The following provides a high-level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important to understand our financial results for the three and nine months ended September 30, 2022, and 2021, respectively. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this report, and our audited consolidated financial statements and accompanying notes included in the Annual Report in Form-10-K for the period ended December 31, 2021 and filed with the SEC on April 15, 2022.

Cautionary Note Regarding Forward-Looking Statements Double Head Edge Triming Machine

This Quarterly Report on Form 10-Q contains "forward-looking statements" (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These forward-looking statements are based on our management's beliefs, assumptions, and expectations and on information currently available to our management. Generally, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expects," "plans," "anticipates," "believes," "estimates," "projects," "predicts," "potential" and similar expressions intended to identify forward-looking statements, which generally are not historical in nature. All statements that address operating or financial performance, events, or developments that we expect or anticipate will occur in the future are forward-looking statements, including without limitation our expectations with respect to the timing for our planned manufacturing expansion and/or new lease for manufacturing and headquarters space, the benefits of our products, customer leads, product sales, financings, or the commercial viability of, and prospects for, our business model. We may not actually achieve the plans, projections or expectations disclosed in forward-looking statements, and actual results, developments or events (including, without limitation, those related to our planned manufacturing relocation and expansion and our sales and marketing initiatives) could differ materially from those disclosed in the forward-looking statements. Our management believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on forward-looking statements because they speak only as of the date when made. We do not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by federal securities laws and the rules of the Securities and Exchange Commission (the "SEC"). We may not actually achieve the plans, projections or expectations disclosed in our forward-looking statements, and actual results, developments or events could differ materially and adversely from those disclosed in the forward-looking statements. Forward-looking statements are subject to a number of significant risks and uncertainties, including without limitation those described from time to time in our reports filed with the SEC.

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q as well as the risk factors and other disclosures contained in our Annual Report on Form 10-K for the period ended December 31, 2021.

Basanite, Inc., and its wholly owned subsidiaries are referred to in this discussion as the "Company", "we", "our", or "us". "Common Stock" refers to the Common Stock of the Company.

On May 30, 2006, Basanite, Inc. was formed as a Nevada corporation. Through our wholly owned subsidiary, Basanite Industries, LLC, a Delaware limited liability company ("BI"), we manufacture a range of "green" (environmentally friendly), sustainable, non-corrosive, lightweight, composite products used in concrete reinforcement by the construction industry. Our core product is BasaFlex™, a basalt fiber reinforced polymer reinforcing bar ("rebar") which we believe is a stronger, lighter, sustainable, non-conductive and corrosion-proof alternative to traditional steel.

Our two other main product lines are BasaMix™, which are fine denier basalt fibers available in various chopped sizes, and BasaMesh™, a line of Basalt Geogrid Mesh Rolls, intended to replace welded wire mesh (made of steel) and other fiber reinforced polymer grids and mesh.

BasaMix™ is designed to help absorb the stresses associated with early-aged plastic shrinkage and settlement cracking in concrete, as well as providing an increased toughness for enhanced reinforcement in Slab on Grade (SOG) and precast elements. BasaMix™ also serves in a "system approach" for optimum performance of a concrete element when used in conjunction with our BasaFlex™ rebar.

BasaMesh™ is designed for secondary and temperature shrinkage reinforcement. BasaMesh™ can also work in conjunction with the BasaFlex™ rebar or BasaMix™ for a total reinforcement program.

Each of our products is specifically designed to extend the lifecycle of concrete products by eliminating "concrete spalling." Spalling results from the steel reinforcing materials embedded within the concrete member rusting (contrary to popular belief, concrete is porous, and water can permeate into concrete). Rusting leads to the steel expanding and eventually causing the surrounding concrete to delaminate, crack, or even break off, resulting in potential structural failure. We believe that each of our products addresses this important need along with other key requirements in today's construction market.

We believe that the following attributes of BasaFlex™ provide it with a competitive advantage in the marketplace:

· BasaFlex™ never corrodes: steel reinforcement products rust, leading to

· BasaFlex™ is sustainable: BasaFlex™ is made from Basalt rock, the most abundant

· BasaFlex™ is "green": From mining, through production, to installation at the

· BasaFlex™ has a lower in-place cost: the physical nature of our products

relative to steel result in a lower net cost to the contractor once installed,

such as: BasaFlex™ is one-quarter of the weight of equivalent sized steel,

meaning 4 times the quantity of material can be delivered by the same truck (or

container); all Basanite products can be loaded/unloaded and moved around the

jobsite by hand - no expensive handling equipment is needed; less concrete is

required as BasaFlex™ does not require the extra concrete cover needed when

using steel; and Basanite products are safer and easier to use. We believe all

these factors materially reduce the net in-place cost of concrete

BI is currently leasing a fully permitted, 36,900 square foot facility located in Pompano Beach, Florida equipped with five customized, Underwriters Laboratories approved, pultrusion manufacturing machines for BasaFlex™ production; one proprietary BasaMaxTM pultrusion manufacturing machine (see following paragraph) for BasaFlex™ production; plus additional composite manufacturing equipment. Pultrusion is a manufacturing process for converting reinforced fibers and liquid resin into a fiber-reinforced polymer product. Each of our current pultrusion machines has up to two linear production lines or "cavities" (we use one or two lines per machine depending on rebar size) giving a maximum capacity of 10 manufacturing lines (smaller bar sizes only). To date, BI's operations team has successfully optimized and scaled the capacity of our manufacturing plant to be able to produce up to 22,800 linear feet of BasaFlex™ rebar per shift, per working day, depending on the product mix. We are planning on vacating this facility on Pompano Beach and relocating to a new facility to accommodate our current and planned additional manufacturing machines (see note 12 to the accompanying financial statements for further information).

During the past year, we designed, developed, and prototyped a next generation Pultrusion manufacturing system for BasaFlexTM rebar we call BasaMax™. This new system has been designed in two versions, a quad-line system named "Tetrad" (for smaller bar sizes) and a dual-line system named "Dyad" (for larger bar sizes). Each machine not only offers double the manufacturing capacity of the current machines for a given bar size, but they also run faster, and they fit in the same manufacturing floorspace. We currently have five of these new BasaMax pultrusion machines manufactured and ready for delivery: three quad-line machines and two dual-line machines.

During the third quarter of 2022, we conducted an evaluation of our current facility in Pompano Beach with a longer-term view and determined that its current facility layout significantly limits our options for growth. In addition, due to limitations on our cash resources, we have been late in our payments to our current landlord, who has taken action to evict us. As a result of these factors, we have been looking for a new facility that will allow for future expansion and be better suited for our manufacturing processes. We have placed the planned installation of our new equipment temporarily on hold, and our current plan is to lease a new facility and accept delivery of new machines by the end of the fourth quarter of 2022 or early in 2023, with installation and calibration of our new machines to commence immediately thereafter. Assuming we are able to secure appropriate manufacturing space, with the introduction of this new equipment and the subsequent establishment of our planned two-shift operations, our maximum manufacturing capacity for BasaFlex™ rebar will increase to more than 100,000 linear feet per working day (on a two-shift basis).

Importantly, BI's own fully equipped Test Lab is utilized to evaluate, validate, and verify each raw material and each batch of completed BasaFlex™ product, ensuring our finished goods meet the required specifications and performance attributes. We are also developing a new process specifically for manufacturing BasaFlex™ shapes (hoops; angles and stirrups) which we call BasaLinks™, which includes developing a next generation pultrusion system as part of this process. Again, assuming we are able to secure appropriate manufacturing space, we expect our first BasaLinks system to be in place and operational during the second quarter of 2023.

We believe that macroeconomic factors are pressuring the construction industry to consider the use of alternative reinforcement materials for the following reasons:

· the increasing need for global infrastructure repair;

· recent design trends towards increasing the lifespan of projects and materials;

· the global interest in promoting the use of sustainable products;

· increasing consideration of both the long-term costs and environmental impacts

· more recently, due to rising steel prices, an increasing level of price

equivalence between steel rebar and our BFRP rebar.

We believe we are well positioned to benefit from this renewed focus, particularly in light of the interest of the U.S. government in funding infrastructure improvements and events such as the collapse of a residential building in Surfside, Florida.

Known Factors, Trends and Risks Impacting Our Business

Search for New Facilities and Manufacturing Expansion

Our business plan calls for scaling the manufacturing capability to enable the potential for increased revenues and cash flow positive operations, and ultimately to profitability, in as short a timeframe as possible. As discussed above, we are currently searching for a new headquarters and manufacturing facility. Once and assuming this new facility is established and fully operational, we plan to open additional facilities around the country based on demand, each designed to service a circular area roughly 1,000 miles in diameter, with the plant at the center.

However, our manufacturing expansion plans have been hindered by several factors: the COVID-19 pandemic, our slower than expected rate of fundraising and our slower than expected ramp-up in sales. This last item has been caused by multiple factors, including:

· Customer requirements for multiple additional product and facility

o International Code Council (or ICC) Evaluation Service (known as "ICC-ES")

Certification to AC 454. ICC-ES is an industry leader in performing technical

evaluations of building products, materials and systems for code compliance.

Basanite's Product ICC-ES certification testing and facility audit were both

successfully completed in the third quarter of 2022, and we received ICC-ES

o Approval by the Florida Department of Transportation ("FDOT"). We have

previously received FDOT with facility approval (FRP22), and our product

approval is pending successful completion of FDOT's product certification

testing program, which is nearing the end of the long-duration product testing

currently underway at the University of Sherbrooke, Canada (9 month program).

This FDOT testing is expected to complete during the fourth quarter of 2022

with final approval to follow in the first quarter of 2023;

o The lack of an ASTM (formerly known as the American Society for Testing and

Materials) product standard specifically for basalt fiber. A member of our

board of directors, Fred Tingberg, who was appointed as our Chief Technology

Officer in June 2022, was appointed to the ASTM committee to review this and

helped bring the process to conclusion. The new ASTM Specification for Basalt

Fiber, D-8448-22 was issued in September 2022;

o The lack of an ASTM product standard covering basalt fiber rebar (this process

is underway). A new ASTM Specification for High-Performance Rebar is expected

to be issued in the first quarter of 2023;

· Customer concerns about our current manufacturing capacity, which have

· The Surfside Condo disaster, which has resulted in some local engineers being

Our new manufacturing equipment mentioned above is expected to be delivered and the installation and calibration process to commence during the fourth quarter of 2022 or early in 2023, assuming we are able to secure a new manufacturing facility. The equipment is expected to become fully operational shortly thereafter. We believe the achievement of this would simultaneously resolve questions about our manufacturing capacity and will materially improve our ability to generate larger sales order.

In the past year, supply chain shortages or delays have had an immaterial impact on our operations. However, on October 31, 2022, we were notified by Mafic USA, LLC (our primary U.S. supplier of basalt fiber, which is the key component in our products) that they would be ceasing manufacturing operations in order to engage in a possible restructuring. As discussed below, we have a second supplier of basalt fiber located in Russia, but at the present time, we require a U.S. supplier of basalt fiber, and the absence of such a supplier, if it continues, would have a material adverse effect on our ability to conduct operations. We have been diligently researching other domestic sources of basalt fiber, and we continue to work with a domestic broker of international basalt fiber sourcing.

The recent war in Ukraine has led the world to issue sanctions on the government of Russia. This directly resulted in a significant price increase of basalt fiber material from our fiber supplier in Russia, Kamenny Vek. Of note, as described above under "Supply Chain" Kamenny Vek is presently our only operating suppler for basalt fiber, and this dependence is a risk factor for us until we can identify alternate suppliers. We have been fortunate as we have been able to raise our finished goods pricing to compensate without any notable affect to customer demand. We have also recently increased the levels of our safety stock of raw materials as an additional cushion. Nonetheless, we are currently qualifying alternate fiber and other materials from other global suppliers to preserve our options in case of further disruptions. We might experience further supply chain challenges in the future because of the war in Ukraine, which could harm our business and our results of operations.

Government Approvals and Specifying of our Products

We continue to pursue additional product and facility qualifications and approvals, and these qualifications and approvals are critical to the market acceptance of our products. As previously noted, we are currently testing products at an independent university laboratory (University of Sherbrooke) in the pursuit of FDOT certification. Formal FDOT approval is expected by the end of the first quarter of 2023. However, we are already selling to FDOT projects on an individual basis through exemptions or via previously issued material specs. Formal FDOT approval will allow us to bid on any FDOT project that is approved to use basalt fiber reinforced polymer products. Until we have obtained these additional approvals, our opportunities to bid on certain projects will be limited.

Inflation & Interest Rate Sensitivity

In the past two fiscal years, inflation has not had a significant impact on our business. However, during the second half of 2021 and into 2022, the U.S. economy has entered into a period of increasing inflation. Should inflation persist or increase, interest rates may continue to rise, and inflation overall could have a significant effect on the economy in general and the construction industry in particular, as well as create volatility in the capital markets. For example, inflation and increased interests could affect the prices of raw materials we use, demand for our products, our ability to attract and retain skilled labor and our ability to obtain financing. We are carefully watching chemical prices, which are following oil and gas prices, as a core component of BasaFlex™ is the chemical resin mix. Prices have risen, but we have been able to raise our own prices to support our margins, largely as the result of the increase in steel prices. We believe we have benefitted from the rapid rise in steel prices over the past several fiscal quarters as well as the reduced availability of steel rebar, both of which changes have opened opportunities to more readily introduce our products into the marketplace. As of the date of this report, BasaFlex™ has become competitive with steel on price alone, and it is relatively available, whereas steel has been impacted by raw material supply chain constraints. We will continue to seek opportunities to take advantage of high steel prices and restricted supply while these issues are prevalent.

The pandemic caused by the novel coronavirus (known as "COVID-19") and governmental responses and efforts to curb the spread of the pandemic has caused great disruption to the U.S. national and international economies. We have been adversely impacted by COVID-19 in that we have been required to temporarily suspend operations during 2020 due to necessary quarantines, and the impact of COVID-19 on the construction industry we service has been significant. Government mandated shutdowns and other measures held less of an impact on our business during 2021, although we did have personnel absent for periods during the year due to COVID-19. During the first quarter of 2022, while certain of our personnel did contract COVID-19, overall COVID-19 did not have a material impact on our business, in part because we were operating with reduced personnel and personnel could work remotely in certain cases.

The continued prevalence of COVID-19 or outbreaks of new variants thereof could disrupt our supply chain, as well as our own operations due to absenteeism by infected or ill members of management or other employees, or absenteeism by members of management and other employees who elect not to come to work due to illness affecting others in our office or plant, or due to additional necessary quarantines. This could be particularly true as we seek to scale operations during 2022 and hire additional personnel. COVID-19 could also impact members of our Board of Directors as well as key providers of services to us, which could adversely impact the management of our affairs. Additionally, as the COVID-19 pandemic continues to develop, we may be required to continue to spend time and resources in monitoring and adhering to government regulations that impact both our company and our customers and potential customers as necessary, which could also adversely impact our business and results of operations. We continue to monitor our operations and applicable government recommendations and requirements.

Results of Operations for the Three Months Ended September 30, 2022, and 2021

Revenue: We had revenue of $235,579 from sales of finished goods for the three months ended September 30, 2022, an increase of $80,102 compared to $155,477 in the prior year. While the increase in revenue in the year over year periods was relatively significant due to our increasing sales success (across all product lines) in 2022, overall revenues continue to be minimal, largely due to our capacity constraints and limited working capital. We continued our efforts to increase our sales during the period.

Cost of goods sold: Cost of goods sold was $387,621 for the three months ended September 30, 2022, an increase of $210,627 compared to cost of goods sold of $176,994 during the prior period. Cost of goods sold reflects the fixed overhead costs absorbed by manufacturing, at low sales volumes this results in negative margins. Our gross profit during the three months ended September 30, 2022, was negative $152,042 compared to $21,517 during the prior period. This change is due to a reduction in selling price. We expect our gross profit to increase as fixed overhead costs are absorbed over a greater volume of sales.

Sales, general, and administrative: Sales, general, and administrative expenses were $595,310 during the three months ended September 30, 2022, a decrease of $1,037,646 compared to $1,632,956 during the prior period. For the current quarter, sales, general, and administrative costs consisted primarily of professional fees of $113,596; payroll and related costs of $200,572, not including stock-based compensation of $71,178; consulting fees of $54,895; investor relations costs of $11,630; research and development of $3,195; advertising and marketing of $24,452; rent of $55,956; computer and IT costs of $29,547, and office costs of $15,371. The primary reason for the decrease in sales, general, and administrative costs compared to the prior period was $774,749 decrease in compensation, professional fees and consulting plus a decrease of $156,439 in other overhead costs due to a reduction in production.

Gain on settlement of legal contingency: There was no gain on legal contingency during the three months ended September 30, 2022. During the prior period, the Company recognized a gain on settlement of legal contingency in the amount of $94,127 in connection with the settlement of accounts payable related to legal matters

Interest expense: Interest expense was $84,467 during the three months ended September 30, 2022, a decrease of $35,603 compared to interest expense of $120,070 during the prior period. Interest expense consists of interest on the Company's notes and loans payable along with late fees on past due invoices charged by vendors.

Results of Operations for the Nine Months Ended September 30, 2022, and 2021

Revenue: The Company had revenue of $781,918 from sales of finished goods for the nine months ended September 30, 2022, compared to $175,162 in the prior year. While the increase in revenue in the year over year periods was relatively significant due to our increasing sales success (across all product lines) in 2022, overall revenues continue to be small, largely due to our capacity constraints and limited working capital.

Cost of goods sold: Cost of goods sold was $1,584,595 for the nine months ended September 30, 2022, an increase of $1,389,908 compared to cost of goods sold of $194,687 during the prior period. Cost of goods sold reflects the fixed overhead costs absorbed by manufacturing, at low sales volumes this results in negative margins. Our gross profit during the nine months ended September 30, 2022, was negative $802,677 compared to negative $19,525 during the prior period. We expect our gross profit to increase as fixed overhead costs are absorbed over a greater volume of sales.

Sales, general, and administrative: Sales, general, and administrative expenses were $2,678,405 during the nine months ended September 30, 2022, a decrease of $1,466,998 compared to $4,145,403 during the prior period. For the current nine-month period, sales, general, and administrative costs consisted primarily of payroll and related costs of $691,549, not including stock-based compensation of $509,013; professional fees of $500,492; consulting fees of $322,837; research and development of $184,227; investor relations costs of $122,843; advertising and marketing of $95,943; rent of $74,976; computer and IT costs of $71,152; and office costs of $50,531. The primary reason for the decrease in sales, general, and administrative costs compared to the prior period was $537,353 in overhead and depreciation charges in the prior period; these costs were absorbed by cost of sales during the nine months ended September 30, 2022 as well as a decrease in stock-based compensation of 477,654 and a decrease in payroll of 164,981 due to a reduction in production.

Gain on settlement of legal contingency: There was no gain on legal contingency during the nine months ended September 30, 2022. During the prior period, the Company recognized a gain on settlement of legal contingency in the amount of $438,649 in connection with the settlement of accounts payable related to legal matters.

Liquidated damages - loan commitment: During the nine months ended September 30, 2022, the company recognized liquidated damages - loan commitment in the amount of $426,759 in connection with our obligations under the terms of our private placement to file a registration statement for an underwritten public offering and concurrent listing on a national stock exchange. There were no such charges during the prior period.

Loss on extinguishment of debt: The Company recognized no loss on extinguishment of debt during the nine months ended September 30, 2022, compared to $6,743,015 during the nine months ended September 30, 2021. For more information about the transaction leading to the extinguishment of debt refer to footnote 7 of the financial statements included in this Form 10-Q.

Gain on loan forgiveness: The Company recognized a gain on loan forgiveness during the nine months ended September 30, 2022 and 2021 of $167,996 and $124,143 respectively due to the PPP loan forgiveness program. The Company received two PPP loans that were both fully forgiven. During the nine months ended September 20, 2022, the Company received a credit from a vendor forgiving an old outstanding balance of $2,100.

Interest expense: Interest expense was $388,701 during the nine months ended September 30, 2022, an increase of $62,757 compared to interest expense of $325,944 during the prior period. Interest expense consists of interest on the Company's notes and loans payable along with late fees on past due invoices charged by vendors.

Since inception, we have incurred net operating losses and negative cash flow. As of September 30, 2022, we had an accumulated deficit of $50,247,626. We have incurred general and administrative expenses associated with our product development and compliance while concurrently setting up our manufacturing facility, beginning operations, and developing our business plan. We also continue to incur legal fees arising from ongoing activities due to fundraising, ongoing public company costs and dispute resolution expenses. We expect operating losses to continue in the short term, and we require additional financing for securing and outfitting our proposed new headquarters and manufacturing space as well as ultimately expanding our manufacturing capability and generally scaling our business until we can generate sufficient revenues to achieve positive cash flow. These conditions raise substantial doubt about our ability to continue as a going concern.

We have historically satisfied our working capital requirements through the sale of restricted Common Stock and the issuance of warrants and promissory notes. We will continue our fundraising efforts until we have obtained positive cash flow to cover our expenses. No assurances can be given that we will be successful in raising capital at all or on terms acceptable to us, or at all, and no assurances can be given that even if we raise capital that we will be able to generate sufficient revenue to become cash flow positive.

On September 27, 2022, we furloughed the majority of our staff to reduce costs during a period of reduced production. We anticipate re-staffing as soon as we are in the new facility with the new equipment. In addition, due to our cash flow and liquidity challenges, we have received demand letters from a number of vendors to our company seeking payment of past due amounts to such vendors. As of the date of this report, such demands have not become formal litigations or other proceedings against our company, but they may become litigations against us in the future.

Notwithstanding proceeds from the sale of our securities, recent related party equipment lease transaction and warrant and option exercises in 2022 and 2021, our current working capital is extremely limited, and our projected sales revenue (together with our limited working capital) is presently insufficient to maintain our current operations. In order to establish and grow our manufacturing and sales and marketing operations and reach the level of revenue sufficient to provide positive cash flow, we require significant funding of both our expansion plans (which includes the finalization of our current manufacturing expansion plans and potential investments in other manufacturing facilities, as well as increased headcount necessary to operate our manufacturing at planned capacity). This will cover our significant operating deficit while we seek to establish and scale our manufacturing capability, secure orders from known potential customers, and introduce our products to new customers. We will attempt to raise this capital through third party financing, including potential private or public offerings of our securities (including a potential underwritten offering and listing of our Common Stock on a national securities exchange) as well as bridge or other loan arrangements. However, there is a material risk that we will be unable to secure the required capital (whether through an underwritten financing and/or uplisting to a national exchange or otherwise) at all or that the terms of such required financing may be available or acceptable to us. If we are unable to obtain adequate financing, we may reduce our operating activities to reduce our cash use until sufficient funding is secured. If we are unable to secure funding when needed, our results from operations may suffer, and our business may fail.

As of September 30, 2022, we had cash of $71,293 compared to $109,514 as of December 31, 2021. The decrease in cash was due to our net loss of $4,126,416, offset primarily by $658,090 in non-cash expenses, a $1,300,000 increase in stock subscription liability, an increase in accounts payable of $1,159,258. We used $780,476 of cash for the purchase of equipment during the period and raised $450,000 in a financing leases. We raised $874,591 from the sales for Common Stock and the exercise of warrants and stock options.

Net cash used in operating activities amounted to negative $907,494 and $3,879,286 for the nine months ended September 30, 2022, and 2021, respectively. The decrease in net cash used in operating activities was primarily a result of an increase in subscription liability in the amount of $1,300,000, a decrease in net loss of $6,536,548 offset by a decrease in non-cash items of $6,816,896 and an increase in accounts payable in the amount of $1,159,268 and a decrease in inventory of $431,098 during the nine months ended September 30, 2022.

During the nine months ended September 30, 2022, we used $330,476 cash for investing activities compared to a negative $1,868,896 used in the same period in the prior fiscal year. The increase is largely due to a reduction in the costs associated with the customization, installation, and verification and validation testing of the prototype BasaMax™ pultrusion machine, for the modifications and UL listing of the current production machinery, and the final payments for the enhancements made to our production facility as compared to the deposits made on machinery and equipment offset by an equipment financing transactions totaling $450,000.

During the nine months ended September 30, 2022, we had $1,199,749 net cash provided by financing from the sale of Common Stock of $649,591, warrants for net proceeds of $225,000, proceeds from notes payable of $305,000, and repayments of notes payable of $20,158. During the prior period, cash provided by financing activities was $6,796,904.

Our cash on hand as of September 30, 2022 or as of the date of this report will not be sufficient to fund our current working capital requirements to the point where we are generating positive cash flow. We have recently entered into several convertible promissory notes and other loan transactions to help fund operations and will require substantial additional working capital in the short term. We continue working towards securing more working capital with a preference towards debt which may be convertible to equity. However, there is no assurance that we will be successful in our efforts or, if we are, that the terms will be beneficial to our shareholders.

The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Please see note 2 to the condensed financial statements included in this report.

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