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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As filed with the Securities and
Exchange Commission on July 22, 2019.</B></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registration
No. 333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>UNITED
STATES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SECURITIES
AND EXCHANGE COMMISSION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Washington,
D.C. 20549</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FORM
S-1</B><BR>
<B>REGISTRATION STATEMENT<BR>
UNDER THE<BR>
SECURITIES ACT OF 1933</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TELEMYND,
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Exact
Name of Registrant as Specified in its Charter)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 32%; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Delaware</B></FONT></TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 32%; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>8090</B></FONT></TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 32%; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>83-4053533</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(State or other jurisdiction
    of</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Primary Standard
    Industrial</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(I.R.S. Employer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">incorporation or
    organization)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Classification Code
    Number)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification No.)</FONT></TD></TR>
</TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>26522
La Alameda, Suite 290</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Mission
Viejo, CA&nbsp;92691</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(949)
420-4400<SUP>1</SUP><BR>
</B>(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant&rsquo;s Principal Executive Offices)</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Patrick
Herguth<BR>
Chief Executive Officer<BR>
Telemynd, Inc.<BR>
26522 La Alameda, Suite 290</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Mission
Viejo, CA&nbsp;92691</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(949)
420-4400<BR>
</B>(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Copies
to:</B></FONT></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 49%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Jeffrey A. Baumel, Esq.</B></FONT></TD>
    <TD STYLE="width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 49%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Kenneth R. Koch, Esq.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Ilan Katz, Esq.</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Dentons US LLP</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Chrysler Center</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>1221 Avenue of the Americas</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>666 Third Avenue</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>New York, New York 10020</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>New York, New York 10017</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>(212) 768-6700</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>(212) 935-3000</B></FONT></TD></TR>
</TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approximate
date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box.&nbsp;&nbsp;&nbsp;&nbsp;&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. &nbsp;&nbsp;&nbsp;&nbsp;&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. &nbsp;&nbsp;&nbsp;&nbsp;&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. &nbsp;&nbsp;&nbsp;&nbsp;&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer,&rdquo; &ldquo;smaller
reporting company&rdquo; and &ldquo;emerging growth company&rdquo; in Rule 12b-2 of the Exchange Act.:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 48%; font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large
    Accelerated Filer&nbsp;&nbsp;&nbsp;&nbsp;&#9744;</FONT></TD>
    <TD STYLE="width: 45%; font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated
    Filer&nbsp;&nbsp;&nbsp;&nbsp;&#9744;</FONT></TD></TR>
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-Accelerated
    Filer&nbsp;&nbsp;&nbsp;&nbsp;&#9744;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Smaller
    Reporting Company&nbsp;&nbsp;&nbsp;&#9746;</FONT></TD></TR>
<TR STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging
    Growth Company&nbsp;&nbsp;&nbsp;&nbsp;&#9746;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CALCULATION
OF REGISTRATION FEE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Title of Each Class of Securities to be Registered</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount to be Registered</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Proposed<BR>
Maximum<BR>
Offering Price Per Share</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Proposed<BR>
Maximum<BR>
Aggregate<BR>
Offering Price</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount of<BR>
Registration Fee<SUP>(2)</SUP></B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 52%"><FONT STYLE="font-size: 10pt">Common Stock, $0.001 par value</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt"></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">8,050,000</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">975.66</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Estimated
solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as
amended.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Red"><B>The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and
it is not soliciting offers to buy these securities in any state where the offer or sale of these securities is not permitted.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; color: Red"><B>Subject to completion,
dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2019</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PRELIMINARY
PROSPECTUS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Telemynd,
Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT><B>1,400,000
shares of Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This is a firm commitment
offering of 1,400,000 shares of our common stock, par value $0.001 per shares at an assumed offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The public offering
price of our common stock offered by this prospectus will be at a fixed price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
per share, which was determined by careful consideration of our management and our Board of Directors based on several factors,
as described in the section entitled &ldquo;Determination of Offering Price&rdquo; beginning on page 35 of this prospectus. Any
proceeds from the sale of the 1,400,000 shares will be used for working capital and general corporate purposes. For more information
about how our shares of common stock may be sold, please see the section entitled &ldquo;Underwriting&rdquo; beginning on page&nbsp;95
of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is currently no public market for our common stock. We have filed an application to have our common
stock listed on The Nasdaq Stock Market under the symbol &ldquo;PSYC&rdquo; and have filed an application to have our common stock
quoted on the OTCQB market of the OTC Markets Group, Inc. (the &ldquo;OTCQB&rdquo;), but there are no assurances that our common
stock will be approved for listing on the Nasdaq Stock Market or quotation on the OTCQB.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an &ldquo;emerging growth company&rdquo; as defined under the federal securities laws and, as such, have elected to comply
with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
should read carefully this prospectus and any applicable prospectus supplement or free writing prospectus, together with the additional
information described in this prospectus under the heading &ldquo;Where You Can Find More Information,&rdquo; before you invest
in any of our securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Investing
in our securities involves a high degree of risk. See &ldquo;Risk Factors&rdquo; beginning on page 6  of this prospectus. You
should also consider the risk factors described or referred to in any documents incorporated by reference in this prospectus,
and in any applicable prospectus supplement, before investing in these securities.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B></B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Per share</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font-size: 10pt; text-align: justify">Public offering price</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">&nbsp;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">Underwriting discount<SUP>(1)</SUP></FONT></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right"></TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Proceeds to us before expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;&nbsp;</B>&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Does
                                         not include a non-accountable expense allowance equal to 1% of the gross proceeds of
                                         this offering payable to Aegis Capital Corp., the representative of the underwriters.
                                         See &ldquo;<I>Underwriting</I>&rdquo; for a description of compensation payable to the
                                         underwriters.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have granted the underwriters the right to purchase up to 210,000 additional shares of common stock
at the public offering price, less the underwriting discount, for the purpose of covering over-allotments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Neither
the Securities and Exchange Commission nor 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.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriters
expect to deliver the shares of common stock against payment on or about
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,&nbsp; 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AEGIS
CAPITAL CORP.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
date of this prospectus is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Table
of Contents</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="width: 90%; text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_001"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></A></TD>
    <TD STYLE="width: 10%; text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_002"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PROSPECTUS
    SUMMARY</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif">1</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_003"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE
    OFFERING</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_004"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">BEING
    AN EMERGING GROWTH COMPANY</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_005"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RECENT
    DEVELOPMENTS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_006"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RISK
    FACTORS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_007"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">USE
    OF PROCEEDS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">34</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_008"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DETERMINATION
    OF THE OFFERING PRICE</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_009"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DILUTION</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_011"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DIVIDEND
    POLICY</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">36</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_012"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SELECTED
    HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING INFORMATION</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">37</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_013"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">MANAGEMENT&rsquo;S
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif">39</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_014"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">OUR
    BUSINESS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">60</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_015"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DIRECTORS
    AND EXECUTIVE OFFICERS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">72</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_016"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CORPORATE
    GOVERNANCE</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">74</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_017"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXECUTIVE
    COMPENSATION</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">79</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_018"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">87</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_019"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RELATED
    PARTY TRANSACTIONS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">89</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_020"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DESCRIPTION
    OF SECURITIES</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">90</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_021"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SHARES
    ELIGIBILE FOR FUTURE SALE</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">94</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_022"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">UNDERWRITING</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">95</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_023"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LEGAL
    MATTERS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">98</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_024"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXPERTS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">98</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_025"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">WHERE
    YOU CAN FIND MORE INFORMATION</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">99</FONT></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: small-caps 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_026"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">INDEX
    TO FINANCIAL STATEMENTS</FONT></A></TD>
    <TD STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-1</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 495pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>We
and the underwriters have not authorized anyone to provide you with information different from that contained or incorporated
by reference in this prospectus or in any applicable prospectus supplement or free writing prospectus prepared by or on behalf
of us or the underwriters to which we or the underwriters have referred you. We and the underwriters do not take any responsibility
for any other information that others may give you. This prospectus is not an offer to sell, nor is it a solicitation of an offer
to buy, the securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information
contained in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the
date on the front cover of those documents, or that the information contained in any document incorporated by reference is accurate
as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus
or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those
dates.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
contained in, and that can be accessed through, our web site <I>www.telemynd.com</I> shall not be deemed to be part of this prospectus
or incorporated herein by reference and should not be relied upon by any prospective investors for the purposes of determining
whether to purchase the shares offered hereunder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Until
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2019 (25 days after the date of this prospectus), all dealers that
buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This
is in addition to each dealer&rsquo;s obligation to deliver a prospectus when acting as underwriter and with respect to its unsold
allotments or subscriptions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="a_001"></A>CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>This
prospectus and the documents incorporated by reference herein contain, in addition to historical information, certain &ldquo;forward-looking
statements&rdquo; within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934,
as amended, that include information relating to future events, future financial performance, strategies, expectations, competitive
environment, regulation and availability of resources. These forward-looking statements include, without limitation, statements
regarding: proposed new products or services; our statements concerning litigation or other matters; statements concerning projections,
predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance;
statements of management&rsquo;s goals and objectives; trends affecting our financial condition, results of operations or future
prospects; our financing plans or growth strategies; and other similar expressions concerning matters that are not historical
facts. Words such as &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;should,&rdquo; &ldquo;could,&rdquo; &ldquo;would,&rdquo; &ldquo;predicts,&rdquo;
&ldquo;potential,&rdquo; &ldquo;continue,&rdquo; &ldquo;expects,&rdquo; &ldquo;anticipates,&rdquo; &ldquo;future,&rdquo; &ldquo;intends,&rdquo;
&ldquo;plans,&rdquo; &ldquo;believes&rdquo; and &ldquo;estimates,&rdquo; and similar expressions, as well as statements in future
tense, identify forward-looking statements.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Forward-looking
statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications
of the times, or by which, that performance or those results will be achieved. Forward-looking statements are based on information
available at the time they are made and/or management&rsquo;s good faith belief as of that time with respect to future events,
and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed
in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited
to, the matters described under &ldquo;Risk Factors&rdquo; and the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         need for immediate additional funding to support our operations and capital expenditures;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify">our ability to successfully maintain listing of our shares of common stock on The Nasdaq Capital Market;


</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         history of operating losses;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to gain widespread acceptance of our PEER Reports;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to prevail in convincing the United States Food and Drug Administration (the
                                         &ldquo;FDA&rdquo;), that our rEEG or PEER Online service does not constitute a medical
                                         device and should, therefore, not be subject to regulations;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         possible imposition of fines or penalties by the FDA for alleged violations of its rules
                                         and regulations;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         subsidiary in telebehavioral health may be harmed by evolving governmental regulation;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         telebehaviorial health subsidiary&rsquo;s business model requires work with affiliated
                                         professional entities not owned by us;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         telebehaviorial health subsidiary may require an expanded and maintained network of certified
                                         professionals;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         revenue and prospects for profitability may be harmed;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         business may be subject to additional regulations in the future that could increase our
                                         compliance costs;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         operating results may fluctuate significantly and our stock price could decline or fluctuate
                                         if our results do not meet the expectation of analysts or investors;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to achieve greater and broader market acceptance of our products and services
                                         in existing and new market segments;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
                                         negative or unfavorable media coverage;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to generate and commercialize additional products and services;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to comply with the substantial and evolving regulation by state and federal
                                         authorities, which could hinder, delay or prevent us from commercializing our products
                                         and services;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to successfully compete against existing and future competitors;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">delays
                                         or failure in clinical trials;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
                                         losses we may incur as a result of litigation;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to manage and maintain the growth of our business;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to protect our intellectual property rights;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">employee
                                         relations;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">possible
                                         security breaches;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">possible
                                         medical liability claims;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">possible
                                         personal injury claims in the future; and</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         limited trading volume.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Forward-looking
statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume
no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors
affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more
forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking
statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 98%"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="a_002"></A>Prospectus
Summary</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>This
summary highlights certain of the information contained elsewhere in this prospectus. It may not contain all of the information
that may be important to you. You should read this entire prospectus carefully, including the Sections entitled &ldquo;Risk Factors,&rdquo;
&ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations,&rdquo; and the financial statements
and related notes included elsewhere in this prospectus prior to making a decision to purchase our common stock. Some information
in this prospectus contains forward looking statements. See &ldquo;Forward Looking Statements.&rdquo;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Telemynd,
Inc. is a newly-formed Delaware corporation that prior to consummation of the Separation and Spin-Off (each as defined below)
consummated on July 16, 2019, did not conduct any activities. Unless the context suggests otherwise, references in this prospectus
to &ldquo;Telemynd,&rdquo; the &ldquo;Company,&rdquo; &ldquo;we,&rdquo; &ldquo;our&rdquo; and &ldquo;us&rdquo; refer to Mynd Analytics,
Inc. (&ldquo;MYnd&rdquo;) and its consolidated subsidiaries prior to the Separation and Spin-off and to Telemynd after the Separation
and Spin-Off.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>In
contemplation of the merger with Emmaus Life Sciences, Inc. (&ldquo;Emmaus&rdquo;), substantially all the assets and all the
liabilities of &nbsp;MYnd, except for an aggregate of $250,000 of liabilities for were contributed to us. Accordingly, our
business and financial position is essentially the business and financial position of &nbsp;MYnd, except for those
liabilities.&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>In addition, our
capital structure is similar to, but not identical to the capital structure of MYnd.&nbsp; Following the spin-off, the holders
of our common stock prior to the merger received one share of Telemynd for each share of MYnd held by them as of the record date.&nbsp;
In addition, the outstanding shares of preferred stock of MYnd were exchanged for shares of preferred stock on substantially the
same economic terms as the outstanding preferred stock of Mynd.&nbsp; While the outstanding options and warrants of Mynd did not
become options and warrants of Telemynd, Telemynd has an Equity Plan and has granted certain options. See &ldquo;Executive and
Director Compensation&rdquo;.&nbsp; &nbsp;In addition, Telemynd reserved 6,269,673 shares of its common stock for issuance upon
exercise of certain MYnd warrants (subject to adjustment upon the potential reverse stock split described under &ldquo;Recent
Development--Reverse Stock Split&rdquo;). MYnd will make additional cash payments to Telemynd, not to exceed $2,500,000 in the
aggregate, from all cash received by MYnd as a result of the exercise of any warrants or stock options of MYnd that were in effect
prior to the Spin-off, to the extent that the proceeds from such warrant and option exercises exceeds $500,000, and less all such
proceeds, if any, theretofore transferred or paid by MYnd to Telemynd pursuant to the Separation Agreement after the Spin-off.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Finally, the officers
and directors of Telemynd are identical to the officers and directors of MYnd immediately prior to the merger with Emmaus, except
that that Robin Smith is not a director of Telemynd</I></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Accordingly,
substantial financial and other information about the business and operations of MYnd are included in this prospectus.&nbsp; Readers
evaluating the relevance of such information to Telemynd should take into account both the many ways in which MYnd&rsquo;s financial
position, operations, capital structure and management are substantially identical to those of Telemynd, as well as the ways in
which they differ as described above. </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Overview
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a technology enabled behavioral health company. Our solutions are designed to improve access to care through telemedicine
and assist clinicians with the development of personalized treatment plans through a proprietary, artificial intelligence platform
with a goal of improving behavioral health outcomes while decreasing overall healthcare costs. The global healthcare analytics
market is expected to reach USD $42.8 billion by 2024 and the global market for behavioral and mental health software, and services
is expected to grow at 11.8% CAGR and reach $4.3 billion by 2025, according to reports by Grand View Research, Inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is a lack of clinical resources available to the estimated substantial number of people in the United States who are suffering
a mental health condition; resulting in our current estimate of less than half of them receiving treatment. Patients fortunate
enough to receive treatment are estimated to experience a low remission rate of only 10%, due to the &lsquo;trial and error&rsquo;
prescribing process to find an effective drug treatment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We,
through our wholly owned subsidiary Arcadian Telepsychiatry, improves access to care with its national network of psychiatric
providers and clinicians through a cloud-based system designed to deliver telemedicine. Telepsychiatry services can be embedded
into primary care clinics, hospitals, skilled nursing and employer clinics to create a seamless care experience for patients and
allow payers and providers to more directly control the care and costs associated with behavioral health. Telemynd is also a preferred
provider of teletherapy solutions that are offered through Employee Assistance Programs (EAPs). EAPs are becoming an integrated
component of most benefit plans and this is an efficient and scalable model for our teletherapy growth.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

</DIV>

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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 98%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
patented, clinically validated technology platform (&ldquo;PEER Online&rdquo;) utilizes complex algorithms to analyze electroencephalograms
(&ldquo;EEGs&rdquo;) to generate Psychiatric EEG Evaluation Registry (&ldquo;PEER&rdquo;) Reports to predict individual responses
to a range of medications prescribed for the treatment of behavioral disorders including depression, anxiety, bipolar disorder,
post-traumatic stress disorder (&ldquo;PTSD&rdquo;) and other non-psychotic disorders. The PEER Online solutions database consists
of over 11,000 patient EEGs and 40,000 correlated outcomes. Machine Learning techniques are used to create an algorithm that can
predict what behavioral health medications will work best for a patient based on their own EEG scan. Clinical studies have shown
that patients under the care of a clinicians using the PEER Report have a 144% improvement in depression scores and a 75% reduction
in suicidality.<SUP>2</SUP> Our PEER Online is a clinical decision support tool that is designed to reduce &ldquo;trial and
error&rdquo; prescribing. These solutions for improving behavioral health care can lead to lower costs for payers, patients, and
providers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are the sole owner of the PEER Online database and its predicative analytics, and has multiple patents covering the intellectual
property associated with the platform. We also have four randomized controlled trials of PEER that represent more LOE 1A evidence
than reported for any other targeted strategy in depression.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
we believe that we are positioned to offer proprietary technology and solutions to payers and providers as they create programs
for managing the behavioral health of their populations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
were incorporated under the laws of Delaware on March 18, 2019 for the purpose of holding the business, assets and liabilities
of MYnd Analytics, Inc. (&ldquo;MYnd&rdquo;), which were spun-ff on July 16, 2019. MYnd had previously disclosed its intention
to divest its technology platform to support personalized care for mental health patients (the &ldquo;Business&rdquo;) concurrent
with its merger with Emmaus Life Sciences, Inc.(&ldquo;Emmaus&rdquo;) (the &ldquo;Merger&rdquo;). This separation (the &ldquo;Separation&rdquo;)
was accomplished through a spin-off in which MYnd contributee its Business (including all assets and liabilities associated therewith)
to Telemynd, Inc. (&ldquo;Telemynd&rdquo;), after which 100% of Telemynd&rsquo;s stock was distributed to MYnd stockholders (the
&ldquo;Spin-Off&rdquo;). Following consummation of the Spin-Off on July 16, 2019, we became an independent public company conducting
the Business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Corporate
Information</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
principal executive offices are located at 26522 La Alameda, Suite 290, Mission Viejo, CA 92691, our telephone number is (949)
420-4400 and we maintain a website at <I>www.telemynd.com</I>. We do not incorporate the information on, or accessible through,
our website into this prospectus, and you should not consider any information on, or accessible through, our website as part of
this prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>2</SUP></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Iosifescu
                                         DV, Neborsky RJ, Valuck RJ. The use of the psychiatric electroencephalography evaluation
                                         registry (PEER) to personalize pharmacotherapy. Neuropsychiatr Dis Treat 2016;12:2131&ndash;2142.</FONT></TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

</DIV>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="a_003"></A>THE
OFFERING</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; width: 30%; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common
    Stock being offered</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 5%; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 65%; font: 10pt Times New Roman, Times, Serif; text-align: justify"><P STYLE="margin: 0pt 0">1,400,000 of&nbsp;&nbsp;shares of common stock, par value $0.001 per share (&ldquo;Common Stock&rdquo;)</P>


</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Offering
    Price</B></FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: justify"><P STYLE="margin: 0pt 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share</P>


</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common
    Stock outstanding</B></FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12,833,143
    shares (as of July 16, 2019)(1)</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Use
    of Proceeds</B></FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    estimate that the net proceeds to us from the sale of shares in this offering, after deducting underwriting discounts and
    offering expenses payable by us, will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million. Our net proceeds will increase by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; if the underwriters&rsquo; over-allotment option is exercised in full. We intend to use the net proceeds to us from
    this offering for working capital and other general corporate purposes, which may include potential investments and acquisitions.
    See &ldquo;Use of Proceeds.&rdquo;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Dividend
    policy</B></FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    intend to retain all earnings for the foreseeable future for use in the operation of our business. Consequently, we do not
    anticipate paying any cash dividends on our common stock for the foreseeable future.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risk
    Factors</B></FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investing
    in our securities involves a high degree of risk. For a discussion of factors to consider before deciding to invest in shares
    of our Common Stock, you should carefully review and consider the &ldquo;Risk Factors&rdquo; section of this prospectus. </FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Reverse
    Stock Split</B></FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    Board and MYnd, as our then sole stockholder, adopted a resolution on June 25, 2019 approving an amendment to Article IV of
    our certificate of incorporation authorizing a reverse stock split of all of the outstanding shares of our Common Stock at
    a ratio of not less than 1-for-2 and not greater than 1-for-10, with the exact ratio to be established at the discretion of
    the Board (a &ldquo;Reverse Stock Split&rdquo;), and granting our board of directors the discretion to file a certificate
    of amendment to our certificate of incorporation with the Secretary of State of the State of Delaware.&nbsp;&nbsp;We expect
    our Board will fix the ratio and effectuate the Reverse Stock Split prior to consummation of the Offering.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Stock
    exchange symbol</B></FONT></TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: justify">We have applied to have
    our common stock listed on The Nasdaq Stock Market (&ldquo;Nasdaq&rdquo;) under the symbol &ldquo;PSYC&rdquo; and we have
    applied to have our common stockstock quoted on the OTCQB, but there is no assurance that our common stock will be approved
    for listing on Nasdaq or quotation on the OTCQB.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><P STYLE="margin: 0pt 0">Does not include 6,269,673 shares of our common stock reserved for issuance upon exercise of certain warrants
of MYnd following consummation of the Spin-off on July 16, 2019 (subject to adjustment upon the potential Reverse Stock Split)
and 2,250,000 shares of our common stock reserved for issuance under our 2019 Omnibus Incentive Compensation Plan.</P>


</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as otherwise indicated herein, all information in this prospectus, including the number of shares that will be outstanding after
this offering, assumes no exercise by the underwriters of their option to purchase additional securities&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

</DIV>

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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 98%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="a_004"></A>Being
an Emerging Growth Company</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year following the fifth anniversary
of the completion of this offering, (2) the last day of the fiscal year in which we have total annual gross revenues of at least
$1.07 billion, (3) the date on which we are deemed to be a &ldquo;large accelerated filer&rdquo; as defined in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock
held by non-affiliates exceeded $700.0 million as of the last business day of our most recently completed second fiscal quarter
or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year
period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other
significant requirements that are otherwise generally applicable to public companies. As an emerging growth company,</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">we
                                         may reduced executive compensation disclosure;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">we
                                         may present only two years of audited financial statements, plus unaudited condensed
                                         financial statements for any interim period, and related Management&rsquo;s Discussion
                                         and Analysis of Financial Condition and Results of Operations in this prospectus;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">we
                                         may avail ourselves of the exemption from the requirement to obtain an attestation and
                                         report from our auditors on the assessment of our internal control over financial reporting
                                         pursuant to the Sarbanes-Oxley Act of 2002; and</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">we
                                         may not require stockholder non-binding advisory votes on executive compensation or golden
                                         parachute arrangements.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have availed ourselves in this prospectus of the reduced reporting requirements described above with respect to compensation disclosure
requirements and selected financial data. As a result, the information that we provide stockholders may be less comprehensive
than what you might receive from other public companies. When we are no longer deemed to be an emerging growth company, we will
not be entitled to the exemptions provided in the JOBS Act discussed above. We have not elected to avail ourselves of the exemption
that allows emerging growth companies to extend the transition period for complying with new or revised financial accounting standards.
This election is irrevocable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an &ldquo;emerging growth</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="a_005"></A>RECENT
DEVELOPMENTS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>SEPARATION
AND DISTRIBUTION</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 4, 2019, MYnd announced its intention to consummate the Merger. In addition, on January 4, 2019, in connection with the
Merger, MYnd and MYnd Analytics, Inc., a California corporation (&ldquo;MYnd-CA&rdquo;) entered into the Separation and Distribution
Agreement to consummate the Spin-Off, which agreement was assigned by MYnd-CA to us on March 27, 2019 pursuant to an amended and
restated Separation and Distribution Agreement (as amended, the &ldquo;Separation Agreement&rdquo;). Among other things, the Separation
Agreement provides for the Separation and the transfer of certain assets and liabilities of MYnd related to the Business to us.
The Separation of the Business was consummated on July 16, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 25, 2019, MYnd&rsquo;s board of directors approved the distribution of the issued and outstanding shares of Company common
stock on the basis of one (1) share of Company common stock for every one (1) share of MYnd common stock held as of the close
of business on the record date of July 15, 2019. On July 16, 2019, the distribution date, each MYnd stockholder received one (1)
share of our common stock for every one (1) share of MYnd common stock at the close of business on the record date for the distribution.
Accordingly, 12,833,143 shares of our common stock were distributed to MYnd stockholders on the distribution date. No options
of Telemynd were issued in the Spin-off and all prior options of MYnd prior to the Spin-off remained outstanding at MYnd.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>REVERSE
STOCK SPLIT</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board and MYnd, as our then sole stockholder, adopted a resolution on June 25, 2019 approving an amendment to Article IV of our
certificate of incorporation authorizing a reverse stock split of all of the outstanding shares of our Common Stock at a ratio
of not less than 1-for-2 and not greater than 1-for-10, with the exact ratio to be established at the discretion of the Board
(a &ldquo;Reverse Stock Split&rdquo;), and granting our board of directors the discretion to file a certificate of amendment to
our certificate of incorporation with the Secretary of State of the State of Delaware. We expect our Board will fix the ratio
and effectuate the Reverse Stock Split prior to consummation of the Offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

</DIV>

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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1.5pt solid; width: 98%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><B>Summary
Historical Condensed Consolidated Financial</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><B>and
Operating Information</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following summary
historical consolidated financial information for the years ended September 30, 2017 and 2018 have been derived from the audited
financial statements of MYnd Analytics, Inc. included elsewhere in this prospectus. The following summary historical consolidated
financial information for the six months ended March 31, 2018 and 2019 have been derived from the unaudited interim consolidated
financial statements of MYnd Analytics, Inc. include elsewhere in this prospectus. In our opinion, such unaudited interim consolidated
financial statements have been prepared on the same basis as the audited consolidated financial statements of MYnd Analytics, Inc.
and reflect all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the results of
operations and financial position of MYnd Analytics, Inc. Results as of and for the six months ended March 31, 2019 are not necessarily
indicative of results that may be expected for the entire year. You should read the following summary historical condensed consolidated
financial and operating information in conjunction with the information appearing under &ldquo;Risk Factors,&rdquo; &ldquo;Management&rsquo;s
Discussion and Analysis of Financial Condition and Results of Operations&rdquo; in this prospectus, and in conjunction with the
audited consolidated financial statements MYnd Analytics, Inc. and the related notes appearing elsewhere in this prospectus.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This prospectus describes the assets transferred to us by MYnd in the Separation as if the transferred assets were our business
for all historical periods described. References in this prospectus to our historical assets, liabilities, products, businesses
or activities of our business are generally intended to refer to the historical assets, liabilities, products, businesses or activities
of the transferred businesses as the businesses were conducted as part of MYnd and its subsidiaries prior to the Separation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended <BR> September
    30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended<BR> March
    31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Statement
    of Operations Data:</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left; padding-left: 0.125in">Total revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,315,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">128,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">847,200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">581,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Total Cost of Revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">827,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">521,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">383,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Gross Margin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">488,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">325,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">198,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Total operating expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,733,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,178,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,691,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,587,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">OPERATING LOSS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(10,244,900</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(7,103,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,365,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,388,600</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">OTHER INCOME (EXPENSE):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Interest expense, net</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(86,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(46,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Total other income (expense)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(86,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(46,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">LOSS BEFORE PROVISION FOR INCOME TAXES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(10,331,200</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(7,110,200</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,411,800</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,427,100</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">NET LOSS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(10,333,100</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(7,112,800</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,414,100</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,429,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net loss attributable to noncontrolling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(734,400</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(778,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(72,300</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Net Loss attributable to MYnd Analytics, Inc.</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(9,598,700</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(7,112,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,636,100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(5,356,700</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">As of<BR> March 31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Balance Sheet Data:</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">(Unaudited)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>ASSETS</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; padding-bottom: 1.5pt">Total current assets</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1.5pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1.5pt solid">3,510,600</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1.5pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1.5pt solid">5,694,200</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1.5pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1.5pt solid">1,548,500</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">TOTAL ASSETS</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,151,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,096,100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,141,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">LIABILITIES AND STOCKHOLDERS&rsquo; EQUITY:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total current liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,165,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,545,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">LONG-TERM LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Long-term borrowing, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">587,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">606,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accrued interest on long-term borrowing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Long term portion of capital lease</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total long-term liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">699,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">728,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">TOTAL LIABILITIES</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,865,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,548,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,628,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

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</DIV>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="a_006"></A>Risk
Factors</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Investing
in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as other
information contained in this prospectus before deciding to invest in our common stock. The occurrence of an of the following
risks could materially and adversely affect our business, prospects, financial conditions, results of operations and cash flows,
which case the trading price of our common stock could decline and you could lose all or part of your investment. </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risks
Related to Our Company</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
need immediate additional funding to support our operations and capital expenditures, which may not be available to us. This lack
of availability could result in the cessation of our business. Our recurring net losses and negative cash flows from operations
raise substantial doubt about our ability to continue as a going concern.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have not generated significant revenues or become profitable, may never do so and may not generate sufficient working capital
to cover costs of operations. Our recurring net losses and negative cash flows from operations raise substantial doubt about our
ability to continue as a going concern. Historically, we have been unable to pay other obligations as they become due and have
been in arrears on paying certain of our larger creditors. We have a history of insolvency that requires us to immediately secure
additional funds to continue our operations. Until we can generate a sufficient amount of revenues to finance our operations and
capital expenditures, we are required to finance our cash needs primarily through public or private equity offerings, debt financings,
borrowings or strategic collaborations. As of March 31, 2019, we had approximately $1.2 million in cash and cash equivalents on
hand. We will therefore need additional funds to continue our operations and will need substantial additional funds before we
can increase demand for our telebehavioral health services and PEER solution offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
we elect to raise additional funds or additional funds are required, we may raise such funds from time to time through public
or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives.
Additional equity or debt financing or corporate collaboration and licensing arrangements may not be available on acceptable terms,
if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented
from pursuing acquisition, licensing, development and commercialization efforts and our ability to generate revenues and achieve
or sustain profitability will be substantially harmed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are currently exploring additional sources of capital; however, we do not know whether additional funding will be available on
acceptable terms, or at all, especially given the economic conditions that currently prevail. Furthermore, any additional equity
funding will likely result in significant dilution to existing stockholders, and, if we incur additional debt financing in the
future, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness,
thus limiting funds available for our business activities. If adequate funds are not available, it would have a material adverse
effect on our business, financial condition and/or results of operations and could cause us to be required to cease operations.
Our financial statements include an opinion of our auditors that our recurring net losses and negative cash flows from operations
raise substantial doubt about our ability to continue as a going concern.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have experienced significant net losses and sustained negative cash flows from operations. In the six months ended March 31, 2019,
we incurred a net loss of $5.4 million and used cash for operating activities of $3.8 million. We had an accumulated deficit of
$89.8 million as of March 31, 2019. We expect to experience further significant net losses in 2019 and the foreseeable future.
These factors raise substantial doubt about our ability to continue as a going concern for at least the next twelve months from
the date of the issuance of the financial statements. As of and for the year ended September 30, 2018, our independent registered
public accounting firm has included an explanatory paragraph in their audit report raising substantial doubt about our ability
to continue as a going concern. Our consolidated financial statements do not include any adjustments that may result from the
outcome of this uncertainty. If we are unable to obtain adequate funding from this proposed offering or in the future, or if we
are unable to grow our revenue substantially to achieve and sustain profitability, amongst other factors, we may not be able to
continue as a going concern, and our shareholders may lose some or all of their investment in us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
have a history of operating losses and we have never been profitable.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
our inception, we have incurred significant operating losses. As of March 31, 2019, our accumulated deficit was approximately
$89.8 million. On November 13, 2017, we acquired Arcadian, a telepsychiatry and telebehavioral health company. Arcadian also has
a history of significant operating losses, which represent a further obstacle to our goal of achieving profitability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
future capital requirements will depend on many factors, such as the risk factors described in this section, including our ability
to maintain our existing cost structure and to execute our business and strategic plans, including the successful integration
of the PEER solution offering with the Arcadian network. Even if we achieve profitability, we may be unable to maintain or increase
profitability on a quarterly or annual basis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risks
Related to Our Business-Telebehavioral Health</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
telebehavioral health business could be adversely affected by new state actions relating to healthcare services and telemedicine
providers, which could restrict our ability to provide the full range of our services in certain states.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to conduct business in each state is dependent upon the state&rsquo;s treatment of telehealth under each state&rsquo;s
laws, rules and policies governing the practice of medicine and other health care professions, which are subject to changing political,
regulatory and other influences. Some state professional boards have established new rules or interpreted existing rules in a
manner that limits or restricts our ability to conduct our business as currently conducted in other states, and it is possible
that the laws and rules governing the practice of telehealth in one or more states may change in a similar manner in the future.
Many states have imposed different, and, in some cases, additional, standards regarding the provision of services via telehealth.
These standards often relate to particular modalities of telecommunication that are permitted or prohibited, meaning that a system
we have established in some states may not satisfy regulatory requirements in others. State laws are also in flux regarding the
type of professional license that is required to provide services via telehealth. By way of example, certain state Medicaid programs
may cover behavioral health treatment provided by psychiatric nurse practitioners, but not clinical social workers. Others provide
that certain services can be provided via telehealth by a clinical social worker, but not a licensed mental health counselor.
Finally, both federal and state laws impose strict standards on using telehealth to prescribe certain classes of controlled substances
that can be commonly used to treat behavioral health disorders. Federal law prohibits prescribing controlled substances without
a prior in-person examination unless one of a number of narrow exceptions is met, and certain states impose further restrictions
which prohibit prescribing certain classes of controlled substances via telemedicine altogether.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recently
passed federal legislation will also allow for controlled substances to be prescribed in emergency situations to treat substance
use disorder, and if that change results in further abuse of controlled substances instead of curbing their abuse as intended,
there could be negative ramifications for the entire telebehavioral health industry. The unpredictability of this regulatory landscape
means that sudden changes in policy regarding standards of care and reimbursement are possible. If this were to happen, and we
were unable to adapt our business model accordingly, our operations in such states could be disrupted, which could have a material
adverse effect on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
telebehavioral health business is dependent on our relationships with affiliated professional entities, which we do not own, to
provide physician services, and our business would be adversely affected if those relationships were disrupted. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is a risk that state authorities in some jurisdictions may find that our contractual relationships with our affiliated physicians,
psychologists and other behavioral health professionals (&ldquo;Providers&rdquo;) violate laws prohibiting the corporate practice
of medicine and certain other health professions. These laws generally prohibit the practice of medicine and certain other health
professions by lay persons or entities and are intended to prevent unlicensed persons or entities from interfering with or inappropriately
influencing the clinician&rsquo;s professional judgment. The professions subject to corporate practice restrictions and the extent
to which each state considers particular actions or contractual relationships to constitute improper influence of professional
judgment vary across the states and are subject to change and evolving interpretations by state boards of medicine and other health
professions and state attorneys general. As such, we must monitor our compliance with laws in every jurisdiction in which we operate
on an ongoing basis and we cannot guarantee that subsequent interpretation of the corporate practice laws will not further circumscribe
our business operations. State corporate practice restrictions also often impose penalties on health professionals for aiding
a corporate practice violation, which could discourage clinicians from participating in our network of providers. Any difficulty
securing clinicians to participate in our network could impair our ability to provide telebehavioral health services and could
have a material adverse effect on our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Corporate
practice restrictions exist in some form, whether by statute, regulation, professional board or attorney general guidance, or
case law, in at least 42 states, though the broad variation between state application and enforcement of the doctrine makes establishing
an exact count difficult. Because of the prevalence of corporate practice restrictions on medicine and psychology in particular,
including in the states where we predominantly conduct our business, we contract for provider services through services agreements
rather than employ Providers. We expect that these relationships will continue, but we cannot guarantee that they will. A material
change in our relationship with the Providers, whether resulting from a dispute among the entities, a change in government regulation,
or the loss of these affiliations, could impair our ability to provide telebehavioral health services and could have a material
adverse effect on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Evolving
government regulations may require increased costs or adversely affect our results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
a regulatory climate that is uncertain, our operations may be subject to direct and indirect adoption, expansion or reinterpretation
of various laws and regulations. Compliance with these future laws and regulations may require us to change our practices at an
undeterminable and possibly significant initial monetary and annual expense. These additional monetary expenditures may increase
future overhead, which could have a material adverse effect on our results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have identified
what we believe are the areas of government regulation that, if changed, would be costly to us. These include: rules governing
the practice of telehealth; including the remote prescribing of controlled substances; licensure standards for behavioral health
professionals; laws limiting the corporate practice of medicine and other professions; clinic licensure laws requiring health facilities
to obtain a clinic license; fraud and abuse; reimbursement and false claims statutes and regulations governing the submission of
health care claims; cybersecurity and privacy laws; laws and rules relating to the distinction between independent contractors
and employees; and tax and other laws encouraging employer-sponsored health insurance. There could be laws and regulations applicable
to our business that we have not identified or that, if changed, may be costly to us, and we cannot predict all the ways in which
implementation of such laws and regulations may affect us.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">

<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT>

<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the states in which we operate, we believe we are in compliance with all applicable laws and regulations, but, because of the
uncertain regulatory environment, certain states may determine that we are in violation of their laws and regulations. If we must
remedy such violations, we may be required to modify our services and solutions in such states in a manner that undermines our
solution&rsquo;s attractiveness to patients or providers. We may become subject to fines or other penalties or, if we determine
that the requirements to operate in compliance in such states are overly burdensome, we may elect to terminate our operations
in such states. In each case, our revenue may decline and our business, financial condition and results of operations could be
materially adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
the introduction of new services may require us to comply with additional, yet undetermined, laws and regulations. Compliance
may require restructuring our relationships with Providers, increasing our security measures and expending additional resources
to monitor developments in applicable rules and ensure compliance. The failure to adequately comply with these future laws and
regulations may delay or possibly prevent some of our solutions or services from being offered, which could have a material adverse
effect on our business, financial condition and results of operations.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
telebehavioral health market is relatively new and volatile, and if it does not develop, if it develops more slowly than we expect,
if it encounters negative publicity or if our solution does not drive patient engagement, the growth of our business will be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
telebehavioral health market is relatively new and unproven, and it is uncertain whether it will achieve and sustain high levels
of demand, consumer acceptance and market adoption. Our success will depend to a substantial extent on the willingness of our
patients to use, and to increase the frequency and extent of their utilization of, our solutions, as well as on our ability to
demonstrate the value of telebehavioral health to employers, health plans, government agencies and other purchasers of healthcare.
Negative publicity concerning our solutions or the telebehavioral health market as a whole could limit market acceptance of our
solutions. Enforcement activity throughout the telehealth industry is on the rise, after the Medicare program published findings
in April 2018 that more than 30% of claims filed failed to satisfy Medicare reimbursement standards, and the Department of Justice
recently issued an indictment alleging that several individuals and companies participated in a billion-dollar fraud conspiracy
that implicated the telemedicine companies and physicians involved. As reimbursement by government and commercial payrs for telemedicine
services grows, enforcement actions are likely to increase in kind. Such activity could certainly produce negative publicity regarding
public and patient confidence in telehealth, which could negatively impact our business. If our patients and providers do not
perceive the benefits of our solutions, or if our solutions do not drive patient engagement, then our market may not develop at
all, or it may develop more slowly than we expect. Similarly, individual and healthcare industry concerns or negative publicity
regarding patient confidentiality and privacy in the context of telehealth could limit market acceptance of our healthcare services.
If any of these events occurs, it could have a material adverse effect on our business, financial condition or results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>A
significant portion of Arcadian&rsquo;s revenue comes from a limited number of clients, the loss of which would have a material
adverse effect on our business, financial condition and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Historically,
Arcadian has relied on a limited number of clients for a substantial portion of its total revenue. We rely on Arcadian&rsquo;s
reputation and recommendations from key clients to promote our solution to potential new clients. In addition, mergers and acquisitions
involving our clients could lead to cancellation or non-renewal of our contracts with those clients or by the acquiring or combining
companies, thereby reducing the number of our existing and potential clients and patients.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
business and growth strategy depend on our ability to maintain and expand a network of qualified providers. If we are unable to
do so, our future growth would be limited and our business, financial condition and results of operations would be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
success is dependent upon our continued ability to maintain a network of qualified providers. If we are unable to recruit and
retain board-certified Providers as needed to render telebehavioral health services in a given state, whether that requires psychiatrists,
psychologists or master&rsquo;s level therapists, it would have a material adverse effect on our business and ability to grow
and would adversely affect our results of operations. In any particular market, Providers could demand higher payments or take
other actions that could result in higher medical costs, extra income, <I>e.g</I>., only permitting clinicians with higher levels
of licensure who demand higher payment rates to provide telebehavioral health services, less attractive service for our clients
or difficulty meeting regulatory or accreditation requirements. Our ability to develop and maintain satisfactory relationships
with Providers also may be negatively impacted by other factors not associated with us, such as changes in Medicare and/or Medicaid
reimbursement levels and other pressures on healthcare providers and consolidation activity among hospitals, physician groups
and the Providers. The failure to maintain or to secure new cost-effective provider contracts may result in a loss of or inability
to grow our membership base, higher costs, healthcare provider network disruptions, less attractive service for our clients and/or
difficulty in meeting regulatory or accreditation requirements, any of which could have a material adverse effect on our business,
financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
telebehavioral health business may give rise to medical liability claims against us, which could cause us to incur significant
expenses and may require us to pay significant damages if not covered by insurance.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
telebehavioral health business entails the risk of malpractice and professional liability claims against both our Providers and
us. Although we and our Providers carry insurance covering malpractice and professional liability claims in amounts that we believe
are appropriate in light of the risks attendant to our business, successful malpractice or professional liability claims could
result in substantial damage awards that exceed the limits of our and our Providers&rsquo; insurance coverage. The Providers each
carry professional liability insurance covering $1 million per claim and $3 million in the aggregate for themselves, and we separately
carry a general insurance policy covering $1 million per claim and $3 million in the aggregate. In addition, professional liability
insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand our services.
As a result, adequate professional liability insurance may not be available to our providers or to us in the future at acceptable
costs or at all.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
claims made against us that are not fully covered by insurance could be costly to defend against, result in substantial damage
awards against us and divert the attention of our management and our Providers from our operations, which could have a material
adverse effect on our business, financial condition and results of operations. In addition, any claims may adversely affect our
business or reputation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If our new applications and services
are not adopted by our affiliated physicians and clinicians or patients, or if we fail to innovate and develop new applications
and services that are adopted by our patients, our revenue and results of operations will be adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our longer-term results
of operations and continued growth will depend on our ability successfully to develop and market new applications and services
that patients want and are willing to purchase. In addition we will invest significant resources in research and development to
enhance our solution and introduce new high-quality applications and services. If patients are not willing to make additional payments
for such new applications, or if new patients do not value such new applications, it could have a material adverse effect on our
business, financial condition and results of operations. If we are unable to predict user preferences or if our industry changes,
or if we are unable to modify our solution and services on a timely basis, patients may not patronize us or the Providers. Our
results of operations would also suffer if our innovations were not responsive to the needs patients, appropriately timed with
market opportunity or effectively brought to market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If our arrangements with Providers
or our affiliated physicians and clinicians are found to violate state laws prohibiting the corporate practice of medicine
and other professions or fee-splitting, our business, financial condition and our ability to operate in those states could be
adversely impacted.</I></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I></I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
laws of many states, including states in which our partners may be located prohibit us from exercising control over the medical
judgments or decisions of psychiatrists and certain other providers and from engaging in certain financial arrangements, such
as splitting professional fees with behavioral health professionals. These laws and their interpretations vary from state to state
and are enforced by state courts and regulatory authorities, each with broad discretion. We enter into agreements with certain
of our providers pursuant to which they render professional medical services. In addition, we may enter into contracts with our
providers to deliver professional services in exchange for fees. These contracts include management services agreements with our
affiliated physician organizations pursuant to which the physician organizations reserve exclusive control and responsibility
for all aspects of the practice of medicine and the delivery of medical services. Although we seek to comply with applicable state
prohibitions on the corporate practice of medicine and fee splitting, state officials who administer these laws or other third
parties may successfully challenge our existing organization and contractual arrangements. If such a claim were successful, we
could be subject to civil and criminal penalties and could be required to restructure or terminate the applicable contractual
arrangements. A determination that these arrangements violate state statutes, or our inability to successfully restructure our
relationships with our providers to comply with these statutes, could eliminate clients located in certain states from the market
for our services, as well as complicate our efforts to secure qualified clinicians to participate in our network. Either outcome
could have a materially adverse effect on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
our providers are characterized as employees, we would be subject to employment and withholding liabilities.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
structure our relationships with the Providers in a manner that we believe results in an independent contractor relationship,
not an employee relationship. An independent contractor is generally distinguished from an employee by his or her degree of autonomy
and independence in providing services. A high degree of autonomy and independence is generally indicative of a contractor relationship,
while a high degree of control is generally indicative of an employment relationship. Although we believe that the Providers are
properly characterized as independent contractors, tax or other regulatory authorities may in the future challenge our characterization
of these relationships. If such regulatory authorities or state, federal or foreign courts were to determine that our providers
are employees, and not independent contractors, we would be required to withhold income taxes, to withhold and pay Social Security,
Medicare and similar taxes and to pay unemployment and other related payroll taxes. We would also be liable for unpaid past taxes
and subject to penalties. As a result, any determination that the Providers are our employees could have a material adverse effect
on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Certain
state tax authorities may assert that we have a state nexus and seek to impose state and local income taxes which could adversely
affect our results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently manage
four professional corporations/associations located in four states for our telebehavioral health business and file state income
tax returns in four states. There is a risk that certain state tax authorities where we do not currently file a state income tax
return could assert that we are liable for state and local income taxes based upon income or gross receipts allocable to such states.
States are becoming increasingly aggressive in asserting a nexus for state income tax purposes. We could be subject to state and
local taxation, including penalties and interest attributable to prior periods, if a state tax authority successfully asserts that
our activities give rise to a nexus. Such tax assessments, penalties and interest may adversely affect our results of operations.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
sales and implementation cycle can be long and unpredictable and requires considerable time and expense, which may cause our results
of operations to fluctuate.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
sales cycle for our solutions from initial contact with a potential lead to contract execution and implementation, varies widely
by client. Some of our clients undertake a significant and prolonged evaluation process, including to determine whether our services
meet their unique healthcare needs, which frequently involves evaluation of not only our solutions but also an evaluation of those
of our competitors, which has in the past resulted in extended sales cycles. Our sales efforts involve educating our clients about
the use, technical capabilities and potential benefits of our solution. Moreover, our large enterprise clients often begin to
deploy our solutions on a limited basis, but nevertheless demand extensive configuration, integration services and pricing concessions,
which increase our upfront investment in the sales effort with no guarantee that these clients will deploy our solutions widely
enough across their organization to justify our substantial upfront investment. It is possible that in the future we may experience
even longer sales cycles, more complex client needs, higher upfront sales costs and less predictability in completing some of
our sales as we continue to expand our direct sales force, expand into new territories and market additional applications and
services. If our sales cycle lengthens or our substantial upfront sales and implementation investments do not result in sufficient
sales to justify our investments, it could have a material adverse effect on our business, financial condition and results of
operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
telehealth market is competitive, and if we are not able to compete effectively, our business, financial condition and results
of operations will be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
the telehealth market is in an early stage of development, it is competitive and we expect it to attract increased competition,
which could make it difficult for us to succeed. We currently face competition in the telehealth industry for our solutions from
a range of companies, including specialized software and solution providers that offer similar solutions, often at substantially
lower prices, and that are continuing to develop additional solutions and becoming more sophisticated and effective. Competition
from specialized software and solution providers, health plans and other parties will result in continued pricing pressures, which
is likely to lead to price declines in certain solution segments, which could negatively impact our sales, profitability and market
share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some
of our competitors may have greater name recognition, longer operating histories and significantly greater resources than we do.
Further, our current or potential competitors may be acquired by third parties with greater available resources. As a result,
our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies,
standards or customer requirements and may have the ability to initiate or withstand substantial price competition. In addition,
current and potential competitors have established, and may in the future establish, cooperative relationships with vendors of
complementary solutions, technologies or services to increase the availability of their solutions in the marketplace. Accordingly,
new competitors or alliances may emerge that have greater market share, a larger customer base, more widely adopted proprietary
technologies, greater marketing expertise, greater financial resources and larger sales forces than we have, which could put us
at a competitive disadvantage. Our competitors could also be better positioned to serve certain segments of the telehealth market,
which could create additional price pressure. In light of these factors, even if our solutions are more effective than those of
our competitors, current or potential clients may accept competitive solutions in lieu of purchasing our solutions. If we are
unable to successfully compete in the telehealth market, our business, financial condition and results of operations could be
materially adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
are subject to evolving and expensive corporate governance regulations and requirements. Management has determined that there
is a material weakness in our internal controls and procedures under the standards of the Public Company Accounting Oversight
Board or PCAOB. Our failure to adequately adhere to these requirements or the failure or circumvention of our internal controls
and procedures could seriously harm our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
we are a public company we are subject to certain federal, state and other rules and regulations, including applicable requirements
of the Sarbanes-Oxley Act of 2002. Compliance with these evolving regulations is costly and requires a significant diversion of
management time and attention, particularly with regard to our disclosure controls and procedures and our internal control over
financial reporting. Faulty judgments, simple errors or mistakes, or the failure of our personnel to adhere to established controls
and procedures may make it difficult for us to ensure that the objectives of the control system are met. A failure of our controls
and procedures to detect other than inconsequential errors or fraud could seriously harm our business and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2018, management assessed the effectiveness of our internal control over financial reporting based on the criteria
for effective internal control over financial reporting, and determined that there continues to be a material weakness in our
internal controls and procedures. The matter involving internal controls and procedures that our management considered to be a
material weakness under the standards of the Public Company Accounting Oversight Board was a lack of a sufficient complement of
personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial
reporting requirements. Management has been continuing, since September 30, 2017, to attempt to remedy the material weakness,
but has been unable to identify sufficient personnel or to implement adequate improvements. A material weakness is a significant
deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement
of the annual or interim financial statements will not be prevented or detected. Failure to provide effective internal controls
may cause investors to lose confidence in our financial reporting and may negatively affect the price of our common stock. Moreover,
effective internal controls are necessary to produce accurate, reliable financial reports and to prevent fraud. If deficiencies
in our internal controls over financial reporting continue, these deficiencies may negatively impact our business and operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Taxing
authorities may successfully assert that we should have collected or in the future should collect sales and use or similar taxes
which could adversely affect our results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not collect sales and use and similar taxes in any states based on our belief that our services are not subject to such taxes
in any state. Sales and use and similar tax laws and rates vary greatly from state to state. Certain states in which we do not
collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties and interest with
respect to past services, and we may be required to collect such taxes for services in the future. Such tax assessments, penalties
and interest or future requirements may adversely affect our results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Economic
uncertainties or downturns in the general economy or the industries in which our clients operate could disproportionately affect
the demand for our telebehavioral health solution and negatively impact our results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">General
worldwide economic conditions have experienced significant downturns during the last ten years, and market volatility and uncertainty
remain widespread, making it potentially very difficult for our clients and us to accurately forecast and plan future business
activities. During challenging economic times, our clients may have difficulty gaining timely access to sufficient credit or obtaining
credit on reasonable terms, which could impair their ability to make timely payments to us and adversely affect our revenue. If
that were to occur, our financial results could be harmed. Further, challenging economic conditions may impair the ability of
our clients to pay for the applications and services they already have purchased from us and, as a result, our write-offs of accounts
receivable could increase. We cannot predict the timing, strength or duration of any economic slowdown or recovery. If the condition
of the general economy or markets in which we operate worsens, our business could be harmed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risks
Related to Our Business-Predictive Medicine (PEER)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
our PEER Reports do not gain widespread market acceptance, we may not be able to achieve the level of sales required for growth,
and our business, financial condition and results of operations would be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have developed a methodology that aids psychiatrists and other physicians in selecting appropriate and effective medications for
patients with certain behavioral or addictive disorders based on physiological traits of the patient&rsquo;s brain and information
contained in a proprietary database that has been developed over approximately the last twenty-five years. We began selling reports,
referred to as rEEG Reports, based on our methodology in 2000; these reports have since been rebranded as PEER Reports. To date,
we have not received widespread market acceptance of the usefulness of our PEER Reports in helping psychiatrists and other physicians
inform their treatment strategies for patients suffering from behavioral and/or addictive disorders and we currently rely on a
limited number of employees to market and promote our PEER Reports. To grow our business, we will need to develop and introduce
new sales and marketing programs and clinical education programs to promote the use of our PEER Reports by psychiatrists and other
physicians and hire additional employees for this purpose which we are in the process of doing. If we do not implement these new
sales and marketing and education programs in a timely and successful manner, we may not be able to achieve the level of market
awareness and sales required to expand our business, which could also negatively impact our stock price, financial condition and
results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
PEER Reports may not be as effective as we believe them to be, which could limit or prevent us from growing our revenues. If the
results of our clinical trials are not significant, we may not be able to continue to fund our development efforts.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
belief in the efficacy of our PEER Online technology is based on a finite number of successful studies. Such results may not be
statistically significant in future studies and may not be indicative of the long-term future efficacy of the information we provide.
Controlled scientific studies, including those that have already been announced and that are planned for the future, may yield
results that are unfavorable or demonstrate that our services, including our PEER Reports, are not clinically useful. While we
have not experienced such problems to date, if the initially indicated results cannot be successfully replicated or maintained
over time, utilization of services based on our PEER Online technology, including the delivery of our PEER Reports, may not increase
as we anticipate, which would harm our operating results and stock price. In addition, if we fail to upgrade our PEER Online database
to account for new medications that are now available on the market, psychiatrists and other physicians may be less inclined to
utilize our services if they believe that our reports only provide information about older treatment options, which would further
harm our operating results and stock price. In August of 2016, we commenced enrolling patients into a new clinical trial. The
trials are designed as a double-blind trial for military patients with a primary diagnosis of depression and other psychological
comorbidity. We do not know whether the ultimate results of the trial will be successful. There are many factors beyond our control
that could affect the success of the trials, including difficulty in registering more subjects, failures of investigators to follow
the proper protocol, and external factors affecting patient health, among others. If we fail to receive significant positive results
for these trials, doctors may not be willing to use our services and our ability to generate revenue and to continue the PEER
Online program, if at all, could be limited.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
FDA believes that rEEG, and potentially our PEER Online service, constitutes a medical device subject to regulation by the FDA.
The FDA has informed us that our marketing of our rEEG services without prior clearance, approval or re-classification by the
FDA constitutes a violation of the Federal Food, Drug and Cosmetic Act. We believe that our PEER Online service is a Class I medical
device, exempt from premarket notification requirements. As we continue to market our PEER Online service, there is risk that
the FDA will determine that the service is a device that requires premarket clearance, approval or re-classification and commence
an enforcement action against us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
April of 2008, we have been engaged in discussions with the FDA regarding its position that our rEEG service, and potentially
its successor, called PEER Online, constitutes a medical device which is subject to regulation by the FDA. On April 10, 2008,
we received correspondence from the FDA stating the agency&rsquo;s position, based in part on the combination of certain marketing
statements FDA observed on our website, together with the delivery method of our rEEG Reports, that our software product aids
clinical diagnosis and, therefore, constituted a &ldquo;medical device&rdquo; requiring premarket approval (&ldquo;PMA&rdquo;)
by or premarket notification (also known as a &ldquo;510(k) clearance&rdquo;) to the FDA pursuant to the Federal Food, Drug and
Cosmetic Act (the &ldquo;Act&rdquo;). We contested at the time and continue to reject FDA&rsquo;s interpretation of our software.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In early 2010, based
upon written guidance from the FDA&rsquo;s Center for Devices and Radiological Health (the &ldquo;Center&rdquo;), we chose to submit
a premarket notification to obtain 510(k) clearance for our rEEG service&nbsp;. We sought review of our rEEG service based upon
its equivalence to predicate devices that already have FDA clearance which appeared to represent a sound mechanism to reduce regulatory
risks. On July 27, 2010, we received a letter from the FDA stating that they determined that our rEEG service was Not Substantially
Equivalent to the predicate devices that had previously been granted 510(k) clearance and that among other options we could be
required to file a PMA and obtain approval before our rEEG service can be marketed legally, unless FDA reclassifies our software
through the De Novo classification request process or otherwise through a reclassification order pursuant to Section 513(e) of
the Act. We did not obtain FDA clearance for tEEG at that time.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We &nbsp;registered
its facility and listed the PEER Outcome database as a Class I device exempt from premarket notification requirements. We have
continued its engagement with Center staff over the potential for a regulatory pathway for PEER Online as a Class II medical device,
based on the Center&rsquo;s recommendation that military use of PEER Online move forward under an investigational device exemption
(&ldquo;IDE&rdquo;) to provide additional data to support a successful 510(k) application. In August 2012, the FDA reviewed the
study protocol to use our PEER Interactive Product, which is substantially similar to the PEER Online product, and determined
that the Walter Reed PEER Trial was considered a non-significant risk clinical trial and did not require an IDE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are proceeding with
two additional clinical trials based substantially on the Walter Reed PEER Trial protocol in an effort to replicate and expand
the result achieved during the Walter Reed PEER Trial. One clinical trial with the Canadian Armed Forces commenced enrollment of
patients in August of 2016. A second clinical trial with a large provider group is ongoing with strong participation from all engaged
parties.&nbsp; At this time we cannot predict the results or the success of any of these trials. We can offer no assurances that
the FDA will not insist that we submit a marketing application in the future, or that the data, which will be included in our future
submissions to the FDA, will not raise any important new issues that could materially affect the safety or effectiveness of our
PEER Online product. The inability to enroll sufficient subjects or the receipt of inconclusive results from our new clinical trials
would have a material adverse effect on our ability to expand our operations. We currently intend to continue marketing as a &nbsp;Class
I cloud-based neurometric service branded as PEER Reports, under our current registration and listing with the FDA, while we pursue
the additional clinical trials and consider submission of a 510(k) application in the future. If we continue to market our PEER
Online product and the FDA determines that we should be subject to further FDA regulation as a Class II or III medical device,
it could initiate enforcement action against us based upon our failure to file a 510(k) or PMA, as a result of which we could be
forced to cease our marketing activities, terminate access to our cloud-based PEER software, implement corrective actions to ensure
compliance with the Act and FDA regulations, and pay fines and penalties, which would have a material adverse impact on us.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">

<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the foregoing, federal and state laws and regulations relating to the sale of our neurometric services are subject
to future changes, as are administrative interpretations of regulatory agencies. If federal and state laws and regulations change,
we may need to incur additional costs to seek government approvals for the sale of our neurometric services</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
government and third-party payors fail to provide coverage and adequate payment rates for treatments that are guided by our PEER
Reports, our revenue and prospects for profitability will be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
future revenue growth will depend in part upon the availability of reimbursement from third-party payors for psychiatrists and
other physicians who use our PEER Reports to guide the treatment of their patients. Such third-party payors include government
health programs such as Medicare and Medicaid, managed care providers, private health insurers and other organizations. These
third-party payors are increasingly attempting to contain healthcare costs by demanding price discounts or rebates and limiting
both coverage on which procedures they will pay for and the amounts that they will pay for new procedures. As a result, they may
not cover or provide adequate payment for treatments that are guided by our PEER Reports, which will discourage psychiatrists
and other physicians from utilizing the information services we provide. We may need to conduct studies in addition to those we
have already announced to demonstrate the cost-effectiveness of treatments that are guided by our solutions and services to such
payors&rsquo; satisfaction. Such studies might require us to commit a significant amount of management time and financial and
other resources. Adequate third-party reimbursement might not be available to enable us to realize an appropriate return on investment
in research and product development and the lack of such reimbursement could have a material adverse effect on our operations
and could adversely affect our revenues and earnings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
state Medicaid programs and commercial insurers are increasingly paying for healthcare services provided via telehealth, including
telebehavioral health, reimbursement by the Medicare program remains limited. Medicare reimbursement is an important consideration
for any provider of healthcare services in the United States, as Medicare accounted for twenty percent (20%) of all health expenditures
in the United States in 2016, and the Centers for Medicare &amp; Medicaid Services expect that figure to rise annually through
at least 2025. It is uncertain if and when Medicare might adopt telehealth reimbursement standards that allow for reimbursement
of telebehavioral health services generally. If Medicare does not loosen its telehealth reimbursement standards, our telehealth
services may not be reimbursable by Medicare and there could be a material adverse effect on our ability to provide services to
a significant portion of the American population, which could have a material adverse effect on our business, financial condition
and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Billing
complexities associated with obtaining payment or reimbursement for our tests may negatively affect our revenue, cash flow and
profitability.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
derive revenue from the PEER Report process, which includes the EEG, the quantitative EEG (&ldquo;QEEG&rdquo;), and the PEER Report,
for which we bill on a fee-for-service basis, including reimbursements by third-party payors, such as Medicare, Medicaid and other
governmental payor programs, hospitals, private insurance plans and managed care organizations and direct payments from individual
patients. Billing for PEER Report testing services is generally highly complex. We conduct our own internal billing and work closely
with third-party providers to ensure accuracy of billing, timely collections, and resolution of appeals and billing discrepancies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depending
on our billing arrangement with each third-party payor and applicable law, we are often obligated to bill in the specific manner
prescribed by the various payors, each of which may have different requirements. Among the potential factors complicating our
billing of third-party payors are:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">disputes
                                         among payors regarding which party is responsible for payment;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">disparity
                                         in coverage among various payors;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">different
                                         process, information, technical and billing requirements among payors; and</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">incorrect
                                         or missing billing information.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
also face risks in our collection efforts, including potential write-offs of doubtful accounts and long collection cycles for
accounts receivable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
from time to time, payors change processes that may affect timely payment. These changes may result in uneven cash flow or impact
the timing of revenue recognized with these payors. With respect to payments received from governmental programs, factors such
as a prolonged government shutdown could cause significant regulatory delays or could result in attempts to reduce payments made
to us by government healthcare programs. These billing complexities, and the related uncertainty in obtaining payment for PEER
Report testing services, could negatively affect our revenue, cash flow and profitability. In addition, increases in write-offs
of doubtful accounts, delays in receiving payments or potential retroactive adjustments and penalties resulting from audits by
payors could adversely affect our business, results of operations and financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Changes
in laws, regulations, payor policies or contracting arrangements with payors may adversely affect coverage or reimbursement for
PEER Report services, which may decrease our revenue and adversely affect our results of operations and financial condition.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Governmental
payors, as well as private insurers, and other private payors have implemented and will continue to implement measures to control
the cost, utilization and delivery of healthcare services, including laboratory services. Congress has from time to time considered
and implemented changes to laws and regulations governing healthcare service providers, including specialized diagnostic service
providers. These changes have adversely affected and may in the future adversely affect coverage for laboratory services, including
the PEER Report and Pharmacogenetic (PGx) testing services we provide. We also believe that healthcare professionals may not use
the PEER Report if third-party payors do not provide adequate coverage and reimbursement for them.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reimbursement
to healthcare providers, such as specialized analytic service providers, are subject to continuing change in policies by governmental
payors, such as Medicare and Medicaid, private insurers, including managed care organizations, and other private payors, such
as hospitals and private medical groups.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a Medicare-participating independent diagnostic testing facility based in California, we bill Noridian Healthcare Solutions, or
Noridian, the Medicare Administrative Contractor, or MAC, for California, and are subject to Noridian&rsquo;s local coverage and
reimbursement policies. Reductions in coverage could decrease our average Medicare reimbursement rate per sample.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
provision of health care services through any kind of clinic, facility, storefront or other location open to the public is often
subject to state clinic licensure laws akin to those that health facilities like hospitals, surgery centers and urgent care clinics
must obtain and maintain. We do not operate or promote any physical place to obtain healthcare and therefore does not believe
it is subject to any clinic licensure requirements, but the application of some of these laws to us and telehealth is unclear
and subject to differing interpretation given our status for Medicare purposes as an independent diagnostic testing facility.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, reimbursement from governmental payors is subject to statutory and regulatory changes, retroactive rate adjustments
and administrative rulings, and other policy changes, all of which could materially decrease the range of services for which we
are reimbursed or the reimbursement rates paid for PEER Report services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Finally,
some private insurers and other third-party payors link their rates to Medicare&rsquo;s reimbursement rates, and a reduction in
Medicare reimbursement rates for PEER Report services could result in a corresponding reduction in the reimbursements we receive
from such third-party payors. Any reductions in reimbursement levels for the PEER Report would decrease our revenue and adversely
affect our results of operations and financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Operating
as a non-contracting provider with certain payors may adversely affect our results of operations and financial condition, and
contracting with those payors may be disadvantageous to us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are currently considered to be an out-of-network or &ldquo;non-contracting provider&rdquo; by a number of third-party payors because
we have not entered into a specific contract to provide PEER Report services to their insured patients at specified rates of reimbursement.
We are generally subject to reimbursement as a non-contracting provider. As a non-contracting provider, many payors pay us a smaller
percentage of our charges that they recognize to be reasonable, and expect us to collect greater coinsurance or copayments from
patients. Rather than collecting these higher coinsurance and copayment amounts from these patients, when permitted by law to
do so, we may, if permissible under applicable law, instead choose to charge them only the lower coinsurance and copayments amounts
that would have applied to them if we had been contracted with their payor, which results in decreased revenues. In instances
where we may be prohibited by law from treating these patients as if we were in-network, thus requiring these patients to pay
higher coinsurance or copayments to us, our customers may decide to reduce or avoid prescribing PEER Report services for such
patients, which could adversely affect our results of operations and financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Should
any of the third-party payors with whom we are not contracted insist that we enter into a contract for the PEER Report services
we provide, the resulting contract may contain pricing and other terms that are materially less favorable to us than the terms
under which we currently operate. If revenue from a particular payor grows, there is heightened risk that such a third-party payor
will insist that we enter into contractual arrangements that contain such terms. If we refuse to enter into a contract with such
a third-party payor, they may refuse to cover and reimburse for PEER Report services, which may lead to a decrease in report volume
and a corresponding decrease in our revenues. If we contract with such a third-party payor, although our report volume may increase
as a result of the contract, our revenue per report under the contractual agreement and gross margin may decrease. The overall
net result of contracting with third-party payors may adversely affect our business, results of operations and financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
relating to the sale of our PEER Reports are constantly changing and in the future, our business may be subject to additional
regulations that will increase our compliance costs.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Federal,
state and foreign laws and regulations relating to the sale of our PEER Reports are subject to future changes, as are administrative
interpretations of regulatory agencies. If we fail to comply with applicable federal, state or foreign laws or regulations, we
could be subject to enforcement actions, including injunctions that would prevent us from conducting our business, withdrawal
of clearances or approvals and civil and criminal penalties. If federal, state, and foreign laws and regulations change, we may
need to incur additional costs to seek government approvals, in addition to the clearance from the FDA if we so chose, to sell
or market our PEER Online service. There is no guarantee that we will be able to obtain such approvals in a timely manner or at
all, and as a result, our business would be significantly harmed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
business practices may be found to constitute illegal fee-splitting or violate corporate practice restrictions, which may lead
to penalties and adversely affect our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Many
states, including California, in which our principal executive offices are located, and where we and our Providers operate, have
laws that prohibit a general corporation as opposed to a professional corporation, from practicing medicine and certain other
healthcare professions such as psychology, exercising control over medical judgments or decisions of behavioral health professionals,
or engaging in certain arrangements, such as employment or fee-splitting, with professionals. We have addressed strong corporate
practice state prohibitions through management services agreements with Providers under which the Providers are paid directly
by payors for professional services and the Providers pay us under the management services agreements for our non-clinical services.
Although we calibrate these management fees to comply with fee-splitting statutes, in many states those fee-splitting statutes
are ambiguous and therefore could be used to challenge our arrangements with the Providers. If asserted, such claims could subject
us to civil and criminal penalties and substantial legal costs, could result in our contracts being found legally invalid and
unenforceable, in whole or in part, or could result in us being required to restructure our contractual arrangements, all with
potentially adverse consequences to our business and our stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we do not maintain and expand our relationships in the psychiatric and physician community, our growth will be limited and our
business could be harmed. If psychiatrists and other physicians do not recommend and endorse our solutions and services, we may
be unable to increase our sales, and in such instances, our profitability would be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
relationships with psychiatrists and other physicians are critical to the growth of our neurometic Services business. We believe
that these relationships are based on the quality and ease of use of our PEER Reports, our commitment to the behavioral health
market, our marketing efforts and our presence at tradeshows. Any actual or perceived diminution in our reputation or the quality
of our PEER Reports, or our failure or inability to maintain our commitment to the behavioral health market and our other marketing
and solution promotion efforts could damage our current relationships, or prevent us from forming new relationships, with psychiatrists
and other physicians and cause our growth to be limited and our business to be harmed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
sell our PEER Reports, psychiatric professionals must recommend and endorse them. We may not obtain the necessary recommendations
or endorsements from this community. Acceptance of our PEER Reports depends on educating psychiatrists and other physicians as
to the benefits, clinical efficacy, ease of use, revenue opportunity and cost-effectiveness of our PEER Reports and on training
the medical community to properly understand and utilize our PEER Reports. If we are not successful in obtaining the recommendations
or endorsements of psychiatrists and other physicians for our PEER Reports, we may be unable to increase our sales and profitability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Negative
publicity or unfavorable media coverage of our PEER technology could damage our reputation and harm our operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the marketplace perceives our PEER Reports as not offering the benefits which we believe they offer, we may receive significant
negative publicity. This publicity may result in litigation and increased regulation and governmental review. If we were to receive
such negative publicity or unfavorable media attention, whether warranted or unwarranted, our ability to market our PEER Reports
would be adversely affected, we may be required to change our solutions and services and become subject to increased regulatory
burdens and we may be required to pay large judgments or fines and incur significant legal expenses. Any combination of these
factors could further increase our cost of doing business and adversely affect our financial position, results of operations and
cash flows.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we do not successfully generate additional solutions and services from our patented methodology and proprietary database, or if
such solutions and services are developed but not successfully commercialized, then we could lose revenue opportunities.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
current focus of our predictive medicine business is the sale of PEER Reports to psychiatrists and other physicians based on our
PEER Online methodology and proprietary database. If we do not successfully generate additional solutions and services from our
patented methodology and proprietary database, or if such solutions and services are developed but not successfully commercialized,
then we could lose revenue opportunities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
industry is highly competitive and our PEER solutions may not be able to compete successfully, which could result in price reductions
and decreased demand for our solutions.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
healthcare industry, in general, and behavioral health treatment services in particular, are highly competitive. If we are unable
to convince physicians, psychiatrists and patients of the efficacy of our solutions and services, individuals seeking treatment
for behavioral health disorders may seek alternative treatment methods, including non-medication-based therapies, which could
negatively impact our sales of PEER Reports and our profitability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we conduct clinical trials, we cannot predict whether we will encounter problems that will cause us or regulatory authorities
to delay or suspend our clinical trials or delay the analysis of data from our completed or ongoing clinical trials. In addition,
we cannot provide assurance that we will be successful in reaching the endpoints in these trials, or if we are, that the FDA or
other regulatory agencies will accept the results.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
of the following factors, among others, could delay the completion of clinical trials, or result in a failure of these trials
to support our business, which would have an adverse effect on our business:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">delays
                                         or the inability to obtain required approvals from institutional review boards or other
                                         governing entities at clinical sites selected for participation in our clinical trials;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">delays
                                         in enrolling patients and volunteers into clinical trials;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">lower
                                         than anticipated retention rates of patients and volunteers in clinical trials;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">negative
                                         results from clinical trials for any of our potential solutions; and</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">failure
                                         of our clinical trials to demonstrate the efficacy or clinical utility of our potential
                                         solutions.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we determine that the costs associated with attaining regulatory approval of a solution exceed the potential financial benefits
or if the projected development time line is inconsistent with our determination of when we need to get the product to market,
we may choose to stop a clinical trial and/or development of a solution.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may not be able to adequately protect our intellectual property, which is the core of our predictive medicine (PEER) business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
consider the protection of our intellectual property to be important to our business prospects. We currently have twenty issued
patents in the United States, Australia, Canada, Europe, Israel, Japan and Mexico and we have also filed multiple additional patent
applications in the United States and in multiple foreign jurisdictions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the future, if we fail to file patent applications in a timely manner, fail to pay applicable maintenance fees on issued patents,
or if we elect not to file a patent application because of the costs associated with patent prosecution, we may lose patent protection
that we may have otherwise obtained. The loss of any proprietary rights which are obtainable under patent laws may result in the
loss of a competitive advantage over present or potential competitors, with a resulting decrease in revenues and profitability
for us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
respect to the applications we have filed, there is no guarantee that the applications will result in issued patents, and further,
any patents that issue may be too narrow in scope to adequately protect our intellectual property and provide us with a competitive
advantage. Competitors and others may design around aspects of our technology, or alternatively, may independently develop similar
or more advanced technologies that fall outside the scope of our claimed subject matter, but that can be used in the treatment
of behavioral health disorders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, even if we are issued additional patents covering our solutions, we cannot predict with any degree of certainty, whether
or not we will be able to enforce our proprietary rights and whether our patents will provide us with adequate protection against
competitors. We may be forced to engage in costly and time-consuming litigation or reexamination proceedings to protect our intellectual
property rights and our opponents in such proceedings may have and be willing to expend, substantially greater resources than
we are able to expend. In addition, the results of such proceedings may result in our patents being invalidated or reduced in
scope. These developments could cause a decrease in our operating income and reduce our available cash flow, which could harm
our business and cause our stock price to decline.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
also utilize processes and technology that constitute trade secrets, such as our PEER Online database, and we must implement appropriate
levels of security for those trade secrets to secure the protection of applicable laws, which we may not do effectively. In addition,
the laws of many foreign countries do not protect proprietary rights as fully as the laws of the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
we have not had any significant issues to date, the loss of any of our trade secrets or proprietary rights, which may be protected
under the foregoing intellectual property safeguards may result in the loss of our competitive advantage over present and potential
competitors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Certain
of our patents will expire in the near future, and we may have difficulties protecting our proprietary rights and technology and
we may not be able to ensure their protection.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently have 20 issued patents, of which seven are in the U.S., one of which covers the process involved in our PEER Online
service. Our patents will expire between July 2019 and April 2023 and cover QEEG (quantitative electrophysiology); at which point
we can no longer enforce our rights under these patents against third parties to prevent them from developing processes and commercializing
solutions similar or identical to ours. Because our efforts to achieve broader market acceptance of our PEER Online service may
take a substantial period of time, our patents may expire or provide only a short period of protection, if any, following such
broader market acceptance. This could expose us to substantially more competition and have a material adverse impact on our business
and our ability to commercialize or license our technology and solutions. Our asset is our PEER Online Database and we will continue
to encrypt and protect it.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
depend heavily upon secure access to, and secure transfer of, data via the internet in exchanging data with customers. Any security
breaches could result in unauthorized access to sensitive patient data, our intellectual property and other confidential business
information. We use third-party data centers and any damage to, or failure of, our central analytical database could adversely
affect our ability to provide our services. For any of the foregoing or related reasons, customers may curtail or stop using our
services and we may incur significant legal and financial exposure and liabilities.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
depend heavily on secure access to, and secure transfer of data via the internet in the generation of our PEER Reports and other
data exchange with our customers. We rely on services provided by third parties to store, transmit and process data in our central
neurometic database. Security breaches could expose us to a risk of losing data and result in litigation and possible liability.
Security measures taken by us or by such third party service providers may be breached as a result of third party action, including
intentional misconduct by computer hackers, employee error, malfeasance, fraud or otherwise, during transfer or processing of
data or at any time and result in someone obtaining unauthorized access to sensitive patient information, our intellectual property,
other confidential business information, or our information technology systems. Because the techniques used to obtain unauthorized
access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we or our
third-party service providers may be unable to anticipate these techniques or to implement adequate preventative measures. Any
security breach could result in a loss of confidence in the security of our service, damage to our reputation, disruption to our
business, and could lead to legal liability and severely curtail future revenue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, any damage to, or failure of, our central neurometic database and the server on which it resides could result in interruptions
in our ability to provide PEER Reports. Interruptions in our service may reduce our revenue, cause PEER Network providers to terminate
their relationship with us and adversely affect our ability to attract new physicians to the PEER Network. Our business will also
be harmed if our customers and potential customers believe our service is unreliable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
our service is complex and cloud-based we rely on third-party data centers to store the data in our central neurometic database,
our data and processes may be corrupted at some future time resulting in erroneous, defective or ineffective reports, which could
result in unanticipated downtime in our service for PEER Network providers, resulting in harm to our reputation and our business.
We do not control the operation of these facilities. While we take precautions (data redundancy, back-up and disaster recovery
plans) to prevent service interruptions, our data centers are vulnerable to damage or interruption from human error, intentional
bad acts, pandemics, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems
failures, communications failures and similar events. The occurrence of a natural disaster or an act of terrorism, vandalism or
other misconduct, resulting in a decision to close the facilities without adequate notice or other unanticipated problems could
result in lengthy interruptions in the availability of our central neurometic database. Since many physicians rely on our service
to assist in treating their patients, any errors, defects, disruptions in service or other performance problems with our service
could hurt our reputation and hurt the reputation of the physicians in our PEER Network. If that occurs, physicians could elect
to terminate their relationship with us, or delay or withhold payment to us. We could lose future revenues or customers may make
warranty or other claims against us, which could result in an increase in our provision for doubtful accounts, an increase in
collection cycles for accounts receivable or the expense and risk of litigation and a reduction in revenue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Security
breaches, damages or failures of the sort described above would adversely affect our ability to market our PEER Reports. In addition,
we may be required to change our products and services and become subject to increased regulatory burdens and we may be required
to pay large judgments or fines and incur significant legal expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>In
the future we could be subject to personal injury claims due to adverse events from treatment facilitated through the use of our
PEER reports, which could result in substantial liabilities that may exceed our insurance coverage.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
significant medical treatments and procedures, including treatment that is facilitated through the use of our PEER Reports, can
involve the risk of serious adverse events up to and including death. Our PEER Reports generally require psychiatrists and other
physicians to titrate patients off of psychotropic medications before receiving an EEG. The titration process and the removal
of medications from patients risk potentially serious health consequences. Although we have no clinical involvement, it is possible
that we could be named as defendants in any malpractice claim involving a patient harmed during the titration process or during
a period in which the patient ceases the use of medications. Although we have not been the subject of any personal injury claims
for patients treated by providers using our PEER Reports, our business entails an inherent risk of claims for personal injuries,
which are subject to the attendant risk of substantial damage awards. We cannot control whether individual physicians and psychiatrists
will properly select patients, apply the appropriate standard of care, or conform to our procedures in determining how to treat
their patients. A significant source of potential liability is negligence or alleged negligence by physicians treating patients
with the aid of the PEER Reports that we provide. There can be no assurance that a future claim or claims will not be successful
or, including the cost of legal defense, will not exceed the limits of available insurance coverage.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently have general liability and medical professional liability insurance coverage for up to $3 million per year for personal
injury claims. We may not be able to maintain adequate liability insurance, in accordance with standard industry practice, with
appropriate coverage based on the nature and risks of our business, at acceptable costs and on favorable terms. Insurance carriers
are often reluctant to provide liability insurance for new healthcare services companies and products due to the limited claims
history for such companies and products. In addition, based on current insurance markets, we expect that liability insurance will
be more difficult to obtain and that premiums will increase over time and as the volume of patients treated by physicians that
are guided by our PEER Reports increases. In the event of litigation, regardless of its merit or eventual outcome, or an award
against us during a time when we have no available insurance or insufficient insurance, we may sustain significant losses of our
operating capital which may substantially reduce stockholder equity in the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We rely on sales to a limited number of customers for
a substantial portion of our revenue, and the loss of one or more significant customers or several of our smaller customers could
materially harm our business. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.8pt; text-align: justify">A substantial portion of our revenue is
generated from sales to a limited number of customers. For the years ended September 30, 2018 and 2017, four customers accounted
for 29% and 50%, respectively, of our neurometric services revenue. Although the composition of our customers will vary from period
to period, we expect that most of our revenues will continue, for the foreseeable future, to come from sales to a relatively small
number of customers. Consequently, our results of operations may fluctuate significantly from period-to-period based on the actions
of one or more significant customers. A customer may take actions that affect us for reasons that we cannot anticipate or control.
Our agreements with these customers may be cancelled if we fail to meet requirements or materially breach the agreement or for
other reasons outside of our control. In addition, our customers may seek to renegotiate the terms of current agreements or renewals.
The loss of, or a reduction in sales or anticipated sales to, one or more of our significant customers could have a material adverse
effect on our business, financial condition and results of operations.</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risks
Related to Our Business-General</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could
incur penalties or be required to make significant changes to our operations or experience adverse publicity, which could have
a material adverse effect on our business, financial condition, and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes
and regulations govern the manner in which Providers provide and bill for services and collect reimbursement from governmental
programs and private payors, our contractual relationships, our marketing activities and other aspects of our operations. Of particular
importance are the following laws and rules:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provider
                                         Licensing and Corporate Practice Restrictions. Behavioral health professionals who provide
                                         their professional services using telehealth modalities must, in most instances, hold
                                         a valid license to practice their health profession in the state in which the patient
                                         is located. In addition, certain states require a physician providing telepsychiatry
                                         to be physically located in the same state as the patient. Corporate practice restrictions
                                         prohibit general business corporations, such as us, from practicing medicine and other
                                         health professions subject to corporate practice restrictions, controlling clinical decisions
                                         or, in some cases, receiving payment for professional services subject to a corporate
                                         practice restriction. State corporate practice laws vary from state to state and are
                                         not consistent among states. These requirements are subject to broad powers of interpretation
                                         and enforcement by state regulators and may apply to an entity even though it is not
                                         located in that state if a Provider is licensed there;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Federal
                                         and State Anti-Kickback Statutes. The federal Anti-Kickback Statute prohibits the knowing
                                         and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or
                                         other remuneration for referring an individual, or in return for ordering, leasing, purchasing
                                         or recommending or arranging for the ordering, purchasing or leasing of items or services
                                         covered, in whole or in part, by any federal healthcare program, such as Medicare or
                                         Medicaid. A person or entity does not need to have actual knowledge of the statute or
                                         specific intent to violate it to have committed a violation. In addition, the government
                                         may assert that a claim including items or services resulting from a violation of the
                                         federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of
                                         the False Claims Act. State anti-kickback statutes require compliance independent of
                                         the federal Anti-Kickback Statute. Some state anti-kickback statutes prohibit the same
                                         conduct as the federal Anti-Kickback Statute, but may apply the prohibition broadly to
                                         all payor-reimbursed services, not just those that are federally-funded. Very few state
                                         anti-kickback statutes have the extensive safe harbors and regulatory guidance of the
                                         federal Anti-Kickback Statute, making interpretation of the scope of the statutes more
                                         uncertain than the federal Anti-Kickback Statute;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Physician
                                         Self-Referral Laws. There is a federal physician self-referral prohibition, commonly
                                         known as the Stark Law, which prohibits a physician from referring Medicare patients
                                         to an entity providing &ldquo;designated health services&rdquo; if the physician or a
                                         member of such physician&rsquo;s immediate family has a &ldquo;financial relationship&rdquo;
                                         with the entity, unless an exception applies. We do not believe our operations, including
                                         those of Arcadian, implicate the Stark Law, because neither we nor Arcadian nor the Providers
                                         acting pursuant to the Services Agreements offer or provide any services that would be
                                         considered designated health services under the Stark Law. As with the anti-kickback
                                         laws, however, physician self-referral prohibitions exist at the state level and which,
                                         like the Stark Law, apply civil penalties to violations of their terms. These state physician
                                         self-referral laws are often similar to the Stark Law, but may apply to different services
                                         than the Stark Law and may have different exceptions. We do not believe it is noncompliant
                                         with any state physician self-referral laws, but these laws are often vague, subject
                                         to amendment and lacking in court precedent or regulatory guidance. It is possible, therefore,
                                         that now or in the future we could be found to be out of compliance with one or more
                                         state physician self-referral laws. Any such noncompliance could have a material adverse
                                         effect on our business, financial condition and results of operations;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Federal
                                         and State False Claims Statutes. The federal False Claims Act imposes civil and criminal
                                         liability on individuals or entities that knowingly submit false or fraudulent claims
                                         for payment to the government or knowingly make, or cause to be made, a false statement
                                         to have a false claim paid, including <I>qui tam</I> or whistleblower suits. Some states
                                         have laws similar to the False Claims Act. The scope of these laws and the interpretations
                                         of them vary from state to state and are enforced by state courts and regulatory authorities,
                                         each with broad discretion. Some state fraud and abuse laws apply to items or services
                                         reimbursed by any third-party payor, including commercial insurers, not just those reimbursed
                                         by a government funded healthcare program;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
                                         Healthcare Anti-Fraud Laws. The criminal healthcare fraud provisions of HIPAA and related
                                         rules that prohibit knowingly and willfully executing a scheme or artifice to defraud
                                         any healthcare benefit program or falsifying, concealing or covering up a material fact
                                         or making any material false, fictitious or fraudulent statement in connection with the
                                         delivery of or payment for healthcare benefits, items or services. Similar to the federal
                                         Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the
                                         statute or specific intent to violate it to have committed a violation;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beyond
                                         HIPAA, additional risks include reassignment of payment rules that prohibit certain types
                                         of billing and collection practices in connection with claims payable by Medicare or
                                         Medicaid programs; and</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         provision of the Social Security Act that imposes criminal penalties on healthcare providers
                                         who fail to disclose or refund known overpayments.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Finally,
in the operations of our Company and our Providers, we must comply with additional restrictions, including the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Reassignment
                                         Rules</U>. Payment reassignment rules prohibit certain types of billing and collection
                                         practices in connection with claims payable by the Medicare or Medicaid programs;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Debt
                                         Collection Laws</U>. Laws that regulate debt collection practices may be applied to our
                                         debt collection practices;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Refund
                                         Disclosures</U>. A provision of the Social Security Act imposes criminal penalties on
                                         healthcare providers who fail to disclose or refund known overpayments;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Billing
                                         Requirements</U>. Federal and state laws prohibit providers from billing and receiving
                                         payment from Medicare and Medicaid for services unless the services are medically necessary,
                                         adequately and accurately documented, and billed using codes that accurately reflect
                                         the type and level of services rendered; and</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Certification
                                         and Accreditation Requirements</U>. Federal and state laws and policies that require
                                         healthcare providers to maintain licensure, certification or accreditation to enroll
                                         and participate in the Medicare and Medicaid programs, to report certain changes in their
                                         operations to the agencies that administer these programs.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some
of our business activities could be subject to challenge under one or more of such laws. Achieving and sustaining compliance with
these laws may prove costly. Failure to comply with these laws and other laws can result in civil and criminal penalties such
as fines, damages, overpayment recoupment loss of enrollment status and exclusion from the Medicare and Medicaid programs. The
risk of our being found in violation of these laws and regulations is increased by the fact that many of them have not been fully
interpreted by the regulatory authorities or the courts, and their provisions are sometimes open to a variety of interpretations.
Our failure to accurately anticipate the application of these laws and regulations to our business or any other failure to comply
with regulatory requirements could create liability for us and negatively affect our business. Any action against us for violation
of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert
our management&rsquo;s attention from the operation of our business and result in adverse publicity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
enforce compliance with the federal laws, the U.S. Department of Justice and the OIG, continue to increase their scrutiny of healthcare
providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.
Dealing with investigations can be time- and resource-consuming and can divert management&rsquo;s attention from the business.
Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business. In addition,
because of the potential for large monetary exposure under the federal False Claims Act, which provides for treble damages and
mandatory minimum penalties of $5,500 to $11,000 per false claim or statement, healthcare providers often resolve allegations
without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages that may be awarded
in litigation proceedings. Such settlements often contain additional compliance and reporting requirements as part of a consent
decree, settlement agreement or corporate integrity agreement. Given the significant size of actual and potential settlements,
it is expected that the government will continue to devote substantial resources to investigating healthcare providers&rsquo;
compliance with the healthcare reimbursement rules and fraud and abuse laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
laws, regulations and standards governing the provision of healthcare services may change significantly in the future. We cannot
assure you that any new or changed healthcare laws, regulations or standards will not materially adversely affect our business.
We cannot assure you that a review of our business by judicial, law enforcement, regulatory or accreditation authorities will
not result in a determination that could adversely affect our operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the FDA regulates development, testing, labeling, manufacturing, marketing, promotion, distribution, record-keeping
and reporting requirements for prescription drugs. Compliance with laws and regulations enforced by the FDA and other regulatory
agencies may be required in relation to future products or services developed or used by us, in addition to the regulatory process
and dialogue in which we are now engaged with the FDA (for more information, please see the risk factor entitled &ldquo;The FDA
believes that rEEG and, potentially, our PEER Online service, constitute a medical device, which is subject to regulation by the
FDA. As we continue to market our PEER Online service, there is risk that the FDA will commence an enforcement action against
us. The FDA has informed us that our marketing of our rEEG services without prior approval or re-classification by the FDA constitutes
a violation of the Federal Food, Drug and Cosmetic Act&rdquo;). Failure to comply with applicable laws and regulations may result
in various adverse consequences, including withdrawal of our products and services from the market, or the imposition of civil
or criminal sanctions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
impact of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending on us is currently
unknown, but may adversely affect our business, financial condition and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending and policy. The healthcare
industry is subject to changing political, regulatory and other influences. The Patient Protection and Affordable Care Act or
PPACA made major changes in how healthcare is delivered and reimbursed, and increased access to health insurance benefits to the
uninsured and underinsured population of the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PPACA, among other things, increased the number of individuals with Medicaid and private insurance coverage, implemented reimbursement
policies that tie payment to quality, facilitated the creation of accountable care organizations that may use capitation and other
alternative payment methodologies, strengthened enforcement of fraud and abuse laws and encouraged the use of information technology.
The future of the PPACA is uncertain and the PPACA remains in a state of near-constant change. Several of these changes require
implementing regulations which have not yet been drafted or have been released only as proposed rules.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Such
changes in the regulatory environment may also result in changes to our payor mix that may affect our operations and revenue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, certain provisions of the PPACA authorize voluntary demonstration projects, which include the development of bundling
payments for acute, inpatient hospital services, physician services and post-acute services for episodes of hospital care. Further,
the PPACA may adversely affect payors by increasing medical costs generally, which could have an effect on the industry and potentially
impact our business and revenue as payors seek to offset these increases by reducing costs in other areas. The full impact of
these changes on us cannot be determined at this time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the
amounts that federal and state governments and other third-party payors will pay for healthcare products and services, which could
adversely affect our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>There
may be adverse consequences if the independent contractor status of Arcadian&rsquo;s providers is successfully characterized as
employee status.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have independent contractor relationships with our providers rather than employee relationships. An independent contractor is
generally distinguished from an employee by his or her degree of autonomy and independence in providing services. Our providers
must be afforded independence over their actions and judgment while providing medical services. If a federal or state authority
or court enacts legislation or adopts regulations or adopts an interpretation that changes the manner in which employees and independent
contractors are classified or makes any adverse determination with respect to some or all of our independent contractors, we could
incur significant costs in complying with such laws, regulations or interpretations, including, in respect of tax withholding,
social security payments and recordkeeping, or we could be held liable for the actions of such independent contractors. As a result,
we could be required to modify our business model. All of the above, individually or in the aggregate could have a material adverse
effect on our business, financial condition and results of operations. In addition, there is the risk that we may be subject to
significant monetary liabilities arising from fines or judgments as a result of any such actual or alleged non-compliance with
federal, state or local tax or employment laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
emergence of new technologies may require us to expend significant resources in order to remain competitive.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
U.S. healthcare industry is massive, has a number of large market participants with conflicting agendas, is subject to significant
government regulation and is currently undergoing significant change. Changes in our industry, for example, away from high-deductible
health plans, or the emergence of new technologies as more competitors enter our market, could result in our solution being less
desirable or relevant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
healthcare benefits trends shift or entirely new technologies are developed that replace existing solutions, our existing or future
solutions could be rendered obsolete and our business could be adversely affected. In addition, we may experience difficulties
with software development, industry standards, design or marketing that could delay or prevent our development, introduction or
implementation of new applications and enhancements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Any
future litigation against us could be costly and time</I></B>-<B><I>consuming to defend.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may become subject, from time to time, to legal proceedings and claims that arise in the ordinary course of business such as claims
in connection with commercial disputes or employment claims made by our current or former associates. Litigation may result in
substantial costs and may divert management&rsquo;s attention and resources, which may substantially harm our business, financial
condition and results of operations. Insurance may not cover such claims, may not provide sufficient payments to cover all of
the costs to resolve one or more such claims and may not continue to be available on terms acceptable to us. A claim brought against
us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our revenue and leading analysts or
potential investors to reduce their expectations of our performance, which could reduce the market price of our stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may be subject to regulatory and investigative proceedings, which may find that our policies and procedures do not fully comply
with complex and changing healthcare regulations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
we have established policies and procedures that we believe will be sufficient to ensure that we operate in substantial compliance
with applicable laws, regulations and requirements, the criteria are often vague and subject to change and interpretation. We
may become the subject of regulatory or other investigations or proceedings, and our interpretations of applicable laws and regulations
may be challenged. The defense of any such challenge could result in substantial cost and a diversion of management&rsquo;s time
and attention. Thus, any such challenge could have a material adverse effect on our business, regardless of whether it ultimately
is successful. If we fail to comply with any applicable laws, or a determination is made that we have failed to comply with these
laws, our financial condition and results of operations could be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Failure
to comply with the Federal Trade Commission Act or similar state laws could result in sanctions or limit the claims we can make.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
promotional activities and materials, including advertising to consumers and physicians, and materials provided to third parties
for their use in promoting our products and services, are regulated by the Federal Trade Commission (FTC) under the FTC Act, which
prohibits unfair and deceptive acts and practices, including claims which are false, misleading or inadequately substantiated.
The FTC typically requires competent and reliable scientific tests or studies to substantiate express or implied claims that a
product or service is effective. If the FTC were to interpret our promotional materials as making express or implied claims that
our products and services are effective for the treatment of mental illness, it may find that we do not have adequate substantiation
for such claims. Failure to comply with the FTC Act or similar laws enforced by state attorneys general and other state and local
officials could result in administrative or judicial orders limiting or eliminating the claims we can make about our products
and services, and other sanctions including fines.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy
and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could
result in significant liability or reputational harm and, in turn, a material adverse effect on our client base, membership base
and revenue.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Numerous
state and federal laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability
and integrity of personally identifiable information, including protected health information. These laws and regulations include
HIPAA . HIPAA establishes a set of basic national privacy and security standards for the protection of protected health information,
or PHI, by health plans, healthcare clearinghouses and certain healthcare providers, referred to as covered entities, and the
business associates with whom such covered entities contract for services, which includes us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">HIPAA
requires healthcare providers like us to develop and maintain policies and procedures with respect to PHI that is used or disclosed,
including the adoption of administrative, physical and technical safeguards to protect such information. HIPAA also implemented
the use of standard transaction code sets and standard identifiers that covered entities must use when submitting or receiving
certain electronic healthcare transactions, including activities associated with the billing and collection of healthcare claims.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">HIPAA
imposes mandatory penalties for certain violations. Penalties for violations of HIPAA and its implementing regulations start at
$100 per violation and are not to exceed $50,000 per violation, subject to a cap of $1.5 million for violations of the same standard
in a single calendar year. However, a single breach incident can result in violations of multiple standards. HIPAA also authorizes
state attorneys general to file suit on behalf of their residents. Courts will be able to award damages, costs and attorneys&rsquo;
fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals
to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits
such as those for negligence or recklessness in the misuse or breach of PHI.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, HIPAA mandates that the Secretary of Health and Human Services, or HHS conduct periodic compliance audits of HIPAA covered
entities or business associates for compliance with the HIPAA Privacy and Security Standards. It also tasks HHS with establishing
a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the Civil
Monetary Penalty fine paid by the violator.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">HIPAA
further requires that patients be notified of any unauthorized acquisition, access, use or disclosure of their unsecured PHI that
compromises the privacy or security of such information, with certain exceptions related to unintentional or inadvertent use or
disclosure by employees or authorized individuals. HIPAA specifies that such notifications must be made &ldquo;without unreasonable
delay and in no case later than 60 calendar days after discovery of the breach.&rdquo; If a breach affects 500 patients or more,
it must be reported to HHS without unreasonable delay, and HHS will post the name of the breaching entity on its public web site.
Breaches affecting 500 patients or more in the same state or jurisdiction must also be reported to the local media. If a breach
involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least annually.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Numerous
other federal and state laws protect the confidentiality, privacy, availability, integrity and security of personally identifiable
information, or PII, including PHI. These laws in many cases are more restrictive than, and may not be preempted by, the HIPAA
rules and may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for
us and our clients and potentially exposing us to additional expense, adverse publicity and liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">New
health information standards, whether implemented pursuant to HIPAA, congressional action or otherwise, could have a significant
effect on the manner in which we must handle healthcare related data, and the cost of complying with standards could be significant.
If we do not comply with existing or new laws and regulations related to PHI, we could be subject to criminal or civil sanctions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
of the extreme sensitivity of the PII we store and transmit, the security features of our technology platform are very important.
If our security measures, some of which are managed by third parties, are breached or fail, unauthorized persons may be able to
obtain access to sensitive client and patient data, including HIPAA PHI. As a result, our reputation could be severely damaged,
adversely affecting client and patient confidence. Patients may curtail their use of or stop using our services or our client
base could decrease, which would cause our business to suffer. In addition, we could face litigation, damages for contract breach,
penalties and regulatory actions for violation of HIPAA and other applicable laws or regulations and significant costs for remediation,
notification to individuals and for measures to prevent future occurrences. Any potential security breach could also result in
increased costs associated with liability for stolen assets or information, repairing system damage that may have been caused
by such breaches, incentives offered to clients or other business partners in an effort to maintain our business relationships
after a breach and implementing measures to prevent future occurrences, including organizational changes, deploying additional
personnel and protection technologies, training employees and engaging third-party experts and consultants. While we maintain
insurance covering certain security and privacy damages and claim expenses in the amount of $100,000 per claim, we may not carry
insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage would not address
the reputational damage that could result from a security incident.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
outsource important aspects of the storage and transmission of client and patient information, and thus rely on third parties
to manage functions that have material cyber-security risks. We attempt to address these risks in part by requiring outsourcing
subcontractors who handle client and patient information to sign business associate agreements contractually requiring those subcontractors
to adequately safeguard personal health data to the same extent that applies to us. However, we cannot assure you that these contractual
measures and other safeguards will adequately protect us from the risks associated with the storage and transmission of client
and patients&rsquo; proprietary and protected health information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
also publish statements to patients that describe how we handle and protect personal information. If federal or state regulatory
authorities or private litigants consider any portion of these statements to be untrue, we may be subject to claims of deceptive
practices, which could lead to significant liabilities and consequences, including, without limitation, costs of responding to
investigations, defending against litigation, settling claims and complying with regulatory or court orders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
also send short message service, or SMS text messages to potential end users who are eligible to use our service through certain
customers and partners. While we obtain consent from or on behalf of these individuals to send text messages, federal or state
regulatory authorities or private litigants may claim that the notices and disclosures we provide, form of consents we obtain
or our SMS texting practices, are not adequate. These SMS texting campaigns are potential sources of risk for class action lawsuits
and liability for our company. Numerous class-action suits under federal and state laws have been filed in the past year against
companies who conduct SMS texting programs, with many resulting in multi-million dollar settlements to the plaintiffs. Any future
such litigation against us could be costly and time-consuming to defend.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may be subject to healthcare anti-fraud initiatives, which may lead to penalties and adversely affect our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">State
and federal governments are devoting increased attention and resources to anti-fraud initiatives against healthcare providers,
taking an expansive definition of fraud that includes receiving fees in connection with a healthcare business that is found to
violate any of the complex regulations described above. Although to our knowledge we have not been the subject of any anti-fraud
investigations, if such a claim were made defending our business practices could be time consuming and expensive, and an adverse
finding could result in substantial penalties or require us to restructure our operations, which we may not be able to do successfully.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
operating results may fluctuate significantly and our stock price could decline or fluctuate if our results do not meet the expectation
of analysts or investors.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
expects that we will experience substantial variations in our operating results from quarter to quarter. We believe that the factors
which influence this variability of quarterly results include, without limitation:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         use of and demand for telebehavioral health services and our PEER Reports, and other
                                         solutions and/or services that we may offer in the future that are based on our patented
                                         methodology;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">inconclusive
                                         or negative result from our clinical trials;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         inability to enroll patients into our clinical trials;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         effectiveness of new marketing and sales programs;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">turnover
                                         among our employees;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
                                         in management;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         introduction of solutions or services that are viewed in the marketplace as substitutes
                                         for the services we provide;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">communications
                                         published by industry organizations or other professional entities in the psychiatric
                                         and physician community that are unfavorable to our business;</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         introduction of regulations which impose additional costs on or impede our business;
                                         and</FONT></TD>
</TR></TABLE>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         timing and amount of our expenses, particularly expenses associated with the marketing
                                         and promotion of our services, the training of physicians and psychiatrists in the use
                                         of our PEER Reports and research and development.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of fluctuations in our revenue and operating expenses that may occur, management believes that period-to-period comparisons
of our results of operations are not a good indication of our future performance. It is possible that in some future quarter or
quarters, our operating results will be below the expectations of securities analysts or investors. In that case, our common stock
price could fluctuate significantly or decline.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may fail to successfully manage and maintain the growth of our business, which could adversely affect our results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
we continue expanding our commercial operations, this expansion could place significant strain on our management, operational
and financial resources. To manage future growth, we will need to continue to hire, train, and manage additional employees, particularly
a specially-trained sales force to market our PEER Reports.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Confidentiality
agreements with employees, licensees and others may not adequately prevent disclosure of trade secrets and other proprietary information.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to protect our proprietary technology and processes, we rely in part on confidentiality provisions in our agreements with
employees, licensees, treating physicians, psychiatrists and behavioral health professionals. These agreements may not effectively
prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure
of confidential information. Moreover, policing compliance with our confidentiality agreements and nondisclosure agreements and
detecting unauthorized use of our technology is difficult and we may, therefore, be unable to determine whether piracy of our
technology has actually occurred. In addition, others may independently discover our trade secrets and proprietary information.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights and failure
to obtain or maintain trade secret protection could adversely affect our competitive business position.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
liability of our directors and officers is limited.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
applicable provisions of the Delaware General Corporation Law and our Certificate of Incorporation and By-laws limit the liability
of our directors to us and our stockholders for monetary damages for breaches of their fiduciary duties, with certain exceptions,
and for other specified acts or omissions of such persons. In addition, the applicable provisions of the Delaware General Corporation
Law and of our Certificate of Incorporation and Bylaws, as well as indemnification agreements we have entered into with our directors,
and officers, provide for indemnification of such persons under certain circumstances. In the event we are required to indemnify
any of our directors or any other person, our financial strength may be harmed, which may in turn lower our stock price.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we do not retain our senior management and other key employees, we may not be able to successfully implement our business strategy.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
future success depends on the ability, experience and performance of our senior management and our key professional personnel.
Our success therefore depends to a significant extent on retaining the services of Patrick Herguth, our Chief Executive Officer,
our senior product development and clinical managers and others. Because of their ability and experience, if we lose one or more
of the members of our senior management or other key employees, our ability to successfully implement our business strategy could
be seriously harmed. While we believe our relationships with our executives are good and do not anticipate any of them leaving
in the near future, the loss of the services of any of our senior management could have a material adverse effect on our ability
to manage our business. We do not carry key-man life insurance on any of our key employees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we do not attract and retain skilled personnel, we may not be able to expand our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
solutions and services are based on a complex database of information. Accordingly, we require skilled medical, scientific and
administrative personnel to sell and support our solutions and services. Our future success will depend largely on our ability
to continue to hire, train, retain and motivate additional skilled personnel, particularly sales representatives who are responsible
for customer education and training and customer support. If we are not able to attract and retain skilled personnel, we will
not be able to continue our development and commercialization activities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
senior management&rsquo;s limited recent experience managing a publicly traded company may divert management&rsquo;s attention
from operations and harm our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management team has relatively limited experience managing a publicly traded company and complying with federal securities laws,
including compliance with recently adopted disclosure requirements on a timely basis. Our management will be required to design
and implement appropriate programs and policies in responding to increased legal, regulatory compliance and reporting requirements,
and any failure to do so could lead to the imposition of fines and penalties and harm our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
estimates of market opportunity and forecasts of market growth included herein may prove to be inaccurate, and even if the market
in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Market
opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that
may not prove to be accurate. The estimates and forecasts herein relating to the size and expected growth of the telehealth and
predictive medicine markets may prove to be inaccurate. Even if the markets in which we compete meet our size estimates and forecasted
growth, our business could fail to grow at similar rates, if at all.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Related to this Offering</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>An active trading market for our
common stock may never develop or be sustained.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Although we have filed
an application to have our common stock listed on The Nasdaq Stock Market under the symbol &ldquo;PSYC&rdquo; and have also filed
an application to have our common stock quoted on the OTCQB, an active trading market for our common stock may not develop on
that quotation system or exchange or elsewhere or, if developed, that market may not be sustained. Accordingly, if an active trading
market for our common stock does not develop or is not maintained, the liquidity of our common stock, your ability to sell your
shares of common stock when desired and the prices that you may obtain for your shares of common stock will be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The market price and trading volume
of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Even if an active
trading market develops, the market price of our common stock may be highly volatile and could be subject to wide fluctuations.
In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. The initial
public offering price of our common stock will be determined by negotiation among us and the representatives of the underwriters
based on a number of factors and may not be indicative of prices that will prevail in the open market following completion of
this offering. If the market price of our common stock declines significantly, you may be unable to resell your shares at or above
your purchase price, if at all. The market price of our common stock may fluctuate or decline significantly in the future. Some
of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common
stock include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt">&#9679;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">quarterly variations in our operating results;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in">&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">operating results that vary from the expectations of securities
    analysts and investors;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in">&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">change in valuations;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in">&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">changes in the industries in which we operate;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in">&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">announcements by us or companies in our industries of significant
    contracts, acquisitions, dispositions, strategic partnerships, joint ventures, capital commitments, plans, prospects, service
    offerings or operating results;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in">&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">additions or departures of key personnel;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in">&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">future sales of our securities;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in">&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">developments in the financial markets and worldwide or regional
    economies;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">announcements of innovations or new products, solutions or services
    by us or our competitors;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">significant sales of our common stock or other securities in
    the open market;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">variations in interest rates;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&#9679;</TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">changes in accounting principles;
        and</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&#9679;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">other unforeseen events.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Stock markets in the
United States have experienced extreme price and volume fluctuations. Market fluctuations, as well as general political and economic
conditions such as acts of terrorism, prolonged economic uncertainty, a recession or interest rate or currency rate fluctuations,
could adversely affect the market price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In the past, stockholders
have often instituted securities class action litigation after periods of volatility in the market price of a company&rsquo;s
securities. If a stockholder were to file any such class action suit against us, we would incur substantial legal fees and our
management&rsquo;s attention and resources would be diverted from operating our business to respond to the litigation, which could
harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The market price of our common stock
could be negatively affected by sales of substantial amounts of our common stock in the public markets.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">After this offering,
there will be shares of common stock outstanding, or shares outstanding if the underwriters exercise their over-allotment option
in full. Of our issued and outstanding shares, all the common stock sold in this offering will be freely transferable, except
for any shares held by our &ldquo;affiliates,&rdquo; as that term is defined in Rule 144 under the Securities Act of 1933 (the
&ldquo;Securities Act&rdquo;). Following completion of the offering, approximately % of our outstanding common stock (or % if
the underwriters exercise their over-allotment option in full) can be resold into the public markets in the future in accordance
with the requirements of Rule 144, subject to the lock-up restrictions described below. See &ldquo;Shares Eligible For Future
Sale.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We and each of our
executive officers and directors have agreed with the underwriters, subject to certain exceptions, for a period of days after
the date of this prospectus, not to directly or indirectly offer, pledge, sell, contract to sell, sell any option or contract
to purchase or otherwise dispose of any common stock or any securities convertible into or exercisable or exchangeable for common
stock, or in any manner transfer all or a portion of the economic consequences associated with the ownership of common stock,
or cause a registration statement covering any common stock to be filed, without the prior written consent of Aegis. See &ldquo;Underwriting.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The market price of
our common stock may decline significantly when the restrictions on resale by our affiliates lapse. A decline in the price of
our common stock might impede our ability to raise capital through the issuance of additional common stock or other equity securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Investors in this offering will
suffer immediate and substantial dilution.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The public offering
price of our common stock will be substantially higher than the pro forma as adjusted net tangible book value per share issued
and outstanding immediately after this offering. Investors who purchase common stock in this offering will pay a price per share
that substantially exceeds the net tangible book value per share of common stock immediately prior to this offering. If you purchase
shares of our common stock in this offering, you will experience immediate and substantial dilution of $ in the pro forma as adjusted
net tangible book value per share, based upon the public offering price of $[5.00] per share (the midpoint of the estimated initial
public offering price range set forth on the cover page of this prospectus). See &ldquo;Dilution.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We will have broad discretion in
the use of the net proceeds to us from this offering and may not use them effectively.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our management currently
intends to use the net proceeds to us from this offering in the manner described under &ldquo;Use of Proceeds&rdquo; and will
have broad discretion in the application of the net proceeds to us from this offering. The failure by our management to apply
these funds effectively could affect our ability to operate and grow our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>As a public company, we will incur
additional costs and face increased demands on our management.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a public company,
we are required to comply with an extensive body of regulations, including certain provisions of the Sarbanes Oxley Act of 2002
(the &ldquo;Sarbanes-Oxley Act&rdquo;), the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulations of the SEC and
if we become listed on The Nasdaq Stock Market, requirements of the Nasdaq. We expect these rules and regulations increase our
legal and financial compliance costs and make some activities more time-consuming and costly. These rules, may impose additional
costs on us and have a material adverse effect on our business, prospects, financial condition, results of operations and cash
flows.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">

&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We are an &ldquo;emerging growth
company&rdquo; and we cannot be certain whether the reduced disclosure requirements applicable to emerging growth companies will
make our common stock less attractive to investors.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are an &ldquo;emerging
growth company,&rdquo; as defined in the JOBS Act, and we intend to take advantage of exemptions from various requirements that
are applicable to other public companies that are not emerging growth companies, including the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company, which may be for as long as five years
following our initial public offering. We cannot predict if investors will find our common stock less attractive because our independent
auditors will not have attested to the effectiveness of our internal controls. If some investors find our common stock less attractive
as a result of our independent auditors not attesting to the effectiveness of our internal controls or other exemptions of which
we plan to take advantage, there may be a less active trading market for our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Related To An Investment In Our
Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Following the listing of our shares,
we expect there will be limited trading volume, which could result in higher price volatility for, and reduced liquidity of, our
common stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Although we have filed
an application have our shares of common stock listed on The Nasdaq Stock Market under the symbol &ldquo;PSYC&rdquo; and have
also filed an application to have our common stock quoted on the OTCQB, we expect the trading volume in our common stock to be
limited and an active trading market for our shares of common stock may never develop or be maintained. The absence of an active
trading market could increase price volatility and reduces the liquidity of our common stock and as a result, the sale of a significant
number of shares of common stock at any particular time could be difficult to achieve at the market prices prevailing immediately
before such shares are offered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We cannot assure you that the common
stock will become liquid or that it will be listed on a securities exchange.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We cannot assure you
that we will ever be able to meet the initial listing standards of any stock exchange, or that we will be able to maintain any
such listing. In addition, if we failed to meet the criteria set forth in SEC regulations, various requirements would be imposed
by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently,
such regulations may deter broker-dealers from recommending or selling the common stock, which may further affect its liquidity.
This would also make it more difficult for us to raise additional capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 33pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we successfully list on the Nasdaq
Stock Market and we cannot continue to satisfy Nasdaq&rsquo;s continuing listing criteria, Nasdaq may subsequently delist our
Common Stock. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 33pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We have applied to
have our common stock listed on The Nasdaq Stock Market. Nasdaq requires us to meet certain financial, public float, bid price
and liquidity standards on an ongoing basis in order to continue the listing of our Common Stock. Generally, we must maintain
a minimum amount of stockholders equity (generally $2.5 million) and a minimum number of holders of our securities (generally
300 round lot holders). If our application is approved and we fail to meet any of the continuing listing requirements, our Common
Stock may be subject to delisting. If our Common Stock is delisted and we are not able to list our Common Stock on another national
securities exchange, we expect our securities would be quoted on an over-the-counter market. If this were to occur, our stockholders
could face significant material adverse consequences, including limited availability of market quotations for our Common Stock
and reduced liquidity for the trading of our securities. In addition, we could experience a decreased ability to issue additional
securities and obtain additional financing in the future. There can be no assurance that an active trading market for our Common
Stock will develop or be sustained. We may choose to raise additional capital in order to increase our stockholders&rsquo; equity
in order to meet the Nasdaq continued listing standards. Any additional equity financings may be financially dilutive to, and
will be dilutive from an ownership perspective to our stockholders, and such dilution may be significant based upon the size of
such financing. Additionally, we cannot assure that such funding will be available on a timely basis, in needed quantities, or
on terms favorable to us, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Future sales of securities by us
in equity or debt financings could result in substantial dilution to our existing stockholders and have a material adverse effect
on our earnings.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Future sales of common
stock or derivative securities by us in private placements or public offerings could result in substantial dilution to our existing
stockholders. In addition, our business strategy may include expansion through internal growth, by acquiring complementary businesses,
by acquiring or licensing additional solutions and services, or by establishing strategic relationships with targeted customers
and suppliers. In order to do so, or to finance the cost of our other activities, we may issue additional equity securities that
could dilute our stockholders&rsquo; stock ownership. We may also assume additional debt and incur impairment losses related to
goodwill and other tangible assets if we acquire another company and this could negatively impact our earnings and results of
operations.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Were our common stock to be considered
penny stock, and therefore subject to the penny stock rules, U.S. broker-dealers may be discouraged from effecting transactions
in shares of our common stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The U.S. Securities
and Exchange Commission (the &ldquo;SEC&rdquo;) has adopted a number of rules to regulate &ldquo;penny stock&rdquo; that may restrict
transactions involving shares of our common stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6,
15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. These rules may have the effect of reducing the liquidity
of penny stocks. &ldquo;Penny stocks&rdquo; generally are equity securities with a price of less than $5.00 per share (other than
securities registered on certain national securities exchanges or quoted on the Nasdaq if current price and volume information
with respect to transactions in such securities is provided by the exchange or system). Our securities have in the past constituted
&ldquo;penny stock&rdquo; within the meaning of the rule. Were our common stock to again be considered &ldquo;penny stock&rdquo;
and therefore become subject to the penny stock rules, the additional sales practice and disclosure requirements imposed upon
U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of our common stock, which could
severely limit the market liquidity of such shares and impede their sale in the secondary market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">A U.S. broker-dealer
selling a penny stock to anyone other than an established customer or &ldquo;accredited investor&rdquo; (generally, an individual
with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must
make a special suitability determination for the purchaser and must receive the purchaser&rsquo;s written consent to the transaction
prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the penny stock regulations require
the U.S. broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared in accordance
with SEC standards relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A U.S.
broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and
current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent
price information with respect to the penny stock held in a customer&rsquo;s account and information with respect to the limited
market in penny stocks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Stockholders should
be aware that, according to SEC, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter
or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
(iii) &ldquo;boiler room&rdquo; practices involving high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale
dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting
in investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although
we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent the described patterns from being established with
respect to our securities in the event our common stock were to again be considered a penny stock and therefore become subject
to penny stock rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We do not expect to pay dividends
for the foreseeable future, and any return on investment may be limited to potential future appreciation on the value of our common
stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We currently intend
to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends
in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking
into account various factors, including without limitation, our financial condition, operating results, cash needs, growth plans
and the terms of any credit agreements that we may be a party to at the time. To the extent we do not pay dividends, our stock
may be less valuable because a return on investment will only occur if and to the extent our stock price appreciates, which may
never occur. In addition, investors must rely on sales of their common stock after price appreciation as the only way to realize
their investment, and if the price of our stock does not appreciate, then there will be no return on investment. Investors seeking
cash dividends should not purchase our common stock.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The rights of the holders of common
stock may be impaired by the potential issuance of preferred stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our certificate of
incorporation gives our board of directors the right to create new series of preferred stock. As a result, the board of directors
may, without stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights which
could adversely affect the voting power and equity interest of the holders of common stock. Preferred stock, which could be issued
with the right to more than one vote per share, could be utilized as a method of discouraging, delaying or preventing a change
of control. The possible impact on takeover attempts could adversely affect the price of our common stock. Although we have no
present intention to issue any additional shares of preferred stock or to create any new series of preferred stock, we may issue
such shares in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our officers, directors and principal
stockholders can exert significant influence over us and may make decisions that are not in the best interests of all stockholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our officers, directors
and principal stockholders (greater than 5% stockholders) collectively control approximately 64.07% of our issued and outstanding
common stock on a fully diluted basis. As a result, these stockholders are able to affect the outcome of, or exert significant
influence over, all matters requiring stockholder approval, including the election and removal of directors and any change in
control. This concentration of ownership of our common stock could have the effect of delaying or preventing a change of control
of us or otherwise discouraging or preventing a potential acquirer from attempting to obtain control of us. This, in turn, could
have a negative effect on the market price of our common stock. It could also prevent our stockholders from realizing a premium
over the market prices for their shares of common stock. Moreover, the interests of this concentration of ownership may not always
coincide with our interests or the interests of other stockholders, and accordingly, they could cause us to enter into transactions
or agreements that we would not otherwise consider.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Transactions involving our common
stock engaged in by our largest stockholders, directors or executive officers may have an adverse effect on the price of our stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our officers, directors
and principal stockholders (greater than 5% stockholders) collectively control approximately 64.07% of our issued and outstanding
common stock on a fully diluted basis. Subsequent sales of our shares by these stockholders could have the effect of lowering
our stock price. The perceived risk associated with the possible sale of a large number of shares by these stockholders, or the
adoption of significant short positions by hedge funds or other significant investors, could cause some of our stockholders to
sell their stock, thus causing the price of our stock to decline. In addition, actual or anticipated downward pressure on our
stock price due to actual or anticipated sales of stock by our directors or officers could cause other institutions or individuals
to engage in short sales of our common stock, which may further cause the price of our stock to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">From time to time
our directors and executive officers may sell shares of our common stock on the open market. These sales will be publicly disclosed
in filings made with the SEC. In the future, our directors and executive officers may sell a significant number of shares for
a variety of reasons unrelated to the performance of our business. Our stockholders may perceive these sales as a reflection on
management&rsquo;s view of the business and result in some stockholders selling their shares of our common stock. These sales
could cause the price of our stock to drop.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We and our executive
officers and directors have agreed with the underwriters that, subject to certain exceptions, for a period of 180 days after the
date of this prospectus for our officers and directors and 90 days for us after the date of this prospectus, we and they will
not directly or indirectly offer, pledge, sell, contract to sell, sell any option or contract to purchase or otherwise dispose
of any common stock or any securities convertible into or exercisable or exchangeable for common stock, or in any manner transfer
all or a portion of the economic consequences associated with the ownership of common stock, or cause a registration statement
covering any common stock to be filed, without the prior written consent of Aegis Capital Corp. See &ldquo;Underwriting.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Anti-takeover provisions may limit
the ability of another party to acquire us, which could cause our stock price to decline.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Provisions in our
certificate of incorporation and our by-laws that will may discourage, delay or prevent a merger, acquisition or other change
in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive
a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for
shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors
is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our
stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our
board of directors. Although we believe these provisions collectively provide for an opportunity to obtain greater value for stockholders
by requiring potential acquirers to negotiate with our board of directors, they would apply even if an offer rejected by our board
of directors were considered beneficial by some stockholders. Among other things, these provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Moreover, because
we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which
prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of
three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless
the merger or combination is approved in a prescribed manner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Non-U.S. investors may have difficulty
effecting service of process against us or enforcing judgments against us in courts of non-U.S. jurisdictions.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are a company incorporated
under the laws of the State of Delaware. All of our directors and officers reside in the United States. It may not be possible
for non-U.S. investors to effect service of process within their own jurisdictions upon our company and our directors and officers.
In addition, it may not be possible for non-U.S. investors to collect from our company, its directors and officers, judgments
obtained in courts in such non-U.S. jurisdictions predicated on non-U.S. legislation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If securities or industry analysts
do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations
regarding our stock adversely, our stock price and trading volume could decline.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The trading market
for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us,
our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our
stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline.
If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose
visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_007"></A>USE
OF PROCEEDS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We estimate that the
net proceeds from sale of shares of common stock offered by us will be approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, after deducting the underwriting
discounts and commissions and estimated offering expenses payable by us, based on the public offering price of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. If the
underwriters&rsquo; option to purchase additional shares is exercised in full, we estimate that our net proceeds will be approximately
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">

&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We anticipate that
we will use the net proceeds from this offering for our working capital and for other general corporate purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We believe opportunities
may exist from time to time to expand our current business through acquisitions or investments. While we have no current agreements,
commitments or understandings for any specific acquisitions or investments, we may use a portion of the net proceeds for these
purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We believe that
the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our
operating expenses and capital expenditure requirements through at least the next &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; months from
the date of this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">This expected use
of the net proceeds from this offering represents our intentions based upon our current plans and business conditions. Pending
our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments,
including short-term, investment grade, interest bearing instruments and U.S. government securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_008"></A>DETERMINATION
OF THE OFFERING PRICE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The public offering
price of the common stock offered by this prospectus was determined by careful consideration of our management and our Board of
Directors, based upon: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and (ii) the common stock&rsquo;s historical trading volume. In considering and determining the price at
which to offer Common Stock in this offering, our management and our board of directors also considered&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. Finally, our management
and our Board of Directors considered discussions with, and advice provided by, independent brokers and investors relating to their
opinions of the price at which we could succeed in attracting investors for this offering. We cannot provide assurances that we
will succeed in attracting any investors at the public offering price of the common stock offered by this prospectus, that the
public offering price is in fact reflective of the true value of our common stock, or of us, or that the markets will react positively
following any such offers and sales by us of our common stock. See &ldquo;Underwriting.&rdquo;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">

&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_009"></A>DILUTION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019,
we had a net tangible book value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; or $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, based on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock outstanding as of March 31, 2019. Net tangible
book value represents&nbsp;our total tangible assets, less all liabilities and intangible assets, divided by the number of shares
of common stock outstanding. Without taking into account any changes in such net tangible book value after March 31, 2019, other
than to give effect to our sale of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock offered hereby at a fixed price of $[&#9679;] per share (and (assuming
no exercise of the underwriters&rsquo; over-allotment option), the pro forma net tangible book value per share at March 31, 2019
was $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; . This amount represents an immediate increase in net tangible book value of $[&#9679;] per share to our current shareholders
and an immediate decrease in net tangible book value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share to new investors purchasing shares in this offering.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">

&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The table set forth
below shows the calculation of the increase in book value to current shareholders and the decrease in offering price to investors
in this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 87%"><FONT STYLE="font-size: 10pt">Post-offering net tangible book value per share</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Pre-offering net tangible book value per share at March 31, 2019</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 10pt">Pro forma&nbsp;increase in book value per share attributable to new investors</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">Offering price per share</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Post-offering net tangible book value per share</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 10pt">Pro forma decrease in&nbsp;offering price&nbsp;per share experienced by new investors</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_011"></A>DIVIDEND
POLICY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We do not currently
expect to pay dividends on its common stock. The payment of any dividends in the future, and the timing and amount thereof, is
within the discretion of our board of directors. The board&rsquo;s decisions regarding the payment of dividends will depend on
many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants
in any debt instrument, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant.
Our ability to pay dividends will depend on our ongoing ability to generate cash from operations. We cannot guarantee that we
will pay a dividend in the future or continue to pay any dividends if we began paying dividends.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-transform: uppercase; text-align: center"><A NAME="a_012"></A>SELECTED
HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The following summary
historical consolidated financial information for the years ended September 30, 2017 and 2018 have been derived from the audited
financial statements of Mynd Analytics, Inc. included elsewhere in this prospectus. The following summary historical consolidated
financial information for the six months ended March 31, 2018 and 2019 have been derived from the unaudited interim consolidated
financial statements of Mynd Analytic, Inc. include elsewhere in this prospectus. In our opinion, such unaudited interim consolidated
financial statements have been prepared on the same basis as the audited consolidated financial statements of Mynd Analytics,
Inc. and reflect all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the results
of operations and financial position of Mynd Analytics, Inc. Results as of and for the six months ended March 31, 2019 are not
necessarily indicative of results that may be expected for the entire year. You should read the following summary historical condensed
consolidated financial and operating information in conjunction with the information appearing under &ldquo;Risk Factors,&rdquo;
&ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo; in this prospectus,
and in conjunction with the audited consolidated financial statements Mynd Analytics, Inc. and the related notes appearing elsewhere
in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">This prospectus describes
the assets transferred to us by MYnd in the Separation as if the transferred assets were our business for all historical periods
described. References in this prospectus to our historical assets, liabilities, products, businesses or activities of our business
are generally intended to refer to the historical assets, liabilities, products, businesses or activities of the transferred businesses
as the businesses were conducted as part of MYnd and its subsidiaries prior to the Separation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years
    ended <BR> September 30,</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months
    Ended<BR> March 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left; border-bottom: Black 1.5pt solid"><B>Statement of Operations Data:</B></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">REVENUES</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 0.25in">Neurometric services</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">263,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">128,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">124,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">133,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Telepsychiatry
    services</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,051,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">723,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">448,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 0.25in">Total revenues</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,315,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">128,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">847,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">581,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">Cost of revenues</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 0.25in">Neurometric services</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">131,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">53,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">118,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Telepsychiatry
    services</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">696,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">509,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">264,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">827,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">53,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">521,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">383,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 9pt">Gross Margin</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">488,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">75,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">325,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">198,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 9pt">OPERATING EXPENSES</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 0.25in">Research</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">231,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">123,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">141,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">154,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 0.25in">Product development</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,146,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,237,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">474,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">611,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 0.25in">Sales and marketing</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,617,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,226,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">351,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,305,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">General and
    administrative</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">7,737,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">4,590,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">4,724,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">3,515,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 0.25in">Total operating expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">10,733,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,178,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,691,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,587,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 9pt">OPERATING LOSS</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(10,244,900</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,103,600</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,365,500</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,388,600</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 9pt">OTHER INCOME (EXPENSE):</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Interest expense,
    net</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(86,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(6,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(46,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(38,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Total other
    income (expense)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(86,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(6,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(46,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(38,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 9pt">LOSS BEFORE PROVISION FOR INCOME TAXES</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(10,331,200</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,110,200</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,411,800</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,427,100</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Income taxes</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 9pt">NET LOSS</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(10,333,100</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(7,112,800</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(5,414,100</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(5,429,000</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -9pt; padding-left: 9pt; padding-bottom: 1.5pt">Net loss attributable to noncontrolling
    interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1.5pt solid">(734,400</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1.5pt solid">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1.5pt solid">(778,000</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1.5pt solid">(72,300</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Net Loss attributable
    to MYnd Analytics, Inc.</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">(9,598,700</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">(7,112,800</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">(4,636,100</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">(5,356,700</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">BASIC AND DILUTED
    LOSS PER SHARE:</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">(1.86</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">(2.52</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">(0.58</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">(1.23</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -9pt; padding-left: 9pt">WEIGHTED AVERAGE SHARES OUTSTANDING:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 0.25in">Basic and Diluted</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">5,199,566</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2,817,415</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">7,964,021</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">4,347,745</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September
    30,</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">As of<BR> March 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1.5pt solid; padding-left: 0.125in; text-indent: -0.125in">Balance
    Sheet Data:</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">(Unaudited)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">ASSETS</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">CURRENT ASSETS:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Cash and cash equivalents</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">3,254,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">5,449,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,203,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Accounts receivable, net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">63,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">154,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Prepaid insurance</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">57,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">57,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Note receivable - related party</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">159,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Prepaid
    expenses and other current assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">134,700</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">22,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">181,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Total current assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,510,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,694,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,548,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Property and equipment, net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">110,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">120,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">87,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Intangible assets, net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">116,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">60,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">88,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Investment in Arcadian</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">195,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">Goodwill</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,386,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,386,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Other assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">27,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">25,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">29,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 4pt; padding-left: 0.125in; text-indent: -0.125in">TOTAL ASSETS</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">5,151,800</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">6,096,100</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">3,141,000</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">LIABILITIES AND STOCKHOLDERS&rsquo;
    EQUITY:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">CURRENT LIABILITIES:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Accounts payable (including $30,350
    and $36,200 to related parties as of September 30, 2018, and 2017, respectively)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">346,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">736,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">970,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Accrued liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">268,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">55,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">204,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Accrued compensation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">175,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">466,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">244,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Accrued compensation &ndash; related
    parties</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">209,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">204,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">322,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Accrued interest and other</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Deferred revenue</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">159,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">45,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">152,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Current portion of note payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">31,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Current
    portion of capital lease</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Total current
    liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,165,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,545,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,900,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">LONG-TERM LIABILITIES</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Long-term borrowing, net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">587,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">606,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Accrued interest on long-term
    borrowing</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">110,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">120,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Long term
    portion of capital lease</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">3,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Total long-term
    liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">699,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">3,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">728,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">TOTAL LIABILITIES</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,865,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,548,700</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2,628,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">STOCKHOLDERS&rsquo; EQUITY:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Preferred stock, $0.001 par value;
    15,000,000 authorized; 1,500,000 shares of Series A Preferred Stock and 500,000 shares of Series A-1 authorized; 550,000 shares
    of Series A Preferred Stock and 500,000 shares of Series A-1 issued and outstanding as of September 30, 2018; No shares of
    Preferred stock issued and outstanding as of September 30, 2017; aggregate liquidation preference of $1,968,750 as of September
    30, 2018</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">Common stock, $0.001 par value; 250,000,000 shares
    and 500,000,000 shares authorized as of September 30, 2018 and September 30, 2017 respectively, 7,407,254 and 4,299,311 shares
    issued and outstanding as of September 30, 2018 and September 30, 2017, respectively;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Additional paid-in capital</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">89,257,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">80,189,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">91,895,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Accumulated
    deficit</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(85,245,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(75,646,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(89,881,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Total controlling
    interests</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">4,020,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">4,547,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2,024,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Non-controlling
    interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(734,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(1,512,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Total stockholders&rsquo;
    equity</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">3,286,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">4,547,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">512,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">TOTAL LIABILITIES
    AND STOCKHOLDERS&rsquo; EQUITY</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">5,151,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">6,096,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">3,141,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.2in"><B><A NAME="a_013"></A>MANAGEMENT&rsquo;S
DISCUSSION AND ANALYSIS OF<BR>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.2in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>The disclosure
in this section describes the financial condition and results of operation of the business of MYnd, which was transferred to Telemynd,
Inc. in the Spin-Off. You should read the following discussion in conjunction with the audited combined financial statements and
the corresponding notes, included elsewhere in this Registration Statement. This Management&rsquo;s Discussion and Analysis of
Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking
statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those
made, projected or implied in the forward-looking statements. Please see the sections titled &ldquo;Risk Factors&rdquo; and &ldquo;Cautionary
Statement Concerning Forward-Looking Statements&rdquo; for a discussion of the uncertainties, risks and assumptions associated
with these statements.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>In contemplation
of the merger with Emmaus, substantially all the assets and all the liabilities of &nbsp;MYnd, except for an aggregate of $250,000&nbsp;&nbsp;
of liabilities for were contributed to us. Accordingly, our business and financial position is essentially the business and financial
position of &nbsp;MYnd, except for those liabilities.&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>In addition, our
capital structure is similar to, but not identical to the capital structure of MYnd.&nbsp; Following the spin-off, the holders
of our common stock prior to the merger received one share of Telemynd for each share of MYnd held by them as of the record date.&nbsp;
In addition, the outstanding shares of preferred stock of MYnd were exchanged for shares of preferred stock on substantially the
same economic terms as the outstanding preferred stock of Mynd.&nbsp; While the outstanding options and warrants of Mynd did not
become options and warrants of Telemynd, Telemynd has an Equity Plan and has granted certain options. See &ldquo;Executive and
Director Compensation&rdquo;.&nbsp; In addition, Telemynd reserved 6,269,673 shares of its common stock for issuance upon exercise
of certain MYnd warrants (subject to adjustment upon the potential reverse stock split described under &ldquo;Recent Development--Reverse
Stock Split</I>&rdquo;). <I>MYnd will make additional cash payments to Telemynd, not to exceed $2,500,000 in the aggregate, from
all cash received by MYnd as a result of the exercise of any warrants or stock options of MYnd that were in effect prior to the
Spin-off, to the extent that the proceeds from such warrant and option exercises exceeds $500,000, and less all such proceeds,
if any, theretofore transferred or paid by MYnd to Telemynd pursuant to the Separation Agreement after the Spin-off.</I></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">

<I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Accordingly, substantial
financial and other information about the business and operations of MYnd are included in this prospectus.&nbsp; Readers evaluating
the relevance of such information to Telemynd should take into account both the many ways in which MYnd&rsquo;s financial position,
operations, capital structure and management are substantially identical to those of Telemynd, as well as the ways in which they
differ as described above.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Telemynd, Inc. (&ldquo;we,&rdquo;
&ldquo;us,&rdquo; &ldquo;our,&rdquo; or the &ldquo;Company&rdquo;), is a predictive analytics company that has developed a decision
support tool to help physicians reduce trial and error treatment in mental health and provide more personalized care to patients.
We employ a clinically validated scalable technology platform to support personalized care for mental health patients. We utilize
our patented machine learning, artificial intelligence, data analytics platform for the delivery of telebehavioral health services
and its PEER predictive analytics product offering. On November 13, 2017, we acquired Arcadian, which manages the delivery of
telepsychiatry and telebehavioral health services through a nationwide network of licensed and credentialed psychiatrists, psychologists
and master&rsquo;s-level therapists. We are commercializing its PEER predictive analytics tool to help physicians reduce trial
and error treatment in mental health. MYnd&rsquo;s patented, clinically validated technology platform (&ldquo;PEER Online&rdquo;)
utilizes complex algorithms to analyze electroencephalograms (&ldquo;EEGs&rdquo;) to generate Psychiatric EEG Evaluation Registry
(&ldquo;PEER&rdquo;) Reports to predict individual responses to a range of medications prescribed for the treatment of behavioral
disorders including depression, anxiety, bipolar disorder, PTSD and other non-psychotic disorders. The discussion of the financial
results in this Section relate to the historical financial results of <I>MYnd</I> for the periods indicated, which results are
attributable to the Business of <I>MYnd</I> transferred to us in the Spin-Off.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Recent Developments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Merger Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 4, 2019,
MYnd entered into an Agreement and Plan of Merger (the &ldquo;Merger Agreement&rdquo;) by and among it, its wholly owned subsidiary,
Athena Merger Subsidiary, Inc., a Delaware corporation (&ldquo;Merger Sub&rdquo;), and Emmaus Life Sciences, Inc., a Delaware
corporation (&ldquo;Emmaus&rdquo;). Under the terms of the Merger Agreement, Merger Sub merged with and into Emmaus with Emmaus
surviving the merger and becoming a wholly-owned subsidiary of MYnd (the &ldquo;Merger&rdquo;). Subject to the terms of the Merger
Agreement, at the effective time of the Merger, Emmaus stockholders received a number of newly issued shares of MYnd common stock
determined using the exchange ratio described below in exchange for their shares of Emmaus stock. Following the Merger, stockholders
of Emmaus became MYnd&rsquo;s majority owners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Spin-Off</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Prior to the closing
of the Merger, MYnd transferred all of its businesses, assets and liabilities not assumed by Emmaus to us, pursuant to the terms
of a Separation and Distribution Agreement entered into on January 4, 2019 by MYnd and MYnd Analytics, Inc., a California corporation,
which was assigned by Mynd-CA to Telemynd on March 27, 2019 pursuant to the terms of an Amended and Restated Separation Agreement
(as amended, the &ldquo;Separation Agreement&rdquo;). MYnd distributed all shares of Telemynd held by it to its stockholders of
record on July 15, 2019 on July 16, 2019. No options of Telemynd were issued in the Spin-off. Options issued by MYnd prior to the
Spin-off remained outstanding and unaffected. The Separation and Distribution was consummated on July 16, 2019. In addition, Telemynd
reserved 6,269,673 shares of its common stock for issuance upon exercise of certain MYnd warrants (subject to adjustment upon the
potential reverse stock split described under &ldquo;<I>Recent Development--Reverse Stock Split</I>&rdquo;)..<I>. MYnd will make
additional cash payments to Telemynd, not to exceed $2,500,000 in the aggregate, from all cash received by MYnd as a result of
the exercise of any warrants or stock options of MYnd that were in effect prior to the Spin-off, to the extent that the proceeds
from such warrant and option exercises exceeds $500,000, and less all such proceeds, if any, theretofore transferred or paid by
MYnd to Telemynd pursuant to the Separation Agreement after the Spin-off.</I></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Going Concern Uncertainty</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our consolidated financial
statements have been prepared in conformity with U.S. generally accepted accounting principles (&ldquo;GAAP&rdquo;), which contemplate
continuation of us as a going concern. The Company has a limited operating history and its operations are subject to certain problems,
expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation of a business with
a limited operating history. These risks include the ability to obtain adequate financing on a timely basis, if at all, the failure
to develop or supply technology or services to meet the demands of the marketplace, the failure to attract and retain qualified
personnel, competition within the industry, government regulation and the general strength of regional and national economies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 38.2pt">Our recurring net
losses and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. During
the six months ended March 31, 2019, weincurred a net loss of approximately $5.4 million and used approximately $3.8 million of
net cash in operating activities. As of March 31, 2019, our accumulated deficit was approximately $89.9 million. In connection
with these consolidated financial statements, management evaluated whether there were conditions and events, considered in the
aggregate, that raised substantial doubt about our ability to meet its obligations as they become due for the next twelve months
from the date of issuance of these financial statements. Management assessed that there were such conditions and events, including
a history of recurring operating losses, and negative cash flows from operating activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our recurring net
losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. During
the twelve months ended September 30, 2018, we incurred a net loss of 10.3 million and used $9.0 million of net cash in operating
activities. As of September 30, 2018, our accumulated deficit was $85.2 million. In connection with the consolidated financial
statements, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial
doubt about our ability to meet its obligations as they become due for the next twelve months from the date of issuance of the
financial statements. Management assessed that there were such conditions and events, including a history of recurring operating
losses, and negative cash flows from operating activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we raise additional
funds by issuing additional equity or convertible debt securities, the fully diluted ownership percentages of existing stockholders
will be reduced. In addition, any equity or debt securities that we would issue may have rights, preferences or privileges senior
to those of the holders of its common stock.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To date, we have financed
its cash requirements primarily from equity financings. We will need to raise funds immediately to continue its operations and
increase demand for its services. Until it can generate sufficient revenues to meet its cash requirements, which we may never
do, we must continue to finance future cash needs primarily through public or private equity offerings, debt financings or strategic
collaborations. Our liquidity and capital requirements depend on several factors, including the rate of market acceptance of our
services, our future profitability, the rate of growth of our business and other factors described elsewhere in this registration
statement. We continue to explore additional sources of capital, but there is substantial doubt as to whether any financing arrangement
will be available in amounts and on terms acceptable to us to permit it to continue operations. The consolidated financial statements
do not include any adjustments that might be necessary if we are unable to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Financial Operations Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Revenues</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our neurometric services
revenues are derived from the sales of PEER Reports and services of Electroencephalographs (EEG) and Quantitative Electroencephalographs
(qEEG). Physicians and Customers are generally billed upon delivery of a PEER Report. The customer&rsquo;s insurance is billed
for EEG and qEEG services. We also derives revenue from its subsidiary Arcadian Services who manages the delivery of telepsychiatry
and telebehavioral health services which are delivered directly to patients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Cost of Revenues</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Cost of revenues are
for services and represent the cost of direct labor, the costs associated with external processing, analysis and consulting services
necessary to generate the revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Research and Product Development</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Research and product
development expenses are associated with our neurometric and telepsychiatry services and primarily represent costs incurred to
design and conduct clinical studies, to recruit patients into the studies, to add data to our database, to improve analytical
techniques and advance application of the methodology. We charge all research and development expenses to operations as they are
incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Sales and Marketing</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For our neurometric
and telepsychiatry services, our selling and marketing expenses consist primarily of personnel, media, support and travel costs
to inform user organizations and consumers of our products and services. Additional marketing expenses are the costs of advertising,
educating physicians, laboratory personnel, other healthcare professionals regarding our products and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>General and Administrative</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our general and administrative
expenses consist primarily of personnel, occupancy, legal, audit, consulting and administrative support costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Critical Accounting Policies and Significant
Judgments and Estimates</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This management&rsquo;s
discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires management
to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent
assets and liabilities at the date of the financial statements, as well as revenues and expenses during the reporting periods.
We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other
factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ
materially from those estimates under different assumptions or conditions.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our significant accounting
policies are described in Note 2 to our Consolidated Financial Statements included elsewhere in this report. We believe the following
critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Revenue Recognition</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenues for our Neurometric
Service product are recognized when a PEER Report is delivered to a Client-Physician. Revenues for our Telepsychiatry services
are recognized in the month the services are delivered by the physician.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Stock-based Compensation Expense</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stock-based compensation
expense, which is a non-cash charge, results from stock option grants and restricted share awards. Compensation for option is
measured at the grant date based on the calculated fair value of the award. We recognize stock-based compensation expense on a
straight-line basis over the vesting period of the underlying option. The amount of stock-based compensation expense expected
to be amortized in future periods may decrease if unvested options are subsequently cancelled or may increase if future option
grants are made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Long-Lived Assets and Intangible Assets</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Property and equipment
and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the
assets may not be recoverable. If we determine that the carrying value of the asset is not recoverable, a permanent impairment
charge is recorded for the amount by which the carrying value of the long-lived or intangible asset exceeds its fair value. Intangible
assets with finite lives are amortized on a straight-line basis over their useful lives of ten years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Costs for software
developed for internal use are accounted for through the capitalization of those costs incurred in connection with developing
or obtaining internal-use software. Capitalized costs for internal-use software are included in intangible assets in the consolidated
balance sheet. Capitalized software development costs are amortized over three years. Costs incurred during the preliminary project
along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product
offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable
judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility
and estimated economic life. We will begin amortizing the software over its estimated economic life once it has been placed into
service.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Derivative accounting for convertible
debt and warrants</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We evaluate all of
its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For
derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its
fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements
of operations. For stock-based derivative financial instruments, we use a weighted average Black-Scholes option pricing model
to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash
settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of September 30, 2018,
we had no financial instruments that contain embedded derivative features.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Results of Operations for Three Months Ended March 31, 2019
and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">MYnd Analytics is
focused on research and the commercialization of its PEER Reports through its Neurometric Services, as well as providing telehealth
service through scheduling and videoconferencing which is accessed through a secure portal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table presents consolidated
statement of operations data for each of the periods:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Revenues</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1.5pt solid"><B>Change</B></TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Neurometric services</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">44,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">79,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(35,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Telepsychiatry services</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">415,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">380,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">35,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total Revenues</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">460,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">459,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our neurometric services
revenues decreased by $35,000, or approximately 44%, during the three months ended March&nbsp;31, 2019. This decrease was primarily
due to decreased sales of PEER reports during the period. Our telepsychiatry revenues increased by $35,200, or approximately 9.3%
during the three months ended March&nbsp;31, 2019 which was primarily due to our allocation of additional resources to the Arcadian
platform during the 2019 period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Cost of Revenues</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1.5pt solid"><B>Change</B></TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Neurometric services</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">5,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">69,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(64,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Telepsychiatry services</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">291,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">228,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">62,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">Cost of Revenues</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">296,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">298,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(2,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Cost of revenues increased
during the three months ended March&nbsp;31, 2019, primarily due to decreased cost of PEER, reports, offset by increased telepsychiatry
service and labor costs. Our cost of revenues for neurometric services represents approximately 11% and 23%, respectively, of
neurometric services revenues for the three months ended March&nbsp;31, 2019 and 2018, respectively. The cost for neurometric
services fluctuates as we pay fees to third party providers for EEG services as a cost for its Peer reports. In most cases, fees
for PEER reports are billed to patients&rsquo; insurance carriers and we do not recognize as revenues until they are ultimately
collected. Historically, we have experienced a low collection rate while most claims are collected in excess of ninety days from
billing. Therefore, there will be timing differences between payment of services (cost of revenues) and receipt of payment (revenues)
which will not reflect evenly in our Statement of Operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Research expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Services Research Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">60,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">73,400</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(12,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Research expenses
consist of consulting fees, travel expenses, conference fees, and other miscellaneous costs listed as following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.25in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Consulting fees</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">58,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">69,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(11,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(2)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">3,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(1,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total Research Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">60,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">73,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(12,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0in"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting costs decreased by $11,300 for the three months ended
    March 31, 2019 and 2018, primarily due to decreased consulting services during the period.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0in"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other miscellaneous costs for the three months ended March 31,
    2019 and 2018 were relatively unchanged.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Product Development</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Product Development Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">237,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">342,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(104,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Product development
expenses consist of payroll costs, (including stock-based compensation), consulting fees, system development costs, conference
fee, travel expenses, and miscellaneous costs which were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.25in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">152,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">140,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">11,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">45,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">139,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(93,500</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">System development costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">28,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">46,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(18,400</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Conference &amp; travel</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,000</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(5)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">7,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">11,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(3,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total Product Development Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">237,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">342,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(104,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries
                                         and benefits increased by $11,900 for the three months ended March 31, 2019 and 2018,
                                         primarily due to increased stock based compensation of $19,000;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting
                                         fees decreased by $93,500 for the three months ended March 31, 2019, primarily due to
                                         services in relation to the upgrade of our cloud based sales platform and for a data
                                         science project to improve our algorithms for the production of an enhanced PEER report
                                         during the three months ended March 31, 2018;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">System
                                         development and maintenance costs decreased by $18,400 for the three months ended March
                                         31, 2019, primarily due to no system development cost incurred during the current period;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference
                                         and travel costs for the three months ended March 31, 2019 and 2018, were relatively
                                         unchanged;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other
                                         miscellaneous costs decreased by $3,900 for the three months ended March 31, 2019, primarily
                                         due to decreased dues subscriptions ;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Sales and marketing</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Sales and Marketing Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">199,400</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">638,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(438,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Sales and marketing
expenses consist of payroll and benefit costs, (including stock-based compensation), advertising and marketing expenses, consulting
fees, and miscellaneous expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.25in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">139,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">342,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(203,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">31,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">95,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(63,900</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Advertising and marketing costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">97,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(92,700</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Conferences and travel costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(24,000</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(5)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">18,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">73,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(54,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total Sales and marketing expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">199,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">638,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(438,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries and benefits for the three months ended March 31, 2019
    decreased by $203,100 from the 2018 period; primarily due to decreased salaries and commission of marketing and sales staff;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting fees for the three months ended March 31, 2019 decreased
    by $63,900, primarily due to the decrease in the number of marketing consultants;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Advertising and marketing expenses for the three months ended
    March 31, 2019 decreased by $92,700 primarily due to decreased social media advertising;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference and travel expenditures for the three months ended
    March 31, 2019 decreased by $24,000, primarily due to decreased travel expense for the sales staff; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(5)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Miscellaneous expenditures for the three months ended March
    31, 2019 decreased by $54,900, primarily due to decreased rent and office expenses.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>General and administrative</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">General and administrative expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">2,350,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,740,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">609,400</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">General and administrative
expenses consist of payroll and benefit costs, (including stock based compensation), legal fees, patent costs, other professional
and consulting fees, general administrative and occupancy costs, dues and subscriptions, conference fees, and travel expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.25in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">998,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">728,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">270,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">336,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">364,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(27,600</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Legal fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">484,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">44,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">440,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Other professional fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">108,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">246,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(138,200</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(5)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Patent costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">44,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">45,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,000</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(6)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Marketing and investor relations costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">143,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">46,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">97,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(7)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Conference and travel costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">36,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">10,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(8)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Dues &amp; subscriptions fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">52,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">49,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(9)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Computer &amp; web services</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">20,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">40,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(19,900</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(10)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">General admin and occupancy costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">125,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">150,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(24,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total General and administrative expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2,350,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,740,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">609,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries and benefit expenses increased by $270,200 for the
    three months ended March 31, 2019 period. This increase was primarily due to increased bonus accrual of $153,000, and increased
    telepsychiatry management and staff cost due to acquisition of Arcadian on November 13, 2017;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting fees decreased by $27,600 for the three months ended
    March 31, 2019 period, primarily related to decreased operational and consulting fees;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Legal fees increased by $440,300 for the three months ended
    March 31, 2019 period, primarily due to additional legal fees related to the negotiation and execution of the merger agreement
    and other financing activities;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other professional fees decreased by $138,200 for the three
    months ended March 31, 2019 period, primarily due to higher audit fees in relation to the acquisition of Arcadian in fiscal
    2018;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(5)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Patent costs decreased by $1,000 primarily due to less volume
    of patent and trademark applications and maintenance costs;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(6)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Marketing and investor relations costs increased by $97,200
    for the three months ended March 31, 2019 as we engaged public relation firms in relation to capital raise and support of
    Nasdaq matters;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(7)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference and travel costs increased by $10,100 for the three
    months ended March 31, 2019, primarily due to more conferences attended and travel made during the period;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(8)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Dues and subscription costs increased by $2,900 for the three
    months ended March 31, 2019, primarily due to additional licenses for our Salesforce platform;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(9)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Computer and web services decreased by $19,900 for the three
    months ended March 31, 2019, primarily due to decreased services related to our telepsychiatry business and cloud hosting
    fees; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(10)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">General administrative and occupancy costs decreased by $24,600
    for the three months ended March 31, 2019 period, primarily due to decreased Delaware franchise tax at $98,000, offset by
    increased bad debt write off of $14,000, and increased expenses from acquisition of Arcadian in fiscal 2018.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Other income (expense)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Interest expense</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(23,400</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(24,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,400</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Interest expense for the three months ended
March 31, 2019 and 2018 were relatively unchanged;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Net Loss</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Loss, net</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(2,709,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(2,659,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(50,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our net loss was $2.7
million for the three months ended March 31, 2019, compared to a net loss of approximately $2.7 million for the same period ended
March 31, 2018, primarily due to increased revenue from the acquisition of our telepsychiatry business on November 13, 2018, offset
by increased costs and expenses respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Results of Operations for Six Months Ended March 31, 2019
and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">MYnd Analytics is
focused on research and the commercialization of its PEER Reports through its Neurometric Services, as well as providing telehealth
service through scheduling and videoconferencing which is accessed through a secure portal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table presents consolidated
statement of operations data for each of the periods:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Revenues</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Neurometric services</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">124,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">133,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(9,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Telepsychiatry services</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">723,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">448,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">274,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total Revenues</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">847,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">581,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">265,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our neurometric services
revenues decreased by $9,100, or approximately 7% for the six months ended March&nbsp;31, 2019 The decrease was primarily due
to decreased sales of PEER reports during the period. Our telepsychiatry revenues increased by $274,400, or approximately 61%
during the six months ended March&nbsp;31, 2019. Our increase in telepsychiatry services revenues is due to a combination of factors.
First, we only began operating our Arcadian business during the three months ended December 31, 2017. As a result, we only recognized
revenues from the Arcadian business (i.e. telepsychiatry services revenues) for a portion of the six-months ended March 31, 2018.
In addition, we provided additional resources to the Arcadian platform during 2019, which improved its results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Cost of Revenues</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Neurometric services</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">11,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">118,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(107,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Telepsychiatry services</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">509,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">264,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">245,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">Cost of Revenues</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">521,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">383,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">138,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<B><I>&nbsp;</I></B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Overall, the cost
of revenues increased during the six months ended March&nbsp;31, 2019, primarily due to fees paid to service providers as a result
of increased sales for telepsychiatry services. Our cost of revenues for neurometric services represents approximately 2% and
31%, respectively, of neurometric services revenues for the six months ended March&nbsp;31, 2019 and 2018, respectively. The cost
for neurometric services fluctuates as we pay fees to third party providers for EEG services as a cost for its Peer reports. In
most cases Peers are billed to patients&rsquo; insurance carriers for which we do not recognize as revenues until they are ultimately
collected. Historically we have experienced a low collection rate while most claims are collected in excess of ninety days from
billing. Therefore, there will be timing differences between payment of services (cost of revenues) and receipt of payment (revenues)
which will not reflect evenly in our Statement of Operations.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Research expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Services Research Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">141,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">154,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(13,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Research expenses consist of consulting
fees, travel expenses, conference fees, and other miscellaneous costs listed as following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.2in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Consulting fees</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">137,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">148,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(11,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(2)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">4,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">6,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(1,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total Research Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">141,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">154,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(13,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting
                                         costs decreased by $11,800 for the six months ended March 31, 2019 and 2018, primarily
                                         due to decreased consulting services during the period;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other
                                         miscellaneous costs for the six months ended March 31, 2019 and 2018 were relatively
                                         unchanged.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Product Development</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Product Development Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">474,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">611,400</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(137,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Product development
expenses consist of payroll costs, (including stock-based compensation), consulting fees, system development costs, conference
fee, travel expenses, and miscellaneous costs which were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.2in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">295,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">265,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">30,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">97,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">211,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(114,400</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">System development costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">63,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">82,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(19,300</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Conference &amp; travel</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(10,500</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(5)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">14,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">37,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(22,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total Product Development Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">474,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">611,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(137,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries
                                         and benefits increased by $30,000 for the six months ended March 31, 2019, primarily
                                         due to increased stock-based compensation $33,000 recognized during the six months of
                                         2019;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting
                                         fees decreased by $114,400 for the six months ended March 31, 2019, primarily due to
                                         services in relation to the upgrade of our cloud based sales platform and for a data
                                         science project to improve our algorithms for the production of an enhanced PEER report
                                         during the six months ended March 31, 2018.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">System
                                         development and maintenance costs decreased by $19,300 for the six months ended March
                                         31, 2019, primarily due to no system development cost incurred during the current period;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference
                                         and travel costs decreased by $10,500 during the six months March 31, 2019 and 2018,
                                         primarily due to decreased conference attendance and travel expenses;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other
                                         miscellaneous costs decreased by $22,900 for the six months ended March 31, 2019, primarily
                                         due to decreased computer services and dues subscriptions during the period;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Sales and marketing</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Sales and Marketing Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">351,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,305,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(953,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Sales and marketing
expenses consist of payroll and benefit costs, (including stock-based compensation), advertising and marketing expenses, consulting
fees, and miscellaneous expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.2in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">230,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">589,400</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(358,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">58,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">270,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(211,900</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Advertising and marketing costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">248,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(243,800</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Conferences and travel costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">55,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(46,100</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(5)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">48,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">141,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(93,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total Sales and marketing expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">351,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,305,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(953,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries
                                         and benefits for the six months ended March 31, 2019 decreased by $358,800 from the 2018
                                         period; primarily due to decreased salaries and commission of marketing and sales staff;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting
                                         fees for the six months ended March 31, 2019 decreased by $211,900, primarily due to
                                         the decrease in the number of marketing consultants;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Advertising
                                         and marketing expenses for the six months ended March 31, 2019 decreased by $243,800
                                         primarily due to decreased social media advertising;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference
                                         and travel expenditures for the six months ended March 31, 2019 decreased by $46,100,
                                         primarily due to decreased travel expense for the sales staff; and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Miscellaneous
                                         expenditures for the six months ended March 31, 2019 decreased by $93,300, primarily
                                         due to decreased rent and office expenses.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>General and administrative</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">General and administrative expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">4,724,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">3,515,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,208,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">General and administrative
expenses consist of payroll and benefit costs, (including stock based compensation), legal fees, patent costs, other professional
and consulting fees, general administrative and occupancy costs, dues and subscriptions, conference fees, and travel expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.2in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,974,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,430,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">544,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Transaction fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">438,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(438,600</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">729,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">562,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">167,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Legal fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">926,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">78,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">847,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Other professional fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">206,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">367,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(160,600</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(5)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Patent costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">46,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">55,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(9,100</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(6)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Marketing and investor relations costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">229,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">119,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">110,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(7)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Conference and travel costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">63,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">82,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(19,200</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(8)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Dues &amp; subscriptions fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">109,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">95,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">(9)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Computer &amp; web services</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">68,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">40,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">28,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(10)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">General admin and occupancy costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">369,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">245,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">124,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Total General and administrative expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">4,724,100</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">3,515,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,208,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries
                                         and benefit expenses increased by $544,100 for the six months ended March&nbsp;31, 2019
                                         period, primarily due to increased bonus accrual of $163,000, and increased telepsychiatry
                                         management and staff cost due to acquisition of Arcadian on November 13, 2017;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Transaction
                                         cost was decreased by $438,600 primarily due to telepsychiatry management and staff cost
                                         related from acquisition of Arcadian on November 13, 2017;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting
                                         fees increased by $167,500 for the six months ended March 31, 2019 period, primarily
                                         related to increased operational and consulting fees, as well as increased recruitment
                                         fees;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Legal
                                         fees increased by $847,100 for the six months ended March 31, 2019 period, primarily
                                         due to additional legal fees related to the negotiation and execution of the merger agreement
                                         and other financing activities;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other
                                         professional fees decreased by $160,600 for the six months ended March 31, 2019 period,
                                         primarily due to higher audit fees in relation to the acquisition of Arcadian in fiscal
                                         2018;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(6)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Patent
                                         costs decreased by $9,100 primarily due to less volume of patent and trademark applications
                                         and maintenance costs;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(7)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Marketing
                                         and investor relations costs increased by $110,700 for the six months ended March 31,
                                         2019 as we engaged public relation firms in relation to capital raising and/or support
                                         of Nasdaq matters;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(8)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference
                                         and travel costs decreased by $19,200 for the six months ended March 31, 2019, primarily
                                         due to less conferences attended and less travel made during the period;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(9)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Dues
                                         and subscription costs increased by $14,000 for the six months ended March 31, 2019,
                                         primarily due to additional licenses for our Salesforce platform;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(10)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Computer
                                         and web services increased by $28,400 for the six months ended March 31, 2019, primarily
                                         due to increased services related to our telepsychiatry business and cloud hosting fees;
                                         and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(11)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">General
                                         administrative and occupancy costs increased by $124,000 for the six months ended March
                                         31, 2019 period. The increase was primarily due to increased bad debt write off at $12,700,
                                         and increased expenses related to our telepsychiatry business, offset by decreased in
                                         Delaware franchise tax in the amount of $43,000.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Other income (expense)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Interest expense</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(46,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(38,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(7,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Interest expense decreased by $7,800 for
the six months ended March 31, 2019, primarily due to interest expense in relation to the acquisition of Arcadian on November
13, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Net Loss</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months
    ended <BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: left">Loss, net</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(5,414,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(5,429,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">14,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our net loss was $14,900
less for the six months ended March 31, 2019, compared to the same period ended March 31, 2018, primarily due to increased revenue
from the acquisition of our telepsychiatry business on November 13, 2018, offset by increased costs and expenses respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Financial Operations Overview for the
Fiscal Year Ended September 30, 2018 and 2017</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are focused on
research and the commercialization of its PEER Reports through our Neurometric Services, as well as providing telehealth service
through scheduling and videoconferencing which is accessed through a secure portal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
presents consolidated statement of operations data for each of the periods:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Revenues</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: justify">Neurometric Services</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">263,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">128,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">135,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Telepsychiatry Services</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,051,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,051,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 4pt">Total Revenues</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">1,315,500</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">128,500</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">1,187,000</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our neurometric services
revenues increased to $263,700 for the year ended September 30, 2018 from $128,500 for the year ended September 30, 2017. Revenues
for neurometric services increased as a result of additional Peer reports ordered by doctors which resulted in increased payments
from medical payors and patients. The increased number of Peer reports was the result of devotion of additional resources during
the year ended September 30, 2018 for marketing relating to Peer report services. Our telepsychiatry revenues increased to $1,051,800
for the year ended September 30, 2018 from no such revenues for the year ended September 30, 2017. We had no telepsychiatry services
revenue during the year ended September 30, 2017 because we only began operating our telepsychiatry services business (i.e. our
Arcadian business) during the three months ended December 31, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Cost of Revenues</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: justify">Neurometric Services</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">131,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">53,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">77,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Telepsychiatry Services</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">696,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">696,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 4pt">Total Cost of Revenues</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">827,400</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">53,500</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">773,900</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our cost of revenues
for neurometic services represents approximately 50% of neurometic service revenues for the year ended September 30, 2018. The
cost for neurometric services fluctuates as we pay pays fees to third party providers for EEG services as a cost for its Peer
reports. In most cases, fees for Peer reports are billed to patients&rsquo; insurance carriers for which we do does not recognize
as revenues until they are ultimately collected. Historically, we have experienced a low collection rate while most claims are
collected in excess of 90 days from billing. Therefore, there will be timing differences between payment of services (cost of
revenues) and receipt of payment (revenues) which will not reflect evenly in our Statement of Operations resulting in the significant
fluctuations in revenues for the periods presented. Cost of revenues increased during the fiscal year ended September 30, 2018,
primarily due to our acquisition of Arcadian Services and labor cost to service our telepsychiatry revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Research Expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Research expenses
consist of payroll expenses, (including stock-based compensation), consulting fees, travel expenses, conference fees, and other
miscellaneous costs listed as following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: justify">Research Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">231,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">123,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">107,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 8pt; text-align: justify; text-indent: 0.5in">Research expenses
consist of payroll costs (including stock-based compensation), consulting fees, travel, conference and other miscellaneous costs
which were as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid">Key Expense Categories</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.2in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(49,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">11,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(60,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">269,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">103,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">166,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(3)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">10,700</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">9,400</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,300</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Total Research Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">231,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">123,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">107,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 8pt; text-align: justify; text-indent: 0.5in">Comparing the fiscal
year ended September 30, 2018, with the corresponding period in 2017:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0%"></TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salary and benefit costs decreased for the fiscal year ended
    September 30, 2018, primarily due to the reversal of our bonus accrual and the department not meeting specified metrics;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting costs increased for the fiscal year ended September
    30, 2018, primarily consisting of costs under a consulting agreement with our Medical Officer to assist with the training
    of clinical trial investigators allowing them to participate in trials, and consult with other physicians in the use and interpretation
    of our PEER Report; additionally, on November 13, 2017 we entered into two consulting agreements for medical directors to
    provide consulting services for the telepsychiatry business;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other miscellaneous costs for the 2018 and 2017 periods were
    substantially unchanged.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 8pt; text-align: justify"><B><I>Product Development Expenses</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: justify">Product Development Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,146,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,237,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(91,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 8pt; text-align: justify; text-indent: 0.5in">Product Development
expenses consist of payroll costs (including stock-based compensation), consulting fees, system development costs, conference,
travel and miscellaneous costs which were as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid">Key Expense Categories</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.2in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">534,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">803,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(269,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">400,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">203,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">197,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">System development costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">133,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">146,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(13,400</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Conference and travel</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">21,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">32,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(11,400</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(5)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">56,700</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">51,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">5,500</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Total Product Development Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,146,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,237,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(91,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 8pt; text-align: left; text-indent: 0.5in">Comparing
the fiscal year ended September 30, 2018, with the corresponding period in 2017:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0%; text-align: justify"></TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries and benefits decreased by $269,100 for the fiscal year
    ended September 30, 2018, primarily due to a reduction in stock-based compensation recognized and a reduction in the number
    of staff members during the fiscal year of 2018;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting fees increased by $197,200 for the fiscal year ended
    September 30, 2018, primarily due to the cost of services in relation to the upgrade of our cloud based sales platform and
    for a data science project to improve our algorithms for the production of an enhanced PEER report;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">System development and maintenance costs decreased by $13,400
    for the fiscal year ended September 30, 2018, primarily due to decreased time spent by our contract system programmers for
    work on quality management initiatives, research support, transitioning to file sharing, and media management;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference and travel costs decreased by $11,400 for the fiscal
    year ended September 30, 2018, primarily due to a reduction in costs relating to attendance at conferences and related travel
    made during the period of 2018; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(5)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other miscellaneous costs increased slightly by $5,500 for the
    fiscal year ended September 30, 2018.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Sales and Marketing Expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
 September&nbsp;30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: justify">Sales and Marketing Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,617,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">1,226,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">391,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Sales and marketing
expenses consist of payroll and benefit costs, advertising and marketing expenses, consulting fees, and miscellaneous expenses
as further set forth below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
 September&nbsp;30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid">Key Expense Categories</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.2in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">795,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">543,200</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">252,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">298,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">422,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(123,800</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Advertising and marketing costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">248,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">152,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">96,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Conferences and travel costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">64,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">45,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(5)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Other miscellaneous costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">209,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">89,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">120,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Total Sales and Marketing Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,617,900</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">1,226,700</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">391,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Comparing the fiscal year ended September
30, 2018, with the same period in 2017:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0%; text-align: justify"></TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries and benefits for the fiscal year ended September 30,
    2018 increased by $252,500 from the 2017 period, primarily due to increased sales and marketing expenses, offset by a decreased
    in stock-based compensation expenses;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting fees for the fiscal year ended September 30, 2018
    decreased by $123,800, primarily due to decreases in the number of marketing consultants.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Advertising and marketing expenses for the fiscal year ended
    September 30, 2018 increased by $96,600, primarily due to social media advertising;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference and travel expenditures for the fiscal year ended
    September 30, 2018 increased by $45,100, primarily due to increased travel expenses for the sales staff; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(5)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Miscellaneous expenditures for the fiscal year ended September
    30, 2018 increased by $120,800, primarily due to us opening PEER Centers in New York and Washington DC. Additional costs were
    incurred for rent and office supplies.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>General and administrative Expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: justify">General and Administrative Expenses</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">7,737,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">4,590,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">3,146,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">General and administrative
expenses consist of payroll and benefit costs, (including stock based compensation), legal fees, patent costs, other professional
and consulting fees, general administrative and occupancy costs, dues and subscriptions, conference fees, and travel expenses
as set forth below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid">Key Expense Categories</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 0.2in; font-size: 10pt; text-align: left">(1)</TD><TD STYLE="width: 0.05in; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Salaries and benefit costs</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">3,198,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">2,451,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">746,900</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Transaction fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">438,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">438,600</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Consulting fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,178,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">590,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">588,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Legal fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">437,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">408,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">29,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(5)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Other professional fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">502,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">210,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">291,900</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(6)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Patent costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">105,700</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">114,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(8,800</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(7)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Marketing and investor relations costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">374,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">173,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">201,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(8)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Conference and travel costs</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">131,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">172,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(40,500</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(9)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Dues &amp; subscriptions fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">218,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">115,300</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">103,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">(10)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Computer &amp; web services</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">157,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">157,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">(11)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">General admin and occupancy costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">993,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">354,200</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">639,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Total General and Administrative Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">7,737,600</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">4,590,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">3,146,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries and benefit expenses for the fiscal year ended September
    30, 2018 increased by $746,900 from the 2017 period. This increase was primarily due to an increase of $680,000 in salaries
    which were related to the acquisition of Arcadian telepsychiatry management and staff; increased payroll, bonus and related
    benefits of $142,000 related to our historical operations, offset by a decreased in stock-based compensation of $50,000;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Transaction fees in relation to Arcadian acquisition were $438,600
    for the fiscal year ended September 30, 2018;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consulting fees for the fiscal year ended September 30, 2018
    increased by $588,700, primarily due to increased directors&rsquo; fees, and related operational and consulting fees;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Legal fees for the fiscal year ended September 30, 2018 increased
    by $29,000, primarily due to increased legal fees associated with fund raising activities and general legal costs;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(5)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Other professional fees for the fiscal year ended September
    30, 2018 increased by $291,900, primarily due to increased audit fees of $218,000, and other consulting fees;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(6)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Patent costs for the fiscal year ended September 30, 2018 decreased
    by $8,800 primarily due to less volume of patent and trademark applications and maintenance costs;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(7)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Marketing and investor relations costs for the fiscal year ended
    September 30, 2018 increased by $201,300 as we engaged a public relations firms to enhance our presence in the media;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(8)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Conference and travel costs decreased by $40,500 for the fiscal
    year ended September 30, 2018, primarily due to a reduction in the number of conferences attended and less travel;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(9)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Dues and subscription costs for the fiscal year ended September
    30, 2018 increased by $103,000 for additional licenses for our Salesforce platform;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(10)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Computer and web services increased by $157,100 for the fiscal
    year ended September 30, 2018 consisting of CTO services related to our telepsychiatry business and cloud hosting fees; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">(11)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">General administrative and occupancy costs increased by $639,600
    for the fiscal year ended September 30, 2018. The increase was primarily due to increased Delaware franchise taxes at $236,000,
    increased depreciation of fixed assets and amortization of intangible asset purchased.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Other income (expense)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: justify">Interest (expense), net</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(86,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(6,600</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(79,700</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Interest expense for
the fiscal year ended September 30, 2018 increased by $79,700, primarily due to the interest expense associated with debt acquired
with the Arcadian acquisition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Net Loss</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: center">Fiscal Year
    ended<BR>
    September 30,</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-size: 10pt; text-align: justify">Net Loss</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(10,333,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(7,112,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">(3,220,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our net loss was $10.3
million for the fiscal year ended September 30, 2018, compared to the approximately $7.1 million for the same period ended September
30, 2017, primarily due to above mentioned increased salaries, payroll, and cost related to the acquisition of Arcadian telepsychiatry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Liquidity and Capital Resources</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our condensed consolidated
financial statements have been prepared in conformity with U.S. generally accepted accounting principles (&ldquo;GAAP&rdquo;),
which contemplate continuation of us as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 33pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since our inception,
we have never been profitable and we have generated significant losses. We have a limited operating history and its operations
are subject to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered
in the operation of a business with a limited operating history. These risks include the ability to obtain adequate financing
on a timely basis, if at all, the failure to develop or supply technology or services to meet the demands of the marketplace,
the failure to attract and retain qualified personnel, competition within the industry, government regulation and the general
strength of regional and national economies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 33pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019,
we had an accumulated deficit of approximately $89.8 million compared to our accumulated deficit as of September 30, 2018, of
approximately $85.2 million. Our management expects that with our proposed clinical trials, sales and marketing and general and
administrative costs, our expenditures will continue to grow and, as a result, we will need to generate significant product revenues
to achieve profitability. We continue to explore additional sources of capital but there is substantial doubt as to whether any
financing arrangement will be available in amounts and on terms acceptable to us to permit it to continue operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 33pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019,
we had $1.2 million in cash and cash equivalents and a working capital deficit of approximately $352,500. This is compared to
our cash position of $3.3 million as of September 30, 2018 and working capital of $2.3 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of September 30,
2018, we had an accumulated deficit of approximately $85.2 million compared to our accumulated deficit as of September 30, 2017,
of approximately $75.6 million. Our management expects that with our proposed clinical trials, sales and marketing and general
and administrative costs, our expenditures will continue to grow and, as a result, we will need to generate significant product
revenues to achieve profitability. We continue to explore additional sources of capital but there is substantial doubt as to whether
any financing arrangement will be available in amounts and on terms acceptable to us to permit it to continue operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As September 30, 2018,
we had $3.3 million in cash and cash equivalents and a working capital surplus of approximately $2.3 million. This is compared
to our cash position of $5.4 million in cash and cash equivalents as of September 30, 2017, and a capital surplus of $4.1 million.
The decrease in cash and cash equivalents was primarily due to less proceeds from financing activities and increased cash used
in operations in 2018 compared to 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have been funded
through multiple rounds of private placements, primarily from members of our Board or our affiliates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Working Capital, Going Concern, Operating
Capital and Capital Expenditure Requirements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019,
we had approximately $1.2 million in cash and cash equivalents, compared to $3.3 million of cash and cash equivalents as of September
30, 2018. We had approximately $3.3 million in cash and cash equivalents as of September 30, 2018, compared to $5.4 million of
cash and cash equivalents as of September 30, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our recurring net
losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. Management&rsquo;s
assessment of substantial doubt of going concern is based on current estimates and assumptions regarding our programs and business
needs. Actual working capital requirements could differ materially from the above working capital projection. We may explore strategic
opportunities including partnerships, licensing and acquisitions of other entities, assets or products. If we are unable to continue
to identify sources of capital, we may be required to limit our activities, to terminate programs or terminate operations temporarily
or permanently.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our ability to successfully
raise sufficient funds through the sale of equity securities, when needed, is subject to many risks and uncertainties and even
if we are successful, future equity issuances would result in dilution to our existing stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The amount of capital
we will need to conduct our operations and the time at which we will require such capital may vary significantly depending upon
a number of factors, such as:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the amount and timing of costs we incur in connection with our
    clinical trials and product development activities, including enhancements to our PEER Online database and costs we incur
    to further validate the efficacy of our technology;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">whether we can receive sufficient business revenues from Arcadian
    to adequately cover our costs;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the amount and timing of costs we incur in connection with the
    expansion of our commercial operations, including our sales and marketing efforts;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">whether we incur additional consulting and legal fees in our
    efforts in conducting Non-Significant Risk trials within FDA requirements, which will enable us to obtain a 510(k) clearance
    from the FDA;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">if we expand our business by acquiring or investing in complimentary
    businesses; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">our continuing access to funding from Aspire Capital.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Sources of Liquidity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Since our inception,
substantially all of our operations have been financed from equity and debt financings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The Aspire Capital Equity Lines of
Credit</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 6, 2016,
MYnd, entered into a common stock purchase agreement (the &ldquo;First Purchase Agreement&rdquo;) with Aspire Capital which provided
that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase
up to an aggregate of $10.0 million of shares of our common stock over the 30-month term of the First Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From April 3, 2018
to May 7, 2018 MYnd sold 1,180,000 shares of common stock to Aspire Capital under the First Purchase Agreement and received total
proceeds of $2.4 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 15, 2018, MYnd
entered into the Second Purchase Agreement with Aspire Capital which provides that, upon the terms and subject to the conditions
and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of MYnd&rsquo;s
common stock over the 30-month term of the Second Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From May 15, 2018
to March 31, 2019, MYnd sold 2,200,100 shares of common stock to Aspire Capital under the Second Purchase Agreement and received
total proceeds of approximately $3.7 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Public Offering</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 33pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In July 2017, MYnd
completed an underwritten public offering of its Common Stock and warrants, raising gross proceeds of approximately $8.79 million.
In the offering, MYnd sold 1,675,000 shares of Common Stock and accompanying warrants to purchase up to 1,675,000 shares of Common
Stock (the &ldquo;Warrants&rdquo;), at a combined public offering price of $5.25 per share and accompanying Warrant, for a total
offering size of $8,793,750. The Warrants were immediately exercisable for one share of Common Stock at an exercise price of $5.25
per share, and will expire five years after the issuance date. In connection with the offering, MYnd granted the representative
of the underwriters a 45-day option to purchase up to 251,250 additional shares of Common Stock and/or Warrants to cover over-allotments,
if any. On August 24, 2017 the underwriters exercised their option and purchased 213,800 common stock warrants for $0.01 per warrant.
The warrants were immediately exercisable for one share of common stock at an exercise price of $5.25 per share, subject to adjustments,
and will expire five years after the issuance date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Private Placement of Series A Preferred Stock with Warrant</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 29, 2018,
MYnd sold an aggregate of 1,050,000 units for $2.00 per Unit, each consisting of one share of newly-designated Series A Preferred
Stock, par value $0.001 per share and one Warrant to purchase one share of Common Stock, par value $0.001 per share for $2.34
per share in a private placement to three of our affiliates, for gross proceeds of $2.1 million. The private placement closed
on March 29, 2018. The closing price per share of the Common Stock on the Nasdaq on March 29, 2018 was $1.19 per share. All of
these shares of preferred stock were exchange for shares of Telemynd preferred stock on July 16, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 30, 2018,
MYnd entered into the First Amended Subscription Agreement for Shares of Series A Preferred Stock and Common Stock Purchase Warrants
(the &ldquo;Amended Agreement&rdquo;) with John Pappajohn and Mary Pappajohn (each an &ldquo;Investor&rdquo;, and collectively
the &ldquo;Investors&rdquo;), which provides for the issuance, as of the date of the Original Agreement, of an aggregate of 500,000
Shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share (&ldquo;Series A-1 Convertible Preferred Stock&rdquo;),
in lieu of the same number of Shares of Series A Convertible Preferred Stock that we had originally agreed to issue to the Investors.
The Series A-1 Convertible Preferred Stock will have substantially the same rights and preferences as the Shares of Series A Preferred
Stock, except that the Shares of Series A-1 Convertible Preferred Stock are non-voting and cannot be converted into Common Stock
by an Investor if, as a result of such conversion, such Investor would beneficially own greater than 19.9% of the outstanding
shares of Common Stock. Additionally, the Warrants were amended to provide that they would not be exercisable by an Investor if,
following any such exercise, such Investor would beneficially own greater than 19.9% of the outstanding shares of Common Stock.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Shares of MYnd&rsquo;s
Series A and Series A-1 Preferred Stock will be entitled to receive cash dividends at the rate of five percent (5.00%) of the
Original Series A and Series A-1 Issue Price per annum, payable out of funds legally available therefor. Dividends will only payable
when and if declared or upon certain events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Warrants will
be exercisable for a period of five years for an exercise price of $2.34. The exercise price is subject to adjustment for stock
splits, stock dividends, combinations or similar events. The Warrants may not be exercised on a cashless basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">On September 21, 2018,
MYnd entered into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman,
as well as John Pappajohn, and Peter Unanue, each a director of us, and entities affiliated with Michal Votruba, a member of the
Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private
placement (the &ldquo;September Private Placement&rdquo;) of an aggregate of 459,458 units for $1.85 per unit, with each unit
consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00
per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Cash Flows</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net cash used in operating
activities was $3.8 million for the six months ended Mach 31, 2019, compared to $4.7 million for the same period in 2018. The
approximate $0.9 million net decrease in cash used for operations was primarily due to an increase in accounts payable of $0.4
million and increased stock based compensation of $0.2 million. Net cash used in operating activities was approximately $9.0 million
for the fiscal year ended September 30, 2018, compared to approximately $4.8 million for the same period in 2017. The $4.2 million
net increase in cash used for operations was primarily due to: consulting fees increased by approximately $1.1 million, salaries
increased by $1.0 million, marketing and investor relations increased by $0.3 million, and transaction cost of $0.4 million, the
remaining relates to other operating costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the six months
ended March 31, 2019, we used $9,100 in investing activities related to the purchase of furniture and equipment. During the six
months ended March 31, 2018, we used $361,800 in investing activities, including $55,200 for the purchase of office equipment
and $306,600 related to the acquisition of Arcadian. During the fiscal year ended September 30, 2018, we spent approximately $0.4
million in investing activities, including $55,200 for the purchase of office equipment and $306,600 related to the acquisition
of Arcadian Services. During the fiscal year ended September 30, 2017, we spent $479,500 in investing activities, including $127,900
in the purchase of computer equipment and expenditures on our Patient Reported Outcomes application and $190,000 investment in
Arcadian.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net Cash provided
by financing activities for the six months ended March 31, 2019 was $1.8 million, consisting of $1.8 million of gross proceeds
received from Aspire purchase, offset by $17,500 repayments on notes payable and $600 repayments on a capital lease.Net Cash used
in financing activities for the six months ended March 31, 2018 was approximately $2.1 million, consisting of $2.1 million in
gross proceeds received from Aspire purchase offset by $34,100 repayments on notes payable and $600 repayments on a capital lease.
Net Cash provided by financing activities for the fiscal year September 30, 2018 were approximately $7.2 million, consisting of
$2.0 million of net proceeds received from private placements of equity from three accredited investors, who are affiliated us;
$0.9 million proceeds received from issuance of common stock; and $4.3 million gross proceeds from issuance purchase notices to
Aspire Capital. Net Cash provided by financing activities for the fiscal year ended September 30, 2017 were approximately $10.4
million. In July 2017, we completed an underwritten public offering of its Common Stock and warrants, raising net proceeds of
approximately $7.5 million; $3.0 million cash proceeds received from private placements of equity from 13 accredited investors,
of which five are affiliated with us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Off-Balance Sheet Arrangements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have no off-balance
sheet arrangements or financing activities with special purpose entities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Contractual Obligations and Commercial
Commitments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Lease Commitments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are is a party
to four leases, three are for office space located in Mission Viejo and Laguna Hills, California which house the corporate headquarters
and neurometric business. The total lease payments per month are $10,666. The two leases for office space located in Mission Viejo
and Laguna Hills have been renewed through February 28, 2020 and the total lease payments per month will be $8,411 beginning on
February 1, 2019. As of November 30, 2018 the third lease for a small annex office in Laguna Hills has been terminated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have one three-year
lease for office space in Tysons, Virginia. As of June 1, 2018, we have sublet the premises under the Tysons, Virginia office
space lease. The master lease period expires on September 30, 2020. The rent through September 30, 2018 was prorated at $2,508;
for the subsequent 12 months the rent is prorated at $2,576; and for the remaining twelve months the rent will be prorated at
$2,647. The subtenant is paying approximately seventy seven percent of the master lease payment for the fourteen months ending
on September 30, 2019 and has an option to renew for the final lease year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 30, 2018
we terminated its month to month tenancy for the premises located at 420 Lexington Avenue, Suite 300, New York, New York 10170.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Arcadian Services&rsquo;
business has office space located in Fort Washington, PA. The lease period expires on February 28, 2020. The rent is currently
$3,312 and will increase to $3,410 on March 1, 2019 for the remainder of the lease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Contractual Obligations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
summarizes our commitments to settle contractual obligations as of September 30, 2018:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Contractual Obligations</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font-size: 10pt; text-align: justify">Debt obligations (1)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">810,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">810,100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Operating lease obligations (2)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">114,000</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">48,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">162,800</TD><TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">114,000</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">48,800</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">810,100</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">972,900</TD><TD STYLE="padding-bottom: 4pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Debt obligations include the principal amount of the note payable
    owed to Ben Franklin Technology Partners of Southeastern Pennsylvania, as well as interest payments to be made under the note
    payable. The note payable matures in 2021. Please see Note 4 of the notes to our consolidated financial statements for more
    information of the terms of the notes payable. The debt obligation balance excludes $112,300 of debt discount on our balance
    sheet and shown net of our debt obligations.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Operating leases include total future minimum rent payments
    under non-cancelable operating lease agreements as described in note 11 of our consolidated financial statements included
    in this Information Statement</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-transform: uppercase; text-align: center"><A NAME="a_014"></A>OUR
BUSINESS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>We were incorporated
in Delaware on March 18, 2019 as Telemynd, Inc. for the purpose of holding MYnd&rsquo;s business, assets and liabilities in connection
with the Separation and Distribution described above. Prior to the contribution of the business, assets and liabilities of MYnd,
which occurred as a result of the Separation on July 16, 2019, we had no operations. The description of our business below describes
the Business, which is the Business transferred to us in the Spin-off.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Introduction</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are a technology
enabled behavioral health company. Our solutions are designed to improve access to care through telemedicine and assist clinicians
with the development of personalized treatment plans through a proprietary, artificial intelligence platform with a goal of improving
behavioral health outcomes while decreasing overall healthcare costs. We employ a clinically validated scalable technology platform
to support personalized care for mental health patients. We utilize our patented machine learning, artificial intelligence, data
analytics platform for the delivery of telebehavioral health services and its PEER predictive analytics product offering. Our
subsidiary Arcadian Telepsychiatry Services LLC (&ldquo;Arcadian&rdquo;) manages the delivery of telepsychiatry and telebehavioral
health services through a nationwide network of licensed and credentialed psychiatrists, psychologists and master&rsquo;s-level
therapists. We are commercializing its PEER predictive analytics tool to help physicians reduce trial and error treatment in mental
health. Our patented, clinically validated technology platform (&ldquo;PEER Online&rdquo;) utilizes complex algorithms to analyze
electroencephalograms (&ldquo;EEGs&rdquo;) to generate Psychiatric EEG Evaluation Registry (&ldquo;PEER&rdquo;) Reports to predict
individual responses to a range of medications prescribed for the treatment of behavioral disorders including depression, anxiety,
bipolar disorder, post-traumatic stress disorder (&ldquo;PTSD&rdquo;) and other non-psychotic disorders. The PEER Online solutions
database consists of over 11,000 patient EEGs and 40,000 correlated outcomes. Machine Learning techniques are used to create an
algorithm that can predict what behavioral health medications will work best for a patient based on their own EEG scan. Clinical
studies have shown that patients under the care of a clinicians using the PEER Report have a 144% improvement in depression scores
and a 75% reduction in suicidality.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>3</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We entered into an
equity purchase agreement (the &ldquo;Agreement&rdquo;) with Arcadian and Mr. Robert Plotkin, pursuant to which we acquired all
of the issued and outstanding membership interests (the &ldquo;Equity Interests&rdquo;) of Arcadian from Mr. Plotkin. In consideration
for the Equity Interests, we entered into an employment agreement with Mr. Plotkin, pursuant to which we will continue to employ
Mr. Plotkin as the CEO of Arcadian for an annual salary of $215,000, and granted him 35,000 options to purchase MYnd common stock.
In addition, the we entered into the Guaranty (as described below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
the Agreement, Arcadian entered into the Side Agreement and Seed Capital Amendment with Ben Franklin Technology Partners of Southeastern
Pennsylvania (&ldquo;BFTP&rdquo;), pursuant to which BFTP waived its rights (a) to an equity conversion contemplated by the existing
funding agreements (as they may be amended, supplemented or otherwise modified from time to time, the &ldquo;BFTP Loan Documents&rdquo;)
between Arcadian and BFTP, under which BFTP has loaned Arcadian, as of August 31, 2017, the aggregate principal amount of $700,000
and upon which an aggregate of $85,496 of interest had then accrued (collectively, the &ldquo;Loan Amount&rdquo;) and (b) to act
as an observer to Arcadian&rsquo;s board. Under the Side Agreement and Seed Capital Amendment, Arcadian acknowledged and reaffirmed
all of BFTP&rsquo;s claims, encumbrances granted by Arcadian to BFTP, and BFTP&rsquo;s other rights, interests and remedies pursuant
to the BFTP Loan Documents and otherwise. The effectiveness of the Side Agreement and Seed Capital Amendment are conditioned upon
(i) Arcadian making a one-time payment to BFTP of $175,000 as payment for the redemption and cancellation of two warrants to purchase
equity interests in Arcadian and (ii) our entering into a guaranty with respect to Arcadian&rsquo;s obligations (including the
Loan Amount) to BFTP under the BFTP Loan Documents, as amended by the Side Agreement and Seed Capital Amendment. Upon satisfaction
of the foregoing conditions, the aforementioned BFTP rights will be waived and the BFTP warrants will be cancelled. The Side Agreement
and Seed Capital Amendment further provide that following the closing of the transactions contemplated by the Agreement, we will
be obligated to complete all financial reporting to BFTP required under the BFTP Loan Documents. These agreements were assigned
to Telemynd in connection with the Spin-off.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><SUP>3</SUP></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Iosifescu
                                         DV, Neborsky RJ, Valuck RJ. The use of the psychiatric electroencephalography evaluation
                                         registry (PEER) to personalize pharmacotherapy. Neuropsychiatr Dis Treat 2016;12:2131&ndash;2142.</FONT></TD>
</TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we executed
an absolute, unconditional, irrevocable and continuing guaranty and suretyship (the &ldquo;Guaranty&rdquo;) in favor of BFTP,
pursuant to which it unconditionally guaranteed the prompt payment and performance, when due, of all loans (including the Loan
Amount), advances, debts, liabilities, obligations, covenants and duties owing by Arcadian to BFTP under the BFTP Loan Documents.
Under the Guaranty, if Arcadian defaults under any obligation under the BFTP Loan Documents, we will be required to pay the amount
then due to BFTP. The Guaranty contains representations, warranties, covenants, conditions, events of default and indemnities
that are customary for agreements of this type. The guaranty was assigned to Telemynd in connection with the Spin-off.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Market for Telebehavioral Health
and Predictive Healthcare</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Telebehavioral health
services involve the use of video conferencing equipment to conduct real time mental health consultations between a clinician
and patient including individuals living in underserved areas or those with limited access to services. Over eighty-nine million
Americans live in federally designated Mental Health Professional Shortage Areas. Two-thirds of US primary care physicians report
not having adequate access to psychiatric care for their patients. Arcadian facilitates on-demand telebehavioral health services
to expedite assessment, diagnosis, treatment, and disposition of patients in a wide variety of settings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Analysts have identified
predictive healthcare as one of the fastest-growing markets in healthcare, particularly, healthcare startups using advanced machine
learning algorithms for medical imaging and diagnostics, remote patient monitoring, and risk prediction. The global healthcare
analytics market is expected to reach USD $42.8 billion by 2024, and the global market for behavioral and mental health software,
and services is expected to grow at 11.8% CAGR and reach $4.3 billion by 2025, according to reports by Grand View Research, Inc.
Efforts to reduce the spiraling healthcare costs are facilitating the usage of healthcare analytics. Additionally, the benefits
of healthcare analytics include the improvement of patient access to customized care, the furthering of transparent operations
to enable better public oversight, and innovation in patient care delivery and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Challenge and the Opportunity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The American Psychiatric
Association estimates that between $26 billion and $48 billion could be saved annually through effective integration of medical
and behavioral health services. Traditional in-person patient encounters for behavioral health are hampered by relative shortages
of behavioral health clinicians, especially in areas of the country where there is the greatest need. Arcadian&rsquo;s customers
are payers, health plans, Employee Assistance Programs (&ldquo;EAPs&rdquo;), and provider groups. There is a lack of clinical
resources available to the substantial number of people in the United States who are suffering from a mental health condition,
resulting in less than our current estimate of less than half of them receiving treatment. Patients fortunate enough to receive
treatment are estimated to experience a low remission rate, due to the &lsquo;trial and error&rsquo; prescribing process to find
an effective drug treatment. With the benefit of the Telemynd technology platform, Arcadian is positioned to capitalize on the
need for behavioral health services, overcoming gaps in care access, while supporting healthcare organizations nationwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Psychotropic medications
have become the dominant treatment for mild to severe behavioral disorders with greater than 400% growth in the prescription of
antidepressant medications over the last two decades. However, recent research has emerged challenging the assumption of efficacy
of strategies for prescribing psychotropic medications for the treatment of mild to severe behavioral disorders, finding that
these medications often do not work or lose their efficacy over time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently, due to
the lack of objective neurophysiological data available to physicians of brain function, physicians regularly make prescribing
decisions based on incomplete symptomatic factors. To address this unmet medical need, we offer our PEER Online technology to
analyze an individual&rsquo;s digital Quantitative EEG (&ldquo;QEEG&rdquo;), correlating the individual&rsquo;s QEEG features
with medication outcomes in our proprietary database of over 11,000 unique patients to predict the efficacy of psychotropic medications
by class and individual medication. The output of this analysis - the PEER Report - has been used as adjunctive information by
physicians for over a decade on patients suffering from behavioral disorders including depression, anxiety disorders, obsessive-compulsive
disorder (&ldquo;OCD&rdquo;), bipolar disorder, PTSD, addiction and eating disorders, including anorexia.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Mental Health
Parity and Addiction Equity Act (MHPAEA) requires health plans to ensure parity between medical/surgical benefits and mental health/substance
use disorder (MH/SUD) benefits. Specifically, plans must offer parity in both numerical or &ldquo;quantitative&rdquo; financial
requirements or treatment limits (e.g., cost sharing and day or visit limits) and &ldquo;non-quantitative&rdquo; treatment limits.
This legislation drove a substantial increase in reimbursement transparency: plan administrators must now provide detailed criteria
for medical necessity determinations relating to MH/SUD, including prior authorization requirements, determinations that a treatment
is experimental, methods for reimbursing providers, step-therapy programs, and restrictions based on geographic location or facility
type.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, key conditions
of the 21st Century Cures Act have recently required the Departments of Labor, Treasury, and Health and Human Services to strengthen
their enforcement of the MHPAEA, requiring audits and enforcement actions for any health insurer or group health plan that has
violated MHPAEA at least five times.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Milliman Global Actuaries
recently released a report on mental health utilization from 2008-13, the period in which the initial Parity regulations were
implemented. For commercial health plans, outpatient visits increased by 19.5% for mental health care compared to only 2% for
medical-surgical treatments; professional services increased by 9.1% for mental health versus 3.1% for medical-surgical care.
In summary, the practical effect of these regulations is that mental health care visits have increased significantly, and we believe
that current procedures with existing reimbursement codes such as EEG will be increasingly reimbursed by payers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Arcadian Telepsychiatry Services LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Arcadian Telepsychiatry
Services LLC, our wholly owned subsidiary, manages the delivery of telebehavioral health services through a multi-state network
of licensed and credentialed psychiatrists, psychologists and other behavioral health therapists (&ldquo;Providers&rdquo;). Although
many companies provide broad telehealth services within the U.S., only a few companies have a primary focus on telepsychiatry
and telebehavioral health. Arcadian&rsquo;s business model is unique, because it has access to a broad network of licensed behavioral
health professionals exclusively focused on telepsychiatry and telebehavioral health. These Providers collectively offer a full
suite of behavioral health and wellness services, including short-term (urgent), medium-term (rehabilitation) and long-term (management)
behavioral care.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Arcadian&rsquo;s telehealth
service delivery model is optimized to deliver behavioral health care anytime and anywhere, offering unprecedented access to behavioral
health services. All technology for scheduling and videoconferencing is accessible through a secure portal, creating a seamless
experience for the patient, referring physician, and Arcadian provider. The Providers&rsquo; services include initial and follow-up
psychiatric evaluations and diagnoses, medication prescribing and monitoring, urgent on-call evaluations, forensic and legal evaluations,
individual and family counseling (<I>e.g</I>., grief, behavior problems, job loss) and drug and alcohol abuse rehabilitation counseling.
Arcadian also arranges for services through Employee Assistance Programs (teleEAP) that many employers include as part of their
employee benefits packages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Arcadian contracts
for most of its Providers&rsquo; services through contracts (each a &ldquo;Service Agreement&rdquo;) with the Providers. Neither
we nor Arcadian has an ownership interest in any Provider, nor any employment relationships with any Provider. All Providers are
required to maintain proper state licensing, credentialing and malpractice insurance. In a typical Service Agreement, Arcadian
provides certain management and administrative services in support of the Providers&rsquo; non-medical functions and the Providers
provide telebehavioral health services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Arcadian and its Providers
currently have contracts with 32 insurance companies, human capital management corporations (<I>i.e</I>., EAP benefits), outpatient
diagnostic and treatment centers, drug and alcohol rehabilitation centers (outpatient and residential), community behavioral health
clinics, treatment and rehabilitation centers, corrections facilities, and post-acute care centers. Arcadian is exploring expansion
opportunities by providing services to emergency departments, schools (K-12 and college) and large employers. Arcadian&rsquo;s
contracts span from Pennsylvania to California and North Dakota to Louisiana and Texas.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Commercial Strategy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We plan to drive adoption of
our technology and secure sustained profitability through the following plan:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Continue integration of Arcadian&rsquo;s business into our
    technology platform to enable scalable growth and achieve incremental growth through the integration of our offering with
    the Arcadian network. </B>We are continuing the integration of Arcadian functions that support scheduling, clinical management
    and billing operations with our operating platform to ensure operational efficiency and scalable growth. By doing so, we believe
    we will have a unique platform which both improves access to and efficacy of behavioral health treatments.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">2.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Commercialize PEER through direct marketing to payers, providers
    and patients. </B>Telemynd has implemented a multi-prong strategy to increase patient and provider awareness of the PEER platform
    involving direct sales, social media and call centers.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">3.</FONT></TD>
    <TD STYLE="text-align: justify"><P STYLE="margin: 0pt 0"><B>Continue to pursue military and veterans&rsquo; engagements in
                                    the US and globally.</B> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
                                    to the high visibility of mental and emotional disorders in their organizations, the military
                                    and veterans&rsquo; administration possess the ability to sustain demand and need for intervention.
                                    We intend to continue the pursue relationships with the military of the United States, Canada
                                    and other countries, to improve the condition of those serving and veterans. We have submitted
                                    an application for a federal supply schedule solicitation with the Department of Veterans
                                    Affairs which, if granted, would provide us with a five year General Services Administrative
                                    contract with all agencies of the Federal government. We have commenced a clinical trial with
                                    the Canadian Armed Forces, which will provide both NATO and Health Canada (Canada&rsquo;s
                                    single payer system) experience with our PEER technology. We were awarded a GSA contract on
                                    January 31, 2019 for five years which is being assigned to our MYnd California subsidiary.
                                    It will also increase the size of our data base, and potentially result in PEER being adopted
                                    as a standard of care by Health Canada.</FONT></P>


</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">4.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Identify and implement strategic opportunities to capitalize
    on our technology platform. </B>We anticipate that recognition of the utility of our technology platform will follow with
    increasing market adoption. Accordingly, we will pursue strategic partnerships, licensing and distribution opportunities with
    global enterprise customers who provide electronic medical records, prescribing tools, and other large scale clinical management
    functions. In addition, we may evaluate and pursue other strategic opportunities that could prove to be beneficial to the
    our business.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 41pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PEER Report and PEER Online Database</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><IMG SRC="img001.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A PEER Report is a
personalized report for a patient which is generated after the patient receives an EEG. An EEG is a painless, non-invasive test
that records the brain&rsquo;s electrical activity and provides a basis for comparison against others within the PEER database.
We utilize artificial intelligence, or AI, machine learning and data analytics in order to inform therapeutic regimens, thereby
improving patient outcomes and reducing healthcare costs. The PEER Reports use data from EEG tests, outcomes and machine learning
to identify endophenotypic markers of drug response. This big data approach has allowed us to generate a large clinical registry
and database of predictive algorithms from more than 11,000 unique patients with psychiatric or addictive problems and 40,000
clinical outcomes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The PEER Outcomes
Database consists of physician-provided assessments of the clinical long-term outcomes of patients and their associated medications.
The clinical outcomes of patients are recorded using an industry-standard outcome rating scale, the Clinical Global Impression-Improvement
scale (&ldquo;CGI-I&rdquo;). The CGI-I allows a clinician to rate how much the patient&rsquo;s illness has improved or worsened
relative to a baseline state. A patient&rsquo;s illness is compared to change over time and rated as: very much improved, much
improved, minimally improved, no change, minimally worse, much worse, or very much worse. The format of the data is standardized
and that standard is enforced at the time of capture by a software application. Outcome data is input into the database by the
treating physician or their office staff. Each physician has access to their patient data through the software tool that captures
the clinical outcome data.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We consider the information
contained in the PEER Online database to be a valuable trade secret and are diligent about protecting such information. The PEER
Online database is stored on a secure server to which only a limited number of employees have access.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Competitive Advantages of Our Technology
Platform</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our technologies utilize
what is believed to be the largest database of longitudinal patient outcomes, collected from our subscribing physicians and patients
over more than a decade. Because our data platform &ldquo;learns&rdquo;, it supports physicians in personalizing treatment of
patients. PEER offers practical advantages to physicians and patients, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Scalable and Applicable to Other Services </B>- Our products
    are built on a secure, HIPAA-compliant Force.com platform which is inherently scalable, i.e. services can be ordered and delivered
    to any physician with a web browser. The platform is capable of distributing point-of-care data to physicians for new drugs,
    non-pharmacological treatments, and other findings that are timely and clinically important for clinicians.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="padding-right: 2pt; padding-left: 1pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B>Clinical utility </B>-
    PEER results are available same-day and provide objective, actionable data to support treating physicians.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 2pt; padding-left: 1pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Machine learning </B>- A core attribute of the PEER Registry
    approach is that it &ldquo;learns&rdquo;, using machine learning algorithms to improve the accuracy of recommendations as
    outcomes are added to the database.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Higher Efficacy </B>- Findings presented at the Military
    Health Services Research Symposium in August 2016 included pooled results from all four randomized trials of PEER, with an
    average 47% improvement (mean change from baseline) for PEER-guided treatments, compared to only 16% average improvement in
    the standard of care group. In other words, physicians with PEER information in our study had three times higher medication
    efficacy than physicians treating as usual without the benefit of PEER.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Pharmacogenomics </B>- Currently, we believe that the most
    proven targets for pharmacogenomics are in the liver - a CYP450 drug metabolism - which apply to less than 15% of Americans.
    Conversely, PEER is based on functional brain activity and therefore, is more broadly applicable.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Clinical Results and Independent Validation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">PEER has abundant
literature showing (1) it affects treatment management decisions, (2) the decisions result in &lsquo;strong&rsquo; effects on
established measures of effectiveness (&gt;3- fold more than what has been reported by FDA and Cochrane review groups on effects
of drugs without benefit of PEER), (3) improved quality of life scores, (4) safety comparable to existing treatment regimens,
(5) generalizability to many settings across many types of patients, and (6) substantial cost offsets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the 2017 PEER Report
Dossier prepared by John Hornberger of Cedar Associates LLC and a Stanford Health Policy Adjunct Affiliate it is stated that &ldquo;EEG
is a well-standardized clinical tool that has been used for decades. As such, the processes for ordering and performing EGG are
established and seamless. PEER represents the next logical enhancement, which is to link the automated, quantitative EEG findings
with phenotypes (in this case, with drug response in patients with TRD) using the world&rsquo;s largest clinical repository. The
four randomized trials met the essential criteria of showing that PEER increases response rates; because of the strength of randomization,
it leads to strong inference that the effect found in the studies were authentic, not due to a confounding factor. Also, the effect
was large enough that relatively modest sample were sufficient to demonstrate the effect was very unlikely (less than 1% risk)
of being due to random chance alone. In addition, more than 45 studies have shown the feasibility of a well-validated and useful
EEG-clinical repository platform to work across many settings and for many types of patients with depression. Due to the high
cost of non-response in depression, and the strong effect found in controlled, prospective trials of PEER, use of PEER at its
recommended list price represents a substantial cost-saving opportunity for health plans, especially those facing renewed efforts
by employers and government agencies to provide and document readily more affordable, value-based care.&rdquo;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Marketing and Sales</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We will aggressively
pursue expansion of its Arcadian telebehavioral health and PEER Online solutions with payers and providers. We will grow within
their existing client base while also adding new customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Arcadian solutions will
be marketed and sold to managed care organizations, acute care hospitals, skilled nursing and other post-acute care facilities,
schools, prisons and employers that wish to offer telepsychiatry and teletherapy directly to their employees. We will continue
to build on their success in deploying a &ldquo;virtual psychiatric office&rdquo; within primary care environments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The PEER Online solutions
will be marketed to managed care organizations, large provider groups and individual physicians. We will pursue programs such as
the Horizon Blue Cross Blue Shield pilot where PEER Online is being evaluated as a population health solution that can be effective
in the primary care environment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are uniquely positioned to offer both the Arcadian telebehavioral health and PEER Online as a solution
for primary care organizations. The services and technology can be bundled into a turnkey solution that can become the cornerstone
of a behavioral health program focused on assisting primary care providers with the behavioral health patients under their care.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While the telehealth
market is in an early stage of development, it is competitive, and we expect it to attract increased competition, which could
make it difficult for us to succeed. We currently face competition in the telehealth industry for our solution from a range of
companies, including specialized software and solution providers that offer similar solutions, often at substantially lower prices,
and that are continuing to develop additional products and becoming more sophisticated and effective. Competition from specialized
software and solution providers, health plans and other parties will result in continued pricing pressures, which are likely to
lead to price declines, which, in turn, could negatively impact our sales, profitability and market share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Some of our competitors
may have greater name recognition, including Teladoc, MDLive, Doctor on Demand and American Well, longer operating histories and
significantly greater resources than we do. Further, our current or potential competitors may be acquired by third parties with
greater available resources. As a result, our competitors may be able to respond more quickly and effectively than we can to new
or changing opportunities, technologies, standards or customer requirements and may have the ability to initiate or withstand
substantial price competition. In addition, current and potential competitors have established, and may in the future establish,
cooperative relationships with vendors of complementary products, technologies or services to increase the availability of their
solutions in the marketplace. Accordingly, new competitors or alliances may emerge that have greater market share, a larger customer
base, more widely adopted proprietary technologies, greater marketing expertise, greater financial resources and larger sales
forces than we have, which could put us at a competitive disadvantage. Our competitors could also be better positioned to serve
certain segments of the telehealth market, which could create additional price pressure. In light of these factors, even if our
solution is more effective than those of our competitors, current or potential clients may accept competitive solutions in lieu
of purchasing our solution. If we are unable to successfully compete in the telehealth market, our business, financial condition
and results of operations could be materially adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although we are not
aware of any company that offers a service directly comparable to PEER Online services, several companies having greater financial
and other resources than we have suggested that they may be pursuing similar strategies, including Assurerx, Genomind, Verily,
IBM Corporation and Google. All of these companies have reported developing either a genomic-based test strategy or other AI analysis
of the health metrics to aid treatment.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Intellectual Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We have 20 enforceable
patents, of which five are in the U.S., at least one of which covers the process of using the data presented in our PEER Online
service. Our currently active U.S. patents will expire between November 2020 and April 2023 and cover QEEG (quantitative electrophysiology).
We have been issued patents in the following non U.S. countries and regions: Canada (four patents), Europe (three patents), Australia
(three patents), Mexico (two patents), Japan (two patents) and Israel (one patent). We also have additional patent applications
under examination for our technology in the U.S (three pending applications) and Canada (one pending application).</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">One US patent covers
internet transmission of neurometric information. This is a basic methods patent, patent number 8,239,013, covers remote or web-based
transmission of neurometric data.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During 2009 and 2011,
we were awarded additional process patents for use of PEER Online technology in drug discovery, including clinical trial and drug
efficacy studies. In addition, we successfully defended our patents by requesting reexamination of a patent issued to Aspect Medical
(acquired by Covidien, plc.), resulting in a reduction and narrowing of claims awarded under the previously issued Aspect Medical
patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We filed patent applications
in the U.S., Europeand Canada related to the Company&rsquo;s acquisition of patient responsivity data for Transcranial Magnetic
Stimulation (&ldquo;TMS&rdquo;). The European application has recently been allowed and Canadian application was issued. These
are the Company&rsquo;s first patents for a neurometric predictor of a non-drug therapy. The Company anticipates using this methodology
to help physicians better understand which patients may positively respond to TMS for treating depression. This portfolio is entitled
&ldquo;Method for Assessing the Susceptibility of a Human Individual Suffering from a Psychiatric or Neurological Disorder to Neuromodulation
Treatment.&rdquo;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">TMS is a non-invasive
outpatient procedure that uses magnetic fields to stimulate areas of the brain thought to control mood. TMS is sometimes used
as an alternative treatment for patients who have failed one or more antidepressants for the treatment of depression. While treatment
periods vary by patient, a typical treatment regimen generally involves 20 to 30 treatments over a four to six week period. TMS
responsivity data, which is based on QEEG, helps physicians learn how patients with similar EEG patterns responded to TMS, thereby
enabling them to more effectively guide patients most likely to benefit from this treatment and reduce expenditures on patients
for whom TMS is not likely to be an effective solution for their depression.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;rEEG&rdquo;,
&ldquo;PEER Online&rdquo; (web-based software application), &ldquo;PEER Online&rdquo; (web-based services), and &ldquo;MYnd Analytics&rdquo;
(word mark) are registered trademarks of us in the United States. We will continue to expand our brand names and our proprietary
trademarks worldwide as our operations expand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Government Regulation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Arcadian</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The healthcare industry,
including behavioral healthcare, is extensively regulated at both the state and federal levels. The laws and rules on the practice
of behavioral healthcare and telehealth continue to evolve, and we will devote significant resources to monitoring these developments.
As the applicable laws and rules change, Arcadian must conform its business processes from time to time to be in compliance with
these changes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Provider Licensing,
Corporate Practice Restrictions, Certification and Scope of Practice</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The practice of health
care professions, including the provision of behavioral health services, is subject to various federal, state and local certification
and licensing laws, regulations and approvals, relating to, among other things, the adequacy of health care, the practice of medicine
and other health professions (including the provision of remote care and cross-coverage practice), equipment, personnel, operating
policies and procedures and the prerequisites for prescribing medication. In addition, the provision of health care services through
any kind of clinic, facility, storefront or other location open to the public is often subject to state clinic licensure laws
akin to those that health facilities like hospitals, surgery centers and urgent care clinics must obtain and maintain. We do not
operate or promote any physical place to obtain healthcare and therefore does not believe it is subject to any clinic licensure
requirements, but the application of some of these laws to us and telehealth is unclear and subject to differing interpretation.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many states have enacted
laws and regulations specific to providing services to patients via telehealth. Such laws and regulations include a variety of
requirements relating to, among other things, informed consent, verification of the patient&rsquo;s identity, the establishment
of the patient-provider relationship, and standards of care for the practice of telehealth. . Behavioral health professionals
who provide professional services using telehealth modalities must, in most instances, hold a valid license to practice the applicable
health profession in the state in which the patient is located. In addition, certain states require a physician providing telepsychiatry
to be physically located in the same state as the patient. Arcadian requires each Provider to put in place procedures to ensure
that the Provider is in compliance with all applicable laws and regulations. Nevertheless, any failure to comply with these laws
and regulations could result in civil or criminal penalties against Arcadian.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Corporate Practice;
Fee-Splitting</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Arcadian contracts
with Providers to help make their psychiatric, psychological and other behavioral health services available to customers. In addition,
Arcadian provides a wide range of services to Providers, and the Providers pay Arcadian for those services. These contractual
relationships are subject to various state laws, including those in New York, Texas and California, that prohibit professionals
from sharing a portion of their professional fees with nonprofessionals (<I>i.e</I>., fee-splitting) and prohibit the practice
of medicine or another health profession by lay entities or persons (<I>i.e</I>., corporate practice restrictions) and are intended
to prevent unlicensed persons from interfering with or influencing a professional&rsquo;s judgment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">State corporate practice
and fee-splitting laws vary from state to state and are not consistent among states. In addition, these requirements are subject
to broad powers of interpretation and enforcement by state regulators and the courts and may apply to Arcadian if a Provider is
licensed there. Accordingly, administrative and management services provided by Arcadian to the Providers, such as scheduling,
contracting, setting rates and the hiring and management of clinical personnel, may be considered an element of the practice of
a health profession under certain state corporate practice doctrines. Decisions and activities may be viewed by regulatory authorities
or other parties, including the Providers, as violating these fee-splitting and the corporate practice restrictions. An adverse
finding with respect to fee-splitting and corporate practice restrictions could lead to judicial or administrative action against
Arcadian or its Providers, civil or criminal penalties, receipt of cease and desist orders from state regulators, loss of Provider
licenses, or the need to revise Service Agreements all in ways that may interfere with Arcadian&rsquo;s business, cause other
materially adverse consequences and may cause a substantial disruption to Arcadian&rsquo;s business model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Federal and State
Fraud and Abuse Laws</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Federal and State
Anti-Kickback Statutes</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We must comply with
the federal and state anti-kickback statutes. The federal Anti-Kickback Statute is broadly worded and prohibits the knowing and
willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a
person covered by Medicare, Medicaid or other federal governmental programs, (ii) the furnishing or arranging for the furnishing
of items or services reimbursable under Medicare, Medicaid or other federal governmental programs or (iii) the purchasing, leasing
or ordering or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under Medicare, Medicaid
or other federal governmental programs. Certain federal courts have held that the federal Anti-Kickback Statute can be violated
if &ldquo;one purpose&rdquo; of a payment is to induce referrals. In addition, a person or entity does not need to have actual
knowledge of this statute or specific intent to violate it to have committed a violation, making it easier for the government
to prove that a defendant had the requisite state of mind or &ldquo;scienter&rdquo; required for a violation. Moreover, the government
may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes
a false or fraudulent claim for purposes of the False Claims Act, as discussed below. Violations of the federal Anti-Kickback
Statute may result in exclusion from Medicare, Medicaid or other federal governmental programs as well as civil and criminal penalties,
including fines of $50,000 per violation and three times the amount of the unlawful remuneration. Imposition of any of these remedies
could have a material adverse effect on our business, financial condition and results of operations.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">State anti-kickback
statutes require compliance independent of the federal Anti-Kickback Statute. Some state anti-kickback statutes prohibit the same
conduct as the federal Anti-Kickback Statute, but may apply the prohibition broadly to all payor-reimbursed services, not just
those that are federally funded. Other state anti-kickback statutes are limited to Medicaid services, while still others apply
only to patient referrals and not to actions that involve &ldquo;arranging or recommending&rdquo; healthcare items or services.
Very few state anti-kickback statutes have the extensive safe harbors and regulatory guidance of the federal Anti-Kickback Statute,
making interpretation of the scope of the statutes more uncertain than the federal Anti-Kickback Statute. Like the federal Anti-Kickback
Statute, violations of most state anti-kickback laws are subject to criminal sanctions. Accordingly, we must analyze and ensure
that it complies with state anti-kickback statutes whenever it commences operations in a new state. Any violation of state anti-kickback
laws, therefore, could have a material adverse effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Physician Self-Referral
Laws</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is a federal
physician self-referral prohibition, commonly known as the Stark Law, which prohibits a physician from referring Medicare patients
to an entity providing &ldquo;designated health services&rdquo; if the physician or a member of such physician&rsquo;s immediate
family has a &ldquo;financial relationship&rdquo; with the entity, unless an exception applies. We do not believe our operations,
including those of Arcadian, implicate the Stark Law, because neither we nor Arcadian nor the Providers acting pursuant to the
Services Agreements offer or provide any services that would be considered designated health services under the Stark Law. As
with the anti-kickback laws, however, physician self-referral prohibitions exist at the state level and, like the Stark Law, apply
civil penalties to violations of their terms. These state physician self-referral laws are often similar to the Stark Law, but
may apply to different services than the Stark Law and may have different exceptions. We dos not believe it is noncompliant with
any state physician self-referral laws, but these laws are often vague, subject to amendment and lacking in court precedent or
regulatory guidance. It is possible, therefore, that now or in the future we could be found to be out of compliance with one or
more state physician self-referral laws. Any such noncompliance could have a material adverse effect on our business, financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Federal and State
False Claims Statutes</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Both federal and state
government agencies have continued civil and criminal enforcement efforts as part of numerous ongoing investigations of healthcare
companies and their executives and managers. Although there are a number of civil and criminal statutes that can be applied to
healthcare providers, a significant number of these investigations involve the federal False Claims Act. These investigations
can be initiated not only by the government, but also by a private party asserting direct knowledge of fraud. These &ldquo;qui
tam&rdquo; whistleblower lawsuits may be initiated against any person or entity alleging such person or entity has knowingly or
recklessly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or has
made a false statement or used a false record to get a claim approved. In addition, the improper retention of an overpayment for
60 days or more is also a basis for a False Claim Act action, even if the claim was originally submitted appropriately. Penalties
for False Claims Act violations include fines ranging from $5,500 to $11,000 for each false claim, plus up to three times the
amount of damages sustained by the federal government. A False Claims Act violation may provide the basis for exclusion from government-funded
healthcare programs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, some
states have laws similar to the False Claims Act. The scope of these laws and the interpretations of them vary from state to state
and are enforced by state courts and regulatory authorities, each with broad discretion. Some state false claims laws apply to
claims for health care or services submitted to any third-party payor, including commercial insurers, not just those reimbursed
by a government-funded healthcare program. A determination of liability under such state false claims laws could result in fines
and penalties and restrictions on our ability to operate in these jurisdictions and have a material adverse effect on our business,
financial condition and results of operations.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Other Healthcare
Anti-Fraud Laws</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The federal Health
Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical
Health Act, or HITECH, and their implementing regulations, collectively referred to as HIPAA, established several separate crimes
for making false or fraudulent claims to insurance companies and other governmental payors of healthcare services. Under HIPAA,
these two additional federal crimes are: &ldquo;Healthcare Fraud&rdquo; and &ldquo;False Statements Relating to Healthcare Matters.&rdquo;
The Healthcare Fraud statute, 18 U.S.C. &sect; 1347, prohibits knowingly and willfully executing or attempting to execute a scheme
or artifice to defraud <I>any</I> healthcare benefit program, including private payors, or obtaining by means of false or fraudulent
pretenses, representations or promises any of the money of the healthcare benefit program in connection with the delivery of,
or payment for, healthcare benefits, items or services. A violation of this statute may result in fines, imprisonment or exclusion
from government-sponsored healthcare programs. The False Statements Relating to Healthcare Matters statute, 18 U.S.C. &sect;1035,
prohibits knowingly and willfully falsifying, concealing or covering up a material fact by any trick, scheme or device, making
any materially false, fictitious or fraudulent statement or representation, or making or using any materially false writing or
document knowing that it contains any materially false, fictitious, or fraudulent statement or entry, in connection with the delivery
of or payment for healthcare benefits, items or services. A violation of this statute may result in fines or imprisonment. This
statute could be used by the government to assert criminal liability if a healthcare provider knowingly fails to refund an overpayment.
These provisions target some of the same conduct in the submission of claims to private payors as the federal False Claims Act
covers in connection with governmental health programs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the federal
Civil Monetary Penalties Law imposes civil administrative sanctions for, among other violations, inappropriate billing of services
to federally funded healthcare programs and employing or contracting with individuals or entities who are excluded from participation
in federally funded healthcare programs. Moreover, a person who offers or transfers to a Medicare or Medicaid beneficiary any
remuneration, including waivers of co-payments and deductible amounts (or any part thereof) that the person knows or should know
is likely to influence the beneficiary&rsquo;s selection of a particular provider, practitioner or supplier of Medicare or Medicaid
payable items or services may be liable for civil monetary penalties of up to $10,000 for each wrongful act. Moreover, in certain
cases, providers who routinely waive copayments and deductibles for Medicare and Medicaid beneficiaries can also be held liable
under the federal Anti-Kickback Statute and civil False Claims Act, which can impose additional penalties associated with the
wrongful act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any violation of these
other healthcare fraud laws could have a material adverse effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>State and Federal
Health Information Privacy and Security Laws</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are numerous
U.S. federal and state laws and regulations related to the privacy and security of personally identifiable information, or PII,
including health information. In particular, HIPAA establishes privacy and security standards that limit the use and disclosure
of protected health information, or PHI, and requires the implementation of administrative, physical, and technical safeguards
to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form.
Arcadian&rsquo;s Providers and some of its clients are all regulated as covered entities under HIPAA. Since the effective date
of the HIPAA Omnibus Final Rule on September 23, 2013, HIPAA&rsquo;s requirements are also directly applicable to the independent
contractors, agents and other &ldquo;business associates&rdquo; of covered entities that create, receive, maintain or transmit
PHI in connection with providing services to covered entities. Arcadian is a business associate under these requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Violations of HIPAA
may result in civil and criminal penalties. The civil penalties range from $100 to $50,000 per violation, with a cap of $1.5 million
per year for violations of the same standard during the same calendar year. However, a single breach incident can result in violations
of multiple standards. HIPAA also contains a breach notification rule. Under the breach notification rule, covered entities must
notify affected individuals without unreasonable delay in the case of a breach of unsecured PHI, which may compromise the privacy,
security or integrity of the PHI. In addition, notification must be provided to the HHS and the local media in cases where a breach
affects more than 500 individuals. Breaches affecting fewer than 500 individuals must be reported to HHS on an annual basis. The
regulations also require business associates of covered entities to notify the covered entity of breaches by the business associate.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">State attorneys general
also have the right to prosecute HIPAA violations committed against residents of their states. Although HIPAA does not create
a private right of action that would allow individuals to sue in civil court for a HIPAA violation, its standards have been used
as the basis for the duty of care in state civil suits, such as those for negligence or recklessness in misusing personal information.
In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA covered entities and their business associates
for compliance. It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches
of unsecured PHI may receive a percentage of the Civil Monetary Penalty fine paid by the violator. In light of the HIPAA Omnibus
Final Rule, recent enforcement activity, and statements from HHS, we expect increased federal and state privacy and security enforcement
efforts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many states also have
laws that protect the privacy and security of sensitive and personal information, including health information. These laws may
be similar to or even more protective than HIPAA and other federal privacy laws. Where state laws are more protective than HIPAA,
Arcadian must comply with the state laws, in addition to HIPAA. In certain cases, it may be necessary to modify Arcadian&rsquo;s
planned operations and procedures to comply with these more stringent state laws. Not only may some of these state laws impose
fines and penalties upon violators, but also some, unlike HIPAA, may afford private rights of action to individuals who believe
their personal information has been misused.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to HIPAA,
state health information privacy and state health information privacy laws, Arcadian may be subject to other state and federal
privacy laws, including laws that prohibit unfair privacy and security practices and deceptive statements about privacy and security
and laws that place specific requirements on certain types of activities, such as data security and texting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In recent years, there
have been a number of publicized data breaches involving the improper use and disclosure of PII and PHI. Many states have responded
to these incidents by enacting laws requiring holders of personal information to maintain safeguards and to take certain actions
in response to a data breach, such as providing prompt notification of the breach to affected individuals and state officials.
In addition, under HIPAA and pursuant to the related contracts that we enter into with our business associates, we must report
breaches of unsecured PHI to our contractual partners following discovery of the breach. Notification must also be made in certain
circumstances to affected individuals, federal authorities and others.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any violation of HIPAA
or state privacy laws, therefore, could result in civil or even criminal liability, subject us to significant monetary fines,
require us to restructure our operations and otherwise have a material adverse effect on our business, financial condition and
results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>FDA Regulation</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since April of 2008,
we have been engaged in discussions with the FDA regarding its position that our rEEG service, and potentially its successor,
called PEER Online, constitutes a medical device which is subject to regulation by the FDA. On April 10, 2008, we received correspondence
from the FDA stating the agency&rsquo;s position, based in part on the combination of certain marketing statements FDA observed
on our website, together with the delivery method of our rEEG Reports, that our software product aids clinical diagnosis and,
therefore, constituted a &ldquo;medical device&rdquo; requiring premarket approval (&ldquo;PMA&rdquo;) by or premarket notification
(also known as a &ldquo;510(k) clearance&rdquo;) to the FDA pursuant to the Federal Food, Drug and Cosmetic Act (the &ldquo;Act&rdquo;).
We contested at the time and continue to reject FDA&rsquo;s interpretation of our software.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In early 2010, based
upon written guidance from the FDA&rsquo;s Center for Devices and Radiological Health (the &ldquo;Center&rdquo;), we chose to
submit a premarket notification to obtain 510(k) clearance for our rEEG service&nbsp;. We sought review of our rEEG service based
upon its equivalence to predicate devices that already have FDA clearance which appeared to represent a sound mechanism to reduce
regulatory risks. On July 27, 2010, we received a letter from the FDA stating that they determined that our rEEG service was Not
Substantially Equivalent to the predicate devices that had previously been granted 510(k) clearance and that among other options
we could be required to file a PMA and obtain approval before our rEEG service can be marketed legally, unless FDA reclassifies
our software through the De Novo classification request process or otherwise through a reclassification order pursuant to Section
513(e) of the Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We &nbsp;registered
our facility and listed the PEER Outcome database as a Class I device exempt from premarket notification requirements. We have
continued its engagement with Center staff over the potential for a regulatory pathway for PEER Online as a Class II medical device,
based on the Center&rsquo;s recommendation that military use of PEER Online move forward under an investigational device exemption
(&ldquo;IDE&rdquo;) to provide additional data to support a successful 510(k) application. In August 2012, the FDA reviewed the
study protocol to use our PEER Interactive Product, which is substantially similar to the PEER Online product, and determined
that the Walter Reed PEER Trial was considered a non-significant risk clinical trial and did not require an IDE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We are proceeding with
two additional clinical trials based substantially on the Walter Reed PEER Trial protocol in an effort to replicate and expand
the result achieved during the Walter Reed PEER Trial. One clinical trial with the Canadian Armed Forces commenced enrollment of
patients in August of 2016. A second clinical trial with a large provider group is ongoing with strong participation from all engaged
parties.&nbsp;At this time we cannot predict the results or the success of any of these trials. We can offer no assurances that
the FDA will not insist that we submit a marketing application in the future, or that the data, which will be included in our future
submissions to the FDA, will not raise any important new issues that could materially affect the safety or effectiveness of our
PEER Online product. The inability to enroll sufficient subjects or the receipt of inconclusive results from our new clinical trials
would have a material adverse effect on our ability to expand our operations. We currently intend to continue marketing as a &nbsp;Class
I cloud-based neurometric service branded as PEER Reports, under our current registration and listing with the FDA, while we pursue
the additional clinical trials and consider submission of a 510(k) application in the future.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Employees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of July 16, 2019,
our operation has [twenty&ndash;five] full-time employees. We believe that our relations with our employees are good. None of
our employees belong to a union.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Properties</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our executive offices
are located at 26522 La Alameda, Suite 290, Mission Viejo, CA 92691. We are a party to four leases, three are for office space
located in Mission Viejo and Laguna Hills, California which house the corporate headquarters and neurometric business. The total
lease payments per month are $10,666. The two leases for office space located in Mission Viejo and Laguna Hills have been renewed
through February 28, 2020 and the total lease payments per month will be $8,411 beginning February 1, 2019. As of November 30,
2018, the third lease for a small annex office in Laguna Hills has been terminated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Legal Proceedings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_015"></A>Directors
and Executive Officers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table sets forth the names, ages and positions of our directors and executive officers as
of July 19, 2019. Our directors will serve until our first annual meeting of stockholders. Directors will be elected annually.
&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 25%; text-align: justify; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Name</B></FONT></TD>
    <TD STYLE="width: 1%; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Age</B></FONT></TD>
    <TD STYLE="width: 1%; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 65%; text-align: justify; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Position</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Geoffrey E. Harris</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">56</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Director</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">John Pappajohn</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">90</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Director</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Peter Unanue</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">51</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Director</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Michal Votruba</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">53</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Director</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Patrick Herguth</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">47</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Chief Executive Officer and Director</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Donald D&rsquo;Ambrosio</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">55</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Chief Financial Officer</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Geoffrey E.
Harris</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">George E. Harris was
appointed to our board of directors on March 18, 2019. Mr. Harris is a portfolio manager and managing partner at c7 Advisors,
a money management and healthcare advisory firm focused on small-to-middle market healthcare companies since 2014. Prior
to his position with c7 Advisors, Mr. Harris served as Managing Director and co-head of the Cantor Fitzgerald Healthcare Investment
Banking Group from 2011 to 2014, and was a Healthcare Investment Banker with Gleacher &amp; Company from 2009 to 2011. Mr. Harris
has over thirty years combined experience as a healthcare analyst and portfolio manager for healthcare companies. Mr. Harris graduated
from MIT&rsquo;s Sloan School of Management with an MS in Finance Management. Mr. Harris serves as a director on the boards of
Cancer Genetics, Inc. (NASDAQ: CGIX) a molecular diagnostics company, and two privately held companies, Connect RN, a healthcare
workforce management company, and PointRight, a healthcare data analytics company. Mr. Harris also serves on the Audit Committee
of Cancer Genetics, Inc. Mr. Harris was selected to serve on our Board of Directors for his significant healthcare, finance and
transactional experience. Furthermore, his financial, analytical and audit committee experience make him well suited to Chair
our Audit Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>John Pappajohn</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">John Poppajohn was
appointed to our board of directors on March 18, 2019. Since 1969, Mr. Pappajohn has been the President and sole owner of Pappajohn
Capital Resources, a venture capital firm, and President and sole owner of Equity Dynamics, Inc., a financial consulting firm,
both located in Des Moines, Iowa. Mr. Pappajohn currently serves as Chairman of the Board of Cancer Genetics, Inc. (NASDAQ: CGIX),
a molecular diagnostics company. Mr. Pappajohn was chosen to serve as a director of our company because of his unparalleled experience
serving as a director of more than 40 public companies and the substantial insight he has gained into the life sciences and healthcare
industries by actively investing in the industries for more than 40 years, and by founding and supporting several public healthcare
companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Peter Unanue</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Peter Unanue was appointed
to our board of directors on March 18, 2019. Mr. Unanue has over 25 years of senior business experience, leveraging data and applied
sciences to enhance business operations. Since 1997, Mr. Unanue has been serving as Executive Vice President of Goya Foods, Inc.,
one of the leading food companies in the U.S. with over a billion dollars in annual sales. While at Goya, Mr. Unanue oversaw the
nationwide expansion of the company&rsquo;s facilities, managed distribution and logistics, consolidated redundant operations resulting
in significant cost savings, and led the implementation of new software and technology to streamline and enhance operations and
profitability. Mr. Unanue has held key operational and analytic roles with Merck Medco Health Solutions, Baxter Healthcare and
Growmark, Inc. He currently serves on the boards of the Meadowlands Regional Chamber of Commerce, the Meadowlands Regional &ldquo;2040
Foundation,&rdquo; and is a Council of Regents Member at Felician University and St Thomas Aquinas College. He was also an employer
trustee for a local UFCW Health and Welfare Fund. He is the recipient of numerous awards and is a regular speaker on various topics
including supply chain management. Mr. Unanue holds a Master of Science in operations research from George Washington University
and a Bachelor of Science from St. Thomas Aquinas College. Mr. Unanue was selected to serve on the Board of Directors because of
his years in operations and analytics as well as his previous board experience for other companies.&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Michal Votruba</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Michal Votruba was
appointed to our board of directors on March 18, 2019. Since 2013, Mr. Votruba has been the Director of the Gradus/RSJ Life Sciences
Fund, the largest dedicated fund in Central Europe with a portfolio of companies in Europe and the United States. Since 2010,
he has served as a member of the board of PrimeCell Therapeutics as the Director of Global Business Development overseeing the
expansion of the largest regenerative medicine company operating in Central Europe. In 2009, the Czech Academy of Sciences solicited
Mr. Votruba&rsquo;s expertise for the first successful privatization project of the Institute of Experimental Medicine in Prague:
the newly created protocol established a precedent for future privatization projects in the Czech Republic. Mr. Votruba graduated
as a Clinical Psychiatrist from the Medical Faculty of Charles University in Prague in 1989. Shortly thereafter, he emigrated
from Czechoslovakia and developed his professional career in Canada and the USA. Since 2005, Mr. Votruba combined his theoretical
and clinical experience in the field of Competitive Intelligence serving the global pharmaceutical industry for eight years as
an industry analyst advising senior leaders of companies including Amgen, Novartis, Eli Lilly, Allergan, EMD, Serono and Sanofi.
Mr. Votruba brings valuable expertise to the Board of Directors as a clinical psychiatrist and broad experience in the international
marketing of innovative medical technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Executive Officers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Patrick Herguth,
Chief Executive Officer and Director</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Herguth, has served
as our Chief Executive Officer since March 18, 2019. From December 12, 2018 until the closing of the Merger on July 17, 2019,
Mr. Herguth served as MYnd&rsquo;s Chief Executive Officer. Prior to joining MYnd, Mr. Herguth worked at Q-Centrix, LLC, an outsourced
healthcare outcomes-data provider focused on acute care hospitals, where he most recently served as Chief Operating Officer since
March 2015. From 2007 to 2015, Mr. Herguth held various roles with Avidyne Corporation, including Chief Operating Officer, Chief
Financial Officer and President, where he helped oversee process and efficiency improvements. Mr. Herguth earned an MBA from the
Kellogg Graduate School of Management at Northwestern University and a B.S. in Applied &amp; Engineering Physics from the College
of Engineering at Cornell University.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Donald D&rsquo;Ambrosio,
Chief Financial Officer</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Donald E.
D&rsquo;Ambrosio was appointed as our Chief Financial Officer on June 25, 2019. From March 31, 2017 until the closing of the
Merger on July 17, 2019, Mr. D&rsquo;Ambrosio served as MYnd&rsquo;s Chief Financial Officer. Prior to joining MYnd
Analytics, from 1996 to 2007 Mr. D&rsquo;Ambrosio served as Senior Vice President, Controller and, ultimately, Chief
Financial Officer of BNC Mortgage, Inc. (NASDAQ: BNCM). As BNC&rsquo;s CFO Mr. D&rsquo;Ambrosio played a key role in the
company&rsquo;s IPO, raising $35 million, and its listing on the Nasdaq on March 10, 1998 which was underwritten by CIBC
Oppenheimer and Piper Jaffray, Inc. Subsequently, Mr. D&rsquo;Ambrosio was also intimately involved in taking the company
private through a $52 million management acquisition by Lehman Brothers. Mr. D&rsquo;Ambrosio played a key role in BNC
Mortgage Inc&rsquo;s acquisition of certain assets and liabilities and the origination platform of America&rsquo;s Lender,
Inc. From 2007 through to February 2017 Mr. D&rsquo;Ambrosio founded and built Oxygen Funding, Inc., an asset-based lending
company that specialized in providing working capital to small businesses, where he served as its President, CEO and CFO.
Oxygen Funding grew to fund over $100 million of client receivables. Mr. D&rsquo;Ambrosio was a featured speaker for the
Small Business Association and a writer for the Commercial Factor magazine. Mr. D&rsquo;Ambrosio holds a Bachelor of Business
Administration degree with an emphasis in accounting from Temple University. Mr. D&rsquo;Ambrosio &lsquo;s skills
and experiences as a Chief Financial Officer along with his IPO and Nasdaq up-listing experience make him an asset to us.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Advisors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Robin L. Smith,
MD</B> serves as our special advisor under the terms of a consulting agreement. She has extensive experience
serving in executive and board level capacities for various medical enterprises and health care-based entities. Dr. Smith joined
MYnd&rsquo;s Board of Directors as its Chairman on August 20, 2015 and currently serves as a director of Emmaus Life Sciences,
Inc. (EMMA). Dr. Smith has extensive experience serving in executive and board level capacities for various medical enterprises
and health care-based entities. She recently joined the board of directors of Seelos Therapeutics (NASDAQ: SEEL) and has been a
member of the board of directors of Rockwell Medical (NASDAQ: RMTI) since June 2016. She also serves as president and chairman
of Stem for Life, Cognitive Warriors, and Cura Foundation, and is vice president and a member of the board of directors of the
STOQ Foundation in Rome, Italy. Dr. Smith is co-chairman of the Life Sci advisory board on gender diversity and advisor to Dthera
Sciences. She also serves on Sanford Health&rsquo;s International Board, Alliance for Regenerative Medicine (ARM) Foundation board
and the board of overseers at the NYU Langone Medical Center in New York. She previously served on the board of trustees of the
NYU Langone Medical Center and is the past chairman of the board of directors for the New York University Hospital for Joint Diseases,
BioXcel Corporation and Signal Genetics (NASDAQ: SGNL). She was appointed as clinical associate professor, Department of Medicine
at the Rutgers, New Jersey Medical School in 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Composition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors consists of the following five members: Patrick Herguth, Geoffrey E. Harris, John
Pappajohn, Michal Votruba and Peter Unanue. All members will serve until our next annual meeting or until his or her successor
is duly elected and qualified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_016"></A>CORPORATE
GOVERNANCE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Committees and Director Independence</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board of Directors
has determined that all of its board members are independent directors in accordance with the listing requirements of the Nasdaq
Capital Market. The Nasdaq independence definition includes a series of objective tests, including that the board member is not,
and has not been for at least three years, one of our employees and that neither the board member nor any of his family members
has engaged in various types of business dealings with us. In addition, as required by Nasdaq rules, our board has made a subjective
determination as to each independent director that no relationships exist, which, in the opinion of our board, would interfere
with the exercise of independent judgment in carrying out the responsibilities of a board member. In making these determinations,
our board reviewed and discussed information provided by the members of the board and us with regard to each board member&rsquo;s
business and personal activities and relationships as they may relate to us and our management. There are no family relationships
among any of the members of our board or our executive officers. In addition, all members of the audit committee meet the independence
requirements contemplated by Rule 10A-3 under the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Committees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board has established
an audit committee, a compensation committee and a governance and nominations committee. Each committee has its own charter, which
is available on our website at www.telemynd.com. Information contained on our website is not incorporated herein by reference.
Each of the Board committees has the composition and responsibilities described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Audit Committee</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board has
established a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;). Geoffrey Harris (Chair), John Pappajohn, and Peter Unanue
are the members of the audit committee. The audit committee is composed of members who are &ldquo;independent&rdquo; within
the meaning of Rule 10A-3 under the Exchange Act and the Nasdaq rules. The Board has determined that Mr. Harris serves as the
&ldquo;audit committee financial expert,&rdquo; as such term is defined in Item 407(d)(5) of Regulation S-K. In his roles as
Audit Committee Chair of another public company, as Managing Partner of a money management and healthcare advisory firm, as a
senior investment banker, portfolio manager and health care research analyst, Mr. Harris has gained over 34 years of
experience analyzing the financial statements of public companies, assessing the use of accounting methods employed by those
companies and the financial acumen of their management.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The audit committee
oversees our accounting and financial reporting processes and oversees the audit of our financial statements and the effectiveness
of our internal control over financial reporting. The specific functions of this committee include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">selecting and recommending to our Board of Directors the appointment
    of an independent registered public accounting firm and overseeing the engagement of such firm;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">approving the fees to be paid to the independent registered
    public accounting firm;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">helping to ensure the independence of our independent registered
    public accounting firm;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">overseeing the integrity of our financial statements;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">preparing an audit committee report as required by the SEC to
    be included in our annual proxy statement;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing major changes to our auditing and accounting principles
    and practices as suggested by our company&rsquo;s independent registered public accounting firm, internal auditors (if any)
    or management;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing and approving all related party transactions; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">overseeing our compliance with legal and regulatory requirements.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Compensation Committee</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our compensation committee assists the Board of Directors in the discharge of its responsibilities relating
to the compensation of the Board of Directors and our executive officers. John Pappajohn (Chair), Geoffrey Harris and Michal Vortuba
are the members of our compensation committee. The Board has determined that they are &ldquo;independent&rdquo; within the meaning
of the Nasdaq rules and both members qualify as &ldquo;non-employee directors&rdquo; under Rule 16b-3 of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The committee&rsquo;s
compensation-related responsibilities include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">assisting our Board of Directors in developing and evaluating
    potential candidates for executive positions and overseeing the development of executive succession plans;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing and approving, on an annual basis, the corporate goals
    and objectives with respect to compensation for our chief executive officer;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing, approving and recommending to our Board of Directors
    on an annual basis the evaluation process and compensation structure for our other executive officers;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">providing oversight of management&rsquo;s decisions concerning
    the performance and compensation of other company officers, employees, consultants and advisors;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing our incentive compensation and other stock-based plans
    and recommending changes in such plans to our Board of Directors as needed, and exercising all the authority of our Board
    of Directors with respect to the administration of such plans;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing and recommending to our Board of Directors the compensation
    of independent directors, including incentive and equity-based compensation; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">selecting, retaining and terminating such compensation consultants,
    outside counsel and other advisors as it deems necessary or appropriate.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Governance and Nominations Committee</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The governance and
nominations committee recommends to the Board nominees for election as directors and persons to be elected to fill any vacancies
on the Board, develops and recommends a set of corporate governance principles and oversees the performance of the Board. Michal
Votruba (Chair), Geoffrey Harris and Peter Unanue are the members of our governance and nominations committee. The Board has determined
that the members of the committee are &ldquo;independent&rdquo; within the meaning of the Nasdaq rules.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The committee&rsquo;s
responsibilities include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Selecting director nominees. The governance and nominations
    committee recommends to the Board of Directors nominees for election as directors at any meeting of stockholders and nominees
    to fill vacancies on the Board. The governance and nominations committee considers candidates proposed by stockholders and
    will apply the same criteria and follows substantially the same process in considering such candidates as it does when considering
    other candidates. The governance and nominations committee may adopt, at its discretion, separate procedures regarding director
    candidates proposed by our stockholders. Director recommendations by stockholders must be in writing, include a resume of
    the candidate&rsquo;s business and personal background and include a signed consent that the candidate would be willing to
    be considered as a nominee to the Board and, if elected, would serve. Such recommendation must be sent to our Secretary at
    our executive offices. When it seeks nominees for directors, our governance and nominations committee takes into account a
    variety of factors including (a) ensuring that the Board, as a whole, is diverse and consists of individuals with various
    and relevant career experience, relevant technical skills, industry knowledge and experience, financial expertise (including
    expertise that could qualify a director as a &ldquo;financial expert,&rdquo; as that term is defined by the rules of the SEC),
    local or community ties and (b) minimum individual qualifications, including strength of character, mature judgment, familiarity
    with our business and industry, independence of thought and an ability to work collegially. We are of the view that the continuing
    service of qualified incumbents promotes stability and continuity in the Board room, contributing to the ability of the Board
    of Directors to work as a collective body, while giving us the benefit of the familiarity and insight into our affairs that
    its directors have accumulated during their tenure. Accordingly, the process of the governance and nominations committee for
    identifying nominees reflects our practice of re-nominating incumbent directors who continue to satisfy the committee&rsquo;s
    criteria for membership on the Board of Directors, whom the committee believes continue to make important contributions to
    the Board of Directors and who consent to continue their service on the Board of Directors. The Board has not adopted a formal
    policy with respect to its consideration of diversity and does not follow any ratio or formula to determine the appropriate
    mix; rather, it uses its judgment to identify nominees whose backgrounds, attributes and experiences, taken as a whole, will
    contribute to the high standards of Board service. The governance and nominations committee may adopt, and periodically review
    and revise as it deems appropriate, procedures regarding director candidates proposed by stockholders.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Reviewing requisite skills and criteria for new Board members
    and Board composition. The governance and nominations committee reviews with the entire Board of Directors, on an annual basis,
    the requisite skills and criteria for Board candidates and the composition of the Board as a whole.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Hiring of search firms to identify director nominees. The governance
    and nominations committee has the authority to retain search firms to assist in identifying Board candidates, approve the
    terms of the search firm&rsquo;s engagement, and cause us to pay the engaged search firm&rsquo;s engagement fee.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Selection of committee members. The governance and nominations
    committee recommends to the Board of Directors, on an annual basis, the directors to be appointed to each committee of the
    Board of Directors.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Evaluation of the Board of Directors. The governance and nominations
    committee oversees an annual self-evaluation of the Board of Directors and its committees to determine whether it and its
    committees are functioning effectively.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Development of Corporate Governance Guidelines. The governance
    and nominations committee develops and recommends to the Board a set of corporate governance guidelines applicable to us.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The governance and
nominations committee may delegate any of its responsibilities to subcommittees as it deems appropriate. The governance and nominations
committee is authorized to retain independent legal and other advisors, and conduct or authorize investigations into any matter
within the scope of its duties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Committee Memberships and Meetings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
below sets forth the membership of each Committee:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 28%; text-align: justify"><FONT STYLE="font-size: 10pt"><B>Name of Director</B></FONT></TD>
    <TD STYLE="width: 1%; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 23%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Audit Committee</B></FONT></TD>
    <TD STYLE="width: 1%; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 23%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Compensation<BR>
    Committee</B></FONT></TD>
    <TD STYLE="width: 1%; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 23%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Governance and<BR>
    Nominations</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Geoffrey E. Harris</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Chair</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Member</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Member</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">John Pappajohn</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Member</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Chair</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Michal Votruba</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Member</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Chair</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Peter Unanue</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Member</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Member</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Meetings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the fiscal
year ended September 30, 2018, MYnd&rsquo;s Board held fifteen meetings, the Audit Committee held five meetings, the Compensation
Committee held two meetings, and the Governance and Nominations Committee held two meetings. Each incumbent director attended
75% or more of the total number of meetings of the Board and the Board Committees of which they were a member during the period
they served as a director in fiscal year 2018. Our board of directors has held three meeting since formation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not yet established
a policy with respect to Board members&rsquo; attendance at its annual meetings. All of MYnd&rsquo;s incumbent directors attended
MYnd&rsquo;s annual meeting this year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Oversight of Risk Management</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors
believes that overseeing how management manages the various risks we face is one of its most important responsibilities to our
stakeholders. Our Board believes that, in light of the interrelated nature of our risks, oversight of risk management is ultimately
the responsibility of the full Board; however, it has delegated this responsibility to the audit committee with respect to financial
risk. The audit committee is expected to meet before each quarterly filing on Form 10-Q or the annual filing on Form 10-K with
management and the independent registered public accounting firm to review our major financial risk exposures and the steps taken
to monitor and control such exposures. Our Board meets regularly to discuss the strategic direction and the issues and opportunities
facing our Company. Throughout the year, our Board provides guidance to management regarding our strategy and helps to refine
our plans to implement our strategy. The involvement of the Board in setting our business strategy is critical to the determination
of the types and appropriate levels of risk undertaken by us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Stockholder Communications</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Interested parties
may communicate with any and all members of our Board of Directors by transmitting correspondence addressed to one or more directors
by name at the address appearing on the cover page of this annual report on Form 10-K. Communications from our stockholders to
one or more directors will be collected and organized by our Corporate Secretary and will be forwarded to the Chairman of the
Board of Directors or to the identified director(s) as soon as practicable. If multiple communications are received on a similar
topic, the Corporate Secretary may, at his or her discretion, forward only representative correspondence. The Chairman of the
Board of Directors will determine whether any communication addressed to the entire Board of Directors should be properly addressed
by the entire Board of Directors or a committee thereof. If a communication is sent to the Board of Directors or a Committee,
the Chairman of the Board of Directors or the Chairman of that committee, as the case may be, will determine whether a response
to the communication is warranted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Conflicts of Interest</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are not aware of
any current conflicts of interest between our officers and directors, and us. However, certain potential conflicts of interests
may arise in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From time to time,
one or more of our affiliates may form or hold an ownership interest in and/or manage other businesses both related and unrelated
to the type of business that we own and operate or may own and operate in the future. These persons may continue to form, hold
an ownership interest in and/or manage additional other businesses which may compete with ours with respect to operations, including
financing and marketing, management time and services and potential customers. These activities may give rise to conflicts between
or among our interests and other businesses with which our affiliates are associated. Our affiliates are in no way prohibited
from undertaking such activities, and neither we nor our stockholders will have any right to require participation in such other
activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, because we
may transact business with some of our officers, directors and affiliates, as well as with firms in which some of our officers,
directors or affiliates have a material interest, potential conflicts may arise between the respective interests of us and these
related persons or entities. We believe that such transactions will be effected on terms at least as favorable to us as those
available from unrelated third parties.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_017"></A>EXECUTIVE
AND DIRECTOR COMPENSATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Compensation Structure</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Overview of Compensation Practices</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our executive compensation
program is administered by the compensation committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Compensation
Philosophy</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally, we compensate
our executive officers with a compensation package that is designed to drive Company performance to maximize stockholder value
while meeting our needs and the needs of our executives. The following are objectives we consider:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Alignment &mdash; to align the interests of executives and stockholders
    through equity-based compensation awards;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Retention &mdash; to attract, retain and motivate highly qualified,
    high performing executives to lead our growth and success; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Performance &mdash; to provide, when appropriate, compensation
    that is dependent upon the executive&rsquo;s achievements and our performance.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">In order to achieve the above objectives, our executive compensation
    philosophy is guided by the following principles:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Rewards under incentive plans are based upon our short-term
    and longer-term financial results and increasing stockholder value;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Executive pay is set at sufficiently competitive levels to attract,
    retain and motivate highly talented individuals who are necessary for us to achieve our goals, objectives and overall financial
    success;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Compensation of an executive is based on such individual&rsquo;s
    role, responsibilities, performance and experience; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Our annual performance and the executive are taken into account
    in determining annual bonuses with the goal of fostering a pay-for-performance culture.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Compensation
Elements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We compensate our
executives through a variety of components, which may include a base salary, annual performance-based incentive bonuses, equity
incentives, and benefits and perquisites, in order to provide our executives with a competitive overall compensation package.
The mix and value of these components are impacted by a variety of factors, such as responsibility level, individual negotiations
and performance and market practice. The purpose and key characteristics for each component are described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Base Salary</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Base salary provides
executives with a steady income stream and is based upon the executive&rsquo;s level of responsibility, experience, individual
performance and contributions to our overall success, as well as negotiations between us and such executive officer. Competitive
base salaries, in conjunction with other pay components, enable us to attract and retain talented executives. The Board typically
sets base salaries for our executives at levels that it deems to be competitive, with input from our Chief Executive Officer.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Annual Incentive
Bonuses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Annual incentive bonuses
are a variable performance-based component of compensation. The primary objective of an annual incentive bonus is to reward executives
for achieving corporate and individual goals and to align a portion of total pay opportunities for executives to the attainment
of our Company&rsquo;s performance goals. Annual incentive awards, when provided, act as a means to recognize the contribution
of our executive officers to our overall financial, operational and strategic success.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Equity Incentives</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Equity incentives
are intended to align executive and stockholder interests by linking a portion of executive pay to long-term stockholder value
creation and financial success over a multi-year period. Equity incentives may also be provided to our executives to attract and
enhance the retention of executives and to facilitate stock ownership by our executives. The Board considers individual and Company
performance when determining long-term incentive opportunities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Health and Welfare
Benefits</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The executive officers
participate in health and welfare and paid time-off benefits which we believe are competitive in the marketplace. Health and welfare
and paid time-off benefits help ensure that we have a productive and focused workforce.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Severance and
Change of Control Arrangements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We do not have a formal
plan for severance or separation pay for our employees, but we typically include a severance provision in the employment agreements
of our executive officers that have written employment agreements with us. Generally, such provisions are triggered in the event
of involuntary termination of the executive without cause or in the event of a change in control. Please see the description of
MYnd&rsquo;s employment agreements with Patrick Herguth, George Carpenter and Donald D&rsquo;Ambrosio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain stock option
awards certificates under the 2012 Plan provide that options to grantees shall become fully vested upon a change of control of
us, as defined therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Other Benefits</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to attract
and retain highly qualified executives, we may provide our executive officers with automobile allowances, consistent with current
market practices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Accounting and
Tax Considerations</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We consider the accounting
and tax implications of all aspects of our executive compensation strategy and, so long as doing so does not conflict with our
general performance objectives described above, we strive to achieve the most favorable accounting and tax treatment possible
to us and our executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Process for
Setting Executive Compensation; Factors Considered</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">When making pay determinations
for named executive officers, the Board considers a variety of factors including, among others: (1) actual Company performance
as compared to pre-established goals, (2) individual executive performance and expected contribution to our future success, (3)
changes in economic conditions and the external marketplace, (4) prior years&rsquo; bonuses and long-term incentive awards, and
(5) in the case of executive officers, other than Chief Executive Officer, the recommendation of our Chief Executive Officer,
and in the case of our Chief Executive Officer, his negotiations with our Board. No specific weighting is assigned to these factors
nor are particular targets set for any particular factor. Ultimately, the Board uses its judgment and discretion when determining
how much to pay our executive officers and sets the pay for such executives by element (including cash versus non-cash compensation)
and in the aggregate, at levels that it believes are competitive and necessary to attract and retain talented executives capable
of achieving our long-term objectives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Summary Compensation Table-Fiscal Years
Ended September 30, 2018 and September 30, 2017</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The information included
in the Summary Compensation Table below reflects compensation earned from MYnd during fiscal years ended September 30, 2018 and
2017 by (i) each person serving as MYnd&rsquo;s principal executive officer (&ldquo;PEO&rdquo;) or acting in a similar capacity
during MYnd&rsquo;s fiscal year ended September 30, 2018; (ii) MYnd&rsquo;s two most highly compensated executive officers other
than our PEO who were serving as executive officers on September 30, 2018 and whose total compensation exceeded $100,000 and (iii)
up to two additional individuals for whom disclosure would have been provided under (ii) but for the fact that the individual
was not serving as an executive officer as of September 30, 2018. The persons covered by (i), (ii), and (iii) of the preceding
sentence are collectively referred to as the &ldquo;named executive officers&rdquo; in this section (&ldquo;NEO&rdquo;). All references
in the following tables to equity awards are to equity awards granted by MYnd in respect of MYnd common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The historical compensation
shown below was determined by MYnd. Future compensation levels at will be determined based on the compensation policies, programs
and procedures to be established by our board of directors or the Compensation Committee of the board of directors. Accordingly,
the amounts and forms of compensation reported below are not necessarily indicative of the compensation that our NEOs will receive
following the separation, which could be higher or lower than the amounts shown below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Name and Principal Position</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fiscal Year Ended September&nbsp;30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Salary<BR>
    ($)&nbsp;<SUP>(1)</SUP></B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Bonus<BR>
    ($)&nbsp;<SUP>(2)</SUP></B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Stock
    Awards<BR>
    ($)&nbsp;<SUP>(3)</SUP></B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><FONT STYLE="font-size: 10pt"><B>Option<BR>
    Awards<BR>
    ($)&nbsp;<SUP>(3)/(4)</SUP></B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>All
    Other Compensation<BR>
    ($)&nbsp;<SUP>(5)</SUP></B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total<BR>
    ($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 37%; text-align: left">George C. Carpenter IV</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: center">2018</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">238,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">127,300</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">102,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">468,325</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">(President and Chief Executive Officer)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2017</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">270,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,035</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">316,035</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Donald D&rsquo;Ambrosio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">215,015</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,835</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">288,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">(Chief Financial Officer)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2017</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">117,296</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">104,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,289</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250,185</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Salaries for the fiscal years
ended September 30, 2018 and 2017 which were accrued and paid as follows:</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Mr. Carpenter&rsquo;s salary for fiscal year 2018 and 2017 was $238,125 and $270,000, respectively, all
of which was paid out. Mr. Carpenter ceased being MYnd&rsquo;s Chief Executive Officer on December 12, 2018. Mr. Carpenter is not
an executive officer of Telemynd.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Mr. D&rsquo;Ambrosio&rsquo;s salary for fiscal year 2018 was
    215,015. Pro-rated salary for fiscal year 2017 (based on actual number of days employed) was $117,296. Mr. D&rsquo;Ambrosio
    joined MYnd as its Chief Financial Officer effective March 31, 2017.</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">On September 18, 2017, the Compensation Committee approved cash
    Management Bonuses for Mr. Carpenter and D&rsquo;Ambrosio in the amounts of $25,000 and $20,000 respectively. On March 31,
    2017, the Compensation Committee approved a signing bonus of $8,959 for Mr. D&rsquo;Ambrosio.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">On November 13, 2017, MYnd&rsquo;s Board granted Mr. Carpenter
    to purchase 7,500 shares of Common Stock, vested immediately at $3.96 per share.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On April 19, 2018, MYnd&rsquo;s
Board granted Mr. Carpenter options to purchase 34,380 shares of Common Stock, vesting quarterly at $2.10 per share. As of September
30, 2018, options to purchase 8,595 of such shares are vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On May 25, 2018, MYnd&rsquo;s
Board granted Mr. Carpenter options to purchase 11,205 shares of Common Stock, which options vested immediately at $2.27 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On April 4, 2018, MYnd&rsquo;s
Board granted Mr. Carpenter options to purchase 100,000 shares of Common Stock. 20% of the options vested on the date of grant
and remainder will vest in 8%-10% increments upon the achievement of various performance-based milestones. The options are exercisable
at $1.55 per share. As of September 30, 2018, options to purchase 32,000 of such shares were forfeited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">On November 13, 2017, MYnd&rsquo;s
Board granted Mr. D&rsquo;Ambrosio options to purchase 7,500 shares of Common Stock, which options vested immediately at $3.96
per share.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On April 4, 2018, the Compensation
Committee of MYnd&rsquo;s Board granted options to Mr. D&rsquo;Ambrosio to purchase 18,000 shares of MYnd&rsquo;s common stock,
which will vest in 25% increments upon the achievement of various performance-based milestones. The options are exercisable at
$1.55 per share. As of September 30, 2018, options to purchase 13,500 of such shares are vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On March 14, 2017, Mr. D&rsquo;Ambrosio
was granted an option to purchase 18,000 shares of Common Stock valued at $104,600 using the Black Scholes Model, at an exercise
price of $5.9 per share with options to purchase 15,000 shares vesting in equal monthly installments over 36 months from March
31, 2017, and options to purchase the remaining 3,000 shares vesting upon the achievement of a performance-based metric which
has been met. The vesting of such grants is also subject to acceleration upon the occurrence of certain pre-determined events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Relates to healthcare insurance
premiums and Health Savings Account contributions paid on behalf of executive officers of MYnd for fiscal years 2018 and 2017,
respectively.</FONT></TD>
</TR></TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.25in">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">For Mr. Carpenter health care benefits were $0 and $21,035 for
    fiscal year 2018 and 2017, respectively.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">For Mr. D&rsquo;Ambrosio health care benefits were $16,835 and
    $8,289 for fiscal year 2018 and 2017, respectively.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Narrative Disclosure to Summary Compensation
Table</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Please refer to the
footnotes to the &ldquo;Summary Compensation Table&rdquo; above for a description of the components of &ldquo;Stock Awards&rdquo;
and &ldquo;All Other Compensation&rdquo; received by the named executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Employment Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following are
summaries of employment agreements that we have entered into with respect to our named executive officers. These summaries include,
where applicable, a description of all payments we are required to make to such named executive officers at, following or in connection
with the resignation, retirement or other termination of such named executive officers, or a change in control of us or a change
in the responsibilities of such named executive officers following a change in control.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 15, 2019,
we entered into an employment agreement with Mr. Herguth, (the &ldquo;Herguth Employment Agreement&rdquo;). Pursuant to the Herguth
Employment Agreement, Mr. Herguth will serve as our Chief Executive Officer and devote substantially all his time to us on an
&ldquo;at will&rdquo; basis and will receive a base annual compensation of $340,000, subject to periodic increases (which compensation
will increase to $360,000 on January 1, 2020) and increases within the discretion of our Board of Directors (the &ldquo;Board&rdquo;),
in each case as specified in the Herguth Employment Agreement. For fiscal year 2019, Mr. Herguth is eligible to receive a performance
bonus in a target amount of $340,000, with payment of such bonuses subject to achievement of certain performance goals set forth
in the Herguth Employment Agreement. In addition, Mr. Herguth is eligible to earn year-end performance bonuses payable in either
cash or equity or both, with a target bonus equal to 60% of the highest base salary Mr. Herguth received during such fiscal year
upon achievement of performance goals set by us. Mr. Herguth will be entitled to fifteen days paid vacation per annum, as well
as participation in all employee benefit plans, programs and arrangements maintained by MYnd from time to time and made available
generally to our similarly-situated senior executives on substantially the same basis that such benefits are provided to such
senior executives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As Mr. Herguth&rsquo;s
employment is on an &ldquo;at-will&rdquo; basis, we or Mr. Herguth may terminate the employment relationship at any time, with
or without Cause or Good Reason (each as defined in the Herguth Employment Agreement). If we terminate Mr. Herguth&rsquo;s employment
without Cause (as defined in the Herguth Employment Agreement) or Mr. Herguth terminates his employment with us for Good Reason
(as defined in the Herguth Employment Agreement) during the first year following execution of the Herguth Employment Agreement,
Mr. Herguth shall be entitled to receive as severance three months of Mr. Herguth&rsquo;s annualized base salary then in effect,
subject to certain exceptions concerning plenary releases given in the Herguth Employment Agreement. If we terminate Mr. Herguth&rsquo;s
employment without Cause or Mr. Herguth terminates his employment with us for Good Reason during the second year following execution
of the Herguth Employment Agreement, Mr. Herguth shall be entitled to receive as severance six months of Mr. Herguth&rsquo;s annualized
base salary then in effect, subject to certain exceptions concerning plenary releases given in the Herguth Employment Agreement.
If Mr. Herguth is terminated by us for Cause, or if Mr. Herguth terminates his employment without Good Reason or due to Death
or Disability (each as defined in the Herguth Employment Agreement), he will be entitled to any unpaid compensation accrued through
the last day of his employment, a lump sum payment in respect of all accrued but unused vacation days at his base salary in effect
on the date such vacation was earned, and payment of any other amounts owing to Mr. Herguth but not yet paid, less any amounts
owed to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Donald D&rsquo;Ambrosio</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 15, 2019,
we and Mr. D&rsquo;Ambrosio entered into a letter agreement of employment setting forth Mr. D&rsquo;Ambrosio&rsquo;s compensation
and certain other employment terms. Pursuant to this letter agreement, Mr. D&rsquo;Ambrosio be paid an annual base salary of $215,020,
will be eligible to participate in our benefit plans and has an effective date of July 17, 2019. Pursuant to the letter agreement,
Mr. D&rsquo;Ambrosio&rsquo;s employment is &ldquo;at-will&rdquo;, and may be terminated by either party for any reason, or no
reason at all. If we terminate Mr. D&rsquo;Ambrosio without &ldquo;cause&rdquo; (as defined in the agreement), or Mr. D&rsquo;Ambrosio
&ldquo;involuntarily terminates&rdquo;(as defined in the agreement) the agreement, Mr. D&rsquo;Ambrosio will be entitled to receive
severance in the form of salary and benefits for a period equal to two-month, with an additional month of salary for each completed
year of service up to a limit of six-months, in each case, subject to Mr. D&rsquo;Ambrosio providing a release of claims satisfactory
to us. In the event we terminate Mr. D&rsquo;Ambrosio for &ldquo;cause&rdquo; or Mr. D&rsquo;Ambrosio voluntarily terminates his
employment, Mr. D&rsquo;Ambrosio will not be entitled to any severance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Consulting Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 30, 2019, we
entered into a Consultant Agreement with Robin L. Smith, MD, which provides that Dr. Smith will receive a $15,000 monthly fee
during the consulting term provided for the grant of (i) an option to purchase up to 200,000 shares of our common stock (which
may be exercised at any time during the ten year period following the grant) and (ii) 100,000 restricted shares of our common
stock. The option and the restricted stock grant will vest upon the completion of our anticipated listing on a national securities
exchange. We also agreed to pay Dr. Smith a $100,000 bonus at the effective time of such listing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<B>&nbsp;</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Outstanding Equity Awards at Fiscal
Year-End&mdash;&mdash;Fiscal Year Ending September 30, 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
presents information regarding outstanding options and restricted stock held by MYnd&rsquo;s named executive officers as of September
30, 2018: All of these options remained outstanding options of MYnd following the Spin-off.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="13" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Option Awards</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Stock Awards</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Securities Underlying
    Unexercised Options (#)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Option Exercise Price ($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Option Expiration Date</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Shares of Stock
    That Have Not Vested (#)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Market Value of Shares of
    Stock That Have Not Vested ($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid">Name</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercisable</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Unexercisable</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: justify"><FONT STYLE="font-size: 10pt">George Carpenter <SUP>(1)</SUP></FONT></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">20,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">48,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1.55</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 11%; text-align: center">04/04/2028</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">09/22/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,175</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">10/08/2023</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9.44</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">12/10/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,300.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">03/02/2020</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,785</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">54,149</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Donald D&rsquo;Ambrosio <SUP>(2)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.55</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">04/04/2028</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">03/31/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">On April 4, 2018, Mr. Carpenter
was granted options to purchase 100,000 shares of Common Stock. 20% of the options vested on the date of grant and the remainder
will vest upon the achievement of various performance-based milestones. The options are exercisable at $1.55 per share. As of
September 30, 2018, options to purchase 32,000 shares were forfeited.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On September 22, 2016, Mr. Carpenter
was granted options to purchase 32,000 shares of Common Stock. 25% of the options vested on the date of grant and the remainder
will vest in 25% increments upon the achievement of various performance-based milestones. As of September 30, 2018, all of the
options are fully vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On October 8, 2013, Mr. Carpenter
was granted options to purchase 2,175 shares of Common Stock. The options are exercisable at $50.00 per share and vested evenly
over 12 months starting from the date of grant. As of September 30, 2018, all of the options are fully vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On December 10, 2012, Mr. Carpenter
was granted options to purchase 6,000 shares of Common Stock. The options are exercisable at $9.44 per share and vested in increments
of 12.5% at the beginning of each quarter starting from the date of grant. Mr. Carpenter was also granted 125 fully vested shares
of Common Stock for his prior services on MYnd&rsquo;s Board. These options are also exercisable at a price of $9.44 per share.
As of September 30, 2018, all of the options are fully vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On March 3, 2010, Mr. Carpenter
was granted options to purchase 667 shares of Common Stock. The options are exercisable at $3,300.00 per share and vested equally
over 48 months starting on March 3, 2010. As of September 30, 2018, all of the options are fully vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">On April 4, 2018, Mr. D&rsquo;Ambrosio
was granted options to purchase 18,000 shares of MYnd&rsquo;s common stock, which will vest in 25% increments upon the achievement
of various performance-based milestones. The options are exercisable at $1.55 per share. As of September 30, 2018, 13,500 shares
of the options are vested.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On March 31, 2017, Mr. D&rsquo;Ambrosio
was granted options to purchase 18,000 shares of MYnd&rsquo;s common stock at an exercise price of $5.9 per share. with: (i) the
option to purchase 15,000 shares vesting in equal monthly installments over 36 months from March 31, 2017, and (ii) the option
to purchase 3,000 shares vesting upon the achievement of a performance-based milestone, which had been met as of September 30,
2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Director Compensation</B>&mdash;<B>Fiscal
Year Ending September 30, 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During MYnd&rsquo;s
fiscal year ended September 30, 2018, non-employee directors received cash compensation, as well as grants of Common Stock, Restricted
Stock and options to purchase Common Stock for their service on MYnd&rsquo;s Board of Directors or committees thereof. The values
of the option and restricted share grants were determined using the Black-Scholes Model and the closing price of the stock on
the day of grant. All option grants remained options of MYnd following the Spin-off</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Non-Employee Director Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid">Name</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fees Earned or Paid in Cash&nbsp;($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Option Awards&nbsp;($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Stock Awards&nbsp;($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">All Other Compensation&nbsp;($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total ($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: justify"><FONT STYLE="font-size: 10pt">Robin Smith <SUP>(1)</SUP></FONT></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">337,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">210,700</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">68,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">28,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">644,700</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">John Pappajohn <SUP>(2)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Geoffrey Harris <SUP>(3)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Michal Votruba <SUP>(4)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Peter Unanue <SUP>(5)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">On July 14, 2017, MYnd&rsquo;s
Board approved the Chairman Services Agreement (the &ldquo;Agreement&rdquo;) with Robin L. Smith, M.D. which became effective
on that date (the &ldquo;Effective Date&rdquo;) and will remain in effect until the earlier of: (a) termination of the Agreement
by mutual agreement of Dr. Smith and MYnd, and (b) the eighteen (18) month anniversary of the Effective Date (the &ldquo;Initial
Period&rdquo;); provided that the Agreement may be automatically extended for additional one year periods thereafter (such period,
the &ldquo;Term&rdquo;). During the Term, and subject to the terms and conditions of the Agreement, Dr. Smith will provide non-exclusive
advisory and management services to MYnd, which may include advice and assistance concerning: strategic vision and planning; identification
of growth and expansion opportunities; financial planning; and corporate partnering and business development (collectively, the
&ldquo;Services&rdquo;). Under the Agreement, Dr. Smith is entitled to an annual cash fee of $300,000 (the &ldquo;Annual Fee&rdquo;),
payable in equal monthly installments. For the 2017 calendar year, Dr. Smith was paid the full amount of the Annual Fee. Dr. Smith
agreed to a reduction in her annual cash fee for the 2018 calendar year. In connection therewith, Dr. Smith&rsquo;s annual cash
fee was reduced from $300,000 to $250,000. Dr. Smith was granted an option to purchase 50,000 shares of Common Stock under MYnd&rsquo;s
2012 Plan, which will not be terminated if Dr. Smith is no longer affiliated with MYnd. On April 4, 2018, Dr. Smith was granted
an option to purchase 75,000 shares of Common Stock, of which 1/3 vested immediately, 1/3 will vest 6 months from the grant date
and the remaining 1/3 will vest 12 months from the grant date. The options are exercisable at $1.55 per share. On April 4, 2018,
Dr. Smith was granted 25,000 restricted shares.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The aggregate number of option
awards outstanding for Dr. Smith at September 30, 2018 was 291,250 shares. Of these, options to purchase 1,250 shares have an
exercise price of $11.00 per share, options to purchase 40,000 shares have an exercise price of $6.00 per share, options to purchase
75,000 shares have an exercise price of $4.33 per share, options to purchase 50,000 shares have an exercise price of $4.16 per
share, options to purchase 75,000 shares have an exercise price of $1.55 per share, options to purchase 50,000 shares have an
exercise price of $1.99 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On May 30, 2019, MYnd and Dr.
Smith entered into an amendment to the Chairman Services Agreement dated July 14, 2017 by and between MYnd and Dr. Smith (or the
Chairman Services Agreement) which provides that the Chairman Services Agreement will terminate at the effective time of the Merger,
as required by the Merger Agreement, and that Dr. Smith will receive a $150,000 bonus, which is to be paid after, and contingent
upon the approval of the stockholder proposals in the Proxy Statement, provided that this payment will be returned to MYnd if
the Merger is not consummated for any reason.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Dr. Smith is not one of our
directors but serves as a consultant under a Consulting Agreement entered into with us on May 30, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Mr. Pappajohn joined MYnd&rsquo;s
Board on August 26, 2009 and was appointed to our Board on March 18, 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">MYnd paid a cash Board Fee to
Mr. Pappajohn of $3,000 during the twelve months ended September 30, 2018, and has determined no cash fee will be paid to members
of MYnd&rsquo;s Board in the coming year except for the Audit Chair and the Chairman of the board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On September 19, 2017, Mr. Pappajohn
was granted, subject to continued MYnd Board service: (i) 12,000 restricted shares, vesting in four quarterly installments of
3,000 shares and (ii) options to purchase 12,000 shares of common stock with an exercise price of $3.60, vesting in four equal
quarterly installments of 3,000 options on December 19, 2017, March 19, 2018, June 19, 2018 and September 19, 2018. The value
as of the grant date for stock options is recognized over the number of days of service required for the stock option to vest
in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On May 25, 2018, Mr. Pappajohn
was granted 4,500 shares of restricted shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">As of September 30, 2018, Mr.
Pappajohn had been granted options to purchase an aggregate 14,542 shares. Of these, options to purchase 42 shares have an exercise
price of $3,300.00 per share, options to purchase 1,250 shares have an exercise price of $11.00 per share, 1,250 shares have an
exercise price of $9.44 per share, options to purchase 12,000 shares have an exercise price of $3.60 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Mr. Harris joined MYnd&rsquo;s
Board on July 20, 2015 and was appointed to our Board on March 18, 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">MYnd paid a cash Board Fee to
Mr. Harris of $25,000 during 2018, and has determined that he will receive the same amount in the coming year due to his position
as Audit Chair.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On September 19, 2017, Mr. Harris
was granted, subject to continued MYnd Board and Audit Committee service: (i) 18,000 restricted shares, vesting in four quarterly
installments of 4,500 shares and (ii) options to purchase 18,000 shares of common stock with an exercise price of $3.60, vesting
in four equal quarterly installments of 4,500 options on December 19, 2017, March 19, 2018, June 19, 2018 and September 19, 2018.
The value as of the grant date for stock options is recognized over the number of days of service required for the stock option
to vest in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">At September 30, 2018, Mr. Harris
had been granted options to purchase an aggregate of 19,250 shares. Of these, options to purchase 1,250 shares have an exercise
price of $11.00 per share and options to purchase 18,000 shares have an exercise price of $3.60 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(6)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Mr. Votruba joined MYnd&rsquo;s
Board on July 20, 2015 and was appointed to our Board on March 18, 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">MYnd paid a cash Board Fee to
Mr. Votruba of $3,000 during 2018, and has determined no cash fee will be paid to members of the MYnd Board in the coming year
except for the Audit Chair and the Chairman of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On September 19, 2017, Mr. Votruba
was granted, subject to continued MYnd Board service: (i) 12,000 restricted shares, vesting in four quarterly installments of
3,000 shares and (ii) options to purchase 12,000 shares of common stock with an exercise price of $3.60, vesting in four equal
quarterly installments of 3,000 options on December 19, 2017, March 19, 2018, June 19, 2018 and September 19, 2018. The value
as of the grant date for stock options is recognized over the number of days of service required for the stock option to vest
in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On May 25, 2018, Mr. Votruba
was granted 4,500 shares of restricted common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">At September 30, 2018, Mr. Votruba
had been granted options to purchase an aggregate of 13,250 shares. Of these, options to purchase 1,250 shares have an exercise
price of $11.00 per share and options to purchase 12,000 shares have an exercise price of $3.60 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(7)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Mr. Unanue joined MYnd&rsquo;s
Board on September 19, 2017 and was appointed to our Board on March 18, 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">MYnd paid a cash Board Fee to
Mr. Unanue of $3,000 during 2018, and has determined no cash fee will be paid to members of the MYnd Board in the coming year
except for the Audit Chair and the Chairman of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On September 19, 2017, Mr. Unanue
was granted, subject to continued MYnd Board service: (i) 12,000 restricted shares, vesting in four quarterly installments of
3,000 shares and (ii) options to purchase 12,000 shares of common stock with an exercise price of $3.60, vesting in four equal
quarterly installments of 3,000 options on December 19, 2017, March 19, 2018, June 19, 2018 and September 19, 2018. The value
as of the grant date for stock options is recognized over the number of days of service required for the stock option to vest
in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.25in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.25in; text-align: justify; text-indent: 0.5in">On May 25, 2018, Mr.
Unanue was granted 4,500 restricted shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>2019 Omnibus Equity Incentive
Plan</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 21, 2019,
the Company adopted the 2019 Omnibus Equity Incentive Plan (the &ldquo;<U>2019 Plan</U>&rdquo;). The purpose of the 2019 Plan is
to allow&nbsp;non-employee&nbsp;directors and selected employees, officers and consultants (&ldquo;<U>Grantees</U>&rdquo;) to acquire
equity ownership in the Company, thereby strengthening their commitment to the Company&rsquo;s success and incentivizing their
efforts on behalf of the Company. The 2019 Plan is also intended to assist the Company in attracting new Grantees and retaining
existing Grantees. Finally, the 2019 Plan supports and increases our ability to facilitate the sustained progress, growth and profitability
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The total number
of shares available for grant under the plan is 2,250,000, subject to adjustment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The compensation
committee of our board of directors (the &ldquo;<U>Committee</U>&rdquo;) administers the 2019 Plan and has full power to grant
stock options and common stock, construe and interpret the 2019 Plan, establish rules and regulations and perform all other acts,
including the delegation of administrative responsibilities, as it believes reasonable and proper. Any decision made or action
taken by the Committee arising out of or in connection with the interpretation and administration of the 2019 Plan is final and
conclusive. The Committee, in its absolute discretion, may award common stock to employees, consultants, and directors of the Company,
and such other persons as the Committee may select, and permit holders of options to exercise such options prior to full vesting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event that
our outstanding common stock is changed into or exchanged for a different number or kind of shares or other securities of the Company
by reason of merger, consolidation, other reorganization, recapitalization, combination of shares, stock&nbsp;split-up&nbsp;or
stock dividend, equitable adjustment will be made to the aggregate number and kind of shares subject to stock options which may
be granted under the 2019 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Committee may
at any time, and from time to time, suspend or terminate the 2019 Plan in whole or in part or amend it from time to time in such
respects as it may deem appropriate and in our best interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The 2019 Plan will
be presented to stockholders for approval at the Company&rsquo;s next annual meeting of stockholders.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_018"></A>Security
Ownership of Certain Beneficial Owners and Management</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Share Ownership of Executive Officers
and Directors and Certain Parties</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information regarding (i) each of our expected directors and expected named executive officers and (ii) all of our
expected directors and named executive officers as a group and (iii) each person who is known by us who will beneficially own
more than five percent of our common stock. Unless otherwise indicated in the table, the persons and entities named in the table
have sole voting and sole investment power with respect to the shares set forth opposite the stockholder&rsquo;s name, subject
to community property laws, where applicable. Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended. For purposes of such calculation, shares of our Common Stock subject to options, warrants and
convertible promissory notes issued by us (and convertible interest on those notes) that are currently exercisable or convertible,
or exercisable or convertible within sixty days from July 16, 2019, are deemed to be outstanding and to be beneficially owned
by the person holding the options, warrants or convertible promissory notes, as applicable, for the purpose of computing the percentage
ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other
person. Unless otherwise indicated, the address of each of the executive officers and directors and 5% or more stockholders named
below is c/o Telemynd, Inc., 26522 La Alameda, Suite 290, Mission Viejo, CA 92691. There are no shares of any other class or series
of stock issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Applicable percentage ownership interest
is based on 12,883,143 shares of issued and outstanding common stock as of July 16, 2019.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares Beneficially Owned</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Name of Beneficial Owner Executive Officers and Directors:</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Shares Beneficially
    &nbsp;Owned</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Percentage of Shares Outstanding</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Patrick Herguth<SUP>)</SUP></I></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Chief
                                         Executive Officer and Director</I></P></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Don D&rsquo;Ambrosio <SUP>(1)</SUP></I></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Chief
                                         Financial Officer</I></P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>John Pappajohn <SUP>(2)</SUP></I></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Director</I></P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,774,350</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24.39</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Michal Votruba <SUP>(3)</SUP></I></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Director</I></P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Geoffrey E. Harris <SUP>(4)</SUP></I></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Director</I></P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">126,668</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Peter Unanue <SUP>(5)</SUP></I></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Director</I></P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">291,754</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.24</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Directors and officers as a group (8 persons) <SUP>(6)</SUP></TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">4,200,272</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">27.68</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Non-Director 5%+ Stockholders:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">RSJ <SUP>(7)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,951,198</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14.21</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">JJBE 123, LLC <SUP>(8)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">694,123</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.41</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">John Steven Emerson <SUP>(9)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">694,122</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.41</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Pacific Capital Management, LLC <SUP>(10)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">763,271</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.95</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Bryan Ezralow as Trustee of the Bryan Ezralow1994 Trust U/T/D 12/122/1994
    <SUP>(11)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">694,123</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.41</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">*</TD><TD STYLE="text-align: justify">Represents beneficial
                                         ownership of less than one percent (1%) of the outstanding shares of common stock.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         7,500 shares of common stock. Mr. D&rsquo;Ambrosio has been our Chief Financial Officer
                                         since March 31, 2017.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         1,132,925 shares of common stock; (b) 1,000,000 shares of common stock issuable upon
                                         conversion of Series A Preferred Stock and (b) 1,641,425 shares of common stock issuable
                                         upon the exercise of MYnd warrants following which the holder is entitled to receive,
                                         in addition to MYnd common stock, our common stock.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(3)</TD><TD STYLE="text-align: justify">Mr. Votruba is a
                                         representative of RSJ; refer to footnote (10) below, as all of his granted shares are
                                         assigned to RSJ. Mr. Votruba has been a member of the Board since July 30, 2015. Mr.
                                         Votruba has agreed to assign to RSJ the benefit of all restricted shares granted to him
                                         in connection with his service as a member of the board of directors.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(4)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         97,110 shares of common stock and (b) 29,558 shares of common stock issuable upon the
                                         exercise of MYnd warrants following which the holder is entitled to receive, in addition
                                         to MYnd common stock, our common stock. Mr. Harris has been a member of the board since
                                         July 30, 2015.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(5)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         126,627 shares of common stock; (b) 50,000 shares of common stock issuable upon conversion
                                         of Series A Preferred Stock and (b) 115,127 shares of common stock issuable upon the
                                         exercise of MYnd warrants following which the holder is entitled to receive, in addition
                                         to MYnd common stock, our common stock. Mr. Unanue has been a member of the Board since
                                         September 19, 2017.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(6)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         1,364,162 shares of common stock; (b) 1,050,000 shares of common stock issuable upon
                                         conversion of Series A Preferred Stock and (b) 1,786,110 shares of common stock issuable
                                         upon the exercise of MYnd warrants following which the holder is entitled to receive,
                                         in addition to MYnd common stock, our common stock.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(7)</TD><TD STYLE="text-align: justify">Consists of 1,056,474
                                         shares of common stock, and (b) 894,724 shares of common stock issuable upon the exercise
                                         of MYnd warrants following which the holder is entitled to receive, in addition to MYnd
                                         common stock, our common stock. The address of RSJ is Na Florenci 2116/15, 110 00 Prague
                                         1, Czech Republic.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(8)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         694,123 shares of common stock. The principal business address of JJBE is1620 26th Street,
                                         Suite 6000N, Santa Monica, California 90404.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(9)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         694,122 shares of common stock. The principal business address of John Steven Emerson
                                         is1522 Ensley Avenue, Los Angeles, California 90024.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(10)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         763,271 shares of common stock. The principal business address of Pacific Capital Management,
                                         LLC is 11601 Wilshire Boulevard, Suite 2180, Los Angeles, CA 90025.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(11)</TD><TD STYLE="text-align: justify">Consists of (a)
                                         694,123 shares of common stock. The principal business address of Bryan Ezralow as Trustee
                                         of the Bryan Ezralow1994 Trust U/T/D 12/122/1994 is 23622 Calabasas Road, Suite 200,
                                         Calabasas, California 91302.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_019"></A>RELATED PARTY TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Sale of Preferred Shares</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 29, 2018,
MYnd sold an aggregate of 1,050,000 shares for $2.00 per Unit, each Unit consisting of (i) one share of newly-designated Series
A Preferred Stock or Series A-1 Preferred Stock, and (ii) one Warrant to purchase a share of Common Stock for $2.34, in a private
placement to Mr. Pappajohn, his spouse and Peter Unanue (a director of MYnd), for gross proceeds of $2.1 million. The private
placement closed on March 29, 2018. Effective July 16, 2019, each of Mr. Pappajohn, his spouse and Mr. Unanue entered into an
exchange agreement under which they exchanged their shares of MYnd Series A Preferred Stock for our Series A Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Private Placement with Directors and
Management</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 21, 2018,
MYnd entered into definitive agreements with Mr. Carpenter, Dr. Smith, Mr. Pappajohn, Mr. Unanue and entities affiliated with
Michal Votruba, a director of MYnd and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private
placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and a warrant
to purchase a share of Common Stock for $2.00.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Director and Executive Officer Compensation</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Please see the &ldquo;Executive
and Director Compensation&rdquo; section of this prospectus for a discussion of payments and options granted to our named executive
officers and non-employee directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Employment Agreements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have entered into
employment agreements with our executive officers. For more information regarding these agreements, see the &ldquo;Executive and
Director Compensation&mdash;Narrative Disclosure to Summary Compensation Table&rdquo; section of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Indemnification Agreements with Officers
and Directors and Directors&rsquo; and Officers&rsquo; Liability Insurance</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
this offering, we have entered into, and intend to continue to enter into, indemnification agreements with each of our executive
officers and directors. The indemnification agreements, our certificate of incorporation and our by-laws require us to indemnify
our directors to the fullest extent not prohibited by Delaware law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Consulting Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 30, 2019, we
entered into a Consultant Agreement with Robin L. Smith, MD, which provides that Dr. Smith will receive a $15,000 monthly fee
during the consulting term and provided for the grant of (i) an option to purchase up to 200,000 shares of our common stock (which
may be exercised at any time during the ten year period following the grant) and (ii) 100,000 restricted shares of our common
stock. The option and the restricted stock grant will vest upon the completion of our anticipated listing on a national securities
exchange. We also agreed to pay Dr. Smith a $100,000 bonus at the effective time of such listing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_020"></A>DESCRIPTION
OF SECURITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>The following is
a summary of the material terms of our capital stock. The summaries and descriptions below do not purport to be complete statements
of the relevant provisions of our certificate of incorporation or bylaws. Our certificate of incorporation and bylaws are attached
as exhibits to this Registration Statement and incorporated herein by reference. The summaries and descriptions below do not purport
to be complete statements of the Delaware General Corporation Law.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Authorized and Outstanding Capital
Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have 105,000,000
authorized shares of capital stock, par value $0.001 per share, of which 100,000,000 shares will be shares of common stock and
5,000,000 shares will be shares of &ldquo;blank check&rdquo; preferred stock. As of the date hereof, there are 12,833,143 shares
of our common stock and 1,050,000 shares of Series A preferred stock issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The holders of our
common stock will be entitled to one vote per share. In addition, the holders of our common stock will be entitled to receive
pro rata dividends, if any, declared by our board of directors out of legally available funds; however, we expect that our board
of directors will retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders
of our common stock will be entitled to share ratably in all assets that are legally available for distribution. The holders of
our common stock will have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges
of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred
stock, which may be designated solely by action of our board of directors and issued in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our board of directors
is authorized, subject to any limitations prescribed by law, without further vote or action by our stockholders, to issue from
time to time shares of preferred stock in one or more series. Each series of preferred stock will have the number of shares, designations,
preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by our board of
directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive
rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The issuance of shares
of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders
will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect
of delaying, deferring or preventing a change of control or other corporate action. We have no current plan to issue any shares
of preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of the date hereof,
there are 1,050,000 shares of Series A Preferred Stock issued and outstanding. The Series A Preferred Stock has the following
terms:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Dividends.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Shares of the Series
A Preferred Stock will be entitled to receive cash dividends at the rate of five percent (5.00%) of the Original Series A Issue
Price per annum, payable out of funds legally available therefor. Such dividends shall (i) accrue on shares of Series A Preferred
Stock from the date of issuance of such shares, (ii) be cumulative, and (iii) be payable only (A) when, as and if declared by
the Board of Directors, (B) upon the occurrence of a Liquidation Event or a Deemed Liquidation Event (whether or not such dividends
have been declared) and (C) &ldquo;in kind&rdquo; upon a conversion of the Series A Preferred Stock. The value of Common Stock
for purposes of determining shares issuable upon a payment in kind shall not be less than the original issue price of the Series
A Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Voting Rights.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each holder of a share
of Series A Preferred Stock shall have the right to one vote for each share of Common Stock into which such Series A Preferred
Stock could then be converted (with any fractional share determined on an aggregate conversion basis being rounded down to the
nearest whole share). The holders shall be entitled to vote as a class on certain significant or corporate actions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Rank.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to distributions
upon a Liquidation Event (as defined below), the Series A rank senior to the Common Stock and to each other class of our capital
stock existing now or hereafter created that are not specifically designated as ranking senior to the Series A Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Liquidation Preference.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event of any
voluntary or involuntary liquidation, dissolution or winding-up of us or such subsidiaries the assets of which constitute all
or substantially all of the assets of the business of us and its subsidiaries, taken as a whole (&ldquo;Liquidation Event&rdquo;),
the holders of shares of Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution in
such Liquidation Event to the holders of any junior securities, including the Common Stock, by reason of their ownership thereof,
an amount per share equal to the Series A Liquidation Preference for each outstanding share of Series A Preferred Stock then held
by them. After the payment or setting apart of payment of the full preferential amounts required to be paid to the holders of
shares of Series A Preferred Stock, the remaining assets and funds legally available for distribution to our stockholders shall
be distributed among the holders of the shares of Common Stock ratably on a per-share basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Consolidation;
Merger.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A (i) consolidation
or merger of us with or into any other entity in which the stockholders of us immediately prior to such transaction do not own
a majority of the voting capital stock of the surviving entity, (ii) sale, lease, transfer, exclusive license, conveyance or disposition
of all or substantially all of the assets of us, or (iii) the effectuation by us of a transaction or series of related transactions
in which more than 50% of the voting power of us is disposed of (each of (i), (ii) and (iii), a &ldquo;Deemed Liquidation Event&rdquo;),
will each be deemed to be a Liquidation Event, unless elected otherwise by vote of the holders of a majority of the then outstanding
shares of Series A Preferred Stock (&ldquo;Required Holders&rdquo;). Any securities to be delivered to the stockholders pursuant
to a Deemed Liquidation Event will be valued at fair market value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Conversion.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Holder of shares
of Series A Preferred Stock shall have the right (the &ldquo;Conversion Right&rdquo;), at any time and from time to time, at such
holder&rsquo;s option, to convert all or any portion of such holder&rsquo;s shares of Series A Preferred Stock into fully paid
and non-assessable shares of Common Stock. Upon a holder&rsquo;s election to exercise its Conversion Right, each share of Series
A Preferred Stock for which the Conversion Right is exercised shall be converted into such number of shares of Common Stock as
is determined by dividing the Original Purchase Price ($1.85) by the conversion price for the Series A Preferred Stock at the
time in effect. In addition, pursuant to the terms of exchange agreements under which holders of MYnd Series A Preferred Stock
exchange such shares for our Series A Preferred Stock, each of our Series A Preferred stockholders agreed that if (i) we sells
shares of our Common Stock in one or more registered public offerings or a private placements, at a price per share that is equal
to, or in excess of, three times the current conversion price of the Series A Preferred Stock or (ii) our Common Stock trades
on a national securities exchange and our Common Stock has a closing sale price that is equal to, or in excess of, three times
the current conversion price of our Series A Preferred Stock for at least five (5) consecutive days, all of our Series A Preferred
Stock shall automatically convert into our Common Stock without any further action on the part of us or the holders of the Series
A Preferred Stock.<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Anti-takeover Provisions in Our Certificate
of Incorporation and Bylaws</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Authorized But Unissued Preferred Stock</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As discussed above,
we will be authorized to issue a total of 5,000,000 shares of preferred stock. Our certificate of incorporation will provide that
the board of directors may issue preferred stock by resolution, without any action of the stockholders. In the event of a hostile
takeover, the board of directors could potentially use this preferred stock to preserve control. The existence of authorized but
unissued shares of preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain
control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary
obligations, our board of directors were to determine that a takeover proposal is not in the best interests of us or our stockholders,
our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private
offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder
or stockholder group. In this regard, our certificate of incorporation grants our board of directors broad power to establish
the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could
decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also
adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring
or preventing a change in control of us.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Filling Vacancies</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our bylaws will include
a provision that permits the board to fill any vacancies on the board arising due to the death, resignation or removal of any
director. The board will also authorized to fill vacancies if the stockholders fail to elect the full authorized number of directors
to be elected at any annual or special meeting of stockholders. Vacancies in the board may be filled by a majority of the remaining
directors then in office, even though less than a quorum of the board, or by a sole remaining director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Board Action Without Meeting</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our bylaws will provide
that the board may take action without a meeting if all the members of the board consent to the action in writing. Board action
through consent allows the board to make swift decisions, including in the event that a hostile takeover threatens current management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>No Cumulative Voting</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our bylaws and certificate
of incorporation will not provide the right to cumulate votes in the election of directors. This provision means that the holders
of a plurality of the shares voting for the election of directors can elect all of the directors. Non-cumulative voting makes
it more difficult for an insurgent minority stockholder to elect a person to the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Special Meetings of Stockholders</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our bylaws will allow
special meetings of stockholders to be called only by our board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Section 203 of the Delaware General
Corporation Law</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to
the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly-held Delaware
corporation from engaging in a &ldquo;business combination&rdquo; with an &ldquo;interested stockholder&rdquo; for a three-year
period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved
in a prescribed manner. A &ldquo;business combination&rdquo; includes, among other things, a merger, asset or stock sale or other
transaction resulting in a financial benefit to the interested stockholder. An &ldquo;interested stockholder&rdquo; is a person
who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder
status, 15% or more of the corporation&rsquo;s voting stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under Section 203,
a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following
conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">before
                                         the stockholder became interested, the board of directors approved either the business
                                         combination or the transaction that resulted in the stockholder becoming an interested
                                         stockholder;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">upon
                                         consummation of the transaction that resulted in the stockholder becoming an interested
                                         stockholder, the interested stockholder owned at least 85% of the voting stock of the
                                         corporation outstanding at the time the transaction commenced, excluding for purposes
                                         of determining the voting stock outstanding, shares owned by persons who are directors
                                         and also officers, and employee stock plans, in some instances; or</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">at
                                         or after the time the stockholder became interested, the business combination was approved
                                         by the board of directors of the corporation and authorized at an annual or special meeting
                                         of the stockholders by the affirmative vote of at least two-thirds of the outstanding
                                         voting stock that is not owned by the interested stockholder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A Delaware corporation
may &ldquo;opt out&rdquo; of these provisions with an express provision in its original certificate of incorporation or an express
provision in its amended and restated certificate of incorporation or amended and restated by-laws resulting from a stockholders&rsquo;
amendment approved by at least a majority of the outstanding voting shares. We have not opted out of these provisions. As a result,
mergers or other takeover or change in control attempts of us may be discouraged or prevented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Limitations on Liability, Indemnification
of Officers and Directors and Insurance</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our certificate of
incorporation contains provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State
of Delaware, the personal liability of our directors and executive officers for monetary damages for breach of their fiduciary
duties as directors or officers. our certificate of incorporation and bylaws provide that we must indemnify its directors and
executive officers and may indemnify its employees and other agents to the fullest extent permitted by the General Corporation
Law of the State of Delaware.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Sections 145 and 102(b)(7)
of the General Corporation Law of the State of Delaware provide that a corporation may indemnify any person made a party to an
action by reason of the fact that he or she was a director, executive officer, employee or agent of the corporation or is or was
serving at the request of a corporation against expenses (including attorneys&rsquo; fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the
case of an action by or in right of the corporation, no indemnification may generally be made in respect of any claim as to which
such person is adjudged to be liable to the corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Authorized but Unissued Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our authorized but
unissued shares of common stock and preferred stock will be available for future issuance without your approval. We may use additional
shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions and as employee
compensation. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult
or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Listing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have applied to
have our shares of common stock listed on the Nasdaq Stock Market under the symbol &ldquo;PSYC,&rdquo; and we have applied to
have our common stock quoted on the OTC.QB although there is no assurance that our application[s] will be approved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Transfer Agent and Registrar</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The transfer agent
and registrar for our common stock is American Stock Transfer &amp; Trust Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_021"></A>Shares
Eligible for Future Sale</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to this offering,
there has been no public market for our common stock, and we cannot predict the effect, if any, that sales of shares or availability
of any shares for sale will have on the market price of our common stock prevailing from time to time. Sales of substantial amounts
of common stock (including shares issued on the exercise of options, warrants or convertible securities, if any) or the perception
that such sales could occur, could adversely affect the market price of our common stock and our ability to raise additional capital
through a future sale of securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
this offering, we will have shares of common stock issued and outstanding (or shares if the underwriters exercise their over-allotment
option in full). All of the shares of our common stock sold in this offering will be freely tradable without restriction or further
registration under the Securities Act unless such shares are purchased by &ldquo;affiliates&rdquo; as that term is defined in
Rule 144 under the Securities Act. These shares will be &ldquo;restricted securities&rdquo; as that phrase is defined in Rule
144. Subject to certain contractual restrictions, including the lock-up agreements described below, holders of restricted shares
will be entitled to sell those shares in the public market if they qualify for an exemption from registration under Rule 144 or
any other applicable exemption under the Securities Act. Subject to the lock-up agreements described below and the provisions
of Rules 144 and 701, additional shares will be available for sale as set forth below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Lock-Up Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We and each of our
directors and executive officers have agreed that, subject to certain exceptions, for ninety (90) days (with respect to us) and
one-hundred eighty (180) days (with respect to officer and directors) after the date of this prospectus, without the prior written
consent of Aegis, we and they will not directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter
into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time
in the future of) any shares of our common stock (including, without limitation, shares of our common stock that may be deemed
to be beneficially owned by us or them in accordance with the rules and regulations of the SEC and shares of common stock that
may be issued upon exercise of any options or warrants) or securities convertible into or exercisable or exchangeable for our
common stock, (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of
the economic consequences of ownership of our common stock or (3) make any demand for or exercise any right or file or cause to
be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of our common
stock or securities convertible, exercisable or exchangeable into our common stock or any of our other securities, although we
are permitted to file a registration statement on Form S-8. We may execute the agreements related to a $10 million equity line
and file the related registration statement, although utilization of the equity line will be subject to the 90-day lock-up referred
to above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Aegis, in its sole
discretion, may release our common stock and other securities subject to the lock-up agreements described above in whole or in
part at any time with or without notice. When determining whether or not to release our common stock and other securities from
the lock-up agreements, &nbsp;Aegis will consider, among other factors, the holder&rsquo;s reasons for requesting the release,
the number of shares of our common stock and other securities for which the release is being requested and market conditions at
the time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Rule 144</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, under
Rule 144 under the Securities Act, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate
of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the
meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders)
would be entitled to sell those shares, subject only to the availability of current public information about us. A non-affiliated
person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled
to sell those shares without regard to the provisions of Rule 144.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A person (or persons
whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities within
the meaning of Rule 144 for at least six months would be entitled to sell within any three-month period a number of shares that
does not exceed the greater of one percent of the then outstanding shares of our common stock or the average weekly trading volume
of our common stock reported through the Nasdaq during the four calendar weeks preceding such sale. Such sales are also subject
to certain manner of sale provisions, notice requirements and the availability of current public information about us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_022"></A>Underwriting</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Aegis Capital Corp.
is acting as the lead managing underwriter and as representative of the underwriters (the &ldquo;Representative&rdquo;). Subject
to the terms and conditions of an underwriting agreement between us and the Representative, we have agreed to sell to each underwriter
named below, and each underwriter named below has severally agreed to purchase, at the public offering price less the underwriting
discounts set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the
following table:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Name of Underwriter</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: justify">Aegis Capital Corp.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriters are
committed to purchase all the shares of common stock offered by this prospectus if they purchase any shares of common stock. The
underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters
may be increased, or the offering may be terminated. The underwriters are not obligated to purchase the shares of common stock
covered by the underwriters&rsquo; option to purchase additional shares of common stock described below. The underwriters are
offering the shares of common stock, subject to prior sale, when, as and if issued to and accepted by them, subject to approval
of legal matters by their counsel, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters
of officer&rsquo;s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to
the public and to reject orders in whole or in part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Over-Allotment Option </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We have granted
the underwriters an option exercisable for up to 45 days after the date of the underwriting agreement, to purchase up to
210,000 shares of common stock at the public offering price listed on the cover page of this prospectus, less underwriting
discounts and commissions. The underwriters may exercise this option only to cover over-allotments, if any, made in
connection with this offering. To the extent the option is exercised, and the conditions of the underwriting agreement are
satisfied, we will be obligated to sell to the underwriters, and the underwriters will be obligated to purchase, these
additional shares of common stock.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Discount and Commissions </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have agreed to
pay the underwriters a cash fee equal to eight percent (8%) of the aggregate gross proceeds. We have agreed to pay a non-accountable
expense allowance to the underwriters equal to 1.0% of the gross proceeds received in this offering (excluding proceeds received
from exercise of the underwriters&rsquo; over-allotment option).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Representative
has advised us that the underwriters propose to offer the shares directly to the public at the public offering price set forth
on the cover of this prospectus. In addition, the Representative may offer some of the shares to other securities dealers at such
price less a concession of up to $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. After the offering to the public, the offering price and other selling terms may
be changed by the Representative without changing the Company&rsquo;s proceeds from the underwriters&rsquo; purchase of the shares.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
shows the public offering price, underwriting discount and proceeds, before expenses, to us. The information assumes either no
exercise or full exercise by the underwriters of their over-allotment option. The underwriting commissions are equal to the public
offering price per share less the amount per share the underwriters pay us for the shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Without Option</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>With Option</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Per Share</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Per Share</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 52%; text-align: justify"><FONT STYLE="font-size: 10pt">Public offering price</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Underwriting discount (8%)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Non-accountable expense allowance (1%)(1)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Proceeds to us before expenses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We estimate that the
total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses,
but excluding underwriting discounts and commissions, will be approximately $_________, all of which are payable by us. This figure
includes expense reimbursements we have agreed to pay the Representative for reimbursement of its expenses related to the offering
up to a maximum aggregate expense allowance of $125,000, for which we have paid a $30,000 advance, which will be returned to us
to the extent not offset by actual expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Determination of Offering Price </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Before this offering,
there has been a very limited public market for our common stock. Accordingly, the public offering price will be negotiated between
us and the representative. Among the factors to be considered in these negotiations are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">the
                                         prospects for our company and the industry in which we operate;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">our
                                         past and present financial and operating performance;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">financial
                                         and operating information and market valuations of publicly traded companies engaged
                                         in activities similar to ours;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">the
                                         prevailing conditions of U.S. securities markets at the time of this offering; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">other
                                         factors deemed relevant.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Lock-Up Agreements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We and each of our
officers and directors have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant
any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable
or exchangeable for shares of our common stock for a period of ninety (90) days (for us) and one hundred eighty (180) days (for
our directors and officers) from the date of this offering without the prior written consent of the Representative.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Representative
may in its sole discretion and at any time without notice release some or all of the shares subject to lock-up agreements prior
to the expiration of the lock-up period. When determining whether or not to release shares from the lock-up agreements, the representative
will consider, among other factors, the security holder&rsquo;s reasons for requesting the release, the number of shares for which
the release is being requested and market conditions at the time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the underwriting
agreement, we have also agreed, for a period of ninety (90) days from the date of the offering, that we will not, subject to specified
exempt issuances, file or cause to be filed any registration statement with the Commission relating to the offering of any shares
of capital stock of us or any securities convertible into or exercisable or exchangeable for shares of capital stock of us. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Right of First Refusal. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to the terms
of the underwriting agreement, upon the closing of this offering, the Representative shall have the right of first refusal, for
a period of six (6) months from the closing of the offering, to act as lead managing underwriter and sole book runner and/or lead
placement agent for any and all future public or private equity, equity-linked or debt (excluding commercial bank debt) offerings,
which shall be increased to nine (9) months from the closing of this offering if the gross proceeds to us equal or exceed $7.0
million but in no case will the right of first refusal extend beyond the third anniversary of the commencement of sales of the
offering. We have also agreed to a tail fee equal to the cash compensation in this offering if any investor to which the underwriter
introduced us with respect to this offering during the term of its engagement provides us with further capital in a public or
private offering or capital raising transaction during the 12-month period following termination of our engagement of the underwriter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Indemnification </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have agreed to
indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute to
payments the underwriters may be required to make in respect thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Electronic Offer, Sale and Distribution of Shares. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A prospectus in electronic
format may be made available on a website maintained by the Representative and may also be made available on a website maintained
by other underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online brokerage
account holders. Internet distributions will be allocated by the Representative to underwriters that may make Internet distributions
on the same basis as other allocations. In connection with the offering, the underwriters or syndicate members may distribute
prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe&reg; PDF will
be used in connection with this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriters have
informed us that they do not expect to confirm sales of shares offered by this prospectus to accounts over which they exercise
discretionary authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other than the prospectus
in electronic format, the information on any underwriter&rsquo;s website and any information contained in any other website maintained
by an underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been
approved and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Price Stabilization, Short Positions,
and Penalty Bids</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common
stock. Specifically, the underwriters may over-allot in connection with this offering by selling more shares than are set forth
on the cover page of this prospectus. This creates a short position in our common stock for its own account. The short position
may be either a covered short position or a naked short position. In a covered short position, the number of shares common stock
over-allotted by the underwriters is not greater than the number of shares of common stock that they may purchase in the over-allotment
option. In a naked short position, the number of shares of common stock involved is greater than the number of shares common stock
in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment
option. The underwriters may also elect to stabilize the price of our common stock or reduce any short position by bidding for,
and purchasing, common stock in the open market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriters may
also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing
a security in this offering because the underwriter repurchases that security in stabilizing or short covering transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Finally, the underwriters
may bid for, and purchase, shares of our common stock in market making transactions, including &ldquo;passive&rdquo; market making
transactions as described below. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These activities may
stabilize or maintain the market price of our common stock at a price that is higher than the price that might otherwise exist
in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of
these activities at any time without notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
this offering, the underwriters and selling group members, if any, or their affiliates may engage in passive market making transactions
in our common stock immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of Regulation
M under the Exchange Act. Rule 103 generally provides that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">a
                                         passive market maker may not effect transactions or display bids for our common stock
                                         in excess of the highest independent bid price by persons who are not passive market
                                         makers;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">net
                                         purchases by a passive market maker on each day are generally limited to 30% of the passive
                                         market maker&rsquo;s average daily trading volume in our common stock during a specified
                                         two-month prior period or 200 shares, whichever is greater, and must be discontinued
                                         when that limit is reached; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: justify">passive
                                         market making bids must be identified as such.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Certain Relationships</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain of the underwriters
and their affiliates may in the future provide various investment banking, commercial banking and other financial services for
us and our affiliates for which they may in the future receive customary fees, however, except for the right of first refusal
disclosed in this prospectus, we have no present arrangements with any of the underwriters for any further services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Offer Restrictions Outside the United
States</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other than in the
United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered
by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may
not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection
with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of
this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered
by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_023"></A>Legal
Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The validity of the
securities offered by this prospectus will be passed upon for us by Dentons US LLP, New York, New York. The underwriters are being
represented by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, New York</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_024"></A>Experts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The financial statements
of MYnd for the years ended September 30, 2018 and 2017 appearing in this prospectus, which describe the assets transferred to
us by MYnd in the Separation as if the transferred assets were our business for all historical periods described, have been audited
by Marcum LLP, independent registered public accounting firm, as set forth in their report dated December 11, 2018, which report
includes an explanatory paragraph as to the ability of MYnd to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><A NAME="a_025"></A>Where
You Can Find More Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have filed with
the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of Common Stock being offered
by this prospectus. This prospectus does not contain all of the information in the registration statement of which this prospectus
is a part and the exhibits to such registration statement. For further information with respect to us and the Common Stock offered
by this prospectus, we refer you to the registration statement of which this prospectus is a part and the exhibits to such registration
statement. Statements contained in this prospectus as to the contents of any contract or any other document are not necessarily
complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration
statement of which this prospectus is a part. Each of these statements is qualified in all respects by this reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You may read and copy
the registration statement of which this prospectus is a part, as well as our reports, proxy statements and other information,
at the SEC&rsquo;s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for more information about the operation of the Public Reference Room. The SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that file electronically with the SEC, including Telemynd,
Inc. The SEC&rsquo;s Internet site can be found at <I>http://www.sec.gov</I>. You may also request a copy of these filings, at
no cost, by writing us at 26522 La Alameda, Suite 290, Mission Viejo, California 92691 or telephoning us at (949) 420-4400.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to
the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and, in accordance with this law,
file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other
information are available for inspection and copying at the SEC&rsquo;s public reference facilities and the website of the SEC
referred to above. We also maintain a website at <I>www.telemynd.com</I>. You may access these materials free of charge as soon
as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website
is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference
only.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_026"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">INDEX
TO FINANCIAL STATEMENTS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>This prospectus describes the assets
transferred to us by MYnd in the Separation as if the transferred assets were our business for all historical periods described.
References in this prospectus to our historical assets, liabilities, products, businesses or activities of our business are generally
intended to refer to the historical assets, liabilities, products, businesses or activities of the transferred businesses as the
businesses were conducted as part of MYnd and its subsidiaries prior to the Separation.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 90%; text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt">Page</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font-size: 10pt">Audited Financial Statements</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_001"><FONT STYLE="font-size: 10pt">Report of Independent Registered Public Accounting Firm for the years ended September 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-2</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_002"><FONT STYLE="font-size: 10pt">Consolidated Balance Sheets as of September 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-3</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_003"><FONT STYLE="font-size: 10pt">Consolidated Statements of Operations for the years ended September 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-4</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_004"><FONT STYLE="font-size: 10pt">Consolidated Statements of Changes in Equity for the years ended September 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-5</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_005"><FONT STYLE="font-size: 10pt">Consolidated Statements of Cash Flows for the years ended September 30, 2018 and 2017</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-6</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_006"><FONT STYLE="font-size: 10pt">Notes to Consolidated Financial Statements</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-7</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font-size: 10pt">Unaudited Financial Statements</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_007"><FONT STYLE="font-size: 10pt">Unaudited Condensed Consolidated Balance Sheets as of March 31, 2019 and September 30, 2018 (audited)</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-31</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_008"><FONT STYLE="font-size: 10pt">Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2019 and 2019</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-32</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_009"><FONT STYLE="font-size: 10pt">Unaudited Condensed Consolidated Statements of Stockholders Equity for&nbsp;&nbsp;the six months ended March 31, 2019 and 2018</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-33</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_010"><FONT STYLE="font-size: 10pt">Unaudited Condensed Consolidated Statements of Cash Flow for the six months ended March 31, 2019 and 2018</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-34</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#fin_011"><FONT STYLE="font-size: 10pt">Notes to Unaudited Condensed Consolidated Financial Statements</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-35</FONT></TD></TR>
</TABLE>
<P STYLE="margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_001"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the Stockholders and Board of Directors of</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">MYnd
Analytics, Inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Opinion
on the Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have audited the accompanying consolidated balance sheets of MYnd Analytics, Inc. (the &ldquo;Company&rdquo;) as of September
30, 2018 and 2017, the related consolidated statements of operations, equity and cash flows for each of the two years in the period
ended September 30, 2018, and the related notes (collectively referred to as the &ldquo;financial statements&rdquo;). In our opinion,
the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2018
and 2017 and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2018,
in conformity with accounting principles generally accepted in the United States of America.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Explanatory
Paragraph - Going Concern</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully
described in Note 1, the Company has incurred significant losses and negative cash flows from operations and needs to raise additional
funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company&rsquo;s ability
to continue as a going concern. Management&rsquo;s plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Basis
for Opinion</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
financial statements are the responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on
the Company&rsquo;s financial statements based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (&ldquo;PCAOB&rdquo;) and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s internal control over financial reporting.
Accordingly, we express no such opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
Marcum LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Marcum
LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have served as the Company&rsquo;s auditor since 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Costa
Mesa, CA</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
11, 2018</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_002"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">MYND
ANALYTICS, INC.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
BALANCE SHEETS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">As of<BR> March 31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">(Unaudited)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>ASSETS</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>CURRENT ASSETS:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3,254,700</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">5,449,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,203,200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">154,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Prepaid insurance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Note receivable - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">159,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Prepaid expenses and other current assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">134,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">181,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,510,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,694,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,548,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">87,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Intangible assets, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">116,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Investment in Arcadian</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">195,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Goodwill</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,386,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,386,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Other assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">27,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">25,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">29,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">TOTAL ASSETS</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,151,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,096,100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,141,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">LIABILITIES AND STOCKHOLDERS&rsquo; EQUITY:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">CURRENT LIABILITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Accounts payable (including $30,350 and $36,200 to related parties as of September 30, 2018, and 2017, respectively)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">346,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">736,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">970,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">268,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accrued compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">466,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">244,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accrued compensation &ndash; related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">209,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">322,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accrued interest and other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Deferred revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">159,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">152,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Current portion of note payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Current portion of capital lease</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total current liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,165,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,545,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">LONG-TERM LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Long-term borrowing, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">587,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">606,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accrued interest on long-term borrowing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Long term portion of capital lease</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total long-term liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">699,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">728,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">TOTAL LIABILITIES</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,865,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,548,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,628,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">STOCKHOLDERS&rsquo; EQUITY:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Preferred stock, $0.001 par value; 15,000,000 authorized; 1,500,000 shares of Series A Preferred Stock and 500,000 shares of Series A-1 authorized; 550,000 shares of Series A Preferred Stock and 500,000 shares of Series A-1 issued and outstanding as of September 30, 2018; No shares of Preferred stock issued and outstanding as of September 30, 2017; aggregate liquidation preference of $1,968,750 as of September 30, 2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Common stock, $0.001 par value; 250,000,000 shares and 500,000,000 shares authorized as of September 30, 2018 and September 30, 2017 respectively, 7,407,254 and 4,299,311 shares issued and outstanding as of September 30, 2018 and September 30, 2017, respectively;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89,257,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,189,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">91,895,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Accumulated deficit</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(85,245,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(75,646,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(89,881,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total controlling interests</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,020,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,547,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,024,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Non-controlling interest</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(734,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,512,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total stockholders&rsquo; equity</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,286,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,547,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">512,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">TOTAL LIABILITIES AND STOCKHOLDERS&rsquo; EQUITY</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,151,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,096,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,141,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Accompanying Notes to the Consolidated Financial Statements</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_003"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">MYND
ANALYTICS, INC.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
STATEMENTS OF OPERATIONS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended <BR> September 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended<BR> March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>REVENUES</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left; text-indent: -9pt; padding-left: 0.25in">Neurometric services</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">263,700</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">128,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">124,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">133,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Telepsychiatry services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,051,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">723,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">448,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Total revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,315,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">128,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">847,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">581,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">Cost of revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Neurometric services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">118,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Telepsychiatry services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">696,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">509,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">264,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">827,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">521,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">383,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Gross Margin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">488,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">325,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">198,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">OPERATING EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 0.25in">Research</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">231,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">141,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">154,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Product development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,146,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,237,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">474,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">611,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,617,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,226,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">351,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,305,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">General and administrative</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,737,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,590,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,724,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,515,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Total operating expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,733,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,178,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,691,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,587,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">OPERATING LOSS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,244,900</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,103,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,365,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,388,600</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">OTHER INCOME (EXPENSE):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Interest expense, net</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(86,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(46,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Total other income (expense)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(86,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(46,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">LOSS BEFORE PROVISION FOR INCOME TAXES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,331,200</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,110,200</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,411,800</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,427,100</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">NET LOSS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(10,333,100</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(7,112,800</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,414,100</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,429,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Net loss attributable to noncontrolling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(734,400</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(778,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(72,300</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Net Loss attributable to MYnd Analytics, Inc.</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(9,598,700</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(7,112,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,636,100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(5,356,700</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">BASIC AND DILUTED LOSS PER SHARE:</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1.86</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.52</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.58</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1.23</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">WEIGHTED AVERAGE SHARES OUTSTANDING:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 0.25in">Basic and Diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,199,566</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,817,415</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">7,964,021</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,347,745</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT>&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Accompanying Notes to the Consolidated Financial Statements</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_004"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>MYND
ANALYTICS, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="text-align: center">&nbsp;</TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="text-align: center">&nbsp;</TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Sub-total</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Common
    Stock</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Preferred
    Stock</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Additional Paid-in</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Accumulated</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">MYnd Stockholders&rsquo;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Noncontrolling</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Total</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Shares</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Amount</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Shares</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Amount</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Capital</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Deficit</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Equity</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Interest</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Equity</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt; text-indent: -5pt; padding-left: 5pt; width: 19%"><FONT STYLE="font-size: 9pt">Balance
    at September&nbsp;30, 2016</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">1,941,061</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">1,900</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">67,467,400</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(68,533,800</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(1,064,500</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(1,064,500</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Stock-based compensation</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,086,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,086,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,086,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Stock issued for private
    placement of shares</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">477,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">500</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,980,800</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,981,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,981,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Stock issued for purchase
    agreement to Aspire Capital</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">20,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">145,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">145,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">145,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Commitment shares issued
    to Aspire Capital</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">80,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">(100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Stock issued to vendor
    for services</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">26,250</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">173,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">173,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">173,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Restricted stock compensation</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">79,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">(100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Common stock issued
    to Arcadian</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">5,900</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">5,900</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">5,900</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Common stock - public
    Offering</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,675,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,700</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">7,480,400</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">7,482,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">7,482,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Offering costs - legal
    fees Arcadian</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">(148,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">(148,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">(148,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Net
    loss</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(7,112,800</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(7,112,800</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(7,112,800</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Balance
    at September&nbsp;30, 2017</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">4,299,311</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">4,300</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">80,189,700</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(75,646,600</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">4,547,400</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">4,547,400</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Stock-based compensation</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,588,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,588,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,588,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Proceeds from issuance
    of preferred stock</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,050,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,036,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,037,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,037,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Stock issued to Aspire
    Capital</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,314,671</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,310</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">4,257,900</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">4,260,210</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">4,260,210</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Issuance of common stock</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">183,814</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">175</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">80,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">80,475</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">80,475</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Stock issued for private
    placement of shares</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">459,458</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">460</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">849,500</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">849,960</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">849,960</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Stock issued to vendor
    for services</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">115,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">120</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">201,800</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">201,920</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">201,920</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Proceeds from option
    exercise</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">35,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">35</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">54,200</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">54,235</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">54,235</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Net
    loss</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(9,598,700</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(9,598,700</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(734,400</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(10,333,100</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -5pt; padding-left: 5pt"><FONT STYLE="font-size: 9pt">Balance at September&nbsp;30, 2018</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">7,407,254</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">7,400</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">1,050,000</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">1,100</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">89,257,700</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(85,245,300</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">4,020,900</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(734,400</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">3,286,500</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>See
Accompanying Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_005"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">MYND
ANALYTICS, INC.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONSOLIDATED
STATEMENTS OF CASH FLOWS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>For the years ended</B><BR> <B>September 30,</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>OPERATING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 10pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(10,333,100</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(7,112,800</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">117,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Change in provision for doubtful accounts</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,588,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,086,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Non-cash common stock issued to vendors for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">201,920</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">173,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Accretion of debt discount and non-cash interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,400</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Prepaid expenses and other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(91,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,100</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(432,700</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">301,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Deferred revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">113,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Deferred compensation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(285,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(275,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(9,038,680</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,792,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">INVESTING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Purchase of property and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55,200</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(127,900</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Investment in Arcadian</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(190,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Payment for acquisition of business, net of cash acquired</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(306,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Loan Advance &ndash; Plotkin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(159,500</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Purchase of intangible assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(361,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(479,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">FINANCING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Principal payments on capital lease</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,200</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Principal payments on long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Principal payments on note payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,200</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(56,200</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Proceeds from Aspire Capital purchase agreements</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,260,210</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">145,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Proceeds from sale of preferred stock and common stock warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,037,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Proceeds from sale of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">930,435</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,981,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Proceeds from public offering</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,482,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Proceeds from stock options exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,235</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Deferred offering costs</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(148,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,206,180</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,402,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">NET INCREASE (DECREASE) IN CASH</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,194,300</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,130,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">CASH- BEGINNING OF YEAR</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,449,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">318,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">CASH- END OF YEAR</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,254,700</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,449,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash paid during the period for:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt">Interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Non-cash financing and investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Long-term borrowings assumed in business combination</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">651,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Commitment shares issued to Aspire Capital as offering cost</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">795,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">708,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Investment in Arcadian 1,000 shares at $5.90 per share of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Accompanying Notes to the Consolidated Financial Statements</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_006"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">MYND
ANALYTICS, INC.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>1.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NATURE
                                         OF OPERATIONS</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Organization,
Nature of Operations and Going Concern Uncertainty</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">MYnd
Analytics, Inc. (&ldquo;MYnd,&rdquo; &ldquo;CNS,&rdquo; &ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our,&rdquo; or the &ldquo;Company&rdquo;),
formerly known as CNS Response Inc., is a predictive analytics company that has developed a decision support tool to help physicians
reduce trial and error treatment in mental health and provide more personalized care to patients. The Company employs a clinically
validated scalable technology platform to support personalized care for mental health patients. The Company utilizes its patented
machine learning, artificial intelligence, data analytics platform for the delivery of telebehavioral health services and its
PEER predictive analytics product offering. On November 13, 2017, the Company acquired Arcadian, which manages the delivery of
telepsychiatry and telebehavioral health services through a nationwide network of licensed and credentialed psychiatrists, psychologists
and master&rsquo;s-level therapists. The Company is commercializing its PEER predictive analytics tool to help physicians reduce
trial and error treatment in mental health. MYnd&rsquo;s patented, clinically validated technology platform (&ldquo;PEER Online&rdquo;)
utilizes complex algorithms to analyze electroencephalograms (&ldquo;EEGs&rdquo;) to generate Psychiatric EEG Evaluation Registry
(&ldquo;PEER&rdquo;) Reports to predict individual responses to a range of medications prescribed for the treatment of behavioral
disorders including depression, anxiety, bipolar disorder, PTSD and other non-psychotic disorders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Going
Concern Uncertainty</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles
(&ldquo;GAAP&rdquo;), which contemplate continuation of the Company as a going concern. The Company&rsquo;s operations are subject
to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation
of a business. These risks include the ability to obtain adequate financing on a timely basis, if at all, the failure to develop
or supply technology or services to meet the demands of the marketplace, the failure to attract and retain qualified personnel,
competition within the industry, government regulation and the general strength of regional and national economies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s recurring net losses and negative cash flows from operations raise substantial doubt about its ability to continue
as a going concern. During the twelve months ended September 30, 2018, the Company incurred a net loss of $10.3 million and used
$9.0 million of net cash in operating activities. As of September 30, 2018, the Company&rsquo;s accumulated deficit was $85.2
million. In connection with these consolidated financial statements, management evaluated whether there were conditions and events,
considered in the aggregate, that raised substantial doubt about the Company&rsquo;s ability to meet its obligations as they become
due for the next twelve months from the date of issuance of these financial statements. Management assessed that there were such
conditions and events, including a history of recurring operating losses, and negative cash flows from operating activities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company raises additional funds by issuing additional equity or convertible debt securities, the fully diluted ownership percentages
of existing stockholders will be reduced. In addition, any equity or debt securities that the Company would issue may have rights,
preferences or privileges senior to those of the holders of its common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To date, the Company
has financed its cash requirements primarily from equity financings. The Company will need to raise funds immediately to continue
its operations and increase demand for its services. Until it can generate sufficient revenues to meet its cash requirements,
which it may never do, the Company must continue to finance future cash needs primarily through public or private equity offerings,
debt financings or strategic collaborations. The Company&rsquo;s liquidity and capital requirements depend on several factors,
including the rate of market acceptance of its services, the future profitability of the Company, the rate of growth of the Company&rsquo;s
business and other factors described elsewhere in this prospectus. The Company continues to explore additional sources of capital,
but there is substantial doubt as to whether any financing arrangement will be available in amounts and on terms acceptable to
the Company to permit it to continue operations. The accompanying consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SUMMARY
                                         OF SIGNIFICANT ACCOUNTING POLICIES</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basis
of Presentation</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the
U.S. Securities and Exchange Commission (the &ldquo;SEC&rdquo;) and are in accordance with accounting principles generally accepted
in the United States of America.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basis
of Consolidation</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
audited consolidated financial statements include the results of MYnd, its wholly owned subsidiary, Arcadian Telepsychiatry Services
LLC (&ldquo;Arcadian Services&rdquo;), two professional associations, Arcadian Telepsychiatry PA (&ldquo;Texas PA&rdquo;) which
is incorporated in Texas and Arcadian Telepsychiatry Florida P.A. (&ldquo;Florida PA&rdquo;) which is incorporated in Florida,
and two professional corporations, Arcadian Telepsychiatry P.C. (&ldquo;Pennsylvania PC&rdquo;) which is incorporated in Pennsylvania
and Arcadian Telepsychiatry of California, P.C. (&ldquo;California PC&rdquo;) which is incorporated in California collectively
&ldquo;the Arcadian Entities.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Arcadian
Services is party to Management Services Agreements by and among it and the Arcadian Entities pursuant to which each entity provides
services to Arcadian Services. Each entity is established pursuant to the requirements of its respective domestic jurisdiction
governing the corporate practice of medicine. All intercompany balances and transactions have been eliminated upon consolidation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Segments</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
view our operations and manage our business as one operating segment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Variable
Interest Entities (VIE)</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 13, 2017, Arcadian Services entered into a management
and administrative services agreement with Texas PA and with Pennsylvania PC, for an initial fixed term of 20 years. In accordance
with relevant accounting guidance, Texas PA and Pennsylvania PC are determined to be a Variable Interest Entity (&ldquo;VIE&rdquo;)
as MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly
affect Texas PA&rsquo;s and Pennsylvania PC&rsquo;s economic performance through its majority representation of the Texas PA and
Pennsylvania PC; therefore, Texas PA and Pennsylvania PC are consolidated by MYnd. On January 19, 2018, Arcadian Services entered
into a management and administrative services agreement with California PC, for an initial fixed term of 20 years. In accordance
with relevant accounting guidance, California PC is determined to be a VIE and MYnd is the primary beneficiary with the ability
to direct the activities (excluding clinical decisions) that most significantly affect California PC&rsquo;s economic performance
through its majority representation of California PC; therefore, California PC is consolidated by MYnd. On March 27, 2018, Arcadian
Services entered into a management and administrative services agreement with Florida PA, for an initial fixed term of 20 years.
In accordance with relevant accounting guidance, Florida PA is determined to be a VIE and MYnd is the primary beneficiary with
the ability to direct the activities (excluding clinical decisions) that most significantly affect Florida PA&rsquo;s economic
performance through its majority representation of Florida PA; therefore, Florida PA is consolidated by MYnd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company holds a variable interest in the entities which
contract with physicians and other health professionals in order to provide telepsychiatry services to Arcadian Services. The entities
are considered variable interest entities since they do not have sufficient equity to finance their activities without additional
financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power
and benefits, that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE&rsquo;s economic
performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the
right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and
rights to control all activities of the entities and funds and absorbs all losses of the VIE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with management service agreements entered into
between the Company and medical professional corporations and associations in compliance with regulatory requirements within certain
states, the Company has the power to direct activities of the VIE&rsquo;s and may transfer assets from the individual VIEs to the
Company. Therefore, the Company considers that there are no assets in any of the consolidated VIEs that may be relied upon to settle
obligations of these entities to third parties. Furthermore, creditors of the VIEs do not have recourse to the general credit of
the Company for any of the liabilities to third parties of the VIEs. Finally, none of the professional corporations or associations
have purchased equipment nor are they responsible for handling cash or accounts receivable.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no explicit or implicit arrangement that requires the
Company to provide financial support to the VIE, including events or circumstances that could expose the Company to a loss. For
the years ended September 30, 2018 and 2017, the Company did not provide, nor does it intend to provide in the future, any financial
or other support either explicitly or implicitly during the periods presented to its variable interest entities. In addition, there
are no restrictions on the net income earned by the VIEs. The Company allocates all of the net income earned to the primary owner
of the VIE. As part of the operating agreement with the VIE, the Company will be reimbursed for all cost incurred related to operating
the VIE in addition to a management fee charged for oversight. For the years ended September 30, 2018 and 2017, no net income was
allocated to the VIEs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the Company has not paid any dividends to the
VIEs from inception to date as there are no dividend payment requirements within the management services agreement entered into
with the medical professional corporations and associations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Use
of Estimates</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of the consolidated financial statements requires
management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related
disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related
to revenue recognition, doubtful accounts, intangible assets, income taxes, valuation of equity instruments, accrued liabilities,
contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these
estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT>&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
and Cash Equivalents</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company considers all liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company
deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At September
30, 2018, cash exceeds the federally insured limit by $3.0 million. The Company believes that the risk of loss is minimal. To date,
the Company has not experienced any losses related to cash deposits with financial institutions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Debt
Instruments</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Debt
instruments are initially recorded at fair value, with coupon interest and amortization of debt issuance discounts recognized
in the statement of operations as interest expense at each period end while such instruments are outstanding.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair
Value of Financial Instruments</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, ASC 825-10 - Recognition and Measurement of Financial
Assets and Financial Liabilities defines financial instruments and requires disclosure of the fair value of financial instruments
held by the Company. The Company considers the carrying amount of cash, accounts receivable, other receivables, accounts payable
and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such
instruments and their expected realization.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also analyzes all financial instruments with features of both liabilities and equity under ASC 480-10, ASC 815-10 and
ASC 815-40.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
FASB has established a framework for measuring fair value using generally accepted accounting principles. That framework provides
a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and
the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described
as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0; width: 0.5in">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level I inputs
    to the valuation methodology are quoted prices for identical assets or liabilities in active markets;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level II
    inputs to the valuation methodology include:</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0; width: 0.75in">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9675;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">quoted prices
    for similar assets and liabilities in active markets;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9675;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Quoted prices
    for identical or similar assets or liabilities in inactive markets;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9675;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inputs other
    than quoted prices that are observable for the asset or liability;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9675;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inputs that
    are derived principally from or corroborated by observable market data by correlation or other means;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term
of the asset or liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level III
    inputs to the valuation methodology are unobservable and significant to the fair value measurement.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
asset or liability&rsquo;s fair value measurement level within the fair value hierarchy is based on the lowest level of any input
that is significant to the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize
the use of unobservable inputs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
Receivable</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company estimates the collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing
the current creditworthiness of each customer. Allowances are provided for specific receivables deemed to be at risk for collection
which as of September 30, 2018 and 2017 are $1,800 and $1,000 respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and Equipment</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and Equipment, which are recorded at cost, consist of office furniture and equipment, which are depreciated, over their estimated
useful lives on a straight-line basis. The useful lives of these assets is estimated to be between three and five years. Depreciation
expense on furniture and equipment for the twelve months ended September 30, 2018 and 2017 was $60,300 and $19,700 respectively.
Accumulated depreciation at September 30, 2018 and 2017 was $149,200 and $84,200, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Long-Lived
                                         Assets</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">As
required by ASC 350-30 - Intangibles &mdash; Goodwill and other, the Company reviews the carrying value of its long-lived
assets at least annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of
an asset may no longer be recoverable. The Company assesses recoverability of the carrying value of the asset by estimating
the future undiscounted net cash flows expected to result from the asset, including eventual disposition. If the future net
cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the
asset&rsquo;s carrying value and fair value. No impairment loss was recorded for the years ended September 30, 2018 and
2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible
Assets</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Costs
for software developed for internal use are accounted for through the capitalization of those costs incurred in connection with
developing or obtaining internal-use software. Capitalized costs for internal-use software are included in intangible assets in
the consolidated balance sheet. Capitalized software development costs are amortized over three years. Costs incurred during the
preliminary project along with post-implementation stages of internal use computer software development and costs incurred to
maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development
costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological
and economic feasibility and estimated economic life.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
September 30, 2018, the Company had $101,700 in capitalized software development costs. Amortization for the twelve months ended
September 30, 2018 and 2017 was $29,000 and $29,000, respectively. Accumulated amortization was $70,400 and $39,300 at September
30, 2018 and 2017, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 13, 2017, the Company acquired customer relationships and tradename intangibles in connection with the Arcadian Services
acquisition of which $109,000 were recorded at fair value and are being amortized over an estimated useful life of four years
on a straight-line basis. Amortization for the twelve months ended September 30, 2018 and 2017 was $23,800 and none, respectively.
Accumulated amortization was $23,800 and $0 at September 30, 2018 and 2017, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
expected amortization of the intangible assets, as of September 30, 2018, for each of the next four years is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid; text-align: left">For the year ended September 30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Intangible<BR> assets</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">2019</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">54,200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2020</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">2022</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; text-align: left">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">116,500</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Goodwill</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Goodwill
represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations.
Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include
a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a
loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business,
significant negative industry or economic trends, or significant underperformance relative to expected historical or projected
future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence
of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is
less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines
that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment
testing is not required. The Company tests for goodwill impairment annually on September 30.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company performed a qualitative goodwill assessment at September 30, 2018 and concluded there was no impairment based on consideration
of a number of factors, including the improvement in the Company&rsquo;s key operating metrics over the prior year, improvement
in the strength of the general economy and the Company&rsquo;s continued execution against its overall strategic objectives.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on the foregoing, the Company determined that it was not more likely than not that the fair value of its reporting unit is less
than its carrying amount and therefore that no further impairment testing was required.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Accrued
Compensation</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued
compensation consists of accrued vacation pay, accrued compensation granted by the Board but not paid, and accrued pay due to
staff members.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued
compensation &ndash; related parties consists of accrued vacation pay, accrued bonuses granted by the Board but not paid for officers
and directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
Revenue</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
revenue represents cash collected in advance of services being rendered but not earned as of September 30, 2018 and 2017. This
represents a philanthropic grant for the payment of PEER Reports ordered in a clinical trial for a member of the U.S. Military,
a veteran or their family members, the cost of which is not covered by other sources. On August 1, 2017, the Company entered into
a Research Study Funding Agreement with Horizon Healthcare Services, Inc. dba Horizon Blue Cross Blue Shield of New Jersey and
its subsidiaries (collectively &ldquo;Horizon&rdquo;) and Cota, Inc. (&ldquo;Cota&rdquo;). On February 6, 2018, Horizon prepaid
for part of the study, $125,000 and the Company paid Cota $15,000 out of this payment for its services under the Study. These
deferred revenue grant funds total $159,700 and $45,900 as of September 30, 2018 and 2017, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company derives substantially all of its revenue from neurometric and telepsychiatry services. The Company recognizes revenues
in accordance with ASC 605, and accordingly revenue is recognized when persuasive evidence of an arrangement exists, delivery
has occurred, the fee is fixed or determinable, collectability is reasonably assured and acceptance criteria, if any, have been
met. If any of these criteria are not met, revenue recognition is deferred until such time that all of the criteria are met. The
Company&rsquo;s neurometric and telepsychiatry services are recognized in the month the services are delivered by the physician.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company charges research and development expenses to operations as incurred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advertising
Expenses</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company charges all advertising expenses to operations as incurred. For the year ended September 30, 2018 and 2017, advertising
expenses were $248,600 and $152,000, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-Based
Compensation</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounts for awards to employees in accordance with ASC 718, Compensation-Stock Compensation. For stock options issued
to employees and directors we use the Black-Scholes option valuation model for estimating fair value at the date of grant. For
stock options issued for services rendered by non-employees, we recognize compensation expense in accordance with the requirements
of ASC 505-50, Equity, or ASC 505-50, as amended. Non-employee option grants that do not vest immediately upon grant are recorded
as an expense over the vesting period. At the end of each financial reporting period prior to performance, the value of these
options, as calculated using the Black-Scholes option valuation model, is determined, and compensation expense recognized or recovered
during the period is adjusted accordingly. Since the fair value of options granted to non-employees is subject to change in the
future, the amount of the future compensation expense is subject to adjustment until the common stock options or warrants are
fully vested.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrants</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, the Company has issued warrants to purchase shares of common stock. These warrants have been issued in connection
with the Company&rsquo;s financing transactions. The Company&rsquo;s warrants are subject to standard anti-dilution provisions
applicable to shares of our common stock. The Company estimates the fair value of warrants using the Black-Scholes option valuation
model with the following assumptions: market prices of the stock, time to maturity, volatility, zero expected dividend rate and
risk free rate all at the date of the warrant issuance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
Taxes</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for
future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation
allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 22, 2017, President Trump signed into law new legislation that significantly revises the Internal Revenue Code of 1986,
as amended, or the Code. The newly enacted federal income tax law, among other things, contains significant changes to corporate
taxation, including reduction of the corporate tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation
of the tax deduction for interest expense to 30 percent of adjusted earnings (except for certain small businesses), limitation
of the deduction for net operating losses to 80 percent of current-year taxable income and elimination of net operating loss carrybacks,
one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain
new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions
and credits.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the implementation of certain provisions of FASB ASC 740, Income Taxes, which clarifies the accounting and disclosure
for uncertainty in tax positions, the Company has analyzed filing positions in each of the federal and state jurisdictions where
required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified U.S. Federal and
California as our major tax jurisdictions. Generally, we remain subject to Internal Revenue Service examination of our 2013 through
2016 U.S. federal income tax returns, and remain subject to California Franchise Tax Board examination of our 2012 through 2016
California Franchise Tax Returns. We have certain tax attribute carryforwards which will remain subject to review and adjustment
by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are
utilized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that
will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been
recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record
such items as a component of income taxes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Noncontrolling Interest</B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company consolidates entities in which the Company has a controlling
financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of
the voting rights, and VIEs for which the Company is the primary beneficiary. Noncontrolling interests represent third-party
equity ownership interests in the Company&rsquo;s consolidated entities. The amount of net loss attributable to noncontrolling
interests for the years ended September 30, 2018 and 2017 was $734,400 and $0, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Earnings
(Loss) per Share</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
and diluted earnings (loss) per share is presented in conformity with the two-class method. Under the two-class method, basic
net loss per share is computed by dividing income (loss) available to common stockholders by the weighted average common shares
outstanding during the period. Net loss per share is calculated as the net loss less the current period preferred stock dividends.
Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts
to issue Common Stock were exercised and converted into Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recent
Accounting Pronouncements</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Apart
from the below-mentioned recent accounting pronouncements, there are no new accounting pronouncements that are currently applicable
to the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended, which requires an entity to recognize
the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, or the new
revenue standard. The new revenue standard also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers,
which discusses the deferral of incremental costs of obtaining a contract with a customer. The new revenue standard is effective
for annual periods beginning after December 15, 2017. The standard permits the use of either a full retrospective or modified
retrospective transition method.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company will adopt the new revenue standard as of October 1, 2018, using the modified retrospective transition method applied
to those contracts which were not completed as of that date. Upon adoption, we will recognize the cumulative effect of adopting
this guidance as an adjustment to our opening balance of accumulated deficit. Prior periods will not be retrospectively adjusted.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not expect the new revenue standard to have a material impact on our revenue upon adoption. Also, we do not expect the new
standard to have a material impact as it relates to the deferral of incremental costs of obtaining contracts. The Company is in
the process of implementing the necessary changes to its accounting policies, processes, internal controls and information systems
that will be required to meet the new revenue standard&rsquo;s reporting and disclosure requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires that a lessee recognize lease assets and lease
liabilities for those leases classified as operating leases. The guidance is effective for interim and annual periods beginning
after December 15, 2018. The Company is currently evaluating the impact of adoption of this standard to its financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several
aspects of the accounting for share-based payment transactions, including the income tax consequences, accounting for forfeitures,
and classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance
is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. The guidance will
be applied prospectively, retrospectively, or by means of a cumulative-effect adjustment to equity as of the beginning of the
period in which the guidance is adopted, dependent upon the specific amendment that is adopted within the ASU. The adoption of
this new guidance did not have a material effect on the consolidated results of operations, cash flows, and financial position.
The Company adopted the guidance on October 1, 2017 and chose to prospectively apply the guidance in its financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This guidance
narrows the definition of a business. This standard provides guidance to assist entities with evaluating when a set of transferred
assets and activities is a business. This guidance is effective for interim and annual reporting periods beginning after December
15, 2017, and early adoption is permitted. This guidance must be applied prospectively to transactions occurring within the period
of adoption. The Company adopted ASU 2017-01 on October 1, 2017, and prospectively applied ASU 2017-01 as required with no impact
on its consolidated financial position, results of operations or cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.
This guidance eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment
charge for the amount by which the goodwill carrying amount exceeds the reporting unit&rsquo;s fair value. This guidance is effective
for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted.
This guidance must be applied on a prospective basis. The Company adopted ASU 2017-04 in the first quarter of 2018, and prospectively
applied ASU 2017-04 as required with no impact on its consolidated financial position, results of operations or cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
May 2017, the FASB issued ASU 2017-9, &ldquo;Compensation &ndash; Stock Compensation (Topic 718): Scope of Modification Accounting,&rdquo;
to provide clarity and reduce both diversity in practice and cost complexity when applying the guidance in Topic 718 to a change
to the terms and conditions of a stock-based payment award. ASU 2017-9 also provides guidance about the types of changes to the
terms or conditions of a share-based payment award that require an entity to apply modification accounting in accordance with
Topic 718. For all entities, including emerging growth companies, the standard is effective for annual periods beginning after
December 15, 2017, and for interim periods therein. Early adoption is permitted. The Company adopted the guidance on October 1,
2017 and there was no impact on the financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2017, the FASB issued a two-part ASU 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and
II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and
Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (&ldquo;ASU 2017-11&rdquo;). ASU 2017-11 amends
guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives
and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments
(or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral
of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those
amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim
periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2017-11
ended October 1, 2017, and retrospectively applied ASU 2017-11 as required with no impact on its consolidated financial position
or results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments
in this Update expand the scope of Topic 718 to include share based payment transactions for acquiring goods and services from
nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs
to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest
and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment
transactions in which a grantor acquires goods or services to be used or consumed in a grantor&rsquo;s own operations by issuing
share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively
provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of
a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for
public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year.
The Company is currently evaluating the impact of adoption of this standard to its financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ACCOUNTS
RECEIVABLE, NET</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
receivable, net, is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap">&nbsp;</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; white-space: nowrap">September&nbsp;30,</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; white-space: nowrap">September&nbsp;30,</TD><TD STYLE="font-weight: bold; white-space: nowrap">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Accounts receivable</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">65,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">7,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Allowance for doubtful accounts</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">63,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>4.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>LONG
- TERM BORROWINGS AND OTHER NOTES PAYABLE</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Debt
assumed from Arcadian Services</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the acquisition of Arcadian Services, the Company guaranteed Arcadian Services&rsquo; then outstanding debt obligations
totaling $700,000 owed to Ben Franklin Technology Partners of Southeastern Pennsylvania (&ldquo;BFTP&rdquo;). The maturity date
for the debt is September 30, 2021 and interest accrues at an 8% annual rate. Unpaid interest was $110,100 as of September 30,
2018. The Company recorded the debt at its fair value and recorded a discount of $112,300 as of September 30, 2018 attributable
to the difference between the market interest rate and the stated interest rate on the debt. Interest expense related to the accretion
of debt discount for the twelve months ended September 30, 2018 was $32,800.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
balloon payment of $700,000 plus interest will be made on the scheduled maturity date of September 30, 2021.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
Notes Payable</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note
Payable - finance company, principal is payable over thirty-six equal payments of $1,200 through May 8, 2018. Interest is payable
monthly on the unpaid balance at 19% per annum. The outstanding balance was paid in full on May 8, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loan
payable to a vendor, principal payments of $5,000 per month, together with interest computed at 6% per annum. The outstanding
balance was paid in full on May 8, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ACQUISITION</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounted for the acquisition of Arcadian Services using the acquisition method of accounting for business combinations
under ASC 805, Business Combinations. The total purchase price is allocated to the tangible and identifiable intangible assets
acquired and liabilities assumed based on their estimated fair values as of the acquisition date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair
value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates
and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities
assumed, as well as asset lives and the expected future cash flows and related discount rates, can materiality impact our results
of operations. Significant inputs used for the model included the amount of cash flows, the expected period of the cash flows
and the discount rates. The finalization of the purchase accounting assessment may result in a change in the fair value of the
debt assumed and intangible assets, which may have a material impact on our results of operations and financial position.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 13, 2017, the Company acquired Arcadian Services. The purchase price, including the value of the indebtedness and payables
of Arcadian Services, is $1,339,600 based upon a deemed acquisition of all of the assets and liabilities of Arcadian Services,
including the equity interests in Arcadian Services. The aggregate purchase price consists of (i) initial investment in Arcadian
of $195,900 (ii) $317,000 of forgiveness of a note receivable with the primary member of Arcadian (iii) assumption by Arcadian
Services of subordinated debt (&ldquo;Arcadian Note&rdquo;) with a fair value of $555,000, plus accrued interest of $96,700 (iv)
$175,000 payment for the redemption and cancellation of two warrants to purchase equity interests in Arcadian Services. The Arcadian
Note bears interest at an annual rate of 8% and matures on September 30, 2021.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the allocation of the purchase consideration and the estimated fair value of the assets acquired and
the liabilities assumed for the acquisition of Arcadian Services made by the Company:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Assets acquired:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">25,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Intangibles</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Goodwill</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">1,386,800</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Total assets acquired</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">1,602,800</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Liabilities assumed</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">147,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accrued other liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">108,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Notes payable</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">6,800</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Total liabilities assumed</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">263,200</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Net assets acquired</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">1,339,600</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Consideration paid:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Initial investment in Arcadian Services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">195,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">555,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accrued interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">96,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Payment on warrant outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Forgiveness of loan in relation of acquisition</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">317,000</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total consideration</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">$</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1.5pt solid">1,339,600</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
weighted average useful life of all identified acquired intangible assets is 3.9 years. The useful lives for trade names and customer
relationships are 1.0 years and 4.0 years. Identifiable intangible assets with definite lives are amortized over the period of
estimated benefit using the straight-line method and the estimated useful lives of one to four years. The straight-line method
of amortization represents the Company&rsquo;s best estimate of the distribution of the economic value of the identifiable intangible
assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the acquisition, the Company recorded $1,386,800 of goodwill. The goodwill balance is primarily attributed to the
anticipated synergies from the acquisition and expanded market opportunities with respect to the integration of Arcadian Services&rsquo;
products with the Company&rsquo;s other solutions. The Company believes that the factors listed above support the amount of goodwill
recorded as a result of the purchase price paid.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended September 30, 2018, the Company incurred transaction costs of $438,600 and $0 in connection with the Arcadian Services
acquisition, which were expensed as incurred and included in general and administrative expenses within the accompanying consolidated
statements of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unaudited
Pro Forma Financial Information</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following unaudited pro forma statement of operations data presents the combined results of operations for the years ended September
30, 2018 and 2017 as if the acquisition of Arcadian Telepsychiatry Services LLC had taken place on October 1, 2016.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
unaudited pro forma financial information includes the effects of certain adjustments, including the amortization of acquired
intangibles and the associated tax effect and the elimination of the Company&rsquo;s and the acquiree&rsquo;s non-recurring acquisition
related expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The
unaudited pro forma information presented does not purport to be indicative of the results that would have been achieved had the
acquisitions been consummated at October 1, 2016 nor of the results which may occur in the future. The pro forma adjustments are
based upon available information and certain assumptions that the Company believes are reasonable.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Pro Forma</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended September 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-bottom: 4pt">Revenues</TD><TD STYLE="width: 1%; padding-bottom: 4pt"><B>&nbsp;</B></TD>
    <TD STYLE="width: 1%; border-bottom: Black 4pt double; text-align: left"><B>$</B></TD><TD STYLE="width: 9%; border-bottom: Black 4pt double; text-align: right"><B>1,460,800</B></TD><TD STYLE="width: 1%; padding-bottom: 4pt; text-align: left"><B>&nbsp;</B></TD><TD STYLE="width: 1%; padding-bottom: 4pt"><B>&nbsp;</B></TD>
    <TD STYLE="width: 1%; border-bottom: Black 4pt double; text-align: left"><B>$</B></TD><TD STYLE="width: 9%; border-bottom: Black 4pt double; text-align: right"><B>1,154,500</B></TD><TD STYLE="width: 1%; padding-bottom: 4pt; text-align: left"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net income (loss)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(10,558,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(7,894,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Basic and diluted loss per share:</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.03</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.80</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>weighted shares outstanding:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,199,566</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,817,415</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>6.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>STOCKHOLDERS&rsquo;
EQUITY</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Aspire Capital Equity Line</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 6, 2016, the Company, entered into the first common stock purchase agreement (the &ldquo;First Purchase Agreement&rdquo;)
with Aspire Capital Fund, LLC (&ldquo;Aspire Capital&rdquo;) which provided that, upon the terms and subject to the conditions
and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $10.0 million of shares of the
Company&rsquo;s Common Stock over the 30-month term of the First Purchase Agreement. Concurrently with entering into the First
Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the &ldquo;Registration
Rights Agreement&rdquo;), pursuant to which the Company maintained an effective registration statement registering the sale of
the shares of Common Stock that were issued to Aspire under the First Purchase Agreement. Under the First Purchase Agreement,
on any trading day selected by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50
per share, the Company had the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire
Capital (as principal) to purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company&rsquo;s
common stock in the aggregate at a per share purchase price equal to the lesser of:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a)</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    lowest sale price of Common Stock on the purchase date; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">b)</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><P STYLE="margin: 0pt 0; text-align: justify">the arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve
(12) consecutive trading days ending on the trading day immediately preceding the purchase date.</P>


</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, on any date on which the Company submitted a purchase notice to Aspire Capital in an amount equal to 50,000 shares,
and the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also had the right, in
its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a &ldquo;VWAP Purchase
Notice&rdquo;) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock
traded on its principal market on the next trading day (the &ldquo;VWAP Purchase Date&rdquo;), subject to a maximum number of
shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted
average price for Common Stock traded on its principal market on the VWAP Purchase Date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
purchase price was subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, or other similar
transaction occurring during the period(s) used to compute the First Purchase Price. The Company could deliver multiple Purchase
Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the
most recent purchase has been completed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
First Purchase Agreement provided that the Company and Aspire Capital would not effect any sales under the First Purchase Agreement
on any purchase date where the closing sale price of the Company&rsquo;s common stock was less than $0.50. There were no trading
volume requirements or restrictions under the First Purchase Agreement, and the Company could control the timing and amount of
sales of Common Stock to Aspire Capital. Aspire Capital had no right to require any sales by the Company, but was obligated to
make purchases from the Company as directed by the Company in accordance with the First Purchase Agreement. There were no limitations
on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights,
penalties or liquidated damages in the First Purchase Agreement. In consideration for entering into the First Purchase Agreement,
concurrently with the execution of the First Purchase Agreement, the Company issued to Aspire Capital 80,000 shares of Common
Stock (the &ldquo;First Commitment Shares&rdquo;). The First Purchase Agreement was terminated and replaced by the Second Purchase
Agreement on May 15, 2018. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall
engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the First
Purchase Agreement. Any proceeds the Company receives under the First Purchase Agreement are expected to be used for working capital
and general corporate purposes. The Company cannot request Aspire to purchase more than $100,000 per business day.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2018, the Company has issued purchase notices to Aspire Capital under the First Purchase Agreement to purchase
an aggregate of 1,180,000 shares of common stock, at a per share price of $2.00, resulting in gross cash proceeds of approximately
$2.4 million. The issuance of shares of common stock that were issued from time to time to Aspire Capital under the First Purchase
Agreement were exempt from registration under the Securities Act, pursuant to the exemption for transactions by an issuer not
involving any public offering under Section 4(a)(2) of the Securities Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Second Purchase Agreement with Aspire Capital</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 15, 2018, the Company, entered into the Second Purchase Agreement with Aspire Capital under substantially the same terms,
conditions and limitations as the First Purchase Agreement. Pursuant to the Second Purchase Agreement, Aspire Capital is committed
to purchase up to an aggregate of $10.0 million of shares of the Company&rsquo;s Common Stock over 80 the 30-month term of the
Second Purchase Agreement. Concurrently with entering into the Second Purchase Agreement, the Company also entered into a registration
rights agreement with Aspire Capital (the &ldquo;Registration Rights Agreement&rdquo;), pursuant to which the Company maintains
an effective registration statement registering the sale of the shares of Common Stock that have and may be issued to Aspire under
the Second Purchase Agreement. Under the Second Purchase Agreement, on any trading day selected by the Company on which the closing
sale price of its Common Stock is equal to or greater than $0.50 per share, the Company has the right, in its sole discretion,
to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 50,000 shares of Common
Stock per business day, up to $10.0 million of the Company&rsquo;s common stock in the aggregate at a per share purchase price
equal to the lesser of:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         lowest sale price of Common Stock on the purchase date; or</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">b)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days
ending on the trading day immediately preceding the purchase date.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, on any date on which the Company submits a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and
the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its
sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a &ldquo;VWAP Purchase
Notice&rdquo;) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock
traded on its principal market on the next trading day (the &ldquo;VWAP Purchase Date&rdquo;), subject to a maximum number of
shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted
average price for Common Stock traded on its principal market on the VWAP Purchase Date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
purchase price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction
occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP
Purchase Notices to Aspire Capital from time to time during the term of the Second Purchase Agreement, so long as the most recent
purchase has been completed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Second Purchase Agreement provides that the Company and Aspire Capital will not effect any sales under the Second Purchase Agreement
on any purchase date where the closing sale price of the Company&rsquo;s common stock is less than $0.50. There are no trading
volume requirements or restrictions under the Second Purchase Agreement, and the Company will control the timing and amount of
sales of Common Stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to
make purchases from the Company as directed by the Company in accordance with the Second Purchase Agreement. There are no limitations
on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights,
penalties or liquidated damages in the Second Purchase Agreement. In consideration for entering into the Second Purchase Agreement,
concurrently with the execution of the Second Purchase Agreement, the Company issued to Aspire Capital 250,000 shares of Common
Stock (the &ldquo;Second Commitment Shares&rdquo;). The Second Purchase Agreement may be terminated by the Company at any time,
at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives
and affiliates shall engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination
of the Second Purchase Agreement. Any proceeds from the Company receives under the Second Purchase Agreement are expected to be
used for working capital and general corporate purposes. The Company cannot request Aspire to purchase more than $300,000 per
business day.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2018, the Company has issued purchase notices to Aspire Capital under the Second Purchase Agreement to purchase
an aggregate of 884,671 shares of common stock, resulting in gross cash proceeds of approximately $1.9 million. The issuance of
shares of common stock that were issued from time to time to Aspire Capital under the Second Purchase Agreement were exempt from
registration under the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering
under Section 4(a)(2) of the Securities Act.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholder
Approval for Removal of Exchange Cap</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Second Purchase Agreement previously
restricted the amount of shares that may be sold to Aspire Capital thereunder to 1,134,671 shares of Common Stock (the &ldquo;Exchange
Cap&rdquo;). On November 26, 2018, the Company received shareholder approval to remove the Exchange Cap in compliance with the
applicable listing rules of the Nasdaq Stock Market. Pursuant to Nasdaq Listing Rule 5635(d), shareholder approval is required
prior to the issuance of securities in connection with a transaction other than a public offering involving the sale, issuance
or potential issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal to 20%
or more of the common stock outstanding before the issuance for less than the greater of book or market value of the stock. Following
receipt of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million, of common
stock to Aspire Capital under the Second Purchase Agreement.</P>



<P STYLE="font: 10pt Times New Roman,serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Common
and Preferred Stock</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2017, the Company is authorized to issue 515,000,000 shares of stock of which 500,000,000 are common stock, and
15,000,000 shares were preferred shares. As of September 30, 2018, the Company is authorized to issue 265,000,000 shares of stock
of which 250,000,000 are common stock, and 15,000,000 shares were preferred shares, with a par value of $0.001 per shares are
blank-check preferred stock which the Board is expressly authorized to issue without stockholder approval, for one or more series
of preferred stock and, with respect to each such series, to fix the number of shares constituting such series and the designation
of such series, the voting powers, if any, of the shares of such series, and the preferences and relative, participating, optional
or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The
powers, preferences and relative, participating, optional and other special rights of each series of preferred stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Private
Placement with Directors and Management</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 21, 2018, the Company entered
into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well
as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of
the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private
placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and one
common stock purchase warrant to purchase one share of Common Stock for $2.00 per share.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-Option
Plans</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2006
Stock Incentive Plan</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 3, 2006, CNS California adopted the CNS California 2006 Stock Incentive Plan (the &ldquo;2006 Plan&rdquo;). The 2006 Plan
provides for the issuance of awards in the form of restricted shares, stock options (which may constitute incentive stock options
(ISO) or non-statutory stock options (NSO), stock appreciation rights and stock unit grants to eligible employees, directors and
consultants and is administered by the Board. A total of 3,339 shares of stock were ultimately reserved for issuance under the
2006 Plan. As of September 30, 2018, zero options were exercised and there were 1,445 option shares outstanding under the amended
2006 Plan. The outstanding options have exercise prices to purchase shares of Common Stock ranging from $2,400 to $3,300 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2012
Omnibus Incentive Compensation Plan</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 22, 2012, our Board approved the MYnd Analytics, Inc. 2012 Omnibus Incentive Compensation Plan (the &ldquo;2012 Plan&rdquo;),
and reserved 1,667 shares of stock for issuance under the 2012 plan. On December 10, 2012, the Board approved the amendment of
the 2012 Plan to increase the shares authorized for issuance from 1,667 shares to 27,500 shares. On March 26, 2013, the Board
further approved the amendment of the 2012 Plan to increase the shares authorized for issuance from 27,500 shares to 75,000 shares.
The 2012 Plan, as amended, was approved by our stockholders at the 2013 annual meeting held on May 23, 2013.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 5, 2016, the Board approved a further amendment of the 2012 Plan to increase the Common Stock authorized for issuance from
75,000 shares to 200,000 shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 22, 2016 the Board amended the 2012 Plan to: (i) increase the total number of shares of Common Stock available for grant
under the 2012 Plan from 200,000 shares to an aggregate of 500,000 shares, (ii) add an &ldquo;evergreen&rdquo; provision which,
on January 1st of each year through 2022, automatically increases the number of shares subject to the 2012 Plan by the lesser
of: (a) a number equal to 10% of the shares of Common Stock authorized under the 2012 Plan as of the preceding December 31st,
or (b) an amount, or no amount, as determined by the Board, but in no event may the number of shares of Common Stock authorized
under the 2012 Plan exceed 885,781 and (iii) increase the annual individual award limits under the 2012 Plan to 100,000 shares
of Common Stock, subject to adjustment in accordance with the 2012 Plan. Per the above mentioned &ldquo;evergreen&rdquo; provision,
an additional 50,000 shares were automatically allocated for distribution under the 2012 Plan as of January 1, 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the 2017 Annual Meeting of Stockholders of MYnd Analytics, Inc. (&ldquo;the Company&rdquo;), held on August 21, 2017 (the &ldquo;2017
Annual Meeting&rdquo;), the holders of the Company&rsquo;s common stock voted to amend the Company&rsquo;s 2012 Omnibus Incentive
Compensation Plan (the &ldquo;2012 Plan&rdquo;) to increase: (i) the total number of shares of common stock, par value $0.001
per share (&ldquo;Common Stock&rdquo;), available for grant under the 2012 Plan (subject to the overall limits described in clause
(ii) below) from 550,000 shares to an aggregate of 975,000 shares; (ii) the aggregate limitation on authorized shares available
for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 885,781 shares to 1,570,248 shares
and (iii) the annual individual award limits under the 2012 Plan to 150,000 shares of Common Stock (subject to adjustment in accordance
with the 2012 Plan);</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the 2018 Annual Meeting of Stockholders of the Company, held on April 4, 2018, the holders of the Company&rsquo;s common stock
voted to amend the 2012 Plan to increase (i) the total number of shares of Common Stock available for grant under the 2012 Plan
(subject to the overall limit described in clause (ii) below) from 1,072,500 shares to an aggregate of 1,500,000 shares and (ii)
the aggregate limitation on the authorization shares available for grant under the 2012 Plan, following any increases pursuant
to the evergreen provision, from 1,570,248 shares to 2,200,000 shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the Special Meeting of Stockholders of the Company, held on November 26, 2018, the holders of the Company&rsquo;s common and preferred
stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012
Plan to increase: (a) the total number of shares of common stock, par value $0.001 per share (&ldquo;Common Stock&rdquo;), available
for grant under the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate
of 2,250,000 shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any
increases pursuant to the evergreen provision (the &ldquo;Evergreen Provision&rdquo;), from 2,200,000 shares to 2,950,000 shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chairman
Agreements and Amendments</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 14, 2017, the Company entered into a Chairman Services Agreement (the &ldquo;Agreement&rdquo;) with Robin L. Smith, M.D.,
the Chairman of the Company&rsquo;s board of directors (the &ldquo;Board&rdquo;). Pursuant to the Agreement, Dr. Smith is entitled
to receive the following equity awards: (a) on the Effective Date, a grant of 25,000 shares of restricted stock (vesting immediately)
under the 2012 Plan; (b) on the Effective Date, options to purchase 75,000 shares of Common Stock under the Plan; and (c) on the
date of the Company&rsquo;s 2017 annual meeting of stockholders, an award of options to purchase 50,000 shares of Common Stock
(the &ldquo;2017 Option Award&rdquo;) was granted. In addition, at each annual meeting of stockholders of the Company thereafter
beginning in 2018 during the Term, Dr. Smith will be entitled to receive a grant of 25,000 shares of restricted stock (vesting
immediately) under the Plan and options to purchase 75,000 shares of Common Stock under the Plan. Other than the 2017 Option Award,
all options granted under the Agreement will vest 1/3 on the date of grant, 1/3 on the six month anniversary of the date of grant
and 1/3 on the twelve month anniversary of the date of grant. The 2017 Option Award will vest on December 1, 2018. Pursuant to
the Agreement, all options owned by Dr. Smith will remain exercisable for a period of 10 years from the date of grant, even if
Dr. Smith is no longer with the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 24, 2018, the Company and Dr. Smith agreed to amend the Chairman Services Agreement, dated as of July 14, 2017 (the &ldquo;Chairman
Amendment&rdquo;) to provide that Dr. Smith&rsquo;s annual compensation for the 2018 calendar year would be reduced from $300,000
to $250,000. This change was retroactive to January 1st. Further, pursuant to the Chairman Amendment, Dr. Smith was granted an
option on April 16, 2018 to purchase 50,000 shares of common stock under the Company&rsquo;s 2012 Plan, which will not be terminated
if Dr. Smith is no longer affiliated with the Company. The options granted under the Chairman Amendment will vest on the date
of the grant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Agreement
with Maxim Group LLC</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 2, 2018, the Company entered into an Advisory Agreement with Maxim Group LLC (&ldquo;Maxim&rdquo;) for general financial
advisory and investment banking services. Maxim&rsquo;s compensation under the agreement was 100,000 shares of the Company&rsquo;s
Common Stock, payable in one payment of 50,000 shares of Common Stock and five monthly payments of 10,000 shares of Common Stock
from April through August 2018. The shares of Common Stock will have unlimited piggyback registration rights and the same rights
afforded other holders of the Company&rsquo;s Common Stock. Compensation expense under this agreement was $162,300 and was recorded
as general and administrative expenses in the consolidated statement of operations for the year ended September 30, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amendment
to Chief Executive Officer&rsquo;s Agreement</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 19, 2018, the Company and George C. Carpenter, IV, the Chief Executive Officer of the Company, entered into an amendment
to his Employment Agreement, dated as of September 7, 2007 (the &ldquo;CEO Amendment&rdquo;), pursuant to which Mr. Carpenter&rsquo;s
annual salary as reduced from $270,000 to $206,250. This change is retroactive to April 13, 2018. Further, pursuant to the CEO
Amendment, Mr. Carpenter was granted 34,380 restricted shares of common stock under the 2012 Plan. The shares granted under the
CEO Amendment will vest quarterly. If the employee&rsquo;s relationship with the Company is terminated, the above grant will be
prorated. On or before December 31, 2018, the parties will review this modification to determine if the above salary reduction
adjustment will be renewed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2018, options to purchase 802,492 shares of Common Stock were outstanding under the 2012 Plan with exercise prices
ranging from $1.55 to $600, with a weighted average exercise price of $4.39. Additionally, 406,564 restricted shares of Common
Stock have been issued under the 2012 Plan, leaving 290,944 shares of Common Stock available to be awarded.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-based
compensation expense is generally recognized over the employees&rsquo; or service provider&rsquo;s requisite service period, generally
the vesting period of the award. Stock-based compensation expense included in the accompanying statements of operations for the
years ended September 30, 2018 and 2017 is as follows:&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Stock-based &nbsp;compensation &nbsp;Expense
    non- Restricted &nbsp;Shares</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Stock-based &nbsp;compensation &nbsp;Expense
    &nbsp;Restricted &nbsp;Shares</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Stock-based &nbsp;compensation &nbsp;Expense
    non- Restricted &nbsp;Shares</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Stock-based compensation &nbsp;Expense &nbsp;Restricted
    &nbsp;Shares</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%">Research</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">10,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Product development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">360,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">General and administrative</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,034,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">513,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">647,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">892,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,058,200</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">530,100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,194,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">892,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
unrecognized compensation expense was $185,537 as of September 30, 2018. The following table sets forth the Company&rsquo;s unrecognized
stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that
expense is expected to be recognized:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid"><B>Type of Award:</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Unrecognized </B><BR> <B>Expense,</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Weighted </B><BR> <B>average </B><BR> <B>Recognition
</B><BR>
<B>Period<BR>
(in&nbsp;years)</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Unrecognized </B><BR> <B>Expense</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Weighted </B><BR> <B>average </B><BR> <B>Recognition</B><BR>
<B>Period <BR>
(in&nbsp;years)</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Stock Options</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">126,509</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">0.96</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">860,915</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3.54</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Restricted Stock</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">59,028</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.55</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">205,858</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">185,537</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">0.83</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,066,773</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3.05</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
summary of stock option activity is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<BR> Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<BR> Average <BR>
    Exercise <BR> Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted-&nbsp;<BR> Average&nbsp;<BR>
    Remaining&nbsp;<BR> Contractual&nbsp;<BR> Term <BR>
(in&nbsp;years)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Intrinsic Value</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; padding-bottom: 1.5pt">Outstanding at September 30, 2016</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">223,120</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">50.98</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">6.63</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">819,137</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">334,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.85</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Forfeited</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,037</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,335.06</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Outstanding at September 30, 2017</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">554,083</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16.14</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6.63</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,425</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">468,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.01</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(35,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.55</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Forfeited or expired</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(183,146</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8.19</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Outstanding at September 30, 2018</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">803,937</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10.13</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8.75</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are 531,604 shares of options vested and 272,333 unvested as of September 30, 2018; there are 249,284 shares of options vested
and 304,799 unvested as of September 30, 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
is a summary of the status of options outstanding at September 30, 2018:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercise<BR> Price ($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number<BR> of Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Expiration<BR> Date</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average<BR> Exercise
    Price ($)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: left; padding-left: 0.125in; text-indent: -0.125in">2012 Omnibus Incentive Compensation Plan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 23%; text-align: right">1.55</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">250,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 24%; text-align: center">4/2028</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">1.55</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.99</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">4/2028</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.99</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.35</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">6/2028</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.35</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.98</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">5/2028</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.98</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">09/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.60</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.74</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">12/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.74</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.88</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">11/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.88</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.96</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">11/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.96</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">08/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.10</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">08/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.16</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.33</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">07/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.33</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">04/2026</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.10</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.90</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">03/2027</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.90</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">174,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">09/2026</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.00</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.44</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,307</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">12/2022 &ndash; 01/2023</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.44</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">08/2025</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.00</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,518</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">03/2023 &ndash; 01/2025</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50.00</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">625</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">07/2024</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52.00</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">600.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">42</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">03/2022</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">600.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: right"><B>Sub-Total</B></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">802,492</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">Weighted Average</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4.39</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: left">2006 Stock Incentive Plan</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 23%; text-align: right">2,400.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">144</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 24%; text-align: center">03/2019 &ndash; 07/2020</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 22%; text-align: right">2,400.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,820.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">03/2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,820.00</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">3,300.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,250</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">03/2020</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,300.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: right"><B>Sub-Total</B></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">1,445</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">Weighted Average</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">3,193.37</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: right"><B>Total</B></TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">803,937</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 4pt">Weighted Average</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">10.13</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
is a summary of the status of restricted shares outstanding at September 30, 2018:&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<BR> Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<BR> Average<BR>
    Grant<BR> Date Fair<BR> Value</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; padding-bottom: 1.5pt">Outstanding at September 30, 2016</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">143,750</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">6.13</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">881,250</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.83</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">302,650</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Forfeited</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Outstanding at September 30, 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">222,750</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">5.31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">1,183,900</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">183,814</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.62</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">480,862</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Forfeited</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Outstanding at September 30, 2018</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">406,564</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4.09</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">1,664,762</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">September 30, 2017 through</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">to September 30, 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Low</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">High</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Annual dividend yield</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left">Expected life (years)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">5</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">5</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Risk-free interest rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.14</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.94</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected volatility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">194.36</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">210.39</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>



<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 0in">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">September 30, 2016 through</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 0in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">to September 30, 2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 0in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Low</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">High</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0in">Annual dividend yield</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left; padding-left: 0in">Expected life (years)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">5</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">5</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0in">Risk-free interest rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.14</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.93</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0in">Expected volatility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">196.77</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">234.54</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>


<P STYLE="font:  10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Expected
Dividend Yield</I>. The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends
in the foreseeable future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Expected
Life</I>. The Company elected to utilize the &ldquo;simplified&rdquo; method for &ldquo;plain vanilla&rdquo; options to value
stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term
and the contractual term.</FONT></P>

<P STYLE="font:  10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Expected
Volatility</I>. The expected volatility rate used to value stock option grants is based on the historical volatilities of the
Company&rsquo;s common stock.</FONT></P>

<P STYLE="font:  10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Risk-free
Interest Rate</I>. The risk-free interest rate assumption was based on U.S. Treasury Bill instruments that had terms consistent
with the expected term of the Company&rsquo;s stock option grants.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
warrant activity for the years ending September 30, 2018 and 2017, is described as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<BR> Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<BR> Average <BR>
    Exercise <BR> Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-bottom: 1.5pt">Outstanding at September 30, 2016</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">7,160</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">50.41</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,561,861</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.27</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Expired</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,349</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">185.61</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Forfeited</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Outstanding at September 30, 2017</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4,567,672</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">5.30</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,509,458</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.24</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Expired/ Forfeited</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,256</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">48.07</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Outstanding at September 30, 2018</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,075,874</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4.53</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>






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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
is a summary of the status of warrants outstanding at September 30, 2018:&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercise<BR> Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><B>Number</B><BR> <B>of Shares</B></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Expiration<BR> Date</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average<BR> Exercise
    Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 23%; text-align: right">2.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">459,458</TD><TD STYLE="width: 1%; text-align: left">(1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 24%; text-align: center">9/21/2028</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">2.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,050,000</TD><TD STYLE="text-align: left">(2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">03/2023</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.34</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,539,061</TD><TD STYLE="text-align: left">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">07/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,675,000</TD><TD STYLE="text-align: left">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">07/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">213,800</TD><TD STYLE="text-align: left">(5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">07/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.04</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134,000</TD><TD STYLE="text-align: left">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">07/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.04</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">06/2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.00</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">55.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">555</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">06/2018 &ndash; 03/2019</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">55.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right"><FONT STYLE="font-size: 10pt">Total</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,075,874</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">4.53</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.5in; text-align: left; text-indent: 0in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD STYLE="text-align: justify"><P STYLE="margin: 0pt 0; text-align: justify">On
                                         September 21, 2018, the Company entered into definitive agreements with George C. Carpenter
                                         IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well as John
                                         Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated
                                         with Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director
                                         of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement
                                         of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one
                                         share of Common Stock and one Common Stock Purchase Warrant to purchase one share of
                                         Common Stock for $2.00 per share. The closing price per share of the Common Stock on
                                         the Nasdaq Stock Market on September 20, 2018 was $1.72 per share.</P>


</TD>
</TR>
<TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: justify"><P STYLE="margin: 0pt 0; text-align: justify">On
                                         March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each
                                         consisting of one share of newly-designated Series A Preferred Stock, and one warrant
                                         for $2.34 per share in a private placement to three affiliates of the Company, for gross
                                         proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing
                                         price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was
                                         $1.19 per share.</P> </TD>
</TR>
<TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(3)</TD><TD STYLE="text-align: justify"><I>O</I>n
                                         July 13, 2017, the Company declared a special dividend of warrants to purchase shares
                                         of the Company&rsquo;s common stock to record holders of Common Stock as of such date.
                                         Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all
                                         holders of common stock on the record date. These warrants will be exercisable (in accordance
                                         with their terms) to purchase one share of common stock, at an exercise price of $5.25
                                         per share. The warrants will become exercisable commencing not less than 12 months following
                                         their July 27, 2017 distribution date and will expire five years thereafter.</TD>
</TR>
<TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(4)</TD><TD STYLE="text-align: justify">On July 19,
                                         2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to
                                         purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public
                                         offering.</TD>
</TR>
<TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(5)</TD><TD STYLE="text-align: justify">On August
                                         23, 2017, the Company issued 213,800 common stock warrants to underwriters as part of
                                         the overallotment attributed to the July 2017 underwritten public offering.</TD>
</TR>
<TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(6)</TD><TD STYLE="text-align: justify">As part of
                                         the underwritten public offering on July 19, 2017, the Company issued 134,000 common
                                         stock warrants to the underwriters as part of the services performed by them in connection
                                         with the underwritten public offering.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.6pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.5in; text-align: left; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
September 30, 2018, there were warrants outstanding to purchase 6,075,874 shares of the Company&rsquo;s Common Stock. The exercise
prices of the outstanding warrants range from $2.00 to $55 with a weighted average exercise price of $4.53. The warrants expire
at various times starting November 2018 through September 2028.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONVERTIBLE
PREFERRED STOCK</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in">On March 29, 2018, the Company sold an
aggregate of 1,050,000 units for $2.00 per Unit, each consisting of one share of newly-designated Series A Preferred Stock, par
value $0.001 per share and one Warrant to purchase one share of Common Stock, par value $0.001 per share for $2.34 per share in
a private placement to three affiliates of the Company, for gross proceeds of $2.1 million (the &ldquo;Financing&rdquo;). The
closing price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share.</P>



<P STYLE="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Warrants will be exercisable for a period of five years for an exercise price of $2.34. The exercise price is subject to adjustment
for stock splits, stock dividends, combinations or similar events. The Warrants may not be exercised on a cashless basis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">John
Pappajohn and Peter Unanue, directors of the Company, purchased $1,000,000 and $100,000 of the Units, respectively. Mary Pappajohn,
the spouse of John Pappajohn, purchased $1,000,000 of the Units.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 30, 2018, the Company entered into the First Amended Subscription Agreement for Shares of Series A Preferred Stock and Common
Stock Purchase Warrants (the &ldquo;Amended Agreement&rdquo;) with John Pappajohn and Mary Pappajohn (each an &ldquo;Investor&rdquo;,
and collectively the &ldquo;Investors&rdquo;), which provides for the issuance, as of the date of the Original Agreement, of an
aggregate of 500,000 Shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share (&ldquo;Series A-1 Convertible
Preferred Stock&rdquo;), in lieu of the same number of Shares of Series A Convertible Preferred Stock that the Company had originally
agreed to issue to the Investors. The Series A-1 Convertible Preferred Stock will have substantially the same rights and preferences
as the Shares of Series A Preferred Stock, except that the Shares of Series A-1 Convertible Preferred Stock are non-voting and
cannot be converted into Common Stock by an Investor if, as a result of such conversion, such Investor would beneficially own
greater than 19.9% of the outstanding shares of Common Stock. Additionally, the Warrants were amended to provide that they would
not be exercisable by an Investor if, following any such exercise, such Investor would beneficially own greater than 19.9% of
the outstanding shares of Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Dividends</I>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in">Shares of the Series A and Series A-1
Preferred Stock will be entitled to receive cash dividends at the rate of five percent (5.00%) of the Original Series A and Series
A-1 Issue Price per annum, payable out of funds legally available therefor. Such dividends shall (i) accrue on shares of Series
A and Series A-1 Preferred Stock from the date of issuance of such shares, (ii) be cumulative, and (iii) be payable only (A) when,
as and if declared by the Board of Directors, (B) upon the occurrence of a Liquidation Event or a Deemed Liquidation Event (whether
or not such dividends have been declared) and (C) &ldquo;in kind&rdquo; upon a conversion of the Series A Preferred Stock. The
value of Common Stock for purposes of determining shares issuable upon a payment in kind shall not be less than the original issue
price of the Series A Preferred Stock.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
September 30, 2018 and 2017, the amount of undeclared cumulative dividends totaled $49,200 and $0, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Voting
Rights.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
holder of a share of Series A Preferred Stock shall have the right to one vote for each share of Common Stock into which such
Series A Preferred Stock could then be converted (with any fractional share determined on an aggregate conversion basis being
rounded down to the nearest whole share). The holders shall be entitled to vote as a class on certain significant or corporate
actions. Holders of shares of Series A-1 Preferred Stock do not have any voting rights.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rank.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
respect to distributions upon a Liquidation Event (as defined below), the Series A and Series A-1 Preferred Stock shall rank senior
to the Common Stock and to each other class of the Company&rsquo;s capital stock existing now or hereafter created that are not
specifically designated as ranking senior to the Series A Preferred Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidation
Preference.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company or such subsidiaries the assets
of which constitute all or substantially all of the assets of the business of the Company and its subsidiaries, taken as a whole
(&ldquo;Liquidation Event&rdquo;), the holders of shares of Series A and Series A-1 Preferred Stock shall be entitled to receive,
prior and in preference to any distribution in such Liquidation Event to the holders of any junior securities, including the Common
Stock, by reason of their ownership thereof, an amount per share equal to the Series A and Series A-1 Liquidation Preference for
each outstanding share of Series A and Series A-1 Preferred Stock then held by them. After the payment or setting apart of payment
of the full preferential amounts required to be paid to the holders of shares of Series A and Series A-1 Preferred Stock, the
remaining assets and funds legally available for distribution to the Company&rsquo;s stockholders shall be distributed among the
holders of the shares of Common Stock ratably on a per-share basis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidation;
Merger.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
(i) consolidation or merger of the Company with or into any other entity in which the stockholders of the Company immediately
prior to such transaction do not own a majority of the voting capital stock of the surviving entity, (ii) sale, lease, transfer,
exclusive license, conveyance or disposition of all or substantially all of the assets of the Company, or (iii) the effectuation
by the Company of a transaction or series of related transactions in which more than 50% of the voting power of the Company is
disposed of (each of (i), (ii) and (iii), a &ldquo;Deemed Liquidation Event&rdquo;), will each be deemed to be a Liquidation Event
within the meaning of the Certificate of Designation, unless elected otherwise by vote of the Required Holders. Any securities
to be delivered to the stockholders pursuant to a Deemed Liquidation Event will be valued at fair market value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Conversion.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
Holder of shares of Series A Preferred Stock shall have the right (the &ldquo;Conversion Right&rdquo;), at any time and from time
to time, at such holder&rsquo;s option, to convert all or any portion of such holder&rsquo;s shares of Series A Preferred Stock
into fully paid and non-assessable shares of Common Stock. Upon a holder&rsquo;s election to exercise its Conversion Right, each
share of Series A Preferred Stock for which the Conversion Right is exercised shall be converted into such number of shares of
Common Stock as is determined by dividing the Original Purchase Price by the conversion price for the Series A Preferred Stock
at the time in effect. Series A-1 Preferred stock cannot be converted into Common Stock by an Investor if, as a result of such
conversion, such Investor would beneficially own greater than 19.9% of the outstanding shares of Common Stock. Additionally, the
Warrants were amended to provide that they would not be exercisable by an Investor if, following any such exercise, such Investor
would beneficially own greater than 19.9% of the outstanding shares of Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Financing, the Company also entered into a registration rights agreement (the &ldquo;Registration Rights Agreement&rdquo;)
with the investors, requiring the Company to register the resale of the shares of Common Stock underlying the preferred stock
and the Warrants. Under the Registration Rights Agreement, holders of a majority of the registrable securities then outstanding
(the &ldquo;Majority Holders&rdquo;) may by a written Demand Notice to the Company (a &ldquo;Demand Notice&rdquo;) commencing
six (6) months from the closing date, request the Company to effect the registration of all or part of the registrable securities
owned by such Majority Holders and their respective affiliates on a Registration Statement on Form S-3. The Company has agreed
to use its reasonable best efforts to cause such registration and/or qualification to be complete as soon as practicable, but
in no event later than sixty (60) days, after receipt of the Demand Notice.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
shares of Series A and Series A-1 Preferred Stock were offered and sold in reliance upon the exemption from the registration requirements
of the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;), set forth under Section 4(a)(2) of the Securities
Act and Rule 506 of Regulation D promulgated under the Securities Act, relating to sales by an issuer not involving any public
offering and in reliance on similar exemptions under applicable state laws. Each purchaser represented that it is an accredited
investor and that it acquired the Series A Preferred Stock and Warrants for investment purposes only and not with a view to any
resale, distribution or other disposition of such securities in violation of the United States federal securities laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">INCOME
TAXES</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a reconciliation of the provision (benefit) for income taxes to the amount compiled by applying the statutory federal
income tax rate to profit (loss) before income taxes is as follows for the years ended September 30, 2018 and 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: 0in; padding-left: -0.125in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 0in; text-indent: 0in">Federal income tax (benefit) at statutory rates</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">24.25</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">34.0</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0in; text-indent: 0in">Stock-based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.22</TD><TD STYLE="text-align: left">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3.46</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0in; text-indent: 0in">Rate change</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(81.08</TD><TD STYLE="text-align: left">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0in; text-indent: 0in">Change in valuation allowance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58.95</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29.29</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0in; text-indent: 0in">True-ups and other adjustments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.09</TD><TD STYLE="text-align: left">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.27</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0in; text-indent: 0in">State tax benefit</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1.82</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(0.02</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0in; text-indent: 0in">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.02</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)%</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.04</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)%</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
provision for income taxes consisted of the following for the years ended September 30, 2018 and 2017:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Current:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Federal:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%">State:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,600</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Deferred:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Federal:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">129,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,082,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>State:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(246,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(840,600</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Change in valuation allowance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(116,800</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,242,300</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Current:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Federal:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; padding-bottom: 1.5pt">State:</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">1,900</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">2,600</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total current</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Deferred:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Federal:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,819,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,082,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">State:</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(246,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(840,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total deferred</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,066,100</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,242,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Change in valuation allowance</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,066,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,242,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,900</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,600</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with U.S. GAAP as determined by ASC 740, Income Taxes, the Company is required to record the effects of tax law changes
in the period enacted. As the Company has a September 30th fiscal year end, its U.S. federal corporate income tax rate will be
blended in fiscal 2018, resulting in a statutory federal rate of approximately 24% (three months at 34% and nine months at 21%),
and will be 21% for subsequent fiscal years. The Company remeasured its existing deferred tax assets and liabilities at the rate
the Company expects to be in effect when those deferred taxes will be realized (24% if in 2018 or 21% thereafter) and recorded
a one-time deferred tax expense of approximately $8.4 million during the year ended September 30, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Temporary
differences between the financial statement carrying amounts and bases of assets and liabilities that give rise to significant
portions of deferred taxes relate to the following at September 30, 2018 and 2017:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Deferred income tax assets:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Net operating loss carryforward</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">13,921,773</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">19,024,793</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Deferred interest, consulting and compensation
    liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,850,840</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,850,567</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Deferred income tax assets
    &ndash; other</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">155,517</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">118,793</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,928,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,994,153</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Deferred income tax liabilities&mdash;other</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Deferred income tax asset&mdash;net before valuation
    allowance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,928,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,994,153</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in; text-indent: -0.125in">Valuation allowance</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(16,928,130</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(22,994,153</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; padding-left: 0.125in; text-indent: -0.125in">Deferred income tax asset&mdash;net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2018, the Company had gross Federal net operating loss carryforwards of approximately $60.2 million and State
gross net operating loss carryforwards of approximately $33.8 million. Both the Federal and State net operating loss carryforwards
will begin to expire in 2022 and 2023 respectively. Our ability to utilize net operating loss carryforwards may be limited in
the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has placed a valuation allowance against the deferred tax assets in excess of deferred tax liabilities due to the uncertainty
surrounding the realization of such excess tax assets. Management periodically evaluates the recoverability of the deferred tax
assets and the level of the valuation allowance. At such time as it is determined that it is more likely than not that the deferred
tax assets are realizable, the valuation allowance will be reduced accordingly.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s estimate of the potential outcome of any uncertain tax position is subject to management&rsquo;s assessment of
relevant risks, facts, and circumstances existing at that time. The Company believes that it has adequately provided for these
matters. However, the Company&rsquo;s future results may include favorable or unfavorable adjustments to its estimates in the
period the audits are resolved, which may impact the Company&rsquo;s effective tax rate. The Company does not believe that it
is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease in the next
12 months. As of September 30, 2018, the Company&rsquo;s tax filings are generally subject to examination in major tax jurisdictions
for years ending on or after September 30, 2014. The Company does not accrue for potential interest and penalties attributed to
uncertain tax positions as it is not material.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">RELATED
PARTY TRANSACTIONS</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DCA
Agreement</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 25, 2013, the Board approved a consulting agreement effective May 1, 2013, for marketing services provided by Decision
Calculus Associates (&ldquo;DCA&rdquo;), an entity operated by Mr. Carpenter&rsquo;s spouse, Jill Carpenter. Effective August
2015, DCA was engaged at a fee of $10,000 per month. From August 2015 through February 2017, DCA has been paid $170,000. The DCA
contract was renewed at $3,000 a month effective March 1, 2017. The Company incurred fees of $31,000 and $$57,000 for the years
ended September 30, 2018 and 2017, respectively. On May 1, 2018, the Company amended the agreement with DCA to reduce the monthly
fee to $2,000 a month. The amendment provides for a term of one year with a 30 day termination clause.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hooper
Holmes Agreement</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in">In 2016, we entered into an agreement
with Hooper Holmes Inc, for which Dr. Smith, our Chairman of the Board, became an advisory member of its board as of March 16,
2017, and in which Mr. Pappajohn, our director, has participated in equity raises to become the beneficial owner of a greater
than 10% interest. Hooper Holmes performs EEGs nationwide to patients who wish to obtain a PEER report. The Company paid $110,100
and $20,300 for these services during the years ended September 30, 2018 and 2017, respectively.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sale
of Preferred Shares</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 29, 2018, the Company sold an aggregate of 1,050,000 shares for $2.00 per Unit, each consisting of one share of newly-designated
Series A Preferred Stock or Series A-1 Preferred Stock, par value $0.001 per share and one Warrant to purchase one share of Common
Stock, par value $0.001 per share for $2.34 per share in a private placement to three affiliates of the Company, John And Mary
Pappajohn and Peter Unanue, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>


<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Private
Placement with Directors and Management</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in">On September 21, 2018, the Company entered
into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well
as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of
the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private
placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and one
common stock purchase warrant to purchase one share of Common Stock for $2.00 per share.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LOSS
PER SHARE</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
earnings (loss) per share is computed by dividing income (loss) available to common stockholders less the current period preferred
stock dividend by the weighted average common shares outstanding during the period. Diluted earnings (loss) per share takes into
account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted
into Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
summary of the net income (loss) and shares used to compute net income (loss) per share for the fiscal years ended September 30,
2018 and 2017 is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 0in">Net Loss for computation of basic and diluted net loss per share:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 0in">Net loss attributable to MYnd Analytics, Inc.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(9,598,700</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(7,112,800</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0in">Preferred stock dividends</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(49,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(9,647,900</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(7,112,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0in">Basic and Diluted net loss per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0in">Basic net loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1.86</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2.52</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0in">Basic and Diluted weighted average shares outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,199,566</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,817,415</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0in">Anti-dilutive common equivalent shares not included in the computation of
    dilutive net loss per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0in">Warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,075,874</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">957,198</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0in">Restricted common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">406,564</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0in">Options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">803,937</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">359,704</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">COMMITMENTS
AND CONTINGENT LIABILITIES</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Litigation</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is not currently party to any legal proceedings, the adverse outcome of which, in the Company&rsquo;s management&rsquo;s
opinion, individually or in the aggregate, would have a material adverse effect on the Company&rsquo;s results of operations or
financial position.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lease
Commitments</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is a party to four leases, three are for office space located in Mission Viejo and Laguna Hills, California which house
the corporate headquarters and neurometric business. The total lease payments per month are $10,666. The two leases for office
space located in Mission Viejo and Laguna Hills have been renewed through February 28, 2020 and the total lease payments per month
will be $8,411 beginning February 1, 2019. As of November 30, 2018, the third lease for a small annex office in Laguna Hills has
been terminated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has one three-year lease for office space in Tysons, Virginia. As of June 1, 2018, the Company has sublet the premises
under the Tyson, Virginia office space lease. The master lease period expires on September 30, 2020. The rent through September
30, 2018 was prorated at $2,508 per month; for the subsequent 12 months the rent is prorated at $2,576 per month; and for the
remaining twelve months the rent will be prorated at $2,647 per month. The subtenant is paying approximately seventy seven percent
of the master lease payment for the fourteen months ending on September 30, 2019 and has an option to renew for the final lease
year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Arcadian
Services&rsquo; business has office space located in Fort Washington, PA. The lease period expires on February 28, 2020. The rent
is currently $3,312 per month and will increase to $3,410 per month on March 1, 2019 for the remainder of the lease.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Payments due by fiscal year</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Contractual Obligations</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; padding-bottom: 1.5pt; padding-left: 0in">Operating Lease Obligations</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">114,000</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">48,800</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">162,800</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0in">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">114,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">48,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">162,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SIGNIFICANT
CUSTOMERS</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the fiscal year ended September 30, 2018, four customers accounted for 29% of Neurometric Services revenue and three customers
accounted for 35% of accounts receivable at September 30, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the fiscal year ended September 30, 2017, four customers accounted for 50% of Neurometric Services revenue and three customers
accounted for 72% of accounts receivable at September 30, 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SUBSEQUENT
EVENTS</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Special
Meeting of Stockholders</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the Special Meeting of Stockholders of the Company, held on November 26, 2018 (&ldquo;Special Meeting 2018&rdquo;) the holders
of the Company&rsquo;s common and preferred stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits
under the 2012 Plan and (ii) amend 2012 Plan to increase: (a) the total number of shares of common stock, par value $0.001 per
share (&ldquo;Common Stock&rdquo;), available for grant under the 2012 Plan (subject to the overall limits described in clause
(b) below) from 1,500,000 shares to an aggregate of 2,250,000 shares and (b) the aggregate limitation on authorized shares available
for grant under the 2012 Plan, following any increases pursuant to the evergreen provision (the &ldquo;Evergreen Provision&rdquo;),
from 2,200,000 shares to 2,950,000 shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, to the above, the Company
received shareholder approval to remove the exchange cap under the Second Purchase Agreement in compliance with the applicable
listing rules of the Nasdaq Stock Market. Pursuant to Nasdaq Listing Rule 5635(d), shareholder approval is required prior to the
issuance of securities in connection with a transaction other than a public offering involving the sale, issuance or potential
issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal to 20% or more of the
common stock outstanding before the issuance for less than the greater of book or market value of the stock. Following receipt
of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million, of common stock
to Aspire Capital under the Second Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share
Grants to Directors</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 8, 2018, the Compensation Committee and the Board granted to Director Votruba 144,000 restricted shares of common stock
under the 2012 Plan for efforts expended as a Board member to explore and identify licensing and other opportunities for the Company
in Europe. Mr. Votruba is a representative of RSJ and has agreed to assign to RSJ the benefit of all options and restricted shares
granted to him in connection with his service as a member of the Board of Directors. On October 8, 2018, the Board granted (i)
30,000 restricted shares under the 2012 Plan to each of John Pappajohn and Peter Unanue, Members of the Board and (ii) 45,000
restricted shares under the 2012 Plan to Geoffrey Harris, who serves as the Audit Committee chairperson, these shares will vest
quarterly.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Option
Grants to the Chairman, Executive Officers and Other Employees</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 8, 2018, the Board granted an option to Dr. Robin Smith, the Chairman of the Board to purchase 48,000 shares of Common
Stock. On the same date, the Board granted options to purchase 48,000 and 30,000 shares to each of George Carpenter, the President
and Chief Executive Officer and Donald D&rsquo;Ambrosio, the Chief Financial Officer, respectively, and options to purchase an
aggregate of 100,500 shares to other employees and consultants. All of the above options will vest upon certain milestones being
met and were subject to the shareholder approval which was granted on November 26, 2018 at the Special Meeting of Shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 3, 2018, options were granted to purchase 30,000 and 26,500 shares of Company common stock to each of George Carpenter,
the President and Chief Executive Officer and Donald D&rsquo;Ambrosio, the Chief Financial Officer, respectively, and options
to purchase an aggregate of 46,758 shares of Company common stock were granted to other employees. One-third of the options granted
vested on December 3, 2018 and one-third will vest on each of December 3, 2019 and December 3, 2020.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leases</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
October and November of 2018, the Company renewed the office space leases in Mission Viejo and Laguna Hills, California until
February 28, 2020. The total lease payments per month will be $8,411 beginning February 1, 2019. As of November 30, 2018, the
third lease for a small annex office in Laguna Hills has been terminated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_007"></A><B>MYND ANALYTICS,
INC. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>As of March&nbsp;31, 2019</B><BR> <B>(Unaudited)</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>As of September&nbsp;30, 2018</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0pt">ASSETS</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0pt">CURRENT ASSETS:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 0.125in">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,203,200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3,254,700</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">154,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Prepaid insurance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Prepaid expenses and other current assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">181,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">134,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,548,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,510,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">87,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Intangible assets, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">116,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in">Goodwill</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,386,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,386,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Other assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">29,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">27,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0pt">TOTAL ASSETS</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,141,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,151,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">LIABILITIES AND STOCKHOLDERS&rsquo; EQUITY:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">CURRENT LIABILITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 20pt; text-indent: -10pt">Accounts payable (including $36,400 and $30,350 to related
    parties as of March 31, 2019 and September 30, 2018, respectively)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">970,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">346,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">268,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Accrued compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">244,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Accrued compensation &ndash; related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">322,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">209,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Accrued interest and other liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Deferred revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">152,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">159,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Current portion of leases</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total current liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,165,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0pt">LONG-TERM LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Long-term borrowing, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">606,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">587,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Accrued interest on long-term borrowing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Long-term portion of capital lease</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total long-term liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">728,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">699,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">TOTAL LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,628,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,865,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">STOCKHOLDERS&rsquo; EQUITY:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.25in; text-indent: -10pt">Preferred stock, $0.001 par value; 15,000,000 authorized; 1,500,000 shares
    of Series A Preferred Stock and 500,000 shares of Series A-1 authorized; 550,000 shares of Series A Preferred Stock and 500,000
    shares of Series A-1 issued and outstanding as of March 31, 2019 and as of September 30, 2018; aggregate liquidation preference
    of $1,968,750 as of March 31, 2019 and as of September 30, 2018;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.25in; text-indent: -10pt">Common stock, $0.001 par value; 250,000,000 shares authorized as of March
    31, 2019 and September 30, 2018 respectively, 8,936,695 and 7,407,254 shares issued and outstanding as of March 31, 2019 and
    September 30, 2018, respectively;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">91,895,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89,257,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Accumulated deficit</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(89,881,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(85,245,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,024,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,020,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Non controlling interest</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,512,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(734,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total stockholders&rsquo; equity</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">512,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,286,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">TOTAL LIABILITIES AND STOCKHOLDERS&rsquo; EQUITY</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,141,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,151,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited condensed
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_008"></A><B>MYND ANALYTICS,
INC. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three Months Ended<BR>
    March 31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended<BR> March
    31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>REVENUES</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left; padding-left: 10pt">Neurometric services</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">44,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">79,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">124,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">133,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Telepsychiatry services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">415,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">380,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">723,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">448,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Total revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">460,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">459,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">847,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">581,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>COST OF REVENUES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Neurometric services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">118,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Telepsychiatry services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">291,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">228,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">509,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">264,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">296,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">298,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">521,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">383,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">GROSS MARGIN</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">163,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">161,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">325,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">198,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">OPERATING EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt">Research</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">141,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">154,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Product development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">237,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">342,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">474,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">611,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">199,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">638,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">351,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,305,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">General and administrative</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,350,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,740,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,724,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,515,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Total operating expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,847,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,794,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,691,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,587,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">OPERATING LOSS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,684,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,632,900</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,365,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,388,600</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">OTHER INCOME (EXPENSE):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Interest expense, net</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(23,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(24,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(46,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Total other income (expense)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(23,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(24,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(46,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">LOSS BEFORE PROVISION FOR INCOME TAXES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,707,400</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,657,700</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,411,800</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,427,100</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">NET LOSS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2,709,700</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2,659,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,414,100</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(5,429,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net loss attributable to noncontrolling interest</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">(451,100</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">(72,300</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">(778,000</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">(72,300</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Net Loss attributable to MYnd Analytics, Inc.</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2,258,600</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2,587,300</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,636,100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(5,356,700</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">BASIC AND DILUTED LOSS PER SHARE:</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.27</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.59</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.58</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1.23</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>WEIGHTED AVERAGE SHARES OUTSTANDING:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Basic and Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,399,443</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,362,564</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,964,021</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,347,745</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited condensed
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_009"></A><B>MYND ANALYTICS,
INC. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF STOCKHOLDERS&rsquo; EQUITY</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>for the three and six months ended March
31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5pt; text-indent: -5pt; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Common
    Stock</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Preferred
    Stock</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">Additional</FONT><BR>
    <FONT STYLE="font-size: 9pt">Paid-in</FONT>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">Accumulated</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">Sub-total</FONT><BR>
    <FONT STYLE="font-size: 9pt">MYnd</FONT><BR> <FONT STYLE="font-size: 9pt">Stockholders&rsquo;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">Non-</FONT><BR>
    <FONT STYLE="font-size: 9pt">controlling</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Shares</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Amount</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Shares</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Amount</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Capital</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Deficit</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Equity</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Interest</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">Total</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-left: 5pt; text-indent: -5pt; width: 23.5%"><FONT STYLE="font-size: 9pt">Balance at
    September&nbsp;30, 2018</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">7,407,254</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">7,400</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">1,050,000</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">1,100</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">89,257,700</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">(85,245,300</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">4,020,900</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">(734,400</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="width: 0.5%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 9pt">3,286,500</FONT></TD><TD STYLE="width: 0.5%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Shares issued to Aspire
    Capital Purchase Agreement</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">144,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">200</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">517,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">517,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">517,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Common Stock issued to vendors
    for services</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">3,750</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">5,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">5,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">5,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">Net loss</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">(2,377,500</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">(2,377,500</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">(326,900</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 9pt">(2,704,400</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Balance at December&nbsp;31,
    2018</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">7,555,004</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">7,600</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,050,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,100</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">89,780,400</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">(87,622,800</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">2,166,300</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">(1,061,300</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,105,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Stock-based compensation</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">30,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">258,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">258,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">258,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Shares issued to Aspire
    Capital Purchase Agreement</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,315,429</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,810,500</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,811,800</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,811,800</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Common Stock issued to vendors
    for services</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">36,262</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">47,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">47,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">47,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Net
    loss</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,258,600</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,258,600</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(451,100</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,709,700</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Balance at March&nbsp;31,
    2019</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">8,936,695</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">8,900</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,050,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,100</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">91,895,900</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">(89,881,400</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">2,024,500</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">(1,512,400</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">512,100</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Balance at September&nbsp;30,
    2017</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">4,299,311</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">4,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">80,189,700</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">(75,646,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">4,547,400</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">4,547,400</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Stock-based compensation</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">37,500</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">336,500</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">336,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">336,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Common Stock issued to vendors
    for services</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">23,750</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">14,800</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">14,800</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">14,800</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Net
    loss</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,769,300</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,769,300</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,769,300</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Balance
    at December&nbsp;31, 2017</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">4,360,561</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">4,400</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">80,541,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">(78,415,900</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">2,129,500</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">2,129,500</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Stock-based compensation</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">20,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">256,400</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">256,400</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">256,400</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Common Stock issued to vendors
    for services</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">(16,250</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">11,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">11,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">11,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Stock issued for preferred
    shares</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,050,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,098,900</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,100,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,100,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Net
    loss</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,659,700</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,659,700</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(72,300</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 9pt">(2,732,000</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt; padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-size: 9pt">Balance
    at March&nbsp;31, 2018</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">4,364,311</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">4,400</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,050,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,100</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">82,907,300</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">(81,075,600</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,837,200</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">(72,300</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 9pt">1,764,900</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying Notes to Unaudited Condensed
Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 7.95pt 0pt 0; text-align: center"><A NAME="fin_010"></A><B>MYND
ANALYTICS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 7.95pt 0pt 0; text-align: center"><B>UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 7.95pt 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended <BR>
    March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>OPERATING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(5,414,100</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(5,429,000</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Change in provision for doubtful accounts</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Stock-based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">775,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">593,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Common stock issued to vendors for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Accretion of debt discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(97,400</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(156,200</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Prepaid expenses and other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(800</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(97,200</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">559,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">112,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Deferred revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Deferred compensation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">183,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(8,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,836,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,740,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">INVESTING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Purchase of furniture and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,100</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55,200</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Payment for acquisition of business, net of cash acquired</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(306,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(9,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(361,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">FINANCING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Principal payments on note payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(34,100</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Principal payments on capital lease</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(600</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 10pt">Proceeds from sale of common stock, net of costs</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,811,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,100,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,793,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,065,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">NET INCREASE (DECREASE) IN CASH</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,051,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,036,800</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">CASH AND CASH EQUIVALENTS - BEGINNING OF THE PERIOD</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,254,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,449,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">CASH AND CASH EQUIVALENTS - END OF THE PERIOD</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,203,200</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,412,200</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash paid during the period for:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt">Interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING &amp; FINANCING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Long-term borrowings assumed in business combination</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">651,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 146.25pt 0pt 8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited condensed
consolidated financial statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 22.3pt 0pt 95.4pt; text-indent: -75.45pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 7.95pt 0pt 0; text-align: center"><A NAME="fin_011"></A><B>MYND
ANALYTICS, INC. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 66.1pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>1.</B></TD><TD STYLE="text-align: justify"><B>Organization, Nature of Operations and Going Concern
Uncertainty</B></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">MYnd Analytics, Inc. (&ldquo;MYnd,&rdquo;
&ldquo;CNS,&rdquo; &ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our,&rdquo; or the &ldquo;Company&rdquo;), formerly known as CNS
Response Inc., is a predictive analytics company that has developed a decision support tool to help physicians reduce trial and
error treatment in mental health and provide more personalized care to patients. The Company employs a clinically validated scalable
technology platform to support personalized care for mental health patients. The Company utilizes its patented machine learning,
artificial intelligence, data analytics platform for the delivery of telebehavioral health services and its PEER predictive analytics
product offering. On November 13, 2017, the Company acquired Arcadian Telepsychiatry Services LLC (&ldquo;Arcadian&rdquo;), which
manages the delivery of telepsychiatry and telebehavioral health services through a nationwide network of licensed and credentialed
psychiatrists, psychologists and master&rsquo;s-level therapists. The Company is commercializing its PEER predictive analytics
tool to help physicians reduce trial and error treatment in mental health. MYnd&rsquo;s patented, clinically validated technology
platform (&ldquo;PEER Online&rdquo;) utilizes complex algorithms to analyze electroencephalograms (&ldquo;EEGs&rdquo;) to generate
Psychiatric EEG Evaluation Registry (&ldquo;PEER&rdquo;) Reports to predict individual responses to a range of medications prescribed
for the treatment of behavioral disorders including depression, anxiety, bipolar disorder, PTSD and other non-psychotic disorders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Going Concern Uncertainty</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited
condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles
(&ldquo;GAAP&rdquo;), which contemplate continuation of the Company as a going concern. The Company&rsquo;s operations are subject
to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation
of a business. These risks include the ability to obtain adequate financing on a timely basis, if at all, the failure to develop
or supply technology or services to meet the demands of the marketplace, the failure to attract and retain qualified personnel,
competition within the industry, government regulation and the general strength of regional and national economies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s recurring
net losses and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. During
the six months ended March 31, 2019, the Company incurred a net loss of $5.4 million and used $3.8 million of net cash in operating
activities. As of March 31, 2019, the Company&rsquo;s accumulated deficit was $89.9 million. In connection with these unaudited
condensed consolidated financial statements, management evaluated whether there were conditions and events, considered in the
aggregate, that raised substantial doubt about the Company&rsquo;s ability to meet its obligations as they become due for the
next twelve months from the date of issuance of these financial statements. Management assessed that there were such conditions
and events, including a history of recurring operating losses, and negative cash flows from operating activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 38.2pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To date, the Company has
financed its cash requirements primarily from equity financings. As of March 31, 2019, the Company&rsquo;s principal sources of
liquidity were its cash balance of $1.2 million and the remaining amount available under the Aspire Equity Line of Credit of $6.3
million. The Company will need to raise funds immediately to continue its operations and increase demand for its services. Until
it can generate sufficient revenues to meet its cash requirements, which it may never do, the Company must continue to finance
future cash needs primarily through public or private equity offerings, debt financings or strategic collaborations. The Company&rsquo;s
liquidity and capital requirements depend on several factors, including the rate of market acceptance of its services, the future
profitability of the Company, the rate of growth of the Company&rsquo;s business and other factors described elsewhere in this
Quarterly Report on Form 10-Q. The Company continues to explore additional sources of capital, but there is substantial doubt
as to whether any financing arrangement will be available in amounts and on terms acceptable to the Company to permit it to continue
operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</B></FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Basis of Presentation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited
condensed consolidated financial statements of the Company have been prepared in accordance with GAAP and applicable rules and
regulations of the Securities and Exchange Commission (the &ldquo;SEC&rdquo;) regarding interim financial reporting. In the opinion
of the Company&rsquo;s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments
(consisting of normal recurring accruals and adjustments) necessary to present fairly the financial position, changes in stockholders&rsquo;
equity, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for
the quarter ended March 31, 2019 are not necessarily indicative of results for the full 2019 fiscal year or any other future interim
periods. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated
financial statements and accompanying notes included in the Company&rsquo;s Form 10- K for the year ended September 30, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Basis of Consolidation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The unaudited condensed
consolidated financial statements include the results of the Company, its wholly owned subsidiary, Arcadian, two professional
associations, Arcadian Telepsychiatry PA (&ldquo;Texas PA&rdquo;) incorporated in Texas, Arcadian Telepsychiatry Florida P.A.
(&ldquo;Florida PA&rdquo;) incorporated in Florida, and two professional corporations, Arcadian Telepsychiatry P.C. (&ldquo;Pennsylvania
PC&rdquo;) incorporated in Pennsylvania and Arcadian Telepsychiatry of California, P.C. incorporated in California (&ldquo;California
PC&rdquo; and together with the Pennsylvania PC, Florida PA and Texas PA, the &ldquo;Arcadian Entities.&rdquo;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Arcadian is party to Management
Services Agreements by and among it and the Arcadian Entities, pursuant to which Arcadian provides management and administrative
services to each of the Arcadian Entities. Each entity is established pursuant to the requirements of its respective domestic
jurisdiction governing the corporate practice of medicine. All intercompany balances and transactions have been eliminated upon
consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Segments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We view our operations and manage our business
as one operating segment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 41pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Variable Interest Entities (VIE)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">On November 13, 2017, Arcadian entered into
a management and administrative services agreement with Texas PA and with Pennsylvania PC, for an initial fixed term of 20 years.
In accordance with relevant accounting guidance, Texas PA and Pennsylvania PC are each determined to be a Variable Interest Entity
(&ldquo;VIE&rdquo;) as MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions)
that most significantly affect Texas PA&rsquo;s and Pennsylvania PC&rsquo;s economic performance through its majority representation
of the Texas PA and Pennsylvania PC; therefore, Texas PA and Pennsylvania PC are consolidated by MYnd. On January 19, 2018, Arcadian
entered into a management and administrative services agreement with California PC, for an initial fixed term of 20 years. In
accordance with relevant accounting guidance, California PC is determined to be a VIE and MYnd is the primary beneficiary with
the ability to direct the activities (excluding clinical decisions) that most significantly affect California PC&rsquo;s economic
performance through its majority representation of California PC; therefore, California PC is consolidated by MYnd. On March 27,
2018, Arcadian entered into a management and administrative services agreement with Florida PA, for an initial fixed term of 20
years. In accordance with relevant accounting guidance, Florida PA is determined to be a VIE and MYnd is the primary beneficiary
with the ability to direct the activities (excluding clinical decisions) that most significantly affect Florida PA&rsquo;s economic
performance through its majority representation of Florida PA; therefore, Florida PA is consolidated by MYnd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The Company holds a variable interest in
the entities which contract with physicians and other health professionals in order to provide telepsychiatry services to Arcadian.
The entities are considered variable interest entities since they do not have sufficient equity to finance their activities without
additional financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has
both power and benefits-that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE&rsquo;s
economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE
or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the
power and rights to control all activities of the entities and funds and absorbs all losses of the VIE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with management
service agreements entered into between the Company and medical professional corporations and associations in compliance with
regulatory requirements within certain states, the Company has the power to direct activities of the VIE&rsquo;s and may transfer
the assets from the individual VIEs. Therefore, the Company considers that there are no assets in any of the consolidated VIEs
that may be relied upon to settle obligations of these entities. Furthermore, creditors of the VIEs do not have recourse to the
general credit of the Company for any of the liabilities of the VIEs. Finally, none of the professional corporations or associations
have purchased equipment nor are they responsible for handling cash or accounts receivable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no either explicit
or implicit arrangement that requires the Company to provide financial support to the VIE, including events or circumstances that
could expose the Company to a loss. For the six months ended March 31, 2019 and 2018, the Company did not provide, nor does it
intend to provide in the future, any financial or other support either explicitly or implicitly during the periods presented to
its variable interest entities. In addition, there are no restrictions on the net income earned by the VIEs. The Company allocates
all of the net income earned to the primary owner of the VIE. As part of the operating agreement with the VIE, the Company will
be reimbursed for all cost incurred related to operating the VIE in addition to a management fee charged for oversight. For the
six months ended March 31, 2019 and 2018, no net income was allocated to the VIEs nor have any dividends been paid from the Company
to the VIEs from inception to date, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, to the extent
that the VIE is not a shareholder of the Company, the Company has not paid any dividends to the VIEs from inception to date and
there are no dividend obligations within the management services agreement entered into with the medical professional corporations
and associations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Use of Estimates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of the
unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenue and expense, and related disclosure of assets and liabilities. On an ongoing basis, the
Company evaluates its estimates, including those related to revenue recognition, allowance for doubtful accounts, useful lives
of furniture and equipment, intangible assets, valuation allowance on deferred taxes, valuation of equity instruments, and accrued
liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Cash and Cash Equivalents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company considers all
liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company deposits its cash with
major financial institutions and may at times exceed the federally insured limit of $250,000. At March 31, 2019 cash exceeds the
federally insured limit by $1.1 million. The Company believes that the risk of loss is minimal. To date, the Company has not experienced
any losses related to cash deposits with financial institutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Debt Instruments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Debt instruments are initially
recorded at fair value, with coupon interest and amortization of debt issuance discounts recognized in the statement of operations
as interest expense at each period end while such instruments are outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Fair Value of Financial Instruments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Financial Accounting Standards
Board, or FASB, Accounting Standards Codification, or ASC, ASC 825-10 Recognition and Measurement of Financial Assets and Financial
Liabilities defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The Company considers the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities,
to approximate their fair values because of the short period of time between the origination of such instruments and their expected
realization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company also analyzes
all financial instruments with features of both liabilities and equity under ASC 480-10, ASC 815-10 and ASC 815-40.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 12.9pt 0pt 5pt; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The FASB has established
a framework for measuring fair value using generally accepted accounting principles. That framework provides a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable
inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9679;</TD>
    <TD STYLE="padding: 0; text-indent: 0; text-align: justify">Level I inputs to the valuation methodology are unadjusted quoted prices
    for identical assets or liabilities in active markets;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9679;</TD>
    <TD STYLE="padding: 0; text-indent: 0">Level II inputs to the valuation methodology include:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.75in; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9675;</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">Quoted prices for similar assets or liabilities in active
    markets;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.75in; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9675;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">Quoted prices for identical or similar assets or liabilities
    in inactive markets; Inputs other than quoted prices that are observable for the asset or liability;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.75in; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9675;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">Inputs that are derived principally from or corroborated
    by observable market data by correlation or other means;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">If the asset or liability
has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 9.4pt 0pt 41pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9679;</TD>
    <TD STYLE="padding: 0; text-indent: 0; text-align: justify">Level III inputs to the valuation methodology are unobservable and significant
    to the fair value measurement.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The asset or liability&rsquo;s
fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to
the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize the use of unobservable
inputs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Accounts Receivable, net</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company estimates the
collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing the current creditworthiness
of each customer. Allowances are provided for specific receivables deemed to be at risk for collection which as of March 31, 2019
and September 30, 2018 were $8,100 and $1,800, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Property and Equipment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Property and equipment,
which are recorded at cost, consist of office furniture and equipment which are depreciated, over their estimated useful lives
on a straight-line basis. The useful lives of these assets are estimated to be between three and five years. Depreciation expense
on furniture and equipment for the three months ended March 31, 2019 and 2018 was $16,100 and $15,600, respectively. Depreciation
expense on furniture and equipment for the six months ended March 31, 2019 and 2018 was 32,300 and 28,000, respectively. Accumulated
depreciation at March 31, 2019 and September 30, 2018 was $181,500 and 149,200, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Intangible Assets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Costs for software developed
for internal use are accounted for through the capitalization of those costs incurred in connection with developing or obtaining
internal-use software. Capitalized costs for internal-use software are included in intangible assets in the unaudited condensed
consolidated balance sheets. Capitalized software development costs are amortized over three years. Costs incurred during the
preliminary project along with post-implementation stages of internal use computer software development and costs incurred to
maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development
costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological
and economic feasibility and estimated economic life.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 13, 2017, the
Company acquired customer relationship and tradename intangibles in connection with the Arcadian acquisition which were recorded
at fair value and are being amortized over an estimated useful life of four years on a straight-line basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Amortization for the three
months ended March 31, 2019 and 2018 was $14,000 and $13,800, respectively. Amortization for the six months ended March 31, 2019
and 2018 was 28,000 and 24,700, respectively. Accumulated amortization was $122,300 and $94,200 at March 31, 2019 and September
30, 2018 respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 37.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The expected amortization
of the intangible assets, as of March 31, 2019, is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 41pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid; text-align: left">For the year ended September 30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Intangible assets</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">2019 (for the remaining six months)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">26,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2020</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">2022</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; text-align: left">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">88,400</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Goodwill</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Goodwill represents the excess of the aggregate
purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and
is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may
not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change
in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant
changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry
or economic trends, or significant under performance relative to expected historical or projected future results of operations.
The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads
to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including
goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than
not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The
Company tests for goodwill impairment annually on September 30.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 23pt 0pt 5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The Company performed a qualitative goodwill
assessment at September 30, 2018 and concluded there was no impairment based on consideration of a number of factors, including
the improvement in the Company&rsquo;s key operating metrics over the prior year, improvement in the strength of the general economy
and the Company&rsquo;s continued execution against its overall strategic objectives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Based on the foregoing,
the Company determined that it was not more likely than not that the fair value of its reporting unit is less than its carrying
amount and therefore that no further impairment testing was required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2019, the Company did
not record any Goodwill impairment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Accrued Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accrued compensation consists
of accrued vacation pay, accrued compensation granted by the Board but not paid, and accrued pay due to staff members.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accrued compensation &ndash;
related parties consists of accrued vacation pay, accrued bonuses granted by the Board but not paid for officers and directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Deferred Revenue</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Deferred revenue represents
cash collected in advance of services being rendered but not earned as of March 31, 2019 and September 30, 2018. This represents
a philanthropic grant for the payment of PEER Reports ordered in a clinical trial for a member of the U.S. Military, a veteran
or their family members, the cost of which is not covered by other sources. On August 1, 2017, the Company entered into a Research
Study Funding Agreement with Horizon Healthcare Services, Inc. dba Horizon Blue Cross Blue Shield of New Jersey and its subsidiaries
(collectively &ldquo;Horizon&rdquo;) and Cota, Inc. (&ldquo;Cota&rdquo;). On February 6, 2018, Horizon prepaid for part of the
study in the amount of $125,000 and the Company paid Cota $15,000 out of this payment for its services under the Study.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These deferred revenue
grant funds total $152,100 and $159,700 as of March 31, 2019 and September 30, 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Revenue Recognition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Neurometric services -
gross service revenue is recorded in the accounting records at the time the services are provided on an accrual basis at the provider&rsquo;s
established rates, regardless of whether the provider expects to collect that amount. The Company reserves a provision for contractual
adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and
value added taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Telepsychiatry services - The Company satisfies
its performance obligation to stand ready to provide telepsychiatry services which occurs when the Company&rsquo;s clients have
access to the telepsychiatry service. The Company generally bills for the telepsychiatry services on a monthly basis with payment
terms generally being 30 days. There are not significant differences between the timing of revenue recognition and billing. Consequently,
the Company has determined that client contracts do not include a financing component. Revenue is recognized in an amount that
reflects the consideration that is expected in exchange for the service and this may include a variable transaction price as the
number of members may vary from the initial billing. Based on historical experience, the Company estimates this amount which is
recorded as a component of revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accounting Standards Update
(&ldquo;ASU&rdquo;) No. 2014-09, <I>Revenue from Contracts with Customers </I>(&ldquo;Topic 606&rdquo;), became effective for
the Company on October 1, 2018. The Company&rsquo;s revenue recognition disclosure reflects its updated accounting policies that
are affected by this new standard. The Company applied the &ldquo;modified retrospective&rdquo; transition method for open contracts
for the implementation of Topic 606<I>. </I>As sales are and have been primarily from providing healthcare services, and the Company
has no significant post-delivery obligations, this new standard did not result in a material recognition of revenue on the Company&rsquo;s
accompanying consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments
to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting
practices under Topic 605, <I>Revenue Recognition</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 12.8pt 0pt 5pt; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue from providing
neurometric and telepsychiatry services are recognized under Topic 606 in a manner that reasonably reflects the delivery of its
services to customers in return for expected consideration and includes the following elements:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9675;</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">executed contracts with the Company&rsquo;s customers
    that it believes are legally enforceable;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9675;</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">identification of performance obligations in the respective
    contract;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9675;</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">determination of the transaction price for each performance
    obligation in the respective contract;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9675;</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">allocation the transaction price to each performance
    obligation; and</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 0.25in; padding: 0; text-indent: 0">&#9675;</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">recognition of revenue only when the Company satisfies
    each performance obligation.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 59pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 59pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Research and Development Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company charges research and development
expenses to operations as incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 41pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Advertising Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company charges all
advertising expenses to operations as incurred. For the three months ended March 31, 2019 and 2018 advertising expenses were $4,800
and $97,500, respectively. For the six months ended March 31, 2019 and 2018 advertising expenses were $4,800 and $248,500, respectively</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Stock-Based Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts for
employee stock options in accordance with ASC 718, Compensation-Stock Compensation. For stock options issued to employees and
directors we use the Black-Scholes option valuation model for estimating fair value at the date of grant. For stock options issued
for services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50, Equity,
as amended. Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period.
At the end of each financial reporting period prior to performance, the value of these options, as calculated using the Black-Scholes
option valuation model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly.
Since the fair value of options granted to non-employees is subject to change in the future, the amount of the future compensation
expense is subject to adjustment until the common stock options or warrants are fully vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From time to time, the
Company has issued warrants to purchase shares of common stock. These warrants have been issued in connection with the Company&rsquo;s
financing transactions. The Company&rsquo;s warrants are subject to standard anti-dilution provisions applicable to shares of
our common stock. The Company estimates the fair value of warrants using the Black-Scholes option valuation model with the following
inputs: market prices of the stock, time to maturity, volatility, zero expected dividend rate and risk free rate all at the date
of the warrant issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts for
income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded,
when necessary, to reduce deferred tax assets to the amount expected to be realized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 22, 2017, new
legislation was adopted that significantly revises the Internal Revenue Code of 1986, as amended, or the Code. The newly enacted
federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate
tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation of the tax deduction for interest expense
to 30 percent of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses
to 80 percent of current-year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings
at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions
for depreciation expense over time, and modifying or repealing many business deductions and credits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the implementation
of certain provisions of FASB ASC 740, Income Taxes, which clarifies the accounting and disclosure for uncertainty in tax positions,
the Company has analyzed filing positions in each of the federal and state jurisdictions where required to file income tax returns,
as well as all open tax years in these jurisdictions. We have identified U.S. Federal and California as our major tax jurisdictions.
Generally, the Company remains subject to Internal Revenue Service examination of our 2014 through 2016 U.S. federal income tax
returns, and remain subject to California Franchise Tax Board examination of our 2013 through 2016 California Franchise Tax Returns.
The Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities
until the statute of limitations closes with respect to the year in which such attributes are utilized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 37.95pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 37.95pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 37.95pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company believes that
its income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result
in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant
to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as
a component of income taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Deferred taxes have been
recorded on a net basis in the accompanying balance sheet. The Act reduces the U.S. statutory tax rate from 35% to 21%, effective
January 1, 2018. As of September 30, 2018, the Company had gross Federal net operating loss carryforwards of approximately $60.2
million and State gross net operating loss carryforwards of approximately $33.8 million. Both the Federal and State net operating
loss carryforwards will begin to expire in 2022 and 2023 respectively. The Company&rsquo;s ability to utilize net operating loss
carryforwards may be limited in the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has placed
a valuation allowance against the deferred tax assets in excess of deferred tax liabilities due to the uncertainty surrounding
the realization of such excess tax assets. Management periodically evaluates the recoverability of the deferred tax assets and
the level of the valuation allowance. At such time as it is determined that it is more likely than not that the deferred tax assets
are realizable, the valuation allowance will be reduced accordingly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Noncontrolling Interest</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company consolidates
entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company
holds, directly or indirectly, more than 50% of the voting rights, and VIEs for which the Company is the primary beneficiary.
Noncontrolling interests represent third-party equity ownership interests in the Company&rsquo;s consolidated entities. The amount
of net loss attributable to noncontrolling interests for the three months ended March 31, 2019 and 2018 was $451,100 and $72,300,
respectively. The amount of net loss attributable to noncontrolling interests for the six months ended March 31, 2019 and 2018
was $778,000 and $72,300, respectively.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Earnings (Loss) per Share</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Basic and diluted earnings (loss) per share
is presented in conformity with the two-class method. Under the two-class method, basic net loss per share is computed by dividing
income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Net loss per
share is calculated as the net loss less the current period preferred stock dividends. Diluted earnings (loss) per share takes
into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and
converted into Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recent Accounting Pronouncements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Apart from the below-mentioned
recent accounting pronouncements, there are no new accounting pronouncements that are currently applicable to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In June 2018, the FASB issued ASU 2018-07,
Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments in this Update expand the scope of Topic
718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the
requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution
of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that
period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods
or services to be used or consumed in a grantor&rsquo;s own operations by issuing share-based payment awards. The amendments also
clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards
granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue
from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning
after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact of
adoption of this standard to its financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASU 2016-15, &ldquo;Statement
of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Payments&rdquo; was issued by the Financial Accounting Standards
Board (FASB) in August 2016. The purpose of this amendment is to address eight specific cash flow issues with the objective of
reducing the existing diversity in practice. The amendments in this Update are effective for public business entities for fiscal
years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The
Company adopted ASU 2016-15 during our first quarter of fiscal year 2019, which had no impact on our consolidated financial statements,
and will apply the new guidance in future periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASU 2016-02, &ldquo;Leases
(Topic 842)&rdquo; was issued by the FASB in February 2016. The guidance requires lessees to recognize the assets and liabilities
that arise from leases on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including
interim periods within those annual periods, and should be applied using a modified retrospective approach. The guidance is effective
for the Company on October 1, 2019. The Company will elect the prospective transition method with the effects of adoption recognized
as a cumulative effect adjustment to the opening balance of retained earnings in the Company&rsquo;s fiscal 2020 financial statements,
with no restatement of comparative periods. The Company will also elect the package of three practical expedients permitted under
the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease
classification. The Company is currently assessing the impact of adopting this guidance on its consolidated financial statements
and related disclosures. The Company expects to record right of use assets and lease liabilities, which may be material, on its
consolidated balance sheet upon adoption of this standard and is still assessing the impact to its results of operations and cash
flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accounting Standards Update
(&ldquo;ASU&rdquo;) No. 2014-09, <I>Revenue from Contracts with Customers </I>(&ldquo;Topic 606&rdquo;), became effective for
the Company on October 1, 2018. The Company&rsquo;s revenue recognition disclosure reflects its updated accounting policies that
are affected by this new standard. The Company applied the &ldquo;modified retrospective&rdquo; transition method for open contracts
for the implementation of Topic 606<I>. </I>As sales are and have been primarily from providing healthcare services, and the Company
has no significant post-delivery obligations, this new standard this new standard did not result in a change to revenue recognition
on the Company&rsquo;s accompanying condensed consolidated financial statements for the cumulative impact of applying this new
standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented
in accordance with its historical accounting practices under Topic 605, <I>Revenue Recognition</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 12.8pt 0pt 5pt; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>3.</B></TD><TD STYLE="text-align: justify"><B>REVENUE RECOGNITION</B></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the adoption of Topic
606, the cumulative effect of initially applying the new revenue standard is required to be presented as an adjustment to the
opening balance of retained earnings. The Company determined there was no impact to opening retained earnings based on applying
the new revenue standard.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company operates as
one reportable segment, the healthcare delivery segment. The Company disaggregates revenue from contracts by service type and
by payor. This level of detail provides useful information pertaining to how the Company generates revenue by significant revenue
stream and by type of direct contracts. The condensed consolidated statements of operations present disaggregated revenue by service
type. The following table presents disaggregated revenue for the three and six months ended March 31, 2019 and 2018:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months ended<BR>
    March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months ended<BR> March
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 53%; text-align: left">Neurometric services</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">44,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">79,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">124,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">133,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Telepsychiatry services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">415,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">380,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">723,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">448,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; padding-bottom: 1.5pt">Revenue</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">460,100</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">459,900</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">847,200</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">581,900</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019, accounts
receivable, net of allowance for doubtful accounts, was $154,400. The allowance for doubtful accounts reflects our best estimate
of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on historical experience,
specific account information and other currently available evidence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 12.15pt 0pt 5pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 12.15pt 0pt 5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company receives payments
from the following sources for services rendered: (i) commercial insurers; (ii) the federal government under the Medicare program
administered by CMS; (iii) state governments under the Medicaid and other programs; (iv) other third party payors (e.g., hospitals);
and (v) individual patients and clients. As the period between the time of service and time of payment is typically one year or
less, the Company elected the practical expedient under ASC 606-10-32-18 and did not adjust for the effects of a significant financing
component.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 12.15pt 0pt 5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company derives a significant
portion of its revenue from Medicare, Medicaid and other payors that receive discounts from established billing rates. The Medicare
and Medicaid regulations and various managed care contracts under which these discounts must be calculated are complex, subject
to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided and
cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the
applicable regulations or contract terms. The services authorized and provided and related reimbursements are often subject to
interpretation that could result in payments that differ from the Company&rsquo;s estimates. Additionally, updated regulations
and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Settlements under cost
reimbursement agreements with third-party payors are estimated and recorded in the period in which the related services are rendered
and are adjusted in future periods as final settlements are determined. Final determination of amounts earned under the Medicare
and Medicaid programs often occurs in subsequent years because of audits by such programs, rights of appeal and the application
of numerous technical provisions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the new revenue standard,
the Company has elected to apply the following practical expedients and optional exemptions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within general and administrative expenses.</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">Recognize revenue in the amount of consideration to which the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company&rsquo;s services completed to date.</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration to which the Company has a right to invoice for services performed, and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">Use a portfolio approach for the fee-for-service (FFS) revenue stream to group contracts with similar characteristics and analyze historical cash collections trends.</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">No adjustment is made for the effects of a significant financing component as the period between the time of service and time of payment is typically one year or less.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Contract Assets</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Typically, revenues and
receivables are recognized once the Company has satisfied its performance obligation. Accordingly, the Company&rsquo;s contract
assets are comprised of accounts receivable. Generally, the Company does not have material amounts of other contract assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Contract Liabilities (Deferred Revenue</U>)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contract liabilities are
recorded when cash payments are received in advance of the Company&rsquo;s performance. The Company&rsquo;s contract liability
balance was $152,100 and $159,700 as of March 31, 2019 and September 30, 2018 and is presented within the &ldquo;Deferred Revenue&rdquo;
line item of the condensed consolidated balance sheets. $7,600 of the amounts recorded as of September 30, 2018 was recognized
as revenue for the six months ended March 31, 2019. The Company has elected the optional exemption to not disclose the remaining
performance obligations of its contracts since substantially all of its contracts have a duration of one year or less.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>4.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ACCOUNTS
RECEIVABLE</B></FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accounts receivable, net, is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September&nbsp;30,<BR>
    2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Accounts receivable</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">162,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">65,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Allowance for doubtful accounts</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(8,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Accounts receivable, net</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">154,400</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1.5pt solid">63,300</TD><TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>5.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>LONG
- TERM BORROWINGS AND OTHER NOTES PAYABLE</B></FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Debt assumed from Arcadian</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 219.8pt 0pt 5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-indent: 0.5in; text-align: justify">As a result of the acquisition of Arcadian,
the Company guaranteed Arcadian&rsquo;s then outstanding debt obligations totaling $700,000 owed to Ben Franklin Technology Partners
of Southeastern Pennsylvania (&ldquo;BFTP&rdquo;). The maturity date for the debt is September 30, 2021 and interest accrues at
an 8% annual rate. Unpaid interest was $120,500 as of March 31, 2019. The Company recorded the debt at its fair value and recorded
a discount of $93,500 as of March 31, 2019 attributable to the difference between the market interest rate and the stated interest
rate on the debt. Interest expense related to the accretion of debt discount for the three months ended March 31, 2019 and 2018
was $9,400 and 9,400, respectively. Interest expense related to the accretion of debt discount for the six months ended March
31, 2019 and 2018 was $18,800 and $14,000, respectively.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-indent: 0.5in; text-align: justify">A balloon payment of $700,000 plus interest
will be made on the scheduled maturity date of September 30, 2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 41pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-indent: 0.5in; text-align: justify">The changes in carrying amounts of the debt
acquired through acquisition for the six months ended March 31, 2019 were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 28.1pt 0pt 5pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left; padding-left: 0in">Beginning balance (September 30, 2018)</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 9%; font-weight: bold; text-align: right">587,700</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0in">Accretion of debt discount</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">18,800</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0in; padding-bottom: 1.5pt">Ending balance (March 31, 2019)</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">$</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 1.5pt solid">606,500</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 28.1pt 0pt 5pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>6.</B></TD><TD STYLE="text-align: justify"><B>ACQUISITION</B></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 13, 2017, the
Company acquired Arcadian. The Company accounted for the acquisition of Arcadian using the acquisition method of accounting for
business combinations under ASC 805, Business Combinations. The total purchase price is allocated to the tangible and identifiable
intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Fair value estimates are
based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The
judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well
as asset lives and the expected future cash flows and related discount rates, can materiality impact our results of operations.
Significant inputs used for the model included the amount of cash flows, the expected period of the cash flows and the discount
rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The purchase price, including
the value of the indebtedness and payables of Arcadian, is $1,339,600 based upon a deemed acquisition of all of the assets and
liabilities of Arcadian, including the equity interests in Arcadian. The aggregate purchase price consists of (i) initial investment
in Arcadian of $195,900 (ii) $317,000 of forgiveness of a note receivable with the primary member of Arcadian (iii) assumption
by Arcadian of subordinated debt (&ldquo;Arcadian Note&rdquo;) with a fair value of $555,000, plus accrued interest of $96,700
(iv) $175,000 payment for the redemption and cancellation of two warrants to purchase equity interests in Arcadian Services. The
Arcadian Note bears interest at an annual rate of 8% and matures on September 30, 2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Unaudited Pro Forma Financial Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The following unaudited pro forma statement
of operations data presents the combined results of operations for the six months ended March 31, 2018 as if the acquisition of
Arcadian had taken place on October 1, 2017. The unaudited pro forma financial information includes the effects of certain adjustments,
including the amortization of acquired intangibles and the associated tax effect and the elimination of the Company&rsquo;s and
the acquiree&rsquo;s non-recurring acquisition related expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The unaudited pro forma
information presented does not purport to be indicative of the results that would have been achieved had the acquisitions been
consummated at October 1, 2017 nor of the results which may occur in the future. The pro forma adjustments are based upon available
information and certain assumptions that the Company believes are reasonable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Pro Forma</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three&nbsp;Months <BR>
Ended <BR>
    March 31, 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended <BR> March
    31, 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">459,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">727,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net income (loss)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,659,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(5,605,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Basic and diluted loss per share:</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(0.61</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1.29</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Outstanding at weighted average shares outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,362,564</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,347,745</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>7.</B></TD><TD STYLE="text-align: justify"><B>REVERSE MERGER</B></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Merger Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 4, 2019, the
Company entered into an Agreement and Plan of Merger (the &ldquo;Merger Agreement&rdquo;) by and among the Company, the Company&rsquo;s
wholly owned subsidiary, Athena Merger Subsidiary, Inc., a Delaware corporation (&ldquo;Merger Sub&rdquo;), and Emmaus Life Sciences,
Inc., a Delaware corporation (&ldquo;Emmaus&rdquo;). Under the terms of the Merger Agreement, pending stockholder approval of
the transaction, Merger Sub will merge with and into Emmaus with Emmaus surviving the merger and becoming a wholly-owned subsidiary
of MYnd (the &ldquo;Merger&rdquo;). Subject to the terms of the Merger Agreement, at the effective time of the Merger, Emmaus
stockholders will receive a number of newly issued shares of MYnd common stock determined using the exchange ratio described below
in exchange for their shares of Emmaus stock. Following the Merger, stockholders of Emmaus will become the majority owners of
MYnd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 12.8pt 0pt 5pt; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The exchange ratio will
be determined prior to closing and will cause the MYnd securityholders (including holders of options and warrants) prior to the
effective time to collectively own 5.9% of the post-merger company on a fully diluted basis and Emmaus securityholders (including
holders of options, warrants and convertible notes) prior to the effective time to collectively own 94.1% of the post-merger company
on a fully diluted basis. The exchange ratio will reflect any dilution that may result from securities sold by MYnd or Emmaus
prior to the closing of the Merger and any changes to the number of outstanding convertible securities of each company. The Merger
Agreement provides that if Emmaus converts certain debt obligations into equity within six months of the completion of the Merger,
Emmaus will issue additional shares (equal to 5.9% of the shares issued in connection with the debt conversion to third parties)
to an existing subsidiary of MYnd which is expected to be spun-off to stockholders of MYnd prior to the effective time of the
merger, as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The post-merger company,
led by Emmaus&rsquo; management team, is expected to be named &ldquo;Emmaus Life Sciences, Inc.&rdquo; Prior to the closing of
the Merger, MYnd will seek shareholder approval to conduct a reverse split of its outstanding shares if necessary to satisfy listing
requirements of the Nasdaq Capital Market (the &ldquo;NasdaqCM&rdquo;). The post-merger company is expected to trade on the NasdaqCM
under a new ticker symbol. At the closing, the post-merger company&rsquo;s board of directors is expected to consist of one member
from MYnd and up to six members from Emmaus. The Merger has been unanimously approved by the Board of Directors of each company.
The transaction is expected to close no later than July 31, 2019, subject to approvals by the stockholders of MYnd and Emmaus,
and other closing conditions, including but not limited to the approval of the continued listing of the post-merger company&rsquo;s
common stock on the NasdaqCM, conversion of MYnd&rsquo;s preferred stock into common stock, satisfaction of certain cash and debt
conversion conditions and consummation of the MYnd spin-off described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The parties to the Merger
Agreement have made representations and warranties to each other as of specific dates for the purpose of allocating risk and not
for the purpose of establishing facts. Accordingly, the representations and warranties should not be relied on as characterizations
of the actual state of facts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement contains
certain termination rights for each of MYnd and Emmaus, and further provides that, upon certain terminations of the Merger Agreement,
MYnd may be required to pay Emmaus a termination fee of $750,000 and Emmaus may be required to pay MYnd a termination fee of $750,000;
provided that if the termination results from the failure to obtain the approval of the continued listing of the post-merger company&rsquo;s
common stock on the NasdaqCM, this fee payable by Emmaus will be $1,600,000. In connection with the termination of the Merger
Agreement upon certain circumstances, either party also may be required to pay the other party&rsquo;s third party expenses up
to $600,000. The termination of the Merger Agreement will not relieve any party thereto from any liability or damages resulting
from or arising out of any fraud or willful or intentional breach of any representation, warranty, covenant, obligation or other
provision contained in the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Spin-Off</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to the closing of
the Merger, we intend, subject to obtaining any required regulatory approvals and the completion of certain tax analyses, to transfer
all of our businesses, assets and liabilities not assumed by Emmaus to our existing wholly-owned subsidiary, Telemynd, Inc., a
Delaware corporation (&ldquo;Telemynd&rdquo;), pursuant to the terms of the Amended and Restated Separation and Distribution Agreement
(the &ldquo;Separation Agreement&rdquo;) entered into on March 27, 2019 by us, Telemynd and MYnd Analytics, Inc., a California
corporation (&ldquo;MYnd California&rdquo;). We intend to distribute all shares of Telemynd held by us to our stockholders of
record as a future record date will be determined for such potential distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Separation Agreement:
(i) amended and restated in its entirety that certain Separation and Distribution Agreement dated as of January 4, 2019, by and
between MYnd and MYnd California (the &ldquo;Prior Agreement&rdquo;) and (ii) caused Telemynd to assume all of the rights and
obligations of MYnd California under the Prior Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Separation
Agreement, the Telemynd Business (as defined in the Separation Agreement) would be separated from the Company upon, and subject
to, the closing of the transactions contemplated by the Separation Agreement (provided that such transactions occur at all), and
the Company intends to distribute all shares of Telemynd held by it to the Company&rsquo;s stockholders of record as of a future
record date to be determined for such potential distribution. The Separation Agreement includes the terms of the proposed spin-off
and the distribution to the Company&rsquo;s stockholders and includes representations and warranties, covenants and conditions,
which would impact the terms of the proposed spin-off and distribution. The proposed spin-off will be subject to conditions and
regulatory approvals not entirely under the control of the Company and the terms of the proposed spin-off, if and when completed,
are subject to change. The foregoing summary of the Separation Agreement is not complete and qualified in its entirety by reference
to the text of the Separation Agreement filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 19.85pt 0pt 13pt; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Amendment to Merger Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 10, 2019, the parties executed amendment no. 1 to the Merger Agreement.&nbsp; By executing amendment
no. 1, MYnd, Emmaus and Merger Sub agreed that: (i) the definition &ldquo;Parent California Subsidiary&rdquo; should be amended
to refer to Telemynd, Inc., the newly formed wholly-owned corporation, (ii) MYnd would not adopt a new equity incentive plan at
closing, which had been contemplated previously and determined to be unnecessary at this time, (iii) MYnd would be entitled to
receive credit in its Net Liabilities calculation for certain agreed upon prepaid costs,&nbsp;(iv) Telemynd would be entitled to
receive shares of Emmaus after closing if the exchange ratio applicable to any Company Warrants, Company Convertible Notes or Company
Debentures is reduced during the six (6) month period after the closing of the Merger for any reason, and (v) the outside termination
date was extended from May 31, 2019 to July 31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 19.85pt 0pt 13pt; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 19.85pt 0pt 13pt; text-align: left; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 19.85pt 0pt 13pt; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>8.</B></TD><TD STYLE="text-align: justify"><B>STOCKHOLDERS&rsquo; EQUITY</B></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Aspire Capital Equity Credit Lines</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 6, 2016, the
Company, entered into the first common stock purchase agreement (the &ldquo;First Purchase Agreement&rdquo;) with Aspire Capital
Fund, LLC (&ldquo;Aspire Capital&rdquo;) which provided that, upon the terms and subject to the conditions and limitations set
forth therein, Aspire Capital was committed to purchase up to an aggregate of $10.0 million of shares of the Company&rsquo;s Common
Stock over the 30-month term of the First Purchase Agreement. Concurrently with entering into the First Purchase Agreement, the
Company also entered into a registration rights agreement with Aspire Capital (the &ldquo;Registration Rights Agreement&rdquo;),
pursuant to which the Company maintained an effective registration statement registering the sale of the shares of Common Stock
that were issued to Aspire under the First Purchase Agreement. Under the First Purchase Agreement, on any trading day selected
by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company had
the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to
purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company&rsquo;s common stock in the
aggregate at a per share purchase price equal to the lesser of:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt">a)</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">the lowest sale price of Common Stock on the purchase date; or</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt">b)</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">the arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, on any date
on which the Company submitted a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and the closing sale price
of its Common Stock is equal to or greater than $0.50 per share, the Company also had the right, in its sole discretion, to present
Aspire Capital with a volume-weighted average price purchase notice (each, a &ldquo;VWAP Purchase Notice&rdquo;) directing Aspire
Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market
on the next trading day (the &ldquo;VWAP Purchase Date&rdquo;), subject to a maximum number of shares the Company may determine.
The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common
Stock traded on its principal market on the VWAP Purchase Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The purchase price was
subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring
during the period(s) used to compute the First Purchase Price. The Company could deliver multiple Purchase Notices and VWAP Purchase
Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has
been completed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The First Purchase Agreement
provided that the Company and Aspire Capital would not effect any sales under the First Purchase Agreement on any purchase date
where the closing sale price of the Company&rsquo;s common stock was less than $0.50. There were no trading volume requirements
or restrictions under the First Purchase Agreement, and the Company could control the timing and amount of sales of Common Stock
to Aspire Capital. Aspire Capital had no right to require any sales by the Company, but was obligated to make purchases from the
Company as directed by the Company in accordance with the First Purchase Agreement. There were no limitations on use of proceeds,
financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or
liquidated damages in the First Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with
the execution of the First Purchase Agreement, the Company issued to Aspire Capital 80,000 shares of Common Stock (the &ldquo;First
Commitment Shares&rdquo;). The First Purchase Agreement was terminated and replaced by the Second Purchase Agreement defined below
on May 15, 2018. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage
in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the Purchase Agreement.
Any proceeds from the Company receives under the First Purchase Agreement are expected to be used for working capital and general
corporate purposes. The Company cannot request Aspire to purchase more than $100,000 per business day.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019, the
Company has issued purchase notices to Aspire Capital under the First Purchase Agreement to purchase an aggregate of 1,180,000
shares of common stock, at a per share price of $2.00, resulting in gross cash proceeds of approximately $2.4 million. The issuance
of shares of common stock that were issued from time to time to Aspire Capital under the First Purchase Agreement were exempt
from registration under the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering
under Section 4(a)(2) of the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Second Purchase Agreement with Aspire Capital</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 15, 2018, the Company
terminated the First Purchase Agreement, and entered into a second common stock purchase agreement (the &ldquo;Second Purchase
Agreement&rdquo;) with Aspire Capital under substantially the same terms, conditions and limitations as the First Purchase Agreement
which are: Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of the Company&rsquo;s Common
Stock over the 30-month term of the Second Purchase Agreement. Concurrently with entering into the Second Purchase Agreement,
the Company also entered into a registration rights agreement with Aspire Capital (the &ldquo;Registration Rights Agreement&rdquo;),
pursuant to which the Company maintains an effective registration statement registering the sale of the shares of Common Stock
that have and may be issued to Aspire under the Second Purchase Agreement. Under the Second Purchase Agreement, on any trading
day selected by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the
Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as
principal) to purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company&rsquo;s common
stock in the aggregate at a per share purchase price equal to the lesser of:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">a) the lowest sale price
of Common Stock on the purchase date; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">b) the arithmetic average
of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days ending on the trading
day immediately preceding the purchase date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, on any date
on which the Company submits a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and the closing sale price
of its Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its sole discretion, to present
Aspire Capital with a volume-weighted average price purchase notice (each, a &ldquo;VWAP Purchase Notice&rdquo;) directing Aspire
Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market
on the next trading day (the &ldquo;VWAP Purchase Date&rdquo;), subject to a maximum number of shares the Company may determine.
The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common
Stock traded on its principal market on the VWAP Purchase Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The purchase price will
be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during
the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices
to Aspire Capital from time to time during the term of the Second Purchase Agreement, so long as the most recent purchase has
been completed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Second Purchase Agreement
provides that the Company and Aspire Capital will not effect any sales under the Second Purchase Agreement on any purchase date
where the closing sale price of the Company&rsquo;s common stock is less than $0.50. There are no trading volume requirements
or restrictions under the Second Purchase Agreement, and the Company will control the timing and amount of sales of Common Stock
to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the
Company as directed by the Company in accordance with the Second Purchase Agreement. There are no limitations on use of proceeds,
financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or
liquidated damages in the Second Purchase Agreement. In consideration for entering into the Second Purchase Agreement, concurrently
with the execution of the Second Purchase Agreement, the Company issued to Aspire Capital 250,000 shares of Common Stock (the
&ldquo;Second Commitment Shares&rdquo;). The Second Purchase Agreement may be terminated by the Company at any time, at its discretion,
without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates
shall engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the
Second Purchase Agreement. Any proceeds from the Company receives under the Second Purchase Agreement are expected to be used
for working capital and general corporate purposes. The Company cannot request Aspire to purchase more than $300,000 per business
day.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019, the
Company has issued purchase notices to Aspire Capital under the Second Purchase Agreement to purchase an aggregate of 2,200,100
shares of common stock, resulting in gross cash proceeds of approximately $3.7 million. The issuance of shares of common stock
that were issued from time to time to Aspire Capital under the Second Purchase Agreement were exempt from registration under the
Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2)
of the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Shareholder Approval for Removal of Exchange Cap</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Second Purchase Agreement
previously restricted the amount of shares that may be sold to Aspire Capital thereunder to 1,134,671 shares of Common Stock (the
&ldquo;Exchange Cap&rdquo;). On November 26, 2018, the Company received shareholder approval to remove the Exchange Cap in compliance
with the applicable listing rules of the Nasdaq Stock Market. Pursuant to Nasdaq Listing Rule 5635(d), shareholder approval is
required prior to the issuance of securities in connection with a transaction other than a public offering involving the sale,
issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal
to 20% or more of the common stock outstanding before the issuance for less than the greater of book or market value of the stock.
Following receipt of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million,
of common stock to Aspire Capital under the Second Purchase Agreement, with remaining availability of $6.3 million at March 31,
2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Common and Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019, the
Company is authorized to issue 265,000,000 shares of stock of which 250,000,000 are common stock, and 15,000,000 shares were preferred
shares, with a par value of $0.001 per shares are blank-check preferred stock which the Board is expressly authorized to issue
without stockholder approval, for one or more series of preferred stock and, with respect to each such series, to fix the number
of shares constituting such series and the designation of such series, the voting powers, if any, of the shares of such series,
and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations
or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other
special rights of each series of preferred stock, and the qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Private Placement with Directors and Management</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 21, 2018,
the Company entered into definitive agreements with George C. Carpenter IV, President and then Chief Executive Officer, Robin
L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with
Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus
fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share
of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Stock-Option Plans</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>2006 Stock Incentive Plan</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 3, 2006, CNS
Response, Inc. adopted the CNS 2006 Stock Incentive Plan (the &ldquo;2006 Plan&rdquo;). The 2006 Plan provided for the issuance
of awards in the form of restricted shares, stock options (which may constitute incentive stock options (ISO) or non-statutory
stock options (NSO), stock appreciation rights and stock unit grants to eligible employees, directors and consultants and is administered
by the Board. A total of 3,339 shares of stock were ultimately reserved for issuance under the 2006 Plan. As of March 31, 2019,
zero options were exercised and there were 1,435 option shares outstanding under the amended 2006 Plan. The outstanding options
have exercise prices to purchase shares of common stock ranging from $2,400 to $3,300 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>2012 Omnibus Incentive Compensation Plan</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 22, 2012, our
Board approved the MYnd Analytics, Inc. 2012 Omnibus Incentive Compensation Plan (the &ldquo;2012 Plan&rdquo;), reserved 1,667
shares of stock for issuance and on December 10, 2012, the Board approved the amendment of the 2012 Plan to increase the shares
authorized for issuance from 1,667 shares to 27,500 shares. On March 26, 2013, the Board further approved the amendment of the
2012 Plan to increase the shares authorized for issuance from 27,500 shares to 75,000 shares. The 2012 Plan, as amended, was approved
by our stockholders at the 2013 annual meeting held on May 23, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 5, 2016, the Board
approved a further amendment of the 2012 Plan to increase the Common Stock authorized for issuance from 75,000 shares to 200,000
shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 22, 2016 the
Board amended the 2012 Plan to: (i) increase the total number of shares of Common Stock available for grant under the 2012 Plan
from 200,000 shares to an aggregate of 500,000 shares, (ii) add an &ldquo;evergreen&rdquo; provision which, on January 1st of
each year through 2022, automatically increases the number of shares subject to the 2012 Plan by the lesser of: (a) a number equal
to 10% of the shares of Common Stock authorized under the 2012 Plan as of the preceding December 31st, or (b) an amount, or no
amount, as determined by the Board, but in no event may the number of shares of Common Stock authorized under the 2012 Plan exceed
885,781 and (iii) increase the annual individual award limits under the 2012 Plan to 100,000 shares of Common Stock, subject to
adjustment in accordance with the 2012 Plan. Per the above mentioned &ldquo;evergreen&rdquo; provision, an additional 50,000 shares
were automatically allocated for distribution under the 2012 Plan as of January 1, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the 2017 Annual Meeting
of Stockholders of the Company, held on August 21, 2017 (the &ldquo;2017 Annual Meeting&rdquo;), the holders of the Company&rsquo;s
common stock voted to amend the Company&rsquo;s 2012 Plan to increase: (i) the total number of shares of common stock, par value
$0.001 per share (&ldquo;Common Stock&rdquo;), available for grant under the 2012 Plan (subject to the overall limits described
in clause (ii) below) from 550,000 shares to an aggregate of 975,000 shares; (ii) the aggregate limitation on authorized shares
available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 885,781 shares to 1,570,248
shares and (iii) the annual individual award limits under the 2012 Plan to 150,000 shares of Common Stock (subject to adjustment
in accordance with the 2012 Plan);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the 2018 Annual Meeting
of Stockholders of the Company, held on April 4, 2018 (the &ldquo;2018 Annual Meeting&rdquo;), the holders of the Company&rsquo;s
common stock voted to amend the 2012 Plan to increase (i) the total number of shares of Common Stock available for grant under
the 2012 Plan (subject to the overall limit described in clause (ii) below) from 1,072,500 shares to an aggregate of 1,500,000
shares and (ii) the aggregate limitation on the authorization shares available for grant under the 2012 Plan, following any increases
pursuant to the evergreen provision, from 1,570,248 shares to 2,200,000 shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the Special Meeting
of Stockholders of the Company, held on November 26, 2018, the holders of the Company&rsquo;s common and preferred stock voted
to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012 Plan to increase:
(a) the total number of shares of common stock, par value $0.001 per share (&ldquo;Common Stock&rdquo;), available for grant under
the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate of 2,250,000
shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases
pursuant to the evergreen provision (the &ldquo;Evergreen Provision&rdquo;), from 2,200,000 shares to 2,950,000 shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Amendment to Chief Executive Officer&rsquo;s Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 19, 2018, the
Company and George C. Carpenter, IV, the former CEO of the Company, entered into an amendment to his Employment Agreement, dated
as of September 7, 2007 (the &ldquo;CEO Amendment&rdquo;), pursuant to which Mr. Carpenter&rsquo;s annual salary was reduced from
$270,000 to $206,250. This change is retroactive to April 13, 2018. Further, pursuant to the CEO Amendment, Mr. Carpenter was
granted 34,380 restricted shares of common stock under the 2012 Plan. The shares granted under the CEO Amendment will vest quarterly.
If the employee&rsquo;s relationship with the Company is terminated, the above grant will be prorated. On or before December 31,
2018, the parties will review this modification to determine if the above salary reduction adjustment will be renewed. As of May
9, 2019, the parties have not amended the modification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Appointment of Chief Innovation Officer; Amendment to Former
CEO Employment Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 12, 2018,
George C. Carpenter, IV no longer served in the position of Chief Executive Officer and became, in addition to President, the
Chief Innovation Officer of the Company. In connection therewith, on December 12, 2018, the Company and Mr. Carpenter entered
into an amendment to his Employment Agreement, dated as of September 7, 2007 (the &ldquo;Carpenter Amendment&rdquo;), pursuant
to which Mr. Carpenter was given the title of President and Chief Innovation Officer of the Company. Pursuant to the Carpenter
Amendment, Mr. Carpenter received an option to purchase 50,000 shares of common stock of the Company, with such option vesting
over a twelve-month period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Appointment of Patrick Herguth as CEO; Herguth Employment
Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Effective December 12, 2018, the Company
appointed Patrick Herguth to the position of Chief Executive Officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with Mr.
Herguth&rsquo;s appointment to the position of Chief Executive Officer, the Company entered into an employment agreement with
Mr. Herguth, dated as of December 12, 2018 (the &ldquo;Herguth Employment Agreement&rdquo;). Pursuant to the Herguth Employment
Agreement, Mr. Herguth will serve as the Company&rsquo;s Chief Executive Officer and will receive a base annual compensation of
$325,000, subject to periodic increases. For fiscal year 2019, Mr. Herguth is eligible to receive a performance bonus in a target
amount of $340,000, with payment of such bonuses subject to achievement of certain performance goals set forth in the Herguth
Employment Agreement. The employment agreement also provides that Mr. Herguth will receive an option to purchase up to 200,000
shares of the Company&rsquo;s common stock, subject to the time-based vesting schedule and up to 200,000 shares of the Company&rsquo;s
common stock subject to a performance-based vesting schedule, both as specified in the Herguth Employment Agreement, with options
to purchase 50,000 of such shares vesting on the date of the Herguth Employment Agreement. The time-based options will be subject
to vesting upon a change of control of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Election of Patrick Herguth to the Board of Directors</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Effective December 12, 2018, the Board increased
the number of directors on the Board by one and elected Mr. Herguth to the Board to serve as a director of the Company to fill
the vacancy created by such increase. Mr. Herguth has not been appointed to any committee of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Stock-based Compensation and Expenses</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2019, options
to purchase 1,428,500 shares of Common Stock were outstanding under the 2012 Plan with exercise prices ranging from $1.20 to $600.00
per share, with a weighted average exercise price of $3.05 per share. Additionally, 580,564 restricted shares of Common Stock
have been granted under the 2012 Plan, leaving 465,936 shares of Common Stock available to be awarded under the 2012 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stock-based compensation
expenses are generally recognized over the employees&rsquo; or service provider&rsquo;s requisite service period, generally the
vesting period of the award. Stock-based compensation expense included in the accompanying unaudited condensed consolidated statements
of operations for the six months ended March 31, 2019 and 2018 is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months ended March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Stock-based </B><BR><B>compensation</B><BR>
    <B>expense - stock </B><BR><B>options</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Stock-based </B><BR><B>compensation </B><BR><B>expense
    - restricted </B><BR><B>shares</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Stock-based </B><BR><B>compensation </B><BR><B>expense
    - stock </B><BR><B>options</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Stock-based </B><BR><B>compensation expense
    </B><BR><B>restricted </B><BR><B>shares</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Research</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 52%; text-align: left">Product development</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">29,200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">17,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">General and administrative</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">404,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">312,100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">302,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">289,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">445,400</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">329,900</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">303,100</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">289,900</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Total unrecognized stock
compensation expense as of March 31, 2019 amounted to $334,900.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The following table sets forth the Company&rsquo;s
unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period
over which that expense is expected to be recognized:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0">March
    31,</TD><TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0">2019</TD><TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD><TD STYLE="font-weight: bold; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0">2018</TD><TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0"><B>Type of Award:</B></TD><TD STYLE="padding: 0; text-indent: 0"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0"><B>Unrecognized Expense,
    net of estimated forfeitures</B></TD><TD STYLE="padding: 0; text-indent: 0"><B>&nbsp;</B></TD><TD STYLE="padding: 0; text-indent: 0"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0"><B>Weighted average
    Recognition Period (in years)</B></TD><TD STYLE="padding: 0; text-indent: 0"><B>&nbsp;</B></TD><TD STYLE="padding: 0; text-indent: 0"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0"><B>Unrecognized Expense,
    net of estimated forfeitures</B></TD><TD STYLE="padding: 0; text-indent: 0"><B>&nbsp;</B></TD><TD STYLE="padding: 0; text-indent: 0"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0"><B>Weighted average
    Recognition Period (in years)</B></TD><TD STYLE="padding: 0; text-indent: 0"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left; padding: 0; text-indent: 0">Stock Options</TD><TD STYLE="width: 1%; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding: 0; text-indent: 0">$</TD><TD STYLE="width: 9%; text-align: right; padding: 0; text-indent: 0">329,600</TD><TD STYLE="width: 1%; text-align: left; padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 9%; text-align: right; padding: 0; text-indent: 0">1.40</TD><TD STYLE="width: 1%; text-align: left; padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding: 0; text-indent: 0">$</TD><TD STYLE="width: 9%; text-align: right; padding: 0; text-indent: 0">682,900</TD><TD STYLE="width: 1%; text-align: left; padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 1%; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; padding: 0; text-indent: 0">&nbsp;</TD><TD STYLE="width: 9%; text-align: right; padding: 0; text-indent: 0">0.53</TD><TD STYLE="width: 1%; text-align: left; padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding: 0; text-indent: 0">Restricted Stock</TD><TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-align: right; text-indent: 0">5,300</TD><TD STYLE="padding: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-align: right; text-indent: 0">0.05</TD><TD STYLE="padding: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-align: right; text-indent: 0">139,100</TD><TD STYLE="padding: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-align: right; text-indent: 0">0.48</TD><TD STYLE="padding: 0; text-align: left; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 4pt; text-indent: 0">Total</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; padding-top: 0; padding-right: 0; padding-left: 0; text-align: left; text-indent: 0">$</TD><TD STYLE="border-bottom: Black 4pt double; padding-top: 0; padding-right: 0; padding-left: 0; text-align: right; text-indent: 0">334,900</TD><TD STYLE="padding: 0 0 4pt; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; padding-top: 0; padding-right: 0; padding-left: 0; text-align: right; text-indent: 0">1.38</TD><TD STYLE="padding: 0 0 4pt; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; padding-top: 0; padding-right: 0; padding-left: 0; text-align: left; text-indent: 0">$</TD><TD STYLE="border-bottom: Black 4pt double; padding-top: 0; padding-right: 0; padding-left: 0; text-align: right; text-indent: 0">822,000</TD><TD STYLE="padding: 0 0 4pt; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 4pt; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-top: 0; padding-right: 0; border-bottom: Black 4pt double; padding-left: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; padding-top: 0; padding-right: 0; padding-left: 0; text-align: right; text-indent: 0">0.52</TD><TD STYLE="padding: 0 0 4pt; text-align: left; text-indent: 0">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">A summary of all stock option activity is
as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 0in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<BR> Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<BR> Average<BR>
    Exercise<BR> Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted-<BR> Average<BR>
    Remaining<BR> Contractual<BR> Term (in<BR> years)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Intrinsic<BR> Value</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; padding-left: 0in">Outstanding at September 30, 2018</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">803,937</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">10.13</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">8.75</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">7,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0in">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">864,758</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0in">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0in">Forfeited or expired</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38,760</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2.28</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0in">Outstanding at March 31, 2019</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,629,935</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5.65</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">8.89</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">52,600</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are 825,100 options vested and 804,835 unvested
as of March 31, 2019; there are 531,604 options vested and 272,333 options unvested as of September 30, 2018;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 38.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Following is a summary of the restricted
stock activity for the six months ended March 31, 2019:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: -0.125in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<BR> Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<BR> Average<BR>
    Grant Date<BR> Fair Value</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-left: 0in">Outstanding at September 30, 2018</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">406,564</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4.09</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0in">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">174,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.35</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 0in">Forfeited</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0in">Outstanding at March 31, 2019</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">580,564</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3.27</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">There are 567,469 shares of restricted stock
vested and 13,095 unvested as of March 31, 2019; there are 351,522 shares of restricted stock vested and 55,042 unvested as of
September 30, 2018;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The range of Black-Scholes option-pricing
model assumption inputs for all the valuation dates are in the table below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Six
                                         Months Ended</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">March
                                         31, <BR>
2019</P></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Low</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">High</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Annual dividend yield</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left">Expected life (years)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3.0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">5.0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Risk-free interest rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.23</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.90</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected volatility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">172.89</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200.47</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><I>Expected Dividend Yield</I>. The Company
has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Expected
Life</I>. The Company elected to utilize the &ldquo;simplified&rdquo; method for &ldquo;plain vanilla&rdquo; options to value
stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term
and the contractual term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><I>Expected Volatility. </I>The expected
volatility rate used to value stock option grants is based on the historical volatilities of the Company&rsquo;s common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><I>Risk-free Interest Rate</I>. The risk-free
interest rate assumption was based on U.S. Treasury bill instruments that had terms consistent with the expected term of the Company&rsquo;s
stock option grants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The warrant activity for the six months ended
March 31, 2019, are described as follows:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<BR> Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<BR> Average<BR>
    Exercise<BR> Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; padding-left: 0in">Outstanding at September 30, 2018</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6,075,874</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 9%; font-weight: bold; text-align: right">4.53</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0in">Expired/ Forfeited</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(555</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">55.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 0in">Outstanding at March 31, 2019</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,075,319</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4.52</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following is a summary of the status of warrants outstanding
at March 31, 2019:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercise<BR> Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number<BR> of Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Expiration<BR> Date</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average<BR> Exercise
    Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 23%; text-align: right">2.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">459,458</TD><TD STYLE="width: 1%; text-align: left">(1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 24%; text-align: center; padding-left: 3pt">09/2023</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 22%; text-align: right">2.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,050,000</TD><TD STYLE="text-align: left">(2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 3pt">03/2023</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.34</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,539,061</TD><TD STYLE="text-align: left">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 3pt">07/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,675,000</TD><TD STYLE="text-align: left">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 3pt">07/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">213,800</TD><TD STYLE="text-align: left">(5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 3pt">07/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.04</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134,000</TD><TD STYLE="text-align: left">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 3pt">07/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.04</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt; padding-left: 3pt">06/2021</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10.00</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><B>Total</B></TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"></TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,075,319</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt; padding-left: 3pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">4.52</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; padding: 0; text-indent: 0">(1)</TD>
    <TD STYLE="width: 97%; padding: 0; text-align: justify; text-indent: 0">On September 21, 2018, the Company entered into definitive
    agreements with George C. Carpenter IV, President and former Chief Executive Officer, Robin L. Smith, Chairman, as well as
    John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of
    the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to
    a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of Common
    Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock for $2.00 per share. The closing price per
    share of the Common Stock on the Nasdaq Stock Market on September 20, 2018 was $1.72 per share.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0; text-align: left"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: justify">On
                                         March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each
                                         consisting of one share of newly-designated Series A Preferred Stock, and one warrant
                                         in a private placement to three affiliates of the Company, for gross proceeds of $2.1
                                         million. The private placement closed on March 29, 2018. The closing price per share
                                         of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0; text-align: left"></TD><TD STYLE="width: 0.25in; text-align: left">(3)</TD><TD STYLE="text-align: justify">On
                                         July 13, 2017, the Company declared a special dividend of warrants to purchase shares
                                         of the Company&rsquo;s common stock to record holders of Common Stock as of such date.
                                         Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all
                                         holders of common stock on the record date. These warrants are exercisable (in accordance
                                         with their terms) to purchase one share of common stock, at an exercise price of $5.25
                                         per share. The warrants will become exercisable commencing not less than 12 months following
                                         their July 27, 2017 distribution date and will expire five years from the date of issuance.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0; text-align: left"></TD><TD STYLE="width: 0.25in; text-align: left">(4)</TD><TD STYLE="text-align: justify">On
                                         July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants
                                         to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten
                                         public offering.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0; text-align: left"></TD><TD STYLE="width: 0.25in; text-align: left">(5)</TD><TD STYLE="text-align: justify">On
                                         August 23, 2017, the Company issued warrants to purchase 213,800 shares of common stock
                                         to underwriters as part of the exercise of the overallotment option attributed to the
                                         July 2017 underwritten public offering.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0; text-align: left"></TD><TD STYLE="width: 0.25in; text-align: left">(6)</TD><TD STYLE="text-align: justify">As
                                         part of the underwritten public offering on July 19, 2017, the Company issued warrants
                                         to purchase 134,000 shares of common stock to the underwriters as part of the services
                                         performed by them in connection with the underwritten public offering.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>9.</B></TD><TD STYLE="text-align: justify"><B>RELATED PARTY TRANSACTIONS</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>DCA Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 25, 2013,
the Board approved a consulting agreement effective May 1, 2013, for marketing services provided by Decision Calculus Associates
(&ldquo;DCA&rdquo;), an entity operated by Mr. Carpenter&rsquo;s spouse, Jill Carpenter. Effective August 2015, DCA was engaged
at a fee of $10,000 per month. From August 2015 through February 2017, DCA has been paid $170,000. The DCA contract was renewed
at $3,000 a month effective March 1, 2017. On May 1, 2018, the Company amended the agreement with DCA to reduce the monthly fee
to $2,000 a month. The amendment provides for a term of one year with a 30 day termination clause. The Company incurred fees of
$6,000 and $9,000 for the three months ended March 31, 2019 and 2018, respectively. The Company incurred fees of $12,000 and $18,000
for the six months ended March 31, 2019 and 2018, respectively. The agreement with DCA was terminated on April 20, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Hooper Holmes Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2016, we entered into an agreement with Hooper Holmes Inc, for which Dr. Smith, our Chairman of the Board, became an advisory member of its board as
of March 16, 2017, and in which Mr. Pappajohn, our director, has participated in equity raises to become the beneficial owner
of a greater than 10% interest. Hooper Holmes performs EEGs nationwide to patients who wish to obtain a PEER report. The Company
paid $0 and $54,300 for these services during the three months ended March 31, 2019 and 2018, respectively. The Company paid $2,600
and $90,700 for these services during the six months ended March 31, 2019 and 2018, respectively. The agreement with Hooper Holmes
was deleted on December 31, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Private Placement with Directors and Management</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 21, 2018,
the Company entered into definitive agreements with George C. Carpenter IV, President and then Chief Executive Officer, Robin
L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with
Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus
fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share
of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>10.</B></TD><TD STYLE="text-align: justify"><B>LOSS PER SHARE</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Basic earnings (loss) per share is computed
by dividing income (loss) available to common stockholders less the current period preferred stock dividend by the weighted average
common shares outstanding during the period. Diluted earnings (loss) per share takes into account the potential dilution that
could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-indent: 0.5in; text-align: justify">A summary of the net income (loss) and shares
used to compute net income (loss) per share for the three and six months ended March 31, 2019 and 2018 is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 37.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three Months Ended<BR>
    March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended<BR>
    March 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Net loss for computation of basic and diluted net loss per share:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Net Loss attributable to MYnd Analytics, Inc.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,258,600</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,587,300</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(4,636,100</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(5,356,700</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Preferred stock dividends</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(24,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(49,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,283,200</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,587,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,685,300</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(5,356,700</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Basic and diluted net loss per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Basic and diluted net loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.27</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.59</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.59</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1.23</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Basic and diluted weighted average shares outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,399,443</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,362,564</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,964,021</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,347,745</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Anti-dilutive common equivalent shares not included
    in the computation of dilutive net loss per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,075,319</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,617,481</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,075,319</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,617,481</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Restricted common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,095</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,416</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,095</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,416</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Options</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,629,935</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">554,059</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,629,935</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">554,059</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">7,718,349</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,213,956</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">7,718,349</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,213,956</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 37.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>11.</B></TD><TD STYLE="text-align: justify"><B>COMMITMENTS AND CONTINGENT LIABILITIES</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Litigation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is not currently
party to any legal proceedings, the adverse outcome of which, in the Company&rsquo;s management&rsquo;s opinion, individually
or in the aggregate, would have a material adverse effect on the Company&rsquo;s results of operations or financial position.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Lease Commitments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has entered
into operating lease agreements for its office locations in California, Virginia and Pennsylvania which expire at various times
through September 30, 2020. Minimum future lease payments under these leases are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: -0.125in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Payments due by period</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid; padding-left: -0.125in">Contractual Obligations</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; padding-bottom: 1.5pt; padding-left: 0in">Operating Lease Obligations</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">177,300</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">129,800</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">47,500</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; padding-left: 0in">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">177,300</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">129,800</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">47,500</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>12.</B></TD><TD STYLE="text-align: justify"><B>SUBSEQUENT EVENTS</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Aspire Line</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subsequent
to March 31, 2019, the Company issued purchase notices to Aspire Capital to purchase 463,636 shares of common stock, at a weighted
average per share price of $1.10, resulting in gross cash proceeds of $510,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Equity Grant to Chairman of the Board</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On
May 8, 2019,<B>&nbsp;</B>the Board of Directors granted 50,000 restricted shares and 100,000 options to purchase common stock
to the Chairman of the Board, Dr. Robin L. Smith, under the Company&rsquo;s Amended and Restated 2012 Omnibus Incentive Compensation
Plan. The restricted shares and options vest immediately and survive the full term. In the event the merger does not close, Dr.
Smith will forfeit 25,000 restricted shares and 25,000 shares of common stock to the Company&rsquo;s plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Registered Direct Offering of Common
Stock</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 22, 2019, the
Company and select investors (&ldquo;Investors&rdquo;) entered into a securities purchase agreement for the issuance and sale of
2,776,941 shares of the Company&rsquo;s common stock in a registered direct offering (the &ldquo;Offering&rdquo;), which Offering
closed on May 28, 2019. The purchase price per share for each share offered to the Investors was $1.02 resulting in aggregate gross
proceeds of approximately $2,832,020. T.R. Winston &amp; Company, LLC (the &ldquo;Placement Agent&rdquo;) acted as the Placement
Agent for the Offering. The net proceeds to the Company from the Offering, after deducting Placement Agent fees and the Company&rsquo;s
estimated offering expenses, was approximately $2,533,779. The Company&rsquo;s common stock in the Offering was registered under
the Securities Act of 1933, as amended, on the Company&rsquo;s Registration Statement on <A HREF="http://www.sec.gov/Archives/edgar/data/822370/000161577418001439/s109158_s3.htm">Form S-3</A> (Registration No. 333-223203),
previously filed with the Securities and Exchange Commission and declared effective on June 29, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Exchange Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 25, 2019, the
Company and its wholly-owned subsidiary Telemynd, Inc. (&ldquo;<U>Telemynd</U>&rdquo;) entered into exchange agreements (the &ldquo;<U>Exchange
Agreements</U>&rdquo;) with the holders of its Series A Preferred Stock and Series A-1 Preferred Stock (collectively, the &ldquo;<U>MYnd
Preferred Shares</U>&rdquo;). The Exchange Agreements were entered into pursuant to the Agreement and Plan of Merger and Reorganization
(as amended on May 24, 2019, the &ldquo;<U>Merger Agreement</U>&rdquo;) with Emmaus Life Sciences, Inc. (&ldquo;<U>Emmaus</U>&rdquo;)
and Athena Merger Subsidiary, Inc. (&ldquo;<U>Merger Sub</U>&rdquo;), which provides that all MYnd Preferred Shares must cease
to be outstanding prior to the time that Merger Sub merges with and into Emmaus, with Emmaus surviving as a subsidiary of the Company
(the &ldquo;<U>Merger</U>&rdquo;). Pursuant to the Exchange Agreements, the MYnd Preferred Shares will be exchanged for an equivalent
number of shares of Company common stock, par value $0.001 per share (the &ldquo;<U>Common Exchange Shares</U>&rdquo;) and an equivalent
number of Telemynd Preferred Shares, as described below. The Exchange Agreements also provide that if (i) Telemynd sells Telemynd
Common Shares in one or more registered public offerings or private placements, at a price per share that is equal to, or in excess
of, three times the then current conversion price of the Telemynd Preferred Shares or (ii) the Telemynd Common Shares trade on
a national securities exchange and have a closing sale price that is equal to, or in excess of, three times the then current conversion
price of the Telemynd Preferred Shares for at least five consecutive days, all of the Telemynd Preferred Shares will automatically
convert into Telemynd Common Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Amendment to Warrants</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 28, 2019, the
Company amended the terms of its existing Warrant Agreements, dated as of July 19, 2017 and July 25, 2017, which were entered into
between the Company and American Stock Transfer &amp; Trust Company, as warrant agent (the &ldquo;<U>Warrant Agreements</U>&rdquo;),
to reduce the exercise price of the warrants issued pursuant to the Warrant Agreements from $5.25 to $2.00 per share, effective
upon the consummation of the Merger, for a period of one year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Issuance of Options</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 25, 2019,
the Company granted 10,000 options to purchase Company common stock (the &ldquo;<U>Options</U>&rdquo;) to Donald D&rsquo;Ambrosio,
the Company&rsquo;s chief financial officer. The grant was made pursuant to the Company&rsquo;s Amended and Restated 2012 Omnibus
Incentive Compensation Plan. The Options are immediately exercisable at an exercise price of $1.18 per share, and will expire
ten years from the issuance date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Separation and Distribution</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On January 4, 2019,
MYnd announced its intention to consummate the Merger. In addition, on January 4, 2019, in connection with the Merger, MYnd and
MYnd Analytics, Inc., a California corporation (&ldquo;MYnd-CA&rdquo;) entered into the Separation and Distribution Agreement to
consummate the Spin-Off, which agreement was assigned by MYnd-CA to us on March 27, 2019 pursuant to an amended and restated Separation
and Distribution Agreement (as amended, the &ldquo;Separation Agreement&rdquo;). Among other things, the Separation Agreement provides
for the Separation and the transfer of certain assets and liabilities of MYnd related to the Business to us. The Separation of
the Business was consummated on July 16, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On June 25, 2019, MYnd&rsquo;s
board of directors approved the distribution of the issued and outstanding shares of Company common stock on the basis of one (1)
share of Company common stock for every one (1) share of MYnd common stock held as of the close of business on the record date
of July 15, 2019. On July 16, 2019, the distribution date, each MYnd stockholder received one (1) share of our common stock for
every one (1) share of MYnd common stock at the close of business on the record date for the distribution. Accordingly, 12,833,143
shares of our common stock were distributed to MYnd stockholders on the distribution date. No options of Telemynd were issued in
the Spin-off and all prior options of MYnd prior to the Spin-off remained outstanding at MYnd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>1,400,000 Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Telemynd, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; font-size: 10pt; text-align: center"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2019</B></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INFORMATION NOT REQUIRED IN PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 13.&nbsp;&nbsp;Other Expenses of
Issuance and Distribution.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth the costs and expenses, payable by the Company in connection with the registration and sale of the Common Stock being
registered. All amounts are estimates except the SEC registration fee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">SEC registration fee</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">905.97</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Printing and mailing expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accounting fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Legal fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Transfer agent fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Miscellaneous</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total expenses</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 14.&nbsp; Indemnification of Directors
and Officers.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Delaware General
Corporation Law and certain provisions of our certificate of incorporation and bylaws under certain circumstances provide for indemnification
of our officers, directors and controlling persons against liabilities which they may incur in such capacities. A summary of the
circumstances in which such indemnification is provided for is contained herein, but this description is qualified in its entirety
by reference to our certificate of incorporation, bylaws and to the statutory provisions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, any officer,
director, employee or agent may be indemnified against expenses, fines, settlements or judgments arising in connection with a legal
proceeding to which such person is a party, if that person&rsquo;s actions were in good faith, were believed to be in our best
interest, and with respect to any criminal action or proceeding, such person had no reasonable cause to believe their actions were
unlawful. Unless such person is successful upon the merits in such an action, indemnification may be awarded only after a determination
by independent decision of the board of directors, by legal counsel, or by a vote of the stockholders, that the applicable standard
of conduct was met by the person to be indemnified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The circumstances under
which indemnification is granted in connection with an action brought on our behalf is generally the same as those set forth above;
however, with respect to such actions, indemnification is granted only with respect to expenses actually incurred in connection
with the defense or settlement of the action. In such actions, unless the court determines otherwise, the person to be indemnified
must have acted in good faith and in a manner believed to have been in our best interest, and have not been adjudged liable to
the corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Indemnification may
also be granted pursuant to the terms of agreements which we are currently party to with each of our directors and executive officers,
agreements which we may enter into in the future or pursuant to a vote of stockholders or directors. Delaware law and our certificate
of incorporation also grant the power to us to purchase and maintain insurance which protects our officers and directors against
any liabilities incurred in connection with their service in such a position, and such a policy may be obtained by us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A stockholder&rsquo;s
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers
as required by these indemnification provisions. There is no pending litigation or proceeding involving any of our directors, officers
or employees regarding which indemnification by us is sought, nor are we aware of any threatened litigation that may result in
claims for indemnification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to
the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 15.&nbsp;&nbsp;Recent Sales of
Unregistered Securities.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the past three
years, the registrant has only issued unregistered securities to its initial stockholders in connection with its formation. The
registrant believes that this transaction was exempt from registration pursuant to Section 4(a)(2) of the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; color: #943634">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 16.&nbsp;&nbsp;Exhibits and Financial
Statement Schedules.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a) The
exhibits listed under the caption &ldquo;Exhibit Index&rdquo; following the signature page are filed herewith or incorporated by
reference herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b) Financial
Statement Schedules</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No financial statement
schedules are provided because the information required to be set forth therein is not applicable or is shown in the consolidated
financial statements or notes thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 17.&nbsp;&nbsp;Undertakings</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(a) The undersigned Registrant hereby undertakes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) to file, during any period in which
offers or sales are being made, a post-effective amendment to this Registration Statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(ii) to reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the &ldquo;Calculation
of Registration Fee&rdquo; table in the effective Registration Statement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(iii) to include any material information
with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such
information in the Registration Statement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) that, for the purpose of determining
any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(3) to remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(4) that, for the purpose of determining
liability under the Securities Act to any purchaser: each prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness;
provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 10pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b) The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each filing of the Registrant&rsquo;s annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan&rsquo;s annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the
requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, on July
22, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>TELEMYND, INC.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">(Registrant)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 36%">/s/ Patrick Herguth&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Patrick Herguth</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Executive Officer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">(Principal Executive Officer)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="poa"></A>POWER OF ATTORNEY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Know All Persons By These Presents, that each person whose signature
appears below constitutes and appoints Patrick Herguth and Donald D&rsquo;Ambrosio, and each of them, as his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities,
to sign the Registration Statement on Form S-1 of Telemynd, and any or all amendments (including post-effective amendments) thereto
and any new registration statement with respect to the offering contemplated thereby filed pursuant to Rule 462(b) of the Securities
Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that
said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the
dates stated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 28%; border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Signature</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 45%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Title</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 25%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Date</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
Patrick Herguth</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 29.7pt; text-indent: -29.7pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer, Director</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">July 22, 2019</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Patrick Herguth</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Principal Executive Officer)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
Donal D&rsquo;Ambrosio</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer </FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">July 22, 2019</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Donald D&rsquo;Ambrosio</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Principal Financial and Accounting Officer)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
Geoffrey E. Harris</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 29.7pt; text-indent: -29.7pt">Director</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">July 22, 2019</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Geoffrey E. Harris</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
John Pappjohn</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 29.7pt; text-indent: -29.7pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">July 22, 2019</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ John Pappajohn</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
Peter Unanue</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 29.7pt; text-indent: -29.7pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">July 22, 2019</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Peter Unanue</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
Michal Votruba</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 29.7pt; text-indent: -29.7pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">July 22, 2019</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Michal Votruba</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>EXHIBIT INDEX </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; border-bottom: Black 1.5pt solid; text-align: justify; width: 10%"><FONT STYLE="font-size: 10pt"><B>Exhibit<BR>
    Number</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 1.5pt; text-align: justify; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt solid; width: 89%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD>1.1**</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Underwriting Agreement.</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">2.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/822370/000161577419000279/s115237_ex10-1.htm">Separation
    and Distribution Agreement dated January 4, 2019 between Mynd Analytics, Inc. a Delaware corporation and Mynd Analytics, Inc.,
    a California corporation, incorporated by reference to the Current Report on Form 8-K filed by Registrant&rsquo;s Parent,
    Mynd Analytics, Inc., on January 7, 2019 (File No.001-35527).</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">2.2</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019010775/f1012b2019a1ex2-2_telemynd.htm">Amended
    and Restated Separation and Distribution Agreement dated March 27, 2019 between Mynd Analytics, Inc., a Delaware corporation
    and Telemynd, Inc., a Delaware corporation, incorporated by reference to Exhibit 2.2 to the Registrant&rsquo;s Registration
    Statement on Form 10 filed by Registrant on June 14, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">3.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019010775/f1012b2019a1ex3-1_telemynd.htm">Certificate
    of Incorporation, incorporated by reference to Exhibit 2.2 to the Registrant&rsquo;s Registration Statement on Form 10 filed
    by Registrant on June 14, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">3.2</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019010775/f1012b2019a1ex3-2_telemynd.htm">By-Laws,
    incorporated by reference to Exhibit 3.2 to the Registrant&rsquo;s Registration Statement on Form 10 filed by Registrant on
    June 14, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">3.3</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019010775/f1012b2019a1ex3-3_telemynd.htm">Certificate
    of Designation of Series A Preferred Stock, incorporated by reference to Exhibit 3.3 to the Registrant&rsquo;s Registration
    Statement on Form 10 filed by Registrant on June 14, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">4.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019010775/f1012b2019a1ex4-1_telemynd.htm">Specimen
    Stock Certificate, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 10 filed by Registrant on
    June 14, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">5.1**</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Opinion of Dentons US LLP.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">10.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019010775/f1012b2019a1ex10-1_telemynd.htm">2019
    Omnibus Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Registrant&rsquo;s Registration Statement
    on Form 10 filed by Registrant on June 14, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">10.2</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/822370/000161577417006767/s108189_ex10-1.htm">Equity
    Purchase Agreement dated November 13, 2017 between Mynd Analytics, Inc., Arcardian Telepsychiatry Services LLC and Robert
    Plotkin, incorporated by reference to the Current Report on Form 8-K filed by Registrant&rsquo;s Parent, Mynd Analytics, Inc.
    on November 15, 2017 (File No. 001-35527)</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">10.3</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/822370/000161577417006767/s108189_ex10-2.htm">Guaranty
    of Mynd Analytics, Inc., dated November 13, 2017, incorporated by reference to the Current Report on Form 8-K filed by Registrant&rsquo;s
    Parent, Mynd Analytics, Inc. on November 15, 2017 (File No. 001-35527).</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">10.4</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000161577419008247/s118301_ex10-4.htm">Side
    Agreement, First Amendment to Seed Capital Funding Agreements and Assignment of Loan Agreements dated November 7, 2017 by
    and among Arcadian Telepsychiatry LLC, Arcadian Telepsychiatry Services LLC and Ben Franklin Technology Partners of Southeastern
    Pennsylvania, incorporated by reference to Exhibit 10.4 to the Registrant&rsquo;s Registration Statement on Form 10 filed
    by Registrant on May 22, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">10.5</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000161577419008247/s118301_ex10-5.htm">Consent
    dated November 7, 2017 by and between Arcadian Telepsychiatry LLC and Ben Franklin Technology Partners of Southeastern Pennsylvania,
    incorporated by reference to Exhibit 10.5 to the Registrant&rsquo;s Registration Statement on Form 10 filed by Registrant
    on May 22, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">10.6</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019011075/f1012g2019ex10-6_telemynd.htm">Consulting
    Agreement dated May 30, 2019 between Telemynd, Inc. and Robin L. Smith, MD, incorporated by reference to Exhibit 10.6 to the
    Registrant&rsquo;s Registration Statement on Form 10 filed by the Registrant on June 20, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">10.7</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/822370/000161577418001326/s108996_ex10-32.htm">Management
    Services Agreement, effective as of November 13, 2017, between Arcadian Telepsychiatry Services LLC and Arcadian Telepsychiatry
    P.C., incorporated by reference to Exhibit No. 10.32 to the Quarterly Report on Form 10-Q filed by the Registrant&rsquo;s
    Parent, MYnd Analytics, Inc., on February 20, 2018 (File No. 001-35527).</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">10.8</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/822370/000161577418001326/s108996_ex10-33.htm">Management
    Services Agreement, effective as of November 13, 2017, between Arcadian Telepsychiatry Services LLC and Arcadian Telepsychiatry
    PA. incorporated by reference to Exhibit No. 10.33 to the Quarterly Report on Form 10-Q filed by the Registrant&rsquo;s Parent,
    MYnd Analytics, Inc., on February 20, 2018 (File No.001-35527).</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">10.9</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/822370/000161577418014245/s114511_ex10-15.htm">Agreement,
    by and between MYnd Analytics, Inc. and RSJ Investments SICAV a.s. acting in respect of its sub-fund RSJ Gradus, RSJ Investment
    SICAV a.s., effective as of September 20, 2018, incorporated by reference to Exhibit No. 10.15 to the Annual Report on Form
    10-K filed by the Registrant&rsquo;s Parent, MYnd Analytics, Inc., on December 11, 2018 (File No. 001-35527).</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">10.10</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019013208/f8k071519ex10-1_telemynd.htm" STYLE="-sec-extract: exhibit">Employment Agreement with Patrick Herguth dated July 15, 2019, incorporated by reference to Exhibit 10.1 of the Registrant&rsquo;s Current Report on Form 8-K filed by the Registrant on July 19, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">10.11</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1771077/000121390019013208/f8k071519ex10-2_telemynd.htm">Employment Agreement with Don D&rsquo;Ambrosio dated July 15, 2019, incorporated by reference to Exhibit 10.2 of the Registrant&rsquo;s Current Report on Form 8-K filed by the Registrant on July 19, 2019.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">23.1*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="fs12019ex23-1_telemyndinc.htm" STYLE="-sec-extract: exhibit">Consent of Independent Registered Public Accounting Firm.</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">23.2**</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consent of Dentons US LLP (included in Exhibit 5.1)</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">24.1*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="#poa">Power of Attorney (included on the signature
    page of this Registration Statement)</A> </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">*</TD><TD STYLE="text-align: justify">Filed herewith</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">**</TD><TD STYLE="text-align: justify">To be filed by amendment</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">II-5</P>

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[{"type": "S-1", "sequence": "1", "filename": "fs12019_telemyndinc.htm", "description": "FORM S-1", "secsgml_size_bytes": 2181864}]
{"company-data": {"conformed-name": "Telemynd, Inc.", "cik": "0001771077", "assigned-sic": "8090", "irs-number": "000000000", "state-of-incorporation": "DE", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-232767", "film-number": "19967077"}, "business-address": {"street1": "26522 LA ALAMEDA", "street2": "SUITE 290", "city": "MISSION VIEJO", "state": "CA", "zip": "92691", "phone": "9494204400"}, "mail-address": {"street1": "26522 LA ALAMEDA", "street2": "SUITE 290", "city": "MISSION VIEJO", "state": "CA", "zip": "92691"}}
As filed with the Securities and
Exchange Commission on July 22, 2019.
Registration
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
TELEMYND,
INC.
(Exact
Name of Registrant as Specified in its Charter)
Delaware
8090
83-4053533
(State or other jurisdiction
    of
(Primary Standard
    Industrial
(I.R.S. Employer
incorporation or
    organization)
Classification Code
    Number)
Identification No.)
26522
La Alameda, Suite 290
Mission
Viejo, CA 92691
(949)
420-4400
1
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices)
Patrick
Herguth
Chief Executive Officer
Telemynd, Inc.
26522 La Alameda, Suite 290
Mission
Viejo, CA 92691
(949)
420-4400
(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)
Copies
to:
Jeffrey A. Baumel, Esq.
Kenneth R. Koch, Esq.
Ilan Katz, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Dentons US LLP
Chrysler Center
1221 Avenue of the Americas
666 Third Avenue
New York, New York 10020
New York, New York 10017
(212) 768-6700
(212) 935-3000
Approximate
date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box.    ☐
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering.     ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.     ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.     ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting 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.:
Large
    Accelerated Filer    ☐
Accelerated
    Filer    ☐
Non-Accelerated
    Filer    ☐
Smaller
    Reporting Company   ☒
Emerging
    Growth Company    ☒
CALCULATION
OF REGISTRATION FEE
Title of Each Class of Securities to be Registered
Amount to be Registered
Proposed
Maximum
Offering Price Per Share
Proposed
Maximum
Aggregate
Offering Price
Amount of
Registration Fee
(2)
Common Stock, $0.001 par value
$
$
8,050,000
(1)
$
975.66
(1)
Estimated
solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as
amended.
The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and
it is not soliciting offers to buy these securities in any state where the offer or sale of these securities is not permitted.
Subject to completion,
dated                 , 2019
PRELIMINARY
PROSPECTUS
Telemynd,
Inc.
1,400,000
shares of Common Stock
This is a firm commitment
offering of 1,400,000 shares of our common stock, par value $0.001 per shares at an assumed offering price of $         per share.
The public offering
price of our common stock offered by this prospectus will be at a fixed price of $         
per share, which was determined by careful consideration of our management and our Board of Directors based on several factors,
as described in the section entitled "Determination of Offering Price" beginning on page 35 of this prospectus. Any
proceeds from the sale of the 1,400,000 shares will be used for working capital and general corporate purposes. For more information
about how our shares of common stock may be sold, please see the section entitled "Underwriting" beginning on page 95
of this prospectus.
There is currently no public market for our common stock. We have filed an application to have our common
stock listed on The Nasdaq Stock Market under the symbol "PSYC" and have filed an application to have our common stock
quoted on the OTCQB market of the OTC Markets Group, Inc. (the "OTCQB"), but there are no assurances that our common
stock will be approved for listing on the Nasdaq Stock Market or quotation on the OTCQB.
We
are an "emerging growth company" as defined under the federal securities laws and, as such, have elected to comply
with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.
You
should read carefully this prospectus and any applicable prospectus supplement or free writing prospectus, together with the additional
information described in this prospectus under the heading "Where You Can Find More Information," before you invest
in any of our securities.
Investing
in our securities involves a high degree of risk. See "Risk Factors" beginning on page 6  of this prospectus. You
should also consider the risk factors described or referred to in any documents incorporated by reference in this prospectus,
and in any applicable prospectus supplement, before investing in these securities.
Per share
Total
Public offering price
$
$
Underwriting discount
(1)
$
$
Proceeds to us before expenses
$
$
(1)
Does
                                         not include a non-accountable expense allowance equal to 1% of the gross proceeds of
                                         this offering payable to Aegis Capital Corp., the representative of the underwriters.
                                         See "
Underwriting
" for a description of compensation payable to the
                                         underwriters.
We have granted the underwriters the right to purchase up to 210,000 additional shares of common stock
at the public offering price, less the underwriting discount, for the purpose of covering over-allotments.
Neither
the Securities and Exchange Commission nor 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.
The underwriters
expect to deliver the shares of common stock against payment on or about
           ,  2019.
AEGIS
CAPITAL CORP.
The
date of this prospectus is                      ,
2019.
Table
of Contents
CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
ii
PROSPECTUS
    SUMMARY
1
THE
    OFFERING
3
BEING
    AN EMERGING GROWTH COMPANY
4
RECENT
    DEVELOPMENTS
4
RISK
    FACTORS
6
USE
    OF PROCEEDS
34
DETERMINATION
    OF THE OFFERING PRICE
35
DILUTION
35
DIVIDEND
    POLICY
36
SELECTED
    HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
37
MANAGEMENT'S
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
39
OUR
    BUSINESS
60
DIRECTORS
    AND EXECUTIVE OFFICERS
72
CORPORATE
    GOVERNANCE
74
EXECUTIVE
    COMPENSATION
79
SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
87
RELATED
    PARTY TRANSACTIONS
89
DESCRIPTION
    OF SECURITIES
90
SHARES
    ELIGIBILE FOR FUTURE SALE
94
UNDERWRITING
95
LEGAL
    MATTERS
98
EXPERTS
98
WHERE
    YOU CAN FIND MORE INFORMATION
99
INDEX
    TO FINANCIAL STATEMENTS
F-1
We
and the underwriters have not authorized anyone to provide you with information different from that contained or incorporated
by reference in this prospectus or in any applicable prospectus supplement or free writing prospectus prepared by or on behalf
of us or the underwriters to which we or the underwriters have referred you. We and the underwriters do not take any responsibility
for any other information that others may give you. This prospectus is not an offer to sell, nor is it a solicitation of an offer
to buy, the securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information
contained in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the
date on the front cover of those documents, or that the information contained in any document incorporated by reference is accurate
as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus
or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those
dates.
Information
contained in, and that can be accessed through, our web site
www.telemynd.com
shall not be deemed to be part of this prospectus
or incorporated herein by reference and should not be relied upon by any prospective investors for the purposes of determining
whether to purchase the shares offered hereunder.
Until
          , 2019 (25 days after the date of this prospectus), all dealers that
buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This
is in addition to each dealer's obligation to deliver a prospectus when acting as underwriter and with respect to its unsold
allotments or subscriptions.
i
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference herein contain, in addition to historical information, certain "forward-looking
statements" within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934,
as amended, that include information relating to future events, future financial performance, strategies, expectations, competitive
environment, regulation and availability of resources. These forward-looking statements include, without limitation, statements
regarding: proposed new products or services; our statements concerning litigation or other matters; statements concerning projections,
predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance;
statements of management's goals and objectives; trends affecting our financial condition, results of operations or future
prospects; our financing plans or growth strategies; and other similar expressions concerning matters that are not historical
facts. Words such as "may," "will," "should," "could," "would," "predicts,"
"potential," "continue," "expects," "anticipates," "future," "intends,"
"plans," "believes" and "estimates," and similar expressions, as well as statements in future
tense, identify forward-looking statements.
Forward-looking
statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications
of the times, or by which, that performance or those results will be achieved. Forward-looking statements are based on information
available at the time they are made and/or management's good faith belief as of that time with respect to future events,
and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed
in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited
to, the matters described under "Risk Factors" and the following:
●
our
                                         need for immediate additional funding to support our operations and capital expenditures;
●
our ability to successfully maintain listing of our shares of common stock on The Nasdaq Capital Market;
●
our
                                         history of operating losses;
●
our
                                         inability to gain widespread acceptance of our PEER Reports;
●
our
                                         inability to prevail in convincing the United States Food and Drug Administration (the
                                         "FDA"), that our rEEG or PEER Online service does not constitute a medical
                                         device and should, therefore, not be subject to regulations;
●
the
                                         possible imposition of fines or penalties by the FDA for alleged violations of its rules
                                         and regulations;
●
our
                                         subsidiary in telebehavioral health may be harmed by evolving governmental regulation;
●
our
                                         telebehaviorial health subsidiary's business model requires work with affiliated
                                         professional entities not owned by us;
●
our
                                         telebehaviorial health subsidiary may require an expanded and maintained network of certified
                                         professionals;
●
our
                                         revenue and prospects for profitability may be harmed;
●
our
                                         business may be subject to additional regulations in the future that could increase our
                                         compliance costs;
●
our
                                         operating results may fluctuate significantly and our stock price could decline or fluctuate
                                         if our results do not meet the expectation of analysts or investors;
●
our
                                         inability to achieve greater and broader market acceptance of our products and services
                                         in existing and new market segments;
●
any
                                         negative or unfavorable media coverage;
ii
●
our
                                         inability to generate and commercialize additional products and services;
●
our
                                         inability to comply with the substantial and evolving regulation by state and federal
                                         authorities, which could hinder, delay or prevent us from commercializing our products
                                         and services;
●
our
                                         inability to successfully compete against existing and future competitors;
●
delays
                                         or failure in clinical trials;
●
any
                                         losses we may incur as a result of litigation;
●
our
                                         inability to manage and maintain the growth of our business;
●
our
                                         inability to protect our intellectual property rights;
●
employee
                                         relations;
●
possible
                                         security breaches;
●
possible
                                         medical liability claims;
●
possible
                                         personal injury claims in the future; and
●
our
                                         limited trading volume.
Forward-looking
statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume
no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors
affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more
forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking
statements.
iii
Prospectus
Summary
This
summary highlights certain of the information contained elsewhere in this prospectus. It may not contain all of the information
that may be important to you. You should read this entire prospectus carefully, including the Sections entitled "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of Operations," and the financial statements
and related notes included elsewhere in this prospectus prior to making a decision to purchase our common stock. Some information
in this prospectus contains forward looking statements. See "Forward Looking Statements."
Telemynd,
Inc. is a newly-formed Delaware corporation that prior to consummation of the Separation and Spin-Off (each as defined below)
consummated on July 16, 2019, did not conduct any activities. Unless the context suggests otherwise, references in this prospectus
to "Telemynd," the "Company," "we," "our" and "us" refer to Mynd Analytics,
Inc. ("MYnd") and its consolidated subsidiaries prior to the Separation and Spin-off and to Telemynd after the Separation
and Spin-Off.
In
contemplation of the merger with Emmaus Life Sciences, Inc. ("Emmaus"), substantially all the assets and all the
liabilities of  MYnd, except for an aggregate of $250,000 of liabilities for were contributed to us. Accordingly, our
business and financial position is essentially the business and financial position of  MYnd, except for those
liabilities.
In addition, our
capital structure is similar to, but not identical to the capital structure of MYnd.  Following the spin-off, the holders
of our common stock prior to the merger received one share of Telemynd for each share of MYnd held by them as of the record date. 
In addition, the outstanding shares of preferred stock of MYnd were exchanged for shares of preferred stock on substantially the
same economic terms as the outstanding preferred stock of Mynd.  While the outstanding options and warrants of Mynd did not
become options and warrants of Telemynd, Telemynd has an Equity Plan and has granted certain options. See "Executive and
Director Compensation".   In addition, Telemynd reserved 6,269,673 shares of its common stock for issuance upon
exercise of certain MYnd warrants (subject to adjustment upon the potential reverse stock split described under "Recent
Development--Reverse Stock Split"). MYnd will make additional cash payments to Telemynd, not to exceed $2,500,000 in the
aggregate, from all cash received by MYnd as a result of the exercise of any warrants or stock options of MYnd that were in effect
prior to the Spin-off, to the extent that the proceeds from such warrant and option exercises exceeds $500,000, and less all such
proceeds, if any, theretofore transferred or paid by MYnd to Telemynd pursuant to the Separation Agreement after the Spin-off.
Finally, the officers
and directors of Telemynd are identical to the officers and directors of MYnd immediately prior to the merger with Emmaus, except
that that Robin Smith is not a director of Telemynd
Accordingly,
substantial financial and other information about the business and operations of MYnd are included in this prospectus.  Readers
evaluating the relevance of such information to Telemynd should take into account both the many ways in which MYnd's financial
position, operations, capital structure and management are substantially identical to those of Telemynd, as well as the ways in
which they differ as described above.
Overview
We
are a technology enabled behavioral health company. Our solutions are designed to improve access to care through telemedicine
and assist clinicians with the development of personalized treatment plans through a proprietary, artificial intelligence platform
with a goal of improving behavioral health outcomes while decreasing overall healthcare costs. The global healthcare analytics
market is expected to reach USD $42.8 billion by 2024 and the global market for behavioral and mental health software, and services
is expected to grow at 11.8% CAGR and reach $4.3 billion by 2025, according to reports by Grand View Research, Inc.
There
is a lack of clinical resources available to the estimated substantial number of people in the United States who are suffering
a mental health condition; resulting in our current estimate of less than half of them receiving treatment. Patients fortunate
enough to receive treatment are estimated to experience a low remission rate of only 10%, due to the 'trial and error'
prescribing process to find an effective drug treatment.
We,
through our wholly owned subsidiary Arcadian Telepsychiatry, improves access to care with its national network of psychiatric
providers and clinicians through a cloud-based system designed to deliver telemedicine. Telepsychiatry services can be embedded
into primary care clinics, hospitals, skilled nursing and employer clinics to create a seamless care experience for patients and
allow payers and providers to more directly control the care and costs associated with behavioral health. Telemynd is also a preferred
provider of teletherapy solutions that are offered through Employee Assistance Programs (EAPs). EAPs are becoming an integrated
component of most benefit plans and this is an efficient and scalable model for our teletherapy growth.
1
Our
patented, clinically validated technology platform ("PEER Online") utilizes complex algorithms to analyze electroencephalograms
("EEGs") to generate Psychiatric EEG Evaluation Registry ("PEER") Reports to predict individual responses
to a range of medications prescribed for the treatment of behavioral disorders including depression, anxiety, bipolar disorder,
post-traumatic stress disorder ("PTSD") and other non-psychotic disorders. The PEER Online solutions database consists
of over 11,000 patient EEGs and 40,000 correlated outcomes. Machine Learning techniques are used to create an algorithm that can
predict what behavioral health medications will work best for a patient based on their own EEG scan. Clinical studies have shown
that patients under the care of a clinicians using the PEER Report have a 144% improvement in depression scores and a 75% reduction
in suicidality.
2
Our PEER Online is a clinical decision support tool that is designed to reduce "trial and
error" prescribing. These solutions for improving behavioral health care can lead to lower costs for payers, patients, and
providers.
We
are the sole owner of the PEER Online database and its predicative analytics, and has multiple patents covering the intellectual
property associated with the platform. We also have four randomized controlled trials of PEER that represent more LOE 1A evidence
than reported for any other targeted strategy in depression.
Accordingly,
we believe that we are positioned to offer proprietary technology and solutions to payers and providers as they create programs
for managing the behavioral health of their populations.
We
were incorporated under the laws of Delaware on March 18, 2019 for the purpose of holding the business, assets and liabilities
of MYnd Analytics, Inc. ("MYnd"), which were spun-ff on July 16, 2019. MYnd had previously disclosed its intention
to divest its technology platform to support personalized care for mental health patients (the "Business") concurrent
with its merger with Emmaus Life Sciences, Inc.("Emmaus") (the "Merger"). This separation (the "Separation")
was accomplished through a spin-off in which MYnd contributee its Business (including all assets and liabilities associated therewith)
to Telemynd, Inc. ("Telemynd"), after which 100% of Telemynd's stock was distributed to MYnd stockholders (the
"Spin-Off"). Following consummation of the Spin-Off on July 16, 2019, we became an independent public company conducting
the Business.
Corporate
Information
Our
principal executive offices are located at 26522 La Alameda, Suite 290, Mission Viejo, CA 92691, our telephone number is (949)
420-4400 and we maintain a website at
www.telemynd.com
. We do not incorporate the information on, or accessible through,
our website into this prospectus, and you should not consider any information on, or accessible through, our website as part of
this prospectus.
2
Iosifescu
                                         DV, Neborsky RJ, Valuck RJ. The use of the psychiatric electroencephalography evaluation
                                         registry (PEER) to personalize pharmacotherapy. Neuropsychiatr Dis Treat 2016;12:2131–2142.
2
THE
OFFERING
Common
    Stock being offered
1,400,000 of  shares of common stock, par value $0.001 per share ("Common Stock")
Offering
    Price
per share
Common
    Stock outstanding
12,833,143
    shares (as of July 16, 2019)(1)
Use
    of Proceeds
We
    estimate that the net proceeds to us from the sale of shares in this offering, after deducting underwriting discounts and
    offering expenses payable by us, will be approximately $        million. Our net proceeds will increase by approximately $          if the underwriters' over-allotment option is exercised in full. We intend to use the net proceeds to us from
    this offering for working capital and other general corporate purposes, which may include potential investments and acquisitions.
    See "Use of Proceeds."
Dividend
    policy
We
    intend to retain all earnings for the foreseeable future for use in the operation of our business. Consequently, we do not
    anticipate paying any cash dividends on our common stock for the foreseeable future.
Risk
    Factors
Investing
    in our securities involves a high degree of risk. For a discussion of factors to consider before deciding to invest in shares
    of our Common Stock, you should carefully review and consider the "Risk Factors" section of this prospectus.
Reverse
    Stock Split
Our
    Board and MYnd, as our then sole stockholder, adopted a resolution on June 25, 2019 approving an amendment to Article IV of
    our certificate of incorporation authorizing a reverse stock split of all of the outstanding shares of our Common Stock at
    a ratio of not less than 1-for-2 and not greater than 1-for-10, with the exact ratio to be established at the discretion of
    the Board (a "Reverse Stock Split"), and granting our board of directors the discretion to file a certificate
    of amendment to our certificate of incorporation with the Secretary of State of the State of Delaware.  We expect
    our Board will fix the ratio and effectuate the Reverse Stock Split prior to consummation of the Offering.
Stock
    exchange symbol
We have applied to have
    our common stock listed on The Nasdaq Stock Market ("Nasdaq") under the symbol "PSYC" and we have
    applied to have our common stockstock quoted on the OTCQB, but there is no assurance that our common stock will be approved
    for listing on Nasdaq or quotation on the OTCQB.
(1)
Does not include 6,269,673 shares of our common stock reserved for issuance upon exercise of certain warrants
of MYnd following consummation of the Spin-off on July 16, 2019 (subject to adjustment upon the potential Reverse Stock Split)
and 2,250,000 shares of our common stock reserved for issuance under our 2019 Omnibus Incentive Compensation Plan.
Except
as otherwise indicated herein, all information in this prospectus, including the number of shares that will be outstanding after
this offering, assumes no exercise by the underwriters of their option to purchase additional securities
3
Being
an Emerging Growth Company
We
are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year following the fifth anniversary
of the completion of this offering, (2) the last day of the fiscal year in which we have total annual gross revenues of at least
$1.07 billion, (3) the date on which we are deemed to be a "large accelerated filer" as defined in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock
held by non-affiliates exceeded $700.0 million as of the last business day of our most recently completed second fiscal quarter
or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year
period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other
significant requirements that are otherwise generally applicable to public companies. As an emerging growth company,
●
we
                                         may reduced executive compensation disclosure;
●
we
                                         may present only two years of audited financial statements, plus unaudited condensed
                                         financial statements for any interim period, and related Management's Discussion
                                         and Analysis of Financial Condition and Results of Operations in this prospectus;
●
we
                                         may avail ourselves of the exemption from the requirement to obtain an attestation and
                                         report from our auditors on the assessment of our internal control over financial reporting
                                         pursuant to the Sarbanes-Oxley Act of 2002; and
●
we
                                         may not require stockholder non-binding advisory votes on executive compensation or golden
                                         parachute arrangements.
We
have availed ourselves in this prospectus of the reduced reporting requirements described above with respect to compensation disclosure
requirements and selected financial data. As a result, the information that we provide stockholders may be less comprehensive
than what you might receive from other public companies. When we are no longer deemed to be an emerging growth company, we will
not be entitled to the exemptions provided in the JOBS Act discussed above. We have not elected to avail ourselves of the exemption
that allows emerging growth companies to extend the transition period for complying with new or revised financial accounting standards.
This election is irrevocable.
As
a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth
RECENT
DEVELOPMENTS
SEPARATION
AND DISTRIBUTION
On
January 4, 2019, MYnd announced its intention to consummate the Merger. In addition, on January 4, 2019, in connection with the
Merger, MYnd and MYnd Analytics, Inc., a California corporation ("MYnd-CA") entered into the Separation and Distribution
Agreement to consummate the Spin-Off, which agreement was assigned by MYnd-CA to us on March 27, 2019 pursuant to an amended and
restated Separation and Distribution Agreement (as amended, the "Separation Agreement"). Among other things, the Separation
Agreement provides for the Separation and the transfer of certain assets and liabilities of MYnd related to the Business to us.
The Separation of the Business was consummated on July 16, 2019.
On
June 25, 2019, MYnd's board of directors approved the distribution of the issued and outstanding shares of Company common
stock on the basis of one (1) share of Company common stock for every one (1) share of MYnd common stock held as of the close
of business on the record date of July 15, 2019. On July 16, 2019, the distribution date, each MYnd stockholder received one (1)
share of our common stock for every one (1) share of MYnd common stock at the close of business on the record date for the distribution.
Accordingly, 12,833,143 shares of our common stock were distributed to MYnd stockholders on the distribution date. No options
of Telemynd were issued in the Spin-off and all prior options of MYnd prior to the Spin-off remained outstanding at MYnd.
REVERSE
STOCK SPLIT
Our
Board and MYnd, as our then sole stockholder, adopted a resolution on June 25, 2019 approving an amendment to Article IV of our
certificate of incorporation authorizing a reverse stock split of all of the outstanding shares of our Common Stock at a ratio
of not less than 1-for-2 and not greater than 1-for-10, with the exact ratio to be established at the discretion of the Board
(a "Reverse Stock Split"), and granting our board of directors the discretion to file a certificate of amendment to
our certificate of incorporation with the Secretary of State of the State of Delaware. We expect our Board will fix the ratio
and effectuate the Reverse Stock Split prior to consummation of the Offering.
4
Summary
Historical Condensed Consolidated Financial
and
Operating Information
The following summary
historical consolidated financial information for the years ended September 30, 2017 and 2018 have been derived from the audited
financial statements of MYnd Analytics, Inc. included elsewhere in this prospectus. The following summary historical consolidated
financial information for the six months ended March 31, 2018 and 2019 have been derived from the unaudited interim consolidated
financial statements of MYnd Analytics, Inc. include elsewhere in this prospectus. In our opinion, such unaudited interim consolidated
financial statements have been prepared on the same basis as the audited consolidated financial statements of MYnd Analytics, Inc.
and reflect all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the results of
operations and financial position of MYnd Analytics, Inc. Results as of and for the six months ended March 31, 2019 are not necessarily
indicative of results that may be expected for the entire year. You should read the following summary historical condensed consolidated
financial and operating information in conjunction with the information appearing under "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus, and in conjunction with the
audited consolidated financial statements MYnd Analytics, Inc. and the related notes appearing elsewhere in this prospectus.
This prospectus describes the assets transferred to us by MYnd in the Separation as if the transferred assets were our business
for all historical periods described. References in this prospectus to our historical assets, liabilities, products, businesses
or activities of our business are generally intended to refer to the historical assets, liabilities, products, businesses or activities
of the transferred businesses as the businesses were conducted as part of MYnd and its subsidiaries prior to the Separation.
For the years ended
September
    30,
Six Months Ended
March
    31,
Statement
    of Operations Data:
2018
2017
2019
2018
Total revenues
$
1,315,500
$
128,500
$
847,200
$
581,900
Total Cost of Revenues
827,400
53,500
521,400
383,200
Gross Margin
488,100
75,000
325,800
198,700
Total operating expenses
10,733,000
7,178,600
5,691,300
5,587,300
OPERATING LOSS
$
(10,244,900
)
$
(7,103,600
)
$
(5,365,500
)
$
(5,388,600
)
OTHER INCOME (EXPENSE):
Interest expense, net
(86,300
)
(6,600
)
(46,300
)
(38,500
)
Total other income (expense)
(86,300
)
(6,600
)
(46,300
)
(38,500
)
LOSS BEFORE PROVISION FOR INCOME TAXES
$
(10,331,200
)
$
(7,110,200
)
$
(5,411,800
)
$
(5,427,100
)
Income taxes
1,900
2,600
2,300
1,900
NET LOSS
$
(10,333,100
)
$
(7,112,800
)
$
(5,414,100
)
$
(5,429,000
)
Net loss attributable to noncontrolling interest
(734,400
)
—
)
(778,000
)
(72,300
)
Net Loss attributable to MYnd Analytics, Inc.
$
(9,598,700
)
$
(7,112,800
)
$
(4,636,100
)
$
(5,356,700
)
September 30,
As of
March 31,
Balance Sheet Data:
2018
2017
2019
(Unaudited)
ASSETS
Total current assets
$
3,510,600
$
5,694,200
$
1,548,500
TOTAL ASSETS
$
5,151,800
$
6,096,100
$
3,141,000
LIABILITIES AND STOCKHOLDERS' EQUITY:
Total current liabilities
$
1,165,400
$
1,545,300
$
1,900,500
LONG-TERM LIABILITIES
Long-term borrowing, net
587,700
—
606,500
Accrued interest on long-term borrowing
110,100
—
120,500
Long term portion of capital lease
2,100
3,400
1,400
Total long-term liabilities
699,900
3,400
728,400
TOTAL LIABILITIES
$
1,865,300
$
1,548,700
$
2,628,900
5
Risk
Factors
Investing
in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as other
information contained in this prospectus before deciding to invest in our common stock. The occurrence of an of the following
risks could materially and adversely affect our business, prospects, financial conditions, results of operations and cash flows,
which case the trading price of our common stock could decline and you could lose all or part of your investment.
Risks
Related to Our Company
We
need immediate additional funding to support our operations and capital expenditures, which may not be available to us. This lack
of availability could result in the cessation of our business. Our recurring net losses and negative cash flows from operations
raise substantial doubt about our ability to continue as a going concern.
We
have not generated significant revenues or become profitable, may never do so and may not generate sufficient working capital
to cover costs of operations. Our recurring net losses and negative cash flows from operations raise substantial doubt about our
ability to continue as a going concern. Historically, we have been unable to pay other obligations as they become due and have
been in arrears on paying certain of our larger creditors. We have a history of insolvency that requires us to immediately secure
additional funds to continue our operations. Until we can generate a sufficient amount of revenues to finance our operations and
capital expenditures, we are required to finance our cash needs primarily through public or private equity offerings, debt financings,
borrowings or strategic collaborations. As of March 31, 2019, we had approximately $1.2 million in cash and cash equivalents on
hand. We will therefore need additional funds to continue our operations and will need substantial additional funds before we
can increase demand for our telebehavioral health services and PEER solution offering.
When
we elect to raise additional funds or additional funds are required, we may raise such funds from time to time through public
or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives.
Additional equity or debt financing or corporate collaboration and licensing arrangements may not be available on acceptable terms,
if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented
from pursuing acquisition, licensing, development and commercialization efforts and our ability to generate revenues and achieve
or sustain profitability will be substantially harmed.
We
are currently exploring additional sources of capital; however, we do not know whether additional funding will be available on
acceptable terms, or at all, especially given the economic conditions that currently prevail. Furthermore, any additional equity
funding will likely result in significant dilution to existing stockholders, and, if we incur additional debt financing in the
future, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness,
thus limiting funds available for our business activities. If adequate funds are not available, it would have a material adverse
effect on our business, financial condition and/or results of operations and could cause us to be required to cease operations.
Our financial statements include an opinion of our auditors that our recurring net losses and negative cash flows from operations
raise substantial doubt about our ability to continue as a going concern.
Our
independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.
We
have experienced significant net losses and sustained negative cash flows from operations. In the six months ended March 31, 2019,
we incurred a net loss of $5.4 million and used cash for operating activities of $3.8 million. We had an accumulated deficit of
$89.8 million as of March 31, 2019. We expect to experience further significant net losses in 2019 and the foreseeable future.
These factors raise substantial doubt about our ability to continue as a going concern for at least the next twelve months from
the date of the issuance of the financial statements. As of and for the year ended September 30, 2018, our independent registered
public accounting firm has included an explanatory paragraph in their audit report raising substantial doubt about our ability
to continue as a going concern. Our consolidated financial statements do not include any adjustments that may result from the
outcome of this uncertainty. If we are unable to obtain adequate funding from this proposed offering or in the future, or if we
are unable to grow our revenue substantially to achieve and sustain profitability, amongst other factors, we may not be able to
continue as a going concern, and our shareholders may lose some or all of their investment in us.
6
We
have a history of operating losses and we have never been profitable.
Since
our inception, we have incurred significant operating losses. As of March 31, 2019, our accumulated deficit was approximately
$89.8 million. On November 13, 2017, we acquired Arcadian, a telepsychiatry and telebehavioral health company. Arcadian also has
a history of significant operating losses, which represent a further obstacle to our goal of achieving profitability.
Our
future capital requirements will depend on many factors, such as the risk factors described in this section, including our ability
to maintain our existing cost structure and to execute our business and strategic plans, including the successful integration
of the PEER solution offering with the Arcadian network. Even if we achieve profitability, we may be unable to maintain or increase
profitability on a quarterly or annual basis.
Risks
Related to Our Business-Telebehavioral Health
Our
telebehavioral health business could be adversely affected by new state actions relating to healthcare services and telemedicine
providers, which could restrict our ability to provide the full range of our services in certain states.
Our
ability to conduct business in each state is dependent upon the state's treatment of telehealth under each state's
laws, rules and policies governing the practice of medicine and other health care professions, which are subject to changing political,
regulatory and other influences. Some state professional boards have established new rules or interpreted existing rules in a
manner that limits or restricts our ability to conduct our business as currently conducted in other states, and it is possible
that the laws and rules governing the practice of telehealth in one or more states may change in a similar manner in the future.
Many states have imposed different, and, in some cases, additional, standards regarding the provision of services via telehealth.
These standards often relate to particular modalities of telecommunication that are permitted or prohibited, meaning that a system
we have established in some states may not satisfy regulatory requirements in others. State laws are also in flux regarding the
type of professional license that is required to provide services via telehealth. By way of example, certain state Medicaid programs
may cover behavioral health treatment provided by psychiatric nurse practitioners, but not clinical social workers. Others provide
that certain services can be provided via telehealth by a clinical social worker, but not a licensed mental health counselor.
Finally, both federal and state laws impose strict standards on using telehealth to prescribe certain classes of controlled substances
that can be commonly used to treat behavioral health disorders. Federal law prohibits prescribing controlled substances without
a prior in-person examination unless one of a number of narrow exceptions is met, and certain states impose further restrictions
which prohibit prescribing certain classes of controlled substances via telemedicine altogether.
Recently
passed federal legislation will also allow for controlled substances to be prescribed in emergency situations to treat substance
use disorder, and if that change results in further abuse of controlled substances instead of curbing their abuse as intended,
there could be negative ramifications for the entire telebehavioral health industry. The unpredictability of this regulatory landscape
means that sudden changes in policy regarding standards of care and reimbursement are possible. If this were to happen, and we
were unable to adapt our business model accordingly, our operations in such states could be disrupted, which could have a material
adverse effect on our business, financial condition and results of operations.
Our
telebehavioral health business is dependent on our relationships with affiliated professional entities, which we do not own, to
provide physician services, and our business would be adversely affected if those relationships were disrupted.
There
is a risk that state authorities in some jurisdictions may find that our contractual relationships with our affiliated physicians,
psychologists and other behavioral health professionals ("Providers") violate laws prohibiting the corporate practice
of medicine and certain other health professions. These laws generally prohibit the practice of medicine and certain other health
professions by lay persons or entities and are intended to prevent unlicensed persons or entities from interfering with or inappropriately
influencing the clinician's professional judgment. The professions subject to corporate practice restrictions and the extent
to which each state considers particular actions or contractual relationships to constitute improper influence of professional
judgment vary across the states and are subject to change and evolving interpretations by state boards of medicine and other health
professions and state attorneys general. As such, we must monitor our compliance with laws in every jurisdiction in which we operate
on an ongoing basis and we cannot guarantee that subsequent interpretation of the corporate practice laws will not further circumscribe
our business operations. State corporate practice restrictions also often impose penalties on health professionals for aiding
a corporate practice violation, which could discourage clinicians from participating in our network of providers. Any difficulty
securing clinicians to participate in our network could impair our ability to provide telebehavioral health services and could
have a material adverse effect on our business.
7
Corporate
practice restrictions exist in some form, whether by statute, regulation, professional board or attorney general guidance, or
case law, in at least 42 states, though the broad variation between state application and enforcement of the doctrine makes establishing
an exact count difficult. Because of the prevalence of corporate practice restrictions on medicine and psychology in particular,
including in the states where we predominantly conduct our business, we contract for provider services through services agreements
rather than employ Providers. We expect that these relationships will continue, but we cannot guarantee that they will. A material
change in our relationship with the Providers, whether resulting from a dispute among the entities, a change in government regulation,
or the loss of these affiliations, could impair our ability to provide telebehavioral health services and could have a material
adverse effect on our business, financial condition and results of operations.
Evolving
government regulations may require increased costs or adversely affect our results of operations.
In
a regulatory climate that is uncertain, our operations may be subject to direct and indirect adoption, expansion or reinterpretation
of various laws and regulations. Compliance with these future laws and regulations may require us to change our practices at an
undeterminable and possibly significant initial monetary and annual expense. These additional monetary expenditures may increase
future overhead, which could have a material adverse effect on our results of operations.
We have identified
what we believe are the areas of government regulation that, if changed, would be costly to us. These include: rules governing
the practice of telehealth; including the remote prescribing of controlled substances; licensure standards for behavioral health
professionals; laws limiting the corporate practice of medicine and other professions; clinic licensure laws requiring health facilities
to obtain a clinic license; fraud and abuse; reimbursement and false claims statutes and regulations governing the submission of
health care claims; cybersecurity and privacy laws; laws and rules relating to the distinction between independent contractors
and employees; and tax and other laws encouraging employer-sponsored health insurance. There could be laws and regulations applicable
to our business that we have not identified or that, if changed, may be costly to us, and we cannot predict all the ways in which
implementation of such laws and regulations may affect us.
In
the states in which we operate, we believe we are in compliance with all applicable laws and regulations, but, because of the
uncertain regulatory environment, certain states may determine that we are in violation of their laws and regulations. If we must
remedy such violations, we may be required to modify our services and solutions in such states in a manner that undermines our
solution's attractiveness to patients or providers. We may become subject to fines or other penalties or, if we determine
that the requirements to operate in compliance in such states are overly burdensome, we may elect to terminate our operations
in such states. In each case, our revenue may decline and our business, financial condition and results of operations could be
materially adversely affected.
Additionally,
the introduction of new services may require us to comply with additional, yet undetermined, laws and regulations. Compliance
may require restructuring our relationships with Providers, increasing our security measures and expending additional resources
to monitor developments in applicable rules and ensure compliance. The failure to adequately comply with these future laws and
regulations may delay or possibly prevent some of our solutions or services from being offered, which could have a material adverse
effect on our business, financial condition and results of operations.
8
The
telebehavioral health market is relatively new and volatile, and if it does not develop, if it develops more slowly than we expect,
if it encounters negative publicity or if our solution does not drive patient engagement, the growth of our business will be harmed.
The
telebehavioral health market is relatively new and unproven, and it is uncertain whether it will achieve and sustain high levels
of demand, consumer acceptance and market adoption. Our success will depend to a substantial extent on the willingness of our
patients to use, and to increase the frequency and extent of their utilization of, our solutions, as well as on our ability to
demonstrate the value of telebehavioral health to employers, health plans, government agencies and other purchasers of healthcare.
Negative publicity concerning our solutions or the telebehavioral health market as a whole could limit market acceptance of our
solutions. Enforcement activity throughout the telehealth industry is on the rise, after the Medicare program published findings
in April 2018 that more than 30% of claims filed failed to satisfy Medicare reimbursement standards, and the Department of Justice
recently issued an indictment alleging that several individuals and companies participated in a billion-dollar fraud conspiracy
that implicated the telemedicine companies and physicians involved. As reimbursement by government and commercial payrs for telemedicine
services grows, enforcement actions are likely to increase in kind. Such activity could certainly produce negative publicity regarding
public and patient confidence in telehealth, which could negatively impact our business. If our patients and providers do not
perceive the benefits of our solutions, or if our solutions do not drive patient engagement, then our market may not develop at
all, or it may develop more slowly than we expect. Similarly, individual and healthcare industry concerns or negative publicity
regarding patient confidentiality and privacy in the context of telehealth could limit market acceptance of our healthcare services.
If any of these events occurs, it could have a material adverse effect on our business, financial condition or results of operations.
A
significant portion of Arcadian's revenue comes from a limited number of clients, the loss of which would have a material
adverse effect on our business, financial condition and results of operations.
Historically,
Arcadian has relied on a limited number of clients for a substantial portion of its total revenue. We rely on Arcadian's
reputation and recommendations from key clients to promote our solution to potential new clients. In addition, mergers and acquisitions
involving our clients could lead to cancellation or non-renewal of our contracts with those clients or by the acquiring or combining
companies, thereby reducing the number of our existing and potential clients and patients.
Our
business and growth strategy depend on our ability to maintain and expand a network of qualified providers. If we are unable to
do so, our future growth would be limited and our business, financial condition and results of operations would be harmed.
Our
success is dependent upon our continued ability to maintain a network of qualified providers. If we are unable to recruit and
retain board-certified Providers as needed to render telebehavioral health services in a given state, whether that requires psychiatrists,
psychologists or master's level therapists, it would have a material adverse effect on our business and ability to grow
and would adversely affect our results of operations. In any particular market, Providers could demand higher payments or take
other actions that could result in higher medical costs, extra income,
e.g
., only permitting clinicians with higher levels
of licensure who demand higher payment rates to provide telebehavioral health services, less attractive service for our clients
or difficulty meeting regulatory or accreditation requirements. Our ability to develop and maintain satisfactory relationships
with Providers also may be negatively impacted by other factors not associated with us, such as changes in Medicare and/or Medicaid
reimbursement levels and other pressures on healthcare providers and consolidation activity among hospitals, physician groups
and the Providers. The failure to maintain or to secure new cost-effective provider contracts may result in a loss of or inability
to grow our membership base, higher costs, healthcare provider network disruptions, less attractive service for our clients and/or
difficulty in meeting regulatory or accreditation requirements, any of which could have a material adverse effect on our business,
financial condition and results of operations.
Our
telebehavioral health business may give rise to medical liability claims against us, which could cause us to incur significant
expenses and may require us to pay significant damages if not covered by insurance.
Our
telebehavioral health business entails the risk of malpractice and professional liability claims against both our Providers and
us. Although we and our Providers carry insurance covering malpractice and professional liability claims in amounts that we believe
are appropriate in light of the risks attendant to our business, successful malpractice or professional liability claims could
result in substantial damage awards that exceed the limits of our and our Providers' insurance coverage. The Providers each
carry professional liability insurance covering $1 million per claim and $3 million in the aggregate for themselves, and we separately
carry a general insurance policy covering $1 million per claim and $3 million in the aggregate. In addition, professional liability
insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand our services.
As a result, adequate professional liability insurance may not be available to our providers or to us in the future at acceptable
costs or at all.
9
Any
claims made against us that are not fully covered by insurance could be costly to defend against, result in substantial damage
awards against us and divert the attention of our management and our Providers from our operations, which could have a material
adverse effect on our business, financial condition and results of operations. In addition, any claims may adversely affect our
business or reputation.
If our new applications and services
are not adopted by our affiliated physicians and clinicians or patients, or if we fail to innovate and develop new applications
and services that are adopted by our patients, our revenue and results of operations will be adversely affected.
Our longer-term results
of operations and continued growth will depend on our ability successfully to develop and market new applications and services
that patients want and are willing to purchase. In addition we will invest significant resources in research and development to
enhance our solution and introduce new high-quality applications and services. If patients are not willing to make additional payments
for such new applications, or if new patients do not value such new applications, it could have a material adverse effect on our
business, financial condition and results of operations. If we are unable to predict user preferences or if our industry changes,
or if we are unable to modify our solution and services on a timely basis, patients may not patronize us or the Providers. Our
results of operations would also suffer if our innovations were not responsive to the needs patients, appropriately timed with
market opportunity or effectively brought to market.
If our arrangements with Providers
or our affiliated physicians and clinicians are found to violate state laws prohibiting the corporate practice of medicine
and other professions or fee-splitting, our business, financial condition and our ability to operate in those states could be
adversely impacted.
The
laws of many states, including states in which our partners may be located prohibit us from exercising control over the medical
judgments or decisions of psychiatrists and certain other providers and from engaging in certain financial arrangements, such
as splitting professional fees with behavioral health professionals. These laws and their interpretations vary from state to state
and are enforced by state courts and regulatory authorities, each with broad discretion. We enter into agreements with certain
of our providers pursuant to which they render professional medical services. In addition, we may enter into contracts with our
providers to deliver professional services in exchange for fees. These contracts include management services agreements with our
affiliated physician organizations pursuant to which the physician organizations reserve exclusive control and responsibility
for all aspects of the practice of medicine and the delivery of medical services. Although we seek to comply with applicable state
prohibitions on the corporate practice of medicine and fee splitting, state officials who administer these laws or other third
parties may successfully challenge our existing organization and contractual arrangements. If such a claim were successful, we
could be subject to civil and criminal penalties and could be required to restructure or terminate the applicable contractual
arrangements. A determination that these arrangements violate state statutes, or our inability to successfully restructure our
relationships with our providers to comply with these statutes, could eliminate clients located in certain states from the market
for our services, as well as complicate our efforts to secure qualified clinicians to participate in our network. Either outcome
could have a materially adverse effect on our business, financial condition and results of operations.
If
our providers are characterized as employees, we would be subject to employment and withholding liabilities.
We
structure our relationships with the Providers in a manner that we believe results in an independent contractor relationship,
not an employee relationship. An independent contractor is generally distinguished from an employee by his or her degree of autonomy
and independence in providing services. A high degree of autonomy and independence is generally indicative of a contractor relationship,
while a high degree of control is generally indicative of an employment relationship. Although we believe that the Providers are
properly characterized as independent contractors, tax or other regulatory authorities may in the future challenge our characterization
of these relationships. If such regulatory authorities or state, federal or foreign courts were to determine that our providers
are employees, and not independent contractors, we would be required to withhold income taxes, to withhold and pay Social Security,
Medicare and similar taxes and to pay unemployment and other related payroll taxes. We would also be liable for unpaid past taxes
and subject to penalties. As a result, any determination that the Providers are our employees could have a material adverse effect
on our business, financial condition and results of operations.
10
Certain
state tax authorities may assert that we have a state nexus and seek to impose state and local income taxes which could adversely
affect our results of operations.
We currently manage
four professional corporations/associations located in four states for our telebehavioral health business and file state income
tax returns in four states. There is a risk that certain state tax authorities where we do not currently file a state income tax
return could assert that we are liable for state and local income taxes based upon income or gross receipts allocable to such states.
States are becoming increasingly aggressive in asserting a nexus for state income tax purposes. We could be subject to state and
local taxation, including penalties and interest attributable to prior periods, if a state tax authority successfully asserts that
our activities give rise to a nexus. Such tax assessments, penalties and interest may adversely affect our results of operations.
Our
sales and implementation cycle can be long and unpredictable and requires considerable time and expense, which may cause our results
of operations to fluctuate.
The
sales cycle for our solutions from initial contact with a potential lead to contract execution and implementation, varies widely
by client. Some of our clients undertake a significant and prolonged evaluation process, including to determine whether our services
meet their unique healthcare needs, which frequently involves evaluation of not only our solutions but also an evaluation of those
of our competitors, which has in the past resulted in extended sales cycles. Our sales efforts involve educating our clients about
the use, technical capabilities and potential benefits of our solution. Moreover, our large enterprise clients often begin to
deploy our solutions on a limited basis, but nevertheless demand extensive configuration, integration services and pricing concessions,
which increase our upfront investment in the sales effort with no guarantee that these clients will deploy our solutions widely
enough across their organization to justify our substantial upfront investment. It is possible that in the future we may experience
even longer sales cycles, more complex client needs, higher upfront sales costs and less predictability in completing some of
our sales as we continue to expand our direct sales force, expand into new territories and market additional applications and
services. If our sales cycle lengthens or our substantial upfront sales and implementation investments do not result in sufficient
sales to justify our investments, it could have a material adverse effect on our business, financial condition and results of
operations.
The
telehealth market is competitive, and if we are not able to compete effectively, our business, financial condition and results
of operations will be harmed.
While
the telehealth market is in an early stage of development, it is competitive and we expect it to attract increased competition,
which could make it difficult for us to succeed. We currently face competition in the telehealth industry for our solutions from
a range of companies, including specialized software and solution providers that offer similar solutions, often at substantially
lower prices, and that are continuing to develop additional solutions and becoming more sophisticated and effective. Competition
from specialized software and solution providers, health plans and other parties will result in continued pricing pressures, which
is likely to lead to price declines in certain solution segments, which could negatively impact our sales, profitability and market
share.
Some
of our competitors may have greater name recognition, longer operating histories and significantly greater resources than we do.
Further, our current or potential competitors may be acquired by third parties with greater available resources. As a result,
our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies,
standards or customer requirements and may have the ability to initiate or withstand substantial price competition. In addition,
current and potential competitors have established, and may in the future establish, cooperative relationships with vendors of
complementary solutions, technologies or services to increase the availability of their solutions in the marketplace. Accordingly,
new competitors or alliances may emerge that have greater market share, a larger customer base, more widely adopted proprietary
technologies, greater marketing expertise, greater financial resources and larger sales forces than we have, which could put us
at a competitive disadvantage. Our competitors could also be better positioned to serve certain segments of the telehealth market,
which could create additional price pressure. In light of these factors, even if our solutions are more effective than those of
our competitors, current or potential clients may accept competitive solutions in lieu of purchasing our solutions. If we are
unable to successfully compete in the telehealth market, our business, financial condition and results of operations could be
materially adversely affected.
11
We
are subject to evolving and expensive corporate governance regulations and requirements. Management has determined that there
is a material weakness in our internal controls and procedures under the standards of the Public Company Accounting Oversight
Board or PCAOB. Our failure to adequately adhere to these requirements or the failure or circumvention of our internal controls
and procedures could seriously harm our business.
Because
we are a public company we are subject to certain federal, state and other rules and regulations, including applicable requirements
of the Sarbanes-Oxley Act of 2002. Compliance with these evolving regulations is costly and requires a significant diversion of
management time and attention, particularly with regard to our disclosure controls and procedures and our internal control over
financial reporting. Faulty judgments, simple errors or mistakes, or the failure of our personnel to adhere to established controls
and procedures may make it difficult for us to ensure that the objectives of the control system are met. A failure of our controls
and procedures to detect other than inconsequential errors or fraud could seriously harm our business and results of operations.
As
of September 30, 2018, management assessed the effectiveness of our internal control over financial reporting based on the criteria
for effective internal control over financial reporting, and determined that there continues to be a material weakness in our
internal controls and procedures. The matter involving internal controls and procedures that our management considered to be a
material weakness under the standards of the Public Company Accounting Oversight Board was a lack of a sufficient complement of
personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial
reporting requirements. Management has been continuing, since September 30, 2017, to attempt to remedy the material weakness,
but has been unable to identify sufficient personnel or to implement adequate improvements. A material weakness is a significant
deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement
of the annual or interim financial statements will not be prevented or detected. Failure to provide effective internal controls
may cause investors to lose confidence in our financial reporting and may negatively affect the price of our common stock. Moreover,
effective internal controls are necessary to produce accurate, reliable financial reports and to prevent fraud. If deficiencies
in our internal controls over financial reporting continue, these deficiencies may negatively impact our business and operations.
Taxing
authorities may successfully assert that we should have collected or in the future should collect sales and use or similar taxes
which could adversely affect our results of operations.
We
do not collect sales and use and similar taxes in any states based on our belief that our services are not subject to such taxes
in any state. Sales and use and similar tax laws and rates vary greatly from state to state. Certain states in which we do not
collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties and interest with
respect to past services, and we may be required to collect such taxes for services in the future. Such tax assessments, penalties
and interest or future requirements may adversely affect our results of operations.
Economic
uncertainties or downturns in the general economy or the industries in which our clients operate could disproportionately affect
the demand for our telebehavioral health solution and negatively impact our results of operations.
General
worldwide economic conditions have experienced significant downturns during the last ten years, and market volatility and uncertainty
remain widespread, making it potentially very difficult for our clients and us to accurately forecast and plan future business
activities. During challenging economic times, our clients may have difficulty gaining timely access to sufficient credit or obtaining
credit on reasonable terms, which could impair their ability to make timely payments to us and adversely affect our revenue. If
that were to occur, our financial results could be harmed. Further, challenging economic conditions may impair the ability of
our clients to pay for the applications and services they already have purchased from us and, as a result, our write-offs of accounts
receivable could increase. We cannot predict the timing, strength or duration of any economic slowdown or recovery. If the condition
of the general economy or markets in which we operate worsens, our business could be harmed.
12
Risks
Related to Our Business-Predictive Medicine (PEER)
If
our PEER Reports do not gain widespread market acceptance, we may not be able to achieve the level of sales required for growth,
and our business, financial condition and results of operations would be harmed.
We
have developed a methodology that aids psychiatrists and other physicians in selecting appropriate and effective medications for
patients with certain behavioral or addictive disorders based on physiological traits of the patient's brain and information
contained in a proprietary database that has been developed over approximately the last twenty-five years. We began selling reports,
referred to as rEEG Reports, based on our methodology in 2000; these reports have since been rebranded as PEER Reports. To date,
we have not received widespread market acceptance of the usefulness of our PEER Reports in helping psychiatrists and other physicians
inform their treatment strategies for patients suffering from behavioral and/or addictive disorders and we currently rely on a
limited number of employees to market and promote our PEER Reports. To grow our business, we will need to develop and introduce
new sales and marketing programs and clinical education programs to promote the use of our PEER Reports by psychiatrists and other
physicians and hire additional employees for this purpose which we are in the process of doing. If we do not implement these new
sales and marketing and education programs in a timely and successful manner, we may not be able to achieve the level of market
awareness and sales required to expand our business, which could also negatively impact our stock price, financial condition and
results of operations.
Our
PEER Reports may not be as effective as we believe them to be, which could limit or prevent us from growing our revenues. If the
results of our clinical trials are not significant, we may not be able to continue to fund our development efforts.
Our
belief in the efficacy of our PEER Online technology is based on a finite number of successful studies. Such results may not be
statistically significant in future studies and may not be indicative of the long-term future efficacy of the information we provide.
Controlled scientific studies, including those that have already been announced and that are planned for the future, may yield
results that are unfavorable or demonstrate that our services, including our PEER Reports, are not clinically useful. While we
have not experienced such problems to date, if the initially indicated results cannot be successfully replicated or maintained
over time, utilization of services based on our PEER Online technology, including the delivery of our PEER Reports, may not increase
as we anticipate, which would harm our operating results and stock price. In addition, if we fail to upgrade our PEER Online database
to account for new medications that are now available on the market, psychiatrists and other physicians may be less inclined to
utilize our services if they believe that our reports only provide information about older treatment options, which would further
harm our operating results and stock price. In August of 2016, we commenced enrolling patients into a new clinical trial. The
trials are designed as a double-blind trial for military patients with a primary diagnosis of depression and other psychological
comorbidity. We do not know whether the ultimate results of the trial will be successful. There are many factors beyond our control
that could affect the success of the trials, including difficulty in registering more subjects, failures of investigators to follow
the proper protocol, and external factors affecting patient health, among others. If we fail to receive significant positive results
for these trials, doctors may not be willing to use our services and our ability to generate revenue and to continue the PEER
Online program, if at all, could be limited.
The
FDA believes that rEEG, and potentially our PEER Online service, constitutes a medical device subject to regulation by the FDA.
The FDA has informed us that our marketing of our rEEG services without prior clearance, approval or re-classification by the
FDA constitutes a violation of the Federal Food, Drug and Cosmetic Act. We believe that our PEER Online service is a Class I medical
device, exempt from premarket notification requirements. As we continue to market our PEER Online service, there is risk that
the FDA will determine that the service is a device that requires premarket clearance, approval or re-classification and commence
an enforcement action against us.
Since
April of 2008, we have been engaged in discussions with the FDA regarding its position that our rEEG service, and potentially
its successor, called PEER Online, constitutes a medical device which is subject to regulation by the FDA. On April 10, 2008,
we received correspondence from the FDA stating the agency's position, based in part on the combination of certain marketing
statements FDA observed on our website, together with the delivery method of our rEEG Reports, that our software product aids
clinical diagnosis and, therefore, constituted a "medical device" requiring premarket approval ("PMA")
by or premarket notification (also known as a "510(k) clearance") to the FDA pursuant to the Federal Food, Drug and
Cosmetic Act (the "Act"). We contested at the time and continue to reject FDA's interpretation of our software.
13
In early 2010, based
upon written guidance from the FDA's Center for Devices and Radiological Health (the "Center"), we chose to submit
a premarket notification to obtain 510(k) clearance for our rEEG service . We sought review of our rEEG service based upon
its equivalence to predicate devices that already have FDA clearance which appeared to represent a sound mechanism to reduce regulatory
risks. On July 27, 2010, we received a letter from the FDA stating that they determined that our rEEG service was Not Substantially
Equivalent to the predicate devices that had previously been granted 510(k) clearance and that among other options we could be
required to file a PMA and obtain approval before our rEEG service can be marketed legally, unless FDA reclassifies our software
through the De Novo classification request process or otherwise through a reclassification order pursuant to Section 513(e) of
the Act. We did not obtain FDA clearance for tEEG at that time.
We  registered
its facility and listed the PEER Outcome database as a Class I device exempt from premarket notification requirements. We have
continued its engagement with Center staff over the potential for a regulatory pathway for PEER Online as a Class II medical device,
based on the Center's recommendation that military use of PEER Online move forward under an investigational device exemption
("IDE") to provide additional data to support a successful 510(k) application. In August 2012, the FDA reviewed the
study protocol to use our PEER Interactive Product, which is substantially similar to the PEER Online product, and determined
that the Walter Reed PEER Trial was considered a non-significant risk clinical trial and did not require an IDE.
We are proceeding with
two additional clinical trials based substantially on the Walter Reed PEER Trial protocol in an effort to replicate and expand
the result achieved during the Walter Reed PEER Trial. One clinical trial with the Canadian Armed Forces commenced enrollment of
patients in August of 2016. A second clinical trial with a large provider group is ongoing with strong participation from all engaged
parties.  At this time we cannot predict the results or the success of any of these trials. We can offer no assurances that
the FDA will not insist that we submit a marketing application in the future, or that the data, which will be included in our future
submissions to the FDA, will not raise any important new issues that could materially affect the safety or effectiveness of our
PEER Online product. The inability to enroll sufficient subjects or the receipt of inconclusive results from our new clinical trials
would have a material adverse effect on our ability to expand our operations. We currently intend to continue marketing as a  Class
I cloud-based neurometric service branded as PEER Reports, under our current registration and listing with the FDA, while we pursue
the additional clinical trials and consider submission of a 510(k) application in the future. If we continue to market our PEER
Online product and the FDA determines that we should be subject to further FDA regulation as a Class II or III medical device,
it could initiate enforcement action against us based upon our failure to file a 510(k) or PMA, as a result of which we could be
forced to cease our marketing activities, terminate access to our cloud-based PEER software, implement corrective actions to ensure
compliance with the Act and FDA regulations, and pay fines and penalties, which would have a material adverse impact on us.
In
addition to the foregoing, federal and state laws and regulations relating to the sale of our neurometric services are subject
to future changes, as are administrative interpretations of regulatory agencies. If federal and state laws and regulations change,
we may need to incur additional costs to seek government approvals for the sale of our neurometric services
If
government and third-party payors fail to provide coverage and adequate payment rates for treatments that are guided by our PEER
Reports, our revenue and prospects for profitability will be harmed.
Our
future revenue growth will depend in part upon the availability of reimbursement from third-party payors for psychiatrists and
other physicians who use our PEER Reports to guide the treatment of their patients. Such third-party payors include government
health programs such as Medicare and Medicaid, managed care providers, private health insurers and other organizations. These
third-party payors are increasingly attempting to contain healthcare costs by demanding price discounts or rebates and limiting
both coverage on which procedures they will pay for and the amounts that they will pay for new procedures. As a result, they may
not cover or provide adequate payment for treatments that are guided by our PEER Reports, which will discourage psychiatrists
and other physicians from utilizing the information services we provide. We may need to conduct studies in addition to those we
have already announced to demonstrate the cost-effectiveness of treatments that are guided by our solutions and services to such
payors' satisfaction. Such studies might require us to commit a significant amount of management time and financial and
other resources. Adequate third-party reimbursement might not be available to enable us to realize an appropriate return on investment
in research and product development and the lack of such reimbursement could have a material adverse effect on our operations
and could adversely affect our revenues and earnings.
14
Although
state Medicaid programs and commercial insurers are increasingly paying for healthcare services provided via telehealth, including
telebehavioral health, reimbursement by the Medicare program remains limited. Medicare reimbursement is an important consideration
for any provider of healthcare services in the United States, as Medicare accounted for twenty percent (20%) of all health expenditures
in the United States in 2016, and the Centers for Medicare & Medicaid Services expect that figure to rise annually through
at least 2025. It is uncertain if and when Medicare might adopt telehealth reimbursement standards that allow for reimbursement
of telebehavioral health services generally. If Medicare does not loosen its telehealth reimbursement standards, our telehealth
services may not be reimbursable by Medicare and there could be a material adverse effect on our ability to provide services to
a significant portion of the American population, which could have a material adverse effect on our business, financial condition
and results of operations.
Billing
complexities associated with obtaining payment or reimbursement for our tests may negatively affect our revenue, cash flow and
profitability.
We
derive revenue from the PEER Report process, which includes the EEG, the quantitative EEG ("QEEG"), and the PEER Report,
for which we bill on a fee-for-service basis, including reimbursements by third-party payors, such as Medicare, Medicaid and other
governmental payor programs, hospitals, private insurance plans and managed care organizations and direct payments from individual
patients. Billing for PEER Report testing services is generally highly complex. We conduct our own internal billing and work closely
with third-party providers to ensure accuracy of billing, timely collections, and resolution of appeals and billing discrepancies.
Depending
on our billing arrangement with each third-party payor and applicable law, we are often obligated to bill in the specific manner
prescribed by the various payors, each of which may have different requirements. Among the potential factors complicating our
billing of third-party payors are:
●
disputes
                                         among payors regarding which party is responsible for payment;
●
disparity
                                         in coverage among various payors;
●
different
                                         process, information, technical and billing requirements among payors; and
●
incorrect
                                         or missing billing information.
We
also face risks in our collection efforts, including potential write-offs of doubtful accounts and long collection cycles for
accounts receivable.
Additionally,
from time to time, payors change processes that may affect timely payment. These changes may result in uneven cash flow or impact
the timing of revenue recognized with these payors. With respect to payments received from governmental programs, factors such
as a prolonged government shutdown could cause significant regulatory delays or could result in attempts to reduce payments made
to us by government healthcare programs. These billing complexities, and the related uncertainty in obtaining payment for PEER
Report testing services, could negatively affect our revenue, cash flow and profitability. In addition, increases in write-offs
of doubtful accounts, delays in receiving payments or potential retroactive adjustments and penalties resulting from audits by
payors could adversely affect our business, results of operations and financial condition.
15
Changes
in laws, regulations, payor policies or contracting arrangements with payors may adversely affect coverage or reimbursement for
PEER Report services, which may decrease our revenue and adversely affect our results of operations and financial condition.
Governmental
payors, as well as private insurers, and other private payors have implemented and will continue to implement measures to control
the cost, utilization and delivery of healthcare services, including laboratory services. Congress has from time to time considered
and implemented changes to laws and regulations governing healthcare service providers, including specialized diagnostic service
providers. These changes have adversely affected and may in the future adversely affect coverage for laboratory services, including
the PEER Report and Pharmacogenetic (PGx) testing services we provide. We also believe that healthcare professionals may not use
the PEER Report if third-party payors do not provide adequate coverage and reimbursement for them.
Reimbursement
to healthcare providers, such as specialized analytic service providers, are subject to continuing change in policies by governmental
payors, such as Medicare and Medicaid, private insurers, including managed care organizations, and other private payors, such
as hospitals and private medical groups.
As
a Medicare-participating independent diagnostic testing facility based in California, we bill Noridian Healthcare Solutions, or
Noridian, the Medicare Administrative Contractor, or MAC, for California, and are subject to Noridian's local coverage and
reimbursement policies. Reductions in coverage could decrease our average Medicare reimbursement rate per sample.
The
provision of health care services through any kind of clinic, facility, storefront or other location open to the public is often
subject to state clinic licensure laws akin to those that health facilities like hospitals, surgery centers and urgent care clinics
must obtain and maintain. We do not operate or promote any physical place to obtain healthcare and therefore does not believe
it is subject to any clinic licensure requirements, but the application of some of these laws to us and telehealth is unclear
and subject to differing interpretation given our status for Medicare purposes as an independent diagnostic testing facility.
In
addition, reimbursement from governmental payors is subject to statutory and regulatory changes, retroactive rate adjustments
and administrative rulings, and other policy changes, all of which could materially decrease the range of services for which we
are reimbursed or the reimbursement rates paid for PEER Report services.
Finally,
some private insurers and other third-party payors link their rates to Medicare's reimbursement rates, and a reduction in
Medicare reimbursement rates for PEER Report services could result in a corresponding reduction in the reimbursements we receive
from such third-party payors. Any reductions in reimbursement levels for the PEER Report would decrease our revenue and adversely
affect our results of operations and financial condition.
Operating
as a non-contracting provider with certain payors may adversely affect our results of operations and financial condition, and
contracting with those payors may be disadvantageous to us.
We
are currently considered to be an out-of-network or "non-contracting provider" by a number of third-party payors because
we have not entered into a specific contract to provide PEER Report services to their insured patients at specified rates of reimbursement.
We are generally subject to reimbursement as a non-contracting provider. As a non-contracting provider, many payors pay us a smaller
percentage of our charges that they recognize to be reasonable, and expect us to collect greater coinsurance or copayments from
patients. Rather than collecting these higher coinsurance and copayment amounts from these patients, when permitted by law to
do so, we may, if permissible under applicable law, instead choose to charge them only the lower coinsurance and copayments amounts
that would have applied to them if we had been contracted with their payor, which results in decreased revenues. In instances
where we may be prohibited by law from treating these patients as if we were in-network, thus requiring these patients to pay
higher coinsurance or copayments to us, our customers may decide to reduce or avoid prescribing PEER Report services for such
patients, which could adversely affect our results of operations and financial condition.
Should
any of the third-party payors with whom we are not contracted insist that we enter into a contract for the PEER Report services
we provide, the resulting contract may contain pricing and other terms that are materially less favorable to us than the terms
under which we currently operate. If revenue from a particular payor grows, there is heightened risk that such a third-party payor
will insist that we enter into contractual arrangements that contain such terms. If we refuse to enter into a contract with such
a third-party payor, they may refuse to cover and reimburse for PEER Report services, which may lead to a decrease in report volume
and a corresponding decrease in our revenues. If we contract with such a third-party payor, although our report volume may increase
as a result of the contract, our revenue per report under the contractual agreement and gross margin may decrease. The overall
net result of contracting with third-party payors may adversely affect our business, results of operations and financial condition.
16
Regulations
relating to the sale of our PEER Reports are constantly changing and in the future, our business may be subject to additional
regulations that will increase our compliance costs.
Federal,
state and foreign laws and regulations relating to the sale of our PEER Reports are subject to future changes, as are administrative
interpretations of regulatory agencies. If we fail to comply with applicable federal, state or foreign laws or regulations, we
could be subject to enforcement actions, including injunctions that would prevent us from conducting our business, withdrawal
of clearances or approvals and civil and criminal penalties. If federal, state, and foreign laws and regulations change, we may
need to incur additional costs to seek government approvals, in addition to the clearance from the FDA if we so chose, to sell
or market our PEER Online service. There is no guarantee that we will be able to obtain such approvals in a timely manner or at
all, and as a result, our business would be significantly harmed.
Our
business practices may be found to constitute illegal fee-splitting or violate corporate practice restrictions, which may lead
to penalties and adversely affect our business.
Many
states, including California, in which our principal executive offices are located, and where we and our Providers operate, have
laws that prohibit a general corporation as opposed to a professional corporation, from practicing medicine and certain other
healthcare professions such as psychology, exercising control over medical judgments or decisions of behavioral health professionals,
or engaging in certain arrangements, such as employment or fee-splitting, with professionals. We have addressed strong corporate
practice state prohibitions through management services agreements with Providers under which the Providers are paid directly
by payors for professional services and the Providers pay us under the management services agreements for our non-clinical services.
Although we calibrate these management fees to comply with fee-splitting statutes, in many states those fee-splitting statutes
are ambiguous and therefore could be used to challenge our arrangements with the Providers. If asserted, such claims could subject
us to civil and criminal penalties and substantial legal costs, could result in our contracts being found legally invalid and
unenforceable, in whole or in part, or could result in us being required to restructure our contractual arrangements, all with
potentially adverse consequences to our business and our stockholders.
If
we do not maintain and expand our relationships in the psychiatric and physician community, our growth will be limited and our
business could be harmed. If psychiatrists and other physicians do not recommend and endorse our solutions and services, we may
be unable to increase our sales, and in such instances, our profitability would be harmed.
Our
relationships with psychiatrists and other physicians are critical to the growth of our neurometic Services business. We believe
that these relationships are based on the quality and ease of use of our PEER Reports, our commitment to the behavioral health
market, our marketing efforts and our presence at tradeshows. Any actual or perceived diminution in our reputation or the quality
of our PEER Reports, or our failure or inability to maintain our commitment to the behavioral health market and our other marketing
and solution promotion efforts could damage our current relationships, or prevent us from forming new relationships, with psychiatrists
and other physicians and cause our growth to be limited and our business to be harmed.
To
sell our PEER Reports, psychiatric professionals must recommend and endorse them. We may not obtain the necessary recommendations
or endorsements from this community. Acceptance of our PEER Reports depends on educating psychiatrists and other physicians as
to the benefits, clinical efficacy, ease of use, revenue opportunity and cost-effectiveness of our PEER Reports and on training
the medical community to properly understand and utilize our PEER Reports. If we are not successful in obtaining the recommendations
or endorsements of psychiatrists and other physicians for our PEER Reports, we may be unable to increase our sales and profitability.
Negative
publicity or unfavorable media coverage of our PEER technology could damage our reputation and harm our operations.
If
the marketplace perceives our PEER Reports as not offering the benefits which we believe they offer, we may receive significant
negative publicity. This publicity may result in litigation and increased regulation and governmental review. If we were to receive
such negative publicity or unfavorable media attention, whether warranted or unwarranted, our ability to market our PEER Reports
would be adversely affected, we may be required to change our solutions and services and become subject to increased regulatory
burdens and we may be required to pay large judgments or fines and incur significant legal expenses. Any combination of these
factors could further increase our cost of doing business and adversely affect our financial position, results of operations and
cash flows.
17
If
we do not successfully generate additional solutions and services from our patented methodology and proprietary database, or if
such solutions and services are developed but not successfully commercialized, then we could lose revenue opportunities.
The
current focus of our predictive medicine business is the sale of PEER Reports to psychiatrists and other physicians based on our
PEER Online methodology and proprietary database. If we do not successfully generate additional solutions and services from our
patented methodology and proprietary database, or if such solutions and services are developed but not successfully commercialized,
then we could lose revenue opportunities.
Our
industry is highly competitive and our PEER solutions may not be able to compete successfully, which could result in price reductions
and decreased demand for our solutions.
The
healthcare industry, in general, and behavioral health treatment services in particular, are highly competitive. If we are unable
to convince physicians, psychiatrists and patients of the efficacy of our solutions and services, individuals seeking treatment
for behavioral health disorders may seek alternative treatment methods, including non-medication-based therapies, which could
negatively impact our sales of PEER Reports and our profitability.
If
we conduct clinical trials, we cannot predict whether we will encounter problems that will cause us or regulatory authorities
to delay or suspend our clinical trials or delay the analysis of data from our completed or ongoing clinical trials. In addition,
we cannot provide assurance that we will be successful in reaching the endpoints in these trials, or if we are, that the FDA or
other regulatory agencies will accept the results.
Any
of the following factors, among others, could delay the completion of clinical trials, or result in a failure of these trials
to support our business, which would have an adverse effect on our business:
●
delays
                                         or the inability to obtain required approvals from institutional review boards or other
                                         governing entities at clinical sites selected for participation in our clinical trials;
●
delays
                                         in enrolling patients and volunteers into clinical trials;
●
lower
                                         than anticipated retention rates of patients and volunteers in clinical trials;
●
negative
                                         results from clinical trials for any of our potential solutions; and
●
failure
                                         of our clinical trials to demonstrate the efficacy or clinical utility of our potential
                                         solutions.
If
we determine that the costs associated with attaining regulatory approval of a solution exceed the potential financial benefits
or if the projected development time line is inconsistent with our determination of when we need to get the product to market,
we may choose to stop a clinical trial and/or development of a solution.
We
may not be able to adequately protect our intellectual property, which is the core of our predictive medicine (PEER) business.
We
consider the protection of our intellectual property to be important to our business prospects. We currently have twenty issued
patents in the United States, Australia, Canada, Europe, Israel, Japan and Mexico and we have also filed multiple additional patent
applications in the United States and in multiple foreign jurisdictions.
In
the future, if we fail to file patent applications in a timely manner, fail to pay applicable maintenance fees on issued patents,
or if we elect not to file a patent application because of the costs associated with patent prosecution, we may lose patent protection
that we may have otherwise obtained. The loss of any proprietary rights which are obtainable under patent laws may result in the
loss of a competitive advantage over present or potential competitors, with a resulting decrease in revenues and profitability
for us.
18
With
respect to the applications we have filed, there is no guarantee that the applications will result in issued patents, and further,
any patents that issue may be too narrow in scope to adequately protect our intellectual property and provide us with a competitive
advantage. Competitors and others may design around aspects of our technology, or alternatively, may independently develop similar
or more advanced technologies that fall outside the scope of our claimed subject matter, but that can be used in the treatment
of behavioral health disorders.
In
addition, even if we are issued additional patents covering our solutions, we cannot predict with any degree of certainty, whether
or not we will be able to enforce our proprietary rights and whether our patents will provide us with adequate protection against
competitors. We may be forced to engage in costly and time-consuming litigation or reexamination proceedings to protect our intellectual
property rights and our opponents in such proceedings may have and be willing to expend, substantially greater resources than
we are able to expend. In addition, the results of such proceedings may result in our patents being invalidated or reduced in
scope. These developments could cause a decrease in our operating income and reduce our available cash flow, which could harm
our business and cause our stock price to decline.
We
also utilize processes and technology that constitute trade secrets, such as our PEER Online database, and we must implement appropriate
levels of security for those trade secrets to secure the protection of applicable laws, which we may not do effectively. In addition,
the laws of many foreign countries do not protect proprietary rights as fully as the laws of the United States.
While
we have not had any significant issues to date, the loss of any of our trade secrets or proprietary rights, which may be protected
under the foregoing intellectual property safeguards may result in the loss of our competitive advantage over present and potential
competitors.
Certain
of our patents will expire in the near future, and we may have difficulties protecting our proprietary rights and technology and
we may not be able to ensure their protection.
We
currently have 20 issued patents, of which seven are in the U.S., one of which covers the process involved in our PEER Online
service. Our patents will expire between July 2019 and April 2023 and cover QEEG (quantitative electrophysiology); at which point
we can no longer enforce our rights under these patents against third parties to prevent them from developing processes and commercializing
solutions similar or identical to ours. Because our efforts to achieve broader market acceptance of our PEER Online service may
take a substantial period of time, our patents may expire or provide only a short period of protection, if any, following such
broader market acceptance. This could expose us to substantially more competition and have a material adverse impact on our business
and our ability to commercialize or license our technology and solutions. Our asset is our PEER Online Database and we will continue
to encrypt and protect it.
We
depend heavily upon secure access to, and secure transfer of, data via the internet in exchanging data with customers. Any security
breaches could result in unauthorized access to sensitive patient data, our intellectual property and other confidential business
information. We use third-party data centers and any damage to, or failure of, our central analytical database could adversely
affect our ability to provide our services. For any of the foregoing or related reasons, customers may curtail or stop using our
services and we may incur significant legal and financial exposure and liabilities.
We
depend heavily on secure access to, and secure transfer of data via the internet in the generation of our PEER Reports and other
data exchange with our customers. We rely on services provided by third parties to store, transmit and process data in our central
neurometic database. Security breaches could expose us to a risk of losing data and result in litigation and possible liability.
Security measures taken by us or by such third party service providers may be breached as a result of third party action, including
intentional misconduct by computer hackers, employee error, malfeasance, fraud or otherwise, during transfer or processing of
data or at any time and result in someone obtaining unauthorized access to sensitive patient information, our intellectual property,
other confidential business information, or our information technology systems. Because the techniques used to obtain unauthorized
access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we or our
third-party service providers may be unable to anticipate these techniques or to implement adequate preventative measures. Any
security breach could result in a loss of confidence in the security of our service, damage to our reputation, disruption to our
business, and could lead to legal liability and severely curtail future revenue.
19
In
addition, any damage to, or failure of, our central neurometic database and the server on which it resides could result in interruptions
in our ability to provide PEER Reports. Interruptions in our service may reduce our revenue, cause PEER Network providers to terminate
their relationship with us and adversely affect our ability to attract new physicians to the PEER Network. Our business will also
be harmed if our customers and potential customers believe our service is unreliable.
Because
our service is complex and cloud-based we rely on third-party data centers to store the data in our central neurometic database,
our data and processes may be corrupted at some future time resulting in erroneous, defective or ineffective reports, which could
result in unanticipated downtime in our service for PEER Network providers, resulting in harm to our reputation and our business.
We do not control the operation of these facilities. While we take precautions (data redundancy, back-up and disaster recovery
plans) to prevent service interruptions, our data centers are vulnerable to damage or interruption from human error, intentional
bad acts, pandemics, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems
failures, communications failures and similar events. The occurrence of a natural disaster or an act of terrorism, vandalism or
other misconduct, resulting in a decision to close the facilities without adequate notice or other unanticipated problems could
result in lengthy interruptions in the availability of our central neurometic database. Since many physicians rely on our service
to assist in treating their patients, any errors, defects, disruptions in service or other performance problems with our service
could hurt our reputation and hurt the reputation of the physicians in our PEER Network. If that occurs, physicians could elect
to terminate their relationship with us, or delay or withhold payment to us. We could lose future revenues or customers may make
warranty or other claims against us, which could result in an increase in our provision for doubtful accounts, an increase in
collection cycles for accounts receivable or the expense and risk of litigation and a reduction in revenue.
Security
breaches, damages or failures of the sort described above would adversely affect our ability to market our PEER Reports. In addition,
we may be required to change our products and services and become subject to increased regulatory burdens and we may be required
to pay large judgments or fines and incur significant legal expenses.
In
the future we could be subject to personal injury claims due to adverse events from treatment facilitated through the use of our
PEER reports, which could result in substantial liabilities that may exceed our insurance coverage.
All
significant medical treatments and procedures, including treatment that is facilitated through the use of our PEER Reports, can
involve the risk of serious adverse events up to and including death. Our PEER Reports generally require psychiatrists and other
physicians to titrate patients off of psychotropic medications before receiving an EEG. The titration process and the removal
of medications from patients risk potentially serious health consequences. Although we have no clinical involvement, it is possible
that we could be named as defendants in any malpractice claim involving a patient harmed during the titration process or during
a period in which the patient ceases the use of medications. Although we have not been the subject of any personal injury claims
for patients treated by providers using our PEER Reports, our business entails an inherent risk of claims for personal injuries,
which are subject to the attendant risk of substantial damage awards. We cannot control whether individual physicians and psychiatrists
will properly select patients, apply the appropriate standard of care, or conform to our procedures in determining how to treat
their patients. A significant source of potential liability is negligence or alleged negligence by physicians treating patients
with the aid of the PEER Reports that we provide. There can be no assurance that a future claim or claims will not be successful
or, including the cost of legal defense, will not exceed the limits of available insurance coverage.
We
currently have general liability and medical professional liability insurance coverage for up to $3 million per year for personal
injury claims. We may not be able to maintain adequate liability insurance, in accordance with standard industry practice, with
appropriate coverage based on the nature and risks of our business, at acceptable costs and on favorable terms. Insurance carriers
are often reluctant to provide liability insurance for new healthcare services companies and products due to the limited claims
history for such companies and products. In addition, based on current insurance markets, we expect that liability insurance will
be more difficult to obtain and that premiums will increase over time and as the volume of patients treated by physicians that
are guided by our PEER Reports increases. In the event of litigation, regardless of its merit or eventual outcome, or an award
against us during a time when we have no available insurance or insufficient insurance, we may sustain significant losses of our
operating capital which may substantially reduce stockholder equity in the company.
We rely on sales to a limited number of customers for
a substantial portion of our revenue, and the loss of one or more significant customers or several of our smaller customers could
materially harm our business.
A substantial portion of our revenue is
generated from sales to a limited number of customers. For the years ended September 30, 2018 and 2017, four customers accounted
for 29% and 50%, respectively, of our neurometric services revenue. Although the composition of our customers will vary from period
to period, we expect that most of our revenues will continue, for the foreseeable future, to come from sales to a relatively small
number of customers. Consequently, our results of operations may fluctuate significantly from period-to-period based on the actions
of one or more significant customers. A customer may take actions that affect us for reasons that we cannot anticipate or control.
Our agreements with these customers may be cancelled if we fail to meet requirements or materially breach the agreement or for
other reasons outside of our control. In addition, our customers may seek to renegotiate the terms of current agreements or renewals.
The loss of, or a reduction in sales or anticipated sales to, one or more of our significant customers could have a material adverse
effect on our business, financial condition and results of operations.
20
Risks
Related to Our Business-General
We
conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could
incur penalties or be required to make significant changes to our operations or experience adverse publicity, which could have
a material adverse effect on our business, financial condition, and results of operations.
The
healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes
and regulations govern the manner in which Providers provide and bill for services and collect reimbursement from governmental
programs and private payors, our contractual relationships, our marketing activities and other aspects of our operations. Of particular
importance are the following laws and rules:
●
Provider
                                         Licensing and Corporate Practice Restrictions. Behavioral health professionals who provide
                                         their professional services using telehealth modalities must, in most instances, hold
                                         a valid license to practice their health profession in the state in which the patient
                                         is located. In addition, certain states require a physician providing telepsychiatry
                                         to be physically located in the same state as the patient. Corporate practice restrictions
                                         prohibit general business corporations, such as us, from practicing medicine and other
                                         health professions subject to corporate practice restrictions, controlling clinical decisions
                                         or, in some cases, receiving payment for professional services subject to a corporate
                                         practice restriction. State corporate practice laws vary from state to state and are
                                         not consistent among states. These requirements are subject to broad powers of interpretation
                                         and enforcement by state regulators and may apply to an entity even though it is not
                                         located in that state if a Provider is licensed there;
●
Federal
                                         and State Anti-Kickback Statutes. The federal Anti-Kickback Statute prohibits the knowing
                                         and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or
                                         other remuneration for referring an individual, or in return for ordering, leasing, purchasing
                                         or recommending or arranging for the ordering, purchasing or leasing of items or services
                                         covered, in whole or in part, by any federal healthcare program, such as Medicare or
                                         Medicaid. A person or entity does not need to have actual knowledge of the statute or
                                         specific intent to violate it to have committed a violation. In addition, the government
                                         may assert that a claim including items or services resulting from a violation of the
                                         federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of
                                         the False Claims Act. State anti-kickback statutes require compliance independent of
                                         the federal Anti-Kickback Statute. Some state anti-kickback statutes prohibit the same
                                         conduct as the federal Anti-Kickback Statute, but may apply the prohibition broadly to
                                         all payor-reimbursed services, not just those that are federally-funded. Very few state
                                         anti-kickback statutes have the extensive safe harbors and regulatory guidance of the
                                         federal Anti-Kickback Statute, making interpretation of the scope of the statutes more
                                         uncertain than the federal Anti-Kickback Statute;
●
Physician
                                         Self-Referral Laws. There is a federal physician self-referral prohibition, commonly
                                         known as the Stark Law, which prohibits a physician from referring Medicare patients
                                         to an entity providing "designated health services" if the physician or a
                                         member of such physician's immediate family has a "financial relationship"
                                         with the entity, unless an exception applies. We do not believe our operations, including
                                         those of Arcadian, implicate the Stark Law, because neither we nor Arcadian nor the Providers
                                         acting pursuant to the Services Agreements offer or provide any services that would be
                                         considered designated health services under the Stark Law. As with the anti-kickback
                                         laws, however, physician self-referral prohibitions exist at the state level and which,
                                         like the Stark Law, apply civil penalties to violations of their terms. These state physician
                                         self-referral laws are often similar to the Stark Law, but may apply to different services
                                         than the Stark Law and may have different exceptions. We do not believe it is noncompliant
                                         with any state physician self-referral laws, but these laws are often vague, subject
                                         to amendment and lacking in court precedent or regulatory guidance. It is possible, therefore,
                                         that now or in the future we could be found to be out of compliance with one or more
                                         state physician self-referral laws. Any such noncompliance could have a material adverse
                                         effect on our business, financial condition and results of operations;
21
●
Federal
                                         and State False Claims Statutes. The federal False Claims Act imposes civil and criminal
                                         liability on individuals or entities that knowingly submit false or fraudulent claims
                                         for payment to the government or knowingly make, or cause to be made, a false statement
                                         to have a false claim paid, including
qui tam
or whistleblower suits. Some states
                                         have laws similar to the False Claims Act. The scope of these laws and the interpretations
                                         of them vary from state to state and are enforced by state courts and regulatory authorities,
                                         each with broad discretion. Some state fraud and abuse laws apply to items or services
                                         reimbursed by any third-party payor, including commercial insurers, not just those reimbursed
                                         by a government funded healthcare program;
●
Other
                                         Healthcare Anti-Fraud Laws. The criminal healthcare fraud provisions of HIPAA and related
                                         rules that prohibit knowingly and willfully executing a scheme or artifice to defraud
                                         any healthcare benefit program or falsifying, concealing or covering up a material fact
                                         or making any material false, fictitious or fraudulent statement in connection with the
                                         delivery of or payment for healthcare benefits, items or services. Similar to the federal
                                         Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the
                                         statute or specific intent to violate it to have committed a violation;
●
Beyond
                                         HIPAA, additional risks include reassignment of payment rules that prohibit certain types
                                         of billing and collection practices in connection with claims payable by Medicare or
                                         Medicaid programs; and
●
a
                                         provision of the Social Security Act that imposes criminal penalties on healthcare providers
                                         who fail to disclose or refund known overpayments.
Finally,
in the operations of our Company and our Providers, we must comply with additional restrictions, including the following:
●
Reassignment
                                         Rules
. Payment reassignment rules prohibit certain types of billing and collection
                                         practices in connection with claims payable by the Medicare or Medicaid programs;
●
Debt
                                         Collection Laws
. Laws that regulate debt collection practices may be applied to our
                                         debt collection practices;
●
Refund
                                         Disclosures
. A provision of the Social Security Act imposes criminal penalties on
                                         healthcare providers who fail to disclose or refund known overpayments;
●
Billing
                                         Requirements
. Federal and state laws prohibit providers from billing and receiving
                                         payment from Medicare and Medicaid for services unless the services are medically necessary,
                                         adequately and accurately documented, and billed using codes that accurately reflect
                                         the type and level of services rendered; and
●
Certification
                                         and Accreditation Requirements
. Federal and state laws and policies that require
                                         healthcare providers to maintain licensure, certification or accreditation to enroll
                                         and participate in the Medicare and Medicaid programs, to report certain changes in their
                                         operations to the agencies that administer these programs.
Because
of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some
of our business activities could be subject to challenge under one or more of such laws. Achieving and sustaining compliance with
these laws may prove costly. Failure to comply with these laws and other laws can result in civil and criminal penalties such
as fines, damages, overpayment recoupment loss of enrollment status and exclusion from the Medicare and Medicaid programs. The
risk of our being found in violation of these laws and regulations is increased by the fact that many of them have not been fully
interpreted by the regulatory authorities or the courts, and their provisions are sometimes open to a variety of interpretations.
Our failure to accurately anticipate the application of these laws and regulations to our business or any other failure to comply
with regulatory requirements could create liability for us and negatively affect our business. Any action against us for violation
of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert
our management's attention from the operation of our business and result in adverse publicity.
22
To
enforce compliance with the federal laws, the U.S. Department of Justice and the OIG, continue to increase their scrutiny of healthcare
providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.
Dealing with investigations can be time- and resource-consuming and can divert management's attention from the business.
Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business. In addition,
because of the potential for large monetary exposure under the federal False Claims Act, which provides for treble damages and
mandatory minimum penalties of $5,500 to $11,000 per false claim or statement, healthcare providers often resolve allegations
without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages that may be awarded
in litigation proceedings. Such settlements often contain additional compliance and reporting requirements as part of a consent
decree, settlement agreement or corporate integrity agreement. Given the significant size of actual and potential settlements,
it is expected that the government will continue to devote substantial resources to investigating healthcare providers'
compliance with the healthcare reimbursement rules and fraud and abuse laws.
The
laws, regulations and standards governing the provision of healthcare services may change significantly in the future. We cannot
assure you that any new or changed healthcare laws, regulations or standards will not materially adversely affect our business.
We cannot assure you that a review of our business by judicial, law enforcement, regulatory or accreditation authorities will
not result in a determination that could adversely affect our operations.
In
addition, the FDA regulates development, testing, labeling, manufacturing, marketing, promotion, distribution, record-keeping
and reporting requirements for prescription drugs. Compliance with laws and regulations enforced by the FDA and other regulatory
agencies may be required in relation to future products or services developed or used by us, in addition to the regulatory process
and dialogue in which we are now engaged with the FDA (for more information, please see the risk factor entitled "The FDA
believes that rEEG and, potentially, our PEER Online service, constitute a medical device, which is subject to regulation by the
FDA. As we continue to market our PEER Online service, there is risk that the FDA will commence an enforcement action against
us. The FDA has informed us that our marketing of our rEEG services without prior approval or re-classification by the FDA constitutes
a violation of the Federal Food, Drug and Cosmetic Act"). Failure to comply with applicable laws and regulations may result
in various adverse consequences, including withdrawal of our products and services from the market, or the imposition of civil
or criminal sanctions.
The
impact of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending on us is currently
unknown, but may adversely affect our business, financial condition and results of operations.
Our
revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending and policy. The healthcare
industry is subject to changing political, regulatory and other influences. The Patient Protection and Affordable Care Act or
PPACA made major changes in how healthcare is delivered and reimbursed, and increased access to health insurance benefits to the
uninsured and underinsured population of the United States.
The
PPACA, among other things, increased the number of individuals with Medicaid and private insurance coverage, implemented reimbursement
policies that tie payment to quality, facilitated the creation of accountable care organizations that may use capitation and other
alternative payment methodologies, strengthened enforcement of fraud and abuse laws and encouraged the use of information technology.
The future of the PPACA is uncertain and the PPACA remains in a state of near-constant change. Several of these changes require
implementing regulations which have not yet been drafted or have been released only as proposed rules.
Such
changes in the regulatory environment may also result in changes to our payor mix that may affect our operations and revenue.
In
addition, certain provisions of the PPACA authorize voluntary demonstration projects, which include the development of bundling
payments for acute, inpatient hospital services, physician services and post-acute services for episodes of hospital care. Further,
the PPACA may adversely affect payors by increasing medical costs generally, which could have an effect on the industry and potentially
impact our business and revenue as payors seek to offset these increases by reducing costs in other areas. The full impact of
these changes on us cannot be determined at this time.
23
We
expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the
amounts that federal and state governments and other third-party payors will pay for healthcare products and services, which could
adversely affect our business, financial condition and results of operations.
There
may be adverse consequences if the independent contractor status of Arcadian's providers is successfully characterized as
employee status.
We
have independent contractor relationships with our providers rather than employee relationships. An independent contractor is
generally distinguished from an employee by his or her degree of autonomy and independence in providing services. Our providers
must be afforded independence over their actions and judgment while providing medical services. If a federal or state authority
or court enacts legislation or adopts regulations or adopts an interpretation that changes the manner in which employees and independent
contractors are classified or makes any adverse determination with respect to some or all of our independent contractors, we could
incur significant costs in complying with such laws, regulations or interpretations, including, in respect of tax withholding,
social security payments and recordkeeping, or we could be held liable for the actions of such independent contractors. As a result,
we could be required to modify our business model. All of the above, individually or in the aggregate could have a material adverse
effect on our business, financial condition and results of operations. In addition, there is the risk that we may be subject to
significant monetary liabilities arising from fines or judgments as a result of any such actual or alleged non-compliance with
federal, state or local tax or employment laws.
The
emergence of new technologies may require us to expend significant resources in order to remain competitive.
The
U.S. healthcare industry is massive, has a number of large market participants with conflicting agendas, is subject to significant
government regulation and is currently undergoing significant change. Changes in our industry, for example, away from high-deductible
health plans, or the emergence of new technologies as more competitors enter our market, could result in our solution being less
desirable or relevant.
If
healthcare benefits trends shift or entirely new technologies are developed that replace existing solutions, our existing or future
solutions could be rendered obsolete and our business could be adversely affected. In addition, we may experience difficulties
with software development, industry standards, design or marketing that could delay or prevent our development, introduction or
implementation of new applications and enhancements.
Any
future litigation against us could be costly and time
-
consuming to defend.
We
may become subject, from time to time, to legal proceedings and claims that arise in the ordinary course of business such as claims
in connection with commercial disputes or employment claims made by our current or former associates. Litigation may result in
substantial costs and may divert management's attention and resources, which may substantially harm our business, financial
condition and results of operations. Insurance may not cover such claims, may not provide sufficient payments to cover all of
the costs to resolve one or more such claims and may not continue to be available on terms acceptable to us. A claim brought against
us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our revenue and leading analysts or
potential investors to reduce their expectations of our performance, which could reduce the market price of our stock.
We
may be subject to regulatory and investigative proceedings, which may find that our policies and procedures do not fully comply
with complex and changing healthcare regulations.
While
we have established policies and procedures that we believe will be sufficient to ensure that we operate in substantial compliance
with applicable laws, regulations and requirements, the criteria are often vague and subject to change and interpretation. We
may become the subject of regulatory or other investigations or proceedings, and our interpretations of applicable laws and regulations
may be challenged. The defense of any such challenge could result in substantial cost and a diversion of management's time
and attention. Thus, any such challenge could have a material adverse effect on our business, regardless of whether it ultimately
is successful. If we fail to comply with any applicable laws, or a determination is made that we have failed to comply with these
laws, our financial condition and results of operations could be adversely affected.
24
Failure
to comply with the Federal Trade Commission Act or similar state laws could result in sanctions or limit the claims we can make.
Our
promotional activities and materials, including advertising to consumers and physicians, and materials provided to third parties
for their use in promoting our products and services, are regulated by the Federal Trade Commission (FTC) under the FTC Act, which
prohibits unfair and deceptive acts and practices, including claims which are false, misleading or inadequately substantiated.
The FTC typically requires competent and reliable scientific tests or studies to substantiate express or implied claims that a
product or service is effective. If the FTC were to interpret our promotional materials as making express or implied claims that
our products and services are effective for the treatment of mental illness, it may find that we do not have adequate substantiation
for such claims. Failure to comply with the FTC Act or similar laws enforced by state attorneys general and other state and local
officials could result in administrative or judicial orders limiting or eliminating the claims we can make about our products
and services, and other sanctions including fines.
Our
use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy
and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could
result in significant liability or reputational harm and, in turn, a material adverse effect on our client base, membership base
and revenue.
Numerous
state and federal laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability
and integrity of personally identifiable information, including protected health information. These laws and regulations include
HIPAA . HIPAA establishes a set of basic national privacy and security standards for the protection of protected health information,
or PHI, by health plans, healthcare clearinghouses and certain healthcare providers, referred to as covered entities, and the
business associates with whom such covered entities contract for services, which includes us.
HIPAA
requires healthcare providers like us to develop and maintain policies and procedures with respect to PHI that is used or disclosed,
including the adoption of administrative, physical and technical safeguards to protect such information. HIPAA also implemented
the use of standard transaction code sets and standard identifiers that covered entities must use when submitting or receiving
certain electronic healthcare transactions, including activities associated with the billing and collection of healthcare claims.
HIPAA
imposes mandatory penalties for certain violations. Penalties for violations of HIPAA and its implementing regulations start at
$100 per violation and are not to exceed $50,000 per violation, subject to a cap of $1.5 million for violations of the same standard
in a single calendar year. However, a single breach incident can result in violations of multiple standards. HIPAA also authorizes
state attorneys general to file suit on behalf of their residents. Courts will be able to award damages, costs and attorneys'
fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals
to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits
such as those for negligence or recklessness in the misuse or breach of PHI.
In
addition, HIPAA mandates that the Secretary of Health and Human Services, or HHS conduct periodic compliance audits of HIPAA covered
entities or business associates for compliance with the HIPAA Privacy and Security Standards. It also tasks HHS with establishing
a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the Civil
Monetary Penalty fine paid by the violator.
HIPAA
further requires that patients be notified of any unauthorized acquisition, access, use or disclosure of their unsecured PHI that
compromises the privacy or security of such information, with certain exceptions related to unintentional or inadvertent use or
disclosure by employees or authorized individuals. HIPAA specifies that such notifications must be made "without unreasonable
delay and in no case later than 60 calendar days after discovery of the breach." If a breach affects 500 patients or more,
it must be reported to HHS without unreasonable delay, and HHS will post the name of the breaching entity on its public web site.
Breaches affecting 500 patients or more in the same state or jurisdiction must also be reported to the local media. If a breach
involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least annually.
25
Numerous
other federal and state laws protect the confidentiality, privacy, availability, integrity and security of personally identifiable
information, or PII, including PHI. These laws in many cases are more restrictive than, and may not be preempted by, the HIPAA
rules and may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for
us and our clients and potentially exposing us to additional expense, adverse publicity and liability.
New
health information standards, whether implemented pursuant to HIPAA, congressional action or otherwise, could have a significant
effect on the manner in which we must handle healthcare related data, and the cost of complying with standards could be significant.
If we do not comply with existing or new laws and regulations related to PHI, we could be subject to criminal or civil sanctions.
Because
of the extreme sensitivity of the PII we store and transmit, the security features of our technology platform are very important.
If our security measures, some of which are managed by third parties, are breached or fail, unauthorized persons may be able to
obtain access to sensitive client and patient data, including HIPAA PHI. As a result, our reputation could be severely damaged,
adversely affecting client and patient confidence. Patients may curtail their use of or stop using our services or our client
base could decrease, which would cause our business to suffer. In addition, we could face litigation, damages for contract breach,
penalties and regulatory actions for violation of HIPAA and other applicable laws or regulations and significant costs for remediation,
notification to individuals and for measures to prevent future occurrences. Any potential security breach could also result in
increased costs associated with liability for stolen assets or information, repairing system damage that may have been caused
by such breaches, incentives offered to clients or other business partners in an effort to maintain our business relationships
after a breach and implementing measures to prevent future occurrences, including organizational changes, deploying additional
personnel and protection technologies, training employees and engaging third-party experts and consultants. While we maintain
insurance covering certain security and privacy damages and claim expenses in the amount of $100,000 per claim, we may not carry
insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage would not address
the reputational damage that could result from a security incident.
We
outsource important aspects of the storage and transmission of client and patient information, and thus rely on third parties
to manage functions that have material cyber-security risks. We attempt to address these risks in part by requiring outsourcing
subcontractors who handle client and patient information to sign business associate agreements contractually requiring those subcontractors
to adequately safeguard personal health data to the same extent that applies to us. However, we cannot assure you that these contractual
measures and other safeguards will adequately protect us from the risks associated with the storage and transmission of client
and patients' proprietary and protected health information.
We
also publish statements to patients that describe how we handle and protect personal information. If federal or state regulatory
authorities or private litigants consider any portion of these statements to be untrue, we may be subject to claims of deceptive
practices, which could lead to significant liabilities and consequences, including, without limitation, costs of responding to
investigations, defending against litigation, settling claims and complying with regulatory or court orders.
We
also send short message service, or SMS text messages to potential end users who are eligible to use our service through certain
customers and partners. While we obtain consent from or on behalf of these individuals to send text messages, federal or state
regulatory authorities or private litigants may claim that the notices and disclosures we provide, form of consents we obtain
or our SMS texting practices, are not adequate. These SMS texting campaigns are potential sources of risk for class action lawsuits
and liability for our company. Numerous class-action suits under federal and state laws have been filed in the past year against
companies who conduct SMS texting programs, with many resulting in multi-million dollar settlements to the plaintiffs. Any future
such litigation against us could be costly and time-consuming to defend.
26
We
may be subject to healthcare anti-fraud initiatives, which may lead to penalties and adversely affect our business.
State
and federal governments are devoting increased attention and resources to anti-fraud initiatives against healthcare providers,
taking an expansive definition of fraud that includes receiving fees in connection with a healthcare business that is found to
violate any of the complex regulations described above. Although to our knowledge we have not been the subject of any anti-fraud
investigations, if such a claim were made defending our business practices could be time consuming and expensive, and an adverse
finding could result in substantial penalties or require us to restructure our operations, which we may not be able to do successfully.
Our
operating results may fluctuate significantly and our stock price could decline or fluctuate if our results do not meet the expectation
of analysts or investors.
Management
expects that we will experience substantial variations in our operating results from quarter to quarter. We believe that the factors
which influence this variability of quarterly results include, without limitation:
●
the
                                         use of and demand for telebehavioral health services and our PEER Reports, and other
                                         solutions and/or services that we may offer in the future that are based on our patented
                                         methodology;
●
inconclusive
                                         or negative result from our clinical trials;
●
our
                                         inability to enroll patients into our clinical trials;
●
the
                                         effectiveness of new marketing and sales programs;
●
turnover
                                         among our employees;
●
changes
                                         in management;
●
the
                                         introduction of solutions or services that are viewed in the marketplace as substitutes
                                         for the services we provide;
●
communications
                                         published by industry organizations or other professional entities in the psychiatric
                                         and physician community that are unfavorable to our business;
●
the
                                         introduction of regulations which impose additional costs on or impede our business;
                                         and
●
the
                                         timing and amount of our expenses, particularly expenses associated with the marketing
                                         and promotion of our services, the training of physicians and psychiatrists in the use
                                         of our PEER Reports and research and development.
As
a result of fluctuations in our revenue and operating expenses that may occur, management believes that period-to-period comparisons
of our results of operations are not a good indication of our future performance. It is possible that in some future quarter or
quarters, our operating results will be below the expectations of securities analysts or investors. In that case, our common stock
price could fluctuate significantly or decline.
We
may fail to successfully manage and maintain the growth of our business, which could adversely affect our results of operations.
As
we continue expanding our commercial operations, this expansion could place significant strain on our management, operational
and financial resources. To manage future growth, we will need to continue to hire, train, and manage additional employees, particularly
a specially-trained sales force to market our PEER Reports.
27
Confidentiality
agreements with employees, licensees and others may not adequately prevent disclosure of trade secrets and other proprietary information.
In
order to protect our proprietary technology and processes, we rely in part on confidentiality provisions in our agreements with
employees, licensees, treating physicians, psychiatrists and behavioral health professionals. These agreements may not effectively
prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure
of confidential information. Moreover, policing compliance with our confidentiality agreements and nondisclosure agreements and
detecting unauthorized use of our technology is difficult and we may, therefore, be unable to determine whether piracy of our
technology has actually occurred. In addition, others may independently discover our trade secrets and proprietary information.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights and failure
to obtain or maintain trade secret protection could adversely affect our competitive business position.
The
liability of our directors and officers is limited.
The
applicable provisions of the Delaware General Corporation Law and our Certificate of Incorporation and By-laws limit the liability
of our directors to us and our stockholders for monetary damages for breaches of their fiduciary duties, with certain exceptions,
and for other specified acts or omissions of such persons. In addition, the applicable provisions of the Delaware General Corporation
Law and of our Certificate of Incorporation and Bylaws, as well as indemnification agreements we have entered into with our directors,
and officers, provide for indemnification of such persons under certain circumstances. In the event we are required to indemnify
any of our directors or any other person, our financial strength may be harmed, which may in turn lower our stock price.
If
we do not retain our senior management and other key employees, we may not be able to successfully implement our business strategy.
Our
future success depends on the ability, experience and performance of our senior management and our key professional personnel.
Our success therefore depends to a significant extent on retaining the services of Patrick Herguth, our Chief Executive Officer,
our senior product development and clinical managers and others. Because of their ability and experience, if we lose one or more
of the members of our senior management or other key employees, our ability to successfully implement our business strategy could
be seriously harmed. While we believe our relationships with our executives are good and do not anticipate any of them leaving
in the near future, the loss of the services of any of our senior management could have a material adverse effect on our ability
to manage our business. We do not carry key-man life insurance on any of our key employees.
If
we do not attract and retain skilled personnel, we may not be able to expand our business.
Our
solutions and services are based on a complex database of information. Accordingly, we require skilled medical, scientific and
administrative personnel to sell and support our solutions and services. Our future success will depend largely on our ability
to continue to hire, train, retain and motivate additional skilled personnel, particularly sales representatives who are responsible
for customer education and training and customer support. If we are not able to attract and retain skilled personnel, we will
not be able to continue our development and commercialization activities.
Our
senior management's limited recent experience managing a publicly traded company may divert management's attention
from operations and harm our business.
Our
management team has relatively limited experience managing a publicly traded company and complying with federal securities laws,
including compliance with recently adopted disclosure requirements on a timely basis. Our management will be required to design
and implement appropriate programs and policies in responding to increased legal, regulatory compliance and reporting requirements,
and any failure to do so could lead to the imposition of fines and penalties and harm our business.
The
estimates of market opportunity and forecasts of market growth included herein may prove to be inaccurate, and even if the market
in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.
Market
opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that
may not prove to be accurate. The estimates and forecasts herein relating to the size and expected growth of the telehealth and
predictive medicine markets may prove to be inaccurate. Even if the markets in which we compete meet our size estimates and forecasted
growth, our business could fail to grow at similar rates, if at all.
28
Risks Related to this Offering
An active trading market for our
common stock may never develop or be sustained.
Although we have filed
an application to have our common stock listed on The Nasdaq Stock Market under the symbol "PSYC" and have also filed
an application to have our common stock quoted on the OTCQB, an active trading market for our common stock may not develop on
that quotation system or exchange or elsewhere or, if developed, that market may not be sustained. Accordingly, if an active trading
market for our common stock does not develop or is not maintained, the liquidity of our common stock, your ability to sell your
shares of common stock when desired and the prices that you may obtain for your shares of common stock will be adversely affected.
The market price and trading volume
of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders.
Even if an active
trading market develops, the market price of our common stock may be highly volatile and could be subject to wide fluctuations.
In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. The initial
public offering price of our common stock will be determined by negotiation among us and the representatives of the underwriters
based on a number of factors and may not be indicative of prices that will prevail in the open market following completion of
this offering. If the market price of our common stock declines significantly, you may be unable to resell your shares at or above
your purchase price, if at all. The market price of our common stock may fluctuate or decline significantly in the future. Some
of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common
stock include:
●
quarterly variations in our operating results;
●
operating results that vary from the expectations of securities
    analysts and investors;
●
change in valuations;
●
changes in the industries in which we operate;
●
announcements by us or companies in our industries of significant
    contracts, acquisitions, dispositions, strategic partnerships, joint ventures, capital commitments, plans, prospects, service
    offerings or operating results;
●
additions or departures of key personnel;
●
future sales of our securities;
●
developments in the financial markets and worldwide or regional
    economies;
●
announcements of innovations or new products, solutions or services
    by us or our competitors;
●
significant sales of our common stock or other securities in
    the open market;
●
variations in interest rates;
●
changes in accounting principles;
        and
●
other unforeseen events.
Stock markets in the
United States have experienced extreme price and volume fluctuations. Market fluctuations, as well as general political and economic
conditions such as acts of terrorism, prolonged economic uncertainty, a recession or interest rate or currency rate fluctuations,
could adversely affect the market price of our common stock.
In the past, stockholders
have often instituted securities class action litigation after periods of volatility in the market price of a company's
securities. If a stockholder were to file any such class action suit against us, we would incur substantial legal fees and our
management's attention and resources would be diverted from operating our business to respond to the litigation, which could
harm our business.
29
The market price of our common stock
could be negatively affected by sales of substantial amounts of our common stock in the public markets.
After this offering,
there will be shares of common stock outstanding, or shares outstanding if the underwriters exercise their over-allotment option
in full. Of our issued and outstanding shares, all the common stock sold in this offering will be freely transferable, except
for any shares held by our "affiliates," as that term is defined in Rule 144 under the Securities Act of 1933 (the
"Securities Act"). Following completion of the offering, approximately % of our outstanding common stock (or % if
the underwriters exercise their over-allotment option in full) can be resold into the public markets in the future in accordance
with the requirements of Rule 144, subject to the lock-up restrictions described below. See "Shares Eligible For Future
Sale."
We and each of our
executive officers and directors have agreed with the underwriters, subject to certain exceptions, for a period of days after
the date of this prospectus, not to directly or indirectly offer, pledge, sell, contract to sell, sell any option or contract
to purchase or otherwise dispose of any common stock or any securities convertible into or exercisable or exchangeable for common
stock, or in any manner transfer all or a portion of the economic consequences associated with the ownership of common stock,
or cause a registration statement covering any common stock to be filed, without the prior written consent of Aegis. See "Underwriting."
The market price of
our common stock may decline significantly when the restrictions on resale by our affiliates lapse. A decline in the price of
our common stock might impede our ability to raise capital through the issuance of additional common stock or other equity securities.
Investors in this offering will
suffer immediate and substantial dilution.
The public offering
price of our common stock will be substantially higher than the pro forma as adjusted net tangible book value per share issued
and outstanding immediately after this offering. Investors who purchase common stock in this offering will pay a price per share
that substantially exceeds the net tangible book value per share of common stock immediately prior to this offering. If you purchase
shares of our common stock in this offering, you will experience immediate and substantial dilution of $ in the pro forma as adjusted
net tangible book value per share, based upon the public offering price of $[5.00] per share (the midpoint of the estimated initial
public offering price range set forth on the cover page of this prospectus). See "Dilution."
We will have broad discretion in
the use of the net proceeds to us from this offering and may not use them effectively.
Our management currently
intends to use the net proceeds to us from this offering in the manner described under "Use of Proceeds" and will
have broad discretion in the application of the net proceeds to us from this offering. The failure by our management to apply
these funds effectively could affect our ability to operate and grow our business.
As a public company, we will incur
additional costs and face increased demands on our management.
As a public company,
we are required to comply with an extensive body of regulations, including certain provisions of the Sarbanes Oxley Act of 2002
(the "Sarbanes-Oxley Act"), the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulations of the SEC and
if we become listed on The Nasdaq Stock Market, requirements of the Nasdaq. We expect these rules and regulations increase our
legal and financial compliance costs and make some activities more time-consuming and costly. These rules, may impose additional
costs on us and have a material adverse effect on our business, prospects, financial condition, results of operations and cash
flows.
30
We are an "emerging growth
company" and we cannot be certain whether the reduced disclosure requirements applicable to emerging growth companies will
make our common stock less attractive to investors.
We are an "emerging
growth company," as defined in the JOBS Act, and we intend to take advantage of exemptions from various requirements that
are applicable to other public companies that are not emerging growth companies, including the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company, which may be for as long as five years
following our initial public offering. We cannot predict if investors will find our common stock less attractive because our independent
auditors will not have attested to the effectiveness of our internal controls. If some investors find our common stock less attractive
as a result of our independent auditors not attesting to the effectiveness of our internal controls or other exemptions of which
we plan to take advantage, there may be a less active trading market for our common stock.
Risks Related To An Investment In Our
Common Stock
Following the listing of our shares,
we expect there will be limited trading volume, which could result in higher price volatility for, and reduced liquidity of, our
common stock.
Although we have filed
an application have our shares of common stock listed on The Nasdaq Stock Market under the symbol "PSYC" and have
also filed an application to have our common stock quoted on the OTCQB, we expect the trading volume in our common stock to be
limited and an active trading market for our shares of common stock may never develop or be maintained. The absence of an active
trading market could increase price volatility and reduces the liquidity of our common stock and as a result, the sale of a significant
number of shares of common stock at any particular time could be difficult to achieve at the market prices prevailing immediately
before such shares are offered.
We cannot assure you that the common
stock will become liquid or that it will be listed on a securities exchange.
We cannot assure you
that we will ever be able to meet the initial listing standards of any stock exchange, or that we will be able to maintain any
such listing. In addition, if we failed to meet the criteria set forth in SEC regulations, various requirements would be imposed
by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently,
such regulations may deter broker-dealers from recommending or selling the common stock, which may further affect its liquidity.
This would also make it more difficult for us to raise additional capital.
If we successfully list on the Nasdaq
Stock Market and we cannot continue to satisfy Nasdaq's continuing listing criteria, Nasdaq may subsequently delist our
Common Stock.
We have applied to
have our common stock listed on The Nasdaq Stock Market. Nasdaq requires us to meet certain financial, public float, bid price
and liquidity standards on an ongoing basis in order to continue the listing of our Common Stock. Generally, we must maintain
a minimum amount of stockholders equity (generally $2.5 million) and a minimum number of holders of our securities (generally
300 round lot holders). If our application is approved and we fail to meet any of the continuing listing requirements, our Common
Stock may be subject to delisting. If our Common Stock is delisted and we are not able to list our Common Stock on another national
securities exchange, we expect our securities would be quoted on an over-the-counter market. If this were to occur, our stockholders
could face significant material adverse consequences, including limited availability of market quotations for our Common Stock
and reduced liquidity for the trading of our securities. In addition, we could experience a decreased ability to issue additional
securities and obtain additional financing in the future. There can be no assurance that an active trading market for our Common
Stock will develop or be sustained. We may choose to raise additional capital in order to increase our stockholders' equity
in order to meet the Nasdaq continued listing standards. Any additional equity financings may be financially dilutive to, and
will be dilutive from an ownership perspective to our stockholders, and such dilution may be significant based upon the size of
such financing. Additionally, we cannot assure that such funding will be available on a timely basis, in needed quantities, or
on terms favorable to us, if at all.
Future sales of securities by us
in equity or debt financings could result in substantial dilution to our existing stockholders and have a material adverse effect
on our earnings.
Future sales of common
stock or derivative securities by us in private placements or public offerings could result in substantial dilution to our existing
stockholders. In addition, our business strategy may include expansion through internal growth, by acquiring complementary businesses,
by acquiring or licensing additional solutions and services, or by establishing strategic relationships with targeted customers
and suppliers. In order to do so, or to finance the cost of our other activities, we may issue additional equity securities that
could dilute our stockholders' stock ownership. We may also assume additional debt and incur impairment losses related to
goodwill and other tangible assets if we acquire another company and this could negatively impact our earnings and results of
operations.
31
Were our common stock to be considered
penny stock, and therefore subject to the penny stock rules, U.S. broker-dealers may be discouraged from effecting transactions
in shares of our common stock.
The U.S. Securities
and Exchange Commission (the "SEC") has adopted a number of rules to regulate "penny stock" that may restrict
transactions involving shares of our common stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6,
15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. These rules may have the effect of reducing the liquidity
of penny stocks. "Penny stocks" generally are equity securities with a price of less than $5.00 per share (other than
securities registered on certain national securities exchanges or quoted on the Nasdaq if current price and volume information
with respect to transactions in such securities is provided by the exchange or system). Our securities have in the past constituted
"penny stock" within the meaning of the rule. Were our common stock to again be considered "penny stock"
and therefore become subject to the penny stock rules, the additional sales practice and disclosure requirements imposed upon
U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of our common stock, which could
severely limit the market liquidity of such shares and impede their sale in the secondary market.
A U.S. broker-dealer
selling a penny stock to anyone other than an established customer or "accredited investor" (generally, an individual
with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must
make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction
prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the penny stock regulations require
the U.S. broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared in accordance
with SEC standards relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A U.S.
broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and
current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent
price information with respect to the penny stock held in a customer's account and information with respect to the limited
market in penny stocks.
Stockholders should
be aware that, according to SEC, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter
or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
(iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale
dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting
in investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although
we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent the described patterns from being established with
respect to our securities in the event our common stock were to again be considered a penny stock and therefore become subject
to penny stock rules.
We do not expect to pay dividends
for the foreseeable future, and any return on investment may be limited to potential future appreciation on the value of our common
stock.
We currently intend
to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends
in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking
into account various factors, including without limitation, our financial condition, operating results, cash needs, growth plans
and the terms of any credit agreements that we may be a party to at the time. To the extent we do not pay dividends, our stock
may be less valuable because a return on investment will only occur if and to the extent our stock price appreciates, which may
never occur. In addition, investors must rely on sales of their common stock after price appreciation as the only way to realize
their investment, and if the price of our stock does not appreciate, then there will be no return on investment. Investors seeking
cash dividends should not purchase our common stock.
32
The rights of the holders of common
stock may be impaired by the potential issuance of preferred stock.
Our certificate of
incorporation gives our board of directors the right to create new series of preferred stock. As a result, the board of directors
may, without stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights which
could adversely affect the voting power and equity interest of the holders of common stock. Preferred stock, which could be issued
with the right to more than one vote per share, could be utilized as a method of discouraging, delaying or preventing a change
of control. The possible impact on takeover attempts could adversely affect the price of our common stock. Although we have no
present intention to issue any additional shares of preferred stock or to create any new series of preferred stock, we may issue
such shares in the future.
Our officers, directors and principal
stockholders can exert significant influence over us and may make decisions that are not in the best interests of all stockholders.
Our officers, directors
and principal stockholders (greater than 5% stockholders) collectively control approximately 64.07% of our issued and outstanding
common stock on a fully diluted basis. As a result, these stockholders are able to affect the outcome of, or exert significant
influence over, all matters requiring stockholder approval, including the election and removal of directors and any change in
control. This concentration of ownership of our common stock could have the effect of delaying or preventing a change of control
of us or otherwise discouraging or preventing a potential acquirer from attempting to obtain control of us. This, in turn, could
have a negative effect on the market price of our common stock. It could also prevent our stockholders from realizing a premium
over the market prices for their shares of common stock. Moreover, the interests of this concentration of ownership may not always
coincide with our interests or the interests of other stockholders, and accordingly, they could cause us to enter into transactions
or agreements that we would not otherwise consider.
Transactions involving our common
stock engaged in by our largest stockholders, directors or executive officers may have an adverse effect on the price of our stock.
Our officers, directors
and principal stockholders (greater than 5% stockholders) collectively control approximately 64.07% of our issued and outstanding
common stock on a fully diluted basis. Subsequent sales of our shares by these stockholders could have the effect of lowering
our stock price. The perceived risk associated with the possible sale of a large number of shares by these stockholders, or the
adoption of significant short positions by hedge funds or other significant investors, could cause some of our stockholders to
sell their stock, thus causing the price of our stock to decline. In addition, actual or anticipated downward pressure on our
stock price due to actual or anticipated sales of stock by our directors or officers could cause other institutions or individuals
to engage in short sales of our common stock, which may further cause the price of our stock to decline.
From time to time
our directors and executive officers may sell shares of our common stock on the open market. These sales will be publicly disclosed
in filings made with the SEC. In the future, our directors and executive officers may sell a significant number of shares for
a variety of reasons unrelated to the performance of our business. Our stockholders may perceive these sales as a reflection on
management's view of the business and result in some stockholders selling their shares of our common stock. These sales
could cause the price of our stock to drop.
We and our executive
officers and directors have agreed with the underwriters that, subject to certain exceptions, for a period of 180 days after the
date of this prospectus for our officers and directors and 90 days for us after the date of this prospectus, we and they will
not directly or indirectly offer, pledge, sell, contract to sell, sell any option or contract to purchase or otherwise dispose
of any common stock or any securities convertible into or exercisable or exchangeable for common stock, or in any manner transfer
all or a portion of the economic consequences associated with the ownership of common stock, or cause a registration statement
covering any common stock to be filed, without the prior written consent of Aegis Capital Corp. See "Underwriting."
33
Anti-takeover provisions may limit
the ability of another party to acquire us, which could cause our stock price to decline.
Provisions in our
certificate of incorporation and our by-laws that will may discourage, delay or prevent a merger, acquisition or other change
in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive
a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for
shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors
is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our
stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our
board of directors. Although we believe these provisions collectively provide for an opportunity to obtain greater value for stockholders
by requiring potential acquirers to negotiate with our board of directors, they would apply even if an offer rejected by our board
of directors were considered beneficial by some stockholders. Among other things, these provisions:
Moreover, because
we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which
prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of
three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless
the merger or combination is approved in a prescribed manner.
Non-U.S. investors may have difficulty
effecting service of process against us or enforcing judgments against us in courts of non-U.S. jurisdictions.
We are a company incorporated
under the laws of the State of Delaware. All of our directors and officers reside in the United States. It may not be possible
for non-U.S. investors to effect service of process within their own jurisdictions upon our company and our directors and officers.
In addition, it may not be possible for non-U.S. investors to collect from our company, its directors and officers, judgments
obtained in courts in such non-U.S. jurisdictions predicated on non-U.S. legislation.
If securities or industry analysts
do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations
regarding our stock adversely, our stock price and trading volume could decline.
The trading market
for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us,
our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our
stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline.
If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose
visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
USE
OF PROCEEDS
We estimate that the
net proceeds from sale of shares of common stock offered by us will be approximately               million, after deducting the underwriting
discounts and commissions and estimated offering expenses payable by us, based on the public offering price of                per share. If the
underwriters' option to purchase additional shares is exercised in full, we estimate that our net proceeds will be approximately
            million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
We anticipate that
we will use the net proceeds from this offering for our working capital and for other general corporate purposes.
We believe opportunities
may exist from time to time to expand our current business through acquisitions or investments. While we have no current agreements,
commitments or understandings for any specific acquisitions or investments, we may use a portion of the net proceeds for these
purposes.
We believe that
the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our
operating expenses and capital expenditure requirements through at least the next       months from
the date of this offering.
This expected use
of the net proceeds from this offering represents our intentions based upon our current plans and business conditions. Pending
our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments,
including short-term, investment grade, interest bearing instruments and U.S. government securities.
34
DETERMINATION
OF THE OFFERING PRICE
The public offering
price of the common stock offered by this prospectus was determined by careful consideration of our management and our Board of
Directors, based upon:            and (ii) the common stock's historical trading volume. In considering and determining the price at
which to offer Common Stock in this offering, our management and our board of directors also considered                  . Finally, our management
and our Board of Directors considered discussions with, and advice provided by, independent brokers and investors relating to their
opinions of the price at which we could succeed in attracting investors for this offering. We cannot provide assurances that we
will succeed in attracting any investors at the public offering price of the common stock offered by this prospectus, that the
public offering price is in fact reflective of the true value of our common stock, or of us, or that the markets will react positively
following any such offers and sales by us of our common stock. See "Underwriting."
DILUTION
As of March 31, 2019,
we had a net tangible book value of $              or $              per share, based on              shares of common stock outstanding as of March 31, 2019. Net tangible
book value represents our total tangible assets, less all liabilities and intangible assets, divided by the number of shares
of common stock outstanding. Without taking into account any changes in such net tangible book value after March 31, 2019, other
than to give effect to our sale of            shares of common stock offered hereby at a fixed price of $[●] per share (and (assuming
no exercise of the underwriters' over-allotment option), the pro forma net tangible book value per share at March 31, 2019
was $             . This amount represents an immediate increase in net tangible book value of $[●] per share to our current shareholders
and an immediate decrease in net tangible book value of $            per share to new investors purchasing shares in this offering.
The table set forth
below shows the calculation of the increase in book value to current shareholders and the decrease in offering price to investors
in this offering.
Post-offering net tangible book value per share
$
Pre-offering net tangible book value per share at March 31, 2019
Pro forma increase in book value per share attributable to new investors
$
Offering price per share
$
Post-offering net tangible book value per share
Pro forma decrease in offering price per share experienced by new investors
$
35
DIVIDEND
POLICY
We do not currently
expect to pay dividends on its common stock. The payment of any dividends in the future, and the timing and amount thereof, is
within the discretion of our board of directors. The board's decisions regarding the payment of dividends will depend on
many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants
in any debt instrument, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant.
Our ability to pay dividends will depend on our ongoing ability to generate cash from operations. We cannot guarantee that we
will pay a dividend in the future or continue to pay any dividends if we began paying dividends.
36
SELECTED
HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
The following summary
historical consolidated financial information for the years ended September 30, 2017 and 2018 have been derived from the audited
financial statements of Mynd Analytics, Inc. included elsewhere in this prospectus. The following summary historical consolidated
financial information for the six months ended March 31, 2018 and 2019 have been derived from the unaudited interim consolidated
financial statements of Mynd Analytic, Inc. include elsewhere in this prospectus. In our opinion, such unaudited interim consolidated
financial statements have been prepared on the same basis as the audited consolidated financial statements of Mynd Analytics,
Inc. and reflect all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the results
of operations and financial position of Mynd Analytics, Inc. Results as of and for the six months ended March 31, 2019 are not
necessarily indicative of results that may be expected for the entire year. You should read the following summary historical condensed
consolidated financial and operating information in conjunction with the information appearing under "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus,
and in conjunction with the audited consolidated financial statements Mynd Analytics, Inc. and the related notes appearing elsewhere
in this prospectus.
This prospectus describes
the assets transferred to us by MYnd in the Separation as if the transferred assets were our business for all historical periods
described. References in this prospectus to our historical assets, liabilities, products, businesses or activities of our business
are generally intended to refer to the historical assets, liabilities, products, businesses or activities of the transferred businesses
as the businesses were conducted as part of MYnd and its subsidiaries prior to the Separation.
For the years
    ended
September 30,
Six Months
    Ended
March 31,
Statement of Operations Data:
2018
2017
2019
2018
REVENUES
Neurometric services
$
263,700
$
128,500
$
124,000
$
133,100
Telepsychiatry
    services
1,051,800
—
723,200
448,800
Total revenues
1,315,500
128,500
847,200
581,900
Cost of revenues
Neurometric services
131,200
53,500
11,500
118,800
Telepsychiatry
    services
696,200
—
509,900
264,400
827,400
53,500
521,400
383,200
Gross Margin
488,100
75,000
325,800
198,700
OPERATING EXPENSES
Research
231,500
123,900
141,600
154,900
Product development
1,146,000
1,237,200
474,300
611,400
Sales and marketing
1,617,900
1,226,700
351,300
1,305,200
General and
    administrative
7,737,600
4,590,800
4,724,100
3,515,800
Total operating expenses
10,733,000
7,178,600
5,691,300
5,587,300
OPERATING LOSS
(10,244,900
)
(7,103,600
)
(5,365,500
)
(5,388,600
)
OTHER INCOME (EXPENSE):
Interest expense,
    net
(86,300
)
(6,600
)
(46,300
)
(38,500
)
Total other
    income (expense)
(86,300
)
(6,600
)
(46,300
)
(38,500
)
LOSS BEFORE PROVISION FOR INCOME TAXES
(10,331,200
)
(7,110,200
)
(5,411,800
)
(5,427,100
)
Income taxes
1,900
2,600
2,300
1,900
NET LOSS
$
(10,333,100
)
$
(7,112,800
)
$
(5,414,100
)
$
(5,429,000
)
Net loss attributable to noncontrolling
    interest
(734,400
)
—
(778,000
)
(72,300
)
Net Loss attributable
    to MYnd Analytics, Inc.
$
(9,598,700
)
$
(7,112,800
)
$
(4,636,100
)
$
(5,356,700
)
BASIC AND DILUTED
    LOSS PER SHARE:
$
(1.86
)
$
(2.52
)
$
(0.58
)
$
(1.23
)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and Diluted
5,199,566
2,817,415
7,964,021
4,347,745
37
September
    30,
As of
March 31,
Balance
    Sheet Data:
2018
2017
2019
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
3,254,700
$
5,449,000
$
1,203,200
Accounts receivable, net
63,300
6,500
154,400
Prepaid insurance
57,900
57,200
9,700
Note receivable - related party
—
159,500
—
Prepaid
    expenses and other current assets
134,700
22,000
181,200
Total current assets
3,510,600
5,694,200
1,548,500
Property and equipment, net
110,800
120,700
87,700
Intangible assets, net
116,500
60,200
88,400
Investment in Arcadian
—
195,900
—
Goodwill
1,386,800
—
1,386,800
Other assets
27,100
25,100
29,600
TOTAL ASSETS
$
5,151,800
$
6,096,100
$
3,141,000
LIABILITIES AND STOCKHOLDERS'
    EQUITY:
CURRENT LIABILITIES:
Accounts payable (including $30,350
    and $36,200 to related parties as of September 30, 2018, and 2017, respectively)
$
346,900
$
736,900
$
970,700
Accrued liabilities
268,900
55,200
204,700
Accrued compensation
175,400
466,000
244,900
Accrued compensation – related
    parties
209,300
204,600
322,800
Accrued interest and other
3,900
3,900
3,900
Deferred revenue
159,700
45,900
152,100
Current portion of note payable
—
31,500
—
Current
    portion of capital lease
1,300
1,300
1,400
Total current
    liabilities
$
1,165,400
$
1,545,300
$
1,900,500
LONG-TERM LIABILITIES
Long-term borrowing, net
587,700
—
606,500
Accrued interest on long-term
    borrowing
110,100
—
120,500
Long term
    portion of capital lease
2,100
3,400
1,400
Total long-term
    liabilities
$
699,900
$
3,400
$
728,400
TOTAL LIABILITIES
$
1,865,300
$
1,548,700
$
2,628,900
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value;
    15,000,000 authorized; 1,500,000 shares of Series A Preferred Stock and 500,000 shares of Series A-1 authorized; 550,000 shares
    of Series A Preferred Stock and 500,000 shares of Series A-1 issued and outstanding as of September 30, 2018; No shares of
    Preferred stock issued and outstanding as of September 30, 2017; aggregate liquidation preference of $1,968,750 as of September
    30, 2018
1,100
—
1,100
Common stock, $0.001 par value; 250,000,000 shares
    and 500,000,000 shares authorized as of September 30, 2018 and September 30, 2017 respectively, 7,407,254 and 4,299,311 shares
    issued and outstanding as of September 30, 2018 and September 30, 2017, respectively;
7,400
4,300
8,900
Additional paid-in capital
89,257,700
80,189,700
91,895,900
Accumulated
    deficit
$
(85,245,300
)
$
(75,646,600
)
$
(89,881,400
)
Total controlling
    interests
4,020,900
4,547,400
2,024,500
Non-controlling
    interest
(734,400
)
—
(1,512,400
Total stockholders'
    equity
$
3,286,500
$
4,547,400
$
512,100
TOTAL LIABILITIES
    AND STOCKHOLDERS' EQUITY
$
5,151,800
$
6,096,100
$
3,141,000
38
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The disclosure
in this section describes the financial condition and results of operation of the business of MYnd, which was transferred to Telemynd,
Inc. in the Spin-Off. You should read the following discussion in conjunction with the audited combined financial statements and
the corresponding notes, included elsewhere in this Registration Statement. This Management's Discussion and Analysis of
Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking
statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those
made, projected or implied in the forward-looking statements. Please see the sections titled "Risk Factors" and "Cautionary
Statement Concerning Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated
with these statements.
In contemplation
of the merger with Emmaus, substantially all the assets and all the liabilities of  MYnd, except for an aggregate of $250,000  
of liabilities for were contributed to us. Accordingly, our business and financial position is essentially the business and financial
position of  MYnd, except for those liabilities.
In addition, our
capital structure is similar to, but not identical to the capital structure of MYnd.  Following the spin-off, the holders
of our common stock prior to the merger received one share of Telemynd for each share of MYnd held by them as of the record date. 
In addition, the outstanding shares of preferred stock of MYnd were exchanged for shares of preferred stock on substantially the
same economic terms as the outstanding preferred stock of Mynd.  While the outstanding options and warrants of Mynd did not
become options and warrants of Telemynd, Telemynd has an Equity Plan and has granted certain options. See "Executive and
Director Compensation".  In addition, Telemynd reserved 6,269,673 shares of its common stock for issuance upon exercise
of certain MYnd warrants (subject to adjustment upon the potential reverse stock split described under "Recent Development--Reverse
Stock Split
").
MYnd will make additional cash payments to Telemynd, not to exceed $2,500,000 in the aggregate, from
all cash received by MYnd as a result of the exercise of any warrants or stock options of MYnd that were in effect prior to the
Spin-off, to the extent that the proceeds from such warrant and option exercises exceeds $500,000, and less all such proceeds,
if any, theretofore transferred or paid by MYnd to Telemynd pursuant to the Separation Agreement after the Spin-off.
Accordingly, substantial
financial and other information about the business and operations of MYnd are included in this prospectus.  Readers evaluating
the relevance of such information to Telemynd should take into account both the many ways in which MYnd's financial position,
operations, capital structure and management are substantially identical to those of Telemynd, as well as the ways in which they
differ as described above.
Overview
Telemynd, Inc. ("we,"
"us," "our," or the "Company"), is a predictive analytics company that has developed a decision
support tool to help physicians reduce trial and error treatment in mental health and provide more personalized care to patients.
We employ a clinically validated scalable technology platform to support personalized care for mental health patients. We utilize
our patented machine learning, artificial intelligence, data analytics platform for the delivery of telebehavioral health services
and its PEER predictive analytics product offering. On November 13, 2017, we acquired Arcadian, which manages the delivery of
telepsychiatry and telebehavioral health services through a nationwide network of licensed and credentialed psychiatrists, psychologists
and master's-level therapists. We are commercializing its PEER predictive analytics tool to help physicians reduce trial
and error treatment in mental health. MYnd's patented, clinically validated technology platform ("PEER Online")
utilizes complex algorithms to analyze electroencephalograms ("EEGs") to generate Psychiatric EEG Evaluation Registry
("PEER") Reports to predict individual responses to a range of medications prescribed for the treatment of behavioral
disorders including depression, anxiety, bipolar disorder, PTSD and other non-psychotic disorders. The discussion of the financial
results in this Section relate to the historical financial results of
MYnd
for the periods indicated, which results are
attributable to the Business of
MYnd
transferred to us in the Spin-Off.
Recent Developments
Merger Agreement
On January 4, 2019,
MYnd entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among it, its wholly owned subsidiary,
Athena Merger Subsidiary, Inc., a Delaware corporation ("Merger Sub"), and Emmaus Life Sciences, Inc., a Delaware
corporation ("Emmaus"). Under the terms of the Merger Agreement, Merger Sub merged with and into Emmaus with Emmaus
surviving the merger and becoming a wholly-owned subsidiary of MYnd (the "Merger"). Subject to the terms of the Merger
Agreement, at the effective time of the Merger, Emmaus stockholders received a number of newly issued shares of MYnd common stock
determined using the exchange ratio described below in exchange for their shares of Emmaus stock. Following the Merger, stockholders
of Emmaus became MYnd's majority owners.
39
Spin-Off
Prior to the closing
of the Merger, MYnd transferred all of its businesses, assets and liabilities not assumed by Emmaus to us, pursuant to the terms
of a Separation and Distribution Agreement entered into on January 4, 2019 by MYnd and MYnd Analytics, Inc., a California corporation,
which was assigned by Mynd-CA to Telemynd on March 27, 2019 pursuant to the terms of an Amended and Restated Separation Agreement
(as amended, the "Separation Agreement"). MYnd distributed all shares of Telemynd held by it to its stockholders of
record on July 15, 2019 on July 16, 2019. No options of Telemynd were issued in the Spin-off. Options issued by MYnd prior to the
Spin-off remained outstanding and unaffected. The Separation and Distribution was consummated on July 16, 2019. In addition, Telemynd
reserved 6,269,673 shares of its common stock for issuance upon exercise of certain MYnd warrants (subject to adjustment upon the
potential reverse stock split described under "
Recent Development--Reverse Stock Split
")..
. MYnd will make
additional cash payments to Telemynd, not to exceed $2,500,000 in the aggregate, from all cash received by MYnd as a result of
the exercise of any warrants or stock options of MYnd that were in effect prior to the Spin-off, to the extent that the proceeds
from such warrant and option exercises exceeds $500,000, and less all such proceeds, if any, theretofore transferred or paid by
MYnd to Telemynd pursuant to the Separation Agreement after the Spin-off.
Going Concern Uncertainty
Our consolidated financial
statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"), which contemplate
continuation of us as a going concern. The Company has a limited operating history and its operations are subject to certain problems,
expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation of a business with
a limited operating history. These risks include the ability to obtain adequate financing on a timely basis, if at all, the failure
to develop or supply technology or services to meet the demands of the marketplace, the failure to attract and retain qualified
personnel, competition within the industry, government regulation and the general strength of regional and national economies.
Our recurring net
losses and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. During
the six months ended March 31, 2019, weincurred a net loss of approximately $5.4 million and used approximately $3.8 million of
net cash in operating activities. As of March 31, 2019, our accumulated deficit was approximately $89.9 million. In connection
with these consolidated financial statements, management evaluated whether there were conditions and events, considered in the
aggregate, that raised substantial doubt about our ability to meet its obligations as they become due for the next twelve months
from the date of issuance of these financial statements. Management assessed that there were such conditions and events, including
a history of recurring operating losses, and negative cash flows from operating activities.
Our recurring net
losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. During
the twelve months ended September 30, 2018, we incurred a net loss of 10.3 million and used $9.0 million of net cash in operating
activities. As of September 30, 2018, our accumulated deficit was $85.2 million. In connection with the consolidated financial
statements, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial
doubt about our ability to meet its obligations as they become due for the next twelve months from the date of issuance of the
financial statements. Management assessed that there were such conditions and events, including a history of recurring operating
losses, and negative cash flows from operating activities.
If we raise additional
funds by issuing additional equity or convertible debt securities, the fully diluted ownership percentages of existing stockholders
will be reduced. In addition, any equity or debt securities that we would issue may have rights, preferences or privileges senior
to those of the holders of its common stock.
To date, we have financed
its cash requirements primarily from equity financings. We will need to raise funds immediately to continue its operations and
increase demand for its services. Until it can generate sufficient revenues to meet its cash requirements, which we may never
do, we must continue to finance future cash needs primarily through public or private equity offerings, debt financings or strategic
collaborations. Our liquidity and capital requirements depend on several factors, including the rate of market acceptance of our
services, our future profitability, the rate of growth of our business and other factors described elsewhere in this registration
statement. We continue to explore additional sources of capital, but there is substantial doubt as to whether any financing arrangement
will be available in amounts and on terms acceptable to us to permit it to continue operations. The consolidated financial statements
do not include any adjustments that might be necessary if we are unable to continue as a going concern.
40
Financial Operations Overview
Revenues
Our neurometric services
revenues are derived from the sales of PEER Reports and services of Electroencephalographs (EEG) and Quantitative Electroencephalographs
(qEEG). Physicians and Customers are generally billed upon delivery of a PEER Report. The customer's insurance is billed
for EEG and qEEG services. We also derives revenue from its subsidiary Arcadian Services who manages the delivery of telepsychiatry
and telebehavioral health services which are delivered directly to patients.
Cost of Revenues
Cost of revenues are
for services and represent the cost of direct labor, the costs associated with external processing, analysis and consulting services
necessary to generate the revenues.
Research and Product Development
Research and product
development expenses are associated with our neurometric and telepsychiatry services and primarily represent costs incurred to
design and conduct clinical studies, to recruit patients into the studies, to add data to our database, to improve analytical
techniques and advance application of the methodology. We charge all research and development expenses to operations as they are
incurred.
Sales and Marketing
For our neurometric
and telepsychiatry services, our selling and marketing expenses consist primarily of personnel, media, support and travel costs
to inform user organizations and consumers of our products and services. Additional marketing expenses are the costs of advertising,
educating physicians, laboratory personnel, other healthcare professionals regarding our products and services.
General and Administrative
Our general and administrative
expenses consist primarily of personnel, occupancy, legal, audit, consulting and administrative support costs.
Critical Accounting Policies and Significant
Judgments and Estimates
This management's
discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires management
to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent
assets and liabilities at the date of the financial statements, as well as revenues and expenses during the reporting periods.
We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other
factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ
materially from those estimates under different assumptions or conditions.
Our significant accounting
policies are described in Note 2 to our Consolidated Financial Statements included elsewhere in this report. We believe the following
critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated
financial statements.
41
Revenue Recognition
Revenues for our Neurometric
Service product are recognized when a PEER Report is delivered to a Client-Physician. Revenues for our Telepsychiatry services
are recognized in the month the services are delivered by the physician.
Stock-based Compensation Expense
Stock-based compensation
expense, which is a non-cash charge, results from stock option grants and restricted share awards. Compensation for option is
measured at the grant date based on the calculated fair value of the award. We recognize stock-based compensation expense on a
straight-line basis over the vesting period of the underlying option. The amount of stock-based compensation expense expected
to be amortized in future periods may decrease if unvested options are subsequently cancelled or may increase if future option
grants are made.
Long-Lived Assets and Intangible Assets
Property and equipment
and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the
assets may not be recoverable. If we determine that the carrying value of the asset is not recoverable, a permanent impairment
charge is recorded for the amount by which the carrying value of the long-lived or intangible asset exceeds its fair value. Intangible
assets with finite lives are amortized on a straight-line basis over their useful lives of ten years.
Costs for software
developed for internal use are accounted for through the capitalization of those costs incurred in connection with developing
or obtaining internal-use software. Capitalized costs for internal-use software are included in intangible assets in the consolidated
balance sheet. Capitalized software development costs are amortized over three years. Costs incurred during the preliminary project
along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product
offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable
judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility
and estimated economic life. We will begin amortizing the software over its estimated economic life once it has been placed into
service.
Derivative accounting for convertible
debt and warrants
We evaluate all of
its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For
derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its
fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements
of operations. For stock-based derivative financial instruments, we use a weighted average Black-Scholes option pricing model
to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash
settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of September 30, 2018,
we had no financial instruments that contain embedded derivative features.
Results of Operations for Three Months Ended March 31, 2019
and 2018
MYnd Analytics is
focused on research and the commercialization of its PEER Reports through its Neurometric Services, as well as providing telehealth
service through scheduling and videoconferencing which is accessed through a secure portal.
The following table presents consolidated
statement of operations data for each of the periods:
Revenues
Three months
    ended
March 31,
2019
2018
Change
Neurometric services
$
44,800
$
79,800
$
(35,000
)
Telepsychiatry services
415,300
380,100
35,200
Total Revenues
$
460,100
$
459,900
$
200
42
Our neurometric services
revenues decreased by $35,000, or approximately 44%, during the three months ended March 31, 2019. This decrease was primarily
due to decreased sales of PEER reports during the period. Our telepsychiatry revenues increased by $35,200, or approximately 9.3%
during the three months ended March 31, 2019 which was primarily due to our allocation of additional resources to the Arcadian
platform during the 2019 period.
Cost of Revenues
Three months
    ended
March 31,
2019
2018
Change
Neurometric services
$
5,100
$
69,700
$
(64,600
)
Telepsychiatry services
291,200
228,600
62,600
Cost of Revenues
$
296,300
$
298,300
$
(2,000
)
Cost of revenues increased
during the three months ended March 31, 2019, primarily due to decreased cost of PEER, reports, offset by increased telepsychiatry
service and labor costs. Our cost of revenues for neurometric services represents approximately 11% and 23%, respectively, of
neurometric services revenues for the three months ended March 31, 2019 and 2018, respectively. The cost for neurometric
services fluctuates as we pay fees to third party providers for EEG services as a cost for its Peer reports. In most cases, fees
for PEER reports are billed to patients' insurance carriers and we do not recognize as revenues until they are ultimately
collected. Historically, we have experienced a low collection rate while most claims are collected in excess of ninety days from
billing. Therefore, there will be timing differences between payment of services (cost of revenues) and receipt of payment (revenues)
which will not reflect evenly in our Statement of Operations.
Research expenses
Three months
    ended
March 31,
2019
2018
Change
Services Research Expenses
$
60,800
$
73,400
$
(12,600
)
Research expenses
consist of consulting fees, travel expenses, conference fees, and other miscellaneous costs listed as following:
Three months
    ended
March 31,
2019
2018
Change
(1)
Consulting fees
58,500
69,800
(11,300
)
(2)
Other miscellaneous costs
2,300
3,600
(1,300
)
Total Research Expenses
$
60,800
$
73,400
$
(12,600
)
(1)
Consulting costs decreased by $11,300 for the three months ended
    March 31, 2019 and 2018, primarily due to decreased consulting services during the period.
(2)
Other miscellaneous costs for the three months ended March 31,
    2019 and 2018 were relatively unchanged.
43
Product Development
Three months
    ended
March 31,
2019
2018
Change
Product Development Expenses
$
237,300
$
342,200
$
(104,900
)
Product development
expenses consist of payroll costs, (including stock-based compensation), consulting fees, system development costs, conference
fee, travel expenses, and miscellaneous costs which were as follows:
Three months
    ended
March 31,
2019
2018
Change
(1)
Salaries and benefit costs
$
152,600
$
140,700
$
11,900
(2)
Consulting fees
45,700
139,200
(93,500
)
(3)
System development costs
28,400
46,800
(18,400
)
(4)
Conference & travel
2,700
3,700
(1,000
)
(5)
Other miscellaneous costs
7,900
11,800
(3,900
)
Total Product Development Expenses
$
237,300
$
342,200
$
(104,900
)
(1)
Salaries
                                         and benefits increased by $11,900 for the three months ended March 31, 2019 and 2018,
                                         primarily due to increased stock based compensation of $19,000;
(2)
Consulting
                                         fees decreased by $93,500 for the three months ended March 31, 2019, primarily due to
                                         services in relation to the upgrade of our cloud based sales platform and for a data
                                         science project to improve our algorithms for the production of an enhanced PEER report
                                         during the three months ended March 31, 2018;
(3)
System
                                         development and maintenance costs decreased by $18,400 for the three months ended March
                                         31, 2019, primarily due to no system development cost incurred during the current period;
(4)
Conference
                                         and travel costs for the three months ended March 31, 2019 and 2018, were relatively
                                         unchanged;
(5)
Other
                                         miscellaneous costs decreased by $3,900 for the three months ended March 31, 2019, primarily
                                         due to decreased dues subscriptions ;
Sales and marketing
Three months
    ended
March 31,
2019
2018
Change
Sales and Marketing Expenses
$
199,400
$
638,000
$
(438,600
)
Sales and marketing
expenses consist of payroll and benefit costs, (including stock-based compensation), advertising and marketing expenses, consulting
fees, and miscellaneous expenses.
Three months
    ended
March 31,
2019
2018
Change
(1)
Salaries and benefit costs
$
139,200
$
342,300
$
(203,100
)
(2)
Consulting fees
31,200
95,100
(63,900
)
(3)
Advertising and marketing costs
4,800
97,500
(92,700
)
(4)
Conferences and travel costs
6,100
30,100
(24,000
)
(5)
Other miscellaneous costs
18,100
73,000
(54,900
)
Total Sales and marketing expenses
$
199,400
$
638,000
$
(438,600
)
(1)
Salaries and benefits for the three months ended March 31, 2019
    decreased by $203,100 from the 2018 period; primarily due to decreased salaries and commission of marketing and sales staff;
44
(2)
Consulting fees for the three months ended March 31, 2019 decreased
    by $63,900, primarily due to the decrease in the number of marketing consultants;
(3)
Advertising and marketing expenses for the three months ended
    March 31, 2019 decreased by $92,700 primarily due to decreased social media advertising;
(4)
Conference and travel expenditures for the three months ended
    March 31, 2019 decreased by $24,000, primarily due to decreased travel expense for the sales staff; and
(5)
Miscellaneous expenditures for the three months ended March
    31, 2019 decreased by $54,900, primarily due to decreased rent and office expenses.
General and administrative
Three months
    ended
March 31,
2019
2018
Change
General and administrative expenses
$
2,350,300
$
1,740,900
$
609,400
General and administrative
expenses consist of payroll and benefit costs, (including stock based compensation), legal fees, patent costs, other professional
and consulting fees, general administrative and occupancy costs, dues and subscriptions, conference fees, and travel expenses.
Three months
    ended
March 31,
2019
2018
Change
(1)
Salaries and benefit costs
$
998,200
$
728,000
$
270,200
(2)
Consulting fees
336,600
364,200
(27,600
)
(3)
Legal fees
484,600
44,300
440,300
(4)
Other professional fees
108,000
246,200
(138,200
)
(5)
Patent costs
44,800
45,800
(1,000
)
(6)
Marketing and investor relations costs
143,700
46,500
97,200
(7)
Conference and travel costs
36,200
26,100
10,100
(8)
Dues & subscriptions fees
52,600
49,700
2,900
(9)
Computer & web services
20,100
40,000
(19,900
)
(10)
General admin and occupancy costs
125,500
150,100
(24,600
)
Total General and administrative expenses
$
2,350,300
$
1,740,900
$
609,400
(1)
Salaries and benefit expenses increased by $270,200 for the
    three months ended March 31, 2019 period. This increase was primarily due to increased bonus accrual of $153,000, and increased
    telepsychiatry management and staff cost due to acquisition of Arcadian on November 13, 2017;
(2)
Consulting fees decreased by $27,600 for the three months ended
    March 31, 2019 period, primarily related to decreased operational and consulting fees;
(3)
Legal fees increased by $440,300 for the three months ended
    March 31, 2019 period, primarily due to additional legal fees related to the negotiation and execution of the merger agreement
    and other financing activities;
(4)
Other professional fees decreased by $138,200 for the three
    months ended March 31, 2019 period, primarily due to higher audit fees in relation to the acquisition of Arcadian in fiscal
    2018;
(5)
Patent costs decreased by $1,000 primarily due to less volume
    of patent and trademark applications and maintenance costs;
45
(6)
Marketing and investor relations costs increased by $97,200
    for the three months ended March 31, 2019 as we engaged public relation firms in relation to capital raise and support of
    Nasdaq matters;
(7)
Conference and travel costs increased by $10,100 for the three
    months ended March 31, 2019, primarily due to more conferences attended and travel made during the period;
(8)
Dues and subscription costs increased by $2,900 for the three
    months ended March 31, 2019, primarily due to additional licenses for our Salesforce platform;
(9)
Computer and web services decreased by $19,900 for the three
    months ended March 31, 2019, primarily due to decreased services related to our telepsychiatry business and cloud hosting
    fees; and
(10)
General administrative and occupancy costs decreased by $24,600
    for the three months ended March 31, 2019 period, primarily due to decreased Delaware franchise tax at $98,000, offset by
    increased bad debt write off of $14,000, and increased expenses from acquisition of Arcadian in fiscal 2018.
Other income (expense)
Three months
    ended
March 31,
2019
2018
Change
Interest expense
$
(23,400
)
$
(24,800
)
$
1,400
Interest expense for the three months ended
March 31, 2019 and 2018 were relatively unchanged;
Net Loss
Three months
    ended
March 31,
2019
2018
Change
Loss, net
$
(2,709,700
)
$
(2,659,600
)
$
(50,100
)
Our net loss was $2.7
million for the three months ended March 31, 2019, compared to a net loss of approximately $2.7 million for the same period ended
March 31, 2018, primarily due to increased revenue from the acquisition of our telepsychiatry business on November 13, 2018, offset
by increased costs and expenses respectively.
Results of Operations for Six Months Ended March 31, 2019
and 2018
MYnd Analytics is
focused on research and the commercialization of its PEER Reports through its Neurometric Services, as well as providing telehealth
service through scheduling and videoconferencing which is accessed through a secure portal.
The following table presents consolidated
statement of operations data for each of the periods:
Revenues
Six months
    ended
March 31,
2019
2018
Change
Neurometric services
$
124,000
$
133,100
$
(9,100
)
Telepsychiatry services
723,200
448,800
274,400
Total Revenues
$
847,200
$
581,900
$
265,300
Our neurometric services
revenues decreased by $9,100, or approximately 7% for the six months ended March 31, 2019 The decrease was primarily due
to decreased sales of PEER reports during the period. Our telepsychiatry revenues increased by $274,400, or approximately 61%
during the six months ended March 31, 2019. Our increase in telepsychiatry services revenues is due to a combination of factors.
First, we only began operating our Arcadian business during the three months ended December 31, 2017. As a result, we only recognized
revenues from the Arcadian business (i.e. telepsychiatry services revenues) for a portion of the six-months ended March 31, 2018.
In addition, we provided additional resources to the Arcadian platform during 2019, which improved its results of operations.
46
Cost of Revenues
Six months
    ended
March 31,
2019
2018
Change
Neurometric services
$
11,500
$
118,800
$
(107,300
)
Telepsychiatry services
509,900
264,400
245,500
Cost of Revenues
$
521,400
$
383,200
$
138,200
Overall, the cost
of revenues increased during the six months ended March 31, 2019, primarily due to fees paid to service providers as a result
of increased sales for telepsychiatry services. Our cost of revenues for neurometric services represents approximately 2% and
31%, respectively, of neurometric services revenues for the six months ended March 31, 2019 and 2018, respectively. The cost
for neurometric services fluctuates as we pay fees to third party providers for EEG services as a cost for its Peer reports. In
most cases Peers are billed to patients' insurance carriers for which we do not recognize as revenues until they are ultimately
collected. Historically we have experienced a low collection rate while most claims are collected in excess of ninety days from
billing. Therefore, there will be timing differences between payment of services (cost of revenues) and receipt of payment (revenues)
which will not reflect evenly in our Statement of Operations.
Research expenses
Six months
    ended
March 31,
2019
2018
Change
Services Research Expenses
$
141,600
$
154,900
$
(13,300
)
Research expenses consist of consulting
fees, travel expenses, conference fees, and other miscellaneous costs listed as following:
Six months
    ended
March 31,
2019
2018
Change
(1)
Consulting fees
137,000
148,800
(11,800
)
(2)
Other miscellaneous costs
4,600
6,100
(1,500
)
Total Research Expenses
$
141,600
$
154,900
$
(13,300
)
(1)
Consulting
                                         costs decreased by $11,800 for the six months ended March 31, 2019 and 2018, primarily
                                         due to decreased consulting services during the period;
(2)
Other
                                         miscellaneous costs for the six months ended March 31, 2019 and 2018 were relatively
                                         unchanged.
47
Product Development
Six months
    ended
March 31,
2019
2018
Change
Product Development Expenses
$
474,300
$
611,400
$
(137,100
)
Product development
expenses consist of payroll costs, (including stock-based compensation), consulting fees, system development costs, conference
fee, travel expenses, and miscellaneous costs which were as follows:
Six months
    ended
March 31,
2019
2018
Change
(1)
Salaries and benefit costs
$
295,100
$
265,100
$
30,000
(2)
Consulting fees
97,300
211,700
(114,400
)
(3)
System development costs
63,500
82,800
(19,300
)
(4)
Conference & travel
4,100
14,600
(10,500
)
(5)
Other miscellaneous costs
14,300
37,200
(22,900
)
Total Product Development Expenses
$
474,300
$
611,400
$
(137,100
)
(1)
Salaries
                                         and benefits increased by $30,000 for the six months ended March 31, 2019, primarily
                                         due to increased stock-based compensation $33,000 recognized during the six months of
                                         2019;
(2)
Consulting
                                         fees decreased by $114,400 for the six months ended March 31, 2019, primarily due to
                                         services in relation to the upgrade of our cloud based sales platform and for a data
                                         science project to improve our algorithms for the production of an enhanced PEER report
                                         during the six months ended March 31, 2018.
(3)
System
                                         development and maintenance costs decreased by $19,300 for the six months ended March
                                         31, 2019, primarily due to no system development cost incurred during the current period;
(4)
Conference
                                         and travel costs decreased by $10,500 during the six months March 31, 2019 and 2018,
                                         primarily due to decreased conference attendance and travel expenses;
(5)
Other
                                         miscellaneous costs decreased by $22,900 for the six months ended March 31, 2019, primarily
                                         due to decreased computer services and dues subscriptions during the period;
Sales and marketing
Six months
    ended
March 31,
2019
2018
Change
Sales and Marketing Expenses
$
351,300
$
1,305,200
$
(953,900
)
Sales and marketing
expenses consist of payroll and benefit costs, (including stock-based compensation), advertising and marketing expenses, consulting
fees, and miscellaneous expenses.
Six months
    ended
March 31,
2019
2018
Change
(1)
Salaries and benefit costs
$
230,600
$
589,400
$
(358,800
)
(2)
Consulting fees
58,100
270,000
(211,900
)
(3)
Advertising and marketing costs
4,800
248,600
(243,800
)
(4)
Conferences and travel costs
9,600
55,700
(46,100
)
(5)
Other miscellaneous costs
48,200
141,500
(93,300
)
Total Sales and marketing expenses
$
351,300
$
1,305,200
$
(953,900
)
(1)
Salaries
                                         and benefits for the six months ended March 31, 2019 decreased by $358,800 from the 2018
                                         period; primarily due to decreased salaries and commission of marketing and sales staff;
(2)
Consulting
                                         fees for the six months ended March 31, 2019 decreased by $211,900, primarily due to
                                         the decrease in the number of marketing consultants;
48
(3)
Advertising
                                         and marketing expenses for the six months ended March 31, 2019 decreased by $243,800
                                         primarily due to decreased social media advertising;
(4)
Conference
                                         and travel expenditures for the six months ended March 31, 2019 decreased by $46,100,
                                         primarily due to decreased travel expense for the sales staff; and
(5)
Miscellaneous
                                         expenditures for the six months ended March 31, 2019 decreased by $93,300, primarily
                                         due to decreased rent and office expenses.
General and administrative
Six months
    ended
March 31,
2019
2018
Change
General and administrative expenses
$
4,724,100
$
3,515,800
$
1,208,300
General and administrative
expenses consist of payroll and benefit costs, (including stock based compensation), legal fees, patent costs, other professional
and consulting fees, general administrative and occupancy costs, dues and subscriptions, conference fees, and travel expenses.
Six months
    ended
March 31,
2019
2018
Change
(1)
Salaries and benefit costs
$
1,974,900
$
1,430,800
$
544,100
(2)
Transaction fees
—
438,600
(438,600
)
(2)
Consulting fees
729,800
562,300
167,500
(3)
Legal fees
926,000
78,900
847,100
(4)
Other professional fees
206,700
367,300
(160,600
)
(5)
Patent costs
46,200
55,300
(9,100
)
(6)
Marketing and investor relations costs
229,700
119,000
110,700
(7)
Conference and travel costs
63,600
82,800
(19,200
)
(8)
Dues & subscriptions fees
109,000
95,000
14,000
(9)
Computer & web services
68,400
40,000
28,400
(10)
General admin and occupancy costs
369,800
245,800
124,000
Total General and administrative expenses
$
4,724,100
$
3,515,800
$
1,208,300
(1)
Salaries
                                         and benefit expenses increased by $544,100 for the six months ended March 31, 2019
                                         period, primarily due to increased bonus accrual of $163,000, and increased telepsychiatry
                                         management and staff cost due to acquisition of Arcadian on November 13, 2017;
(2)
Transaction
                                         cost was decreased by $438,600 primarily due to telepsychiatry management and staff cost
                                         related from acquisition of Arcadian on November 13, 2017;
(3)
Consulting
                                         fees increased by $167,500 for the six months ended March 31, 2019 period, primarily
                                         related to increased operational and consulting fees, as well as increased recruitment
                                         fees;
(4)
Legal
                                         fees increased by $847,100 for the six months ended March 31, 2019 period, primarily
                                         due to additional legal fees related to the negotiation and execution of the merger agreement
                                         and other financing activities;
49
(5)
Other
                                         professional fees decreased by $160,600 for the six months ended March 31, 2019 period,
                                         primarily due to higher audit fees in relation to the acquisition of Arcadian in fiscal
                                         2018;
(6)
Patent
                                         costs decreased by $9,100 primarily due to less volume of patent and trademark applications
                                         and maintenance costs;
(7)
Marketing
                                         and investor relations costs increased by $110,700 for the six months ended March 31,
                                         2019 as we engaged public relation firms in relation to capital raising and/or support
                                         of Nasdaq matters;
(8)
Conference
                                         and travel costs decreased by $19,200 for the six months ended March 31, 2019, primarily
                                         due to less conferences attended and less travel made during the period;
(9)
Dues
                                         and subscription costs increased by $14,000 for the six months ended March 31, 2019,
                                         primarily due to additional licenses for our Salesforce platform;
(10)
Computer
                                         and web services increased by $28,400 for the six months ended March 31, 2019, primarily
                                         due to increased services related to our telepsychiatry business and cloud hosting fees;
                                         and
(11)
General
                                         administrative and occupancy costs increased by $124,000 for the six months ended March
                                         31, 2019 period. The increase was primarily due to increased bad debt write off at $12,700,
                                         and increased expenses related to our telepsychiatry business, offset by decreased in
                                         Delaware franchise tax in the amount of $43,000.
Other income (expense)
Six months
    ended
March 31,
2019
2018
Change
Interest expense
$
(46,300
)
$
(38,500
)
$
(7,800
)
Interest expense decreased by $7,800 for
the six months ended March 31, 2019, primarily due to interest expense in relation to the acquisition of Arcadian on November
13, 2017.
Net Loss
Six months
    ended
March 31,
2019
2018
Change
Loss, net
$
(5,414,100
)
$
(5,429,000
)
$
14,900
Our net loss was $14,900
less for the six months ended March 31, 2019, compared to the same period ended March 31, 2018, primarily due to increased revenue
from the acquisition of our telepsychiatry business on November 13, 2018, offset by increased costs and expenses respectively.
Financial Operations Overview for the
Fiscal Year Ended September 30, 2018 and 2017
We are focused on
research and the commercialization of its PEER Reports through our Neurometric Services, as well as providing telehealth service
through scheduling and videoconferencing which is accessed through a secure portal.
50
The following table
presents consolidated statement of operations data for each of the periods:
Revenues
Fiscal Year
    ended
September 30,
2018
2017
Change
Neurometric Services
$
263,700
$
128,500
$
135,200
Telepsychiatry Services
1,051,800
—
1,051,800
Total Revenues
$
1,315,500
$
128,500
$
1,187,000
Our neurometric services
revenues increased to $263,700 for the year ended September 30, 2018 from $128,500 for the year ended September 30, 2017. Revenues
for neurometric services increased as a result of additional Peer reports ordered by doctors which resulted in increased payments
from medical payors and patients. The increased number of Peer reports was the result of devotion of additional resources during
the year ended September 30, 2018 for marketing relating to Peer report services. Our telepsychiatry revenues increased to $1,051,800
for the year ended September 30, 2018 from no such revenues for the year ended September 30, 2017. We had no telepsychiatry services
revenue during the year ended September 30, 2017 because we only began operating our telepsychiatry services business (i.e. our
Arcadian business) during the three months ended December 31, 2017.
Cost of Revenues
Fiscal Year
    ended
September 30,
2018
2017
Change
Neurometric Services
$
131,200
$
53,500
$
77,700
Telepsychiatry Services
696,200
—
696,200
Total Cost of Revenues
$
827,400
$
53,500
$
773,900
Our cost of revenues
for neurometic services represents approximately 50% of neurometic service revenues for the year ended September 30, 2018. The
cost for neurometric services fluctuates as we pay pays fees to third party providers for EEG services as a cost for its Peer
reports. In most cases, fees for Peer reports are billed to patients' insurance carriers for which we do does not recognize
as revenues until they are ultimately collected. Historically, we have experienced a low collection rate while most claims are
collected in excess of 90 days from billing. Therefore, there will be timing differences between payment of services (cost of
revenues) and receipt of payment (revenues) which will not reflect evenly in our Statement of Operations resulting in the significant
fluctuations in revenues for the periods presented. Cost of revenues increased during the fiscal year ended September 30, 2018,
primarily due to our acquisition of Arcadian Services and labor cost to service our telepsychiatry revenue.
Research Expenses
Research expenses
consist of payroll expenses, (including stock-based compensation), consulting fees, travel expenses, conference fees, and other
miscellaneous costs listed as following:
Fiscal Year
    ended
September 30,
2018
2017
Change
Research Expenses
$
231,500
$
123,900
$
107,600
51
Research expenses
consist of payroll costs (including stock-based compensation), consulting fees, travel, conference and other miscellaneous costs
which were as follows:
Fiscal Year
    ended
September 30,
Key Expense Categories
2018
2017
Change
(1)
Salaries and benefit costs
$
(49,000
)
$
11,000
$
(60,000
)
(2)
Consulting fees
269,800
103,500
166,300
(3)
Other miscellaneous costs
10,700
9,400
1,300
Total Research Expenses
$
231,500
$
123,900
$
107,600
Comparing the fiscal
year ended September 30, 2018, with the corresponding period in 2017:
(1)
Salary and benefit costs decreased for the fiscal year ended
    September 30, 2018, primarily due to the reversal of our bonus accrual and the department not meeting specified metrics;
(2)
Consulting costs increased for the fiscal year ended September
    30, 2018, primarily consisting of costs under a consulting agreement with our Medical Officer to assist with the training
    of clinical trial investigators allowing them to participate in trials, and consult with other physicians in the use and interpretation
    of our PEER Report; additionally, on November 13, 2017 we entered into two consulting agreements for medical directors to
    provide consulting services for the telepsychiatry business;
(3)
Other miscellaneous costs for the 2018 and 2017 periods were
    substantially unchanged.
Product Development Expenses
Fiscal Year
    ended
September 30,
2018
2017
Change
Product Development Expenses
$
1,146,000
$
1,237,200
$
(91,200
)
Product Development
expenses consist of payroll costs (including stock-based compensation), consulting fees, system development costs, conference,
travel and miscellaneous costs which were as follows:
Fiscal Year
    ended
September 30,
Key Expense Categories
2018
2017
Change
(1)
Salaries and benefit costs
$
534,700
$
803,800
$
(269,100
)
(2)
Consulting fees
400,200
203,000
197,200
(3)
System development costs
133,300
146,700
(13,400
)
(4)
Conference and travel
21,100
32,500
(11,400
)
(5)
Other miscellaneous costs
56,700
51,200
5,500
Total Product Development Expenses
$
1,146,000
$
1,237,200
$
(91,200
)
Comparing
the fiscal year ended September 30, 2018, with the corresponding period in 2017:
(1)
Salaries and benefits decreased by $269,100 for the fiscal year
    ended September 30, 2018, primarily due to a reduction in stock-based compensation recognized and a reduction in the number
    of staff members during the fiscal year of 2018;
(2)
Consulting fees increased by $197,200 for the fiscal year ended
    September 30, 2018, primarily due to the cost of services in relation to the upgrade of our cloud based sales platform and
    for a data science project to improve our algorithms for the production of an enhanced PEER report;
(3)
System development and maintenance costs decreased by $13,400
    for the fiscal year ended September 30, 2018, primarily due to decreased time spent by our contract system programmers for
    work on quality management initiatives, research support, transitioning to file sharing, and media management;
(4)
Conference and travel costs decreased by $11,400 for the fiscal
    year ended September 30, 2018, primarily due to a reduction in costs relating to attendance at conferences and related travel
    made during the period of 2018; and
(5)
Other miscellaneous costs increased slightly by $5,500 for the
    fiscal year ended September 30, 2018.
52
Sales and Marketing Expenses
Fiscal Year
    ended
September 30,
2018
2017
Change
Sales and Marketing Expenses
$
1,617,900
$
1,226,700
$
391,200
Sales and marketing
expenses consist of payroll and benefit costs, advertising and marketing expenses, consulting fees, and miscellaneous expenses
as further set forth below.
Fiscal Year
    ended
September 30,
Key Expense Categories
2018
2017
Change
(1)
Salaries and benefit costs
$
795,700
$
543,200
$
252,500
(2)
Consulting fees
298,900
422,700
(123,800
)
(3)
Advertising and marketing costs
248,600
152,000
96,600
(4)
Conferences and travel costs
64,900
19,800
45,100
(5)
Other miscellaneous costs
209,800
89,000
120,800
Total Sales and Marketing Expenses
$
1,617,900
$
1,226,700
$
391,200
Comparing the fiscal year ended September
30, 2018, with the same period in 2017:
(1)
Salaries and benefits for the fiscal year ended September 30,
    2018 increased by $252,500 from the 2017 period, primarily due to increased sales and marketing expenses, offset by a decreased
    in stock-based compensation expenses;
(2)
Consulting fees for the fiscal year ended September 30, 2018
    decreased by $123,800, primarily due to decreases in the number of marketing consultants.
(3)
Advertising and marketing expenses for the fiscal year ended
    September 30, 2018 increased by $96,600, primarily due to social media advertising;
(4)
Conference and travel expenditures for the fiscal year ended
    September 30, 2018 increased by $45,100, primarily due to increased travel expenses for the sales staff; and
(5)
Miscellaneous expenditures for the fiscal year ended September
    30, 2018 increased by $120,800, primarily due to us opening PEER Centers in New York and Washington DC. Additional costs were
    incurred for rent and office supplies.
General and administrative Expenses
Fiscal Year
    ended
September 30,
2018
2017
Change
General and Administrative Expenses
$
7,737,600
$
4,590,800
$
3,146,800
53
General and administrative
expenses consist of payroll and benefit costs, (including stock based compensation), legal fees, patent costs, other professional
and consulting fees, general administrative and occupancy costs, dues and subscriptions, conference fees, and travel expenses
as set forth below.
Fiscal Year
    ended
September 30,
Key Expense Categories
2018
2017
Change
(1)
Salaries and benefit costs
$
3,198,700
$
2,451,800
$
746,900
(2)
Transaction fees
438,600
—
438,600
(3)
Consulting fees
1,178,800
590,100
588,700
(4)
Legal fees
437,800
408,800
29,000
(5)
Other professional fees
502,700
210,800
291,900
(6)
Patent costs
105,700
114,500
(8,800
)
(7)
Marketing and investor relations costs
374,300
173,000
201,300
(8)
Conference and travel costs
131,800
172,300
(40,500
)
(9)
Dues & subscriptions fees
218,300
115,300
103,000
(10)
Computer & web services
157,100
—
157,100
(11)
General admin and occupancy costs
993,800
354,200
639,600
Total General and Administrative Expenses
$
7,737,600
$
4,590,800
$
3,146,800
(1)
Salaries and benefit expenses for the fiscal year ended September
    30, 2018 increased by $746,900 from the 2017 period. This increase was primarily due to an increase of $680,000 in salaries
    which were related to the acquisition of Arcadian telepsychiatry management and staff; increased payroll, bonus and related
    benefits of $142,000 related to our historical operations, offset by a decreased in stock-based compensation of $50,000;
(2)
Transaction fees in relation to Arcadian acquisition were $438,600
    for the fiscal year ended September 30, 2018;
(3)
Consulting fees for the fiscal year ended September 30, 2018
    increased by $588,700, primarily due to increased directors' fees, and related operational and consulting fees;
(4)
Legal fees for the fiscal year ended September 30, 2018 increased
    by $29,000, primarily due to increased legal fees associated with fund raising activities and general legal costs;
(5)
Other professional fees for the fiscal year ended September
    30, 2018 increased by $291,900, primarily due to increased audit fees of $218,000, and other consulting fees;
(6)
Patent costs for the fiscal year ended September 30, 2018 decreased
    by $8,800 primarily due to less volume of patent and trademark applications and maintenance costs;
(7)
Marketing and investor relations costs for the fiscal year ended
    September 30, 2018 increased by $201,300 as we engaged a public relations firms to enhance our presence in the media;
(8)
Conference and travel costs decreased by $40,500 for the fiscal
    year ended September 30, 2018, primarily due to a reduction in the number of conferences attended and less travel;
(9)
Dues and subscription costs for the fiscal year ended September
    30, 2018 increased by $103,000 for additional licenses for our Salesforce platform;
(10)
Computer and web services increased by $157,100 for the fiscal
    year ended September 30, 2018 consisting of CTO services related to our telepsychiatry business and cloud hosting fees; and
(11)
General administrative and occupancy costs increased by $639,600
    for the fiscal year ended September 30, 2018. The increase was primarily due to increased Delaware franchise taxes at $236,000,
    increased depreciation of fixed assets and amortization of intangible asset purchased.
54
Other income (expense)
Fiscal Year
    ended
September 30,
2018
2017
Change
Interest (expense), net
$
(86,300
)
$
(6,600
)
$
(79,700
)
Interest expense for
the fiscal year ended September 30, 2018 increased by $79,700, primarily due to the interest expense associated with debt acquired
with the Arcadian acquisition.
Net Loss
Fiscal Year
    ended
September 30,
2018
2017
Change
Net Loss
$
(10,333,100
)
$
(7,112,800
)
$
(3,220,300
)
Our net loss was $10.3
million for the fiscal year ended September 30, 2018, compared to the approximately $7.1 million for the same period ended September
30, 2017, primarily due to above mentioned increased salaries, payroll, and cost related to the acquisition of Arcadian telepsychiatry.
Liquidity and Capital Resources
Our condensed consolidated
financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"),
which contemplate continuation of us as a going concern.
Since our inception,
we have never been profitable and we have generated significant losses. We have a limited operating history and its operations
are subject to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered
in the operation of a business with a limited operating history. These risks include the ability to obtain adequate financing
on a timely basis, if at all, the failure to develop or supply technology or services to meet the demands of the marketplace,
the failure to attract and retain qualified personnel, competition within the industry, government regulation and the general
strength of regional and national economies.
As of March 31, 2019,
we had an accumulated deficit of approximately $89.8 million compared to our accumulated deficit as of September 30, 2018, of
approximately $85.2 million. Our management expects that with our proposed clinical trials, sales and marketing and general and
administrative costs, our expenditures will continue to grow and, as a result, we will need to generate significant product revenues
to achieve profitability. We continue to explore additional sources of capital but there is substantial doubt as to whether any
financing arrangement will be available in amounts and on terms acceptable to us to permit it to continue operations.
As of March 31, 2019,
we had $1.2 million in cash and cash equivalents and a working capital deficit of approximately $352,500. This is compared to
our cash position of $3.3 million as of September 30, 2018 and working capital of $2.3 million.
As of September 30,
2018, we had an accumulated deficit of approximately $85.2 million compared to our accumulated deficit as of September 30, 2017,
of approximately $75.6 million. Our management expects that with our proposed clinical trials, sales and marketing and general
and administrative costs, our expenditures will continue to grow and, as a result, we will need to generate significant product
revenues to achieve profitability. We continue to explore additional sources of capital but there is substantial doubt as to whether
any financing arrangement will be available in amounts and on terms acceptable to us to permit it to continue operations.
55
As September 30, 2018,
we had $3.3 million in cash and cash equivalents and a working capital surplus of approximately $2.3 million. This is compared
to our cash position of $5.4 million in cash and cash equivalents as of September 30, 2017, and a capital surplus of $4.1 million.
The decrease in cash and cash equivalents was primarily due to less proceeds from financing activities and increased cash used
in operations in 2018 compared to 2017.
We have been funded
through multiple rounds of private placements, primarily from members of our Board or our affiliates.
Working Capital, Going Concern, Operating
Capital and Capital Expenditure Requirements
As of March 31, 2019,
we had approximately $1.2 million in cash and cash equivalents, compared to $3.3 million of cash and cash equivalents as of September
30, 2018. We had approximately $3.3 million in cash and cash equivalents as of September 30, 2018, compared to $5.4 million of
cash and cash equivalents as of September 30, 2017.
Our recurring net
losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. Management's
assessment of substantial doubt of going concern is based on current estimates and assumptions regarding our programs and business
needs. Actual working capital requirements could differ materially from the above working capital projection. We may explore strategic
opportunities including partnerships, licensing and acquisitions of other entities, assets or products. If we are unable to continue
to identify sources of capital, we may be required to limit our activities, to terminate programs or terminate operations temporarily
or permanently.
Our ability to successfully
raise sufficient funds through the sale of equity securities, when needed, is subject to many risks and uncertainties and even
if we are successful, future equity issuances would result in dilution to our existing stockholders.
The amount of capital
we will need to conduct our operations and the time at which we will require such capital may vary significantly depending upon
a number of factors, such as:
●
the amount and timing of costs we incur in connection with our
    clinical trials and product development activities, including enhancements to our PEER Online database and costs we incur
    to further validate the efficacy of our technology;
●
whether we can receive sufficient business revenues from Arcadian
    to adequately cover our costs;
●
the amount and timing of costs we incur in connection with the
    expansion of our commercial operations, including our sales and marketing efforts;
●
whether we incur additional consulting and legal fees in our
    efforts in conducting Non-Significant Risk trials within FDA requirements, which will enable us to obtain a 510(k) clearance
    from the FDA;
●
if we expand our business by acquiring or investing in complimentary
    businesses; and
●
our continuing access to funding from Aspire Capital.
Sources of Liquidity
Since our inception,
substantially all of our operations have been financed from equity and debt financings.
The Aspire Capital Equity Lines of
Credit
On December 6, 2016,
MYnd, entered into a common stock purchase agreement (the "First Purchase Agreement") with Aspire Capital which provided
that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase
up to an aggregate of $10.0 million of shares of our common stock over the 30-month term of the First Purchase Agreement.
From April 3, 2018
to May 7, 2018 MYnd sold 1,180,000 shares of common stock to Aspire Capital under the First Purchase Agreement and received total
proceeds of $2.4 million.
56
On May 15, 2018, MYnd
entered into the Second Purchase Agreement with Aspire Capital which provides that, upon the terms and subject to the conditions
and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of MYnd's
common stock over the 30-month term of the Second Purchase Agreement.
From May 15, 2018
to March 31, 2019, MYnd sold 2,200,100 shares of common stock to Aspire Capital under the Second Purchase Agreement and received
total proceeds of approximately $3.7 million.
Public Offering
In July 2017, MYnd
completed an underwritten public offering of its Common Stock and warrants, raising gross proceeds of approximately $8.79 million.
In the offering, MYnd sold 1,675,000 shares of Common Stock and accompanying warrants to purchase up to 1,675,000 shares of Common
Stock (the "Warrants"), at a combined public offering price of $5.25 per share and accompanying Warrant, for a total
offering size of $8,793,750. The Warrants were immediately exercisable for one share of Common Stock at an exercise price of $5.25
per share, and will expire five years after the issuance date. In connection with the offering, MYnd granted the representative
of the underwriters a 45-day option to purchase up to 251,250 additional shares of Common Stock and/or Warrants to cover over-allotments,
if any. On August 24, 2017 the underwriters exercised their option and purchased 213,800 common stock warrants for $0.01 per warrant.
The warrants were immediately exercisable for one share of common stock at an exercise price of $5.25 per share, subject to adjustments,
and will expire five years after the issuance date.
Private Placement of Series A Preferred Stock with Warrant
On March 29, 2018,
MYnd sold an aggregate of 1,050,000 units for $2.00 per Unit, each consisting of one share of newly-designated Series A Preferred
Stock, par value $0.001 per share and one Warrant to purchase one share of Common Stock, par value $0.001 per share for $2.34
per share in a private placement to three of our affiliates, for gross proceeds of $2.1 million. The private placement closed
on March 29, 2018. The closing price per share of the Common Stock on the Nasdaq on March 29, 2018 was $1.19 per share. All of
these shares of preferred stock were exchange for shares of Telemynd preferred stock on July 16, 2019.
On April 30, 2018,
MYnd entered into the First Amended Subscription Agreement for Shares of Series A Preferred Stock and Common Stock Purchase Warrants
(the "Amended Agreement") with John Pappajohn and Mary Pappajohn (each an "Investor", and collectively
the "Investors"), which provides for the issuance, as of the date of the Original Agreement, of an aggregate of 500,000
Shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share ("Series A-1 Convertible Preferred Stock"),
in lieu of the same number of Shares of Series A Convertible Preferred Stock that we had originally agreed to issue to the Investors.
The Series A-1 Convertible Preferred Stock will have substantially the same rights and preferences as the Shares of Series A Preferred
Stock, except that the Shares of Series A-1 Convertible Preferred Stock are non-voting and cannot be converted into Common Stock
by an Investor if, as a result of such conversion, such Investor would beneficially own greater than 19.9% of the outstanding
shares of Common Stock. Additionally, the Warrants were amended to provide that they would not be exercisable by an Investor if,
following any such exercise, such Investor would beneficially own greater than 19.9% of the outstanding shares of Common Stock.
Shares of MYnd's
Series A and Series A-1 Preferred Stock will be entitled to receive cash dividends at the rate of five percent (5.00%) of the
Original Series A and Series A-1 Issue Price per annum, payable out of funds legally available therefor. Dividends will only payable
when and if declared or upon certain events.
The Warrants will
be exercisable for a period of five years for an exercise price of $2.34. The exercise price is subject to adjustment for stock
splits, stock dividends, combinations or similar events. The Warrants may not be exercised on a cashless basis.
On September 21, 2018,
MYnd entered into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman,
as well as John Pappajohn, and Peter Unanue, each a director of us, and entities affiliated with Michal Votruba, a member of the
Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private
placement (the "September Private Placement") of an aggregate of 459,458 units for $1.85 per unit, with each unit
consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00
per share.
57
Cash Flows
Net cash used in operating
activities was $3.8 million for the six months ended Mach 31, 2019, compared to $4.7 million for the same period in 2018. The
approximate $0.9 million net decrease in cash used for operations was primarily due to an increase in accounts payable of $0.4
million and increased stock based compensation of $0.2 million. Net cash used in operating activities was approximately $9.0 million
for the fiscal year ended September 30, 2018, compared to approximately $4.8 million for the same period in 2017. The $4.2 million
net increase in cash used for operations was primarily due to: consulting fees increased by approximately $1.1 million, salaries
increased by $1.0 million, marketing and investor relations increased by $0.3 million, and transaction cost of $0.4 million, the
remaining relates to other operating costs.
During the six months
ended March 31, 2019, we used $9,100 in investing activities related to the purchase of furniture and equipment. During the six
months ended March 31, 2018, we used $361,800 in investing activities, including $55,200 for the purchase of office equipment
and $306,600 related to the acquisition of Arcadian. During the fiscal year ended September 30, 2018, we spent approximately $0.4
million in investing activities, including $55,200 for the purchase of office equipment and $306,600 related to the acquisition
of Arcadian Services. During the fiscal year ended September 30, 2017, we spent $479,500 in investing activities, including $127,900
in the purchase of computer equipment and expenditures on our Patient Reported Outcomes application and $190,000 investment in
Arcadian.
Net Cash provided
by financing activities for the six months ended March 31, 2019 was $1.8 million, consisting of $1.8 million of gross proceeds
received from Aspire purchase, offset by $17,500 repayments on notes payable and $600 repayments on a capital lease.Net Cash used
in financing activities for the six months ended March 31, 2018 was approximately $2.1 million, consisting of $2.1 million in
gross proceeds received from Aspire purchase offset by $34,100 repayments on notes payable and $600 repayments on a capital lease.
Net Cash provided by financing activities for the fiscal year September 30, 2018 were approximately $7.2 million, consisting of
$2.0 million of net proceeds received from private placements of equity from three accredited investors, who are affiliated us;
$0.9 million proceeds received from issuance of common stock; and $4.3 million gross proceeds from issuance purchase notices to
Aspire Capital. Net Cash provided by financing activities for the fiscal year ended September 30, 2017 were approximately $10.4
million. In July 2017, we completed an underwritten public offering of its Common Stock and warrants, raising net proceeds of
approximately $7.5 million; $3.0 million cash proceeds received from private placements of equity from 13 accredited investors,
of which five are affiliated with us.
Off-Balance Sheet Arrangements
We have no off-balance
sheet arrangements or financing activities with special purpose entities.
Contractual Obligations and Commercial
Commitments
Lease Commitments
We are is a party
to four leases, three are for office space located in Mission Viejo and Laguna Hills, California which house the corporate headquarters
and neurometric business. The total lease payments per month are $10,666. The two leases for office space located in Mission Viejo
and Laguna Hills have been renewed through February 28, 2020 and the total lease payments per month will be $8,411 beginning on
February 1, 2019. As of November 30, 2018 the third lease for a small annex office in Laguna Hills has been terminated.
We have one three-year
lease for office space in Tysons, Virginia. As of June 1, 2018, we have sublet the premises under the Tysons, Virginia office
space lease. The master lease period expires on September 30, 2020. The rent through September 30, 2018 was prorated at $2,508;
for the subsequent 12 months the rent is prorated at $2,576; and for the remaining twelve months the rent will be prorated at
$2,647. The subtenant is paying approximately seventy seven percent of the master lease payment for the fourteen months ending
on September 30, 2019 and has an option to renew for the final lease year.
58
On April 30, 2018
we terminated its month to month tenancy for the premises located at 420 Lexington Avenue, Suite 300, New York, New York 10170.
Arcadian Services'
business has office space located in Fort Washington, PA. The lease period expires on February 28, 2020. The rent is currently
$3,312 and will increase to $3,410 on March 1, 2019 for the remainder of the lease.
Contractual Obligations
The following table
summarizes our commitments to settle contractual obligations as of September 30, 2018:
Contractual Obligations
2019
2020
2021
Total
Debt obligations (1)
$
—
$
—
$
810,100
$
810,100
Operating lease obligations (2)
114,000
48,800
—
$
162,800
$
114,000
$
48,800
$
810,100
$
972,900
(1)
Debt obligations include the principal amount of the note payable
    owed to Ben Franklin Technology Partners of Southeastern Pennsylvania, as well as interest payments to be made under the note
    payable. The note payable matures in 2021. Please see Note 4 of the notes to our consolidated financial statements for more
    information of the terms of the notes payable. The debt obligation balance excludes $112,300 of debt discount on our balance
    sheet and shown net of our debt obligations.
(2)
Operating leases include total future minimum rent payments
    under non-cancelable operating lease agreements as described in note 11 of our consolidated financial statements included
    in this Information Statement
59
OUR
BUSINESS
We were incorporated
in Delaware on March 18, 2019 as Telemynd, Inc. for the purpose of holding MYnd's business, assets and liabilities in connection
with the Separation and Distribution described above. Prior to the contribution of the business, assets and liabilities of MYnd,
which occurred as a result of the Separation on July 16, 2019, we had no operations. The description of our business below describes
the Business, which is the Business transferred to us in the Spin-off.
Introduction
We are a technology
enabled behavioral health company. Our solutions are designed to improve access to care through telemedicine and assist clinicians
with the development of personalized treatment plans through a proprietary, artificial intelligence platform with a goal of improving
behavioral health outcomes while decreasing overall healthcare costs. We employ a clinically validated scalable technology platform
to support personalized care for mental health patients. We utilize our patented machine learning, artificial intelligence, data
analytics platform for the delivery of telebehavioral health services and its PEER predictive analytics product offering. Our
subsidiary Arcadian Telepsychiatry Services LLC ("Arcadian") manages the delivery of telepsychiatry and telebehavioral
health services through a nationwide network of licensed and credentialed psychiatrists, psychologists and master's-level
therapists. We are commercializing its PEER predictive analytics tool to help physicians reduce trial and error treatment in mental
health. Our patented, clinically validated technology platform ("PEER Online") utilizes complex algorithms to analyze
electroencephalograms ("EEGs") to generate Psychiatric EEG Evaluation Registry ("PEER") Reports to predict
individual responses to a range of medications prescribed for the treatment of behavioral disorders including depression, anxiety,
bipolar disorder, post-traumatic stress disorder ("PTSD") and other non-psychotic disorders. The PEER Online solutions
database consists of over 11,000 patient EEGs and 40,000 correlated outcomes. Machine Learning techniques are used to create an
algorithm that can predict what behavioral health medications will work best for a patient based on their own EEG scan. Clinical
studies have shown that patients under the care of a clinicians using the PEER Report have a 144% improvement in depression scores
and a 75% reduction in suicidality.
3
We entered into an
equity purchase agreement (the "Agreement") with Arcadian and Mr. Robert Plotkin, pursuant to which we acquired all
of the issued and outstanding membership interests (the "Equity Interests") of Arcadian from Mr. Plotkin. In consideration
for the Equity Interests, we entered into an employment agreement with Mr. Plotkin, pursuant to which we will continue to employ
Mr. Plotkin as the CEO of Arcadian for an annual salary of $215,000, and granted him 35,000 options to purchase MYnd common stock.
In addition, the we entered into the Guaranty (as described below).
In connection with
the Agreement, Arcadian entered into the Side Agreement and Seed Capital Amendment with Ben Franklin Technology Partners of Southeastern
Pennsylvania ("BFTP"), pursuant to which BFTP waived its rights (a) to an equity conversion contemplated by the existing
funding agreements (as they may be amended, supplemented or otherwise modified from time to time, the "BFTP Loan Documents")
between Arcadian and BFTP, under which BFTP has loaned Arcadian, as of August 31, 2017, the aggregate principal amount of $700,000
and upon which an aggregate of $85,496 of interest had then accrued (collectively, the "Loan Amount") and (b) to act
as an observer to Arcadian's board. Under the Side Agreement and Seed Capital Amendment, Arcadian acknowledged and reaffirmed
all of BFTP's claims, encumbrances granted by Arcadian to BFTP, and BFTP's other rights, interests and remedies pursuant
to the BFTP Loan Documents and otherwise. The effectiveness of the Side Agreement and Seed Capital Amendment are conditioned upon
(i) Arcadian making a one-time payment to BFTP of $175,000 as payment for the redemption and cancellation of two warrants to purchase
equity interests in Arcadian and (ii) our entering into a guaranty with respect to Arcadian's obligations (including the
Loan Amount) to BFTP under the BFTP Loan Documents, as amended by the Side Agreement and Seed Capital Amendment. Upon satisfaction
of the foregoing conditions, the aforementioned BFTP rights will be waived and the BFTP warrants will be cancelled. The Side Agreement
and Seed Capital Amendment further provide that following the closing of the transactions contemplated by the Agreement, we will
be obligated to complete all financial reporting to BFTP required under the BFTP Loan Documents. These agreements were assigned
to Telemynd in connection with the Spin-off.
3
Iosifescu
                                         DV, Neborsky RJ, Valuck RJ. The use of the psychiatric electroencephalography evaluation
                                         registry (PEER) to personalize pharmacotherapy. Neuropsychiatr Dis Treat 2016;12:2131–2142.
60
In addition, we executed
an absolute, unconditional, irrevocable and continuing guaranty and suretyship (the "Guaranty") in favor of BFTP,
pursuant to which it unconditionally guaranteed the prompt payment and performance, when due, of all loans (including the Loan
Amount), advances, debts, liabilities, obligations, covenants and duties owing by Arcadian to BFTP under the BFTP Loan Documents.
Under the Guaranty, if Arcadian defaults under any obligation under the BFTP Loan Documents, we will be required to pay the amount
then due to BFTP. The Guaranty contains representations, warranties, covenants, conditions, events of default and indemnities
that are customary for agreements of this type. The guaranty was assigned to Telemynd in connection with the Spin-off.
The Market for Telebehavioral Health
and Predictive Healthcare
Telebehavioral health
services involve the use of video conferencing equipment to conduct real time mental health consultations between a clinician
and patient including individuals living in underserved areas or those with limited access to services. Over eighty-nine million
Americans live in federally designated Mental Health Professional Shortage Areas. Two-thirds of US primary care physicians report
not having adequate access to psychiatric care for their patients. Arcadian facilitates on-demand telebehavioral health services
to expedite assessment, diagnosis, treatment, and disposition of patients in a wide variety of settings.
Analysts have identified
predictive healthcare as one of the fastest-growing markets in healthcare, particularly, healthcare startups using advanced machine
learning algorithms for medical imaging and diagnostics, remote patient monitoring, and risk prediction. The global healthcare
analytics market is expected to reach USD $42.8 billion by 2024, and the global market for behavioral and mental health software,
and services is expected to grow at 11.8% CAGR and reach $4.3 billion by 2025, according to reports by Grand View Research, Inc.
Efforts to reduce the spiraling healthcare costs are facilitating the usage of healthcare analytics. Additionally, the benefits
of healthcare analytics include the improvement of patient access to customized care, the furthering of transparent operations
to enable better public oversight, and innovation in patient care delivery and services.
The Challenge and the Opportunity
The American Psychiatric
Association estimates that between $26 billion and $48 billion could be saved annually through effective integration of medical
and behavioral health services. Traditional in-person patient encounters for behavioral health are hampered by relative shortages
of behavioral health clinicians, especially in areas of the country where there is the greatest need. Arcadian's customers
are payers, health plans, Employee Assistance Programs ("EAPs"), and provider groups. There is a lack of clinical
resources available to the substantial number of people in the United States who are suffering from a mental health condition,
resulting in less than our current estimate of less than half of them receiving treatment. Patients fortunate enough to receive
treatment are estimated to experience a low remission rate, due to the 'trial and error' prescribing process to find
an effective drug treatment. With the benefit of the Telemynd technology platform, Arcadian is positioned to capitalize on the
need for behavioral health services, overcoming gaps in care access, while supporting healthcare organizations nationwide.
Psychotropic medications
have become the dominant treatment for mild to severe behavioral disorders with greater than 400% growth in the prescription of
antidepressant medications over the last two decades. However, recent research has emerged challenging the assumption of efficacy
of strategies for prescribing psychotropic medications for the treatment of mild to severe behavioral disorders, finding that
these medications often do not work or lose their efficacy over time.
Currently, due to
the lack of objective neurophysiological data available to physicians of brain function, physicians regularly make prescribing
decisions based on incomplete symptomatic factors. To address this unmet medical need, we offer our PEER Online technology to
analyze an individual's digital Quantitative EEG ("QEEG"), correlating the individual's QEEG features
with medication outcomes in our proprietary database of over 11,000 unique patients to predict the efficacy of psychotropic medications
by class and individual medication. The output of this analysis - the PEER Report - has been used as adjunctive information by
physicians for over a decade on patients suffering from behavioral disorders including depression, anxiety disorders, obsessive-compulsive
disorder ("OCD"), bipolar disorder, PTSD, addiction and eating disorders, including anorexia.
61
The Mental Health
Parity and Addiction Equity Act (MHPAEA) requires health plans to ensure parity between medical/surgical benefits and mental health/substance
use disorder (MH/SUD) benefits. Specifically, plans must offer parity in both numerical or "quantitative" financial
requirements or treatment limits (e.g., cost sharing and day or visit limits) and "non-quantitative" treatment limits.
This legislation drove a substantial increase in reimbursement transparency: plan administrators must now provide detailed criteria
for medical necessity determinations relating to MH/SUD, including prior authorization requirements, determinations that a treatment
is experimental, methods for reimbursing providers, step-therapy programs, and restrictions based on geographic location or facility
type.
Further, key conditions
of the 21st Century Cures Act have recently required the Departments of Labor, Treasury, and Health and Human Services to strengthen
their enforcement of the MHPAEA, requiring audits and enforcement actions for any health insurer or group health plan that has
violated MHPAEA at least five times.
Milliman Global Actuaries
recently released a report on mental health utilization from 2008-13, the period in which the initial Parity regulations were
implemented. For commercial health plans, outpatient visits increased by 19.5% for mental health care compared to only 2% for
medical-surgical treatments; professional services increased by 9.1% for mental health versus 3.1% for medical-surgical care.
In summary, the practical effect of these regulations is that mental health care visits have increased significantly, and we believe
that current procedures with existing reimbursement codes such as EEG will be increasingly reimbursed by payers.
Arcadian Telepsychiatry Services LLC
Arcadian Telepsychiatry
Services LLC, our wholly owned subsidiary, manages the delivery of telebehavioral health services through a multi-state network
of licensed and credentialed psychiatrists, psychologists and other behavioral health therapists ("Providers"). Although
many companies provide broad telehealth services within the U.S., only a few companies have a primary focus on telepsychiatry
and telebehavioral health. Arcadian's business model is unique, because it has access to a broad network of licensed behavioral
health professionals exclusively focused on telepsychiatry and telebehavioral health. These Providers collectively offer a full
suite of behavioral health and wellness services, including short-term (urgent), medium-term (rehabilitation) and long-term (management)
behavioral care.
Arcadian's telehealth
service delivery model is optimized to deliver behavioral health care anytime and anywhere, offering unprecedented access to behavioral
health services. All technology for scheduling and videoconferencing is accessible through a secure portal, creating a seamless
experience for the patient, referring physician, and Arcadian provider. The Providers' services include initial and follow-up
psychiatric evaluations and diagnoses, medication prescribing and monitoring, urgent on-call evaluations, forensic and legal evaluations,
individual and family counseling (
e.g
., grief, behavior problems, job loss) and drug and alcohol abuse rehabilitation counseling.
Arcadian also arranges for services through Employee Assistance Programs (teleEAP) that many employers include as part of their
employee benefits packages.
Arcadian contracts
for most of its Providers' services through contracts (each a "Service Agreement") with the Providers. Neither
we nor Arcadian has an ownership interest in any Provider, nor any employment relationships with any Provider. All Providers are
required to maintain proper state licensing, credentialing and malpractice insurance. In a typical Service Agreement, Arcadian
provides certain management and administrative services in support of the Providers' non-medical functions and the Providers
provide telebehavioral health services.
Arcadian and its Providers
currently have contracts with 32 insurance companies, human capital management corporations (
i.e
., EAP benefits), outpatient
diagnostic and treatment centers, drug and alcohol rehabilitation centers (outpatient and residential), community behavioral health
clinics, treatment and rehabilitation centers, corrections facilities, and post-acute care centers. Arcadian is exploring expansion
opportunities by providing services to emergency departments, schools (K-12 and college) and large employers. Arcadian's
contracts span from Pennsylvania to California and North Dakota to Louisiana and Texas.
62
Commercial Strategy
We plan to drive adoption of
our technology and secure sustained profitability through the following plan:
1.
Continue integration of Arcadian's business into our
    technology platform to enable scalable growth and achieve incremental growth through the integration of our offering with
    the Arcadian network.
We are continuing the integration of Arcadian functions that support scheduling, clinical management
    and billing operations with our operating platform to ensure operational efficiency and scalable growth. By doing so, we believe
    we will have a unique platform which both improves access to and efficacy of behavioral health treatments.
2.
Commercialize PEER through direct marketing to payers, providers
    and patients.
Telemynd has implemented a multi-prong strategy to increase patient and provider awareness of the PEER platform
    involving direct sales, social media and call centers.
3.
Continue to pursue military and veterans' engagements in
                                    the US and globally.
Due
                                    to the high visibility of mental and emotional disorders in their organizations, the military
                                    and veterans' administration possess the ability to sustain demand and need for intervention.
                                    We intend to continue the pursue relationships with the military of the United States, Canada
                                    and other countries, to improve the condition of those serving and veterans. We have submitted
                                    an application for a federal supply schedule solicitation with the Department of Veterans
                                    Affairs which, if granted, would provide us with a five year General Services Administrative
                                    contract with all agencies of the Federal government. We have commenced a clinical trial with
                                    the Canadian Armed Forces, which will provide both NATO and Health Canada (Canada's
                                    single payer system) experience with our PEER technology. We were awarded a GSA contract on
                                    January 31, 2019 for five years which is being assigned to our MYnd California subsidiary.
                                    It will also increase the size of our data base, and potentially result in PEER being adopted
                                    as a standard of care by Health Canada.
4.
Identify and implement strategic opportunities to capitalize
    on our technology platform.
We anticipate that recognition of the utility of our technology platform will follow with
    increasing market adoption. Accordingly, we will pursue strategic partnerships, licensing and distribution opportunities with
    global enterprise customers who provide electronic medical records, prescribing tools, and other large scale clinical management
    functions. In addition, we may evaluate and pursue other strategic opportunities that could prove to be beneficial to the
    our business.
PEER Report and PEER Online Database
A PEER Report is a
personalized report for a patient which is generated after the patient receives an EEG. An EEG is a painless, non-invasive test
that records the brain's electrical activity and provides a basis for comparison against others within the PEER database.
We utilize artificial intelligence, or AI, machine learning and data analytics in order to inform therapeutic regimens, thereby
improving patient outcomes and reducing healthcare costs. The PEER Reports use data from EEG tests, outcomes and machine learning
to identify endophenotypic markers of drug response. This big data approach has allowed us to generate a large clinical registry
and database of predictive algorithms from more than 11,000 unique patients with psychiatric or addictive problems and 40,000
clinical outcomes.
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The PEER Outcomes
Database consists of physician-provided assessments of the clinical long-term outcomes of patients and their associated medications.
The clinical outcomes of patients are recorded using an industry-standard outcome rating scale, the Clinical Global Impression-Improvement
scale ("CGI-I"). The CGI-I allows a clinician to rate how much the patient's illness has improved or worsened
relative to a baseline state. A patient's illness is compared to change over time and rated as: very much improved, much
improved, minimally improved, no change, minimally worse, much worse, or very much worse. The format of the data is standardized
and that standard is enforced at the time of capture by a software application. Outcome data is input into the database by the
treating physician or their office staff. Each physician has access to their patient data through the software tool that captures
the clinical outcome data.
We consider the information
contained in the PEER Online database to be a valuable trade secret and are diligent about protecting such information. The PEER
Online database is stored on a secure server to which only a limited number of employees have access.
Competitive Advantages of Our Technology
Platform
Our technologies utilize
what is believed to be the largest database of longitudinal patient outcomes, collected from our subscribing physicians and patients
over more than a decade. Because our data platform "learns", it supports physicians in personalizing treatment of
patients. PEER offers practical advantages to physicians and patients, including:
●
Scalable and Applicable to Other Services
- Our products
    are built on a secure, HIPAA-compliant Force.com platform which is inherently scalable, i.e. services can be ordered and delivered
    to any physician with a web browser. The platform is capable of distributing point-of-care data to physicians for new drugs,
    non-pharmacological treatments, and other findings that are timely and clinically important for clinicians.
●
Clinical utility
-
    PEER results are available same-day and provide objective, actionable data to support treating physicians.
●
Machine learning
- A core attribute of the PEER Registry
    approach is that it "learns", using machine learning algorithms to improve the accuracy of recommendations as
    outcomes are added to the database.
●
Higher Efficacy
- Findings presented at the Military
    Health Services Research Symposium in August 2016 included pooled results from all four randomized trials of PEER, with an
    average 47% improvement (mean change from baseline) for PEER-guided treatments, compared to only 16% average improvement in
    the standard of care group. In other words, physicians with PEER information in our study had three times higher medication
    efficacy than physicians treating as usual without the benefit of PEER.
●
Pharmacogenomics
- Currently, we believe that the most
    proven targets for pharmacogenomics are in the liver - a CYP450 drug metabolism - which apply to less than 15% of Americans.
    Conversely, PEER is based on functional brain activity and therefore, is more broadly applicable.
Clinical Results and Independent Validation
PEER has abundant
literature showing (1) it affects treatment management decisions, (2) the decisions result in 'strong' effects on
established measures of effectiveness (>3- fold more than what has been reported by FDA and Cochrane review groups on effects
of drugs without benefit of PEER), (3) improved quality of life scores, (4) safety comparable to existing treatment regimens,
(5) generalizability to many settings across many types of patients, and (6) substantial cost offsets.
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In the 2017 PEER Report
Dossier prepared by John Hornberger of Cedar Associates LLC and a Stanford Health Policy Adjunct Affiliate it is stated that "EEG
is a well-standardized clinical tool that has been used for decades. As such, the processes for ordering and performing EGG are
established and seamless. PEER represents the next logical enhancement, which is to link the automated, quantitative EEG findings
with phenotypes (in this case, with drug response in patients with TRD) using the world's largest clinical repository. The
four randomized trials met the essential criteria of showing that PEER increases response rates; because of the strength of randomization,
it leads to strong inference that the effect found in the studies were authentic, not due to a confounding factor. Also, the effect
was large enough that relatively modest sample were sufficient to demonstrate the effect was very unlikely (less than 1% risk)
of being due to random chance alone. In addition, more than 45 studies have shown the feasibility of a well-validated and useful
EEG-clinical repository platform to work across many settings and for many types of patients with depression. Due to the high
cost of non-response in depression, and the strong effect found in controlled, prospective trials of PEER, use of PEER at its
recommended list price represents a substantial cost-saving opportunity for health plans, especially those facing renewed efforts
by employers and government agencies to provide and document readily more affordable, value-based care."
Marketing and Sales
We will aggressively
pursue expansion of its Arcadian telebehavioral health and PEER Online solutions with payers and providers. We will grow within
their existing client base while also adding new customers.
Arcadian solutions will
be marketed and sold to managed care organizations, acute care hospitals, skilled nursing and other post-acute care facilities,
schools, prisons and employers that wish to offer telepsychiatry and teletherapy directly to their employees. We will continue
to build on their success in deploying a "virtual psychiatric office" within primary care environments.
The PEER Online solutions
will be marketed to managed care organizations, large provider groups and individual physicians. We will pursue programs such as
the Horizon Blue Cross Blue Shield pilot where PEER Online is being evaluated as a population health solution that can be effective
in the primary care environment.
We are uniquely positioned to offer both the Arcadian telebehavioral health and PEER Online as a solution
for primary care organizations. The services and technology can be bundled into a turnkey solution that can become the cornerstone
of a behavioral health program focused on assisting primary care providers with the behavioral health patients under their care.
Competition
While the telehealth
market is in an early stage of development, it is competitive, and we expect it to attract increased competition, which could
make it difficult for us to succeed. We currently face competition in the telehealth industry for our solution from a range of
companies, including specialized software and solution providers that offer similar solutions, often at substantially lower prices,
and that are continuing to develop additional products and becoming more sophisticated and effective. Competition from specialized
software and solution providers, health plans and other parties will result in continued pricing pressures, which are likely to
lead to price declines, which, in turn, could negatively impact our sales, profitability and market share.
Some of our competitors
may have greater name recognition, including Teladoc, MDLive, Doctor on Demand and American Well, longer operating histories and
significantly greater resources than we do. Further, our current or potential competitors may be acquired by third parties with
greater available resources. As a result, our competitors may be able to respond more quickly and effectively than we can to new
or changing opportunities, technologies, standards or customer requirements and may have the ability to initiate or withstand
substantial price competition. In addition, current and potential competitors have established, and may in the future establish,
cooperative relationships with vendors of complementary products, technologies or services to increase the availability of their
solutions in the marketplace. Accordingly, new competitors or alliances may emerge that have greater market share, a larger customer
base, more widely adopted proprietary technologies, greater marketing expertise, greater financial resources and larger sales
forces than we have, which could put us at a competitive disadvantage. Our competitors could also be better positioned to serve
certain segments of the telehealth market, which could create additional price pressure. In light of these factors, even if our
solution is more effective than those of our competitors, current or potential clients may accept competitive solutions in lieu
of purchasing our solution. If we are unable to successfully compete in the telehealth market, our business, financial condition
and results of operations could be materially adversely affected.
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Although we are not
aware of any company that offers a service directly comparable to PEER Online services, several companies having greater financial
and other resources than we have suggested that they may be pursuing similar strategies, including Assurerx, Genomind, Verily,
IBM Corporation and Google. All of these companies have reported developing either a genomic-based test strategy or other AI analysis
of the health metrics to aid treatment.
Intellectual Property
We have 20 enforceable
patents, of which five are in the U.S., at least one of which covers the process of using the data presented in our PEER Online
service. Our currently active U.S. patents will expire between November 2020 and April 2023 and cover QEEG (quantitative electrophysiology).
We have been issued patents in the following non U.S. countries and regions: Canada (four patents), Europe (three patents), Australia
(three patents), Mexico (two patents), Japan (two patents) and Israel (one patent). We also have additional patent applications
under examination for our technology in the U.S (three pending applications) and Canada (one pending application).
One US patent covers
internet transmission of neurometric information. This is a basic methods patent, patent number 8,239,013, covers remote or web-based
transmission of neurometric data.
During 2009 and 2011,
we were awarded additional process patents for use of PEER Online technology in drug discovery, including clinical trial and drug
efficacy studies. In addition, we successfully defended our patents by requesting reexamination of a patent issued to Aspect Medical
(acquired by Covidien, plc.), resulting in a reduction and narrowing of claims awarded under the previously issued Aspect Medical
patents.
We filed patent applications
in the U.S., Europeand Canada related to the Company's acquisition of patient responsivity data for Transcranial Magnetic
Stimulation ("TMS"). The European application has recently been allowed and Canadian application was issued. These
are the Company's first patents for a neurometric predictor of a non-drug therapy. The Company anticipates using this methodology
to help physicians better understand which patients may positively respond to TMS for treating depression. This portfolio is entitled
"Method for Assessing the Susceptibility of a Human Individual Suffering from a Psychiatric or Neurological Disorder to Neuromodulation
Treatment."
TMS is a non-invasive
outpatient procedure that uses magnetic fields to stimulate areas of the brain thought to control mood. TMS is sometimes used
as an alternative treatment for patients who have failed one or more antidepressants for the treatment of depression. While treatment
periods vary by patient, a typical treatment regimen generally involves 20 to 30 treatments over a four to six week period. TMS
responsivity data, which is based on QEEG, helps physicians learn how patients with similar EEG patterns responded to TMS, thereby
enabling them to more effectively guide patients most likely to benefit from this treatment and reduce expenditures on patients
for whom TMS is not likely to be an effective solution for their depression.
"rEEG",
"PEER Online" (web-based software application), "PEER Online" (web-based services), and "MYnd Analytics"
(word mark) are registered trademarks of us in the United States. We will continue to expand our brand names and our proprietary
trademarks worldwide as our operations expand.
Government Regulation
Arcadian
The healthcare industry,
including behavioral healthcare, is extensively regulated at both the state and federal levels. The laws and rules on the practice
of behavioral healthcare and telehealth continue to evolve, and we will devote significant resources to monitoring these developments.
As the applicable laws and rules change, Arcadian must conform its business processes from time to time to be in compliance with
these changes.
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Provider Licensing,
Corporate Practice Restrictions, Certification and Scope of Practice
The practice of health
care professions, including the provision of behavioral health services, is subject to various federal, state and local certification
and licensing laws, regulations and approvals, relating to, among other things, the adequacy of health care, the practice of medicine
and other health professions (including the provision of remote care and cross-coverage practice), equipment, personnel, operating
policies and procedures and the prerequisites for prescribing medication. In addition, the provision of health care services through
any kind of clinic, facility, storefront or other location open to the public is often subject to state clinic licensure laws
akin to those that health facilities like hospitals, surgery centers and urgent care clinics must obtain and maintain. We do not
operate or promote any physical place to obtain healthcare and therefore does not believe it is subject to any clinic licensure
requirements, but the application of some of these laws to us and telehealth is unclear and subject to differing interpretation.
Many states have enacted
laws and regulations specific to providing services to patients via telehealth. Such laws and regulations include a variety of
requirements relating to, among other things, informed consent, verification of the patient's identity, the establishment
of the patient-provider relationship, and standards of care for the practice of telehealth. . Behavioral health professionals
who provide professional services using telehealth modalities must, in most instances, hold a valid license to practice the applicable
health profession in the state in which the patient is located. In addition, certain states require a physician providing telepsychiatry
to be physically located in the same state as the patient. Arcadian requires each Provider to put in place procedures to ensure
that the Provider is in compliance with all applicable laws and regulations. Nevertheless, any failure to comply with these laws
and regulations could result in civil or criminal penalties against Arcadian.
Corporate Practice;
Fee-Splitting
Arcadian contracts
with Providers to help make their psychiatric, psychological and other behavioral health services available to customers. In addition,
Arcadian provides a wide range of services to Providers, and the Providers pay Arcadian for those services. These contractual
relationships are subject to various state laws, including those in New York, Texas and California, that prohibit professionals
from sharing a portion of their professional fees with nonprofessionals (
i.e
., fee-splitting) and prohibit the practice
of medicine or another health profession by lay entities or persons (
i.e
., corporate practice restrictions) and are intended
to prevent unlicensed persons from interfering with or influencing a professional's judgment.
State corporate practice
and fee-splitting laws vary from state to state and are not consistent among states. In addition, these requirements are subject
to broad powers of interpretation and enforcement by state regulators and the courts and may apply to Arcadian if a Provider is
licensed there. Accordingly, administrative and management services provided by Arcadian to the Providers, such as scheduling,
contracting, setting rates and the hiring and management of clinical personnel, may be considered an element of the practice of
a health profession under certain state corporate practice doctrines. Decisions and activities may be viewed by regulatory authorities
or other parties, including the Providers, as violating these fee-splitting and the corporate practice restrictions. An adverse
finding with respect to fee-splitting and corporate practice restrictions could lead to judicial or administrative action against
Arcadian or its Providers, civil or criminal penalties, receipt of cease and desist orders from state regulators, loss of Provider
licenses, or the need to revise Service Agreements all in ways that may interfere with Arcadian's business, cause other
materially adverse consequences and may cause a substantial disruption to Arcadian's business model.
Federal and State
Fraud and Abuse Laws
Federal and State
Anti-Kickback Statutes
We must comply with
the federal and state anti-kickback statutes. The federal Anti-Kickback Statute is broadly worded and prohibits the knowing and
willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a
person covered by Medicare, Medicaid or other federal governmental programs, (ii) the furnishing or arranging for the furnishing
of items or services reimbursable under Medicare, Medicaid or other federal governmental programs or (iii) the purchasing, leasing
or ordering or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under Medicare, Medicaid
or other federal governmental programs. Certain federal courts have held that the federal Anti-Kickback Statute can be violated
if "one purpose" of a payment is to induce referrals. In addition, a person or entity does not need to have actual
knowledge of this statute or specific intent to violate it to have committed a violation, making it easier for the government
to prove that a defendant had the requisite state of mind or "scienter" required for a violation. Moreover, the government
may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes
a false or fraudulent claim for purposes of the False Claims Act, as discussed below. Violations of the federal Anti-Kickback
Statute may result in exclusion from Medicare, Medicaid or other federal governmental programs as well as civil and criminal penalties,
including fines of $50,000 per violation and three times the amount of the unlawful remuneration. Imposition of any of these remedies
could have a material adverse effect on our business, financial condition and results of operations.
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State anti-kickback
statutes require compliance independent of the federal Anti-Kickback Statute. Some state anti-kickback statutes prohibit the same
conduct as the federal Anti-Kickback Statute, but may apply the prohibition broadly to all payor-reimbursed services, not just
those that are federally funded. Other state anti-kickback statutes are limited to Medicaid services, while still others apply
only to patient referrals and not to actions that involve "arranging or recommending" healthcare items or services.
Very few state anti-kickback statutes have the extensive safe harbors and regulatory guidance of the federal Anti-Kickback Statute,
making interpretation of the scope of the statutes more uncertain than the federal Anti-Kickback Statute. Like the federal Anti-Kickback
Statute, violations of most state anti-kickback laws are subject to criminal sanctions. Accordingly, we must analyze and ensure
that it complies with state anti-kickback statutes whenever it commences operations in a new state. Any violation of state anti-kickback
laws, therefore, could have a material adverse effect on our business, financial condition and results of operations.
Physician Self-Referral
Laws
There is a federal
physician self-referral prohibition, commonly known as the Stark Law, which prohibits a physician from referring Medicare patients
to an entity providing "designated health services" if the physician or a member of such physician's immediate
family has a "financial relationship" with the entity, unless an exception applies. We do not believe our operations,
including those of Arcadian, implicate the Stark Law, because neither we nor Arcadian nor the Providers acting pursuant to the
Services Agreements offer or provide any services that would be considered designated health services under the Stark Law. As
with the anti-kickback laws, however, physician self-referral prohibitions exist at the state level and, like the Stark Law, apply
civil penalties to violations of their terms. These state physician self-referral laws are often similar to the Stark Law, but
may apply to different services than the Stark Law and may have different exceptions. We dos not believe it is noncompliant with
any state physician self-referral laws, but these laws are often vague, subject to amendment and lacking in court precedent or
regulatory guidance. It is possible, therefore, that now or in the future we could be found to be out of compliance with one or
more state physician self-referral laws. Any such noncompliance could have a material adverse effect on our business, financial
condition and results of operations.
Federal and State
False Claims Statutes
Both federal and state
government agencies have continued civil and criminal enforcement efforts as part of numerous ongoing investigations of healthcare
companies and their executives and managers. Although there are a number of civil and criminal statutes that can be applied to
healthcare providers, a significant number of these investigations involve the federal False Claims Act. These investigations
can be initiated not only by the government, but also by a private party asserting direct knowledge of fraud. These "qui
tam" whistleblower lawsuits may be initiated against any person or entity alleging such person or entity has knowingly or
recklessly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or has
made a false statement or used a false record to get a claim approved. In addition, the improper retention of an overpayment for
60 days or more is also a basis for a False Claim Act action, even if the claim was originally submitted appropriately. Penalties
for False Claims Act violations include fines ranging from $5,500 to $11,000 for each false claim, plus up to three times the
amount of damages sustained by the federal government. A False Claims Act violation may provide the basis for exclusion from government-funded
healthcare programs.
In addition, some
states have laws similar to the False Claims Act. The scope of these laws and the interpretations of them vary from state to state
and are enforced by state courts and regulatory authorities, each with broad discretion. Some state false claims laws apply to
claims for health care or services submitted to any third-party payor, including commercial insurers, not just those reimbursed
by a government-funded healthcare program. A determination of liability under such state false claims laws could result in fines
and penalties and restrictions on our ability to operate in these jurisdictions and have a material adverse effect on our business,
financial condition and results of operations.
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Other Healthcare
Anti-Fraud Laws
The federal Health
Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical
Health Act, or HITECH, and their implementing regulations, collectively referred to as HIPAA, established several separate crimes
for making false or fraudulent claims to insurance companies and other governmental payors of healthcare services. Under HIPAA,
these two additional federal crimes are: "Healthcare Fraud" and "False Statements Relating to Healthcare Matters."
The Healthcare Fraud statute, 18 U.S.C. § 1347, prohibits knowingly and willfully executing or attempting to execute a scheme
or artifice to defraud
any
healthcare benefit program, including private payors, or obtaining by means of false or fraudulent
pretenses, representations or promises any of the money of the healthcare benefit program in connection with the delivery of,
or payment for, healthcare benefits, items or services. A violation of this statute may result in fines, imprisonment or exclusion
from government-sponsored healthcare programs. The False Statements Relating to Healthcare Matters statute, 18 U.S.C. §1035,
prohibits knowingly and willfully falsifying, concealing or covering up a material fact by any trick, scheme or device, making
any materially false, fictitious or fraudulent statement or representation, or making or using any materially false writing or
document knowing that it contains any materially false, fictitious, or fraudulent statement or entry, in connection with the delivery
of or payment for healthcare benefits, items or services. A violation of this statute may result in fines or imprisonment. This
statute could be used by the government to assert criminal liability if a healthcare provider knowingly fails to refund an overpayment.
These provisions target some of the same conduct in the submission of claims to private payors as the federal False Claims Act
covers in connection with governmental health programs.
In addition, the federal
Civil Monetary Penalties Law imposes civil administrative sanctions for, among other violations, inappropriate billing of services
to federally funded healthcare programs and employing or contracting with individuals or entities who are excluded from participation
in federally funded healthcare programs. Moreover, a person who offers or transfers to a Medicare or Medicaid beneficiary any
remuneration, including waivers of co-payments and deductible amounts (or any part thereof) that the person knows or should know
is likely to influence the beneficiary's selection of a particular provider, practitioner or supplier of Medicare or Medicaid
payable items or services may be liable for civil monetary penalties of up to $10,000 for each wrongful act. Moreover, in certain
cases, providers who routinely waive copayments and deductibles for Medicare and Medicaid beneficiaries can also be held liable
under the federal Anti-Kickback Statute and civil False Claims Act, which can impose additional penalties associated with the
wrongful act.
Any violation of these
other healthcare fraud laws could have a material adverse effect on our business, financial condition and results of operations.
State and Federal
Health Information Privacy and Security Laws
There are numerous
U.S. federal and state laws and regulations related to the privacy and security of personally identifiable information, or PII,
including health information. In particular, HIPAA establishes privacy and security standards that limit the use and disclosure
of protected health information, or PHI, and requires the implementation of administrative, physical, and technical safeguards
to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form.
Arcadian's Providers and some of its clients are all regulated as covered entities under HIPAA. Since the effective date
of the HIPAA Omnibus Final Rule on September 23, 2013, HIPAA's requirements are also directly applicable to the independent
contractors, agents and other "business associates" of covered entities that create, receive, maintain or transmit
PHI in connection with providing services to covered entities. Arcadian is a business associate under these requirements.
Violations of HIPAA
may result in civil and criminal penalties. The civil penalties range from $100 to $50,000 per violation, with a cap of $1.5 million
per year for violations of the same standard during the same calendar year. However, a single breach incident can result in violations
of multiple standards. HIPAA also contains a breach notification rule. Under the breach notification rule, covered entities must
notify affected individuals without unreasonable delay in the case of a breach of unsecured PHI, which may compromise the privacy,
security or integrity of the PHI. In addition, notification must be provided to the HHS and the local media in cases where a breach
affects more than 500 individuals. Breaches affecting fewer than 500 individuals must be reported to HHS on an annual basis. The
regulations also require business associates of covered entities to notify the covered entity of breaches by the business associate.
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State attorneys general
also have the right to prosecute HIPAA violations committed against residents of their states. Although HIPAA does not create
a private right of action that would allow individuals to sue in civil court for a HIPAA violation, its standards have been used
as the basis for the duty of care in state civil suits, such as those for negligence or recklessness in misusing personal information.
In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA covered entities and their business associates
for compliance. It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches
of unsecured PHI may receive a percentage of the Civil Monetary Penalty fine paid by the violator. In light of the HIPAA Omnibus
Final Rule, recent enforcement activity, and statements from HHS, we expect increased federal and state privacy and security enforcement
efforts.
Many states also have
laws that protect the privacy and security of sensitive and personal information, including health information. These laws may
be similar to or even more protective than HIPAA and other federal privacy laws. Where state laws are more protective than HIPAA,
Arcadian must comply with the state laws, in addition to HIPAA. In certain cases, it may be necessary to modify Arcadian's
planned operations and procedures to comply with these more stringent state laws. Not only may some of these state laws impose
fines and penalties upon violators, but also some, unlike HIPAA, may afford private rights of action to individuals who believe
their personal information has been misused.
In addition to HIPAA,
state health information privacy and state health information privacy laws, Arcadian may be subject to other state and federal
privacy laws, including laws that prohibit unfair privacy and security practices and deceptive statements about privacy and security
and laws that place specific requirements on certain types of activities, such as data security and texting.
In recent years, there
have been a number of publicized data breaches involving the improper use and disclosure of PII and PHI. Many states have responded
to these incidents by enacting laws requiring holders of personal information to maintain safeguards and to take certain actions
in response to a data breach, such as providing prompt notification of the breach to affected individuals and state officials.
In addition, under HIPAA and pursuant to the related contracts that we enter into with our business associates, we must report
breaches of unsecured PHI to our contractual partners following discovery of the breach. Notification must also be made in certain
circumstances to affected individuals, federal authorities and others.
Any violation of HIPAA
or state privacy laws, therefore, could result in civil or even criminal liability, subject us to significant monetary fines,
require us to restructure our operations and otherwise have a material adverse effect on our business, financial condition and
results of operations.
FDA Regulation
Since April of 2008,
we have been engaged in discussions with the FDA regarding its position that our rEEG service, and potentially its successor,
called PEER Online, constitutes a medical device which is subject to regulation by the FDA. On April 10, 2008, we received correspondence
from the FDA stating the agency's position, based in part on the combination of certain marketing statements FDA observed
on our website, together with the delivery method of our rEEG Reports, that our software product aids clinical diagnosis and,
therefore, constituted a "medical device" requiring premarket approval ("PMA") by or premarket notification
(also known as a "510(k) clearance") to the FDA pursuant to the Federal Food, Drug and Cosmetic Act (the "Act").
We contested at the time and continue to reject FDA's interpretation of our software.
In early 2010, based
upon written guidance from the FDA's Center for Devices and Radiological Health (the "Center"), we chose to
submit a premarket notification to obtain 510(k) clearance for our rEEG service . We sought review of our rEEG service based
upon its equivalence to predicate devices that already have FDA clearance which appeared to represent a sound mechanism to reduce
regulatory risks. On July 27, 2010, we received a letter from the FDA stating that they determined that our rEEG service was Not
Substantially Equivalent to the predicate devices that had previously been granted 510(k) clearance and that among other options
we could be required to file a PMA and obtain approval before our rEEG service can be marketed legally, unless FDA reclassifies
our software through the De Novo classification request process or otherwise through a reclassification order pursuant to Section
513(e) of the Act.
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We  registered
our facility and listed the PEER Outcome database as a Class I device exempt from premarket notification requirements. We have
continued its engagement with Center staff over the potential for a regulatory pathway for PEER Online as a Class II medical device,
based on the Center's recommendation that military use of PEER Online move forward under an investigational device exemption
("IDE") to provide additional data to support a successful 510(k) application. In August 2012, the FDA reviewed the
study protocol to use our PEER Interactive Product, which is substantially similar to the PEER Online product, and determined
that the Walter Reed PEER Trial was considered a non-significant risk clinical trial and did not require an IDE.
We are proceeding with
two additional clinical trials based substantially on the Walter Reed PEER Trial protocol in an effort to replicate and expand
the result achieved during the Walter Reed PEER Trial. One clinical trial with the Canadian Armed Forces commenced enrollment of
patients in August of 2016. A second clinical trial with a large provider group is ongoing with strong participation from all engaged
parties. At this time we cannot predict the results or the success of any of these trials. We can offer no assurances that
the FDA will not insist that we submit a marketing application in the future, or that the data, which will be included in our future
submissions to the FDA, will not raise any important new issues that could materially affect the safety or effectiveness of our
PEER Online product. The inability to enroll sufficient subjects or the receipt of inconclusive results from our new clinical trials
would have a material adverse effect on our ability to expand our operations. We currently intend to continue marketing as a  Class
I cloud-based neurometric service branded as PEER Reports, under our current registration and listing with the FDA, while we pursue
the additional clinical trials and consider submission of a 510(k) application in the future.
Employees
As of July 16, 2019,
our operation has [twenty–five] full-time employees. We believe that our relations with our employees are good. None of
our employees belong to a union.
Properties
Our executive offices
are located at 26522 La Alameda, Suite 290, Mission Viejo, CA 92691. We are a party to four leases, three are for office space
located in Mission Viejo and Laguna Hills, California which house the corporate headquarters and neurometric business. The total
lease payments per month are $10,666. The two leases for office space located in Mission Viejo and Laguna Hills have been renewed
through February 28, 2020 and the total lease payments per month will be $8,411 beginning February 1, 2019. As of November 30,
2018, the third lease for a small annex office in Laguna Hills has been terminated.
Legal Proceedings
None.
71
Directors
and Executive Officers
The following table sets forth the names, ages and positions of our directors and executive officers as
of July 19, 2019. Our directors will serve until our first annual meeting of stockholders. Directors will be elected annually.
Name
Age
Position
Geoffrey E. Harris
56
Director
John Pappajohn
90
Director
Peter Unanue
51
Director
Michal Votruba
53
Director
Patrick Herguth
47
Chief Executive Officer and Director
Donald D'Ambrosio
55
Chief Financial Officer
Directors
Geoffrey E.
Harris
George E. Harris was
appointed to our board of directors on March 18, 2019. Mr. Harris is a portfolio manager and managing partner at c7 Advisors,
a money management and healthcare advisory firm focused on small-to-middle market healthcare companies since 2014. Prior
to his position with c7 Advisors, Mr. Harris served as Managing Director and co-head of the Cantor Fitzgerald Healthcare Investment
Banking Group from 2011 to 2014, and was a Healthcare Investment Banker with Gleacher & Company from 2009 to 2011. Mr. Harris
has over thirty years combined experience as a healthcare analyst and portfolio manager for healthcare companies. Mr. Harris graduated
from MIT's Sloan School of Management with an MS in Finance Management. Mr. Harris serves as a director on the boards of
Cancer Genetics, Inc. (NASDAQ: CGIX) a molecular diagnostics company, and two privately held companies, Connect RN, a healthcare
workforce management company, and PointRight, a healthcare data analytics company. Mr. Harris also serves on the Audit Committee
of Cancer Genetics, Inc. Mr. Harris was selected to serve on our Board of Directors for his significant healthcare, finance and
transactional experience. Furthermore, his financial, analytical and audit committee experience make him well suited to Chair
our Audit Committee.
John Pappajohn
John Poppajohn was
appointed to our board of directors on March 18, 2019. Since 1969, Mr. Pappajohn has been the President and sole owner of Pappajohn
Capital Resources, a venture capital firm, and President and sole owner of Equity Dynamics, Inc., a financial consulting firm,
both located in Des Moines, Iowa. Mr. Pappajohn currently serves as Chairman of the Board of Cancer Genetics, Inc. (NASDAQ: CGIX),
a molecular diagnostics company. Mr. Pappajohn was chosen to serve as a director of our company because of his unparalleled experience
serving as a director of more than 40 public companies and the substantial insight he has gained into the life sciences and healthcare
industries by actively investing in the industries for more than 40 years, and by founding and supporting several public healthcare
companies.
Peter Unanue
Peter Unanue was appointed
to our board of directors on March 18, 2019. Mr. Unanue has over 25 years of senior business experience, leveraging data and applied
sciences to enhance business operations. Since 1997, Mr. Unanue has been serving as Executive Vice President of Goya Foods, Inc.,
one of the leading food companies in the U.S. with over a billion dollars in annual sales. While at Goya, Mr. Unanue oversaw the
nationwide expansion of the company's facilities, managed distribution and logistics, consolidated redundant operations resulting
in significant cost savings, and led the implementation of new software and technology to streamline and enhance operations and
profitability. Mr. Unanue has held key operational and analytic roles with Merck Medco Health Solutions, Baxter Healthcare and
Growmark, Inc. He currently serves on the boards of the Meadowlands Regional Chamber of Commerce, the Meadowlands Regional "2040
Foundation," and is a Council of Regents Member at Felician University and St Thomas Aquinas College. He was also an employer
trustee for a local UFCW Health and Welfare Fund. He is the recipient of numerous awards and is a regular speaker on various topics
including supply chain management. Mr. Unanue holds a Master of Science in operations research from George Washington University
and a Bachelor of Science from St. Thomas Aquinas College. Mr. Unanue was selected to serve on the Board of Directors because of
his years in operations and analytics as well as his previous board experience for other companies.
72
Michal Votruba
Michal Votruba was
appointed to our board of directors on March 18, 2019. Since 2013, Mr. Votruba has been the Director of the Gradus/RSJ Life Sciences
Fund, the largest dedicated fund in Central Europe with a portfolio of companies in Europe and the United States. Since 2010,
he has served as a member of the board of PrimeCell Therapeutics as the Director of Global Business Development overseeing the
expansion of the largest regenerative medicine company operating in Central Europe. In 2009, the Czech Academy of Sciences solicited
Mr. Votruba's expertise for the first successful privatization project of the Institute of Experimental Medicine in Prague:
the newly created protocol established a precedent for future privatization projects in the Czech Republic. Mr. Votruba graduated
as a Clinical Psychiatrist from the Medical Faculty of Charles University in Prague in 1989. Shortly thereafter, he emigrated
from Czechoslovakia and developed his professional career in Canada and the USA. Since 2005, Mr. Votruba combined his theoretical
and clinical experience in the field of Competitive Intelligence serving the global pharmaceutical industry for eight years as
an industry analyst advising senior leaders of companies including Amgen, Novartis, Eli Lilly, Allergan, EMD, Serono and Sanofi.
Mr. Votruba brings valuable expertise to the Board of Directors as a clinical psychiatrist and broad experience in the international
marketing of innovative medical technologies.
Executive Officers
Patrick Herguth,
Chief Executive Officer and Director
Mr. Herguth, has served
as our Chief Executive Officer since March 18, 2019. From December 12, 2018 until the closing of the Merger on July 17, 2019,
Mr. Herguth served as MYnd's Chief Executive Officer. Prior to joining MYnd, Mr. Herguth worked at Q-Centrix, LLC, an outsourced
healthcare outcomes-data provider focused on acute care hospitals, where he most recently served as Chief Operating Officer since
March 2015. From 2007 to 2015, Mr. Herguth held various roles with Avidyne Corporation, including Chief Operating Officer, Chief
Financial Officer and President, where he helped oversee process and efficiency improvements. Mr. Herguth earned an MBA from the
Kellogg Graduate School of Management at Northwestern University and a B.S. in Applied & Engineering Physics from the College
of Engineering at Cornell University.
Donald D'Ambrosio,
Chief Financial Officer
Donald E.
D'Ambrosio was appointed as our Chief Financial Officer on June 25, 2019. From March 31, 2017 until the closing of the
Merger on July 17, 2019, Mr. D'Ambrosio served as MYnd's Chief Financial Officer. Prior to joining MYnd
Analytics, from 1996 to 2007 Mr. D'Ambrosio served as Senior Vice President, Controller and, ultimately, Chief
Financial Officer of BNC Mortgage, Inc. (NASDAQ: BNCM). As BNC's CFO Mr. D'Ambrosio played a key role in the
company's IPO, raising $35 million, and its listing on the Nasdaq on March 10, 1998 which was underwritten by CIBC
Oppenheimer and Piper Jaffray, Inc. Subsequently, Mr. D'Ambrosio was also intimately involved in taking the company
private through a $52 million management acquisition by Lehman Brothers. Mr. D'Ambrosio played a key role in BNC
Mortgage Inc's acquisition of certain assets and liabilities and the origination platform of America's Lender,
Inc. From 2007 through to February 2017 Mr. D'Ambrosio founded and built Oxygen Funding, Inc., an asset-based lending
company that specialized in providing working capital to small businesses, where he served as its President, CEO and CFO.
Oxygen Funding grew to fund over $100 million of client receivables. Mr. D'Ambrosio was a featured speaker for the
Small Business Association and a writer for the Commercial Factor magazine. Mr. D'Ambrosio holds a Bachelor of Business
Administration degree with an emphasis in accounting from Temple University. Mr. D'Ambrosio 's skills
and experiences as a Chief Financial Officer along with his IPO and Nasdaq up-listing experience make him an asset to us.
73
Advisors
Robin L. Smith,
MD
serves as our special advisor under the terms of a consulting agreement. She has extensive experience
serving in executive and board level capacities for various medical enterprises and health care-based entities. Dr. Smith joined
MYnd's Board of Directors as its Chairman on August 20, 2015 and currently serves as a director of Emmaus Life Sciences,
Inc. (EMMA). Dr. Smith has extensive experience serving in executive and board level capacities for various medical enterprises
and health care-based entities. She recently joined the board of directors of Seelos Therapeutics (NASDAQ: SEEL) and has been a
member of the board of directors of Rockwell Medical (NASDAQ: RMTI) since June 2016. She also serves as president and chairman
of Stem for Life, Cognitive Warriors, and Cura Foundation, and is vice president and a member of the board of directors of the
STOQ Foundation in Rome, Italy. Dr. Smith is co-chairman of the Life Sci advisory board on gender diversity and advisor to Dthera
Sciences. She also serves on Sanford Health's International Board, Alliance for Regenerative Medicine (ARM) Foundation board
and the board of overseers at the NYU Langone Medical Center in New York. She previously served on the board of trustees of the
NYU Langone Medical Center and is the past chairman of the board of directors for the New York University Hospital for Joint Diseases,
BioXcel Corporation and Signal Genetics (NASDAQ: SGNL). She was appointed as clinical associate professor, Department of Medicine
at the Rutgers, New Jersey Medical School in 2017.
Board Composition
Our Board of Directors consists of the following five members: Patrick Herguth, Geoffrey E. Harris, John
Pappajohn, Michal Votruba and Peter Unanue. All members will serve until our next annual meeting or until his or her successor
is duly elected and qualified.
CORPORATE
GOVERNANCE
Committees and Director Independence
The Board of Directors
has determined that all of its board members are independent directors in accordance with the listing requirements of the Nasdaq
Capital Market. The Nasdaq independence definition includes a series of objective tests, including that the board member is not,
and has not been for at least three years, one of our employees and that neither the board member nor any of his family members
has engaged in various types of business dealings with us. In addition, as required by Nasdaq rules, our board has made a subjective
determination as to each independent director that no relationships exist, which, in the opinion of our board, would interfere
with the exercise of independent judgment in carrying out the responsibilities of a board member. In making these determinations,
our board reviewed and discussed information provided by the members of the board and us with regard to each board member's
business and personal activities and relationships as they may relate to us and our management. There are no family relationships
among any of the members of our board or our executive officers. In addition, all members of the audit committee meet the independence
requirements contemplated by Rule 10A-3 under the Exchange Act.
Board Committees
The Board has established
an audit committee, a compensation committee and a governance and nominations committee. Each committee has its own charter, which
is available on our website at www.telemynd.com. Information contained on our website is not incorporated herein by reference.
Each of the Board committees has the composition and responsibilities described below.
Audit Committee
The Board has
established a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act of 1934, as amended (the "Exchange Act"). Geoffrey Harris (Chair), John Pappajohn, and Peter Unanue
are the members of the audit committee. The audit committee is composed of members who are "independent" within
the meaning of Rule 10A-3 under the Exchange Act and the Nasdaq rules. The Board has determined that Mr. Harris serves as the
"audit committee financial expert," as such term is defined in Item 407(d)(5) of Regulation S-K. In his roles as
Audit Committee Chair of another public company, as Managing Partner of a money management and healthcare advisory firm, as a
senior investment banker, portfolio manager and health care research analyst, Mr. Harris has gained over 34 years of
experience analyzing the financial statements of public companies, assessing the use of accounting methods employed by those
companies and the financial acumen of their management.
74
The audit committee
oversees our accounting and financial reporting processes and oversees the audit of our financial statements and the effectiveness
of our internal control over financial reporting. The specific functions of this committee include:
●
selecting and recommending to our Board of Directors the appointment
    of an independent registered public accounting firm and overseeing the engagement of such firm;
●
approving the fees to be paid to the independent registered
    public accounting firm;
●
helping to ensure the independence of our independent registered
    public accounting firm;
●
overseeing the integrity of our financial statements;
●
preparing an audit committee report as required by the SEC to
    be included in our annual proxy statement;
●
reviewing major changes to our auditing and accounting principles
    and practices as suggested by our company's independent registered public accounting firm, internal auditors (if any)
    or management;
●
reviewing and approving all related party transactions; and
●
overseeing our compliance with legal and regulatory requirements.
Compensation Committee
Our compensation committee assists the Board of Directors in the discharge of its responsibilities relating
to the compensation of the Board of Directors and our executive officers. John Pappajohn (Chair), Geoffrey Harris and Michal Vortuba
are the members of our compensation committee. The Board has determined that they are "independent" within the meaning
of the Nasdaq rules and both members qualify as "non-employee directors" under Rule 16b-3 of the Exchange Act.
The committee's
compensation-related responsibilities include:
●
assisting our Board of Directors in developing and evaluating
    potential candidates for executive positions and overseeing the development of executive succession plans;
●
reviewing and approving, on an annual basis, the corporate goals
    and objectives with respect to compensation for our chief executive officer;
●
reviewing, approving and recommending to our Board of Directors
    on an annual basis the evaluation process and compensation structure for our other executive officers;
●
providing oversight of management's decisions concerning
    the performance and compensation of other company officers, employees, consultants and advisors;
●
reviewing our incentive compensation and other stock-based plans
    and recommending changes in such plans to our Board of Directors as needed, and exercising all the authority of our Board
    of Directors with respect to the administration of such plans;
●
reviewing and recommending to our Board of Directors the compensation
    of independent directors, including incentive and equity-based compensation; and
●
selecting, retaining and terminating such compensation consultants,
    outside counsel and other advisors as it deems necessary or appropriate.
75
Governance and Nominations Committee
The governance and
nominations committee recommends to the Board nominees for election as directors and persons to be elected to fill any vacancies
on the Board, develops and recommends a set of corporate governance principles and oversees the performance of the Board. Michal
Votruba (Chair), Geoffrey Harris and Peter Unanue are the members of our governance and nominations committee. The Board has determined
that the members of the committee are "independent" within the meaning of the Nasdaq rules.
The committee's
responsibilities include:
●
Selecting director nominees. The governance and nominations
    committee recommends to the Board of Directors nominees for election as directors at any meeting of stockholders and nominees
    to fill vacancies on the Board. The governance and nominations committee considers candidates proposed by stockholders and
    will apply the same criteria and follows substantially the same process in considering such candidates as it does when considering
    other candidates. The governance and nominations committee may adopt, at its discretion, separate procedures regarding director
    candidates proposed by our stockholders. Director recommendations by stockholders must be in writing, include a resume of
    the candidate's business and personal background and include a signed consent that the candidate would be willing to
    be considered as a nominee to the Board and, if elected, would serve. Such recommendation must be sent to our Secretary at
    our executive offices. When it seeks nominees for directors, our governance and nominations committee takes into account a
    variety of factors including (a) ensuring that the Board, as a whole, is diverse and consists of individuals with various
    and relevant career experience, relevant technical skills, industry knowledge and experience, financial expertise (including
    expertise that could qualify a director as a "financial expert," as that term is defined by the rules of the SEC),
    local or community ties and (b) minimum individual qualifications, including strength of character, mature judgment, familiarity
    with our business and industry, independence of thought and an ability to work collegially. We are of the view that the continuing
    service of qualified incumbents promotes stability and continuity in the Board room, contributing to the ability of the Board
    of Directors to work as a collective body, while giving us the benefit of the familiarity and insight into our affairs that
    its directors have accumulated during their tenure. Accordingly, the process of the governance and nominations committee for
    identifying nominees reflects our practice of re-nominating incumbent directors who continue to satisfy the committee's
    criteria for membership on the Board of Directors, whom the committee believes continue to make important contributions to
    the Board of Directors and who consent to continue their service on the Board of Directors. The Board has not adopted a formal
    policy with respect to its consideration of diversity and does not follow any ratio or formula to determine the appropriate
    mix; rather, it uses its judgment to identify nominees whose backgrounds, attributes and experiences, taken as a whole, will
    contribute to the high standards of Board service. The governance and nominations committee may adopt, and periodically review
    and revise as it deems appropriate, procedures regarding director candidates proposed by stockholders.
●
Reviewing requisite skills and criteria for new Board members
    and Board composition. The governance and nominations committee reviews with the entire Board of Directors, on an annual basis,
    the requisite skills and criteria for Board candidates and the composition of the Board as a whole.
●
Hiring of search firms to identify director nominees. The governance
    and nominations committee has the authority to retain search firms to assist in identifying Board candidates, approve the
    terms of the search firm's engagement, and cause us to pay the engaged search firm's engagement fee.
●
Selection of committee members. The governance and nominations
    committee recommends to the Board of Directors, on an annual basis, the directors to be appointed to each committee of the
    Board of Directors.
●
Evaluation of the Board of Directors. The governance and nominations
    committee oversees an annual self-evaluation of the Board of Directors and its committees to determine whether it and its
    committees are functioning effectively.
●
Development of Corporate Governance Guidelines. The governance
    and nominations committee develops and recommends to the Board a set of corporate governance guidelines applicable to us.
76
The governance and
nominations committee may delegate any of its responsibilities to subcommittees as it deems appropriate. The governance and nominations
committee is authorized to retain independent legal and other advisors, and conduct or authorize investigations into any matter
within the scope of its duties.
Committee Memberships and Meetings
The following table
below sets forth the membership of each Committee:
Name of Director
Audit Committee
Compensation
Committee
Governance and
Nominations
Geoffrey E. Harris
Chair
Member
Member
John Pappajohn
Member
Chair
Michal Votruba
Member
Chair
Peter Unanue
Member
Member
Board Meetings
During the fiscal
year ended September 30, 2018, MYnd's Board held fifteen meetings, the Audit Committee held five meetings, the Compensation
Committee held two meetings, and the Governance and Nominations Committee held two meetings. Each incumbent director attended
75% or more of the total number of meetings of the Board and the Board Committees of which they were a member during the period
they served as a director in fiscal year 2018. Our board of directors has held three meeting since formation.
We have not yet established
a policy with respect to Board members' attendance at its annual meetings. All of MYnd's incumbent directors attended
MYnd's annual meeting this year.
Board Oversight of Risk Management
Our Board of Directors
believes that overseeing how management manages the various risks we face is one of its most important responsibilities to our
stakeholders. Our Board believes that, in light of the interrelated nature of our risks, oversight of risk management is ultimately
the responsibility of the full Board; however, it has delegated this responsibility to the audit committee with respect to financial
risk. The audit committee is expected to meet before each quarterly filing on Form 10-Q or the annual filing on Form 10-K with
management and the independent registered public accounting firm to review our major financial risk exposures and the steps taken
to monitor and control such exposures. Our Board meets regularly to discuss the strategic direction and the issues and opportunities
facing our Company. Throughout the year, our Board provides guidance to management regarding our strategy and helps to refine
our plans to implement our strategy. The involvement of the Board in setting our business strategy is critical to the determination
of the types and appropriate levels of risk undertaken by us.
77
Stockholder Communications
Interested parties
may communicate with any and all members of our Board of Directors by transmitting correspondence addressed to one or more directors
by name at the address appearing on the cover page of this annual report on Form 10-K. Communications from our stockholders to
one or more directors will be collected and organized by our Corporate Secretary and will be forwarded to the Chairman of the
Board of Directors or to the identified director(s) as soon as practicable. If multiple communications are received on a similar
topic, the Corporate Secretary may, at his or her discretion, forward only representative correspondence. The Chairman of the
Board of Directors will determine whether any communication addressed to the entire Board of Directors should be properly addressed
by the entire Board of Directors or a committee thereof. If a communication is sent to the Board of Directors or a Committee,
the Chairman of the Board of Directors or the Chairman of that committee, as the case may be, will determine whether a response
to the communication is warranted.
Conflicts of Interest
We are not aware of
any current conflicts of interest between our officers and directors, and us. However, certain potential conflicts of interests
may arise in the future.
From time to time,
one or more of our affiliates may form or hold an ownership interest in and/or manage other businesses both related and unrelated
to the type of business that we own and operate or may own and operate in the future. These persons may continue to form, hold
an ownership interest in and/or manage additional other businesses which may compete with ours with respect to operations, including
financing and marketing, management time and services and potential customers. These activities may give rise to conflicts between
or among our interests and other businesses with which our affiliates are associated. Our affiliates are in no way prohibited
from undertaking such activities, and neither we nor our stockholders will have any right to require participation in such other
activities.
Further, because we
may transact business with some of our officers, directors and affiliates, as well as with firms in which some of our officers,
directors or affiliates have a material interest, potential conflicts may arise between the respective interests of us and these
related persons or entities. We believe that such transactions will be effected on terms at least as favorable to us as those
available from unrelated third parties.
78
EXECUTIVE
AND DIRECTOR COMPENSATION
Compensation Structure
Overview of Compensation Practices
Our executive compensation
program is administered by the compensation committee.
Compensation
Philosophy
Generally, we compensate
our executive officers with a compensation package that is designed to drive Company performance to maximize stockholder value
while meeting our needs and the needs of our executives. The following are objectives we consider:
●
Alignment — to align the interests of executives and stockholders
    through equity-based compensation awards;
●
Retention — to attract, retain and motivate highly qualified,
    high performing executives to lead our growth and success; and
●
Performance — to provide, when appropriate, compensation
    that is dependent upon the executive's achievements and our performance.
●
In order to achieve the above objectives, our executive compensation
    philosophy is guided by the following principles:
●
Rewards under incentive plans are based upon our short-term
    and longer-term financial results and increasing stockholder value;
●
Executive pay is set at sufficiently competitive levels to attract,
    retain and motivate highly talented individuals who are necessary for us to achieve our goals, objectives and overall financial
    success;
●
Compensation of an executive is based on such individual's
    role, responsibilities, performance and experience; and
●
Our annual performance and the executive are taken into account
    in determining annual bonuses with the goal of fostering a pay-for-performance culture.
Compensation
Elements
We compensate our
executives through a variety of components, which may include a base salary, annual performance-based incentive bonuses, equity
incentives, and benefits and perquisites, in order to provide our executives with a competitive overall compensation package.
The mix and value of these components are impacted by a variety of factors, such as responsibility level, individual negotiations
and performance and market practice. The purpose and key characteristics for each component are described below.
Base Salary
Base salary provides
executives with a steady income stream and is based upon the executive's level of responsibility, experience, individual
performance and contributions to our overall success, as well as negotiations between us and such executive officer. Competitive
base salaries, in conjunction with other pay components, enable us to attract and retain talented executives. The Board typically
sets base salaries for our executives at levels that it deems to be competitive, with input from our Chief Executive Officer.
79
Annual Incentive
Bonuses
Annual incentive bonuses
are a variable performance-based component of compensation. The primary objective of an annual incentive bonus is to reward executives
for achieving corporate and individual goals and to align a portion of total pay opportunities for executives to the attainment
of our Company's performance goals. Annual incentive awards, when provided, act as a means to recognize the contribution
of our executive officers to our overall financial, operational and strategic success.
Equity Incentives
Equity incentives
are intended to align executive and stockholder interests by linking a portion of executive pay to long-term stockholder value
creation and financial success over a multi-year period. Equity incentives may also be provided to our executives to attract and
enhance the retention of executives and to facilitate stock ownership by our executives. The Board considers individual and Company
performance when determining long-term incentive opportunities.
Health and Welfare
Benefits
The executive officers
participate in health and welfare and paid time-off benefits which we believe are competitive in the marketplace. Health and welfare
and paid time-off benefits help ensure that we have a productive and focused workforce.
Severance and
Change of Control Arrangements
We do not have a formal
plan for severance or separation pay for our employees, but we typically include a severance provision in the employment agreements
of our executive officers that have written employment agreements with us. Generally, such provisions are triggered in the event
of involuntary termination of the executive without cause or in the event of a change in control. Please see the description of
MYnd's employment agreements with Patrick Herguth, George Carpenter and Donald D'Ambrosio.
Certain stock option
awards certificates under the 2012 Plan provide that options to grantees shall become fully vested upon a change of control of
us, as defined therein.
Other Benefits
In order to attract
and retain highly qualified executives, we may provide our executive officers with automobile allowances, consistent with current
market practices.
Accounting and
Tax Considerations
We consider the accounting
and tax implications of all aspects of our executive compensation strategy and, so long as doing so does not conflict with our
general performance objectives described above, we strive to achieve the most favorable accounting and tax treatment possible
to us and our executive officers.
Process for
Setting Executive Compensation; Factors Considered
When making pay determinations
for named executive officers, the Board considers a variety of factors including, among others: (1) actual Company performance
as compared to pre-established goals, (2) individual executive performance and expected contribution to our future success, (3)
changes in economic conditions and the external marketplace, (4) prior years' bonuses and long-term incentive awards, and
(5) in the case of executive officers, other than Chief Executive Officer, the recommendation of our Chief Executive Officer,
and in the case of our Chief Executive Officer, his negotiations with our Board. No specific weighting is assigned to these factors
nor are particular targets set for any particular factor. Ultimately, the Board uses its judgment and discretion when determining
how much to pay our executive officers and sets the pay for such executives by element (including cash versus non-cash compensation)
and in the aggregate, at levels that it believes are competitive and necessary to attract and retain talented executives capable
of achieving our long-term objectives.
80
Summary Compensation Table-Fiscal Years
Ended September 30, 2018 and September 30, 2017
The information included
in the Summary Compensation Table below reflects compensation earned from MYnd during fiscal years ended September 30, 2018 and
2017 by (i) each person serving as MYnd's principal executive officer ("PEO") or acting in a similar capacity
during MYnd's fiscal year ended September 30, 2018; (ii) MYnd's two most highly compensated executive officers other
than our PEO who were serving as executive officers on September 30, 2018 and whose total compensation exceeded $100,000 and (iii)
up to two additional individuals for whom disclosure would have been provided under (ii) but for the fact that the individual
was not serving as an executive officer as of September 30, 2018. The persons covered by (i), (ii), and (iii) of the preceding
sentence are collectively referred to as the "named executive officers" in this section ("NEO"). All references
in the following tables to equity awards are to equity awards granted by MYnd in respect of MYnd common stock.
The historical compensation
shown below was determined by MYnd. Future compensation levels at will be determined based on the compensation policies, programs
and procedures to be established by our board of directors or the Compensation Committee of the board of directors. Accordingly,
the amounts and forms of compensation reported below are not necessarily indicative of the compensation that our NEOs will receive
following the separation, which could be higher or lower than the amounts shown below.
Name and Principal Position
Fiscal Year Ended September 30,
Salary
($)
(1)
Bonus
($)
(2)
Stock
    Awards
($)
(3)
Option
Awards
($)
(3)/(4)
All
    Other Compensation
($)
(5)
Total
($)
George C. Carpenter IV
2018
238,125
—
127,300
102,900
—
468,325
(President and Chief Executive Officer)
2017
270,000
25,000
—
—
21,035
316,035
Donald D'Ambrosio
2018
215,015
—
29,700
27,200
16,835
288,750
(Chief Financial Officer)
2017
117,296
20,000
—
104,600
8,289
250,185
(1)
Salaries for the fiscal years
ended September 30, 2018 and 2017 which were accrued and paid as follows:
●
Mr. Carpenter's salary for fiscal year 2018 and 2017 was $238,125 and $270,000, respectively, all
of which was paid out. Mr. Carpenter ceased being MYnd's Chief Executive Officer on December 12, 2018. Mr. Carpenter is not
an executive officer of Telemynd.
●
Mr. D'Ambrosio's salary for fiscal year 2018 was
    215,015. Pro-rated salary for fiscal year 2017 (based on actual number of days employed) was $117,296. Mr. D'Ambrosio
    joined MYnd as its Chief Financial Officer effective March 31, 2017.
(2)
On September 18, 2017, the Compensation Committee approved cash
    Management Bonuses for Mr. Carpenter and D'Ambrosio in the amounts of $25,000 and $20,000 respectively. On March 31,
    2017, the Compensation Committee approved a signing bonus of $8,959 for Mr. D'Ambrosio.
(3)
On November 13, 2017, MYnd's Board granted Mr. Carpenter
    to purchase 7,500 shares of Common Stock, vested immediately at $3.96 per share.
On April 19, 2018, MYnd's
Board granted Mr. Carpenter options to purchase 34,380 shares of Common Stock, vesting quarterly at $2.10 per share. As of September
30, 2018, options to purchase 8,595 of such shares are vested.
On May 25, 2018, MYnd's
Board granted Mr. Carpenter options to purchase 11,205 shares of Common Stock, which options vested immediately at $2.27 per share.
On April 4, 2018, MYnd's
Board granted Mr. Carpenter options to purchase 100,000 shares of Common Stock. 20% of the options vested on the date of grant
and remainder will vest in 8%-10% increments upon the achievement of various performance-based milestones. The options are exercisable
at $1.55 per share. As of September 30, 2018, options to purchase 32,000 of such shares were forfeited.
81
(4)
On November 13, 2017, MYnd's
Board granted Mr. D'Ambrosio options to purchase 7,500 shares of Common Stock, which options vested immediately at $3.96
per share.
On April 4, 2018, the Compensation
Committee of MYnd's Board granted options to Mr. D'Ambrosio to purchase 18,000 shares of MYnd's common stock,
which will vest in 25% increments upon the achievement of various performance-based milestones. The options are exercisable at
$1.55 per share. As of September 30, 2018, options to purchase 13,500 of such shares are vested.
On March 14, 2017, Mr. D'Ambrosio
was granted an option to purchase 18,000 shares of Common Stock valued at $104,600 using the Black Scholes Model, at an exercise
price of $5.9 per share with options to purchase 15,000 shares vesting in equal monthly installments over 36 months from March
31, 2017, and options to purchase the remaining 3,000 shares vesting upon the achievement of a performance-based metric which
has been met. The vesting of such grants is also subject to acceleration upon the occurrence of certain pre-determined events.
(5)
Relates to healthcare insurance
premiums and Health Savings Account contributions paid on behalf of executive officers of MYnd for fiscal years 2018 and 2017,
respectively.
●
For Mr. Carpenter health care benefits were $0 and $21,035 for
    fiscal year 2018 and 2017, respectively.
●
For Mr. D'Ambrosio health care benefits were $16,835 and
    $8,289 for fiscal year 2018 and 2017, respectively.
Narrative Disclosure to Summary Compensation
Table
Please refer to the
footnotes to the "Summary Compensation Table" above for a description of the components of "Stock Awards"
and "All Other Compensation" received by the named executive officers.
Employment Agreements
The following are
summaries of employment agreements that we have entered into with respect to our named executive officers. These summaries include,
where applicable, a description of all payments we are required to make to such named executive officers at, following or in connection
with the resignation, retirement or other termination of such named executive officers, or a change in control of us or a change
in the responsibilities of such named executive officers following a change in control.
On July 15, 2019,
we entered into an employment agreement with Mr. Herguth, (the "Herguth Employment Agreement"). Pursuant to the Herguth
Employment Agreement, Mr. Herguth will serve as our Chief Executive Officer and devote substantially all his time to us on an
"at will" basis and will receive a base annual compensation of $340,000, subject to periodic increases (which compensation
will increase to $360,000 on January 1, 2020) and increases within the discretion of our Board of Directors (the "Board"),
in each case as specified in the Herguth Employment Agreement. For fiscal year 2019, Mr. Herguth is eligible to receive a performance
bonus in a target amount of $340,000, with payment of such bonuses subject to achievement of certain performance goals set forth
in the Herguth Employment Agreement. In addition, Mr. Herguth is eligible to earn year-end performance bonuses payable in either
cash or equity or both, with a target bonus equal to 60% of the highest base salary Mr. Herguth received during such fiscal year
upon achievement of performance goals set by us. Mr. Herguth will be entitled to fifteen days paid vacation per annum, as well
as participation in all employee benefit plans, programs and arrangements maintained by MYnd from time to time and made available
generally to our similarly-situated senior executives on substantially the same basis that such benefits are provided to such
senior executives.
82
As Mr. Herguth's
employment is on an "at-will" basis, we or Mr. Herguth may terminate the employment relationship at any time, with
or without Cause or Good Reason (each as defined in the Herguth Employment Agreement). If we terminate Mr. Herguth's employment
without Cause (as defined in the Herguth Employment Agreement) or Mr. Herguth terminates his employment with us for Good Reason
(as defined in the Herguth Employment Agreement) during the first year following execution of the Herguth Employment Agreement,
Mr. Herguth shall be entitled to receive as severance three months of Mr. Herguth's annualized base salary then in effect,
subject to certain exceptions concerning plenary releases given in the Herguth Employment Agreement. If we terminate Mr. Herguth's
employment without Cause or Mr. Herguth terminates his employment with us for Good Reason during the second year following execution
of the Herguth Employment Agreement, Mr. Herguth shall be entitled to receive as severance six months of Mr. Herguth's annualized
base salary then in effect, subject to certain exceptions concerning plenary releases given in the Herguth Employment Agreement.
If Mr. Herguth is terminated by us for Cause, or if Mr. Herguth terminates his employment without Good Reason or due to Death
or Disability (each as defined in the Herguth Employment Agreement), he will be entitled to any unpaid compensation accrued through
the last day of his employment, a lump sum payment in respect of all accrued but unused vacation days at his base salary in effect
on the date such vacation was earned, and payment of any other amounts owing to Mr. Herguth but not yet paid, less any amounts
owed to us.
Donald D'Ambrosio
On July 15, 2019,
we and Mr. D'Ambrosio entered into a letter agreement of employment setting forth Mr. D'Ambrosio's compensation
and certain other employment terms. Pursuant to this letter agreement, Mr. D'Ambrosio be paid an annual base salary of $215,020,
will be eligible to participate in our benefit plans and has an effective date of July 17, 2019. Pursuant to the letter agreement,
Mr. D'Ambrosio's employment is "at-will", and may be terminated by either party for any reason, or no
reason at all. If we terminate Mr. D'Ambrosio without "cause" (as defined in the agreement), or Mr. D'Ambrosio
"involuntarily terminates"(as defined in the agreement) the agreement, Mr. D'Ambrosio will be entitled to receive
severance in the form of salary and benefits for a period equal to two-month, with an additional month of salary for each completed
year of service up to a limit of six-months, in each case, subject to Mr. D'Ambrosio providing a release of claims satisfactory
to us. In the event we terminate Mr. D'Ambrosio for "cause" or Mr. D'Ambrosio voluntarily terminates his
employment, Mr. D'Ambrosio will not be entitled to any severance.
Consulting Agreement
On May 30, 2019, we
entered into a Consultant Agreement with Robin L. Smith, MD, which provides that Dr. Smith will receive a $15,000 monthly fee
during the consulting term provided for the grant of (i) an option to purchase up to 200,000 shares of our common stock (which
may be exercised at any time during the ten year period following the grant) and (ii) 100,000 restricted shares of our common
stock. The option and the restricted stock grant will vest upon the completion of our anticipated listing on a national securities
exchange. We also agreed to pay Dr. Smith a $100,000 bonus at the effective time of such listing.
83
Outstanding Equity Awards at Fiscal
Year-End——Fiscal Year Ending September 30, 2018
The following table
presents information regarding outstanding options and restricted stock held by MYnd's named executive officers as of September
30, 2018: All of these options remained outstanding options of MYnd following the Spin-off.
Option Awards
Stock Awards
Number of Securities Underlying
    Unexercised Options (#)
Option Exercise Price ($)
Option Expiration Date
Number of Shares of Stock
    That Have Not Vested (#)
Market Value of Shares of
    Stock That Have Not Vested ($)
Name
Exercisable
Unexercisable
George Carpenter
(1)
20,000
48,000
$
1.55
04/04/2028
32,000
—
$
6.00
09/22/2022
—
—
2,175
—
50.00
10/08/2023
—
—
6,125
—
$
9.44
12/10/2022
—
—
667
—
3,300.00
03/02/2020
—
—
25,785
$
54,149
Donald D'Ambrosio
(2)
13,500
4,500
$
1.55
04/04/2028
—
—
10,500
7,500
$
5.9
03/31/2027
—
—
(1)
On April 4, 2018, Mr. Carpenter
was granted options to purchase 100,000 shares of Common Stock. 20% of the options vested on the date of grant and the remainder
will vest upon the achievement of various performance-based milestones. The options are exercisable at $1.55 per share. As of
September 30, 2018, options to purchase 32,000 shares were forfeited.
On September 22, 2016, Mr. Carpenter
was granted options to purchase 32,000 shares of Common Stock. 25% of the options vested on the date of grant and the remainder
will vest in 25% increments upon the achievement of various performance-based milestones. As of September 30, 2018, all of the
options are fully vested.
On October 8, 2013, Mr. Carpenter
was granted options to purchase 2,175 shares of Common Stock. The options are exercisable at $50.00 per share and vested evenly
over 12 months starting from the date of grant. As of September 30, 2018, all of the options are fully vested.
On December 10, 2012, Mr. Carpenter
was granted options to purchase 6,000 shares of Common Stock. The options are exercisable at $9.44 per share and vested in increments
of 12.5% at the beginning of each quarter starting from the date of grant. Mr. Carpenter was also granted 125 fully vested shares
of Common Stock for his prior services on MYnd's Board. These options are also exercisable at a price of $9.44 per share.
As of September 30, 2018, all of the options are fully vested.
On March 3, 2010, Mr. Carpenter
was granted options to purchase 667 shares of Common Stock. The options are exercisable at $3,300.00 per share and vested equally
over 48 months starting on March 3, 2010. As of September 30, 2018, all of the options are fully vested.
(2)
On April 4, 2018, Mr. D'Ambrosio
was granted options to purchase 18,000 shares of MYnd's common stock, which will vest in 25% increments upon the achievement
of various performance-based milestones. The options are exercisable at $1.55 per share. As of September 30, 2018, 13,500 shares
of the options are vested.
On March 31, 2017, Mr. D'Ambrosio
was granted options to purchase 18,000 shares of MYnd's common stock at an exercise price of $5.9 per share. with: (i) the
option to purchase 15,000 shares vesting in equal monthly installments over 36 months from March 31, 2017, and (ii) the option
to purchase 3,000 shares vesting upon the achievement of a performance-based milestone, which had been met as of September 30,
2017.
84
Director Compensation
—
Fiscal
Year Ending September 30, 2018
During MYnd's
fiscal year ended September 30, 2018, non-employee directors received cash compensation, as well as grants of Common Stock, Restricted
Stock and options to purchase Common Stock for their service on MYnd's Board of Directors or committees thereof. The values
of the option and restricted share grants were determined using the Black-Scholes Model and the closing price of the stock on
the day of grant. All option grants remained options of MYnd following the Spin-off
Non-Employee Director Compensation
Name
Fees Earned or Paid in Cash ($)
Option Awards ($)
Stock Awards ($)
All Other Compensation ($)
Total ($)
Robin Smith
(1)
337,500
210,700
68,500
28,000
644,700
John Pappajohn
(2)
3,000
—
10,200
—
13,200
Geoffrey Harris
(3)
25,000
—
—
—
25,000
Michal Votruba
(4)
3,000
—
10,200
—
13,200
Peter Unanue
(5)
3,000
—
10,200
—
13,200
(1)
On July 14, 2017, MYnd's
Board approved the Chairman Services Agreement (the "Agreement") with Robin L. Smith, M.D. which became effective
on that date (the "Effective Date") and will remain in effect until the earlier of: (a) termination of the Agreement
by mutual agreement of Dr. Smith and MYnd, and (b) the eighteen (18) month anniversary of the Effective Date (the "Initial
Period"); provided that the Agreement may be automatically extended for additional one year periods thereafter (such period,
the "Term"). During the Term, and subject to the terms and conditions of the Agreement, Dr. Smith will provide non-exclusive
advisory and management services to MYnd, which may include advice and assistance concerning: strategic vision and planning; identification
of growth and expansion opportunities; financial planning; and corporate partnering and business development (collectively, the
"Services"). Under the Agreement, Dr. Smith is entitled to an annual cash fee of $300,000 (the "Annual Fee"),
payable in equal monthly installments. For the 2017 calendar year, Dr. Smith was paid the full amount of the Annual Fee. Dr. Smith
agreed to a reduction in her annual cash fee for the 2018 calendar year. In connection therewith, Dr. Smith's annual cash
fee was reduced from $300,000 to $250,000. Dr. Smith was granted an option to purchase 50,000 shares of Common Stock under MYnd's
2012 Plan, which will not be terminated if Dr. Smith is no longer affiliated with MYnd. On April 4, 2018, Dr. Smith was granted
an option to purchase 75,000 shares of Common Stock, of which 1/3 vested immediately, 1/3 will vest 6 months from the grant date
and the remaining 1/3 will vest 12 months from the grant date. The options are exercisable at $1.55 per share. On April 4, 2018,
Dr. Smith was granted 25,000 restricted shares.
The aggregate number of option
awards outstanding for Dr. Smith at September 30, 2018 was 291,250 shares. Of these, options to purchase 1,250 shares have an
exercise price of $11.00 per share, options to purchase 40,000 shares have an exercise price of $6.00 per share, options to purchase
75,000 shares have an exercise price of $4.33 per share, options to purchase 50,000 shares have an exercise price of $4.16 per
share, options to purchase 75,000 shares have an exercise price of $1.55 per share, options to purchase 50,000 shares have an
exercise price of $1.99 per share.
On May 30, 2019, MYnd and Dr.
Smith entered into an amendment to the Chairman Services Agreement dated July 14, 2017 by and between MYnd and Dr. Smith (or the
Chairman Services Agreement) which provides that the Chairman Services Agreement will terminate at the effective time of the Merger,
as required by the Merger Agreement, and that Dr. Smith will receive a $150,000 bonus, which is to be paid after, and contingent
upon the approval of the stockholder proposals in the Proxy Statement, provided that this payment will be returned to MYnd if
the Merger is not consummated for any reason.
Dr. Smith is not one of our
directors but serves as a consultant under a Consulting Agreement entered into with us on May 30, 2019.
(2)
Mr. Pappajohn joined MYnd's
Board on August 26, 2009 and was appointed to our Board on March 18, 2019.
MYnd paid a cash Board Fee to
Mr. Pappajohn of $3,000 during the twelve months ended September 30, 2018, and has determined no cash fee will be paid to members
of MYnd's Board in the coming year except for the Audit Chair and the Chairman of the board.
On September 19, 2017, Mr. Pappajohn
was granted, subject to continued MYnd Board service: (i) 12,000 restricted shares, vesting in four quarterly installments of
3,000 shares and (ii) options to purchase 12,000 shares of common stock with an exercise price of $3.60, vesting in four equal
quarterly installments of 3,000 options on December 19, 2017, March 19, 2018, June 19, 2018 and September 19, 2018. The value
as of the grant date for stock options is recognized over the number of days of service required for the stock option to vest
in full.
On May 25, 2018, Mr. Pappajohn
was granted 4,500 shares of restricted shares.
As of September 30, 2018, Mr.
Pappajohn had been granted options to purchase an aggregate 14,542 shares. Of these, options to purchase 42 shares have an exercise
price of $3,300.00 per share, options to purchase 1,250 shares have an exercise price of $11.00 per share, 1,250 shares have an
exercise price of $9.44 per share, options to purchase 12,000 shares have an exercise price of $3.60 per share.
85
(5)
Mr. Harris joined MYnd's
Board on July 20, 2015 and was appointed to our Board on March 18, 2019.
MYnd paid a cash Board Fee to
Mr. Harris of $25,000 during 2018, and has determined that he will receive the same amount in the coming year due to his position
as Audit Chair.
On September 19, 2017, Mr. Harris
was granted, subject to continued MYnd Board and Audit Committee service: (i) 18,000 restricted shares, vesting in four quarterly
installments of 4,500 shares and (ii) options to purchase 18,000 shares of common stock with an exercise price of $3.60, vesting
in four equal quarterly installments of 4,500 options on December 19, 2017, March 19, 2018, June 19, 2018 and September 19, 2018.
The value as of the grant date for stock options is recognized over the number of days of service required for the stock option
to vest in full.
At September 30, 2018, Mr. Harris
had been granted options to purchase an aggregate of 19,250 shares. Of these, options to purchase 1,250 shares have an exercise
price of $11.00 per share and options to purchase 18,000 shares have an exercise price of $3.60 per share.
(6)
Mr. Votruba joined MYnd's
Board on July 20, 2015 and was appointed to our Board on March 18, 2019.
MYnd paid a cash Board Fee to
Mr. Votruba of $3,000 during 2018, and has determined no cash fee will be paid to members of the MYnd Board in the coming year
except for the Audit Chair and the Chairman of the Board.
On September 19, 2017, Mr. Votruba
was granted, subject to continued MYnd Board service: (i) 12,000 restricted shares, vesting in four quarterly installments of
3,000 shares and (ii) options to purchase 12,000 shares of common stock with an exercise price of $3.60, vesting in four equal
quarterly installments of 3,000 options on December 19, 2017, March 19, 2018, June 19, 2018 and September 19, 2018. The value
as of the grant date for stock options is recognized over the number of days of service required for the stock option to vest
in full.
On May 25, 2018, Mr. Votruba
was granted 4,500 shares of restricted common stock.
At September 30, 2018, Mr. Votruba
had been granted options to purchase an aggregate of 13,250 shares. Of these, options to purchase 1,250 shares have an exercise
price of $11.00 per share and options to purchase 12,000 shares have an exercise price of $3.60 per share.
(7)
Mr. Unanue joined MYnd's
Board on September 19, 2017 and was appointed to our Board on March 18, 2019.
MYnd paid a cash Board Fee to
Mr. Unanue of $3,000 during 2018, and has determined no cash fee will be paid to members of the MYnd Board in the coming year
except for the Audit Chair and the Chairman of the Board.
On September 19, 2017, Mr. Unanue
was granted, subject to continued MYnd Board service: (i) 12,000 restricted shares, vesting in four quarterly installments of
3,000 shares and (ii) options to purchase 12,000 shares of common stock with an exercise price of $3.60, vesting in four equal
quarterly installments of 3,000 options on December 19, 2017, March 19, 2018, June 19, 2018 and September 19, 2018. The value
as of the grant date for stock options is recognized over the number of days of service required for the stock option to vest
in full.
On May 25, 2018, Mr.
Unanue was granted 4,500 restricted shares.
2019 Omnibus Equity Incentive
Plan
On March 21, 2019,
the Company adopted the 2019 Omnibus Equity Incentive Plan (the "
2019 Plan
"). The purpose of the 2019 Plan is
to allow non-employee directors and selected employees, officers and consultants ("
Grantees
") to acquire
equity ownership in the Company, thereby strengthening their commitment to the Company's success and incentivizing their
efforts on behalf of the Company. The 2019 Plan is also intended to assist the Company in attracting new Grantees and retaining
existing Grantees. Finally, the 2019 Plan supports and increases our ability to facilitate the sustained progress, growth and profitability
of the Company.
The total number
of shares available for grant under the plan is 2,250,000, subject to adjustment.
The compensation
committee of our board of directors (the "
Committee
") administers the 2019 Plan and has full power to grant
stock options and common stock, construe and interpret the 2019 Plan, establish rules and regulations and perform all other acts,
including the delegation of administrative responsibilities, as it believes reasonable and proper. Any decision made or action
taken by the Committee arising out of or in connection with the interpretation and administration of the 2019 Plan is final and
conclusive. The Committee, in its absolute discretion, may award common stock to employees, consultants, and directors of the Company,
and such other persons as the Committee may select, and permit holders of options to exercise such options prior to full vesting.
In the event that
our outstanding common stock is changed into or exchanged for a different number or kind of shares or other securities of the Company
by reason of merger, consolidation, other reorganization, recapitalization, combination of shares, stock split-up or
stock dividend, equitable adjustment will be made to the aggregate number and kind of shares subject to stock options which may
be granted under the 2019 Plan.
The Committee may
at any time, and from time to time, suspend or terminate the 2019 Plan in whole or in part or amend it from time to time in such
respects as it may deem appropriate and in our best interest.
The 2019 Plan will
be presented to stockholders for approval at the Company's next annual meeting of stockholders.
86
Security
Ownership of Certain Beneficial Owners and Management
Share Ownership of Executive Officers
and Directors and Certain Parties
The following table
sets forth information regarding (i) each of our expected directors and expected named executive officers and (ii) all of our
expected directors and named executive officers as a group and (iii) each person who is known by us who will beneficially own
more than five percent of our common stock. Unless otherwise indicated in the table, the persons and entities named in the table
have sole voting and sole investment power with respect to the shares set forth opposite the stockholder's name, subject
to community property laws, where applicable. Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended. For purposes of such calculation, shares of our Common Stock subject to options, warrants and
convertible promissory notes issued by us (and convertible interest on those notes) that are currently exercisable or convertible,
or exercisable or convertible within sixty days from July 16, 2019, are deemed to be outstanding and to be beneficially owned
by the person holding the options, warrants or convertible promissory notes, as applicable, for the purpose of computing the percentage
ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other
person. Unless otherwise indicated, the address of each of the executive officers and directors and 5% or more stockholders named
below is c/o Telemynd, Inc., 26522 La Alameda, Suite 290, Mission Viejo, CA 92691. There are no shares of any other class or series
of stock issued and outstanding.
Applicable percentage ownership interest
is based on 12,883,143 shares of issued and outstanding common stock as of July 16, 2019.
Shares Beneficially Owned
Name of Beneficial Owner Executive Officers and Directors:
Number of Shares Beneficially
     Owned
Percentage of Shares Outstanding
Patrick Herguth
)
Chief
                                         Executive Officer and Director
0
*
Don D'Ambrosio
(1)
Chief
                                         Financial Officer
7,500
*
John Pappajohn
(2)
Director
3,774,350
24.39
%
Michal Votruba
(3)
Director
0
*
Geoffrey E. Harris
(4)
Director
126,668
*
Peter Unanue
(5)
Director
291,754
2.24
%
Directors and officers as a group (8 persons)
(6)
4,200,272
27.68
%
Non-Director 5%+ Stockholders:
RSJ
(7)
1,951,198
14.21
%
JJBE 123, LLC
(8)
694,123
5.41
%
John Steven Emerson
(9)
694,122
5.41
%
Pacific Capital Management, LLC
(10)
763,271
5.95
%
Bryan Ezralow as Trustee of the Bryan Ezralow1994 Trust U/T/D 12/122/1994
(11)
694,123
5.41
%
*
Represents beneficial
                                         ownership of less than one percent (1%) of the outstanding shares of common stock.
(1)
Consists of (a)
                                         7,500 shares of common stock. Mr. D'Ambrosio has been our Chief Financial Officer
                                         since March 31, 2017.
(2)
Consists of (a)
                                         1,132,925 shares of common stock; (b) 1,000,000 shares of common stock issuable upon
                                         conversion of Series A Preferred Stock and (b) 1,641,425 shares of common stock issuable
                                         upon the exercise of MYnd warrants following which the holder is entitled to receive,
                                         in addition to MYnd common stock, our common stock.
87
(3)
Mr. Votruba is a
                                         representative of RSJ; refer to footnote (10) below, as all of his granted shares are
                                         assigned to RSJ. Mr. Votruba has been a member of the Board since July 30, 2015. Mr.
                                         Votruba has agreed to assign to RSJ the benefit of all restricted shares granted to him
                                         in connection with his service as a member of the board of directors.
(4)
Consists of (a)
                                         97,110 shares of common stock and (b) 29,558 shares of common stock issuable upon the
                                         exercise of MYnd warrants following which the holder is entitled to receive, in addition
                                         to MYnd common stock, our common stock. Mr. Harris has been a member of the board since
                                         July 30, 2015.
(5)
Consists of (a)
                                         126,627 shares of common stock; (b) 50,000 shares of common stock issuable upon conversion
                                         of Series A Preferred Stock and (b) 115,127 shares of common stock issuable upon the
                                         exercise of MYnd warrants following which the holder is entitled to receive, in addition
                                         to MYnd common stock, our common stock. Mr. Unanue has been a member of the Board since
                                         September 19, 2017.
(6)
Consists of (a)
                                         1,364,162 shares of common stock; (b) 1,050,000 shares of common stock issuable upon
                                         conversion of Series A Preferred Stock and (b) 1,786,110 shares of common stock issuable
                                         upon the exercise of MYnd warrants following which the holder is entitled to receive,
                                         in addition to MYnd common stock, our common stock.
(7)
Consists of 1,056,474
                                         shares of common stock, and (b) 894,724 shares of common stock issuable upon the exercise
                                         of MYnd warrants following which the holder is entitled to receive, in addition to MYnd
                                         common stock, our common stock. The address of RSJ is Na Florenci 2116/15, 110 00 Prague
                                         1, Czech Republic.
(8)
Consists of (a)
                                         694,123 shares of common stock. The principal business address of JJBE is1620 26th Street,
                                         Suite 6000N, Santa Monica, California 90404.
(9)
Consists of (a)
                                         694,122 shares of common stock. The principal business address of John Steven Emerson
                                         is1522 Ensley Avenue, Los Angeles, California 90024.
(10)
Consists of (a)
                                         763,271 shares of common stock. The principal business address of Pacific Capital Management,
                                         LLC is 11601 Wilshire Boulevard, Suite 2180, Los Angeles, CA 90025.
(11)
Consists of (a)
                                         694,123 shares of common stock. The principal business address of Bryan Ezralow as Trustee
                                         of the Bryan Ezralow1994 Trust U/T/D 12/122/1994 is 23622 Calabasas Road, Suite 200,
                                         Calabasas, California 91302.
88
RELATED PARTY TRANSACTIONS
Sale of Preferred Shares
On March 29, 2018,
MYnd sold an aggregate of 1,050,000 shares for $2.00 per Unit, each Unit consisting of (i) one share of newly-designated Series
A Preferred Stock or Series A-1 Preferred Stock, and (ii) one Warrant to purchase a share of Common Stock for $2.34, in a private
placement to Mr. Pappajohn, his spouse and Peter Unanue (a director of MYnd), for gross proceeds of $2.1 million. The private
placement closed on March 29, 2018. Effective July 16, 2019, each of Mr. Pappajohn, his spouse and Mr. Unanue entered into an
exchange agreement under which they exchanged their shares of MYnd Series A Preferred Stock for our Series A Preferred Stock.
Private Placement with Directors and
Management
On September 21, 2018,
MYnd entered into definitive agreements with Mr. Carpenter, Dr. Smith, Mr. Pappajohn, Mr. Unanue and entities affiliated with
Michal Votruba, a director of MYnd and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private
placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and a warrant
to purchase a share of Common Stock for $2.00.
Director and Executive Officer Compensation
Please see the "Executive
and Director Compensation" section of this prospectus for a discussion of payments and options granted to our named executive
officers and non-employee directors.
Employment Agreements
We have entered into
employment agreements with our executive officers. For more information regarding these agreements, see the "Executive and
Director Compensation—Narrative Disclosure to Summary Compensation Table" section of this prospectus.
Indemnification Agreements with Officers
and Directors and Directors' and Officers' Liability Insurance
In connection with
this offering, we have entered into, and intend to continue to enter into, indemnification agreements with each of our executive
officers and directors. The indemnification agreements, our certificate of incorporation and our by-laws require us to indemnify
our directors to the fullest extent not prohibited by Delaware law.
Consulting Agreement
On May 30, 2019, we
entered into a Consultant Agreement with Robin L. Smith, MD, which provides that Dr. Smith will receive a $15,000 monthly fee
during the consulting term and provided for the grant of (i) an option to purchase up to 200,000 shares of our common stock (which
may be exercised at any time during the ten year period following the grant) and (ii) 100,000 restricted shares of our common
stock. The option and the restricted stock grant will vest upon the completion of our anticipated listing on a national securities
exchange. We also agreed to pay Dr. Smith a $100,000 bonus at the effective time of such listing.
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DESCRIPTION
OF SECURITIES
The following is
a summary of the material terms of our capital stock. The summaries and descriptions below do not purport to be complete statements
of the relevant provisions of our certificate of incorporation or bylaws. Our certificate of incorporation and bylaws are attached
as exhibits to this Registration Statement and incorporated herein by reference. The summaries and descriptions below do not purport
to be complete statements of the Delaware General Corporation Law.
Authorized and Outstanding Capital
Stock
We have 105,000,000
authorized shares of capital stock, par value $0.001 per share, of which 100,000,000 shares will be shares of common stock and
5,000,000 shares will be shares of "blank check" preferred stock. As of the date hereof, there are 12,833,143 shares
of our common stock and 1,050,000 shares of Series A preferred stock issued and outstanding.
Common Stock
The holders of our
common stock will be entitled to one vote per share. In addition, the holders of our common stock will be entitled to receive
pro rata dividends, if any, declared by our board of directors out of legally available funds; however, we expect that our board
of directors will retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders
of our common stock will be entitled to share ratably in all assets that are legally available for distribution. The holders of
our common stock will have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges
of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred
stock, which may be designated solely by action of our board of directors and issued in the future.
Preferred Stock
Our board of directors
is authorized, subject to any limitations prescribed by law, without further vote or action by our stockholders, to issue from
time to time shares of preferred stock in one or more series. Each series of preferred stock will have the number of shares, designations,
preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by our board of
directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive
rights.
The issuance of shares
of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders
will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect
of delaying, deferring or preventing a change of control or other corporate action. We have no current plan to issue any shares
of preferred stock.
As of the date hereof,
there are 1,050,000 shares of Series A Preferred Stock issued and outstanding. The Series A Preferred Stock has the following
terms:
Dividends.
Shares of the Series
A Preferred Stock will be entitled to receive cash dividends at the rate of five percent (5.00%) of the Original Series A Issue
Price per annum, payable out of funds legally available therefor. Such dividends shall (i) accrue on shares of Series A Preferred
Stock from the date of issuance of such shares, (ii) be cumulative, and (iii) be payable only (A) when, as and if declared by
the Board of Directors, (B) upon the occurrence of a Liquidation Event or a Deemed Liquidation Event (whether or not such dividends
have been declared) and (C) "in kind" upon a conversion of the Series A Preferred Stock. The value of Common Stock
for purposes of determining shares issuable upon a payment in kind shall not be less than the original issue price of the Series
A Preferred Stock.
Voting Rights.
Each holder of a share
of Series A Preferred Stock shall have the right to one vote for each share of Common Stock into which such Series A Preferred
Stock could then be converted (with any fractional share determined on an aggregate conversion basis being rounded down to the
nearest whole share). The holders shall be entitled to vote as a class on certain significant or corporate actions.
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Rank.
With respect to distributions
upon a Liquidation Event (as defined below), the Series A rank senior to the Common Stock and to each other class of our capital
stock existing now or hereafter created that are not specifically designated as ranking senior to the Series A Preferred Stock.
Liquidation Preference.
In the event of any
voluntary or involuntary liquidation, dissolution or winding-up of us or such subsidiaries the assets of which constitute all
or substantially all of the assets of the business of us and its subsidiaries, taken as a whole ("Liquidation Event"),
the holders of shares of Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution in
such Liquidation Event to the holders of any junior securities, including the Common Stock, by reason of their ownership thereof,
an amount per share equal to the Series A Liquidation Preference for each outstanding share of Series A Preferred Stock then held
by them. After the payment or setting apart of payment of the full preferential amounts required to be paid to the holders of
shares of Series A Preferred Stock, the remaining assets and funds legally available for distribution to our stockholders shall
be distributed among the holders of the shares of Common Stock ratably on a per-share basis.
Consolidation;
Merger.
A (i) consolidation
or merger of us with or into any other entity in which the stockholders of us immediately prior to such transaction do not own
a majority of the voting capital stock of the surviving entity, (ii) sale, lease, transfer, exclusive license, conveyance or disposition
of all or substantially all of the assets of us, or (iii) the effectuation by us of a transaction or series of related transactions
in which more than 50% of the voting power of us is disposed of (each of (i), (ii) and (iii), a "Deemed Liquidation Event"),
will each be deemed to be a Liquidation Event, unless elected otherwise by vote of the holders of a majority of the then outstanding
shares of Series A Preferred Stock ("Required Holders"). Any securities to be delivered to the stockholders pursuant
to a Deemed Liquidation Event will be valued at fair market value.
Conversion.
Each Holder of shares
of Series A Preferred Stock shall have the right (the "Conversion Right"), at any time and from time to time, at such
holder's option, to convert all or any portion of such holder's shares of Series A Preferred Stock into fully paid
and non-assessable shares of Common Stock. Upon a holder's election to exercise its Conversion Right, each share of Series
A Preferred Stock for which the Conversion Right is exercised shall be converted into such number of shares of Common Stock as
is determined by dividing the Original Purchase Price ($1.85) by the conversion price for the Series A Preferred Stock at the
time in effect. In addition, pursuant to the terms of exchange agreements under which holders of MYnd Series A Preferred Stock
exchange such shares for our Series A Preferred Stock, each of our Series A Preferred stockholders agreed that if (i) we sells
shares of our Common Stock in one or more registered public offerings or a private placements, at a price per share that is equal
to, or in excess of, three times the current conversion price of the Series A Preferred Stock or (ii) our Common Stock trades
on a national securities exchange and our Common Stock has a closing sale price that is equal to, or in excess of, three times
the current conversion price of our Series A Preferred Stock for at least five (5) consecutive days, all of our Series A Preferred
Stock shall automatically convert into our Common Stock without any further action on the part of us or the holders of the Series
A Preferred Stock.
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Anti-takeover Provisions in Our Certificate
of Incorporation and Bylaws
Authorized But Unissued Preferred Stock
As discussed above,
we will be authorized to issue a total of 5,000,000 shares of preferred stock. Our certificate of incorporation will provide that
the board of directors may issue preferred stock by resolution, without any action of the stockholders. In the event of a hostile
takeover, the board of directors could potentially use this preferred stock to preserve control. The existence of authorized but
unissued shares of preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain
control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary
obligations, our board of directors were to determine that a takeover proposal is not in the best interests of us or our stockholders,
our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private
offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder
or stockholder group. In this regard, our certificate of incorporation grants our board of directors broad power to establish
the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could
decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also
adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring
or preventing a change in control of us.
Filling Vacancies
Our bylaws will include
a provision that permits the board to fill any vacancies on the board arising due to the death, resignation or removal of any
director. The board will also authorized to fill vacancies if the stockholders fail to elect the full authorized number of directors
to be elected at any annual or special meeting of stockholders. Vacancies in the board may be filled by a majority of the remaining
directors then in office, even though less than a quorum of the board, or by a sole remaining director.
Board Action Without Meeting
Our bylaws will provide
that the board may take action without a meeting if all the members of the board consent to the action in writing. Board action
through consent allows the board to make swift decisions, including in the event that a hostile takeover threatens current management.
No Cumulative Voting
Our bylaws and certificate
of incorporation will not provide the right to cumulate votes in the election of directors. This provision means that the holders
of a plurality of the shares voting for the election of directors can elect all of the directors. Non-cumulative voting makes
it more difficult for an insurgent minority stockholder to elect a person to the board of directors.
Special Meetings of Stockholders
Our bylaws will allow
special meetings of stockholders to be called only by our board of directors.
Section 203 of the Delaware General
Corporation Law
We are subject to
the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly-held Delaware
corporation from engaging in a "business combination" with an "interested stockholder" for a three-year
period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved
in a prescribed manner. A "business combination" includes, among other things, a merger, asset or stock sale or other
transaction resulting in a financial benefit to the interested stockholder. An "interested stockholder" is a person
who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder
status, 15% or more of the corporation's voting stock.
Under Section 203,
a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following
conditions:
●
before
                                         the stockholder became interested, the board of directors approved either the business
                                         combination or the transaction that resulted in the stockholder becoming an interested
                                         stockholder;
●
upon
                                         consummation of the transaction that resulted in the stockholder becoming an interested
                                         stockholder, the interested stockholder owned at least 85% of the voting stock of the
                                         corporation outstanding at the time the transaction commenced, excluding for purposes
                                         of determining the voting stock outstanding, shares owned by persons who are directors
                                         and also officers, and employee stock plans, in some instances; or
●
at
                                         or after the time the stockholder became interested, the business combination was approved
                                         by the board of directors of the corporation and authorized at an annual or special meeting
                                         of the stockholders by the affirmative vote of at least two-thirds of the outstanding
                                         voting stock that is not owned by the interested stockholder.
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A Delaware corporation
may "opt out" of these provisions with an express provision in its original certificate of incorporation or an express
provision in its amended and restated certificate of incorporation or amended and restated by-laws resulting from a stockholders'
amendment approved by at least a majority of the outstanding voting shares. We have not opted out of these provisions. As a result,
mergers or other takeover or change in control attempts of us may be discouraged or prevented.
Limitations on Liability, Indemnification
of Officers and Directors and Insurance
Our certificate of
incorporation contains provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State
of Delaware, the personal liability of our directors and executive officers for monetary damages for breach of their fiduciary
duties as directors or officers. our certificate of incorporation and bylaws provide that we must indemnify its directors and
executive officers and may indemnify its employees and other agents to the fullest extent permitted by the General Corporation
Law of the State of Delaware.
Sections 145 and 102(b)(7)
of the General Corporation Law of the State of Delaware provide that a corporation may indemnify any person made a party to an
action by reason of the fact that he or she was a director, executive officer, employee or agent of the corporation or is or was
serving at the request of a corporation against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the
case of an action by or in right of the corporation, no indemnification may generally be made in respect of any claim as to which
such person is adjudged to be liable to the corporation.
Authorized but Unissued Shares
Our authorized but
unissued shares of common stock and preferred stock will be available for future issuance without your approval. We may use additional
shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions and as employee
compensation. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult
or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Listing
We have applied to
have our shares of common stock listed on the Nasdaq Stock Market under the symbol "PSYC," and we have applied to
have our common stock quoted on the OTC.QB although there is no assurance that our application[s] will be approved.
Transfer Agent and Registrar
The transfer agent
and registrar for our common stock is American Stock Transfer & Trust Company.
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Shares
Eligible for Future Sale
Prior to this offering,
there has been no public market for our common stock, and we cannot predict the effect, if any, that sales of shares or availability
of any shares for sale will have on the market price of our common stock prevailing from time to time. Sales of substantial amounts
of common stock (including shares issued on the exercise of options, warrants or convertible securities, if any) or the perception
that such sales could occur, could adversely affect the market price of our common stock and our ability to raise additional capital
through a future sale of securities.
Upon completion of
this offering, we will have shares of common stock issued and outstanding (or shares if the underwriters exercise their over-allotment
option in full). All of the shares of our common stock sold in this offering will be freely tradable without restriction or further
registration under the Securities Act unless such shares are purchased by "affiliates" as that term is defined in
Rule 144 under the Securities Act. These shares will be "restricted securities" as that phrase is defined in Rule
144. Subject to certain contractual restrictions, including the lock-up agreements described below, holders of restricted shares
will be entitled to sell those shares in the public market if they qualify for an exemption from registration under Rule 144 or
any other applicable exemption under the Securities Act. Subject to the lock-up agreements described below and the provisions
of Rules 144 and 701, additional shares will be available for sale as set forth below.
Lock-Up Agreements
We and each of our
directors and executive officers have agreed that, subject to certain exceptions, for ninety (90) days (with respect to us) and
one-hundred eighty (180) days (with respect to officer and directors) after the date of this prospectus, without the prior written
consent of Aegis, we and they will not directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter
into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time
in the future of) any shares of our common stock (including, without limitation, shares of our common stock that may be deemed
to be beneficially owned by us or them in accordance with the rules and regulations of the SEC and shares of common stock that
may be issued upon exercise of any options or warrants) or securities convertible into or exercisable or exchangeable for our
common stock, (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of
the economic consequences of ownership of our common stock or (3) make any demand for or exercise any right or file or cause to
be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of our common
stock or securities convertible, exercisable or exchangeable into our common stock or any of our other securities, although we
are permitted to file a registration statement on Form S-8. We may execute the agreements related to a $10 million equity line
and file the related registration statement, although utilization of the equity line will be subject to the 90-day lock-up referred
to above.
Aegis, in its sole
discretion, may release our common stock and other securities subject to the lock-up agreements described above in whole or in
part at any time with or without notice. When determining whether or not to release our common stock and other securities from
the lock-up agreements,  Aegis will consider, among other factors, the holder's reasons for requesting the release,
the number of shares of our common stock and other securities for which the release is being requested and market conditions at
the time.
Rule 144
In general, under
Rule 144 under the Securities Act, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate
of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the
meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders)
would be entitled to sell those shares, subject only to the availability of current public information about us. A non-affiliated
person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled
to sell those shares without regard to the provisions of Rule 144.
A person (or persons
whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities within
the meaning of Rule 144 for at least six months would be entitled to sell within any three-month period a number of shares that
does not exceed the greater of one percent of the then outstanding shares of our common stock or the average weekly trading volume
of our common stock reported through the Nasdaq during the four calendar weeks preceding such sale. Such sales are also subject
to certain manner of sale provisions, notice requirements and the availability of current public information about us.
94
Underwriting
Aegis Capital Corp.
is acting as the lead managing underwriter and as representative of the underwriters (the "Representative"). Subject
to the terms and conditions of an underwriting agreement between us and the Representative, we have agreed to sell to each underwriter
named below, and each underwriter named below has severally agreed to purchase, at the public offering price less the underwriting
discounts set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the
following table:
Name of Underwriter
Number of Shares
Aegis Capital Corp.
Total
The underwriters are
committed to purchase all the shares of common stock offered by this prospectus if they purchase any shares of common stock. The
underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters
may be increased, or the offering may be terminated. The underwriters are not obligated to purchase the shares of common stock
covered by the underwriters' option to purchase additional shares of common stock described below. The underwriters are
offering the shares of common stock, subject to prior sale, when, as and if issued to and accepted by them, subject to approval
of legal matters by their counsel, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters
of officer's certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to
the public and to reject orders in whole or in part.
Over-Allotment Option
We have granted
the underwriters an option exercisable for up to 45 days after the date of the underwriting agreement, to purchase up to
210,000 shares of common stock at the public offering price listed on the cover page of this prospectus, less underwriting
discounts and commissions. The underwriters may exercise this option only to cover over-allotments, if any, made in
connection with this offering. To the extent the option is exercised, and the conditions of the underwriting agreement are
satisfied, we will be obligated to sell to the underwriters, and the underwriters will be obligated to purchase, these
additional shares of common stock.
Discount and Commissions
We have agreed to
pay the underwriters a cash fee equal to eight percent (8%) of the aggregate gross proceeds. We have agreed to pay a non-accountable
expense allowance to the underwriters equal to 1.0% of the gross proceeds received in this offering (excluding proceeds received
from exercise of the underwriters' over-allotment option).
The Representative
has advised us that the underwriters propose to offer the shares directly to the public at the public offering price set forth
on the cover of this prospectus. In addition, the Representative may offer some of the shares to other securities dealers at such
price less a concession of up to $             per share. After the offering to the public, the offering price and other selling terms may
be changed by the Representative without changing the Company's proceeds from the underwriters' purchase of the shares.
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The following table
shows the public offering price, underwriting discount and proceeds, before expenses, to us. The information assumes either no
exercise or full exercise by the underwriters of their over-allotment option. The underwriting commissions are equal to the public
offering price per share less the amount per share the underwriters pay us for the shares.
Without Option
With Option
Per Share
Total
Per Share
Total
Public offering price
$
$
$
$
Underwriting discount (8%)
$
$
$
$
Non-accountable expense allowance (1%)(1)
$
$
Proceeds to us before expenses
$
$
$
$
We estimate that the
total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses,
but excluding underwriting discounts and commissions, will be approximately $_________, all of which are payable by us. This figure
includes expense reimbursements we have agreed to pay the Representative for reimbursement of its expenses related to the offering
up to a maximum aggregate expense allowance of $125,000, for which we have paid a $30,000 advance, which will be returned to us
to the extent not offset by actual expenses.
Determination of Offering Price
Before this offering,
there has been a very limited public market for our common stock. Accordingly, the public offering price will be negotiated between
us and the representative. Among the factors to be considered in these negotiations are:
●
the
                                         prospects for our company and the industry in which we operate;
●
our
                                         past and present financial and operating performance;
●
financial
                                         and operating information and market valuations of publicly traded companies engaged
                                         in activities similar to ours;
●
the
                                         prevailing conditions of U.S. securities markets at the time of this offering; and
●
other
                                         factors deemed relevant.
Lock-Up Agreements
We and each of our
officers and directors have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant
any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable
or exchangeable for shares of our common stock for a period of ninety (90) days (for us) and one hundred eighty (180) days (for
our directors and officers) from the date of this offering without the prior written consent of the Representative.
The Representative
may in its sole discretion and at any time without notice release some or all of the shares subject to lock-up agreements prior
to the expiration of the lock-up period. When determining whether or not to release shares from the lock-up agreements, the representative
will consider, among other factors, the security holder's reasons for requesting the release, the number of shares for which
the release is being requested and market conditions at the time.
Pursuant to the underwriting
agreement, we have also agreed, for a period of ninety (90) days from the date of the offering, that we will not, subject to specified
exempt issuances, file or cause to be filed any registration statement with the Commission relating to the offering of any shares
of capital stock of us or any securities convertible into or exercisable or exchangeable for shares of capital stock of us.
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Right of First Refusal.
According to the terms
of the underwriting agreement, upon the closing of this offering, the Representative shall have the right of first refusal, for
a period of six (6) months from the closing of the offering, to act as lead managing underwriter and sole book runner and/or lead
placement agent for any and all future public or private equity, equity-linked or debt (excluding commercial bank debt) offerings,
which shall be increased to nine (9) months from the closing of this offering if the gross proceeds to us equal or exceed $7.0
million but in no case will the right of first refusal extend beyond the third anniversary of the commencement of sales of the
offering. We have also agreed to a tail fee equal to the cash compensation in this offering if any investor to which the underwriter
introduced us with respect to this offering during the term of its engagement provides us with further capital in a public or
private offering or capital raising transaction during the 12-month period following termination of our engagement of the underwriter.
Indemnification
We have agreed to
indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute to
payments the underwriters may be required to make in respect thereof.
Electronic Offer, Sale and Distribution of Shares.
A prospectus in electronic
format may be made available on a website maintained by the Representative and may also be made available on a website maintained
by other underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online brokerage
account holders. Internet distributions will be allocated by the Representative to underwriters that may make Internet distributions
on the same basis as other allocations. In connection with the offering, the underwriters or syndicate members may distribute
prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe® PDF will
be used in connection with this offering.
The underwriters have
informed us that they do not expect to confirm sales of shares offered by this prospectus to accounts over which they exercise
discretionary authority.
Other than the prospectus
in electronic format, the information on any underwriter's website and any information contained in any other website maintained
by an underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been
approved and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.
Price Stabilization, Short Positions,
and Penalty Bids
In connection with
this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common
stock. Specifically, the underwriters may over-allot in connection with this offering by selling more shares than are set forth
on the cover page of this prospectus. This creates a short position in our common stock for its own account. The short position
may be either a covered short position or a naked short position. In a covered short position, the number of shares common stock
over-allotted by the underwriters is not greater than the number of shares of common stock that they may purchase in the over-allotment
option. In a naked short position, the number of shares of common stock involved is greater than the number of shares common stock
in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment
option. The underwriters may also elect to stabilize the price of our common stock or reduce any short position by bidding for,
and purchasing, common stock in the open market.
The underwriters may
also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing
a security in this offering because the underwriter repurchases that security in stabilizing or short covering transactions.
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Finally, the underwriters
may bid for, and purchase, shares of our common stock in market making transactions, including "passive" market making
transactions as described below.
These activities may
stabilize or maintain the market price of our common stock at a price that is higher than the price that might otherwise exist
in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of
these activities at any time without notice.
In connection with
this offering, the underwriters and selling group members, if any, or their affiliates may engage in passive market making transactions
in our common stock immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of Regulation
M under the Exchange Act. Rule 103 generally provides that:
●
a
                                         passive market maker may not effect transactions or display bids for our common stock
                                         in excess of the highest independent bid price by persons who are not passive market
                                         makers;
●
net
                                         purchases by a passive market maker on each day are generally limited to 30% of the passive
                                         market maker's average daily trading volume in our common stock during a specified
                                         two-month prior period or 200 shares, whichever is greater, and must be discontinued
                                         when that limit is reached; and
●
passive
                                         market making bids must be identified as such.
Certain Relationships
Certain of the underwriters
and their affiliates may in the future provide various investment banking, commercial banking and other financial services for
us and our affiliates for which they may in the future receive customary fees, however, except for the right of first refusal
disclosed in this prospectus, we have no present arrangements with any of the underwriters for any further services.
Offer Restrictions Outside the United
States
Other than in the
United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered
by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may
not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection
with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of
this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered
by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
Legal
Matters
The validity of the
securities offered by this prospectus will be passed upon for us by Dentons US LLP, New York, New York. The underwriters are being
represented by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, New York
Experts
The financial statements
of MYnd for the years ended September 30, 2018 and 2017 appearing in this prospectus, which describe the assets transferred to
us by MYnd in the Separation as if the transferred assets were our business for all historical periods described, have been audited
by Marcum LLP, independent registered public accounting firm, as set forth in their report dated December 11, 2018, which report
includes an explanatory paragraph as to the ability of MYnd to continue as a going concern.
98
Where
You Can Find More Information
We have filed with
the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of Common Stock being offered
by this prospectus. This prospectus does not contain all of the information in the registration statement of which this prospectus
is a part and the exhibits to such registration statement. For further information with respect to us and the Common Stock offered
by this prospectus, we refer you to the registration statement of which this prospectus is a part and the exhibits to such registration
statement. Statements contained in this prospectus as to the contents of any contract or any other document are not necessarily
complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration
statement of which this prospectus is a part. Each of these statements is qualified in all respects by this reference.
You may read and copy
the registration statement of which this prospectus is a part, as well as our reports, proxy statements and other information,
at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for more information about the operation of the Public Reference Room. The SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that file electronically with the SEC, including Telemynd,
Inc. The SEC's Internet site can be found at
http://www.sec.gov
. You may also request a copy of these filings, at
no cost, by writing us at 26522 La Alameda, Suite 290, Mission Viejo, California 92691 or telephoning us at (949) 420-4400.
We are subject to
the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and, in accordance with this law,
file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other
information are available for inspection and copying at the SEC's public reference facilities and the website of the SEC
referred to above. We also maintain a website at
www.telemynd.com
. You may access these materials free of charge as soon
as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website
is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference
only.
99
INDEX
TO FINANCIAL STATEMENTS
This prospectus describes the assets
transferred to us by MYnd in the Separation as if the transferred assets were our business for all historical periods described.
References in this prospectus to our historical assets, liabilities, products, businesses or activities of our business are generally
intended to refer to the historical assets, liabilities, products, businesses or activities of the transferred businesses as the
businesses were conducted as part of MYnd and its subsidiaries prior to the Separation.
Page
Audited Financial Statements
Report of Independent Registered Public Accounting Firm for the years ended September 30, 2018 and 2017
F-2
Consolidated Balance Sheets as of September 30, 2018 and 2017
F-3
Consolidated Statements of Operations for the years ended September 30, 2018 and 2017
F-4
Consolidated Statements of Changes in Equity for the years ended September 30, 2018 and 2017
F-5
Consolidated Statements of Cash Flows for the years ended September 30, 2018 and 2017
F-6
Notes to Consolidated Financial Statements
F-7
Unaudited Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2019 and September 30, 2018 (audited)
F-31
Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2019 and 2019
F-32
Unaudited Condensed Consolidated Statements of Stockholders Equity for  the six months ended March 31, 2019 and 2018
F-33
Unaudited Condensed Consolidated Statements of Cash Flow for the six months ended March 31, 2019 and 2018
F-34
Notes to Unaudited Condensed Consolidated Financial Statements
F-35
F-
1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Stockholders and Board of Directors of
MYnd
Analytics, Inc.
Opinion
on the Financial Statements
We
have audited the accompanying consolidated balance sheets of MYnd Analytics, Inc. (the "Company") as of September
30, 2018 and 2017, the related consolidated statements of operations, equity and cash flows for each of the two years in the period
ended September 30, 2018, and the related notes (collectively referred to as the "financial statements"). In our opinion,
the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2018
and 2017 and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2018,
in conformity with accounting principles generally accepted in the United States of America.
Explanatory
Paragraph - Going Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully
described in Note 1, the Company has incurred significant losses and negative cash flows from operations and needs to raise additional
funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis
for Opinion
These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
/s/
Marcum LLP
Marcum
LLP
We
have served as the Company's auditor since 2017.
Costa
Mesa, CA
December
11, 2018
F-
2
MYND
ANALYTICS, INC.
CONSOLIDATED
BALANCE SHEETS
September 30,
As of
March 31,
2018
2017
2019
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
3,254,700
$
5,449,000
$
1,203,200
Accounts receivable, net
63,300
6,500
154,400
Prepaid insurance
57,900
57,200
9,700
Note receivable - related party
—
159,500
Prepaid expenses and other current assets
134,700
22,000
181,200
Total current assets
3,510,600
5,694,200
1,548,500
Property and equipment, net
110,800
120,700
87,700
Intangible assets, net
116,500
60,200
88,400
Investment in Arcadian
—
195,900
Goodwill
1,386,800
—
1,386,800
Other assets
27,100
25,100
29,600
TOTAL ASSETS
$
5,151,800
$
6,096,100
$
3,141,000
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable (including $30,350 and $36,200 to related parties as of September 30, 2018, and 2017, respectively)
$
346,900
$
736,900
$
970,700
Accrued liabilities
268,900
55,200
204,700
Accrued compensation
175,400
466,000
244,900
Accrued compensation – related parties
209,300
204,600
322,800
Accrued interest and other
3,900
3,900
3,900
Deferred revenue
159,700
45,900
152,100
Current portion of note payable
—
31,500
Current portion of capital lease
1,300
1,300
1,400
Total current liabilities
1,165,400
1,545,300
1,900,500
LONG-TERM LIABILITIES
Long-term borrowing, net
587,700
—
606,500
Accrued interest on long-term borrowing
110,100
—
120,500
Long term portion of capital lease
2,100
3,400
1,400
Total long-term liabilities
699,900
3,400
728,400
TOTAL LIABILITIES
1,865,300
1,548,700
2,628,900
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 15,000,000 authorized; 1,500,000 shares of Series A Preferred Stock and 500,000 shares of Series A-1 authorized; 550,000 shares of Series A Preferred Stock and 500,000 shares of Series A-1 issued and outstanding as of September 30, 2018; No shares of Preferred stock issued and outstanding as of September 30, 2017; aggregate liquidation preference of $1,968,750 as of September 30, 2018
1,100
—
1,100
Common stock, $0.001 par value; 250,000,000 shares and 500,000,000 shares authorized as of September 30, 2018 and September 30, 2017 respectively, 7,407,254 and 4,299,311 shares issued and outstanding as of September 30, 2018 and September 30, 2017, respectively;
7,400
4,300
8,900
Additional paid-in capital
89,257,700
80,189,700
91,895,900
Accumulated deficit
(85,245,300
)
(75,646,600
)
(89,881,400
)
Total controlling interests
4,020,900
4,547,400
2,024,500
Non-controlling interest
(734,400
)
—
(1,512,400
Total stockholders' equity
$
3,286,500
$
4,547,400
$
512,100
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
5,151,800
$
6,096,100
$
3,141,000
See
Accompanying Notes to the Consolidated Financial Statements
F-
3
MYND
ANALYTICS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
For the years ended
September 30,
Six Months Ended
March 31,
2018
2017
2019
2018
REVENUES
Neurometric services
$
263,700
$
128,500
$
124,000
$
133,100
Telepsychiatry services
1,051,800
—
723,200
448,800
Total revenues
1,315,500
128,500
847,200
581,900
Cost of revenues
Neurometric services
131,200
53,500
11,500
118,800
Telepsychiatry services
696,200
—
509,900
264,400
827,400
53,500
521,400
383,200
Gross Margin
488,100
75,000
325,800
198,700
OPERATING EXPENSES
Research
231,500
123,900
141,600
154,900
Product development
1,146,000
1,237,200
474,300
611,400
Sales and marketing
1,617,900
1,226,700
351,300
1,305,200
General and administrative
7,737,600
4,590,800
4,724,100
3,515,800
Total operating expenses
10,733,000
7,178,600
5,691,300
5,587,300
OPERATING LOSS
(10,244,900
)
(7,103,600
)
(5,365,500
)
(5,388,600
)
OTHER INCOME (EXPENSE):
Interest expense, net
(86,300
)
(6,600
)
(46,300
)
(38,500
)
Total other income (expense)
(86,300
)
(6,600
)
(46,300
)
(38,500
)
LOSS BEFORE PROVISION FOR INCOME TAXES
(10,331,200
)
(7,110,200
)
(5,411,800
)
(5,427,100
)
Income taxes
1,900
2,600
2,300
1,900
NET LOSS
$
(10,333,100
)
$
(7,112,800
)
$
(5,414,100
)
$
(5,429,000
)
Net loss attributable to noncontrolling interest
(734,400
)
—
(778,000
)
(72,300
)
Net Loss attributable to MYnd Analytics, Inc.
$
(9,598,700
)
$
(7,112,800
)
$
(4,636,100
)
$
(5,356,700
)
BASIC AND DILUTED LOSS PER SHARE:
$
(1.86
)
$
(2.52
)
$
(0.58
)
$
(1.23
)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and Diluted
5,199,566
2,817,415
7,964,021
4,347,745
See
Accompanying Notes to the Consolidated Financial Statements
F-
4
MYND
ANALYTICS, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
Sub-total
Common
    Stock
Preferred
    Stock
Additional Paid-in
Accumulated
MYnd Stockholders'
Noncontrolling
Total
Shares
Amount
Shares
Amount
Capital
Deficit
Equity
Interest
Equity
Balance
    at September 30, 2016
1,941,061
$
1,900
—
$
—
$
67,467,400
$
(68,533,800
)
$
(1,064,500
)
$
—
$
(1,064,500
)
Stock-based compensation
—
—
—
—
2,086,000
—
2,086,000
—
2,086,000
Stock issued for private
    placement of shares
477,000
500
—
—
2,980,800
—
2,981,300
—
2,981,300
Stock issued for purchase
    agreement to Aspire Capital
20,000
—
—
—
145,000
—
145,000
—
145,000
Commitment shares issued
    to Aspire Capital
80,000
100
—
—
(100
)
—
—
—
—
Stock issued to vendor
    for services
26,250
—
—
—
173,000
—
173,000
—
173,000
Restricted stock compensation
79,000
100
—
—
(100
)
—
—
—
—
Common stock issued
    to Arcadian
1,000
—
—
—
5,900
—
5,900
—
5,900
Common stock - public
    Offering
1,675,000
1,700
—
—
7,480,400
—
7,482,100
—
7,482,100
Offering costs - legal
    fees Arcadian
—
—
—
(148,600
)
—
(148,600
)
—
(148,600
)
Net
    loss
—
—
—
(7,112,800
)
(7,112,800
)
—
(7,112,800
)
Balance
    at September 30, 2017
4,299,311
$
4,300
—
$
—
$
80,189,700
$
(75,646,600
)
$
4,547,400
$
—
$
4,547,400
Stock-based compensation
—
—
—
—
1,588,300
—
1,588,300
—
1,588,300
Proceeds from issuance
    of preferred stock
—
—
1,050,000
1,100
2,036,000
—
2,037,100
—
2,037,100
Stock issued to Aspire
    Capital
2,314,671
2,310
—
—
4,257,900
—
4,260,210
—
4,260,210
Issuance of common stock
183,814
175
—
—
80,300
—
80,475
—
80,475
Stock issued for private
    placement of shares
459,458
460
—
—
849,500
—
849,960
—
849,960
Stock issued to vendor
    for services
115,000
120
—
—
201,800
—
201,920
—
201,920
Proceeds from option
    exercise
35,000
35
—
—
54,200
—
54,235
—
54,235
Net
    loss
(9,598,700
)
(9,598,700
)
(734,400
)
(10,333,100
)
Balance at September 30, 2018
7,407,254
$
7,400
1,050,000
$
1,100
$
89,257,700
$
(85,245,300
)
$
4,020,900
$
(734,400
)
$
3,286,500
See
Accompanying Notes to the Consolidated Financial Statements
F-
5
MYND
ANALYTICS, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the years ended
September 30,
2018
2017
OPERATING ACTIVITIES:
Net loss
$
(10,333,100
)
$
(7,112,800
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
117,900
48,700
Change in provision for doubtful accounts
800
—
Stock based compensation
1,588,300
2,086,000
Non-cash common stock issued to vendors for services
201,920
173,000
Accretion of debt discount and non-cash interest expense
82,300
—
Changes in operating assets and liabilities:
Accounts receivable
(500
)
(1,400
)
Prepaid expenses and other assets
(91,500
)
(12,100
)
Accounts payable and accrued liabilities
(432,700
)
301,500
Deferred revenue
113,800
—
Deferred compensation
(285,900
)
(275,000
)
Net cash used in operating activities
(9,038,680
)
(4,792,100
)
INVESTING ACTIVITIES:
Purchase of property and equipment
(55,200
)
(127,900
)
Investment in Arcadian
—
(190,000
)
Payment for acquisition of business, net of cash acquired
(306,600
)
—
Loan Advance – Plotkin
—
(159,500
)
Purchase of intangible assets
—
(2,100
)
Net cash used in investing activities
(361,800
)
(479,500
)
FINANCING ACTIVITIES:
Principal payments on capital lease
(2,600
)
(1,200
)
Principal payments on long-term debt
(37,000
)
—
Principal payments on note payable
(36,200
)
(56,200
)
Proceeds from Aspire Capital purchase agreements
4,260,210
145,000
Proceeds from sale of preferred stock and common stock warrants
2,037,100
—
Proceeds from sale of common stock
930,435
2,981,300
Proceeds from public offering
—
7,482,100
Proceeds from stock options exercised
54,235
—
Deferred offering costs
—
(148,600
)
Net cash provided by financing activities
7,206,180
10,402,400
NET INCREASE (DECREASE) IN CASH
(2,194,300
)
5,130,800
CASH- BEGINNING OF YEAR
5,449,000
318,200
CASH- END OF YEAR
$
3,254,700
$
5,449,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest
$
8,200
$
6,600
Income taxes
$
1,900
$
2,600
Non-cash financing and investing activities
Long-term borrowings assumed in business combination
$
651,700
—
Commitment shares issued to Aspire Capital as offering cost
$
795,000
$
708,000
Investment in Arcadian 1,000 shares at $5.90 per share of common stock
$
—
$
5,900
See
Accompanying Notes to the Consolidated Financial Statements
F-
6
MYND
ANALYTICS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
NATURE
                                         OF OPERATIONS
Organization,
Nature of Operations and Going Concern Uncertainty
MYnd
Analytics, Inc. ("MYnd," "CNS," "we," "us," "our," or the "Company"),
formerly known as CNS Response Inc., is a predictive analytics company that has developed a decision support tool to help physicians
reduce trial and error treatment in mental health and provide more personalized care to patients. The Company employs a clinically
validated scalable technology platform to support personalized care for mental health patients. The Company utilizes its patented
machine learning, artificial intelligence, data analytics platform for the delivery of telebehavioral health services and its
PEER predictive analytics product offering. On November 13, 2017, the Company acquired Arcadian, which manages the delivery of
telepsychiatry and telebehavioral health services through a nationwide network of licensed and credentialed psychiatrists, psychologists
and master's-level therapists. The Company is commercializing its PEER predictive analytics tool to help physicians reduce
trial and error treatment in mental health. MYnd's patented, clinically validated technology platform ("PEER Online")
utilizes complex algorithms to analyze electroencephalograms ("EEGs") to generate Psychiatric EEG Evaluation Registry
("PEER") Reports to predict individual responses to a range of medications prescribed for the treatment of behavioral
disorders including depression, anxiety, bipolar disorder, PTSD and other non-psychotic disorders.
Going
Concern Uncertainty
The
accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles
("GAAP"), which contemplate continuation of the Company as a going concern. The Company's operations are subject
to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation
of a business. These risks include the ability to obtain adequate financing on a timely basis, if at all, the failure to develop
or supply technology or services to meet the demands of the marketplace, the failure to attract and retain qualified personnel,
competition within the industry, government regulation and the general strength of regional and national economies.
The
Company's recurring net losses and negative cash flows from operations raise substantial doubt about its ability to continue
as a going concern. During the twelve months ended September 30, 2018, the Company incurred a net loss of $10.3 million and used
$9.0 million of net cash in operating activities. As of September 30, 2018, the Company's accumulated deficit was $85.2
million. In connection with these consolidated financial statements, management evaluated whether there were conditions and events,
considered in the aggregate, that raised substantial doubt about the Company's ability to meet its obligations as they become
due for the next twelve months from the date of issuance of these financial statements. Management assessed that there were such
conditions and events, including a history of recurring operating losses, and negative cash flows from operating activities.
If
the Company raises additional funds by issuing additional equity or convertible debt securities, the fully diluted ownership percentages
of existing stockholders will be reduced. In addition, any equity or debt securities that the Company would issue may have rights,
preferences or privileges senior to those of the holders of its common stock.
To date, the Company
has financed its cash requirements primarily from equity financings. The Company will need to raise funds immediately to continue
its operations and increase demand for its services. Until it can generate sufficient revenues to meet its cash requirements,
which it may never do, the Company must continue to finance future cash needs primarily through public or private equity offerings,
debt financings or strategic collaborations. The Company's liquidity and capital requirements depend on several factors,
including the rate of market acceptance of its services, the future profitability of the Company, the rate of growth of the Company's
business and other factors described elsewhere in this prospectus. The Company continues to explore additional sources of capital,
but there is substantial doubt as to whether any financing arrangement will be available in amounts and on terms acceptable to
the Company to permit it to continue operations. The accompanying consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
F-
7
2.
SUMMARY
                                         OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the
U.S. Securities and Exchange Commission (the "SEC") and are in accordance with accounting principles generally accepted
in the United States of America.
Basis
of Consolidation
The
audited consolidated financial statements include the results of MYnd, its wholly owned subsidiary, Arcadian Telepsychiatry Services
LLC ("Arcadian Services"), two professional associations, Arcadian Telepsychiatry PA ("Texas PA") which
is incorporated in Texas and Arcadian Telepsychiatry Florida P.A. ("Florida PA") which is incorporated in Florida,
and two professional corporations, Arcadian Telepsychiatry P.C. ("Pennsylvania PC") which is incorporated in Pennsylvania
and Arcadian Telepsychiatry of California, P.C. ("California PC") which is incorporated in California collectively
"the Arcadian Entities."
Arcadian
Services is party to Management Services Agreements by and among it and the Arcadian Entities pursuant to which each entity provides
services to Arcadian Services. Each entity is established pursuant to the requirements of its respective domestic jurisdiction
governing the corporate practice of medicine. All intercompany balances and transactions have been eliminated upon consolidation.
Segments
We
view our operations and manage our business as one operating segment.
Variable
Interest Entities (VIE)
On November 13, 2017, Arcadian Services entered into a management
and administrative services agreement with Texas PA and with Pennsylvania PC, for an initial fixed term of 20 years. In accordance
with relevant accounting guidance, Texas PA and Pennsylvania PC are determined to be a Variable Interest Entity ("VIE")
as MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly
affect Texas PA's and Pennsylvania PC's economic performance through its majority representation of the Texas PA and
Pennsylvania PC; therefore, Texas PA and Pennsylvania PC are consolidated by MYnd. On January 19, 2018, Arcadian Services entered
into a management and administrative services agreement with California PC, for an initial fixed term of 20 years. In accordance
with relevant accounting guidance, California PC is determined to be a VIE and MYnd is the primary beneficiary with the ability
to direct the activities (excluding clinical decisions) that most significantly affect California PC's economic performance
through its majority representation of California PC; therefore, California PC is consolidated by MYnd. On March 27, 2018, Arcadian
Services entered into a management and administrative services agreement with Florida PA, for an initial fixed term of 20 years.
In accordance with relevant accounting guidance, Florida PA is determined to be a VIE and MYnd is the primary beneficiary with
the ability to direct the activities (excluding clinical decisions) that most significantly affect Florida PA's economic
performance through its majority representation of Florida PA; therefore, Florida PA is consolidated by MYnd.
The Company holds a variable interest in the entities which
contract with physicians and other health professionals in order to provide telepsychiatry services to Arcadian Services. The entities
are considered variable interest entities since they do not have sufficient equity to finance their activities without additional
financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power
and benefits, that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic
performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the
right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and
rights to control all activities of the entities and funds and absorbs all losses of the VIE.
In accordance with management service agreements entered into
between the Company and medical professional corporations and associations in compliance with regulatory requirements within certain
states, the Company has the power to direct activities of the VIE's and may transfer assets from the individual VIEs to the
Company. Therefore, the Company considers that there are no assets in any of the consolidated VIEs that may be relied upon to settle
obligations of these entities to third parties. Furthermore, creditors of the VIEs do not have recourse to the general credit of
the Company for any of the liabilities to third parties of the VIEs. Finally, none of the professional corporations or associations
have purchased equipment nor are they responsible for handling cash or accounts receivable.
F-
8
There is no explicit or implicit arrangement that requires the
Company to provide financial support to the VIE, including events or circumstances that could expose the Company to a loss. For
the years ended September 30, 2018 and 2017, the Company did not provide, nor does it intend to provide in the future, any financial
or other support either explicitly or implicitly during the periods presented to its variable interest entities. In addition, there
are no restrictions on the net income earned by the VIEs. The Company allocates all of the net income earned to the primary owner
of the VIE. As part of the operating agreement with the VIE, the Company will be reimbursed for all cost incurred related to operating
the VIE in addition to a management fee charged for oversight. For the years ended September 30, 2018 and 2017, no net income was
allocated to the VIEs.
In addition, the Company has not paid any dividends to the
VIEs from inception to date as there are no dividend payment requirements within the management services agreement entered into
with the medical professional corporations and associations.
Use
of Estimates
The preparation of the consolidated financial statements requires
management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related
disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related
to revenue recognition, doubtful accounts, intangible assets, income taxes, valuation of equity instruments, accrued liabilities,
contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these
estimates.
Cash
and Cash Equivalents
The
Company considers all liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company
deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At September
30, 2018, cash exceeds the federally insured limit by $3.0 million. The Company believes that the risk of loss is minimal. To date,
the Company has not experienced any losses related to cash deposits with financial institutions.
Debt
Instruments
Debt
instruments are initially recorded at fair value, with coupon interest and amortization of debt issuance discounts recognized
in the statement of operations as interest expense at each period end while such instruments are outstanding.
Fair
Value of Financial Instruments
Financial
Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, ASC 825-10 - Recognition and Measurement of Financial
Assets and Financial Liabilities defines financial instruments and requires disclosure of the fair value of financial instruments
held by the Company. The Company considers the carrying amount of cash, accounts receivable, other receivables, accounts payable
and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such
instruments and their expected realization.
The
Company also analyzes all financial instruments with features of both liabilities and equity under ASC 480-10, ASC 815-10 and
ASC 815-40.
F-
9
The
FASB has established a framework for measuring fair value using generally accepted accounting principles. That framework provides
a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and
the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described
as follows:
●
Level I inputs
    to the valuation methodology are quoted prices for identical assets or liabilities in active markets;
●
Level II
    inputs to the valuation methodology include:
○
quoted prices
    for similar assets and liabilities in active markets;
○
Quoted prices
    for identical or similar assets or liabilities in inactive markets;
○
Inputs other
    than quoted prices that are observable for the asset or liability;
○
Inputs that
    are derived principally from or corroborated by observable market data by correlation or other means;
If
the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term
of the asset or liability.
●
Level III
    inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The
asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input
that is significant to the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize
the use of unobservable inputs.
Accounts
Receivable
The
Company estimates the collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing
the current creditworthiness of each customer. Allowances are provided for specific receivables deemed to be at risk for collection
which as of September 30, 2018 and 2017 are $1,800 and $1,000 respectively.
Property
and Equipment
Property
and Equipment, which are recorded at cost, consist of office furniture and equipment, which are depreciated, over their estimated
useful lives on a straight-line basis. The useful lives of these assets is estimated to be between three and five years. Depreciation
expense on furniture and equipment for the twelve months ended September 30, 2018 and 2017 was $60,300 and $19,700 respectively.
Accumulated depreciation at September 30, 2018 and 2017 was $149,200 and $84,200, respectively.
Long-Lived
                                         Assets
As
required by ASC 350-30 - Intangibles — Goodwill and other, the Company reviews the carrying value of its long-lived
assets at least annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of
an asset may no longer be recoverable. The Company assesses recoverability of the carrying value of the asset by estimating
the future undiscounted net cash flows expected to result from the asset, including eventual disposition. If the future net
cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the
asset's carrying value and fair value. No impairment loss was recorded for the years ended September 30, 2018 and
2017.
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10
Intangible
Assets
Costs
for software developed for internal use are accounted for through the capitalization of those costs incurred in connection with
developing or obtaining internal-use software. Capitalized costs for internal-use software are included in intangible assets in
the consolidated balance sheet. Capitalized software development costs are amortized over three years. Costs incurred during the
preliminary project along with post-implementation stages of internal use computer software development and costs incurred to
maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development
costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological
and economic feasibility and estimated economic life.
At
September 30, 2018, the Company had $101,700 in capitalized software development costs. Amortization for the twelve months ended
September 30, 2018 and 2017 was $29,000 and $29,000, respectively. Accumulated amortization was $70,400 and $39,300 at September
30, 2018 and 2017, respectively.
On
November 13, 2017, the Company acquired customer relationships and tradename intangibles in connection with the Arcadian Services
acquisition of which $109,000 were recorded at fair value and are being amortized over an estimated useful life of four years
on a straight-line basis. Amortization for the twelve months ended September 30, 2018 and 2017 was $23,800 and none, respectively.
Accumulated amortization was $23,800 and $0 at September 30, 2018 and 2017, respectively.
The
expected amortization of the intangible assets, as of September 30, 2018, for each of the next four years is as follows:
For the year ended September 30,
Intangible
assets
2019
$
54,200
2020
29,400
2021
29,400
2022
3,500
Total
$
116,500
Goodwill
Goodwill
represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations.
Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include
a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a
loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business,
significant negative industry or economic trends, or significant underperformance relative to expected historical or projected
future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence
of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is
less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines
that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment
testing is not required. The Company tests for goodwill impairment annually on September 30.
The
Company performed a qualitative goodwill assessment at September 30, 2018 and concluded there was no impairment based on consideration
of a number of factors, including the improvement in the Company's key operating metrics over the prior year, improvement
in the strength of the general economy and the Company's continued execution against its overall strategic objectives.
Based
on the foregoing, the Company determined that it was not more likely than not that the fair value of its reporting unit is less
than its carrying amount and therefore that no further impairment testing was required.
F-
11
Accrued
Compensation
Accrued
compensation consists of accrued vacation pay, accrued compensation granted by the Board but not paid, and accrued pay due to
staff members.
Accrued
compensation – related parties consists of accrued vacation pay, accrued bonuses granted by the Board but not paid for officers
and directors.
Deferred
Revenue
Deferred
revenue represents cash collected in advance of services being rendered but not earned as of September 30, 2018 and 2017. This
represents a philanthropic grant for the payment of PEER Reports ordered in a clinical trial for a member of the U.S. Military,
a veteran or their family members, the cost of which is not covered by other sources. On August 1, 2017, the Company entered into
a Research Study Funding Agreement with Horizon Healthcare Services, Inc. dba Horizon Blue Cross Blue Shield of New Jersey and
its subsidiaries (collectively "Horizon") and Cota, Inc. ("Cota"). On February 6, 2018, Horizon prepaid
for part of the study, $125,000 and the Company paid Cota $15,000 out of this payment for its services under the Study. These
deferred revenue grant funds total $159,700 and $45,900 as of September 30, 2018 and 2017, respectively.
Revenues
The
Company derives substantially all of its revenue from neurometric and telepsychiatry services. The Company recognizes revenues
in accordance with ASC 605, and accordingly revenue is recognized when persuasive evidence of an arrangement exists, delivery
has occurred, the fee is fixed or determinable, collectability is reasonably assured and acceptance criteria, if any, have been
met. If any of these criteria are not met, revenue recognition is deferred until such time that all of the criteria are met. The
Company's neurometric and telepsychiatry services are recognized in the month the services are delivered by the physician.
Research
The
Company charges research and development expenses to operations as incurred.
Advertising
Expenses
The
Company charges all advertising expenses to operations as incurred. For the year ended September 30, 2018 and 2017, advertising
expenses were $248,600 and $152,000, respectively.
Stock-Based
Compensation
The
Company accounts for awards to employees in accordance with ASC 718, Compensation-Stock Compensation. For stock options issued
to employees and directors we use the Black-Scholes option valuation model for estimating fair value at the date of grant. For
stock options issued for services rendered by non-employees, we recognize compensation expense in accordance with the requirements
of ASC 505-50, Equity, or ASC 505-50, as amended. Non-employee option grants that do not vest immediately upon grant are recorded
as an expense over the vesting period. At the end of each financial reporting period prior to performance, the value of these
options, as calculated using the Black-Scholes option valuation model, is determined, and compensation expense recognized or recovered
during the period is adjusted accordingly. Since the fair value of options granted to non-employees is subject to change in the
future, the amount of the future compensation expense is subject to adjustment until the common stock options or warrants are
fully vested.
Warrants
From
time to time, the Company has issued warrants to purchase shares of common stock. These warrants have been issued in connection
with the Company's financing transactions. The Company's warrants are subject to standard anti-dilution provisions
applicable to shares of our common stock. The Company estimates the fair value of warrants using the Black-Scholes option valuation
model with the following assumptions: market prices of the stock, time to maturity, volatility, zero expected dividend rate and
risk free rate all at the date of the warrant issuance.
F-
12
Income
Taxes
The
Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for
future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation
allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.
On
December 22, 2017, President Trump signed into law new legislation that significantly revises the Internal Revenue Code of 1986,
as amended, or the Code. The newly enacted federal income tax law, among other things, contains significant changes to corporate
taxation, including reduction of the corporate tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation
of the tax deduction for interest expense to 30 percent of adjusted earnings (except for certain small businesses), limitation
of the deduction for net operating losses to 80 percent of current-year taxable income and elimination of net operating loss carrybacks,
one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain
new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions
and credits.
As
a result of the implementation of certain provisions of FASB ASC 740, Income Taxes, which clarifies the accounting and disclosure
for uncertainty in tax positions, the Company has analyzed filing positions in each of the federal and state jurisdictions where
required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified U.S. Federal and
California as our major tax jurisdictions. Generally, we remain subject to Internal Revenue Service examination of our 2013 through
2016 U.S. federal income tax returns, and remain subject to California Franchise Tax Board examination of our 2012 through 2016
California Franchise Tax Returns. We have certain tax attribute carryforwards which will remain subject to review and adjustment
by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are
utilized.
We
believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that
will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been
recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record
such items as a component of income taxes.
Noncontrolling Interest
The Company consolidates entities in which the Company has a controlling
financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of
the voting rights, and VIEs for which the Company is the primary beneficiary. Noncontrolling interests represent third-party
equity ownership interests in the Company's consolidated entities. The amount of net loss attributable to noncontrolling
interests for the years ended September 30, 2018 and 2017 was $734,400 and $0, respectively.
Earnings
(Loss) per Share
Basic
and diluted earnings (loss) per share is presented in conformity with the two-class method. Under the two-class method, basic
net loss per share is computed by dividing income (loss) available to common stockholders by the weighted average common shares
outstanding during the period. Net loss per share is calculated as the net loss less the current period preferred stock dividends.
Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts
to issue Common Stock were exercised and converted into Common Stock.
Recent
Accounting Pronouncements
Apart
from the below-mentioned recent accounting pronouncements, there are no new accounting pronouncements that are currently applicable
to the Company.
In
May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended, which requires an entity to recognize
the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, or the new
revenue standard. The new revenue standard also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers,
which discusses the deferral of incremental costs of obtaining a contract with a customer. The new revenue standard is effective
for annual periods beginning after December 15, 2017. The standard permits the use of either a full retrospective or modified
retrospective transition method.
F-
13
The
Company will adopt the new revenue standard as of October 1, 2018, using the modified retrospective transition method applied
to those contracts which were not completed as of that date. Upon adoption, we will recognize the cumulative effect of adopting
this guidance as an adjustment to our opening balance of accumulated deficit. Prior periods will not be retrospectively adjusted.
We
do not expect the new revenue standard to have a material impact on our revenue upon adoption. Also, we do not expect the new
standard to have a material impact as it relates to the deferral of incremental costs of obtaining contracts. The Company is in
the process of implementing the necessary changes to its accounting policies, processes, internal controls and information systems
that will be required to meet the new revenue standard's reporting and disclosure requirements.
In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires that a lessee recognize lease assets and lease
liabilities for those leases classified as operating leases. The guidance is effective for interim and annual periods beginning
after December 15, 2018. The Company is currently evaluating the impact of adoption of this standard to its financial statements.
In
March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several
aspects of the accounting for share-based payment transactions, including the income tax consequences, accounting for forfeitures,
and classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance
is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. The guidance will
be applied prospectively, retrospectively, or by means of a cumulative-effect adjustment to equity as of the beginning of the
period in which the guidance is adopted, dependent upon the specific amendment that is adopted within the ASU. The adoption of
this new guidance did not have a material effect on the consolidated results of operations, cash flows, and financial position.
The Company adopted the guidance on October 1, 2017 and chose to prospectively apply the guidance in its financial statements.
In
January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This guidance
narrows the definition of a business. This standard provides guidance to assist entities with evaluating when a set of transferred
assets and activities is a business. This guidance is effective for interim and annual reporting periods beginning after December
15, 2017, and early adoption is permitted. This guidance must be applied prospectively to transactions occurring within the period
of adoption. The Company adopted ASU 2017-01 on October 1, 2017, and prospectively applied ASU 2017-01 as required with no impact
on its consolidated financial position, results of operations or cash flows.
In
January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.
This guidance eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment
charge for the amount by which the goodwill carrying amount exceeds the reporting unit's fair value. This guidance is effective
for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted.
This guidance must be applied on a prospective basis. The Company adopted ASU 2017-04 in the first quarter of 2018, and prospectively
applied ASU 2017-04 as required with no impact on its consolidated financial position, results of operations or cash flows.
In
May 2017, the FASB issued ASU 2017-9, "Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting,"
to provide clarity and reduce both diversity in practice and cost complexity when applying the guidance in Topic 718 to a change
to the terms and conditions of a stock-based payment award. ASU 2017-9 also provides guidance about the types of changes to the
terms or conditions of a share-based payment award that require an entity to apply modification accounting in accordance with
Topic 718. For all entities, including emerging growth companies, the standard is effective for annual periods beginning after
December 15, 2017, and for interim periods therein. Early adoption is permitted. The Company adopted the guidance on October 1,
2017 and there was no impact on the financial statements.
In
July 2017, the FASB issued a two-part ASU 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and
II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and
Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception ("ASU 2017-11"). ASU 2017-11 amends
guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives
and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments
(or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral
of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those
amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim
periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2017-11
ended October 1, 2017, and retrospectively applied ASU 2017-11 as required with no impact on its consolidated financial position
or results of operations.
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14
In
June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments
in this Update expand the scope of Topic 718 to include share based payment transactions for acquiring goods and services from
nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs
to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest
and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment
transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing
share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively
provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of
a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for
public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year.
The Company is currently evaluating the impact of adoption of this standard to its financial statements.
3.
ACCOUNTS
RECEIVABLE, NET
Accounts
receivable, net, is as follows:
September 30,
September 30,
2018
2017
Accounts receivable
$
65,100
$
7,500
Allowance for doubtful accounts
(1,800
)
(1,000
)
Accounts receivable, net
$
63,300
$
6,500
4.
LONG
- TERM BORROWINGS AND OTHER NOTES PAYABLE
Debt
assumed from Arcadian Services
As
a result of the acquisition of Arcadian Services, the Company guaranteed Arcadian Services' then outstanding debt obligations
totaling $700,000 owed to Ben Franklin Technology Partners of Southeastern Pennsylvania ("BFTP"). The maturity date
for the debt is September 30, 2021 and interest accrues at an 8% annual rate. Unpaid interest was $110,100 as of September 30,
2018. The Company recorded the debt at its fair value and recorded a discount of $112,300 as of September 30, 2018 attributable
to the difference between the market interest rate and the stated interest rate on the debt. Interest expense related to the accretion
of debt discount for the twelve months ended September 30, 2018 was $32,800.
A
balloon payment of $700,000 plus interest will be made on the scheduled maturity date of September 30, 2021.
Other
Notes Payable
Note
Payable - finance company, principal is payable over thirty-six equal payments of $1,200 through May 8, 2018. Interest is payable
monthly on the unpaid balance at 19% per annum. The outstanding balance was paid in full on May 8, 2018.
Loan
payable to a vendor, principal payments of $5,000 per month, together with interest computed at 6% per annum. The outstanding
balance was paid in full on May 8, 2018.
5.
ACQUISITION
The
Company accounted for the acquisition of Arcadian Services using the acquisition method of accounting for business combinations
under ASC 805, Business Combinations. The total purchase price is allocated to the tangible and identifiable intangible assets
acquired and liabilities assumed based on their estimated fair values as of the acquisition date.
Fair
value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates
and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities
assumed, as well as asset lives and the expected future cash flows and related discount rates, can materiality impact our results
of operations. Significant inputs used for the model included the amount of cash flows, the expected period of the cash flows
and the discount rates. The finalization of the purchase accounting assessment may result in a change in the fair value of the
debt assumed and intangible assets, which may have a material impact on our results of operations and financial position.
On
November 13, 2017, the Company acquired Arcadian Services. The purchase price, including the value of the indebtedness and payables
of Arcadian Services, is $1,339,600 based upon a deemed acquisition of all of the assets and liabilities of Arcadian Services,
including the equity interests in Arcadian Services. The aggregate purchase price consists of (i) initial investment in Arcadian
of $195,900 (ii) $317,000 of forgiveness of a note receivable with the primary member of Arcadian (iii) assumption by Arcadian
Services of subordinated debt ("Arcadian Note") with a fair value of $555,000, plus accrued interest of $96,700 (iv)
$175,000 payment for the redemption and cancellation of two warrants to purchase equity interests in Arcadian Services. The Arcadian
Note bears interest at an annual rate of 8% and matures on September 30, 2021.
F-
15
The
following table summarizes the allocation of the purchase consideration and the estimated fair value of the assets acquired and
the liabilities assumed for the acquisition of Arcadian Services made by the Company:
Assets acquired:
Cash
$
25,900
Accounts receivable
57,100
Other assets
24,000
Intangibles
109,000
Goodwill
1,386,800
Total assets acquired
$
1,602,800
Liabilities assumed
Accounts payable
$
147,700
Accrued other liabilities
108,700
Notes payable
6,800
Total liabilities assumed
$
263,200
Net assets acquired
$
1,339,600
Consideration paid:
Initial investment in Arcadian Services
195,900
Long-term debt
555,000
Accrued interest
96,700
Payment on warrant outstanding
175,000
Forgiveness of loan in relation of acquisition
317,000
Total consideration
$
1,339,600
The
weighted average useful life of all identified acquired intangible assets is 3.9 years. The useful lives for trade names and customer
relationships are 1.0 years and 4.0 years. Identifiable intangible assets with definite lives are amortized over the period of
estimated benefit using the straight-line method and the estimated useful lives of one to four years. The straight-line method
of amortization represents the Company's best estimate of the distribution of the economic value of the identifiable intangible
assets.
As
a result of the acquisition, the Company recorded $1,386,800 of goodwill. The goodwill balance is primarily attributed to the
anticipated synergies from the acquisition and expanded market opportunities with respect to the integration of Arcadian Services'
products with the Company's other solutions. The Company believes that the factors listed above support the amount of goodwill
recorded as a result of the purchase price paid.
For
the year ended September 30, 2018, the Company incurred transaction costs of $438,600 and $0 in connection with the Arcadian Services
acquisition, which were expensed as incurred and included in general and administrative expenses within the accompanying consolidated
statements of operations.
Unaudited
Pro Forma Financial Information
The
following unaudited pro forma statement of operations data presents the combined results of operations for the years ended September
30, 2018 and 2017 as if the acquisition of Arcadian Telepsychiatry Services LLC had taken place on October 1, 2016.
The
unaudited pro forma financial information includes the effects of certain adjustments, including the amortization of acquired
intangibles and the associated tax effect and the elimination of the Company's and the acquiree's non-recurring acquisition
related expenses.
F-
16
The
unaudited pro forma information presented does not purport to be indicative of the results that would have been achieved had the
acquisitions been consummated at October 1, 2016 nor of the results which may occur in the future. The pro forma adjustments are
based upon available information and certain assumptions that the Company believes are reasonable.
Pro Forma
Years Ended September 30,
2018
2017
Revenues
$
1,460,800
$
1,154,500
Net income (loss)
$
(10,558,000
)
$
(7,894,700
)
Basic and diluted loss per share:
$
(2.03
)
$
(2.80
)
weighted shares outstanding:
5,199,566
2,817,415
6.
STOCKHOLDERS'
EQUITY
The
Aspire Capital Equity Line
On
December 6, 2016, the Company, entered into the first common stock purchase agreement (the "First Purchase Agreement")
with Aspire Capital Fund, LLC ("Aspire Capital") which provided that, upon the terms and subject to the conditions
and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $10.0 million of shares of the
Company's Common Stock over the 30-month term of the First Purchase Agreement. Concurrently with entering into the First
Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the "Registration
Rights Agreement"), pursuant to which the Company maintained an effective registration statement registering the sale of
the shares of Common Stock that were issued to Aspire under the First Purchase Agreement. Under the First Purchase Agreement,
on any trading day selected by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50
per share, the Company had the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire
Capital (as principal) to purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company's
common stock in the aggregate at a per share purchase price equal to the lesser of:
a)
the
    lowest sale price of Common Stock on the purchase date; or
b)
the arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve
(12) consecutive trading days ending on the trading day immediately preceding the purchase date.
In
addition, on any date on which the Company submitted a purchase notice to Aspire Capital in an amount equal to 50,000 shares,
and the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also had the right, in
its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a "VWAP Purchase
Notice") directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock
traded on its principal market on the next trading day (the "VWAP Purchase Date"), subject to a maximum number of
shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted
average price for Common Stock traded on its principal market on the VWAP Purchase Date.
The
purchase price was subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, or other similar
transaction occurring during the period(s) used to compute the First Purchase Price. The Company could deliver multiple Purchase
Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the
most recent purchase has been completed.
The
First Purchase Agreement provided that the Company and Aspire Capital would not effect any sales under the First Purchase Agreement
on any purchase date where the closing sale price of the Company's common stock was less than $0.50. There were no trading
volume requirements or restrictions under the First Purchase Agreement, and the Company could control the timing and amount of
sales of Common Stock to Aspire Capital. Aspire Capital had no right to require any sales by the Company, but was obligated to
make purchases from the Company as directed by the Company in accordance with the First Purchase Agreement. There were no limitations
on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights,
penalties or liquidated damages in the First Purchase Agreement. In consideration for entering into the First Purchase Agreement,
concurrently with the execution of the First Purchase Agreement, the Company issued to Aspire Capital 80,000 shares of Common
Stock (the "First Commitment Shares"). The First Purchase Agreement was terminated and replaced by the Second Purchase
Agreement on May 15, 2018. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall
engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the First
Purchase Agreement. Any proceeds the Company receives under the First Purchase Agreement are expected to be used for working capital
and general corporate purposes. The Company cannot request Aspire to purchase more than $100,000 per business day.
F-
17
As
of September 30, 2018, the Company has issued purchase notices to Aspire Capital under the First Purchase Agreement to purchase
an aggregate of 1,180,000 shares of common stock, at a per share price of $2.00, resulting in gross cash proceeds of approximately
$2.4 million. The issuance of shares of common stock that were issued from time to time to Aspire Capital under the First Purchase
Agreement were exempt from registration under the Securities Act, pursuant to the exemption for transactions by an issuer not
involving any public offering under Section 4(a)(2) of the Securities Act.
The
Second Purchase Agreement with Aspire Capital
On
May 15, 2018, the Company, entered into the Second Purchase Agreement with Aspire Capital under substantially the same terms,
conditions and limitations as the First Purchase Agreement. Pursuant to the Second Purchase Agreement, Aspire Capital is committed
to purchase up to an aggregate of $10.0 million of shares of the Company's Common Stock over 80 the 30-month term of the
Second Purchase Agreement. Concurrently with entering into the Second Purchase Agreement, the Company also entered into a registration
rights agreement with Aspire Capital (the "Registration Rights Agreement"), pursuant to which the Company maintains
an effective registration statement registering the sale of the shares of Common Stock that have and may be issued to Aspire under
the Second Purchase Agreement. Under the Second Purchase Agreement, on any trading day selected by the Company on which the closing
sale price of its Common Stock is equal to or greater than $0.50 per share, the Company has the right, in its sole discretion,
to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 50,000 shares of Common
Stock per business day, up to $10.0 million of the Company's common stock in the aggregate at a per share purchase price
equal to the lesser of:
a)
the
                                         lowest sale price of Common Stock on the purchase date; or
b)
the
arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days
ending on the trading day immediately preceding the purchase date.
In
addition, on any date on which the Company submits a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and
the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its
sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a "VWAP Purchase
Notice") directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock
traded on its principal market on the next trading day (the "VWAP Purchase Date"), subject to a maximum number of
shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted
average price for Common Stock traded on its principal market on the VWAP Purchase Date.
The
purchase price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction
occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP
Purchase Notices to Aspire Capital from time to time during the term of the Second Purchase Agreement, so long as the most recent
purchase has been completed.
The
Second Purchase Agreement provides that the Company and Aspire Capital will not effect any sales under the Second Purchase Agreement
on any purchase date where the closing sale price of the Company's common stock is less than $0.50. There are no trading
volume requirements or restrictions under the Second Purchase Agreement, and the Company will control the timing and amount of
sales of Common Stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to
make purchases from the Company as directed by the Company in accordance with the Second Purchase Agreement. There are no limitations
on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights,
penalties or liquidated damages in the Second Purchase Agreement. In consideration for entering into the Second Purchase Agreement,
concurrently with the execution of the Second Purchase Agreement, the Company issued to Aspire Capital 250,000 shares of Common
Stock (the "Second Commitment Shares"). The Second Purchase Agreement may be terminated by the Company at any time,
at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives
and affiliates shall engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination
of the Second Purchase Agreement. Any proceeds from the Company receives under the Second Purchase Agreement are expected to be
used for working capital and general corporate purposes. The Company cannot request Aspire to purchase more than $300,000 per
business day.
As
of September 30, 2018, the Company has issued purchase notices to Aspire Capital under the Second Purchase Agreement to purchase
an aggregate of 884,671 shares of common stock, resulting in gross cash proceeds of approximately $1.9 million. The issuance of
shares of common stock that were issued from time to time to Aspire Capital under the Second Purchase Agreement were exempt from
registration under the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering
under Section 4(a)(2) of the Securities Act.
F-
18
Shareholder
Approval for Removal of Exchange Cap
The Second Purchase Agreement previously
restricted the amount of shares that may be sold to Aspire Capital thereunder to 1,134,671 shares of Common Stock (the "Exchange
Cap"). On November 26, 2018, the Company received shareholder approval to remove the Exchange Cap in compliance with the
applicable listing rules of the Nasdaq Stock Market. Pursuant to Nasdaq Listing Rule 5635(d), shareholder approval is required
prior to the issuance of securities in connection with a transaction other than a public offering involving the sale, issuance
or potential issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal to 20%
or more of the common stock outstanding before the issuance for less than the greater of book or market value of the stock. Following
receipt of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million, of common
stock to Aspire Capital under the Second Purchase Agreement.
Common
and Preferred Stock
As
of September 30, 2017, the Company is authorized to issue 515,000,000 shares of stock of which 500,000,000 are common stock, and
15,000,000 shares were preferred shares. As of September 30, 2018, the Company is authorized to issue 265,000,000 shares of stock
of which 250,000,000 are common stock, and 15,000,000 shares were preferred shares, with a par value of $0.001 per shares are
blank-check preferred stock which the Board is expressly authorized to issue without stockholder approval, for one or more series
of preferred stock and, with respect to each such series, to fix the number of shares constituting such series and the designation
of such series, the voting powers, if any, of the shares of such series, and the preferences and relative, participating, optional
or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The
powers, preferences and relative, participating, optional and other special rights of each series of preferred stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.
Private
Placement with Directors and Management
On September 21, 2018, the Company entered
into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well
as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of
the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private
placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and one
common stock purchase warrant to purchase one share of Common Stock for $2.00 per share.
Stock-Option
Plans
2006
Stock Incentive Plan
On
August 3, 2006, CNS California adopted the CNS California 2006 Stock Incentive Plan (the "2006 Plan"). The 2006 Plan
provides for the issuance of awards in the form of restricted shares, stock options (which may constitute incentive stock options
(ISO) or non-statutory stock options (NSO), stock appreciation rights and stock unit grants to eligible employees, directors and
consultants and is administered by the Board. A total of 3,339 shares of stock were ultimately reserved for issuance under the
2006 Plan. As of September 30, 2018, zero options were exercised and there were 1,445 option shares outstanding under the amended
2006 Plan. The outstanding options have exercise prices to purchase shares of Common Stock ranging from $2,400 to $3,300 per share.
2012
Omnibus Incentive Compensation Plan
On
March 22, 2012, our Board approved the MYnd Analytics, Inc. 2012 Omnibus Incentive Compensation Plan (the "2012 Plan"),
and reserved 1,667 shares of stock for issuance under the 2012 plan. On December 10, 2012, the Board approved the amendment of
the 2012 Plan to increase the shares authorized for issuance from 1,667 shares to 27,500 shares. On March 26, 2013, the Board
further approved the amendment of the 2012 Plan to increase the shares authorized for issuance from 27,500 shares to 75,000 shares.
The 2012 Plan, as amended, was approved by our stockholders at the 2013 annual meeting held on May 23, 2013.
On
April 5, 2016, the Board approved a further amendment of the 2012 Plan to increase the Common Stock authorized for issuance from
75,000 shares to 200,000 shares.
F-
19
On
September 22, 2016 the Board amended the 2012 Plan to: (i) increase the total number of shares of Common Stock available for grant
under the 2012 Plan from 200,000 shares to an aggregate of 500,000 shares, (ii) add an "evergreen" provision which,
on January 1st of each year through 2022, automatically increases the number of shares subject to the 2012 Plan by the lesser
of: (a) a number equal to 10% of the shares of Common Stock authorized under the 2012 Plan as of the preceding December 31st,
or (b) an amount, or no amount, as determined by the Board, but in no event may the number of shares of Common Stock authorized
under the 2012 Plan exceed 885,781 and (iii) increase the annual individual award limits under the 2012 Plan to 100,000 shares
of Common Stock, subject to adjustment in accordance with the 2012 Plan. Per the above mentioned "evergreen" provision,
an additional 50,000 shares were automatically allocated for distribution under the 2012 Plan as of January 1, 2017.
At
the 2017 Annual Meeting of Stockholders of MYnd Analytics, Inc. ("the Company"), held on August 21, 2017 (the "2017
Annual Meeting"), the holders of the Company's common stock voted to amend the Company's 2012 Omnibus Incentive
Compensation Plan (the "2012 Plan") to increase: (i) the total number of shares of common stock, par value $0.001
per share ("Common Stock"), available for grant under the 2012 Plan (subject to the overall limits described in clause
(ii) below) from 550,000 shares to an aggregate of 975,000 shares; (ii) the aggregate limitation on authorized shares available
for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 885,781 shares to 1,570,248 shares
and (iii) the annual individual award limits under the 2012 Plan to 150,000 shares of Common Stock (subject to adjustment in accordance
with the 2012 Plan);
At
the 2018 Annual Meeting of Stockholders of the Company, held on April 4, 2018, the holders of the Company's common stock
voted to amend the 2012 Plan to increase (i) the total number of shares of Common Stock available for grant under the 2012 Plan
(subject to the overall limit described in clause (ii) below) from 1,072,500 shares to an aggregate of 1,500,000 shares and (ii)
the aggregate limitation on the authorization shares available for grant under the 2012 Plan, following any increases pursuant
to the evergreen provision, from 1,570,248 shares to 2,200,000 shares.
At
the Special Meeting of Stockholders of the Company, held on November 26, 2018, the holders of the Company's common and preferred
stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012
Plan to increase: (a) the total number of shares of common stock, par value $0.001 per share ("Common Stock"), available
for grant under the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate
of 2,250,000 shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any
increases pursuant to the evergreen provision (the "Evergreen Provision"), from 2,200,000 shares to 2,950,000 shares.
Chairman
Agreements and Amendments
On
July 14, 2017, the Company entered into a Chairman Services Agreement (the "Agreement") with Robin L. Smith, M.D.,
the Chairman of the Company's board of directors (the "Board"). Pursuant to the Agreement, Dr. Smith is entitled
to receive the following equity awards: (a) on the Effective Date, a grant of 25,000 shares of restricted stock (vesting immediately)
under the 2012 Plan; (b) on the Effective Date, options to purchase 75,000 shares of Common Stock under the Plan; and (c) on the
date of the Company's 2017 annual meeting of stockholders, an award of options to purchase 50,000 shares of Common Stock
(the "2017 Option Award") was granted. In addition, at each annual meeting of stockholders of the Company thereafter
beginning in 2018 during the Term, Dr. Smith will be entitled to receive a grant of 25,000 shares of restricted stock (vesting
immediately) under the Plan and options to purchase 75,000 shares of Common Stock under the Plan. Other than the 2017 Option Award,
all options granted under the Agreement will vest 1/3 on the date of grant, 1/3 on the six month anniversary of the date of grant
and 1/3 on the twelve month anniversary of the date of grant. The 2017 Option Award will vest on December 1, 2018. Pursuant to
the Agreement, all options owned by Dr. Smith will remain exercisable for a period of 10 years from the date of grant, even if
Dr. Smith is no longer with the Company.
On
April 24, 2018, the Company and Dr. Smith agreed to amend the Chairman Services Agreement, dated as of July 14, 2017 (the "Chairman
Amendment") to provide that Dr. Smith's annual compensation for the 2018 calendar year would be reduced from $300,000
to $250,000. This change was retroactive to January 1st. Further, pursuant to the Chairman Amendment, Dr. Smith was granted an
option on April 16, 2018 to purchase 50,000 shares of common stock under the Company's 2012 Plan, which will not be terminated
if Dr. Smith is no longer affiliated with the Company. The options granted under the Chairman Amendment will vest on the date
of the grant.
Agreement
with Maxim Group LLC
On
April 2, 2018, the Company entered into an Advisory Agreement with Maxim Group LLC ("Maxim") for general financial
advisory and investment banking services. Maxim's compensation under the agreement was 100,000 shares of the Company's
Common Stock, payable in one payment of 50,000 shares of Common Stock and five monthly payments of 10,000 shares of Common Stock
from April through August 2018. The shares of Common Stock will have unlimited piggyback registration rights and the same rights
afforded other holders of the Company's Common Stock. Compensation expense under this agreement was $162,300 and was recorded
as general and administrative expenses in the consolidated statement of operations for the year ended September 30, 2018.
F-
20
Amendment
to Chief Executive Officer's Agreement
On
April 19, 2018, the Company and George C. Carpenter, IV, the Chief Executive Officer of the Company, entered into an amendment
to his Employment Agreement, dated as of September 7, 2007 (the "CEO Amendment"), pursuant to which Mr. Carpenter's
annual salary as reduced from $270,000 to $206,250. This change is retroactive to April 13, 2018. Further, pursuant to the CEO
Amendment, Mr. Carpenter was granted 34,380 restricted shares of common stock under the 2012 Plan. The shares granted under the
CEO Amendment will vest quarterly. If the employee's relationship with the Company is terminated, the above grant will be
prorated. On or before December 31, 2018, the parties will review this modification to determine if the above salary reduction
adjustment will be renewed.
As
of September 30, 2018, options to purchase 802,492 shares of Common Stock were outstanding under the 2012 Plan with exercise prices
ranging from $1.55 to $600, with a weighted average exercise price of $4.39. Additionally, 406,564 restricted shares of Common
Stock have been issued under the 2012 Plan, leaving 290,944 shares of Common Stock available to be awarded.
Stock-based
compensation expense is generally recognized over the employees' or service provider's requisite service period, generally
the vesting period of the award. Stock-based compensation expense included in the accompanying statements of operations for the
years ended September 30, 2018 and 2017 is as follows:
September 30,
2018
2017
Stock-based  compensation  Expense
    non- Restricted  Shares
Stock-based  compensation  Expense
     Restricted  Shares
Stock-based  compensation  Expense
    non- Restricted  Shares
Stock-based compensation  Expense  Restricted
     Shares
Research
$
—
$
—
$
10,900
$
—
Product development
20,000
16,400
360,600
—
Sales and marketing
3,400
—
175,300
—
General and administrative
1,034,800
513,700
647,200
892,000
Total
$
1,058,200
$
530,100
$
1,194,000
$
892,000
Total
unrecognized compensation expense was $185,537 as of September 30, 2018. The following table sets forth the Company's unrecognized
stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that
expense is expected to be recognized:
September 30,
2018
2017
Type of Award:
Unrecognized
Expense,
Weighted
average
Recognition
Period
(in years)
Unrecognized
Expense
Weighted
average
Recognition
Period
(in years)
Stock Options
$
126,509
0.96
$
860,915
3.54
Restricted Stock
$
59,028
0.55
$
205,858
1.00
Total
$
185,537
0.83
$
1,066,773
3.05
A
summary of stock option activity is as follows:
Number of
Shares
Weighted
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
(in years)
Intrinsic Value
Outstanding at September 30, 2016
223,120
$
50.98
6.63
$
819,137
Granted
334,000
4.85
—
—
Exercised
—
—
—
—
Forfeited
(3,037
)
1,335.06
—
—
Outstanding at September 30, 2017
554,083
$
16.14
6.63
$
7,425
Granted
468,000
2.01
—
—
Exercised
(35,000
)
1.55
—
—
Forfeited or expired
(183,146
)
8.19
—
—
Outstanding at September 30, 2018
803,937
$
10.13
8.75
$
7,500
F-
21
There
are 531,604 shares of options vested and 272,333 unvested as of September 30, 2018; there are 249,284 shares of options vested
and 304,799 unvested as of September 30, 2017.
Following
is a summary of the status of options outstanding at September 30, 2018:
Exercise
Price ($)
Number
of Shares
Expiration
Date
Weighted Average
Exercise
    Price ($)
2012 Omnibus Incentive Compensation Plan
$
1.55
250,000
4/2028
1.55
1.99
50,000
4/2028
1.99
2.35
10,000
6/2028
2.35
2.98
10,000
5/2028
2.98
3.60
54,000
09/2027
3.60
3.74
5,000
12/2027
3.74
3.88
20,000
11/2027
3.88
3.96
35,000
11/2027
3.96
4.10
5,000
08/2027
4.10
4.16
50,000
08/2027
4.16
4.33
75,000
07/2027
4.33
5.10
7,750
04/2026
5.10
5.90
18,000
03/2027
5.90
6.00
174,000
09/2026
6.00
9.44
22,307
12/2022 – 01/2023
9.44
11.00
6,250
08/2025
11.00
50.00
9,518
03/2023 – 01/2025
50.00
52.00
625
07/2024
52.00
$
600.00
42
03/2022
600.00
Sub-Total
802,492
Weighted Average
$
4.39
2006 Stock Incentive Plan
$
2,400.00
144
03/2019 – 07/2020
$
2,400.00
2,820.00
51
03/2021
2,820.00
$
3,300.00
1,250
03/2020
$
3,300.00
Sub-Total
1,445
Weighted Average
$
3,193.37
Total
803,937
Weighted Average
$
10.13
Following
is a summary of the status of restricted shares outstanding at September 30, 2018:
Number of
Shares
Weighted
Average
Grant
Date Fair
Value
Amount
Outstanding at September 30, 2016
143,750
$
6.13
$
881,250
Granted
79,000
3.83
302,650
Forfeited
—
—
—
Outstanding at September 30, 2017
222,750
$
5.31
$
1,183,900
Granted
183,814
2.62
480,862
Forfeited
—
—
—
Outstanding at September 30, 2018
406,564
$
4.09
$
1,664,762
F-
22
The
range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below:
September 30, 2017 through
to September 30, 2018
Low
High
Annual dividend yield
—
%
—
%
Expected life (years)
5
5
Risk-free interest rate
1.14
%
2.94
%
Expected volatility
194.36
%
210.39
%
September 30, 2016 through
to September 30, 2017
Low
High
Annual dividend yield
—
%
—
%
Expected life (years)
5
5
Risk-free interest rate
1.14
%
1.93
%
Expected volatility
196.77
%
234.54
%
Expected
Dividend Yield
. The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends
in the foreseeable future.
Expected
Life
. The Company elected to utilize the "simplified" method for "plain vanilla" options to value
stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term
and the contractual term.
Expected
Volatility
. The expected volatility rate used to value stock option grants is based on the historical volatilities of the
Company's common stock.
Risk-free
Interest Rate
. The risk-free interest rate assumption was based on U.S. Treasury Bill instruments that had terms consistent
with the expected term of the Company's stock option grants.
The
warrant activity for the years ending September 30, 2018 and 2017, is described as follows:
Number of
Shares
Weighted
Average
Exercise
Price
Outstanding at September 30, 2016
7,160
$
50.41
Granted
4,561,861
5.27
Exercised
—
—
Expired
(1,349
)
185.61
Forfeited
—
—
Outstanding at September 30, 2017
4,567,672
$
5.30
Granted
1,509,458
2.24
Exercised
—
—
Expired/ Forfeited
(1,256
)
48.07
Outstanding at September 30, 2018
6,075,874
$
4.53
F-
23
Following
is a summary of the status of warrants outstanding at September 30, 2018:
Exercise
Price
Number
of Shares
Expiration
Date
Weighted Average
Exercise
    Price
2.00
459,458
(1)
9/21/2028
2.00
2.34
1,050,000
(2)
03/2023
2.34
5.25
2,539,061
(3)
07/2022
5.25
5.25
1,675,000
(4)
07/2022
5.25
5.25
213,800
(5)
07/2022
5.25
6.04
134,000
(6)
07/2022
6.04
10.00
4,000
06/2021
10.00
55.00
555
06/2018 – 03/2019
55.00
Total
6,075,874
$
4.53
(1)
On
                                         September 21, 2018, the Company entered into definitive agreements with George C. Carpenter
                                         IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well as John
                                         Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated
                                         with Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director
                                         of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement
                                         of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one
                                         share of Common Stock and one Common Stock Purchase Warrant to purchase one share of
                                         Common Stock for $2.00 per share. The closing price per share of the Common Stock on
                                         the Nasdaq Stock Market on September 20, 2018 was $1.72 per share.
(2)
On
                                         March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each
                                         consisting of one share of newly-designated Series A Preferred Stock, and one warrant
                                         for $2.34 per share in a private placement to three affiliates of the Company, for gross
                                         proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing
                                         price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was
                                         $1.19 per share.
(3)
O
n
                                         July 13, 2017, the Company declared a special dividend of warrants to purchase shares
                                         of the Company's common stock to record holders of Common Stock as of such date.
                                         Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all
                                         holders of common stock on the record date. These warrants will be exercisable (in accordance
                                         with their terms) to purchase one share of common stock, at an exercise price of $5.25
                                         per share. The warrants will become exercisable commencing not less than 12 months following
                                         their July 27, 2017 distribution date and will expire five years thereafter.
(4)
On July 19,
                                         2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to
                                         purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public
                                         offering.
(5)
On August
                                         23, 2017, the Company issued 213,800 common stock warrants to underwriters as part of
                                         the overallotment attributed to the July 2017 underwritten public offering.
(6)
As part of
                                         the underwritten public offering on July 19, 2017, the Company issued 134,000 common
                                         stock warrants to the underwriters as part of the services performed by them in connection
                                         with the underwritten public offering.
At
September 30, 2018, there were warrants outstanding to purchase 6,075,874 shares of the Company's Common Stock. The exercise
prices of the outstanding warrants range from $2.00 to $55 with a weighted average exercise price of $4.53. The warrants expire
at various times starting November 2018 through September 2028.
7.
CONVERTIBLE
PREFERRED STOCK
On March 29, 2018, the Company sold an
aggregate of 1,050,000 units for $2.00 per Unit, each consisting of one share of newly-designated Series A Preferred Stock, par
value $0.001 per share and one Warrant to purchase one share of Common Stock, par value $0.001 per share for $2.34 per share in
a private placement to three affiliates of the Company, for gross proceeds of $2.1 million (the "Financing"). The
closing price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share.
The
Warrants will be exercisable for a period of five years for an exercise price of $2.34. The exercise price is subject to adjustment
for stock splits, stock dividends, combinations or similar events. The Warrants may not be exercised on a cashless basis.
John
Pappajohn and Peter Unanue, directors of the Company, purchased $1,000,000 and $100,000 of the Units, respectively. Mary Pappajohn,
the spouse of John Pappajohn, purchased $1,000,000 of the Units.
On
April 30, 2018, the Company entered into the First Amended Subscription Agreement for Shares of Series A Preferred Stock and Common
Stock Purchase Warrants (the "Amended Agreement") with John Pappajohn and Mary Pappajohn (each an "Investor",
and collectively the "Investors"), which provides for the issuance, as of the date of the Original Agreement, of an
aggregate of 500,000 Shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share ("Series A-1 Convertible
Preferred Stock"), in lieu of the same number of Shares of Series A Convertible Preferred Stock that the Company had originally
agreed to issue to the Investors. The Series A-1 Convertible Preferred Stock will have substantially the same rights and preferences
as the Shares of Series A Preferred Stock, except that the Shares of Series A-1 Convertible Preferred Stock are non-voting and
cannot be converted into Common Stock by an Investor if, as a result of such conversion, such Investor would beneficially own
greater than 19.9% of the outstanding shares of Common Stock. Additionally, the Warrants were amended to provide that they would
not be exercisable by an Investor if, following any such exercise, such Investor would beneficially own greater than 19.9% of
the outstanding shares of Common Stock.
F-
24
Dividends
.
Shares of the Series A and Series A-1
Preferred Stock will be entitled to receive cash dividends at the rate of five percent (5.00%) of the Original Series A and Series
A-1 Issue Price per annum, payable out of funds legally available therefor. Such dividends shall (i) accrue on shares of Series
A and Series A-1 Preferred Stock from the date of issuance of such shares, (ii) be cumulative, and (iii) be payable only (A) when,
as and if declared by the Board of Directors, (B) upon the occurrence of a Liquidation Event or a Deemed Liquidation Event (whether
or not such dividends have been declared) and (C) "in kind" upon a conversion of the Series A Preferred Stock. The
value of Common Stock for purposes of determining shares issuable upon a payment in kind shall not be less than the original issue
price of the Series A Preferred Stock.
At
September 30, 2018 and 2017, the amount of undeclared cumulative dividends totaled $49,200 and $0, respectively.
Voting
Rights.
Each
holder of a share of Series A Preferred Stock shall have the right to one vote for each share of Common Stock into which such
Series A Preferred Stock could then be converted (with any fractional share determined on an aggregate conversion basis being
rounded down to the nearest whole share). The holders shall be entitled to vote as a class on certain significant or corporate
actions. Holders of shares of Series A-1 Preferred Stock do not have any voting rights.
Rank.
With
respect to distributions upon a Liquidation Event (as defined below), the Series A and Series A-1 Preferred Stock shall rank senior
to the Common Stock and to each other class of the Company's capital stock existing now or hereafter created that are not
specifically designated as ranking senior to the Series A Preferred Stock.
Liquidation
Preference.
In
the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company or such subsidiaries the assets
of which constitute all or substantially all of the assets of the business of the Company and its subsidiaries, taken as a whole
("Liquidation Event"), the holders of shares of Series A and Series A-1 Preferred Stock shall be entitled to receive,
prior and in preference to any distribution in such Liquidation Event to the holders of any junior securities, including the Common
Stock, by reason of their ownership thereof, an amount per share equal to the Series A and Series A-1 Liquidation Preference for
each outstanding share of Series A and Series A-1 Preferred Stock then held by them. After the payment or setting apart of payment
of the full preferential amounts required to be paid to the holders of shares of Series A and Series A-1 Preferred Stock, the
remaining assets and funds legally available for distribution to the Company's stockholders shall be distributed among the
holders of the shares of Common Stock ratably on a per-share basis.
Consolidation;
Merger.
A
(i) consolidation or merger of the Company with or into any other entity in which the stockholders of the Company immediately
prior to such transaction do not own a majority of the voting capital stock of the surviving entity, (ii) sale, lease, transfer,
exclusive license, conveyance or disposition of all or substantially all of the assets of the Company, or (iii) the effectuation
by the Company of a transaction or series of related transactions in which more than 50% of the voting power of the Company is
disposed of (each of (i), (ii) and (iii), a "Deemed Liquidation Event"), will each be deemed to be a Liquidation Event
within the meaning of the Certificate of Designation, unless elected otherwise by vote of the Required Holders. Any securities
to be delivered to the stockholders pursuant to a Deemed Liquidation Event will be valued at fair market value.
Conversion.
Each
Holder of shares of Series A Preferred Stock shall have the right (the "Conversion Right"), at any time and from time
to time, at such holder's option, to convert all or any portion of such holder's shares of Series A Preferred Stock
into fully paid and non-assessable shares of Common Stock. Upon a holder's election to exercise its Conversion Right, each
share of Series A Preferred Stock for which the Conversion Right is exercised shall be converted into such number of shares of
Common Stock as is determined by dividing the Original Purchase Price by the conversion price for the Series A Preferred Stock
at the time in effect. Series A-1 Preferred stock cannot be converted into Common Stock by an Investor if, as a result of such
conversion, such Investor would beneficially own greater than 19.9% of the outstanding shares of Common Stock. Additionally, the
Warrants were amended to provide that they would not be exercisable by an Investor if, following any such exercise, such Investor
would beneficially own greater than 19.9% of the outstanding shares of Common Stock.
F-
25
In
connection with the Financing, the Company also entered into a registration rights agreement (the "Registration Rights Agreement")
with the investors, requiring the Company to register the resale of the shares of Common Stock underlying the preferred stock
and the Warrants. Under the Registration Rights Agreement, holders of a majority of the registrable securities then outstanding
(the "Majority Holders") may by a written Demand Notice to the Company (a "Demand Notice") commencing
six (6) months from the closing date, request the Company to effect the registration of all or part of the registrable securities
owned by such Majority Holders and their respective affiliates on a Registration Statement on Form S-3. The Company has agreed
to use its reasonable best efforts to cause such registration and/or qualification to be complete as soon as practicable, but
in no event later than sixty (60) days, after receipt of the Demand Notice.
The
shares of Series A and Series A-1 Preferred Stock were offered and sold in reliance upon the exemption from the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act"), set forth under Section 4(a)(2) of the Securities
Act and Rule 506 of Regulation D promulgated under the Securities Act, relating to sales by an issuer not involving any public
offering and in reliance on similar exemptions under applicable state laws. Each purchaser represented that it is an accredited
investor and that it acquired the Series A Preferred Stock and Warrants for investment purposes only and not with a view to any
resale, distribution or other disposition of such securities in violation of the United States federal securities laws.
8.
INCOME
TAXES
The
following is a reconciliation of the provision (benefit) for income taxes to the amount compiled by applying the statutory federal
income tax rate to profit (loss) before income taxes is as follows for the years ended September 30, 2018 and 2017.
2018
2017
Federal income tax (benefit) at statutory rates
24.25
%
34.0
%
Stock-based compensation
(0.22
)%
(3.46
)%
Rate change
(81.08
)%
—
Change in valuation allowance
58.95
%
(29.29
)%
True-ups and other adjustments
(0.09
)%
(1.27
)%
State tax benefit
(1.82
)%
(0.02
)%
Total
(0.02
)%
(0.04
)%
The
provision for income taxes consisted of the following for the years ended September 30, 2018 and 2017:
2018
2017
Current:
Federal:
$
—
$
—
State:
1,900
2,600
Deferred:
Federal:
129,700
2,082,900
State:
(246,500
)
(840,600
)
Change in valuation allowance
(116,800
)
(1,242,300
)
Total
1,900
2,600
2018
2017
Current:
Federal:
$
—
$
—
State:
1,900
2,600
Total current
1,900
2,600
Deferred:
Federal:
(5,819,600
)
2,082,900
State:
(246,500
)
(840,600
)
Total deferred
(6,066,100
)
1,242,300
Change in valuation allowance
6,066,100
(1,242,300
)
Total
$
1,900
$
2,600
In
accordance with U.S. GAAP as determined by ASC 740, Income Taxes, the Company is required to record the effects of tax law changes
in the period enacted. As the Company has a September 30th fiscal year end, its U.S. federal corporate income tax rate will be
blended in fiscal 2018, resulting in a statutory federal rate of approximately 24% (three months at 34% and nine months at 21%),
and will be 21% for subsequent fiscal years. The Company remeasured its existing deferred tax assets and liabilities at the rate
the Company expects to be in effect when those deferred taxes will be realized (24% if in 2018 or 21% thereafter) and recorded
a one-time deferred tax expense of approximately $8.4 million during the year ended September 30, 2018.
F-
26
Temporary
differences between the financial statement carrying amounts and bases of assets and liabilities that give rise to significant
portions of deferred taxes relate to the following at September 30, 2018 and 2017:
2018
2017
Deferred income tax assets:
Net operating loss carryforward
$
13,921,773
$
19,024,793
Deferred interest, consulting and compensation
    liabilities
2,850,840
3,850,567
Deferred income tax assets
    – other
155,517
118,793
16,928,130
22,994,153
Deferred income tax liabilities—other
—
—
Deferred income tax asset—net before valuation
    allowance
16,928,130
22,994,153
Valuation allowance
(16,928,130
)
(22,994,153
)
Deferred income tax asset—net
$
—
$
—
As
of September 30, 2018, the Company had gross Federal net operating loss carryforwards of approximately $60.2 million and State
gross net operating loss carryforwards of approximately $33.8 million. Both the Federal and State net operating loss carryforwards
will begin to expire in 2022 and 2023 respectively. Our ability to utilize net operating loss carryforwards may be limited in
the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future.
The
Company has placed a valuation allowance against the deferred tax assets in excess of deferred tax liabilities due to the uncertainty
surrounding the realization of such excess tax assets. Management periodically evaluates the recoverability of the deferred tax
assets and the level of the valuation allowance. At such time as it is determined that it is more likely than not that the deferred
tax assets are realizable, the valuation allowance will be reduced accordingly.
The
Company's estimate of the potential outcome of any uncertain tax position is subject to management's assessment of
relevant risks, facts, and circumstances existing at that time. The Company believes that it has adequately provided for these
matters. However, the Company's future results may include favorable or unfavorable adjustments to its estimates in the
period the audits are resolved, which may impact the Company's effective tax rate. The Company does not believe that it
is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease in the next
12 months. As of September 30, 2018, the Company's tax filings are generally subject to examination in major tax jurisdictions
for years ending on or after September 30, 2014. The Company does not accrue for potential interest and penalties attributed to
uncertain tax positions as it is not material.
9.
RELATED
PARTY TRANSACTIONS
DCA
Agreement
On
September 25, 2013, the Board approved a consulting agreement effective May 1, 2013, for marketing services provided by Decision
Calculus Associates ("DCA"), an entity operated by Mr. Carpenter's spouse, Jill Carpenter. Effective August
2015, DCA was engaged at a fee of $10,000 per month. From August 2015 through February 2017, DCA has been paid $170,000. The DCA
contract was renewed at $3,000 a month effective March 1, 2017. The Company incurred fees of $31,000 and $$57,000 for the years
ended September 30, 2018 and 2017, respectively. On May 1, 2018, the Company amended the agreement with DCA to reduce the monthly
fee to $2,000 a month. The amendment provides for a term of one year with a 30 day termination clause.
Hooper
Holmes Agreement
In 2016, we entered into an agreement
with Hooper Holmes Inc, for which Dr. Smith, our Chairman of the Board, became an advisory member of its board as of March 16,
2017, and in which Mr. Pappajohn, our director, has participated in equity raises to become the beneficial owner of a greater
than 10% interest. Hooper Holmes performs EEGs nationwide to patients who wish to obtain a PEER report. The Company paid $110,100
and $20,300 for these services during the years ended September 30, 2018 and 2017, respectively.
Sale
of Preferred Shares
On
March 29, 2018, the Company sold an aggregate of 1,050,000 shares for $2.00 per Unit, each consisting of one share of newly-designated
Series A Preferred Stock or Series A-1 Preferred Stock, par value $0.001 per share and one Warrant to purchase one share of Common
Stock, par value $0.001 per share for $2.34 per share in a private placement to three affiliates of the Company, John And Mary
Pappajohn and Peter Unanue, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018.
F-
27
Private
Placement with Directors and Management
On September 21, 2018, the Company entered
into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well
as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of
the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private
placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and one
common stock purchase warrant to purchase one share of Common Stock for $2.00 per share.
10.
LOSS
PER SHARE
Basic
earnings (loss) per share is computed by dividing income (loss) available to common stockholders less the current period preferred
stock dividend by the weighted average common shares outstanding during the period. Diluted earnings (loss) per share takes into
account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted
into Common Stock.
A
summary of the net income (loss) and shares used to compute net income (loss) per share for the fiscal years ended September 30,
2018 and 2017 is as follows:
2018
2017
Net Loss for computation of basic and diluted net loss per share:
Net loss attributable to MYnd Analytics, Inc.
$
(9,598,700
)
$
(7,112,800
)
Preferred stock dividends
(49,200
)
—
$
(9,647,900
)
$
(7,112,800
)
Basic and Diluted net loss per share:
Basic net loss per share
$
(1.86
)
$
(2.52
)
Basic and Diluted weighted average shares outstanding
5,199,566
2,817,415
Anti-dilutive common equivalent shares not included in the computation of
    dilutive net loss per share:
Warrants
6,075,874
957,198
Restricted common stock
406,564
4,500
Options
803,937
359,704
11.
COMMITMENTS
AND CONTINGENT LIABILITIES
Litigation
The
Company is not currently party to any legal proceedings, the adverse outcome of which, in the Company's management's
opinion, individually or in the aggregate, would have a material adverse effect on the Company's results of operations or
financial position.
Lease
Commitments
The
Company is a party to four leases, three are for office space located in Mission Viejo and Laguna Hills, California which house
the corporate headquarters and neurometric business. The total lease payments per month are $10,666. The two leases for office
space located in Mission Viejo and Laguna Hills have been renewed through February 28, 2020 and the total lease payments per month
will be $8,411 beginning February 1, 2019. As of November 30, 2018, the third lease for a small annex office in Laguna Hills has
been terminated.
F-
28
The
Company has one three-year lease for office space in Tysons, Virginia. As of June 1, 2018, the Company has sublet the premises
under the Tyson, Virginia office space lease. The master lease period expires on September 30, 2020. The rent through September
30, 2018 was prorated at $2,508 per month; for the subsequent 12 months the rent is prorated at $2,576 per month; and for the
remaining twelve months the rent will be prorated at $2,647 per month. The subtenant is paying approximately seventy seven percent
of the master lease payment for the fourteen months ending on September 30, 2019 and has an option to renew for the final lease
year.
Arcadian
Services' business has office space located in Fort Washington, PA. The lease period expires on February 28, 2020. The rent
is currently $3,312 per month and will increase to $3,410 per month on March 1, 2019 for the remainder of the lease.
Payments due by fiscal year
Contractual Obligations
2019
2020
Total
Operating Lease Obligations
$
114,000
$
48,800
$
162,800
Total
$
114,000
$
48,800
$
162,800
12.
SIGNIFICANT
CUSTOMERS
For
the fiscal year ended September 30, 2018, four customers accounted for 29% of Neurometric Services revenue and three customers
accounted for 35% of accounts receivable at September 30, 2018.
For
the fiscal year ended September 30, 2017, four customers accounted for 50% of Neurometric Services revenue and three customers
accounted for 72% of accounts receivable at September 30, 2017.
13.
SUBSEQUENT
EVENTS
Special
Meeting of Stockholders
At
the Special Meeting of Stockholders of the Company, held on November 26, 2018 ("Special Meeting 2018") the holders
of the Company's common and preferred stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits
under the 2012 Plan and (ii) amend 2012 Plan to increase: (a) the total number of shares of common stock, par value $0.001 per
share ("Common Stock"), available for grant under the 2012 Plan (subject to the overall limits described in clause
(b) below) from 1,500,000 shares to an aggregate of 2,250,000 shares and (b) the aggregate limitation on authorized shares available
for grant under the 2012 Plan, following any increases pursuant to the evergreen provision (the "Evergreen Provision"),
from 2,200,000 shares to 2,950,000 shares.
In addition, to the above, the Company
received shareholder approval to remove the exchange cap under the Second Purchase Agreement in compliance with the applicable
listing rules of the Nasdaq Stock Market. Pursuant to Nasdaq Listing Rule 5635(d), shareholder approval is required prior to the
issuance of securities in connection with a transaction other than a public offering involving the sale, issuance or potential
issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal to 20% or more of the
common stock outstanding before the issuance for less than the greater of book or market value of the stock. Following receipt
of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million, of common stock
to Aspire Capital under the Second Purchase Agreement.
Share
Grants to Directors
On
October 8, 2018, the Compensation Committee and the Board granted to Director Votruba 144,000 restricted shares of common stock
under the 2012 Plan for efforts expended as a Board member to explore and identify licensing and other opportunities for the Company
in Europe. Mr. Votruba is a representative of RSJ and has agreed to assign to RSJ the benefit of all options and restricted shares
granted to him in connection with his service as a member of the Board of Directors. On October 8, 2018, the Board granted (i)
30,000 restricted shares under the 2012 Plan to each of John Pappajohn and Peter Unanue, Members of the Board and (ii) 45,000
restricted shares under the 2012 Plan to Geoffrey Harris, who serves as the Audit Committee chairperson, these shares will vest
quarterly.
F-
29
Option
Grants to the Chairman, Executive Officers and Other Employees
On
October 8, 2018, the Board granted an option to Dr. Robin Smith, the Chairman of the Board to purchase 48,000 shares of Common
Stock. On the same date, the Board granted options to purchase 48,000 and 30,000 shares to each of George Carpenter, the President
and Chief Executive Officer and Donald D'Ambrosio, the Chief Financial Officer, respectively, and options to purchase an
aggregate of 100,500 shares to other employees and consultants. All of the above options will vest upon certain milestones being
met and were subject to the shareholder approval which was granted on November 26, 2018 at the Special Meeting of Shareholders.
On
December 3, 2018, options were granted to purchase 30,000 and 26,500 shares of Company common stock to each of George Carpenter,
the President and Chief Executive Officer and Donald D'Ambrosio, the Chief Financial Officer, respectively, and options
to purchase an aggregate of 46,758 shares of Company common stock were granted to other employees. One-third of the options granted
vested on December 3, 2018 and one-third will vest on each of December 3, 2019 and December 3, 2020.
Leases
In
October and November of 2018, the Company renewed the office space leases in Mission Viejo and Laguna Hills, California until
February 28, 2020. The total lease payments per month will be $8,411 beginning February 1, 2019. As of November 30, 2018, the
third lease for a small annex office in Laguna Hills has been terminated.
F-
30
MYND ANALYTICS,
INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
As of March 31, 2019
(Unaudited)
As of September 30, 2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
1,203,200
$
3,254,700
Accounts receivable, net
154,400
63,300
Prepaid insurance
9,700
57,900
Prepaid expenses and other current assets
181,200
134,700
Total current assets
1,548,500
3,510,600
Property and equipment, net
87,700
110,800
Intangible assets, net
88,400
116,500
Goodwill
1,386,800
1,386,800
Other assets
29,600
27,100
TOTAL ASSETS
$
3,141,000
$
5,151,800
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable (including $36,400 and $30,350 to related
    parties as of March 31, 2019 and September 30, 2018, respectively)
$
970,700
$
346,900
Accrued liabilities
204,700
268,900
Accrued compensation
244,900
175,400
Accrued compensation – related parties
322,800
209,300
Accrued interest and other liabilities
3,900
3,900
Deferred revenue
152,100
159,700
Current portion of leases
1,400
1,300
Total current liabilities
1,900,500
1,165,400
LONG-TERM LIABILITIES
Long-term borrowing, net
606,500
587,700
Accrued interest on long-term borrowing
120,500
110,100
Long-term portion of capital lease
1,400
2,100
Total long-term liabilities
728,400
699,900
TOTAL LIABILITIES
2,628,900
1,865,300
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 15,000,000 authorized; 1,500,000 shares
    of Series A Preferred Stock and 500,000 shares of Series A-1 authorized; 550,000 shares of Series A Preferred Stock and 500,000
    shares of Series A-1 issued and outstanding as of March 31, 2019 and as of September 30, 2018; aggregate liquidation preference
    of $1,968,750 as of March 31, 2019 and as of September 30, 2018;
1,100
1,100
Common stock, $0.001 par value; 250,000,000 shares authorized as of March
    31, 2019 and September 30, 2018 respectively, 8,936,695 and 7,407,254 shares issued and outstanding as of March 31, 2019 and
    September 30, 2018, respectively;
8,900
7,400
Additional paid-in capital
91,895,900
89,257,700
Accumulated deficit
(89,881,400
)
(85,245,300
)
2,024,500
4,020,900
Non controlling interest
(1,512,400
)
(734,400
)
Total stockholders' equity
512,100
3,286,500
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
3,141,000
$
5,151,800
See accompanying notes to unaudited condensed
consolidated financial statements.
F-
31
MYND ANALYTICS,
INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
Three Months Ended
March 31,
Six Months Ended
March
    31,
2019
2018
2019
2018
REVENUES
Neurometric services
$
44,800
$
79,800
$
124,000
$
133,100
Telepsychiatry services
415,300
380,100
723,200
448,800
Total revenues
460,100
459,900
847,200
581,900
COST OF REVENUES
Neurometric services
5,100
69,700
11,500
118,800
Telepsychiatry services
291,200
228,600
509,900
264,400
296,300
298,300
521,400
383,200
GROSS MARGIN
163,800
161,600
325,800
198,700
OPERATING EXPENSES
Research
60,800
73,400
141,600
154,900
Product development
237,300
342,200
474,300
611,400
Sales and marketing
199,400
638,000
351,300
1,305,200
General and administrative
2,350,300
1,740,900
4,724,100
3,515,800
Total operating expenses
2,847,800
2,794,500
5,691,300
5,587,300
OPERATING LOSS
(2,684,000
)
(2,632,900
)
(5,365,500
)
(5,388,600
)
OTHER INCOME (EXPENSE):
Interest expense, net
(23,400
)
(24,800
)
(46,300
)
(38,500
)
Total other income (expense)
(23,400
)
(24,800
)
(46,300
)
(38,500
)
LOSS BEFORE PROVISION FOR INCOME TAXES
(2,707,400
)
(2,657,700
)
(5,411,800
)
(5,427,100
)
Income taxes
2,300
1,900
2,300
1,900
NET LOSS
$
(2,709,700
)
$
(2,659,600
)
$
(5,414,100
)
$
(5,429,000
)
Net loss attributable to noncontrolling interest
(451,100
)
(72,300
)
(778,000
)
(72,300
)
Net Loss attributable to MYnd Analytics, Inc.
$
(2,258,600
)
$
(2,587,300
)
$
(4,636,100
)
$
(5,356,700
)
BASIC AND DILUTED LOSS PER SHARE:
$
(0.27
)
$
(0.59
)
$
(0.58
)
$
(1.23
)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and Diluted
8,399,443
4,362,564
7,964,021
4,347,745
See accompanying notes to unaudited condensed
consolidated financial statements.
F-
32
MYND ANALYTICS,
INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF STOCKHOLDERS' EQUITY
for the three and six months ended March
31, 2019 and 2018
Common
    Stock
Preferred
    Stock
Additional
Paid-in
Accumulated
Sub-total
MYnd
Stockholders'
Non-
controlling
Shares
Amount
Shares
Amount
Capital
Deficit
Equity
Interest
Total
Balance at
    September 30, 2018
7,407,254
$
7,400
1,050,000
$
1,100
$
89,257,700
$
(85,245,300
)
$
4,020,900
$
(734,400
)
$
3,286,500
Shares issued to Aspire
    Capital Purchase Agreement
144,000
200
517,100
—
517,300
517,300
Common Stock issued to vendors
    for services
3,750
—
—
—
5,600
—
5,600
—
5,600
Net loss
—
—
—
—
—
(2,377,500
)
(2,377,500
)
(326,900
)
(2,704,400
)
Balance at December 31,
    2018
7,555,004
$
7,600
1,050,000
$
1,100
$
89,780,400
$
(87,622,800
)
$
2,166,300
$
(1,061,300
)
$
1,105,000
Stock-based compensation
30,000
—
—
—
258,000
—
258,000
—
258,000
Shares issued to Aspire
    Capital Purchase Agreement
1,315,429
1,300
1,810,500
—
1,811,800
1,811,800
Common Stock issued to vendors
    for services
36,262
—
—
—
47,000
—
47,000
—
47,000
Net
    loss
—
—
—
—
—
(2,258,600
)
(2,258,600
)
(451,100
)
(2,709,700
)
Balance at March 31,
    2019
8,936,695
$
8,900
1,050,000
$
1,100
$
91,895,900
$
(89,881,400
)
$
2,024,500
$
(1,512,400
)
$
512,100
Balance at September 30,
    2017
4,299,311
$
4,300
—
$
—
$
80,189,700
$
(75,646,600
)
$
4,547,400
—
$
4,547,400
Stock-based compensation
37,500
100
336,500
336,600
—
336,600
Common Stock issued to vendors
    for services
23,750
—
14,800
14,800
14,800
Net
    loss
(2,769,300
)
(2,769,300
)
—
(2,769,300
)
Balance
    at December 31, 2017
4,360,561
$
4,400
—
$
—
$
80,541,000
$
(78,415,900
)
$
2,129,500
$
—
$
2,129,500
Stock-based compensation
20,000
—
256,400
—
256,400
—
256,400
Common Stock issued to vendors
    for services
(16,250
)
—
11,000
—
11,000
—
11,000
Stock issued for preferred
    shares
—
—
1,050,000
1,100
2,098,900
—
2,100,000
—
2,100,000
Net
    loss
—
—
(2,659,700
)
(2,659,700
)
(72,300
)
(2,732,000
)
Balance
    at March 31, 2018
4,364,311
$
4,400
1,050,000
$
1,100
$
82,907,300
$
(81,075,600
)
$
1,837,200
$
(72,300
)
$
1,764,900
See accompanying Notes to Unaudited Condensed
Consolidated Financial Statements.
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33
MYND
ANALYTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Six Months Ended
March 31,
2019
2018
OPERATING ACTIVITIES:
Net loss
$
(5,414,100
)
$
(5,429,000
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
60,300
57,500
Change in provision for doubtful accounts
6,300
1,200
Stock-based compensation
775,300
593,000
Common stock issued to vendors for services
52,600
25,800
Accretion of debt discount
46,700
35,500
Changes in operating assets and liabilities:
Accounts receivable
(97,400
)
(156,200
)
Prepaid expenses and other assets
(800
)
(97,200
)
Accounts payable and accrued liabilities
559,600
112,400
Deferred revenue
(7,600
)
125,000
Deferred compensation
183,000
(8,300
)
Net cash used in operating activities
(3,836,100
)
(4,740,300
)
INVESTING ACTIVITIES:
Purchase of furniture and equipment
(9,100
)
(55,200
)
Payment for acquisition of business, net of cash acquired
—
(306,600
)
Net cash used in investing activities
(9,100
)
(361,800
)
FINANCING ACTIVITIES:
Principal payments on note payable
(17,500
)
(34,100
)
Principal payments on capital lease
(600
)
(600
)
Proceeds from sale of common stock, net of costs
1,811,800
2,100,000
Net cash provided by financing activities
1,793,700
2,065,300
NET INCREASE (DECREASE) IN CASH
(2,051,500
)
(3,036,800
)
CASH AND CASH EQUIVALENTS - BEGINNING OF THE PERIOD
3,254,700
5,449,000
CASH AND CASH EQUIVALENTS - END OF THE PERIOD
$
1,203,200
$
2,412,200
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest
$
2,000
$
4,700
Income taxes
$
2,300
$
1,900
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING & FINANCING ACTIVITIES:
Long-term borrowings assumed in business combination
$
—
$
651,700
See accompanying notes to unaudited condensed
consolidated financial statements
F-
34
MYND
ANALYTICS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1.
Organization, Nature of Operations and Going Concern
Uncertainty
MYnd Analytics, Inc. ("MYnd,"
"CNS," "we," "us," "our," or the "Company"), formerly known as CNS
Response Inc., is a predictive analytics company that has developed a decision support tool to help physicians reduce trial and
error treatment in mental health and provide more personalized care to patients. The Company employs a clinically validated scalable
technology platform to support personalized care for mental health patients. The Company utilizes its patented machine learning,
artificial intelligence, data analytics platform for the delivery of telebehavioral health services and its PEER predictive analytics
product offering. On November 13, 2017, the Company acquired Arcadian Telepsychiatry Services LLC ("Arcadian"), which
manages the delivery of telepsychiatry and telebehavioral health services through a nationwide network of licensed and credentialed
psychiatrists, psychologists and master's-level therapists. The Company is commercializing its PEER predictive analytics
tool to help physicians reduce trial and error treatment in mental health. MYnd's patented, clinically validated technology
platform ("PEER Online") utilizes complex algorithms to analyze electroencephalograms ("EEGs") to generate
Psychiatric EEG Evaluation Registry ("PEER") Reports to predict individual responses to a range of medications prescribed
for the treatment of behavioral disorders including depression, anxiety, bipolar disorder, PTSD and other non-psychotic disorders.
Going Concern Uncertainty
The accompanying unaudited
condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles
("GAAP"), which contemplate continuation of the Company as a going concern. The Company's operations are subject
to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation
of a business. These risks include the ability to obtain adequate financing on a timely basis, if at all, the failure to develop
or supply technology or services to meet the demands of the marketplace, the failure to attract and retain qualified personnel,
competition within the industry, government regulation and the general strength of regional and national economies.
The Company's recurring
net losses and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. During
the six months ended March 31, 2019, the Company incurred a net loss of $5.4 million and used $3.8 million of net cash in operating
activities. As of March 31, 2019, the Company's accumulated deficit was $89.9 million. In connection with these unaudited
condensed consolidated financial statements, management evaluated whether there were conditions and events, considered in the
aggregate, that raised substantial doubt about the Company's ability to meet its obligations as they become due for the
next twelve months from the date of issuance of these financial statements. Management assessed that there were such conditions
and events, including a history of recurring operating losses, and negative cash flows from operating activities.
To date, the Company has
financed its cash requirements primarily from equity financings. As of March 31, 2019, the Company's principal sources of
liquidity were its cash balance of $1.2 million and the remaining amount available under the Aspire Equity Line of Credit of $6.3
million. The Company will need to raise funds immediately to continue its operations and increase demand for its services. Until
it can generate sufficient revenues to meet its cash requirements, which it may never do, the Company must continue to finance
future cash needs primarily through public or private equity offerings, debt financings or strategic collaborations. The Company's
liquidity and capital requirements depend on several factors, including the rate of market acceptance of its services, the future
profitability of the Company, the rate of growth of the Company's business and other factors described elsewhere in this
Quarterly Report on Form 10-Q. The Company continues to explore additional sources of capital, but there is substantial doubt
as to whether any financing arrangement will be available in amounts and on terms acceptable to the Company to permit it to continue
operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
F-
35
2.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited
condensed consolidated financial statements of the Company have been prepared in accordance with GAAP and applicable rules and
regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. In the opinion
of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments
(consisting of normal recurring accruals and adjustments) necessary to present fairly the financial position, changes in stockholders'
equity, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for
the quarter ended March 31, 2019 are not necessarily indicative of results for the full 2019 fiscal year or any other future interim
periods. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated
financial statements and accompanying notes included in the Company's Form 10- K for the year ended September 30, 2018.
Basis of Consolidation
The unaudited condensed
consolidated financial statements include the results of the Company, its wholly owned subsidiary, Arcadian, two professional
associations, Arcadian Telepsychiatry PA ("Texas PA") incorporated in Texas, Arcadian Telepsychiatry Florida P.A.
("Florida PA") incorporated in Florida, and two professional corporations, Arcadian Telepsychiatry P.C. ("Pennsylvania
PC") incorporated in Pennsylvania and Arcadian Telepsychiatry of California, P.C. incorporated in California ("California
PC" and together with the Pennsylvania PC, Florida PA and Texas PA, the "Arcadian Entities.")
Arcadian is party to Management
Services Agreements by and among it and the Arcadian Entities, pursuant to which Arcadian provides management and administrative
services to each of the Arcadian Entities. Each entity is established pursuant to the requirements of its respective domestic
jurisdiction governing the corporate practice of medicine. All intercompany balances and transactions have been eliminated upon
consolidation.
Segments
We view our operations and manage our business
as one operating segment.
Variable Interest Entities (VIE)
On November 13, 2017, Arcadian entered into
a management and administrative services agreement with Texas PA and with Pennsylvania PC, for an initial fixed term of 20 years.
In accordance with relevant accounting guidance, Texas PA and Pennsylvania PC are each determined to be a Variable Interest Entity
("VIE") as MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions)
that most significantly affect Texas PA's and Pennsylvania PC's economic performance through its majority representation
of the Texas PA and Pennsylvania PC; therefore, Texas PA and Pennsylvania PC are consolidated by MYnd. On January 19, 2018, Arcadian
entered into a management and administrative services agreement with California PC, for an initial fixed term of 20 years. In
accordance with relevant accounting guidance, California PC is determined to be a VIE and MYnd is the primary beneficiary with
the ability to direct the activities (excluding clinical decisions) that most significantly affect California PC's economic
performance through its majority representation of California PC; therefore, California PC is consolidated by MYnd. On March 27,
2018, Arcadian entered into a management and administrative services agreement with Florida PA, for an initial fixed term of 20
years. In accordance with relevant accounting guidance, Florida PA is determined to be a VIE and MYnd is the primary beneficiary
with the ability to direct the activities (excluding clinical decisions) that most significantly affect Florida PA's economic
performance through its majority representation of Florida PA; therefore, Florida PA is consolidated by MYnd.
The Company holds a variable interest in
the entities which contract with physicians and other health professionals in order to provide telepsychiatry services to Arcadian.
The entities are considered variable interest entities since they do not have sufficient equity to finance their activities without
additional financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has
both power and benefits-that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's
economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE
or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the
power and rights to control all activities of the entities and funds and absorbs all losses of the VIE.
F-
36
In accordance with management
service agreements entered into between the Company and medical professional corporations and associations in compliance with
regulatory requirements within certain states, the Company has the power to direct activities of the VIE's and may transfer
the assets from the individual VIEs. Therefore, the Company considers that there are no assets in any of the consolidated VIEs
that may be relied upon to settle obligations of these entities. Furthermore, creditors of the VIEs do not have recourse to the
general credit of the Company for any of the liabilities of the VIEs. Finally, none of the professional corporations or associations
have purchased equipment nor are they responsible for handling cash or accounts receivable.
There is no either explicit
or implicit arrangement that requires the Company to provide financial support to the VIE, including events or circumstances that
could expose the Company to a loss. For the six months ended March 31, 2019 and 2018, the Company did not provide, nor does it
intend to provide in the future, any financial or other support either explicitly or implicitly during the periods presented to
its variable interest entities. In addition, there are no restrictions on the net income earned by the VIEs. The Company allocates
all of the net income earned to the primary owner of the VIE. As part of the operating agreement with the VIE, the Company will
be reimbursed for all cost incurred related to operating the VIE in addition to a management fee charged for oversight. For the
six months ended March 31, 2019 and 2018, no net income was allocated to the VIEs nor have any dividends been paid from the Company
to the VIEs from inception to date, respectively.
In addition, to the extent
that the VIE is not a shareholder of the Company, the Company has not paid any dividends to the VIEs from inception to date and
there are no dividend obligations within the management services agreement entered into with the medical professional corporations
and associations.
Use of Estimates
The preparation of the
unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenue and expense, and related disclosure of assets and liabilities. On an ongoing basis, the
Company evaluates its estimates, including those related to revenue recognition, allowance for doubtful accounts, useful lives
of furniture and equipment, intangible assets, valuation allowance on deferred taxes, valuation of equity instruments, and accrued
liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates.
Cash and Cash Equivalents
The Company considers all
liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company deposits its cash with
major financial institutions and may at times exceed the federally insured limit of $250,000. At March 31, 2019 cash exceeds the
federally insured limit by $1.1 million. The Company believes that the risk of loss is minimal. To date, the Company has not experienced
any losses related to cash deposits with financial institutions.
Debt Instruments
Debt instruments are initially
recorded at fair value, with coupon interest and amortization of debt issuance discounts recognized in the statement of operations
as interest expense at each period end while such instruments are outstanding.
Fair Value of Financial Instruments
Financial Accounting Standards
Board, or FASB, Accounting Standards Codification, or ASC, ASC 825-10 Recognition and Measurement of Financial Assets and Financial
Liabilities defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The Company considers the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities,
to approximate their fair values because of the short period of time between the origination of such instruments and their expected
realization.
F-
37
The Company also analyzes
all financial instruments with features of both liabilities and equity under ASC 480-10, ASC 815-10 and ASC 815-40.
The FASB has established
a framework for measuring fair value using generally accepted accounting principles. That framework provides a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable
inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows:
●
Level I inputs to the valuation methodology are unadjusted quoted prices
    for identical assets or liabilities in active markets;
●
Level II inputs to the valuation methodology include:
○
Quoted prices for similar assets or liabilities in active
    markets;
○
Quoted prices for identical or similar assets or liabilities
    in inactive markets; Inputs other than quoted prices that are observable for the asset or liability;
○
Inputs that are derived principally from or corroborated
    by observable market data by correlation or other means;
If the asset or liability
has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.
●
Level III inputs to the valuation methodology are unobservable and significant
    to the fair value measurement.
The asset or liability's
fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to
the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize the use of unobservable
inputs.
Accounts Receivable, net
The Company estimates the
collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing the current creditworthiness
of each customer. Allowances are provided for specific receivables deemed to be at risk for collection which as of March 31, 2019
and September 30, 2018 were $8,100 and $1,800, respectively.
Property and Equipment
Property and equipment,
which are recorded at cost, consist of office furniture and equipment which are depreciated, over their estimated useful lives
on a straight-line basis. The useful lives of these assets are estimated to be between three and five years. Depreciation expense
on furniture and equipment for the three months ended March 31, 2019 and 2018 was $16,100 and $15,600, respectively. Depreciation
expense on furniture and equipment for the six months ended March 31, 2019 and 2018 was 32,300 and 28,000, respectively. Accumulated
depreciation at March 31, 2019 and September 30, 2018 was $181,500 and 149,200, respectively.
Intangible Assets
Costs for software developed
for internal use are accounted for through the capitalization of those costs incurred in connection with developing or obtaining
internal-use software. Capitalized costs for internal-use software are included in intangible assets in the unaudited condensed
consolidated balance sheets. Capitalized software development costs are amortized over three years. Costs incurred during the
preliminary project along with post-implementation stages of internal use computer software development and costs incurred to
maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development
costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological
and economic feasibility and estimated economic life.
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38
On November 13, 2017, the
Company acquired customer relationship and tradename intangibles in connection with the Arcadian acquisition which were recorded
at fair value and are being amortized over an estimated useful life of four years on a straight-line basis.
Amortization for the three
months ended March 31, 2019 and 2018 was $14,000 and $13,800, respectively. Amortization for the six months ended March 31, 2019
and 2018 was 28,000 and 24,700, respectively. Accumulated amortization was $122,300 and $94,200 at March 31, 2019 and September
30, 2018 respectively.
The expected amortization
of the intangible assets, as of March 31, 2019, is as follows:
For the year ended September 30,
Intangible assets
2019 (for the remaining six months)
$
26,100
2020
29,400
2021
29,400
2022
3,500
Total
$
88,400
Goodwill
Goodwill represents the excess of the aggregate
purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and
is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may
not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change
in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant
changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry
or economic trends, or significant under performance relative to expected historical or projected future results of operations.
The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads
to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including
goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than
not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The
Company tests for goodwill impairment annually on September 30.
The Company performed a qualitative goodwill
assessment at September 30, 2018 and concluded there was no impairment based on consideration of a number of factors, including
the improvement in the Company's key operating metrics over the prior year, improvement in the strength of the general economy
and the Company's continued execution against its overall strategic objectives.
Based on the foregoing,
the Company determined that it was not more likely than not that the fair value of its reporting unit is less than its carrying
amount and therefore that no further impairment testing was required.
During the six months ended March 31, 2019, the Company did
not record any Goodwill impairment.
Accrued Compensation
Accrued compensation consists
of accrued vacation pay, accrued compensation granted by the Board but not paid, and accrued pay due to staff members.
Accrued compensation –
related parties consists of accrued vacation pay, accrued bonuses granted by the Board but not paid for officers and directors.
F-
39
Deferred Revenue
Deferred revenue represents
cash collected in advance of services being rendered but not earned as of March 31, 2019 and September 30, 2018. This represents
a philanthropic grant for the payment of PEER Reports ordered in a clinical trial for a member of the U.S. Military, a veteran
or their family members, the cost of which is not covered by other sources. On August 1, 2017, the Company entered into a Research
Study Funding Agreement with Horizon Healthcare Services, Inc. dba Horizon Blue Cross Blue Shield of New Jersey and its subsidiaries
(collectively "Horizon") and Cota, Inc. ("Cota"). On February 6, 2018, Horizon prepaid for part of the
study in the amount of $125,000 and the Company paid Cota $15,000 out of this payment for its services under the Study.
These deferred revenue
grant funds total $152,100 and $159,700 as of March 31, 2019 and September 30, 2018, respectively.
Revenue Recognition
Neurometric services -
gross service revenue is recorded in the accounting records at the time the services are provided on an accrual basis at the provider's
established rates, regardless of whether the provider expects to collect that amount. The Company reserves a provision for contractual
adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and
value added taxes.
Telepsychiatry services - The Company satisfies
its performance obligation to stand ready to provide telepsychiatry services which occurs when the Company's clients have
access to the telepsychiatry service. The Company generally bills for the telepsychiatry services on a monthly basis with payment
terms generally being 30 days. There are not significant differences between the timing of revenue recognition and billing. Consequently,
the Company has determined that client contracts do not include a financing component. Revenue is recognized in an amount that
reflects the consideration that is expected in exchange for the service and this may include a variable transaction price as the
number of members may vary from the initial billing. Based on historical experience, the Company estimates this amount which is
recorded as a component of revenue.
Accounting Standards Update
("ASU") No. 2014-09,
Revenue from Contracts with Customers
("Topic 606"), became effective for
the Company on October 1, 2018. The Company's revenue recognition disclosure reflects its updated accounting policies that
are affected by this new standard. The Company applied the "modified retrospective" transition method for open contracts
for the implementation of Topic 606
.
As sales are and have been primarily from providing healthcare services, and the Company
has no significant post-delivery obligations, this new standard did not result in a material recognition of revenue on the Company's
accompanying consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments
to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting
practices under Topic 605,
Revenue Recognition
.
Revenue from providing
neurometric and telepsychiatry services are recognized under Topic 606 in a manner that reasonably reflects the delivery of its
services to customers in return for expected consideration and includes the following elements:
○
executed contracts with the Company's customers
    that it believes are legally enforceable;
○
identification of performance obligations in the respective
    contract;
○
determination of the transaction price for each performance
    obligation in the respective contract;
○
allocation the transaction price to each performance
    obligation; and
○
recognition of revenue only when the Company satisfies
    each performance obligation.
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40
Research and Development Expenses
The Company charges research and development
expenses to operations as incurred.
Advertising Expenses
The Company charges all
advertising expenses to operations as incurred. For the three months ended March 31, 2019 and 2018 advertising expenses were $4,800
and $97,500, respectively. For the six months ended March 31, 2019 and 2018 advertising expenses were $4,800 and $248,500, respectively
Stock-Based Compensation
The Company accounts for
employee stock options in accordance with ASC 718, Compensation-Stock Compensation. For stock options issued to employees and
directors we use the Black-Scholes option valuation model for estimating fair value at the date of grant. For stock options issued
for services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50, Equity,
as amended. Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period.
At the end of each financial reporting period prior to performance, the value of these options, as calculated using the Black-Scholes
option valuation model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly.
Since the fair value of options granted to non-employees is subject to change in the future, the amount of the future compensation
expense is subject to adjustment until the common stock options or warrants are fully vested.
Warrants
From time to time, the
Company has issued warrants to purchase shares of common stock. These warrants have been issued in connection with the Company's
financing transactions. The Company's warrants are subject to standard anti-dilution provisions applicable to shares of
our common stock. The Company estimates the fair value of warrants using the Black-Scholes option valuation model with the following
inputs: market prices of the stock, time to maturity, volatility, zero expected dividend rate and risk free rate all at the date
of the warrant issuance.
Income Taxes
The Company accounts for
income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded,
when necessary, to reduce deferred tax assets to the amount expected to be realized.
On December 22, 2017, new
legislation was adopted that significantly revises the Internal Revenue Code of 1986, as amended, or the Code. The newly enacted
federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate
tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation of the tax deduction for interest expense
to 30 percent of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses
to 80 percent of current-year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings
at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions
for depreciation expense over time, and modifying or repealing many business deductions and credits.
As a result of the implementation
of certain provisions of FASB ASC 740, Income Taxes, which clarifies the accounting and disclosure for uncertainty in tax positions,
the Company has analyzed filing positions in each of the federal and state jurisdictions where required to file income tax returns,
as well as all open tax years in these jurisdictions. We have identified U.S. Federal and California as our major tax jurisdictions.
Generally, the Company remains subject to Internal Revenue Service examination of our 2014 through 2016 U.S. federal income tax
returns, and remain subject to California Franchise Tax Board examination of our 2013 through 2016 California Franchise Tax Returns.
The Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities
until the statute of limitations closes with respect to the year in which such attributes are utilized.
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The Company believes that
its income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result
in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant
to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as
a component of income taxes.
Deferred taxes have been
recorded on a net basis in the accompanying balance sheet. The Act reduces the U.S. statutory tax rate from 35% to 21%, effective
January 1, 2018. As of September 30, 2018, the Company had gross Federal net operating loss carryforwards of approximately $60.2
million and State gross net operating loss carryforwards of approximately $33.8 million. Both the Federal and State net operating
loss carryforwards will begin to expire in 2022 and 2023 respectively. The Company's ability to utilize net operating loss
carryforwards may be limited in the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future.
The Company has placed
a valuation allowance against the deferred tax assets in excess of deferred tax liabilities due to the uncertainty surrounding
the realization of such excess tax assets. Management periodically evaluates the recoverability of the deferred tax assets and
the level of the valuation allowance. At such time as it is determined that it is more likely than not that the deferred tax assets
are realizable, the valuation allowance will be reduced accordingly.
Noncontrolling Interest
The Company consolidates
entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company
holds, directly or indirectly, more than 50% of the voting rights, and VIEs for which the Company is the primary beneficiary.
Noncontrolling interests represent third-party equity ownership interests in the Company's consolidated entities. The amount
of net loss attributable to noncontrolling interests for the three months ended March 31, 2019 and 2018 was $451,100 and $72,300,
respectively. The amount of net loss attributable to noncontrolling interests for the six months ended March 31, 2019 and 2018
was $778,000 and $72,300, respectively.
Earnings (Loss) per Share
Basic and diluted earnings (loss) per share
is presented in conformity with the two-class method. Under the two-class method, basic net loss per share is computed by dividing
income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Net loss per
share is calculated as the net loss less the current period preferred stock dividends. Diluted earnings (loss) per share takes
into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and
converted into Common Stock.
Recent Accounting Pronouncements
Apart from the below-mentioned
recent accounting pronouncements, there are no new accounting pronouncements that are currently applicable to the Company.
In June 2018, the FASB issued ASU 2018-07,
Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments in this Update expand the scope of Topic
718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the
requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution
of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that
period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods
or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The amendments also
clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards
granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue
from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning
after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact of
adoption of this standard to its financial statements.
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ASU 2016-15, "Statement
of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Payments" was issued by the Financial Accounting Standards
Board (FASB) in August 2016. The purpose of this amendment is to address eight specific cash flow issues with the objective of
reducing the existing diversity in practice. The amendments in this Update are effective for public business entities for fiscal
years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The
Company adopted ASU 2016-15 during our first quarter of fiscal year 2019, which had no impact on our consolidated financial statements,
and will apply the new guidance in future periods.
ASU 2016-02, "Leases
(Topic 842)" was issued by the FASB in February 2016. The guidance requires lessees to recognize the assets and liabilities
that arise from leases on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including
interim periods within those annual periods, and should be applied using a modified retrospective approach. The guidance is effective
for the Company on October 1, 2019. The Company will elect the prospective transition method with the effects of adoption recognized
as a cumulative effect adjustment to the opening balance of retained earnings in the Company's fiscal 2020 financial statements,
with no restatement of comparative periods. The Company will also elect the package of three practical expedients permitted under
the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease
classification. The Company is currently assessing the impact of adopting this guidance on its consolidated financial statements
and related disclosures. The Company expects to record right of use assets and lease liabilities, which may be material, on its
consolidated balance sheet upon adoption of this standard and is still assessing the impact to its results of operations and cash
flows.
Accounting Standards Update
("ASU") No. 2014-09,
Revenue from Contracts with Customers
("Topic 606"), became effective for
the Company on October 1, 2018. The Company's revenue recognition disclosure reflects its updated accounting policies that
are affected by this new standard. The Company applied the "modified retrospective" transition method for open contracts
for the implementation of Topic 606
.
As sales are and have been primarily from providing healthcare services, and the Company
has no significant post-delivery obligations, this new standard this new standard did not result in a change to revenue recognition
on the Company's accompanying condensed consolidated financial statements for the cumulative impact of applying this new
standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented
in accordance with its historical accounting practices under Topic 605,
Revenue Recognition
.
3.
REVENUE RECOGNITION
At the adoption of Topic
606, the cumulative effect of initially applying the new revenue standard is required to be presented as an adjustment to the
opening balance of retained earnings. The Company determined there was no impact to opening retained earnings based on applying
the new revenue standard.
The Company operates as
one reportable segment, the healthcare delivery segment. The Company disaggregates revenue from contracts by service type and
by payor. This level of detail provides useful information pertaining to how the Company generates revenue by significant revenue
stream and by type of direct contracts. The condensed consolidated statements of operations present disaggregated revenue by service
type. The following table presents disaggregated revenue for the three and six months ended March 31, 2019 and 2018:
Three months ended
March 31,
Six months ended
March
    31,
2019
2018
2019
2018
Neurometric services
$
44,800
$
79,800
$
124,000
$
133,100
Telepsychiatry services
415,300
380,100
723,200
448,800
Revenue
460,100
459,900
847,200
581,900
As of March 31, 2019, accounts
receivable, net of allowance for doubtful accounts, was $154,400. The allowance for doubtful accounts reflects our best estimate
of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on historical experience,
specific account information and other currently available evidence.
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The Company receives payments
from the following sources for services rendered: (i) commercial insurers; (ii) the federal government under the Medicare program
administered by CMS; (iii) state governments under the Medicaid and other programs; (iv) other third party payors (e.g., hospitals);
and (v) individual patients and clients. As the period between the time of service and time of payment is typically one year or
less, the Company elected the practical expedient under ASC 606-10-32-18 and did not adjust for the effects of a significant financing
component.
The Company derives a significant
portion of its revenue from Medicare, Medicaid and other payors that receive discounts from established billing rates. The Medicare
and Medicaid regulations and various managed care contracts under which these discounts must be calculated are complex, subject
to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided and
cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the
applicable regulations or contract terms. The services authorized and provided and related reimbursements are often subject to
interpretation that could result in payments that differ from the Company's estimates. Additionally, updated regulations
and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management.
Settlements under cost
reimbursement agreements with third-party payors are estimated and recorded in the period in which the related services are rendered
and are adjusted in future periods as final settlements are determined. Final determination of amounts earned under the Medicare
and Medicaid programs often occurs in subsequent years because of audits by such programs, rights of appeal and the application
of numerous technical provisions.
Under the new revenue standard,
the Company has elected to apply the following practical expedients and optional exemptions:
●
Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within general and administrative expenses.
●
Recognize revenue in the amount of consideration to which the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company's services completed to date.
●
Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration to which the Company has a right to invoice for services performed, and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.
●
Use a portfolio approach for the fee-for-service (FFS) revenue stream to group contracts with similar characteristics and analyze historical cash collections trends.
●
No adjustment is made for the effects of a significant financing component as the period between the time of service and time of payment is typically one year or less.
Contract Assets
Typically, revenues and
receivables are recognized once the Company has satisfied its performance obligation. Accordingly, the Company's contract
assets are comprised of accounts receivable. Generally, the Company does not have material amounts of other contract assets.
Contract Liabilities (Deferred Revenue
)
Contract liabilities are
recorded when cash payments are received in advance of the Company's performance. The Company's contract liability
balance was $152,100 and $159,700 as of March 31, 2019 and September 30, 2018 and is presented within the "Deferred Revenue"
line item of the condensed consolidated balance sheets. $7,600 of the amounts recorded as of September 30, 2018 was recognized
as revenue for the six months ended March 31, 2019. The Company has elected the optional exemption to not disclose the remaining
performance obligations of its contracts since substantially all of its contracts have a duration of one year or less.
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4.
ACCOUNTS
RECEIVABLE
Accounts receivable, net, is as follows:
March 31,
2019
September 30,
2018
Accounts receivable
$
162,500
$
65,100
Allowance for doubtful accounts
(8,100
)
(1,800
)
Accounts receivable, net
$
154,400
$
63,300
5.
LONG
- TERM BORROWINGS AND OTHER NOTES PAYABLE
Debt assumed from Arcadian
As a result of the acquisition of Arcadian,
the Company guaranteed Arcadian's then outstanding debt obligations totaling $700,000 owed to Ben Franklin Technology Partners
of Southeastern Pennsylvania ("BFTP"). The maturity date for the debt is September 30, 2021 and interest accrues at
an 8% annual rate. Unpaid interest was $120,500 as of March 31, 2019. The Company recorded the debt at its fair value and recorded
a discount of $93,500 as of March 31, 2019 attributable to the difference between the market interest rate and the stated interest
rate on the debt. Interest expense related to the accretion of debt discount for the three months ended March 31, 2019 and 2018
was $9,400 and 9,400, respectively. Interest expense related to the accretion of debt discount for the six months ended March
31, 2019 and 2018 was $18,800 and $14,000, respectively.
A balloon payment of $700,000 plus interest
will be made on the scheduled maturity date of September 30, 2021.
The changes in carrying amounts of the debt
acquired through acquisition for the six months ended March 31, 2019 were as follows:
Beginning balance (September 30, 2018)
$
587,700
Accretion of debt discount
18,800
Ending balance (March 31, 2019)
$
606,500
6.
ACQUISITION
On November 13, 2017, the
Company acquired Arcadian. The Company accounted for the acquisition of Arcadian using the acquisition method of accounting for
business combinations under ASC 805, Business Combinations. The total purchase price is allocated to the tangible and identifiable
intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.
Fair value estimates are
based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The
judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well
as asset lives and the expected future cash flows and related discount rates, can materiality impact our results of operations.
Significant inputs used for the model included the amount of cash flows, the expected period of the cash flows and the discount
rates.
The purchase price, including
the value of the indebtedness and payables of Arcadian, is $1,339,600 based upon a deemed acquisition of all of the assets and
liabilities of Arcadian, including the equity interests in Arcadian. The aggregate purchase price consists of (i) initial investment
in Arcadian of $195,900 (ii) $317,000 of forgiveness of a note receivable with the primary member of Arcadian (iii) assumption
by Arcadian of subordinated debt ("Arcadian Note") with a fair value of $555,000, plus accrued interest of $96,700
(iv) $175,000 payment for the redemption and cancellation of two warrants to purchase equity interests in Arcadian Services. The
Arcadian Note bears interest at an annual rate of 8% and matures on September 30, 2021.
Unaudited Pro Forma Financial Information
The following unaudited pro forma statement
of operations data presents the combined results of operations for the six months ended March 31, 2018 as if the acquisition of
Arcadian had taken place on October 1, 2017. The unaudited pro forma financial information includes the effects of certain adjustments,
including the amortization of acquired intangibles and the associated tax effect and the elimination of the Company's and
the acquiree's non-recurring acquisition related expenses.
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The unaudited pro forma
information presented does not purport to be indicative of the results that would have been achieved had the acquisitions been
consummated at October 1, 2017 nor of the results which may occur in the future. The pro forma adjustments are based upon available
information and certain assumptions that the Company believes are reasonable.
Pro Forma
Three Months
Ended
March 31, 2018
Six Months Ended
March
    31, 2018
Revenues
$
459,900
$
727,100
Net income (loss)
(2,659,600
)
(5,605,300
)
Basic and diluted loss per share:
$
(0.61
)
$
(1.29
)
Outstanding at weighted average shares outstanding
4,362,564
4,347,745
7.
REVERSE MERGER
Merger Agreement
On January 4, 2019, the
Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, the Company's
wholly owned subsidiary, Athena Merger Subsidiary, Inc., a Delaware corporation ("Merger Sub"), and Emmaus Life Sciences,
Inc., a Delaware corporation ("Emmaus"). Under the terms of the Merger Agreement, pending stockholder approval of
the transaction, Merger Sub will merge with and into Emmaus with Emmaus surviving the merger and becoming a wholly-owned subsidiary
of MYnd (the "Merger"). Subject to the terms of the Merger Agreement, at the effective time of the Merger, Emmaus
stockholders will receive a number of newly issued shares of MYnd common stock determined using the exchange ratio described below
in exchange for their shares of Emmaus stock. Following the Merger, stockholders of Emmaus will become the majority owners of
MYnd.
The exchange ratio will
be determined prior to closing and will cause the MYnd securityholders (including holders of options and warrants) prior to the
effective time to collectively own 5.9% of the post-merger company on a fully diluted basis and Emmaus securityholders (including
holders of options, warrants and convertible notes) prior to the effective time to collectively own 94.1% of the post-merger company
on a fully diluted basis. The exchange ratio will reflect any dilution that may result from securities sold by MYnd or Emmaus
prior to the closing of the Merger and any changes to the number of outstanding convertible securities of each company. The Merger
Agreement provides that if Emmaus converts certain debt obligations into equity within six months of the completion of the Merger,
Emmaus will issue additional shares (equal to 5.9% of the shares issued in connection with the debt conversion to third parties)
to an existing subsidiary of MYnd which is expected to be spun-off to stockholders of MYnd prior to the effective time of the
merger, as described below.
The post-merger company,
led by Emmaus' management team, is expected to be named "Emmaus Life Sciences, Inc." Prior to the closing of
the Merger, MYnd will seek shareholder approval to conduct a reverse split of its outstanding shares if necessary to satisfy listing
requirements of the Nasdaq Capital Market (the "NasdaqCM"). The post-merger company is expected to trade on the NasdaqCM
under a new ticker symbol. At the closing, the post-merger company's board of directors is expected to consist of one member
from MYnd and up to six members from Emmaus. The Merger has been unanimously approved by the Board of Directors of each company.
The transaction is expected to close no later than July 31, 2019, subject to approvals by the stockholders of MYnd and Emmaus,
and other closing conditions, including but not limited to the approval of the continued listing of the post-merger company's
common stock on the NasdaqCM, conversion of MYnd's preferred stock into common stock, satisfaction of certain cash and debt
conversion conditions and consummation of the MYnd spin-off described below.
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The parties to the Merger
Agreement have made representations and warranties to each other as of specific dates for the purpose of allocating risk and not
for the purpose of establishing facts. Accordingly, the representations and warranties should not be relied on as characterizations
of the actual state of facts.
The Merger Agreement contains
certain termination rights for each of MYnd and Emmaus, and further provides that, upon certain terminations of the Merger Agreement,
MYnd may be required to pay Emmaus a termination fee of $750,000 and Emmaus may be required to pay MYnd a termination fee of $750,000;
provided that if the termination results from the failure to obtain the approval of the continued listing of the post-merger company's
common stock on the NasdaqCM, this fee payable by Emmaus will be $1,600,000. In connection with the termination of the Merger
Agreement upon certain circumstances, either party also may be required to pay the other party's third party expenses up
to $600,000. The termination of the Merger Agreement will not relieve any party thereto from any liability or damages resulting
from or arising out of any fraud or willful or intentional breach of any representation, warranty, covenant, obligation or other
provision contained in the Merger Agreement.
Spin-Off
Prior to the closing of
the Merger, we intend, subject to obtaining any required regulatory approvals and the completion of certain tax analyses, to transfer
all of our businesses, assets and liabilities not assumed by Emmaus to our existing wholly-owned subsidiary, Telemynd, Inc., a
Delaware corporation ("Telemynd"), pursuant to the terms of the Amended and Restated Separation and Distribution Agreement
(the "Separation Agreement") entered into on March 27, 2019 by us, Telemynd and MYnd Analytics, Inc., a California
corporation ("MYnd California"). We intend to distribute all shares of Telemynd held by us to our stockholders of
record as a future record date will be determined for such potential distribution.
The Separation Agreement:
(i) amended and restated in its entirety that certain Separation and Distribution Agreement dated as of January 4, 2019, by and
between MYnd and MYnd California (the "Prior Agreement") and (ii) caused Telemynd to assume all of the rights and
obligations of MYnd California under the Prior Agreement.
Pursuant to the Separation
Agreement, the Telemynd Business (as defined in the Separation Agreement) would be separated from the Company upon, and subject
to, the closing of the transactions contemplated by the Separation Agreement (provided that such transactions occur at all), and
the Company intends to distribute all shares of Telemynd held by it to the Company's stockholders of record as of a future
record date to be determined for such potential distribution. The Separation Agreement includes the terms of the proposed spin-off
and the distribution to the Company's stockholders and includes representations and warranties, covenants and conditions,
which would impact the terms of the proposed spin-off and distribution. The proposed spin-off will be subject to conditions and
regulatory approvals not entirely under the control of the Company and the terms of the proposed spin-off, if and when completed,
are subject to change. The foregoing summary of the Separation Agreement is not complete and qualified in its entirety by reference
to the text of the Separation Agreement filed herewith.
Amendment to Merger Agreement
On May 10, 2019, the parties executed amendment no. 1 to the Merger Agreement.  By executing amendment
no. 1, MYnd, Emmaus and Merger Sub agreed that: (i) the definition "Parent California Subsidiary" should be amended
to refer to Telemynd, Inc., the newly formed wholly-owned corporation, (ii) MYnd would not adopt a new equity incentive plan at
closing, which had been contemplated previously and determined to be unnecessary at this time, (iii) MYnd would be entitled to
receive credit in its Net Liabilities calculation for certain agreed upon prepaid costs, (iv) Telemynd would be entitled to
receive shares of Emmaus after closing if the exchange ratio applicable to any Company Warrants, Company Convertible Notes or Company
Debentures is reduced during the six (6) month period after the closing of the Merger for any reason, and (v) the outside termination
date was extended from May 31, 2019 to July 31, 2019.
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8.
STOCKHOLDERS' EQUITY
The Aspire Capital Equity Credit Lines
On December 6, 2016, the
Company, entered into the first common stock purchase agreement (the "First Purchase Agreement") with Aspire Capital
Fund, LLC ("Aspire Capital") which provided that, upon the terms and subject to the conditions and limitations set
forth therein, Aspire Capital was committed to purchase up to an aggregate of $10.0 million of shares of the Company's Common
Stock over the 30-month term of the First Purchase Agreement. Concurrently with entering into the First Purchase Agreement, the
Company also entered into a registration rights agreement with Aspire Capital (the "Registration Rights Agreement"),
pursuant to which the Company maintained an effective registration statement registering the sale of the shares of Common Stock
that were issued to Aspire under the First Purchase Agreement. Under the First Purchase Agreement, on any trading day selected
by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company had
the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to
purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company's common stock in the
aggregate at a per share purchase price equal to the lesser of:
a)
the lowest sale price of Common Stock on the purchase date; or
b)
the arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date.
In addition, on any date
on which the Company submitted a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and the closing sale price
of its Common Stock is equal to or greater than $0.50 per share, the Company also had the right, in its sole discretion, to present
Aspire Capital with a volume-weighted average price purchase notice (each, a "VWAP Purchase Notice") directing Aspire
Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market
on the next trading day (the "VWAP Purchase Date"), subject to a maximum number of shares the Company may determine.
The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common
Stock traded on its principal market on the VWAP Purchase Date.
The purchase price was
subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring
during the period(s) used to compute the First Purchase Price. The Company could deliver multiple Purchase Notices and VWAP Purchase
Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has
been completed.
The First Purchase Agreement
provided that the Company and Aspire Capital would not effect any sales under the First Purchase Agreement on any purchase date
where the closing sale price of the Company's common stock was less than $0.50. There were no trading volume requirements
or restrictions under the First Purchase Agreement, and the Company could control the timing and amount of sales of Common Stock
to Aspire Capital. Aspire Capital had no right to require any sales by the Company, but was obligated to make purchases from the
Company as directed by the Company in accordance with the First Purchase Agreement. There were no limitations on use of proceeds,
financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or
liquidated damages in the First Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with
the execution of the First Purchase Agreement, the Company issued to Aspire Capital 80,000 shares of Common Stock (the "First
Commitment Shares"). The First Purchase Agreement was terminated and replaced by the Second Purchase Agreement defined below
on May 15, 2018. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage
in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the Purchase Agreement.
Any proceeds from the Company receives under the First Purchase Agreement are expected to be used for working capital and general
corporate purposes. The Company cannot request Aspire to purchase more than $100,000 per business day.
As of March 31, 2019, the
Company has issued purchase notices to Aspire Capital under the First Purchase Agreement to purchase an aggregate of 1,180,000
shares of common stock, at a per share price of $2.00, resulting in gross cash proceeds of approximately $2.4 million. The issuance
of shares of common stock that were issued from time to time to Aspire Capital under the First Purchase Agreement were exempt
from registration under the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering
under Section 4(a)(2) of the Securities Act.
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The Second Purchase Agreement with Aspire Capital
On May 15, 2018, the Company
terminated the First Purchase Agreement, and entered into a second common stock purchase agreement (the "Second Purchase
Agreement") with Aspire Capital under substantially the same terms, conditions and limitations as the First Purchase Agreement
which are: Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of the Company's Common
Stock over the 30-month term of the Second Purchase Agreement. Concurrently with entering into the Second Purchase Agreement,
the Company also entered into a registration rights agreement with Aspire Capital (the "Registration Rights Agreement"),
pursuant to which the Company maintains an effective registration statement registering the sale of the shares of Common Stock
that have and may be issued to Aspire under the Second Purchase Agreement. Under the Second Purchase Agreement, on any trading
day selected by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the
Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as
principal) to purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company's common
stock in the aggregate at a per share purchase price equal to the lesser of:
a) the lowest sale price
of Common Stock on the purchase date; or
b) the arithmetic average
of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days ending on the trading
day immediately preceding the purchase date.
In addition, on any date
on which the Company submits a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and the closing sale price
of its Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its sole discretion, to present
Aspire Capital with a volume-weighted average price purchase notice (each, a "VWAP Purchase Notice") directing Aspire
Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market
on the next trading day (the "VWAP Purchase Date"), subject to a maximum number of shares the Company may determine.
The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common
Stock traded on its principal market on the VWAP Purchase Date.
The purchase price will
be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during
the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices
to Aspire Capital from time to time during the term of the Second Purchase Agreement, so long as the most recent purchase has
been completed.
The Second Purchase Agreement
provides that the Company and Aspire Capital will not effect any sales under the Second Purchase Agreement on any purchase date
where the closing sale price of the Company's common stock is less than $0.50. There are no trading volume requirements
or restrictions under the Second Purchase Agreement, and the Company will control the timing and amount of sales of Common Stock
to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the
Company as directed by the Company in accordance with the Second Purchase Agreement. There are no limitations on use of proceeds,
financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or
liquidated damages in the Second Purchase Agreement. In consideration for entering into the Second Purchase Agreement, concurrently
with the execution of the Second Purchase Agreement, the Company issued to Aspire Capital 250,000 shares of Common Stock (the
"Second Commitment Shares"). The Second Purchase Agreement may be terminated by the Company at any time, at its discretion,
without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates
shall engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the
Second Purchase Agreement. Any proceeds from the Company receives under the Second Purchase Agreement are expected to be used
for working capital and general corporate purposes. The Company cannot request Aspire to purchase more than $300,000 per business
day.
As of March 31, 2019, the
Company has issued purchase notices to Aspire Capital under the Second Purchase Agreement to purchase an aggregate of 2,200,100
shares of common stock, resulting in gross cash proceeds of approximately $3.7 million. The issuance of shares of common stock
that were issued from time to time to Aspire Capital under the Second Purchase Agreement were exempt from registration under the
Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2)
of the Securities Act.
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Shareholder Approval for Removal of Exchange Cap
The Second Purchase Agreement
previously restricted the amount of shares that may be sold to Aspire Capital thereunder to 1,134,671 shares of Common Stock (the
"Exchange Cap"). On November 26, 2018, the Company received shareholder approval to remove the Exchange Cap in compliance
with the applicable listing rules of the Nasdaq Stock Market. Pursuant to Nasdaq Listing Rule 5635(d), shareholder approval is
required prior to the issuance of securities in connection with a transaction other than a public offering involving the sale,
issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal
to 20% or more of the common stock outstanding before the issuance for less than the greater of book or market value of the stock.
Following receipt of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million,
of common stock to Aspire Capital under the Second Purchase Agreement, with remaining availability of $6.3 million at March 31,
2019.
Common and Preferred Stock
As of March 31, 2019, the
Company is authorized to issue 265,000,000 shares of stock of which 250,000,000 are common stock, and 15,000,000 shares were preferred
shares, with a par value of $0.001 per shares are blank-check preferred stock which the Board is expressly authorized to issue
without stockholder approval, for one or more series of preferred stock and, with respect to each such series, to fix the number
of shares constituting such series and the designation of such series, the voting powers, if any, of the shares of such series,
and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations
or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other
special rights of each series of preferred stock, and the qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding.
Private Placement with Directors and Management
On September 21, 2018,
the Company entered into definitive agreements with George C. Carpenter IV, President and then Chief Executive Officer, Robin
L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with
Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus
fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share
of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share.
Stock-Option Plans
2006 Stock Incentive Plan
On August 3, 2006, CNS
Response, Inc. adopted the CNS 2006 Stock Incentive Plan (the "2006 Plan"). The 2006 Plan provided for the issuance
of awards in the form of restricted shares, stock options (which may constitute incentive stock options (ISO) or non-statutory
stock options (NSO), stock appreciation rights and stock unit grants to eligible employees, directors and consultants and is administered
by the Board. A total of 3,339 shares of stock were ultimately reserved for issuance under the 2006 Plan. As of March 31, 2019,
zero options were exercised and there were 1,435 option shares outstanding under the amended 2006 Plan. The outstanding options
have exercise prices to purchase shares of common stock ranging from $2,400 to $3,300 per share.
2012 Omnibus Incentive Compensation Plan
On March 22, 2012, our
Board approved the MYnd Analytics, Inc. 2012 Omnibus Incentive Compensation Plan (the "2012 Plan"), reserved 1,667
shares of stock for issuance and on December 10, 2012, the Board approved the amendment of the 2012 Plan to increase the shares
authorized for issuance from 1,667 shares to 27,500 shares. On March 26, 2013, the Board further approved the amendment of the
2012 Plan to increase the shares authorized for issuance from 27,500 shares to 75,000 shares. The 2012 Plan, as amended, was approved
by our stockholders at the 2013 annual meeting held on May 23, 2013.
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50
On April 5, 2016, the Board
approved a further amendment of the 2012 Plan to increase the Common Stock authorized for issuance from 75,000 shares to 200,000
shares.
On September 22, 2016 the
Board amended the 2012 Plan to: (i) increase the total number of shares of Common Stock available for grant under the 2012 Plan
from 200,000 shares to an aggregate of 500,000 shares, (ii) add an "evergreen" provision which, on January 1st of
each year through 2022, automatically increases the number of shares subject to the 2012 Plan by the lesser of: (a) a number equal
to 10% of the shares of Common Stock authorized under the 2012 Plan as of the preceding December 31st, or (b) an amount, or no
amount, as determined by the Board, but in no event may the number of shares of Common Stock authorized under the 2012 Plan exceed
885,781 and (iii) increase the annual individual award limits under the 2012 Plan to 100,000 shares of Common Stock, subject to
adjustment in accordance with the 2012 Plan. Per the above mentioned "evergreen" provision, an additional 50,000 shares
were automatically allocated for distribution under the 2012 Plan as of January 1, 2017.
At the 2017 Annual Meeting
of Stockholders of the Company, held on August 21, 2017 (the "2017 Annual Meeting"), the holders of the Company's
common stock voted to amend the Company's 2012 Plan to increase: (i) the total number of shares of common stock, par value
$0.001 per share ("Common Stock"), available for grant under the 2012 Plan (subject to the overall limits described
in clause (ii) below) from 550,000 shares to an aggregate of 975,000 shares; (ii) the aggregate limitation on authorized shares
available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 885,781 shares to 1,570,248
shares and (iii) the annual individual award limits under the 2012 Plan to 150,000 shares of Common Stock (subject to adjustment
in accordance with the 2012 Plan);
At the 2018 Annual Meeting
of Stockholders of the Company, held on April 4, 2018 (the "2018 Annual Meeting"), the holders of the Company's
common stock voted to amend the 2012 Plan to increase (i) the total number of shares of Common Stock available for grant under
the 2012 Plan (subject to the overall limit described in clause (ii) below) from 1,072,500 shares to an aggregate of 1,500,000
shares and (ii) the aggregate limitation on the authorization shares available for grant under the 2012 Plan, following any increases
pursuant to the evergreen provision, from 1,570,248 shares to 2,200,000 shares.
At the Special Meeting
of Stockholders of the Company, held on November 26, 2018, the holders of the Company's common and preferred stock voted
to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012 Plan to increase:
(a) the total number of shares of common stock, par value $0.001 per share ("Common Stock"), available for grant under
the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate of 2,250,000
shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases
pursuant to the evergreen provision (the "Evergreen Provision"), from 2,200,000 shares to 2,950,000 shares.
Amendment to Chief Executive Officer's Agreement
On April 19, 2018, the
Company and George C. Carpenter, IV, the former CEO of the Company, entered into an amendment to his Employment Agreement, dated
as of September 7, 2007 (the "CEO Amendment"), pursuant to which Mr. Carpenter's annual salary was reduced from
$270,000 to $206,250. This change is retroactive to April 13, 2018. Further, pursuant to the CEO Amendment, Mr. Carpenter was
granted 34,380 restricted shares of common stock under the 2012 Plan. The shares granted under the CEO Amendment will vest quarterly.
If the employee's relationship with the Company is terminated, the above grant will be prorated. On or before December 31,
2018, the parties will review this modification to determine if the above salary reduction adjustment will be renewed. As of May
9, 2019, the parties have not amended the modification.
Appointment of Chief Innovation Officer; Amendment to Former
CEO Employment Agreement
As of December 12, 2018,
George C. Carpenter, IV no longer served in the position of Chief Executive Officer and became, in addition to President, the
Chief Innovation Officer of the Company. In connection therewith, on December 12, 2018, the Company and Mr. Carpenter entered
into an amendment to his Employment Agreement, dated as of September 7, 2007 (the "Carpenter Amendment"), pursuant
to which Mr. Carpenter was given the title of President and Chief Innovation Officer of the Company. Pursuant to the Carpenter
Amendment, Mr. Carpenter received an option to purchase 50,000 shares of common stock of the Company, with such option vesting
over a twelve-month period.
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51
Appointment of Patrick Herguth as CEO; Herguth Employment
Agreement
Effective December 12, 2018, the Company
appointed Patrick Herguth to the position of Chief Executive Officer.
In connection with Mr.
Herguth's appointment to the position of Chief Executive Officer, the Company entered into an employment agreement with
Mr. Herguth, dated as of December 12, 2018 (the "Herguth Employment Agreement"). Pursuant to the Herguth Employment
Agreement, Mr. Herguth will serve as the Company's Chief Executive Officer and will receive a base annual compensation of
$325,000, subject to periodic increases. For fiscal year 2019, Mr. Herguth is eligible to receive a performance bonus in a target
amount of $340,000, with payment of such bonuses subject to achievement of certain performance goals set forth in the Herguth
Employment Agreement. The employment agreement also provides that Mr. Herguth will receive an option to purchase up to 200,000
shares of the Company's common stock, subject to the time-based vesting schedule and up to 200,000 shares of the Company's
common stock subject to a performance-based vesting schedule, both as specified in the Herguth Employment Agreement, with options
to purchase 50,000 of such shares vesting on the date of the Herguth Employment Agreement. The time-based options will be subject
to vesting upon a change of control of the Company.
Election of Patrick Herguth to the Board of Directors
Effective December 12, 2018, the Board increased
the number of directors on the Board by one and elected Mr. Herguth to the Board to serve as a director of the Company to fill
the vacancy created by such increase. Mr. Herguth has not been appointed to any committee of the Board.
Stock-based Compensation and Expenses
As of March 31, 2019, options
to purchase 1,428,500 shares of Common Stock were outstanding under the 2012 Plan with exercise prices ranging from $1.20 to $600.00
per share, with a weighted average exercise price of $3.05 per share. Additionally, 580,564 restricted shares of Common Stock
have been granted under the 2012 Plan, leaving 465,936 shares of Common Stock available to be awarded under the 2012 Plan.
Stock-based compensation
expenses are generally recognized over the employees' or service provider's requisite service period, generally the
vesting period of the award. Stock-based compensation expense included in the accompanying unaudited condensed consolidated statements
of operations for the six months ended March 31, 2019 and 2018 is as follows:
Six months ended March 31,
2019
2018
Stock-based
compensation
expense - stock
options
Stock-based
compensation
expense
    - restricted
shares
Stock-based
compensation
expense
    - stock
options
Stock-based
compensation expense
restricted
shares
Research
$
—
$
—
$
—
$
—
Product development
29,200
17,800
100
—
Sales and marketing
12,000
—
100
—
General and administrative
404,200
312,100
302,900
289,900
Total
$
445,400
$
329,900
$
303,100
$
289,900
Total unrecognized stock
compensation expense as of March 31, 2019 amounted to $334,900.
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52
The following table sets forth the Company's
unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period
over which that expense is expected to be recognized:
March
    31,
2019
2018
Type of Award:
Unrecognized Expense,
    net of estimated forfeitures
Weighted average
    Recognition Period (in years)
Unrecognized Expense,
    net of estimated forfeitures
Weighted average
    Recognition Period (in years)
Stock Options
$
329,600
1.40
$
682,900
0.53
Restricted Stock
5,300
0.05
139,100
0.48
Total
$
334,900
1.38
$
822,000
0.52
A summary of all stock option activity is
as follows:
Number of
Shares
Weighted
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (in
years)
Intrinsic
Value
Outstanding at September 30, 2018
803,937
$
10.13
8.75
$
7,500
Granted
864,758
1.34
—
Exercised
—
—
—
Forfeited or expired
(38,760
)
2.28
Outstanding at March 31, 2019
1,629,935
$
5.65
8.89
$
52,600
There are 825,100 options vested and 804,835 unvested
as of March 31, 2019; there are 531,604 options vested and 272,333 options unvested as of September 30, 2018;
Following is a summary of the restricted
stock activity for the six months ended March 31, 2019:
Number of
Shares
Weighted
Average
Grant Date
Fair Value
Outstanding at September 30, 2018
406,564
$
4.09
Granted
174,000
1.35
Forfeited
—
—
Outstanding at March 31, 2019
580,564
$
3.27
There are 567,469 shares of restricted stock
vested and 13,095 unvested as of March 31, 2019; there are 351,522 shares of restricted stock vested and 55,042 unvested as of
September 30, 2018;
The range of Black-Scholes option-pricing
model assumption inputs for all the valuation dates are in the table below:
Six
                                         Months Ended
March
                                         31,
2019
Low
High
Annual dividend yield
—
%
—
%
Expected life (years)
3.0
5.0
Risk-free interest rate
2.23
%
2.90
%
Expected volatility
172.89
%
200.47
%
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53
Expected Dividend Yield
. The Company
has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future.
Expected
Life
. The Company elected to utilize the "simplified" method for "plain vanilla" options to value
stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term
and the contractual term.
Expected Volatility.
The expected
volatility rate used to value stock option grants is based on the historical volatilities of the Company's common stock.
Risk-free Interest Rate
. The risk-free
interest rate assumption was based on U.S. Treasury bill instruments that had terms consistent with the expected term of the Company's
stock option grants.
The warrant activity for the six months ended
March 31, 2019, are described as follows:
Number of
Shares
Weighted
Average
Exercise
Price
Outstanding at September 30, 2018
6,075,874
$
4.53
Expired/ Forfeited
(555
)
55.00
Outstanding at March 31, 2019
6,075,319
$
4.52
Following is a summary of the status of warrants outstanding
at March 31, 2019:
Exercise
Price
Number
of Shares
Expiration
Date
Weighted Average
Exercise
    Price
$
2.00
459,458
(1)
09/2023
$
2.00
2.34
1,050,000
(2)
03/2023
2.34
5.25
2,539,061
(3)
07/2022
5.25
5.25
1,675,000
(4)
07/2022
5.25
5.25
213,800
(5)
07/2022
5.25
6.04
134,000
(6)
07/2022
6.04
10.00
4,000
06/2021
10.00
Total
6,075,319
$
4.52
(1)
On September 21, 2018, the Company entered into definitive
    agreements with George C. Carpenter IV, President and former Chief Executive Officer, Robin L. Smith, Chairman, as well as
    John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of
    the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to
    a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of Common
    Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock for $2.00 per share. The closing price per
    share of the Common Stock on the Nasdaq Stock Market on September 20, 2018 was $1.72 per share.
(2)
On
                                         March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each
                                         consisting of one share of newly-designated Series A Preferred Stock, and one warrant
                                         in a private placement to three affiliates of the Company, for gross proceeds of $2.1
                                         million. The private placement closed on March 29, 2018. The closing price per share
                                         of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share.
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54
(3)
On
                                         July 13, 2017, the Company declared a special dividend of warrants to purchase shares
                                         of the Company's common stock to record holders of Common Stock as of such date.
                                         Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all
                                         holders of common stock on the record date. These warrants are exercisable (in accordance
                                         with their terms) to purchase one share of common stock, at an exercise price of $5.25
                                         per share. The warrants will become exercisable commencing not less than 12 months following
                                         their July 27, 2017 distribution date and will expire five years from the date of issuance.
(4)
On
                                         July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants
                                         to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten
                                         public offering.
(5)
On
                                         August 23, 2017, the Company issued warrants to purchase 213,800 shares of common stock
                                         to underwriters as part of the exercise of the overallotment option attributed to the
                                         July 2017 underwritten public offering.
(6)
As
                                         part of the underwritten public offering on July 19, 2017, the Company issued warrants
                                         to purchase 134,000 shares of common stock to the underwriters as part of the services
                                         performed by them in connection with the underwritten public offering.
9.
RELATED PARTY TRANSACTIONS
DCA Agreement
On September 25, 2013,
the Board approved a consulting agreement effective May 1, 2013, for marketing services provided by Decision Calculus Associates
("DCA"), an entity operated by Mr. Carpenter's spouse, Jill Carpenter. Effective August 2015, DCA was engaged
at a fee of $10,000 per month. From August 2015 through February 2017, DCA has been paid $170,000. The DCA contract was renewed
at $3,000 a month effective March 1, 2017. On May 1, 2018, the Company amended the agreement with DCA to reduce the monthly fee
to $2,000 a month. The amendment provides for a term of one year with a 30 day termination clause. The Company incurred fees of
$6,000 and $9,000 for the three months ended March 31, 2019 and 2018, respectively. The Company incurred fees of $12,000 and $18,000
for the six months ended March 31, 2019 and 2018, respectively. The agreement with DCA was terminated on April 20, 2019.
Hooper Holmes Agreement
In 2016, we entered into an agreement with Hooper Holmes Inc, for which Dr. Smith, our Chairman of the Board, became an advisory member of its board as
of March 16, 2017, and in which Mr. Pappajohn, our director, has participated in equity raises to become the beneficial owner
of a greater than 10% interest. Hooper Holmes performs EEGs nationwide to patients who wish to obtain a PEER report. The Company
paid $0 and $54,300 for these services during the three months ended March 31, 2019 and 2018, respectively. The Company paid $2,600
and $90,700 for these services during the six months ended March 31, 2019 and 2018, respectively. The agreement with Hooper Holmes
was deleted on December 31, 2018.
Private Placement with Directors and Management
On September 21, 2018,
the Company entered into definitive agreements with George C. Carpenter IV, President and then Chief Executive Officer, Robin
L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with
Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus
fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share
of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share.
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10.
LOSS PER SHARE
Basic earnings (loss) per share is computed
by dividing income (loss) available to common stockholders less the current period preferred stock dividend by the weighted average
common shares outstanding during the period. Diluted earnings (loss) per share takes into account the potential dilution that
could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock
A summary of the net income (loss) and shares
used to compute net income (loss) per share for the three and six months ended March 31, 2019 and 2018 is as follows:
Three Months Ended
March 31,
Six Months Ended
March 31,
2019
2018
2019
2018
Net loss for computation of basic and diluted net loss per share:
Net Loss attributable to MYnd Analytics, Inc.
$
(2,258,600
)
$
(2,587,300
)
$
(4,636,100
)
$
(5,356,700
)
Preferred stock dividends
(24,600
)
—
(49,200
)
—
$
(2,283,200
)
$
(2,587,300
)
$
(4,685,300
)
$
(5,356,700
)
Basic and diluted net loss per share:
Basic and diluted net loss per share
$
(0.27
)
$
(0.59
)
$
(0.59
)
$
(1.23
)
Basic and diluted weighted average shares outstanding
8,399,443
4,362,564
7,964,021
4,347,745
Anti-dilutive common equivalent shares not included
    in the computation of dilutive net loss per share:
Warrants
6,075,319
5,617,481
6,075,319
5,617,481
Restricted common stock
13,095
42,416
13,095
42,416
Options
1,629,935
554,059
1,629,935
554,059
Total
7,718,349
6,213,956
7,718,349
6,213,956
11.
COMMITMENTS AND CONTINGENT LIABILITIES
Litigation
The Company is not currently
party to any legal proceedings, the adverse outcome of which, in the Company's management's opinion, individually
or in the aggregate, would have a material adverse effect on the Company's results of operations or financial position.
Lease Commitments
The Company has entered
into operating lease agreements for its office locations in California, Virginia and Pennsylvania which expire at various times
through September 30, 2020. Minimum future lease payments under these leases are as follows:
Payments due by period
Contractual Obligations
Total
2019
2020
Operating Lease Obligations
$
177,300
$
129,800
$
47,500
Total
$
177,300
$
129,800
$
47,500
12.
SUBSEQUENT EVENTS
Aspire Line
Subsequent
to March 31, 2019, the Company issued purchase notices to Aspire Capital to purchase 463,636 shares of common stock, at a weighted
average per share price of $1.10, resulting in gross cash proceeds of $510,000.
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Equity Grant to Chairman of the Board
On
May 8, 2019,
the Board of Directors granted 50,000 restricted shares and 100,000 options to purchase common stock
to the Chairman of the Board, Dr. Robin L. Smith, under the Company's Amended and Restated 2012 Omnibus Incentive Compensation
Plan. The restricted shares and options vest immediately and survive the full term. In the event the merger does not close, Dr.
Smith will forfeit 25,000 restricted shares and 25,000 shares of common stock to the Company's plan.
Registered Direct Offering of Common
Stock
On May 22, 2019, the
Company and select investors ("Investors") entered into a securities purchase agreement for the issuance and sale of
2,776,941 shares of the Company's common stock in a registered direct offering (the "Offering"), which Offering
closed on May 28, 2019. The purchase price per share for each share offered to the Investors was $1.02 resulting in aggregate gross
proceeds of approximately $2,832,020. T.R. Winston & Company, LLC (the "Placement Agent") acted as the Placement
Agent for the Offering. The net proceeds to the Company from the Offering, after deducting Placement Agent fees and the Company's
estimated offering expenses, was approximately $2,533,779. The Company's common stock in the Offering was registered under
the Securities Act of 1933, as amended, on the Company's Registration Statement on
Form S-3
(Registration No. 333-223203),
previously filed with the Securities and Exchange Commission and declared effective on June 29, 2018.
Exchange Agreement
On June 25, 2019, the
Company and its wholly-owned subsidiary Telemynd, Inc. ("
Telemynd
") entered into exchange agreements (the "
Exchange
Agreements
") with the holders of its Series A Preferred Stock and Series A-1 Preferred Stock (collectively, the "
MYnd
Preferred Shares
"). The Exchange Agreements were entered into pursuant to the Agreement and Plan of Merger and Reorganization
(as amended on May 24, 2019, the "
Merger Agreement
") with Emmaus Life Sciences, Inc. ("
Emmaus
")
and Athena Merger Subsidiary, Inc. ("
Merger Sub
"), which provides that all MYnd Preferred Shares must cease
to be outstanding prior to the time that Merger Sub merges with and into Emmaus, with Emmaus surviving as a subsidiary of the Company
(the "
Merger
"). Pursuant to the Exchange Agreements, the MYnd Preferred Shares will be exchanged for an equivalent
number of shares of Company common stock, par value $0.001 per share (the "
Common Exchange Shares
") and an equivalent
number of Telemynd Preferred Shares, as described below. The Exchange Agreements also provide that if (i) Telemynd sells Telemynd
Common Shares in one or more registered public offerings or private placements, at a price per share that is equal to, or in excess
of, three times the then current conversion price of the Telemynd Preferred Shares or (ii) the Telemynd Common Shares trade on
a national securities exchange and have a closing sale price that is equal to, or in excess of, three times the then current conversion
price of the Telemynd Preferred Shares for at least five consecutive days, all of the Telemynd Preferred Shares will automatically
convert into Telemynd Common Shares.
Amendment to Warrants
On June 28, 2019, the
Company amended the terms of its existing Warrant Agreements, dated as of July 19, 2017 and July 25, 2017, which were entered into
between the Company and American Stock Transfer & Trust Company, as warrant agent (the "
Warrant Agreements
"),
to reduce the exercise price of the warrants issued pursuant to the Warrant Agreements from $5.25 to $2.00 per share, effective
upon the consummation of the Merger, for a period of one year.
Issuance of Options
On June 25, 2019,
the Company granted 10,000 options to purchase Company common stock (the "
Options
") to Donald D'Ambrosio,
the Company's chief financial officer. The grant was made pursuant to the Company's Amended and Restated 2012 Omnibus
Incentive Compensation Plan. The Options are immediately exercisable at an exercise price of $1.18 per share, and will expire
ten years from the issuance date.
Separation and Distribution
On January 4, 2019,
MYnd announced its intention to consummate the Merger. In addition, on January 4, 2019, in connection with the Merger, MYnd and
MYnd Analytics, Inc., a California corporation ("MYnd-CA") entered into the Separation and Distribution Agreement to
consummate the Spin-Off, which agreement was assigned by MYnd-CA to us on March 27, 2019 pursuant to an amended and restated Separation
and Distribution Agreement (as amended, the "Separation Agreement"). Among other things, the Separation Agreement provides
for the Separation and the transfer of certain assets and liabilities of MYnd related to the Business to us. The Separation of
the Business was consummated on July 16, 2019.
On June 25, 2019, MYnd's
board of directors approved the distribution of the issued and outstanding shares of Company common stock on the basis of one (1)
share of Company common stock for every one (1) share of MYnd common stock held as of the close of business on the record date
of July 15, 2019. On July 16, 2019, the distribution date, each MYnd stockholder received one (1) share of our common stock for
every one (1) share of MYnd common stock at the close of business on the record date for the distribution. Accordingly, 12,833,143
shares of our common stock were distributed to MYnd stockholders on the distribution date. No options of Telemynd were issued in
the Spin-off and all prior options of MYnd prior to the Spin-off remained outstanding at MYnd.
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1,400,000 Shares
Common Stock
Telemynd, Inc.
PROSPECTUS
, 2019
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13.  Other Expenses of
Issuance and Distribution.
The following table
sets forth the costs and expenses, payable by the Company in connection with the registration and sale of the Common Stock being
registered. All amounts are estimates except the SEC registration fee.
Amount
SEC registration fee
$
905.97
Printing and mailing expenses
Accounting fees and expenses
Legal fees and expenses
Transfer agent fees and expenses
Miscellaneous
Total expenses
$
ITEM 14.  Indemnification of Directors
and Officers.
The Delaware General
Corporation Law and certain provisions of our certificate of incorporation and bylaws under certain circumstances provide for indemnification
of our officers, directors and controlling persons against liabilities which they may incur in such capacities. A summary of the
circumstances in which such indemnification is provided for is contained herein, but this description is qualified in its entirety
by reference to our certificate of incorporation, bylaws and to the statutory provisions.
In general, any officer,
director, employee or agent may be indemnified against expenses, fines, settlements or judgments arising in connection with a legal
proceeding to which such person is a party, if that person's actions were in good faith, were believed to be in our best
interest, and with respect to any criminal action or proceeding, such person had no reasonable cause to believe their actions were
unlawful. Unless such person is successful upon the merits in such an action, indemnification may be awarded only after a determination
by independent decision of the board of directors, by legal counsel, or by a vote of the stockholders, that the applicable standard
of conduct was met by the person to be indemnified.
The circumstances under
which indemnification is granted in connection with an action brought on our behalf is generally the same as those set forth above;
however, with respect to such actions, indemnification is granted only with respect to expenses actually incurred in connection
with the defense or settlement of the action. In such actions, unless the court determines otherwise, the person to be indemnified
must have acted in good faith and in a manner believed to have been in our best interest, and have not been adjudged liable to
the corporation.
Indemnification may
also be granted pursuant to the terms of agreements which we are currently party to with each of our directors and executive officers,
agreements which we may enter into in the future or pursuant to a vote of stockholders or directors. Delaware law and our certificate
of incorporation also grant the power to us to purchase and maintain insurance which protects our officers and directors against
any liabilities incurred in connection with their service in such a position, and such a policy may be obtained by us.
A stockholder's
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers
as required by these indemnification provisions. There is no pending litigation or proceeding involving any of our directors, officers
or employees regarding which indemnification by us is sought, nor are we aware of any threatened litigation that may result in
claims for indemnification.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to
the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
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ITEM 15.  Recent Sales of
Unregistered Securities.
During the past three
years, the registrant has only issued unregistered securities to its initial stockholders in connection with its formation. The
registrant believes that this transaction was exempt from registration pursuant to Section 4(a)(2) of the Securities Act.
ITEM 16.  Exhibits and Financial
Statement Schedules.
(a) The
exhibits listed under the caption "Exhibit Index" following the signature page are filed herewith or incorporated by
reference herein.
(b) Financial
Statement Schedules
No financial statement
schedules are provided because the information required to be set forth therein is not applicable or is shown in the consolidated
financial statements or notes thereto.
ITEM 17.  Undertakings
.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which
offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement; and
(iii) to include any material information
with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the Registration Statement.
(2) that, for the purpose of determining
any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) to remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) that, for the purpose of determining
liability under the Securities Act to any purchaser: each prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness;
provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
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(b) The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, on July
22, 2019.
TELEMYND, INC.
(Registrant)
By:
/s/ Patrick Herguth
Patrick Herguth
Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
Know All Persons By These Presents, that each person whose signature
appears below constitutes and appoints Patrick Herguth and Donald D'Ambrosio, and each of them, as his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities,
to sign the Registration Statement on Form S-1 of Telemynd, and any or all amendments (including post-effective amendments) thereto
and any new registration statement with respect to the offering contemplated thereby filed pursuant to Rule 462(b) of the Securities
Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that
said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the
dates stated.
Signature
Title
Date
/s/
Patrick Herguth
Chief Executive Officer, Director
July 22, 2019
Patrick Herguth
(Principal Executive Officer)
/s/
Donal D'Ambrosio
Chief Financial Officer
July 22, 2019
/s/ Donald D'Ambrosio
(Principal Financial and Accounting Officer)
/s/
Geoffrey E. Harris
Director
July 22, 2019
Geoffrey E. Harris
/s/
John Pappjohn
Director
July 22, 2019
/s/ John Pappajohn
/s/
Peter Unanue
Director
July 22, 2019
Peter Unanue
/s/
Michal Votruba
Director
July 22, 2019
Michal Votruba
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EXHIBIT INDEX
Exhibit
Number
Description
1.1**
Form of Underwriting Agreement.
2.1
Separation
    and Distribution Agreement dated January 4, 2019 between Mynd Analytics, Inc. a Delaware corporation and Mynd Analytics, Inc.,
    a California corporation, incorporated by reference to the Current Report on Form 8-K filed by Registrant's Parent,
    Mynd Analytics, Inc., on January 7, 2019 (File No.001-35527).
2.2
Amended
    and Restated Separation and Distribution Agreement dated March 27, 2019 between Mynd Analytics, Inc., a Delaware corporation
    and Telemynd, Inc., a Delaware corporation, incorporated by reference to Exhibit 2.2 to the Registrant's Registration
    Statement on Form 10 filed by Registrant on June 14, 2019.
3.1
Certificate
    of Incorporation, incorporated by reference to Exhibit 2.2 to the Registrant's Registration Statement on Form 10 filed
    by Registrant on June 14, 2019.
3.2
By-Laws,
    incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form 10 filed by Registrant on
    June 14, 2019.
3.3
Certificate
    of Designation of Series A Preferred Stock, incorporated by reference to Exhibit 3.3 to the Registrant's Registration
    Statement on Form 10 filed by Registrant on June 14, 2019.
4.1
Specimen
    Stock Certificate, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 10 filed by Registrant on
    June 14, 2019.
5.1**
Opinion of Dentons US LLP.
10.1
2019
    Omnibus Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Registrant's Registration Statement
    on Form 10 filed by Registrant on June 14, 2019.
10.2
Equity
    Purchase Agreement dated November 13, 2017 between Mynd Analytics, Inc., Arcardian Telepsychiatry Services LLC and Robert
    Plotkin, incorporated by reference to the Current Report on Form 8-K filed by Registrant's Parent, Mynd Analytics, Inc.
    on November 15, 2017 (File No. 001-35527)
10.3
Guaranty
    of Mynd Analytics, Inc., dated November 13, 2017, incorporated by reference to the Current Report on Form 8-K filed by Registrant's
    Parent, Mynd Analytics, Inc. on November 15, 2017 (File No. 001-35527).
10.4
Side
    Agreement, First Amendment to Seed Capital Funding Agreements and Assignment of Loan Agreements dated November 7, 2017 by
    and among Arcadian Telepsychiatry LLC, Arcadian Telepsychiatry Services LLC and Ben Franklin Technology Partners of Southeastern
    Pennsylvania, incorporated by reference to Exhibit 10.4 to the Registrant's Registration Statement on Form 10 filed
    by Registrant on May 22, 2019.
10.5
Consent
    dated November 7, 2017 by and between Arcadian Telepsychiatry LLC and Ben Franklin Technology Partners of Southeastern Pennsylvania,
    incorporated by reference to Exhibit 10.5 to the Registrant's Registration Statement on Form 10 filed by Registrant
    on May 22, 2019.
10.6
Consulting
    Agreement dated May 30, 2019 between Telemynd, Inc. and Robin L. Smith, MD, incorporated by reference to Exhibit 10.6 to the
    Registrant's Registration Statement on Form 10 filed by the Registrant on June 20, 2019.
10.7
Management
    Services Agreement, effective as of November 13, 2017, between Arcadian Telepsychiatry Services LLC and Arcadian Telepsychiatry
    P.C., incorporated by reference to Exhibit No. 10.32 to the Quarterly Report on Form 10-Q filed by the Registrant's
    Parent, MYnd Analytics, Inc., on February 20, 2018 (File No. 001-35527).
10.8
Management
    Services Agreement, effective as of November 13, 2017, between Arcadian Telepsychiatry Services LLC and Arcadian Telepsychiatry
    PA. incorporated by reference to Exhibit No. 10.33 to the Quarterly Report on Form 10-Q filed by the Registrant's Parent,
    MYnd Analytics, Inc., on February 20, 2018 (File No.001-35527).
10.9
Agreement,
    by and between MYnd Analytics, Inc. and RSJ Investments SICAV a.s. acting in respect of its sub-fund RSJ Gradus, RSJ Investment
    SICAV a.s., effective as of September 20, 2018, incorporated by reference to Exhibit No. 10.15 to the Annual Report on Form
    10-K filed by the Registrant's Parent, MYnd Analytics, Inc., on December 11, 2018 (File No. 001-35527).
10.10
Employment Agreement with Patrick Herguth dated July 15, 2019, incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed by the Registrant on July 19, 2019.
10.11
Employment Agreement with Don D'Ambrosio dated July 15, 2019, incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed by the Registrant on July 19, 2019.
23.1*
Consent of Independent Registered Public Accounting Firm.
23.2**
Consent of Dentons US LLP (included in Exhibit 5.1)
24.1*
Power of Attorney (included on the signature
    page of this Registration Statement)
*
Filed herewith
**
To be filed by amendment
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