terms that could be significantlydetrimental to our existing stockholders and holders of the convertible promissory notes and to our business.

Critical Accounting Policies and Estimates 

The discussion and analysis of our financial conditionand results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance withU.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make certain estimates and judgments thataffect the reported amounts of assets, liabilities, and expenses. On an ongoing basis, we make these estimates based on our historicalexperience and on assumptions that we consider reasonable under the circumstances. Actual results may differ from these estimates andreported results could differ under different assumptions or conditions. Our significant accounting policies and estimates are disclosedin Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2021. As of March 31, 2022, there have beenno material changes to our significant accounting policies and estimates.

Results of Operations  

Three Months Ended March 31,2022 and March31,2021

The following table sets forth the results ofoperations of the Company for the three months ended March 31, 2022 and 2021.

Revenues

Revenues for the three months ended March 31,2022 and 2021 were generated primarily from the Russian subsidiary for distributing third-party medical devices in Russia (including thosepurchased from a company affiliated with one of our former officers and directors), while we continue to commercialize our products. Whilewe intend to continue generating revenues through the sale of third-party medical devices, we do not intend for it to be our primary sourceof revenue in the long-term. Sales for piezoelectric motors decreased from 2021 as the Company focused on the final commercializationof the Blue Series of motors. Revenues for the three months ended March 31, 2021 of $1,475 related to the sales of evaluation kits. Wedo not expect to generate recurring, material revenue from our products unless or until we successfully commercialize our products. Ifwe fail to successfully commercialize our developed products or fail to complete the development of any other product candidate we maypursue in the future, in a timely manner, or fail to obtain regulatory approval, we may not be able to solely rely on generating substantialand material revenue from the distribution of third-party medical devices.

General and Administrative Expenses

General and administrative expenses consist primarilyof personnel-related costs for administration, product management, for personnel in functions not directly associated with sales and marketingor research and development activities. Other significant costs include rent, travel, legal fees relating to corporate matters, intellectualproperty costs, professional fees for consultants assisting with regulatory, product development and financial matters, and product costs.We anticipate that our general and administrative expenses will be steady in the near to support our continued commercialization of ourProducts and maintaining the infrastructure for a public company.

General and administrative expenses were $1,185,457for the three months ended March 31, 2022, compared to $559,462 for the three months ended March 31, 2021. The increase in general andadministrative expenses was primarily due to an increase in payroll and related expenses, and amortization of intangible assets.

Research and Development Expenses

Research and development expenses consist of expensesincurred in performing research and development activities in developing our Products. Research and development expenses include compensationand benefits for research and development employees, overhead expenses, cost of laboratory supplies, costs related to regulatory operations,fees paid to consultants, and other outside expenses. Research and development costs are expensed as incurred and costs incurred by thirdparties are expensed as the contracted work is performed.

We expect our research and development expensesto be maintained at the current level until we begin generating revenue from our existing Neurology and Motion Products. We anticipateit will then begin to increase as we exploit additional patents in our Motion Products and develop our Neurology Products, including conductingpreclinical testing and clinical trials.

Research and development expenses were $84,717for the three months ended March 31, 2022, compared to $55,165 for the three months ended March 31, 2021. The increase in research anddevelopment expenses were primarily due to increased activities in our Ukrainian office as well as payroll expenses.

Interest Expense

Interest expense primarily consists of costs andinterest costs related to the convertible notes we issued in 2022 and 2021. The convertible notes bear interest at fixed rate of 10% perannum.

Interest expense for the three months ended March31, 2022 and for 2021 was $271,919 and 58,785 respectively. The March 2022 amount includes amortization of debt issuance costs and discountsof approximately $16,453 related to the Company’s convertible and non-convertible promissory notes.

Professional fees

Professional fees were $187,766 for the threemonths ended March 31, 2022, compared to $50,057 for the three months ended March 31, 2021. The increase was primarily due to an increasein legal, accounting and consulting fees in the current quarter due to regulatory filings and requirements, and fund-raising activities.

Years Ended December 31,2021 and December 31,2020

The following table sets forth the results ofoperations of the Company for the years Ended December 31, 2021 and December 31, 2020.

Revenues

Revenue for the fiscalyear ended December 31, 2021 was $265,747 compared to $93,664 for the fiscal year ended December 31, 2020. In the fiscal years endedDecember 31, 2021, we generated the majority of our revenue through acting as a distributor of third-party medical devices inRussia, and we did not have significant sales of our products. The increase in revenues in year ended December 31, 2021resulted from inclusion of sales of third-party medical devices in Russia.

Revenues for 2021 were generated both from saleof evaluation kits for piezoelectric motors of $38,309 for the year. Revenue includes 4^th quarter sales of $6,194 of NeuroCapsand of $221,244 from the Russian subsidiary for distributing third-party medical devices in Russia. Sales for piezoelectric motors reducedfrom 2020 as Piezo focused on the final commercialization of the Blue Series of motors. In 2020, revenue had included non-recurring revenuefrom engineering services and licensing of software for approximately $66k of revenue.

Cost of goods sold

Cost of goods sold were $182,519 for the fiscalyear ended December 31, 2021, compared to $43,792 for the fiscal year ended December 31, 2020. The increased cost of sales was primarilydue to the inclusion in sales of third-party medical devices in Russia during 4^th quarter of 2021.

Research and development expenses

Research and development expenses were $329,425for the fiscal year ended December 31, 2021, compared to $210,706 for the fiscal year ended December 31, 2020. The increase was primarilydue to an increase in product validation activities and adding additional personnel to complete the commercialization of the Blues Seriespiezoelectric motors.

Professional fees

Professional fees were $818,698 for the fiscalyear ended December 31, 2021, compared to $268,223 for the fiscal year ended December 31, 2020. In the fiscal year ended December 31,2021, professional fees were associated with preparation for the Piezo Acquisition, including approximately $373,000 in legal expenses,approximately $323,000 in accounting expenses, and approximately $67,000 of advisory expenses. In the fiscal year ended December 31, 2020,professional fees were primarily related to approximately $232,000 in legal expenses and approximately $35,000 in accounting expenses.The increase in professional fees in the fiscal year ended December 31, 2021 was due primarily to the Piezo Acquisition.

Sales and marketing expenses

Sales and marketing expenses were $1,041,575,for the fiscal year ended December 31, 2021, compared to $197,372 for the fiscal year ended December 31, 2020. The increase was primarilydue to hiring of personnel to begin the process of sales and marketing products as the Company readied for full commercialization.

General and administrative expenses

General and administrative expenses were $6,549,981for the fiscal year ended December 31, 2021, compared to $2,143,089 for the fiscal year ended December 31, 2020. In the fiscal year endedDecember 31, 2021, general and administrative expenses included payroll expenses of approximately $1,985,000, expense associated withstock-option based compensation of approximately $3,224,000, approximately $161,000 of insurance expense, $244,000 of consulting for productengineering and system implementation and $216,000 of travel expenses. In the fiscal year ended December 31, 2020, general and administrativeexpenses were primarily related to approximately $1,429,000 in payroll related expenses, approximately $321,000 in consulting fees andapproximately $9,000 in insurance expense. The increase in spending in the fiscal year ended December 31, 2020 was primarily attributableto the stock-based compensation, increased D&O insurance costs and an increase in payroll related expenses.

Interest expense

Interest expense, for the fiscal year ended December31, 2021 was $467,849, related to the Company’s convertible and promissory notes. A further amortization of debt discount of $89,787was expensed for the year ended December 31, 2021. Interest expense, for the fiscal year ended December 31, 2020 was $29,474, relatedto the Company’s convertible promissory notes. The increase was due to the issuance of approximately $6.9 million of convertibledebt during the year ended December 31, 2021.

Other income and expense

Other expense for the fiscal year ended December31, 2021 was $444,209. For the year ended December 31, 2021, other expense was derived primarily from interest expense of $467,849 anddebt discount amortization of $89,787 partially offset by gain on forgiveness of paycheck protection plan of $112,338 and other incomeof $1,110.

Liquidity and Capital Resources

While we have generatedlimited revenue in 2022 and 2021, we anticipate that we will continue to incur losses for the foreseeable future. Furthermore,substantially all of such revenue was generated through acting as a distributor of third-party medical devices in Russia, which hasbeen negatively impacted by Russia’s invasion of Ukraine, and we did not have any material sales of our products. Weanticipate that our expenses will increase substantially as we develop our products and pursue pre-clinical testing and clinicaltrials, seek any further regulatory approvals, contract to manufacture any products, establish our own sales, marketing anddistribution infrastructure to commercialize our products, hire additional staff, add operational, financial and management systemsand operate as a public company. We also expect to increase our expenses as a result of the Piezo Motor Corp. acquisition. As ofMarch 31, 2022 and December 31, 2021, we had $346,365 and $785,363 of cash, respectively, and an accumulated deficit of $24,438,861and $22,278,923, respectively.

Historically, our primary source of cash has beenproceeds from the sale of convertible promissory notes and related party loans. We have also from time to time issued shares of our commonstock to individuals and entities as payment for services rendered to us in lieu of cash.

We have no current sourceof revenue to sustain our present activities other than as acting as a distributor of third-party medical devices in Russia (includingthose purchased from a company affiliated with one of our offices and directors), which is not our primary business goal, and we do notexpect to generate material revenue, from our products until, and unless, the FDA or other regulatory authorities approve our productsunder development, and we successfully commercialize our products. Until such time, if ever, as we can generate substantial product revenue,we expect to finance our cash needs through our distributorship revenue, a combination of equity (preferred stock or common stock) anddebt financings as well as collaborations, strategic alliances and licensing arrangements. We do not have any committed external sourceof funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interestof our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affectyour rights as a common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restrictingour ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raiseadditional funds through collaborations, strategic alliances or licensing arrangements with third-party partners, we may have to relinquishvaluable rights to our technologies, future revenue streams or grant licenses on terms that may not be favorable to us. If we are unableto raise additional funds through equity or debt financings or through collaborations, strategic alliances or licensing arrangements whenneeded, we may be required to delay, limit, reduce or terminate our Product development, future commercialization efforts, or grant rightsto develop and market our cortical strip, grid electrode and depth electrode technology that we would otherwise prefer to develop andmarket ourselves.

Our independent registered public accounting firmincluded an explanatory paragraph in its report on our financial statements as of and for the years ended December 31, 2021 and 2020,noting the existence of substantial doubt about our ability to continue as a going concern. This uncertainty arose from management’sreview of our results of operations and financial condition and its conclusion that, based on our operating plans, we did not have sufficientexisting working capital to sustain operations for a period of twelve months from the date of the issuance of these financial statements.

We will require additional funds and/or generaterevenues, to continue to fund operations.

During the three months ended March 31, 2022,we issued convertible promissory notes in the amount of $1,150,000. We may obtain additional financing in the future through the issuanceof our common stock, through other equity or debt financings or through collaborations or partnerships with other companies. We may notbe able to raise additional capital on terms acceptable to us, or at all, and any failure to raise capital as and when needed could compromiseour ability to execute on our business plan.

Since March 31, 2022, we issuedconvertible notes in the principal amount of $888,500 and debentures in the principal amount of $5,659,500. The convertible notes havebeen converted to equity in connection with our PPO Offering at a conversion rate of $0.25 per share. See “PROSPECTUS SUMMARY –PPO Debentures/Warrant Offering.”

The market acceptance anddemand for our products is subject to numerous uncertainties. We have based these estimates on assumptions that may prove to be substantiallydifferent than we currently anticipate and could use our cash resources sooner than we expect. Our ability to successfully transitionto profitability will be dependent upon achieving a level of product sales adequate to support our cost structure. We cannot assure youthat we will ever be profitable or generate positive cash flow from operating activities.

Net cash used in operating activities

Net cash used in operating activities was $1,493,658for the three months ended March 31, 2022 compared to $672,962 for the three months ended March 31, 2021. This fluctuation is primarilydue to an increase in net loss of $1,505,934 and a gain on lease settlement of $1,660, partially offset by increases in share based compensationexpenses of $298,301, depreciation and amortization expenses of $195,350, amortization of debt discount of $16,454 and a decrease in cashused in working capital of $64,455.

Net cash used in investing activities

Net cash used in investing activities was $6,508for the three months ended March 31, 2022, compared to $20,122 for the three months ended March 31, 2021. The decrease was due primarilyto a decrease in purchases of property and equipment.

Net cash provided by financing activities

Net cash provided by financing activities was$1,060,759 for the three months ended March 31, 2022, which primarily consisted of the issuances of convertible promissory notes for aggregategross proceeds of $1,150,000, offset by the partial repayments of non-convertible promissory notes and accrued interest in the amountof $89,241.

Net cash provided by financing activities was$1,319,982 for the three months ended March 31, 2021, which consisted of proceeds from the issuances of convertible promissory notes.

Critical Accounting Policies and SignificantJudgments and Estimates

Our management’s discussion and analysisof our financial condition and results of operations is based on our financial statements, which have been prepared in accordance withaccounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements requiresus to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assetsand liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses during the reporting periods. Inaccordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable underthe circumstances at the time such estimates are made. Actual results may differ materially from our estimates and judgments under differentassumptions or conditions. We periodically review our estimates in light of changes in circumstances, facts and experience. The effectsof material revisions in estimates are reflected in our financial statements prospectively from the date of the change in estimate.

While our significant accounting policies aremore fully described in the notes to our financial statements appearing elsewhere in this Report, we believe the following are the criticalaccounting policies used in the preparation of our financial statements that require significant estimates and judgments.

Use of Estimates: The preparation of consolidatedfinancial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amountsof assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements andthe reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significantestimates in the accompanying consolidated financial statements include the estimates of useful lives for depreciation, the valuationof stock options, and the valuation of derivative liabilities.

Fair Value of Financial Instruments: Fairvalue is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction betweenmarket participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted pricesin active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Financial instruments consist of cash and cashequivalents, accounts receivable, accounts payable and borrowings. The fair value of current financial assets and current financial liabilitiesapproximates their carrying value because of the short-term maturity of these financial instruments.

Income Taxes. The Company accounts forincome taxes under the asset and liability method, as required by the accounting standard for income taxes, ASC 740. Under this method,deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statementcarrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carryforwards. Deferredtax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporarydifferences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognizedin income in the period that includes the enactment date.

Stock Based Compensation. The Company accountsfor the grant of restricted stock awards in accordance with ASC 718, “Compensation-Stock Compensation.” ASC 718 requires companiesto recognize in the statement of operations the grant-date fair value of equity-based compensation. The expense is recognized over theperiod during which the employee is required to provide service in exchange for the compensation. Any remaining unrecognized balance willbe recognized ratably over the life of the vesting period and is a reduction of stockholders’ equity.

The Company accounts for non-employee share-basedawards in accordance with the measurement and recognition criteria of ASC 505-50 “Equity-Based Payments to Non-Employees.”

Recent Accounting Pronouncements

Management does not believe that any recentlyissued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financialstatements, other than those disclosed below.

In August 2020, the FASB issued Accounting StandardsUpdate (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging- Contracts in Entity’s Own Equity (Subtopic 815 - 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accountingfor certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on anentity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexityin U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods withinthose fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements.

BUSINESS

Overview

We are a MedTech company with two innovative productlines: neurology and motion products. Since October 1, 2021, we have had two direct subsidiaries, each of which is focused on one of ourcomplimentary product lines.

The products of our subsidiary Memory MD, Inc.,hereinafter referred to as the Neurology Products, are medical devices designed for the neurology market. The products of our subsidiaryPiezo Motion Corp., hereinafter referred to as the Motion Products, are small piezoelectric motors which are designed for and expectedto have valuable and beneficial uses as motors within medical devices and devices outside of the MedTech industry

Since the merger between Brain Scientific Inc.and Piezo Motion Corp., we have focused on building an experienced team and platform to grow revenues from existing products and introducenew technologies to the market while leveraging our store of intellectual property.

The following diagram illustrates our legal structurefor our two primary revenue streams.

To date, substantially allof our revenues have been derived from our Russian subsidiary, Memory MD Russia, which has operated as a distributor of third-party medicaldevices within Russia. The Russian invasion of Ukraine in February 2022 negatively impacted the operation of our Russian subsidiary. Withthe uncertainty raised due to the continued Russian invasion of Ukraine, we do not anticipate having these medical device sales restartin Russia in the foreseeable future. No decision has been made as to winding down operations.

Products

The two lines of productsthat we currently sell are (i) Neurology Products and (ii) Motion Products.

Neurology Products

The Neurology Products of our subsidiary MemoryMD, Inc. are medical devices and software products designed for the neurology market. We believe our Neurology Products represent a stepforward in EEG technology and will allow for use in a wider range of applications

Electroencephalography, or EEG, is a method toidentify and to evaluate the electrical activity of the brain. An EEG could be beneficial, when used with other tools in the diagnosisof brain-related issues, including epilepsy, brain activity after a stroke, and sleep disorders. An EEG may also be used to determinethe electrical activity of a comatose individual.

Our initial Neurology Products are intended toallow for simplifying and making more ambulatory the completion of EEG. Further, the NeuroCap™ and NeuroEEG™ Products, both510K FDA cleared and available for sale, are focused on providing efficient tools to the EEG medical market. Our technology allows a miniature,wireless, clinical device capable of recording an EEG and provides the data to medical staff without the bulky hardware or necessitatinga neurology technician to place the cap. The NeuroEEG™ amplifier and desktop software used to store and analyze data captured fromthe NeuroCap™ are anticipated to have strong margins, utilizing a distribution network to provide access to hospitals, neurologists,and general practitioners as well as the various telehealth and tele-neurology companies.

NeuroCap™

The NeuroCap™ is an FDA cleared disposable,soft layered cap with an integrated electrode circuit that is designed to address existing problems of conventional EEG systems. The silverembedded wiring is pre-gelled, so it requires no prepping of the skin before application. NeuroCap™ makes it possible for medicalstaff of all levels to perform EEG tests, without having to laboriously apply electrodes one-by-one or spend considerable time cleaningan EEG headset after each use.

The NeuroCap™ works in parallel with theNeuroEEG™ amplifier device to successfully carry out EEG tests. However, the NeuroCap™ can also work with other EEG devicesin addition to our NeuroEEG. The NeuroCap™’s electrode placement follows standard alignment pursuant to the international10-20 system. The acquisition of electrical brain activity is carried out by non-invasive pre-gelled passive Ag/AgCl scalp (cutaneous)electrodes, ensuring maximum comfortability for the wearer. Benefits of NeuroCap™ include:

Expanding its potential uses, the NeuroCap™’seasy to follow numbered straps makes application easy by healthcare workers of all skill levels. We estimate preparation for the EEG canbe completed in approximately 5 minutes. It is user-friendly and requires minimal training. It can be utilized for EEG testing for upto 4 hours. A routine EEG is currently reimbursable by several Current Procedural Terminology (CPT^®) codes referring toa routine EEG.

To date, initial sales of NeuroCap™ havebeen made direct to a small number of hospitals and clinics. In 2022, we entered into a manufacturing agreement which we anticipate willallow us to begin providing NeuroCap™ for broader sale in August 2022 Our strategy is to expand to indirect sales through representativesand distributors during 2022.

NeuroEEG™ ™

The NeuroEEG™ connects wirelessly to thecomputer, allowing freedom of movement for the patient and enabling telemedicine applications. Currently, we believe a shortage of EEGtesting equipment and technicians exists in some areas. Other technology may require a specialized technician to apply the gel and electrodesindividually. A neurology technician may be more expensive and in shorter supply. They may not be staffed and available 24/7 for somehospitals.

NeuroHub™

NeuroHub™, fka NeuroNet Cloud, is beingdeveloped to collect and aggregate data from current and future Company devices like the NeuroCap™ and NeuroEEG™ and fromexternal sources such as research and medical data banks, 3rd-party devices, and clinical-use applications. We believe that NeuroHub™will allow for comprehensive monitoring and facilitate collaborative diagnosis, analysis, research, treatment, and prevention by employingsophisticated Artificial Intelligence or AI and machine learning or ML algorithms utilizing historical and current patient, device, andplatform data.

We anticipate that NeuroHub™ will allowwhite-labeling to provide facilities, physicians, and patients with a HIPAA-compliant branded portal for Tele-neurology/Tele-medicineservices, enabling secure access to patient data for evaluation and assessment by internal and external clinical specialists and neurologists.The platform will also integrate with Electronic Medical Records or EMRs and other external medical record databases to ensure up-to-dateand complete access to patient information.

We also anticipate that NeuroHub™ will allowusers to access patient and clinical data to evaluate patient conditions remotely. We believe that such an infrastructure removes theneed for direct contact with the patient, opening up underserved geographic locations with an undersupply of physicians to meet the growingdemand for neurological care as aging patient populations continue to grow.

As designed, we anticipate that NeuroHub™will allow for cross-referencing multiple points of data to aid with the following:

Artificial Intelligence Infrastructure

Our infrastructure is also being designed to gatherand mine brain-imaging data. Clinicians and researchers will be able to access data profiles of their patients and generate risk assessmentand treatment plans to address neurological conditions. This data could also be useful in establishing correlations between a myriad ofbrain scans, allowing us to further understand connections about the brain that have not been discovered.

Artificial intelligence infrastructure in theCompany cloud refers to all modules used to perform automatic analysis of patient data. This infrastructure can receive inputs from manydifferent sources such as medical databases, normative data sets, and other patient health information. By using machine-learning algorithms,the system is being designed to improve accuracy, providing for more advanced diagnostics as additional brain images are acquired.

The infrastructure is being designed to combineneural networks with state-of-the-art tree search and pattern classification systems to build robust neurological health profiles of patientbrain scans. These models are expected to be self-learning, so the more data supplied to it, the more “educated” it is expectedto be.

Our objective is to achieve better patient outcomesat a reduced cost through robust modelling and correlational analysis of brain imaging and other biometric data. Significant patternsrecognized by the system are designed to help medical professionals detect nuances in an individual’s brain, allowing them to tailormore personalized treatment plans for their patients. NeuroHub is being designed to handle millions of brain images to create robust modelsthat correlate health records, behaviors, and other neurological factors.

NeuroHub™ remains in development and isnot currently integrated into our NeuroCap™ or NeuroEEG™.

Markets and Customers

NeuroCap™ and NeuroEEG™can be used for recording EEGs in neurology clinics, urban and rural emergency departments (EDs), intensive care units (ICUs), urgentcare clinics, nursing homes and assisted living facilities, sports facilities, remote clinical research studies and a variety of othersettings.

We sell direct and throughdistributors in the US and internationally.

We are in the processof applying for our CE certification, which will certify that our NeuroCap™ meets all sales requirements in the European Union andEuropean-Economic Area countries.

Market Overview

We compete within the domestic and global medicaldevice industry, referred to as the “MedTech” industry, which industry, on a global scale, is expected to reach an estimated$594.5 billion by 2024, and it is forecast to grow at a compound annual growth rate or CAGR of 5.3% from 2020 to 2024, according to Statista.

The MedTech industry is characterized by rapidchange resulting from technological advances and scientific discoveries. We believe that U.S. medical device companies are highly regardedon a global scale for their innovations and high-technology products, which innovations and products are produced due to a significantinvestment in research and development.

Between both of our product lines, Neurology Productsand Motion Products, there is a significant opportunity for growth. The primary market for our Motion Products is within MedTech. However,they can be used in multiple other businesses including drones, robotics, and automotive industries. As we continue to expand, based uponthe availability of funds to do so, we anticipate pursuing these additional markets.

The global EEG system and device market is expectedto reach $1.59 billion by 2026, growing at a CAGR of 8.7% during the forecast period according to Grand View Research. We believe theincreasing incidence and prevalence of neurological disorders, rising awareness about neurodegenerative disorders, high incidence of epilepsy,sleeping disorders, Parkinson’s, and the increasing applications of brain monitoring in clinical trials are driving the growth ofthis market. In 2018, standalone devices were estimated to generate the most revenue as they gained adoption in hospitals and specializedcenters. These customers are the primary target market for our neurology devices.

The U.S. had the highest revenue share of theEEG system/device market according to Grand View Research. It is our plan to target the US market primarily, though we are pursuing salesglobally through our master agent LOK Corporation as well. Statista estimates the U.S. EEG market size at $355M in 2024, growing at a5.6% CAGR over the forecast period.

Brain monitoring is a complex process, requiringexpensive and advanced devices and equipment that are mainly found only in hospitals. Hospitals also see a considerably larger inflowof patients as compared to small clinics and other end users. Additionally, brain monitoring devices can pose a considerable burden interms of maintenance expenses on healthcare facilities; we believe that in general hospitals, more than other end users, are able to bearsuch costs. Hence, brain monitoring devices are mostly used in hospitals, which consequently account for the largest market share.

U.S. Healthcare Market

The National Health Expenditure Accounts or NHEAare the official estimates of total health care spending in the U.S. U.S. health care spending grew 9.7 percent in 2020, reaching $4.1trillion or $12,530 per person. As a share of the nation’s Gross Domestic Product, health spending accounted for 19.7%.

Digital health innovations are driving growthand opportunity in three major verticals of healthcare:

Neurology Reimbursement

Coverage in the U.S.

Reimbursement from private third-party healthcarepayors and, to a lesser extent, Medicare will be an important element of our success. Although the Centers for Medicare and Medicaid,or CMS, and third-party payors have adopted coverage policies for our targeted indications, there is no guarantee this will continue atthe same levels or at all in the future.

The International Classification of Diseases,Tenth Edition, or ICD-10 is a clinical cataloging system that went into effect for the U.S. healthcare industry on October 1, 2015, aftera series of lengthy delays. Accounting for modern advances in clinical treatment and medical devices, ICD-10 codes offer many more classificationoptions compared to those found in its predecessor, ICD-9. Within the healthcare industry, providers, coders, IT professionals, insurancecarriers, government agencies and others use ICD codes to properly note diseases on health records, to track epidemiological trends andto assist in medical reimbursement decisions.

We believe that many of the indications we arepursuing with our technologies are currently reimbursed on a widespread basis by Medicare, Medicaid, and private insurance companies. 

Coverage Outside the U.S.

If we seek to commercialize our products in countriesoutside the U.S., coverage may be available from certain governmental authorities, private health insurance plans, and labor unions. Coveragesystems in international markets vary significantly by country and, within some countries, by region. If we seek to commercialize ourtechnology, if approved, outside the U.S., coverage approvals must be obtained on a country-by-country, region-by-region or, in some instances,a case-by case basis. Based on our ongoing evaluation, certain countries reimburse more highly than others.

Athletic Performance Market

Athletic performance encompasses the treatmentand prevention of injuries related to athletics and exercise. Our business plan includes positioning our products and services as a go-to-choicein diagnostic tools for brain-related sports injuries. The EEG with cortical brain maps is highly capable of identifying post-concussionsyndrome. Concussions and traumatic brain injuries caused by contact sports are a growing and significant issue among athletes. The Centerfor Disease Control and Prevention has reported that 1.6 million to 3.8 million concussions occur each year, and UPMC Sports Medicineestimates 5 in 10 concussions go unreported or undetected with 2 in 10 high school athletes who play contact sports getting a concussionin a given year.

Other Markets

Our business plan includes positioning our productsand services as a go-to-choice in diagnostic tools for brain-related sports injuries.

Market Dynamics

Driver: Growing incidence of traumatic braininjuries

A traumatic brain injury or TBI is non-degenerative,non-congenital damage to the brain from an external mechanical force, possibly leading to permanent or temporary impairment. TBI is amajor public health concern. According to the Journal of Neurosurgery, TBI is a leading cause of morbidity and mortality, with approximately69 million people suffering TBI annually worldwide. Estimated incidence is highest in regions with good data such as North America andEurope, indicating that better testing would likely uncover a higher global TBI incidence. 

Opportunity: Increasing and expanding therapeuticapplications of brain monitoring devices

Apart from applications in neurological disorders,neurodegenerative diseases, and psychiatric disorders, brain monitoring devices are also used in other therapeutic areas like insomnia,post-traumatic stress disorder or PTSD, and sleep apnea. Quantitative EEG analysis is widely used to investigate the neurophysiologicalcharacteristics of insomnia. EEG biofeedback is a training process that has been scientifically proven to aid in the management of PTSD.

A number of research studies have demonstratedthe effectiveness of neurofeedback for PTSD in adults. For instance, a research study published by the NCBI, or National Center for BiotechnologyInformation, in 2016 demonstrated that 24 sessions of neurofeedback significantly reduced PTSD symptoms in adult sample populations. Similarstudies are also being conducted in children. Such positive research outcomes suggest that neurofeedback is a promising approach in thetreatment of PTSD. This is especially important because existing treatments can be quite difficult to tolerate and have limited effectivenessfor many individuals with PTSD. In addition, EEG is routinely used to measure and record brain wave activity for the diagnosis and treatmentof sleep apnea. These extended applications of brain monitoring devices are expected to provide growth opportunities for players operatingin this market.

Challenge: Shortage of trained professionals

Trained medical personnel are required to effectivelyoperate devices involved in the complex process of brain monitoring. The positioning of electrodes on the scalp and the insertion of muscularneedles require accuracy and can be performed only by highly trained personnel. In addition, the results generated by brain monitoringmachines are complex and can only be interpreted by qualified technicians or skilled professionals. Without these fundamental skills,end users will face difficulties in maximizing the utility of their brain monitoring equipment. The presence of highly skilled medicalpersonnel and staff is, therefore, vital for the effective use of brain monitoring equipment.

Currently, there is a shortage of skilled medicalpersonnel in both developed and developing countries. The AAMC, or Association of American Medical Colleges, estimates that the U.S. willsee a shortage of up to nearly 122,000 physicians by 2032 as demand for physicians continues to grow faster than supply, Furthermore,according to the American Association of Colleges of Nursing, there is a projected shortage of registered nurses in the US, and it isexpected to intensify by 2030. Moreover, the shortage of trained and experienced neurodiagnostic technologists globally has compelledhospitals to cross-train other allied health professionals to perform neurodiagnostic examinations. This presents a key challenge forthe growth of the global brain monitoring devices market.

Market Application

For neurologists and other health providers, weaim to provide a solution for monitoring patient health and safety across a variety of locations including the hospital, specialized clinics,and home settings. In managing patients with epilepsy, providers can improve in areas concerning patient re-admittance, patient mortalityand morbidity. Providers can also proactivity prevent the onset of negative chronic health conditions by engaging with at-risk populationsat a fraction of the cost by implementing our affordable EEG solutions.

For health providers, our offering of an EEG monitoringsolution could ease data collection efforts. By providing an accurate and consistent stream of EEG data, our products and services arebeing designed to allow physicians and other health professionals to make use of newly available bio-metric data to improve diagnosis,treatment, and management of various neurological illnesses, effectively increasing the quality and value add of medical services.

Our portability and integration potential augmentthe existing suite of remote monitoring solutions, allowing physicians to differentiate between nuanced neurological conditions happeningmore accurately within and outside the hospital setting. An example includes helping neurologist’s contrast nocturnal epilepsy patternsacross other sleep disorders such as parasomnia where individuals engage in abnormal movements during sleep.

Motion Products

Piezo Motion is a provider of piezo motor technologywith significant investment in research and development of affordable piezoelectric motors to meet, and exceed, the needs of today’s globalmarkets. We are committed to the development of innovative piezoelectric technology and motion products that enhance their functionalityin a multitude of applications. We work with startups, OEMs, research institutions and industrial companies from around the world empoweringthe visionaries behind their products.

Piezo Motion’s piezoelectric motors arecurrently divided into two main series (the Blue Series and the Imperial Series) based on design and construction methodology.

Blue Series

LCS

RBS

LAS

RAS

Imperial Series

Piezo Motion has recently completed an extensiveengineering program culminating in the development and initial launch of a unique line of small rotary and linear piezo motor productshereinafter referred to as the Blue Series, control electronics and associated software. Piezo Motion’s motor product line utilizesengineering polymers making them suitable for equipment and for high volume OEM applications. While there are several types of piezo motorson the market, the design and technology employed by Piezo Motion is very new and combines what we perceive to be key advantages, suchas superior precision and power density with affordability and ease-of-manufacture.

Piezo Motion’s Blue Series piezo motorsare available in a variety of sizes and configurations and are divided into twelve core motor platforms which include rotary motors (ModelsRBS, RAS) and linear motors (Models LCS, LBS and LAS). These core motor models differ in output specification and are further dividedinto variants/versions which include versions having hollow-shaft and solid-shaft rotors, versions having integrated magnetic and/or opticalencoders and versions which are non-magnetic and suitable for use within medical MRI. For each motor product line Piezo Motion has developedhardware control electronics together with motion control software including firmware and operating software. 

The second series of motors available is theImperial Series which employs a unique piezoelectric drive system, in which a ring-shaped piezo resonator with a peripheral vibrationshell is directly coupled to an array of radially positioned stainless-steel pushers. This unique rotary motor design enables a substantialincrease in the coupling efficiency between the stator and the rotor, which increases overall motor efficiency and provides superior resolutionand torque.

The Imperial Series includes powerful motorscapable of extremely faster response times, coupled with submicron-level angular steps and exceptional torque. The range includes bothbidirectional (reversible) and unidirectional PCB-mounted piezo motor models, like the Blue Series.

We believe that the piezoelectric motors of theBlue Series are unique because they combine the key performance benefits of a piezo motor with the price point of traditional precisiondirect current or DC motors. The Blue Series motor utilizes engineering polymers, making them very lightweight and suitable for equipmentand high-volume OEM applications. Unlike the classic DC motor (e.g., BLDC and stepper motors), the versatile design employed by the BlueSeries enables rotary and linear piezo motors consisting of very few parts, enabling economical manufacturing volume yielding a stableand reliable final result. Piezo technology is inherently non-magnetic which enables motor designs for specialized applications wheretraditional DC motors cannot be used. Piezo motors are also immune from electromagnetic or EM and radio frequency or RF interference andgenerate no emissions which can aid original equipment manufacturer or OEM product compliance and reduce or eliminate shielding costs.

We also believe that the Piezo-electric motorsof the Imperial Series are unique because they provide the highest level of precision performance within a robust metal enclosure. ImperialSeries motors are rotary and available in both reversible and non-reversible designs. These motors offer a much higher range of torqueoutputs compared to the Blue Series and provide higher precision for the most demanding positioning applications. Like the Blue Series,the piezo technology employed is inherently non-magnetic which enables motor designs for specialized applications where traditional DCmotors cannot be used. They are also immune from EM and RF interference and generate no emissions which can aid OEM product complianceand reduce or eliminate shielding costs.

We believe that our propriety piezo technologymay be up to 1,000 times more precise and up to 100 times faster to respond than the DC competitors. A typical rotary stepper motor mightbe configured to make up to 200 – 500 steps in each rotation. By comparison, our Blue Series rotary motors provide over 600,000steps per full rotation and our Imperial Series can achieve over 2.5 million steps per full rotation. These performance attributes providesmoother and more precise motion. Our technology is also extremely scalable, enabling manufacture of very compact motors with our smallestbeing the length and width of a thumbnail.

Piezo Motion’s target markets include industriessuch as:

Precision Motion Market

We compete within the domestic and global precisionmicro motor and piezoelectric motor industries which combined are expected to grow at a CAGR of 4.1% from 2021 to 2026 to an estimated$34.3B by 2026. The precision motion market is defined primarily by costly, high-precision piezoelectric motors and lower-end DC precisionmotors. These are the motors that guide lasers, satellites, Mars rovers, and small cameras, among other things. This market continuesto value more compact, precise, efficient motors to address the trends of miniaturization and portability. These motors are used acrossmany industries, including aerospace, robotics, manufacturing, drones, telecommunications, and the medical field. We believe that we areuniquely positioned with our patented technology to sell piezo precision at a price point that can compete with precision DC motors.

Medical Technology Market

The primary focus for our piezoelectric motorsremains on the medical technology, or MedTech, market. Use cases for precision motion products in this space vary from lab equipment tosurgical robotics to drug delivery systems, to give a few examples. The MedTech industry is an optimal target because it increasinglyrequires higher precision than DC motors can offer, low electromagnetic interference, and often an affordable price point to reduce systemcosts. We believe that our products’ unique advantages will play well into this space.

Markets and Customers

Driver: Trends toward miniaturization and portability

Creating increasingly small and mobile devicesrequires not just smaller and more energy-efficient motors within those devices but also more precise machinery to manufacture said devices.

According to Machine Design, the need for miniaturemotors is itself being expanded by trends towards the invent of collaborative robotic applications, robustness and extended life, safetyand analytics through encoders and other feedback devices, and autonomy through multi-axis control. Smaller drones, smaller assembly lines,more complex smartphones and cameras, and more precise robotics all push the demand for miniaturized motors forward.

Portability has long been a trend for convenience,but an interconnected global world, increasingly complex robotic systems, and an increasingly mobile workforce all speak to the need formicro-sized motors to be more energy and weight efficient than before. According to an article from ISA (International Society of Automation),increased human-robotics interactions and systems is a primary driver behind the trend of compact portability for robotics and motionsystems. These trends are likely to support market growth for our products.

Opportunity: Increased need for small precision motion systems

To drive progress in current hardware systemsand robotics, and to keep pace with software and analytical developments, we believe increased motion precision is needed. The World EconomicForum estimates that by 2025 humans will create 463 exabytes of data each day globally. For context, one exabyte is equal to 1 millionterabytes. This predicted influx of data creation data will likely drive more precise analytics, predictions, and recommendations –but to drive change in the physical world we believe will require motion systems capable of such high precision.

Piezoelectric motors are generally more precisethan DC motors, so they stand to benefit from demand for greater precision. The primary historic limitation of piezoelectric motion forprecision applications has been their cost.

Challenge: The cost of piezoelectric motion systems

Piezoelectric systems can often cost 10x as muchas a precision DC motor of a comparable size. For most precision use cases outside of the highest-cost, highest-precision applications,precision DC motors are used today. We believe that piezoelectric motion can be far more affordable while still maintaining advantagesin precision, efficiency, simplicity, and weight compared to precision DC motors.

We believe that our patented technology makesus unique in this ability and will help us maintain pricing levels comparable to precision DC motors while offering piezoelectric motorperformance.

Market Application

Our piezoelectric motion devices have many applications.Our primary markets are life sciences, MedTech, and lab instruments given those markets’ focus on precision and need for miniaturization.We believe devices in these fields can benefit from our technology: such potential applications include infusion MRI pumps, syringe pumps,wearable drug dispensers, handheld drug dispensers, surgical robotics, microscopes and micro-positioning systems, and diagnostic testingequipment.

In addition to the life sciences industry, ourmotors have market applications in a wider set of industries, some of which have already started to use our motors. These secondary targetmarkets include the advanced manufacturing, defense, laser/photonics/optic, semiconductor, and aerospace industries.

Competitive Strengths

We believe that we are well positioned withinthe markets in which we operate. Our competitive strengths include:

Neurology