You should read the following discussion and analysis of our financial condition and plan of operations together with "Selected Financial Data" and our financial statements and the related notes appearing elsewhere in this prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled "Risk Factors" included elsewhere in this prospectus. All amounts in this report are in U.S. dollars, unless otherwise noted.





FORWARD-LOOKING STATEMENTS

This report, including exhibits that are being filed as part of this report, as well as other statements made by Nanomix Corporation (the "Company", "we", "us", and "our"), contain "forward-looking statements" that include information relating to future events, future financial performance, strategies, expectations, competitive environment and regulation. Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," and similar expressions, as well as statements in future tense, identify forward-looking statements.

These forward-looking statements include such things as: investment objectives and the Company's ability to make investments in a timely manner on acceptable terms; references to future success of the Company's products; the Company's business strategy; estimated future capital expenditures; sales of the Company's products; competitive strengths and goals; and other similar matters.

These forward-looking statements reflect the Company's current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties and other factors outside the Company's control that may cause actual results to differ materially from those projected. Such factors include, but are not limited to, the following: ability to develop, commercialize and market new products; ability to market and sell products, whether through an internal, direct sales force or third parties; ability to manufacture products in accordance with applicable specifications, performance standards and quality requirements; ability to obtain, and timing and cost of obtaining, necessary regulatory approvals for new products or new indications or applications for existing products; ability to comply with applicable regulatory requirements; ability to effectively resolve warning letters, audit observations and other findings or comments from the FDA or other regulatory entities; changes in relationships, including disputes or disagreements, with strategic partners or other parties and reliance on strategic partners for the performance of critical activities under collaborative arrangements; competing products and technology changes; reduction or deferral of public funding available to customers; competition from new or better technology or lower cost products; market acceptance of our products; changes in market acceptance of products based on product performance or other factors, including changes in testing guidelines, algorithms or other recommendations by the Centers for Disease Control and Prevention and other agencies; ability to fund research and development and other products and operations; ability to obtain and maintain new or existing product distribution channels; reliance on sole supply sources for critical products and components; ability to reach and maintain sustained profitability; uncertainty relating to patent protection and potential patent infringement claims; uncertainty and costs of litigation relating to patents and other intellectual property; availability of licenses to patents or other technology; obstacles to international marketing and manufacturing of products; ability to sell products internationally, including the impact of changes in international funding sources and testing algorithms; adverse movements in foreign currency exchange rates; loss or impairment of sources of capital; ability to attract and retain qualified personnel; exposure to product liability and other types of litigation; changes in international, federal or state laws and regulations; customer consolidations and inventory practices; equipment failures and ability to obtain needed raw materials and components; the impact of terrorist attacks and civil unrest; changes in laws or regulations; global and regional economic conditions; and general political, business and market conditions.

Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, these are only assumptions, and forward-looking statements should not be read as a guarantee of future performance or results and will probably not be accurate indications of when such performance or results will be achieved. Investors are cautioned that forward-looking statements may not be reliable and speak only as of the date they are made and that, except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect any future events or circumstances. All subsequent written or oral forward-looking statements attributable to the Company or to individuals acting on its behalf are expressly qualified in their entirety by this section.





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Investors should also be aware that while we do, from time to time, communicate with securities analysts, it is against our policy to disclose any material non-public information or other confidential commercial information to securities analysts unless and until we have made it publicly available. Accordingly, stockholders should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, we have a policy against issuing or confirming financial forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of the Company.





Overview

This discussion and analysis should be read in conjunction with the accompanying Consolidated Financial Statements and related notes. The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we review our estimates and assumptions. Our estimates are based on our historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations. Our critical accounting policies, the policies we believe are most important to the presentation of our financial statements and require the most difficult, subjective and complex judgments, are outlined below in ''Critical Accounting Policies,''.

This management's discussion and analysis of financial condition and results of operations ("MD&A") is intended to help you understand the business operations and financial condition of the Company as of December 31, 2022.

Our MD&A is presented in six sections:





 ? Executive Overview

? Consolidated Results of Operations

? Liquidity and Capital Resources






 ? Recent Developments

? Significant Accounting Policies and Critical Accounting Estimates

? Recently Issued Accounting Pronouncements






Executive Overview

On June 6, 2021, Nanomix, Inc., or Nanomix, and Boston Therapeutics completed a reverse merger, or the Merger, resulting in the formation of Nanomix Corporation (the "Company"). As consideration for the Merger, the shareholders of Nanomix received 1,000,000 shares of Series C Convertible Preferred Stock of the Company (the "Preferred Stock"). On March 2, 2022 upon approval of a previously approved 173:1 reverse stock split, all such shares of Preferred Stock issued to Nanomix shareholders automatically converted into approximately 35,644,997 shares of common stock of the Company, the warrants assumed at closing may be exercisable into approximately 2,124,687 shares of common stock of the Company and the options assumed at closing may be exercisable into approximately 5,718,838 shares of common stock of the Company. The shares of common stock issued upon conversion of the Preferred Stock together with warrants, restricted stock units and options assumed on the closing date represent approximately 80% of the outstanding shares of Common Stock of the Company upon closing of the Merger. After the merger, the Company changed its name to Nanomix Corporation and its ticker symbol to NNMX.





Our Business

Nanomix, Inc, is a development stage company that seeks to develop, manufacture, and commercialize point-of-care diagnostic tests that are used to detect or monitor diseases. The Company's product development efforts are focused on our proprietary technology, a novel point-of-care diagnostic platform that offers certain customer advantages as compared to other point-of-care diagnostic technologies. Nanomix, Inc. was originally formed in 2001 as a nanotechnology sensor company. In 2009, ownership changed, and the business was redirected to development and commercialization of a mobile point-of-care diagnostic platform.





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Business Strategy

The healthcare market is rapidly evolving to incorporate a decentralized system of care delivery within a broad spectrum of environments: the emergency department, skilled nursing facilities, elderly homes, urgent care centers, ambulances, and remote locations. While hospital central laboratories currently are the gold standard of clinical testing, a mobile diagnostic platform offering high-quality testing results at affordable prices is needed to serve the decentralized testing requirements. The Nanomix eLab System is specifically designed to meet this evolving market need. The system includes a durable, handheld, rechargeable battery powered instrument and a disposable multiplex, microfluidic test cartridge. Proprietary biosensors deliver laboratory-quality performance wherever the patient or healthcare provider needs it, including a wide range of testing environments outside the hospital. The Nanomix eLab System is well suited for markets that include pre-hospital assessment, chronic medical care, and post-hospital disease management, as well as use in remote locations far from traditional centers of health care delivery. Whether in an Emergency Department, an Urgent Care facility, a skilled nursing facility or on an ambulance, the Nanomix eLab System is designed to help mobile health providers to quickly assess a patient's condition and intervene with a higher level of care when necessary.

Our initial product development focus is on testing for critical medical conditions where rapidly available information is needed to help inform clinical decision making. The Nanomix S1 Assay Panel is designed to provide information about critical infections, including sepsis, in less than 15 minutes. The S1 Assay Panel has received CE marking. Future product development efforts for other critical conditions are planned for development.





Results of Operations

Results of operations for the years ended December 31, 2022 and 2021





The results of operations for the years ended December 31, 2022 and 2021 were as
follows:



                              NANOMIX CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS



                                                        December 31,
                                                   2022              2021

Revenues                                       $      15,450     $    141,778

Operating costs and expenses:
Research and development                           3,159,239        3,017,263
Selling, general and administrative expenses       5,293,379        2,849,666
Total operating expenses                           8,452,618        5,866,929
Loss from operations                              (8,437,168 )     (5,725,151 )

Other income (expense):
Interest income                                            3                2
Interest expense                                  (3,716,544 )     (1,644,829 )

Interest expense, related, party                    (391,757 )       (572,347 )
Other income                                         212,490                -
Change in fair value of derivative liability               -           15,282
Change in fair value of warrant liability                  -          438,972
Forgiveness of PPP loan and accrued interest               -          408,242
Loss on debt modification                                  -       (2,385,204 )
Total income (expense)                            (3,895,808 )     (3,739,882 )

Loss before income taxes                         (12,332,976 )     (9,465,033 )
Provision for income taxes                                 -                -
Net loss                                       $ (12,332,976 )   $ (9,465,033 )




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Total Revenues

Total net revenues during twelve months ended December 31, 2022 were $15 thousand, a decrease of $126 thousand compared to year 2021. Revenues in 2022 were from product sales while revenues in 2021 were related to completion of a BARDA product development contract.





Research and Development

This category includes costs incurred for product and process development, and clinical & regulatory affairs. Costs for year ended December 31, 2022 of $3.2 million were largely related to further development of the Company's S-1 Assay Panel for critical infections and for regulatory filing and related activities for an assay for the detection of COVID-19. Costs of $3.0 million in the year ended December 31, 2021 were related to the development of the S1 Assay Panel and development work on the COVID-19 program. All development efforts were for development of the eLab platform.

Selling, General and Administrative Expense

Selling, general and administrative expense ("SG&A") for the year ended December 31, 2022 increased by $2.4 million from the same period in 2021. The increase was due to establishment of a sales and marketing function in 2021 and increased general and administrative costs in 2022 mainly from legal and accounting costs related to the merger and subsequent regulatory filings, insurance, and warrant expense recorded in year of 2022.





Other Income (Expense)

Other Expense in 2022 was $3,896 thousand, an increase in expense of $156 thousand compared to 2021. Other expense in 2022 was primarily composed of amortization of the previously recorded debt discount for the year ended December 31, 2022. Other expense in 2021 is primarily composed of loss on debt modification of $2,385 thousand for the year ended December 31, 2021 resulting from the exchange of a Nanomix secured Note and related accrued interest for a Senior Secured Convertible Note as part of the merger. These Notes and accrued interest were converted to Preferred Series C stock in 2021 as part of the merger. Other income of $212,490 in 2022 is from sale of the domain rights for nano.com to a third party for $250,000 net of escrow fees.





Net Loss

The Net Loss for the year ended December 31, 2022 was $12.3 million versus $9.5 million for the same period in 2021. The increased loss of $2.8 million was largely due to the increase in operating expenses and the decrease in revenue.

Liquidity and Capital Resources





Overview

Our liquidity requirements are primarily to fund our business operations, including capital expenditures and working capital requirements. Our primary sources of liquidity are additional capital investment and debt.

On June 25, 2021, the Company entered into a securities purchase agreement with accredited investors pursuant to which the Company issued senior secured convertible notes in an aggregate principal amount of approximately $8.4 million for an aggregate purchase price of approximately $7.9 million. Immediately prior to the execution of the agreement described above, we entered into exchange agreements with the holders of outstanding promissory notes with an aggregate principal amount, together with accrued but unpaid interest, of approximately $2.1 million. The holders of the outstanding promissory notes were issued senior secured notes in the financing described above for an aggregate principal amount of $2.1 million. In connection with the issuance of the Notes, we issued to the Investors warrants to purchase an aggregate of approximately 4.1 million shares of Common Stock (collectively, the "Warrants"). The Company received approximately $5.8 million in funding from the transaction. In 2022, an additional $5,122 thousand of Notes were issued to investors bringing the total senior secured convertible notes issued to $13.4 million. We issued additional warrants to purchase an aggregate of approximately 6,1 million shares of common stock.

In March of 2022, the Company entered into a Convertible Preferred stock arrangement and issued 500 shares of Preferred D stock for $500 thousand. The Preferred D investment agreement was to provide an additional $2.5 million in funding over the next 6 months. The Company is in discussions to potentially terminate or amend the agreement.

In the 4th quarter of 2022, the Company issued common stock to a distribution partner in return for a $500,000 investment.





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Cash Flows

As of December 31, 2022, the Company had cash and equivalents of $17 thousand compared to $297 thousand as of December 31, 2021 and outstanding debt of $14.6 million compared to $9.6 million in the same quarter of 2021.

Cash used in operating activities during the year ended December 31, 2022 was $6.1 million. The net loss of $12.3 million for the year 2022 was increased by amortization of the discount from the issue of promissory notes of $4.0 million, services compensated by stock issuance of $1.0 million, change in accounts payable of $0.5 million and stock-based compensation $0.5 million, which were the significant non-cash expense items.

Cash provided by investing activities during the year ended December 31, 2022 of $186 thousand was primarily from domain sale proceeds.

Cash provided by financing activities during year 2022 of $5.6 million was primarily related to proceeds from the sale of convertible debt issuances for the amount $4.6 million, $500 thousand of common stock sales, and $500 thousand proceeds from issuance of Preferred D stock used to fund company operations.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K under the Securities Exchange Act of 1934, as amended.





Recent Developments

In June 2021, the Company completed a merger with Boston Therapeutics, a publicly held entity. The Company is the majority shareholder of the resulting entity. As part of the merger agreement, substantially all of the Company's debt has been converted to equity in the merged entity. In addition, and in conjunction with the merger, the Company entered into a Convertible Equity arrangement and as of December 31, 2022 has issued $13.426 million in secured Notes and a received a related cash investment of $10.4 million.

Significant Accounting Policies and Critical Accounting Estimates

Significant accounting policies are described in Note 3 - Significant Accounting Policies to the audited consolidated financial statements included herein. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. We consider an accounting estimate to be critical if:

? It requires us to make assumptions about matters that were uncertain at the

time we were making the estimate, and

? Changes in the estimate or different estimates that we could have selected

would have had a material impact on our financial condition or results of


   operations.

The following listing is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States of America, with no need for management's judgment in their application. There are also areas in which management's judgment in selecting any viable alternative would not produce a materially different result. There have been no significant changes in our critical accounting estimates during the year ended December 31, 2022.





Revenue Recognition

For certain contracts, we recognize revenue from R&D, milestone and grant revenues when earned. Grants are invoiced after expenses are incurred, as that is the depiction of the timing of the transfer of services. Performance obligations generally follow the major phases of product development processes: design feasibility & planning, product development & design optimization, design verification, design validation & process validation, and pivotal studies. Further details regarding revenue recognition are document at Note 3(b) - Summary of Significant Accounting Policies: Revenue Recognition to the Unaudited Condensed Consolidated Financial Statements.





Stock-Based Compensation

We recognize the fair value of equity-based awards as compensation expense in our statement of operations. The fair value of our stock option awards was estimated using a Black-Scholes option valuation model. This valuation model's computations incorporate highly subjective assumptions, such as the expected stock price volatility and the estimated life of each award. The fair value of the options, after considering the effect of expected forfeitures, is then amortized, generally on a straight-line basis, over the related vesting period of the option.





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Research & Development Costs

Research and development activities consist primarily of new product development, continuing engineering for existing products, and regulatory and clinical trial costs. Costs related to research and development efforts on existing or potential products are expensed as incurred.





Income Taxes

Income taxes are accounted for under ASC 740 authoritative guidance ("Guidance"), which requires the asset and liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities. Deferred tax assets or liabilities at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered.

The Guidance also requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence needs to be considered, including a company's current and past performance, the market environment in which the company operates, length of carryback and carryforward periods and existing contracts that will result in future profits. The Company believes that it is more likely than not that it will not be able to utilize its net operating loss carryforwards and maintains a full valuation allowance. The Company maintains a full valuation allowance on research and development tax credits.

The Guidance also prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the consolidated financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction.

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