PSI designs, develops and markets a targeted ultraviolet ("UV") phototherapy device called the Psoria-Light. The Psoria-Light is designated for use in targeted PUVA photochemistry and UVB phototherapy and is designed to treat certain skin conditions including psoriasis, vitiligo, atopic dermatitis (eczema), seborrheic dermatitis, and leukoderma.

Analysis of Financial Condition and Results of Operations

Results of Operations for the three months ended June 30, 2022 compared to the three months ended June 30, 2021.

Revenue and Cost of Goods Sold

Operating expenses for the three months ended June 30, 2022 and 2021 were $430,227 and $272,666, respectively. The increase in operating expenses in 2022 was due primarily to the increase in stock-related compensation.

Results of Operations for the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021.

Revenue and Cost of Goods Sold

Operating expenses for the nine months ended June 30, 2022 and 2021 were $1,028,678 and $943,425, respectively. The increase in operating expenses in 2022 was due primarily to the increase in employee-related costs and stock compensation.

Results of Operations by Segment

The Company currently maintains two business segments:

(i) Medical Devices: which it provided through PSI, its subsidiary acquired on

August 24, 2012, a developer, manufacturer, marketer and distributer of

targeted Ultra Violet ("UV") phototherapy devices for the treatment of skin

(ii) Authentication and Encryption Products and Services: which it provided

through SCI, its wholly-owned subsidiary that on April 4, 2014 acquired

certain assets of SMI Holdings, Inc. d/b/a Stealth Mark, Inc., including

Stealth Mark tradenames and marks, and related encryption and

authentication solutions offering advanced product security technologies

The detailed segment information of the Company is as follows:

Operations by Segment for the Three Months Ended June 30, 2022 and 2021

Comparison of nine months ended June 30, 2022 and 2021

As of June 30, 2022, we had $42,045 in cash, negative working capital of $3,693,937 and an accumulated deficit of $29,321,882.

As of June 30, 2021, we had $41,799 in cash, negative working capital of $3,010,102 and an accumulated deficit of $28,130,835

Cash flows used in operating activities

Cash flows used in investing activities

During the nine months ended June 30, 2022 and 2021, the Company had no cash flows from investing activities.

Cash flows provided by financing activities

Summary of Critical Accounting Policies.

See Management's discussion of recent accounting policies included in footnote 2 to the condensed consolidated financial statements.

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