What changed in this filing

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Item 9A. Controls and Procedures

2021-04-06 compared with 2020-06-23 · 1533 added, 939 removed, 744 unchanged (77% of the section changed)

and Procedures

Controls and Procedures

Disclosure Controls and Procedures

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Based on his evaluation, Mr.

Emmons concluded that, due to a material weakness in our internal control over financial

reporting as described below, our disclosure controls and procedures were not effective as of December 31, 2019.

In light of the

material weakness in internal control over financial reporting, we completed substantive procedures, including validating the

completeness and accuracy of the underlying data used for accounting prior to filing this Annual Report.

Emmons concluded that, due to a material weakness in our internal control over financial reporting

as described below, our disclosure controls and procedures were not effective as of December 31, 2020.

In light of the material

weakness in internal control over financial reporting, we completed substantive procedures, including validating the completeness

and accuracy of the underlying data used for accounting prior to filing this Annual Report.

These additional procedures have allowed

us to conclude that, notwithstanding the material weakness in our internal control over financial reporting, the consolidated

financial statements included in this report fairly present, in all material respects, our financial position, results of operations

and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

us to conclude that, notwithstanding the material weakness in our internal control over financial reporting, the consolidated financial

statements included in this report fairly present, in all material respects, our financial position, results of operations and

cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

Management’s Report on Internal

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and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal

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of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of

the effectiveness of our internal control over financial reporting as of December 31, 2019 based upon Internal Control-Integrated

Management conducted an evaluation of the

effectiveness of our internal control over financial reporting as of December 31, 2020 based upon Internal Control-Integrated

Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“

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A material weakness is a deficiency, or

a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that

a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely

We noted deficiencies involving lack of segregation of duties, lack of governance/oversight, and lack of internal control documentation

that we believe to be material weaknesses.

a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a

material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely

We noted deficiencies involving lack of

segregation of duties, lack of governance/oversight, and lack of internal control documentation that we believe to be material

Because of this material weaknesses, management

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Separation of corporate responsibilities, e.g.

CEO, CFO, Secretary,

CEO, CFO, Secretary, etc.

to different key management individuals;

Creation and adoption of a formal policy manual specifically

dealing with financial controls.

Creation and adoption of a formal policy manual specifically dealing with financial controls.

Due to a material weakness as disclosed

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however, due to lack of resources, we were unable to execute the complete remediation plan.

If we are unable to increase

our workforce, we may never be able to implement the remediation plan proposed above.

We are committed to maintaining a strong

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December 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial

Executive Officers and Corporate Governance

Other Information

Directors, Executive Officers

and Corporate Governance

Current Management

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Chief Operating Officer

Antony Coufal

Chief Technology Officer and President of HereLab

Chandran Seshagiri

Interim Chief Technology Officer

Vidhyadhar Mitta

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Officers and Directors

The principal occupation and business

experience during the past five years for our executive officers and directors is as follows:

The principal occupation and business experience

during the past five years for our executive officers and directors is as follows:

has served as our Chief Executive Officer, President, Interim Chief Financial Officer, and director since June 4, 2018.

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Karen McNemar:

served as our Chief Operating Officer since September 20, 2018.

has served as our Chief Operating Officer since September 20, 2018.

From 1998 until August 2017, Ms.

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for Medtronic which included as a Senior Director of R&D Operations.

McNemar is a collaborative

strategic global business leader with extensive experience in New Product Development and Operations, building strong and effective

diverse teams across organizations at all levels.

McNemar is also a trusted advisor, recognized for successful process and

program management, with a focus on leading complex initiatives and analyzing data and processes to identify solutions to increase

organizational productivity and performance.

McNemar received her Bachelor of Science in Industrial Engineering and Operations

Antony Coufal:

Coufal has served

as our Chief Technology Officer since April 23, 2018.

From December 2008 to December 2017, Mr.

Coufal served as the Chief Executive

Officer of INTEX Corp., a telecommunications contractor.

Coufal is a multicultural leader with

strong business acumen and diverse technical skills who has 20+ years of experience launching several successful technology focused

corporations serving government, Fortune 500, and global entities requiring innovative solutions in engineering, construction,

intelligent security, IT & telecom, industrial electrical and HVAC in numerous US and LATAM markets.

He is a graduate of Rensselaer

Polytechnic Institute with degrees in Engineering Sciences and Business Administration.

McNemar is a collaborative strategic global business

leader with extensive experience in New Product Development and Operations, building strong and effective diverse teams across

organizations at all levels.

McNemar is also a trusted advisor, recognized for successful process and program management, with

a focus on leading complex initiatives and analyzing data and processes to identify solutions to increase organizational productivity

and performance.

McNemar received her Bachelor of Science in Industrial Engineering and Operations Research.

Chandran Seshagiri:

has served as our Interim Chief Technology Officer since April 1, 2021.

During the last five years, Mr.

Seshagiri was the Lead Research Scientist for Cephalogics, LLC as well as Director of Scientific Affairs for NeoSync, Inc.

Seshagiri has also been a Scientific Advisor and Technical consultant to Invisio Medical, Inc.

In addition to these

Seshagiri has consulted for other medical device companies on technology strategy, algorithm development and evaluation,

and clinical study planning.

Vidhyadhar Mitta:

served as a director of the Company since the closing of the reverse acquisition on July 28, 2017.

Mitta has also served as

a director of OXYS since its inception on August 4, 2016.

has served as a director of the Company since the closing of the reverse acquisition on July 28, 2017.

Mitta has also served

as a director of OXYS since its inception on August 4, 2016.

Since 2000, he has been the founder and President of Synergic Solutions

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comprised of a majority of “independent directors.”

We currently have not established any

committees of the Board of Directors.

Our Board of Directors may designate from among its members an executive committee and one

or more other committees in the future.

We currently have not established any committees

of the Board of Directors.

Our Board of Directors may designate from among its members an executive committee and one or more other

committees in the future.

We do not have a nominating committee or a nominating committee charter.

Further, we do

not have a policy with regard to the consideration of any director candidates recommended by security holders.

To date, other

than as described above, no security holders have made any such recommendations.

The entire Board of Directors performs all functions

that would otherwise be performed by committees.

Further, we do not have a policy

with regard to the consideration of any director candidates recommended by security holders.

To date, other than as described above,

no security holders have made any such recommendations.

The entire Board of Directors performs all functions that would otherwise

be performed by committees.

Given the present size of our board it is not practical for us to have committees.

If we are able to grow our business and increase our operations, we intend to expand the size of our board and allocate responsibilities

If we are able to

grow our business and increase our operations, we intend to expand the size of our board and allocate responsibilities accordingly.

Compliance with Section 16(a) of

the Securities Exchange Act of 1934

The following table identifies each person

who, at any time during the fiscal year ended December 31, 2019, was a director, executive officer, or beneficial owner of more

than 10% of our common stock that failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during

the most recent fiscal year:

of Late Reports

of Transactions Not Reported on a Timely Basis

Vidhyadhar Mitta

We are unaware of any person who, at any

time during the fiscal year ended December 31, 2020, was a director, executive officer, or beneficial owner of more than 10% of

our common stock that failed to file on a timely basis reports required by Section 16(a) of the Exchange Act.

Code of Ethics

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honest and ethical conduct;

full, fair, accurate, timely, and understandable disclosure

in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by the

avoidance and ethical handling of actual or apparent conflicts

of interest, including disclosure to an appropriate person of any material transaction or relationship that reasonably could

be expected to give rise to such a conflict;

full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by the Company;

avoidance and ethical handling of actual or apparent conflicts of interest, including disclosure to an appropriate person of any material transaction or relationship that reasonably could be expected to give rise to such a conflict;

confidentiality of corporate information;

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compliance with applicable governmental laws, rules, and regulations;

prompt internal reporting of any violations of this Code to

an appropriate person;

prompt internal reporting of any violations of this Code to an appropriate person;

accountability for adherence to the Code.

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Code of Ethics is available at www.oxyscorp.com and is included as an exhibit to this Annual Report.

The Company will provide

any person, without charge and upon request through our website, a copy of the Code of Ethics.

The Company will provide any

person, without charge and upon request through our website, a copy of the Code of Ethics.

Executive Compensation

The following table sets forth information

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Summary Compensation Table

principal position

Name and principal position

Clifford Emmons (1)

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Karen McNemar (11)

Emmons was appointed as our CEO, President,

and interim CFO on June 4, 2018.

Emmons was appointed as our CEO, President, and interim CFO on June 4, 2018.

As of December 31, 2020, Mr.

Emmons was owed $115,907 in accrued and unpaid consulting fees and $17,001 in reimbursable expenses.

On June 4, 2020, 1,000,000 shares of Common Stock previously granted to Mr.

Emmons vested.

Effective December 31, 2019, Mr.

Emmons forgave

$185,000 of accrued and unpaid consulting fees.

Emmons forgave $185,000 of accrued and unpaid consulting fees.

As of December 31, 2019, Mr.

Emmons was owed $100,000 in accrued and unpaid

consulting fees and $17,001 in reimbursable expenses.

On June 4, 2019, 560,000 shares of Common

Stock previously granted to Mr.

Emmons was owed $100,000 in accrued and unpaid consulting fees and $17,001 in reimbursable expenses.

On June 4, 2019, 560,000 shares of Common Stock previously granted to Mr.

Emmons vested.

$46,283 of Mr.

Emmons’

salary for 2018

was owed to Accelerated Healthcare Innovations LLC, a limited liability company owned by Mr.

Represents shares which have been granted

but were unvested at December 31, 2018.

Coufal was appointed as our CTO on April 23, 2018.

As of December 31, 2020, Mr.

Coufal was owed $117,917 in accrued and unpaid consulting fees and $8,226 in reimbursable expenses.

On April 23, 2020, 600,000 shares of Common Stock previously granted to Mr.

Coufal vested.

Effective December 31, 2019, Mr.

Coufal forgave

$82,475 of accrued and unpaid consulting fees.

Coufal forgave $82,475 of accrued and unpaid consulting fees.

As of December 31, 2019, Mr.

Coufal was owed $100,000 in accrued and unpaid

consulting fees and $8,225 in reimbursable expenses.

On April 23, 2019, 300,000 shares of Common

Stock previously granted to Mr.

Coufal was owed $100,000 in accrued and unpaid consulting fees and $8,225 in reimbursable expenses.

On April 23, 2019, 300,000 shares of Common Stock previously granted to Mr.

Coufal vested.

Represents shares which have been granted

but were unvested at December 31, 2018.

McNemar was appointed as our COO effective

as of September 20, 2018.

McNemar was appointed as our COO effective as of September 20, 2018.

As of December 31, 2020, Ms.

McNemar was owed $120,814 in accrued and unpaid consulting fees and $18,000 in reimbursable expenses.

On October 1, 2020, 800,000 shares of Common Stock previously granted to Ms.

McNemar vested.

Effective December 31, 2019, Ms.

McNemar forgave

$103,250 of accrued and unpaid consulting fees.

McNemar forgave $103,250 of accrued and unpaid consulting fees.

As of December 31, 2019, Ms.

McNemar was owed $100,000 in accrued and unpaid

consulting fees and $18,000 in reimbursable expenses.

On October 1, 2019, 409,000 shares of Common

Stock previously granted to Ms.

McNemar was owed $100,000 in accrued and unpaid consulting fees and $18,000 in reimbursable expenses.

On October 1, 2019, 409,000 shares of Common Stock previously granted to Ms.

McNemar vested.

$52,479 of Ms.

McNemar’s salary for

2018 was accrued and unpaid.

Represents shares which have been granted

but were unvested at December 31, 2018.

Emmons Consulting Agreement

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Emmons Agreement ”).

The term of the Emmons Agreement is for three years beginning as of the effective date, unless terminated earlier pursuant to

the agreement and is automatically renewable for one-year terms upon the consent of the parties.

The services to be provided by

The term of the Emmons Agreement is for three years beginning as of the effective date, unless terminated earlier pursuant to the

agreement and is automatically renewable for one-year terms upon the consent of the parties.

The services to be provided by Mr.

Emmons pursuant to the Emmons Agreement are those customary for the positions in which he is serving.

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of $15,000 which accrues unless converted into shares of Common Stock of the Company at a conversion rate specified in the Emmons

Until the Company closes a minimum $500,000 capital raise, the monthly fee accrues and, upon the closing of such a

capital raise, $5,000 of the monthly fee will be paid to Mr.

Until the Company closes a minimum $500,000 capital raise, the monthly fee accrues and, upon the closing of such a capital

raise, $5,000 of the monthly fee will be paid to Mr.

Emmons in cash and the remainder will continue to accrue.

closing of a capital raise of at least $2,000,000, the entire monthly fee will be paid to Mr.

Emmons in cash and all accrued and

unpaid monthly fees will be paid by the Company within one year of the closing of such a capital raise.

As of the effective date, the Company

shall issue to Mr.

Upon the closing

of a capital raise of at least $2,000,000, the entire monthly fee will be paid to Mr.

Emmons in cash and all accrued and unpaid

monthly fees will be paid by the Company within one year of the closing of such a capital raise.

As of the effective date, the Company shall

Emmons an aggregate of 3,060,000 shares of the Company’s Common Stock which vest as follows:

560,000 shares on the first-year anniversary of the effective

1,000,000 shares on the second-year anniversary of the effective

1,500,000 shares on the third-year anniversary of the effective

The shares are granted under the 2019

Vesting of the shares is subject to acceleration of vesting upon the occurrence of certain events such as a Change of Control

(as defined in the Emmons Agreement) or the listing of the Company’s Common Stock on a senior exchange.

On June 12, 2020, the Company entered

into an amendment effective January 1, 2020 (the “

560,000 shares on the first-year anniversary of the effective date;

1,000,000 shares on the second-year anniversary of the effective date;

1,500,000 shares on the third-year anniversary of the effective date.

The shares are granted under the 2019 Plan.

Vesting of the shares is subject to acceleration of vesting upon the occurrence of certain events such as a Change of Control (as

defined in the Emmons Agreement) or the listing of the Company’s Common Stock on a senior exchange.

On June 12, 2020, the Company entered into

an amendment effective January 1, 2020 (the “

Emmons Amendment ”) to the Emmons Agreement, pursuant to which,

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Coufal Agreement ”).

The term of the Coufal Agreement is for

three years beginning as of the effective date, unless terminated earlier pursuant to the agreement and is automatically renewable

for one-year terms upon the consent of the parties.

The term of the Coufal Agreement is for three

years beginning as of the effective date, unless terminated earlier pursuant to the agreement and is automatically renewable for

one-year terms upon the consent of the parties.

The services to be provided by Mr.

Coufal pursuant to the Coufal Agreement

are those customary for the position in which he is serving.

Coufal pursuant to the Coufal Agreement are

those customary for the position in which he is serving.

Coufal shall receive a monthly fee

of $9,375 which accrues unless converted into shares of Common Stock of the Company at a conversion rate specified in the Coufal

Until the Company closes a minimum $500,000 capital raise, the monthly fee accrues and, upon the closing of such a

capital raise, $3,125 of the monthly fee will be paid to Mr.

Until the Company closes a minimum $500,000 capital raise, the monthly fee accrues and, upon the closing of such a capital

raise, $3,125 of the monthly fee will be paid to Mr.

Coufal in cash and the remainder will continue to accrue.

closing of a capital raise of at least $2,000,000, the entire monthly fee will be paid to Mr.

Coufal in cash and all accrued and

unpaid monthly fees will be paid by the Company within one year of the closing of such a capital raise.

As of the effective date, the Company

shall issue to Mr.

Upon the closing

of a capital raise of at least $2,000,000, the entire monthly fee will be paid to Mr.

Coufal in cash and all accrued and unpaid

monthly fees will be paid by the Company within one year of the closing of such a capital raise.

As of the effective date, the Company shall

Coufal an aggregate of 1,800,000 shares of the Company’s Common Stock which vest as follows:

300,000 shares on the first-year anniversary of the effective

600,000 shares on the second-year anniversary of the effective

900,000 shares on the third-year anniversary of the effective

The shares are granted under the 2017

Stock Incentive Plan.

Vesting of the shares is subject to acceleration of vesting upon the occurrence of certain events such as

a Change of Control (as defined in the Coufal Agreement) or the listing of the Company’s Common Stock on a senior exchange.

On June 12, 2020, the Company entered

into an amendment effective January 1, 2020 (the “

300,000 shares on the first-year anniversary of the effective date;

600,000 shares on the second-year anniversary of the effective date;

900,000 shares on the third-year anniversary of the effective date.

The shares are granted under the 2017 Stock

Incentive Plan.

Vesting of the shares is subject to acceleration of vesting upon the occurrence of certain events such as a Change

of Control (as defined in the Coufal Agreement) or the listing of the Company’s Common Stock on a senior exchange.

On June 12, 2020, the Company entered into

an amendment effective January 1, 2020 (the “

Coufal Amendment ”) to the Coufal Agreement, pursuant to which,

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of $12,750 which accrues unless converted into shares of Common Stock of the Company at a conversion rate specified in the McNemar

Until the Company closes a minimum $500,000 capital raise, the monthly fee accrues and, upon the closing of such a

capital raise, $4,250 of the monthly fee will be paid to Ms.

Until the Company closes a minimum $500,000 capital raise, the monthly fee accrues and, upon the closing of such a capital

raise, $4,250 of the monthly fee will be paid to Ms.

McNemar in cash and the remainder will continue to accrue.

closing of a capital raise of at least $2,000,000, the entire monthly fee will be paid to Ms.

McNemar in cash and all accrued

and unpaid monthly fees will be paid by the Company within one year of the closing of such a capital raise.

As of the effective date, the Company

shall issue to Ms.

Upon the closing

of a capital raise of at least $2,000,000, the entire monthly fee will be paid to Ms.

McNemar in cash and all accrued and unpaid

monthly fees will be paid by the Company within one year of the closing of such a capital raise.

As of the effective date, the Company shall

McNemar an aggregate of 2,409,000 shares of the Company’s Common Stock which vest as follows:

409,000 shares on the first-year anniversary of the effective

800,000 shares on the second-year anniversary of the effective

1,200,000 shares on the third-year anniversary of the effective

The shares are granted under the 2017

Stock Incentive Plan.

Vesting of the shares is subject to acceleration of vesting upon the occurrence of certain events such as

a Change of Control (as defined in the McNemar Agreement) or the listing of the Company’s Common Stock on a senior exchange.

On June 12, 2020, the Company entered

into an amendment effective January 1, 2020 (the “

McNemar Amendment ”) to the McNemar Agreement, pursuant to

which, Sections 7(a) and 7(b) of the McNemar Agreement were amended to read as follows:

409,000 shares on the first-year anniversary of the effective date;

800,000 shares on the second-year anniversary of the effective date;

1,200,000 shares on the third-year anniversary of the effective date.

The shares are granted under the 2017 Stock

Incentive Plan.

Vesting of the shares is subject to acceleration of vesting upon the occurrence of certain events such as a Change

of Control (as defined in the McNemar Agreement) or the listing of the Company’s Common Stock on a senior exchange.

On June 12, 2020, the Company entered into

an amendment effective January 1, 2020 (the “

McNemar Amendment ”) to the McNemar Agreement, pursuant to which,

Sections 7(a) and 7(b) of the McNemar Agreement were amended to read as follows:

From January 1, 2020 until April 23, 2020, the Consultant shall be paid an hourly wage of $12.75 per hour for Services performed.

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Debt Forgiveness Agreements

On June 11, 2020, the Company entered

into Debt Forgiveness Agreements with Cliff Emmons, Karen McNemar, and Antony Coufal, pursuant to which:

Emmons forgave $185,000 of accrued and unpaid consulting fees owed to him pursuant to

his consulting agreement with the Company;

McNemar forgave $103,250 of accrued and unpaid consulting fees owed to her pursuant to

her current and previous consulting agreement with the Company;

Coufal forgave $82,475 of accrued and unpaid consulting fees owed to him pursuant to

his consulting agreement with the Company.

On June 11, 2020, the Company entered into

Debt Forgiveness Agreements with Cliff Emmons, Karen McNemar, and Antony Coufal, pursuant to which:

Emmons forgave $185,000 of accrued and unpaid consulting fees owed to him pursuant to his consulting agreement with the Company;

McNemar forgave $103,250 of accrued and unpaid consulting fees owed to her pursuant to her current and previous consulting agreement with the Company;

Coufal forgave $82,475 of accrued and unpaid consulting fees owed to him pursuant to his consulting agreement with the Company.

Share Exchange Agreements

As of November 9, 2020, we entered into

a Share Exchange Agreements (the “

Exchange Agreements ”) with Mr.

Emmons, Vidhyadhar Mitta, our director, and

McNemar pursuant to which:

we agreed to sell Mr.

Emmons 7,800 shares of Series A Preferred Stock (as defined below) in exchange for 780,000 unissued, vested shares of our Common Stock;

we agreed to sell Mr.

Mitta 12,000 shares of Series A Preferred in exchange for 1,000,000 unissued, awarded shares of our Common Stock and $168 in accrued and unpaid interest pursuant to a note issued to Mr.

we agreed to sell Ms.

McNemar 6,045 shares of Series A Preferred Stock in exchange for 604,500 unissued, vested shares of our Common Stock.

Equity Awards

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concerning as of the year ended December 31, 2020 for our named executive officers.

Outstanding Equity Awards at Fiscal

shares or units of stock that have not vested

of shares of units of stock that have not vested

shares, units or other rights that have not vested

Market or payout value of

Outstanding Equity Awards at Fiscal Year-End

Number of shares or units of stock that have not vested

Market value of shares of units of stock that have not vested

Equity incentive plan awards:

Number of unearned shares, units or other

rights that have not vested

Equity incentive plan awards:

Market or payout value of unearned

shares, units or other rights that have not vested

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Karen McNemar

fair market value was deemed $0.30 per share.

The fair market value was deemed $0.30 per share.

Compensation of Directors

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above), this table includes any person who served as a director at any time during fiscal 2019.

Except as described below, we have not

entered into any employment or compensation agreements or arrangements with Mr.

Mitta for his services as a director of our company.

Except as described below, we have

not entered into any employment or compensation agreements or arrangements with Mr.

Mitta for his services as a director of our

Director Compensation

1 unchanged sentence

Vidhyadhar Mitta

Ownership of Certain Beneficial Owners and Management

On November 9, 2020, our Board of Directors (with Mr.

Mitta abstaining) approved the award of 1,000,000 shares of our Common Stock to Mr.

Mitta for services rendered to the Company in his capacity as a director since his appointment.

Security Ownership of Certain

Beneficial Owners and Management

The following table and footnotes thereto

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officer of our company, (ii) each person known by us to be the beneficial owner of 5% or more of its issued and outstanding shares

of common stock, and (iii) named executive officers, executive officers, and directors of the Company as a group.

In calculating

any percentage in the following table of common stock beneficially owned by one or more persons named therein, the following table

assumes 135,167,713 shares of common stock outstanding.

Unless otherwise further indicated in the following table, the footnotes

thereto and/or elsewhere in this report, the persons and entities named in the following table have sole voting and sole investment

power with respect to the shares set forth opposite the shareholder’s name, subject to community property laws, where applicable.

Unless as otherwise indicated in the following table and/or the footnotes thereto, the address of our named executive officers

and directors in the following table is:

of common stock, and (iii) named executive officers, executive officers, and directors of the Company as a group as of March 15,

In calculating any percentage in the following table of common stock beneficially owned by one or more persons named therein,

the following table assumes 178,361,108 shares of common stock outstanding.

Unless otherwise further indicated in the following

table, the footnotes thereto and/or elsewhere in this report, the persons and entities named in the following table have sole voting

and sole investment power with respect to the shares set forth opposite the shareholder’s name, subject to community property

laws, where applicable.

Unless as otherwise indicated in the following table and/or the footnotes thereto, the address of our named

executive officers and directors in the following tables is:

705 Cambridge Street, Cambridge, MA 02141.

Name and Address of Beneficial

Name and Address of Beneficial Owner

Ownership (1)

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Clifford Emmons

83,031,849 (2)

Antony Coufal

7,198,144 (3)

Karen McNemar

6,646,130 (4)

Vidhyadhar Mitta

Executive Officers, Named Executive Officers, and Directors as

a Group (4 Persons)

179,179,105 (5)

Executive Officers, Named Executive Officers, and Directors as a Group (4 Persons)

5% Beneficial Holders (Not Named Above)

3080 W 1 st Apt 601

Brooklyn, NY 11224

62,781,573 (6)

Cambridge MedSpace LLC

705 Cambridge Street

Cambridge, MA 02141

76,160,417 (7)

*Less than 1%

Under Rule 13d-3 of the Exchange

Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement,

understanding, relationship, or otherwise has or shares:

(i) voting power, which includes the power to vote, or to direct

the voting of shares;

Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

(i) voting power, which includes the power to vote, or to direct the voting of shares;

and (ii) investment power, which includes the power to dispose or direct the disposition of shares.

Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to

vote or the power to dispose of the shares).

In addition, shares are deemed to be beneficially owned by a person if the person

has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information

In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the

number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s

actual ownership or voting power with respect to the number of shares of common stock actually outstanding on the date of

this Annual Report.

Includes 36,667 shares issuable upon the exercise

of warrants issued to Cambridge MedSpace LLC, an entity of which Mr.

Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares).

In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided.

In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

As a result, the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on the March 15, 2021.

Includes 36,667 shares issuable upon the exercise of warrants issued to Cambridge MedSpace LLC, an entity of which Mr.

Emmons is an owner.

Also includes 9,812,166 shares issuable

upon the conversion of a note issued to Cambridge MedSpace LLC.

Lastly, includes 8,708,658 shares of Common Stock issuable

upon the conversion of $104,777 in accrued and unpaid salary.

Includes 8,708,658 shares of Common Stock

issuable upon the conversion of $104,777 in accrued and unpaid salary.

Includes 8,795,265 shares of Common Stock

issuable upon the conversion of $105,819 in accrued and unpaid salary.

Includes 781,250 shares issuable upon the

exercise of warrants.

Also includes 76,123,750 shares issuable upon the conversion of a note issued to Cambridge MedSpace LLC.

Includes 5,311,432 shares of Common Stock issuable upon the conversion of $123,119 in accrued and unpaid consulting fees.

Lastly, includes 780,000 shares issuable upon the conversion of shares of Series A Preferred Stock owned by Mr.

Includes 5,398,144 shares of Common Stock issuable upon the conversion

of $125,129 in accrued and unpaid salary and 900,000 shares of Common Stock issuable upon the vesting of an award on April 23,

Includes 6,041,630 shares of Common Stock issuable upon the conversion of $140,045 in accrued and unpaid salary.

Lastly, includes 604,500 shares issuable upon the conversion of shares of Series A Preferred Stock owned by Ms.

Includes 1,562,500 shares issuable upon the exercise of warrants.

Also includes 174,679,762 shares issuable upon the conversion of a note issued to Mr.

Relationships and Related Transactions, and Director Independence

Lastly, includes 1,200,000 shares issuable upon the conversion of shares of Series A Preferred Stock owned by Mr.

Includes 54,984,600 shares issuable upon the conversion of a note issued to Mr.

Gogin and 384,615 shares issuable upon the exercise of warrants.

Also includes 6,004,200 shares issuable upon the conversion of a note issued to YVSGRAMORAH LLC, an entity controlled by Mr.

Gogin and 125,000 warrants issuable upon the exercise of warrants issued to YVSGRAMORAH LLC.

Includes 36,667 shares issuable upon the exercise of warrants issued to Cambridge MedSpace LLC, an entity of which Mr.

Emmons is an owner.

Also includes 75,427,500 shares issuable upon the conversion of a note issued to Cambridge MedSpace LLC.

The following table sets forth information

known to us regarding the beneficial ownership of our Series A Supervoting Preferred Stock as of March 15, 2021.

Title of Class

Name and address of beneficial owner

Amount and nature of beneficial ownership

Percent of Class

Series A Supervoting Preferred Stock

Vidhyadhar Mitta

Karen McNemar

The following table sets forth information

known to us regarding the beneficial ownership of our Series B Convertible Preferred Stock as of March 15, 2021.

Title of Class

Name and address of beneficial owner (1)

Amount and nature of beneficial ownership

Percent of Class

Series B Convertible Preferred Stock

GHS Investments, LLC

Certain Relationships and Related

Transactions, and Director Independence

Certain Relationships and Related

For transactions with our executive officers,

1 unchanged sentence

Executive Compensation.

Accelerated Healthcare Consulting Agreement

On December 1, 2017, we entered into a

Consulting Agreement with Accelerated Healthcare Innovations LLC, a company owned by Clifford Emmons (“

AHI ”),

our current CEO and Director pursuant to which we agreed to pay to AHI a flat fee of $24,000 and 30,000 shares of our Common Stock

in exchange for consulting services to be provided by AHI.

The term of the agreement is until the completion of the Services,

as defined in the agreement or until early termination upon 10 days’

written notice given by either party.

On July 31, 2018, we entered into Amendment

1 to Consulting Agreement dated December 1, 2017 with AHI which changed the fee from a flat fee to an hourly fee not to exceed

$24,000 in the aggregate and also eliminated the obligation of the Company to issue to the Consultant any equity compensation

pursuant to the agreement.

On March 1, 2018, we entered into a Consulting

Agreement with AHI.

The term of the agreement is until the completion of the Services, as defined in the agreement or until early

termination upon 10 days’

written notice given by either party.

Pursuant to the agreement, the consultant agreed to provide

business consulting services to us in exchange for a flat fee of $48,000 and the issuance of 60,000 shares of our Common Stock.

On July 31, 2018, we entered into Amendment

1 to Consulting Agreement dated March 1, 2018 with Accelerated Healthcare Innovations LLC which changed the fee from a flat

fee to an hourly fee not to exceed $48,000 in the aggregate and also eliminated the obligation of the Company to issue to the

Consultant any equity compensation pursuant to the agreement.

On July 31, 2018, we entered into the

Termination Agreement with Accelerated Healthcare Innovations LLC which terminated the Consulting Agreement, as amended, dated

March 1, 2018 effective June 4, 2018.

Cambridge MedSpace Note

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Secured Convertible Note in the principal amount of $55,000.

The note is convertible, in whole or in part, into shares of our

Common Stock, at any time at a rate of $0.65 per share with fractions rounded up to the nearest whole share, unless paid in cash

at our election.

The note is convertible, in whole or in part, into shares of our Common

Stock, at any time at a rate of $0.65 per share with fractions rounded up to the nearest whole share, unless paid in cash at our

The note bears interest at a rate of 5% per annum and interest payments will be made on an annual basis.

note matures January 22, 2020.

The note is governed by the SPA and is secured by all our assets (but is not a senior secured note)

pursuant to the Security Agreement.

In addition to the issuance of the note, we issued to Cambridge MedSpace warrants to purchase

one share of our Common Stock for 50% of the number of shares of Common Stock issuable upon conversion of the note.

is immediately exercisable at $0.75 per share and expires on January 22, 2024.

The Lender is owned by shareholders of the Company,

or their affiliates, including Clifford Emmons, our Chief Executive Officer, Interim Chief Financial Officer, and director.

On June 12, 2020, the Company entered

into Amendment No.

1 to the 5% Secured Convertible Note with Cambridge MedSpace pursuant to which the note was amended to extend

the maturity date to January 22, 2021.

The note matures

January 22, 2020.

The note is governed by the SPA and is secured by all our assets (but is not a senior secured note) pursuant

to the Security Agreement.

In addition to the issuance of the note, we issued to Cambridge MedSpace warrants to purchase one share

of our Common Stock for 50% of the number of shares of Common Stock issuable upon conversion of the note.

Each warrant is immediately

exercisable at $0.75 per share and expires on January 22, 2024.

The Lender is owned by shareholders of the Company, or their affiliates,

including Clifford Emmons, our Chief Executive Officer, Interim Chief Financial Officer, and director.

On June 12, 2020, the Company entered into

Amendment No.

1 to the 5% Secured Convertible Note with Cambridge MedSpace pursuant to which the note was amended to extend the

maturity date to January 22, 2021.

Due to adjustments to the conversion price

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On August 2, 2019, the first closing of the note occurred pursuant to which we received $75,000.

On September 6, 2019, the

second closing occurred pursuant to which the Company received $25,000.

On October 16, 2019, the third closing occurred pursuant

to which the Company received $25,000.

On September 6, 2019, the second

closing occurred pursuant to which the Company received $25,000.

On October 16, 2019, the third closing occurred pursuant to which

the Company received $25,000.

The note is governed by the SPA and is

2 unchanged sentences

the issuance of the note, we issued to the Mr.

Mitta warrants to purchase one share our Common Stock for 50% of the number of

shares of Common Stock issuable upon conversion of the funds received.

Each warrant is immediately exercisable at $0.12 per share

and expires on August 2, 2024.

Mitta warrants to purchase one share our Common Stock for 50% of the number of shares

of Common Stock issuable upon conversion of the funds received.

Each warrant is immediately exercisable at $0.12 per share and

expires on August 2, 2024.

Due to adjustments to the conversion price

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Mitta would meet this standard, and therefore, would be considered to be independent.

Accountant Fees and Services

Principal Accountant Fees and

The aggregate fees billed for professional

19 unchanged sentences

of those services, to be performed for us by our independent auditor prior to engagement.

Financial Statement Schedules

Exhibits, Financial Statement

Financial Statements

3 unchanged sentences

Public Accounting Firm

Balance Sheets at

December 31, 2019 and 2018

Balance Sheets at December

31, 2020 and 2019

Statements of Operations for

6 unchanged sentences

The following exhibits are included with

this Annual Report:

Incorporated by Reference

Exhibit Description

Exchange Agreement dated March 16, 2017, by and among Gotham Capital Holdings, Inc., OXYS Corp.

and the Shareholders of OXYS

and Plan of Merger dated July 10, 2017

Exchange Agreement dated December 14, 2017, with HereLab, Inc.

Articles of Incorporation for IIOT-OXYS, Inc.

for IIOT-OXYS, Inc.

Articles of Merger dated July 14, 2017

Jersey Certificate of Merger dated October 26, 2017

Securities Exchange Agreement dated March 16, 2017, by and among Gotham Capital Holdings, Inc., OXYS Corp.

and the Shareholders of OXYS Corp.

Agreement and Plan of Merger dated July 10, 2017

Securities Exchange Agreement dated December 14, 2017, with HereLab, Inc.

Nevada Articles of Incorporation for IIOT-OXYS, Inc.

Bylaws for IIOT-OXYS, Inc.

Nevada Articles of Merger dated July 14, 2017

New Jersey Certificate of Merger dated October 26, 2017

Articles of Exchange

Certificate of Amendment to Articles of Incorporation filed with the Nevada Secretary of State effective January 18, 2021

Certificate of Designation for Series B Convertible Preferred Stock

Certificate of Designation filed with the Nevada Secretary of State on July 2, 2020

Certificate of Designation filed with the Nevada Secretary of State on November 9, 2020

2017 Stock Incentive Plan

2019 Stock Incentive Plan

Non-Exclusive

Patent License Agreement with MIT dated February 5, 2018

of 12% Senior Secured Convertible Note

of Securities Purchase Agreement

of Security and Pledge Agreement

Non-Exclusive Patent License Agreement with MIT dated February 5, 2018

Form of 12% Senior Secured Convertible Note

Form of Securities Purchase Agreement

Form of Security and Pledge Agreement

Form of Warrant

Amendment No.

1 to the 12% Senior Secured Convertible Promissory Note Issued to Sergey Gogin on January 22, 2018

Amendment No.

1 to the Warrant Agreement Issued to Sergey Gogin on January 22, 2018

of 12% Senior Secured Convertible Note

of Securities Purchase Agreement

of Security and Pledge Agreement

and Restated Consulting Agreement with Antony Coufal dated effective April 23, 2018

Agreement with Clifford Emmons dated effective June 4, 2018

Agreement with Karen McNemar dated effective October 1, 2018

Form of 12% Senior Secured Convertible Note

Form of Securities Purchase Agreement

Form of Security and Pledge Agreement

Form of Warrant

Amended and Restated Consulting Agreement with Antony Coufal dated effective April 23, 2018

Consulting Agreement with Clifford Emmons dated effective June 4, 2018

Consulting Agreement with Karen McNemar dated effective October 1, 2018

Amendment No.

1 to the Consulting Agreement with Karen McNemar dated October 5, 2018

Consulting Agreement with Draco Financial LLC dated effective March 4, 2019

Purchase Agreement with Cambridge MedSpace, LLC dated January 22, 2019

Financial Consulting Agreement with Draco Financial LLC dated effective March 4, 2019

Securities Purchase Agreement with Cambridge MedSpace, LLC dated January 22, 2019

5% Convertible Secured Note with Cambridge MedSpace, LLC dated January 22, 2019

Agreement with Cambridge MedSpace, LLC dated January 22, 2019

Advisory Agreement with Uptick Capital LLC dated January 10, 2019

Purchase Agreement with Vidhyadhar Mitta dated August 2, 2019

Security Agreement with Cambridge MedSpace, LLC dated January 22, 2019

Warrant Agreement with Cambridge MedSpace, LLC dated January 22, 2019

Strategic Advisory Agreement with Uptick Capital LLC dated January 10, 2019

Securities Purchase Agreement with Vidhyadhar Mitta dated August 2, 2019

12% Convertible Secured Note with Vidhyadhar Mitta dated August 2, 2019

Agreement with Vidhyadhar Mitta dated August 2, 2019

Security Agreement with Vidhyadhar Mitta dated August 2, 2019

Warrant Agreement with Vidhyadhar Mitta dated August 2, 2019

Warrant Agreement with Vidhyadhar Mitta dated September 6, 2019

Warrant Agreement with Vidhyadhar Mitta dated October 16, 2019

Agreement with ThinkEquity dated August 7, 2019

Purchase Agreement with Crown Bridge Partners, LLC dated August 29, 2019

Advisory Agreement with ThinkEquity dated August 7, 2019

Securities Purchase Agreement with Crown Bridge Partners, LLC dated August 29, 2019

12% Convertible Secured Note with Crown Bridge Partners, LLC dated August 29, 2019

Agreement with Crown Bridge Partners, LLC dated August 29, 2019

Public Relations Agreement dated September 6, 2019 with SmallCapVoice.com

from Pritchett Siler & Hardy, P.C.

Dated January 19, 2018 Regarding Change in Certifying Accountant

of Subsidiaries

of Haynie & Company, independent registered public accounting firm

Rule 13a-14(a) Certification by Principal Executive

Section 1350 Certification of Principal Executive

Warrant Agreement with Crown Bridge Partners, LLC dated August 29, 2019

Financial Public Relations Agreement dated September 6, 2019 with SmallCapVoice.com

Equity Financing Agreement between IIOT-OXYS, Inc.

and GHS Investments LLC dated as of July 29, 2020

Registration Rights Agreement between IIOT-OXYS, Inc.

and GHS Investments LLC dated as of July 29, 2020

$100,000 Convertible Promissory Note dated July 29, 2020 issued to GHS Investments LLC

$75,000 Convertible Promissory Note dated July 29, 2020 issued to GHS Investments LLC

Collaboration Agreement effective March 18, 2020 with Aingura IIoT, S.L.

Finder’s Fee Agreement with J.H.

Darbie & Co., Inc.

dated May 18, 2020

Common Stock Purchase Warrant dated May 20, 2020

Debt Forgiveness Agreement with Clifford L.

Emmons effective as of December 31, 2019

Debt Forgiveness Agreement with Karen McNemar effective as of December 31, 2019

Debt Forgiveness Agreement with Antony Coufal effective as of December 31, 2019

Amendment to Consulting Agreement with Clifford L.

Emmons dated June 12, 2020

Amendment to Consulting Agreement with Karen McNemar dated June 12, 2020

Amendment to Consulting Agreement with Antony Coufal dated June 12, 2020

Amendment No.

1 to the 5% Secured Promissory Note with Cambridge MedSpace, LLC

Securities Purchase Agreement dated November 16, 2020 with GHS Investments, LLC

Settlement and Mutual Release Agreement dated July 29, 2020

Amendment No.

1 to Senior Secured Convertible Promissory Note with Catalytic Capital LLC

Amendment No.

1 to Senior Secured Convertible Promissory Note with YVSGRAMORAH LLC

Exchange Agreement Dated November 9, 2020 with Clifford L.

Exchange Agreement Dated November 9, 2020 with Vidhyadhar Mitta

Exchange Agreement Dated November 9, 2020 with Karen McNemar

Code of Ethics

List of Subsidiaries

Consent of Haynie & Company, independent registered public accounting firm

Consent of Attorney

Rule 13a-14(a) Certification by Principal Executive Officer

Section 1350 Certification of Principal Executive Officer

XBRL Instance Document

2 unchanged sentences

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

*Management contract or compensatory plan

or arrangement.

*Management contract or compensatory

plan or arrangement.

Form 10-K Summary

SIGNATURE PAGE FOLLOWS

3 unchanged sentences

IIOT-OXYS, INC.

June 22, 2020

April 6, 2021

/s/ Clifford L.

Emmons, Chief Executive Officer and Interim Chief

Financial Officer

Emmons, Chief Executive Officer and Interim Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

3 unchanged sentences

/s/ Clifford L.

June 22, 2020

April 6, 2021

/s/ Vidhyadhar Mitta

June 22, 2020

April 6, 2021

Vidhyadhar Mitta

INDEX TO FINANCIAL

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

Statements of Changes in Stockholders’

Deficit for the years ended December

31, 2019 and 2018

Deficit for the years ended December 31, 2020 and 2019

Statements of Cash Flows for the years ended December 31, 2020 and 2019

Notes to Financial Statements

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

5 unchanged sentences

stockholders’

equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2019, 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 December 31, 2019 and 2018, and the results of its operations

and its cash flows for each of the years in the two-year period ended December 31, 2019, in conformity with accounting principles

generally accepted in the United States of America.

Consideration of the Company’s

Ability to Continue as a 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 2 to the financial statements,

the Company has incurred net losses since inception and has negative cash flows from operations.

These factors 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 2 to the financial statements.

The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2020, 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 December 31, 2020 and 2019, and the results of its operations and its cash flows

for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the

United States of America.

Consideration of the Company’s Ability

to Continue as a 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 2 to the financial statements, the

Company has incurred net losses since inception and has negative cash flows from operations.

These factors 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 2 to the financial statements.

The financial statements do not include any adjustments that might result from the outcome of this

Basis for Opinion

1 unchanged sentence

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.

Our responsibility is to express an opinion on the Company’s financial statements based on our

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/ Haynie & Company

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.

Haynie & Company

Salt Lake City, Utah

June 22, 2020

We have served as the Company’s auditor

April 6, 2021

We have served as the Company’s auditor since 2018.

IIOT-OXYS, Inc.

and Subsidiaries

Condensed Consolidated Balance Sheets

As of December 31, 2019 and December 31, 2018

Consolidated Balance Sheets

December 31, 2020

3 unchanged sentences

Accounts Receivable, Net

Prepaid Expense

Prepaid Expenses

Total Current Assets

Intangible Assets, Net

Liabilities and Stockholders' (Deficit) Equity

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities

Shares Payable to Related Parties

Salaries Payable to Related Parties

Accounts Payable

Accrued Liabilities

Deferred Revenue

Notes Payable, Current Portion

Shares Payable to Related Parties

Salaries Payable to Related Parties

Derivative Liability

Total Current Liabilities

Notes Payable, net

Due to Stockholder

Notes Payable

PPP Liability

Due to Stockholders

Total Liabilities

Commitments and Contingencies (Note 4)

Stockholders' (Deficit) Equity

Preferred stock $0.001 par value, 10,000,000 shares authorized;

0 issued and outstanding

Series B Convertible Preferred Stock, 600 Shares Designated, $0.001 Par Value, $1,200 Stated Value;

155 Shares and 0 Shares Issued and Outstanding at December 31, 2020 and 2019, Respectively.

Liquidation Preference $186,000 as of December 31, 2020.

Stockholders' Equity (Deficit)

Preferred Stock Series A, $0.001 Par Value, 10,000,000 Shares authorized;

25,845 Shares and 0 Shares Issued and Outstanding at December 31, 2020 and 2019, Respectively

Common Stock $0.001 Par Value, 190,000,000 shares Authorized;

43,313,547 and 40,633,327 shares issued and outstanding, respectively

145,110,130 Shares and 43,313,547 Shares Issued and Outstanding at December 31, 2020 and 2019, Respectively

Additional Paid in Capital

Accumulated Deficit

Total Stockholders' Deficit

Total Liabilities and Stockholders' Deficit

See accompanying notes to audited condensed

consolidated financial statements.

Total Stockholders' Equity (Deficit)

Total Liabilities and Stockholders' Equity (Deficit)

The accompanying notes are an integral part of these consolidated financial statements.

IIOT-OXYS, Inc.

and Subsidiaries

Condensed Consolidated Statements of Operations

For the Years Ended December 31, 2019 and

Year Ended December 31,

Consolidated Statements of Operations

For The Years Ended December 31,

Cost of Sales

Operating Expenses

Bank Service Charges

1 unchanged sentence

Organization Costs

Payroll Expense

Patent License Fee

Amortization of Intangible Assets

Total Expenses

Total Operating Expenses

Other Income (Expense)

Gain on Forgiveness of Salaries Payable to Related Parties

Gain (Loss) on Change in FMV of Derivative Liability

Loss on Derivative

Loss on Extinguishment of Debt

Interest Expense

Miscellaneous Income

Total Other Income (Expense)

Net Loss Before Income Taxes

Provision for Income Tax

$ (2,235,111 )

$ (1,887,287 )

Loss per Common Share

Weighted Average Number of Shares Outstanding - Basic and Diluted

See accompanying notes to audited condensed

consolidated financial statements.

Convertible Preferred Stock Dividend

Net Loss Attributable to Common Stockholders

$ (2,236,774 )

$ (1,887,287 )

Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted

Weighted Average Shares Outstanding Attributable to Common Stockholders - Basic and Diluted

The accompanying notes are an integral part of these consolidated financial statements.

IIOT-OXYS, Inc.

and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity (Deficit)

Consolidated Statements of Stockholders' Equity (Deficit)

For the Years Ended December 31, 2020 and 2019

Paid-In Capital

Stockholders' Equity (Deficit)

Balance December 31, 2017

Acquisition of HereLab

Beneficial conversion feature discount on note

Preferred Stock

Additional Paid-In

Total Stockholders' Equity

Balance - December 31, 2018

3 unchanged sentences

Balance - December 31, 2019

Preferred Stock Issued in Exchange of Shares Exchange

Common Stock Issued for Conversion of Convertible Note Payable

Common Stock issued for Conversion of Detachable Warrants

Relief of Derivative Liabilities

Warrants Issued for Default of Convertible Note Payables

Changes in FMV of Warrants Related to Convertible Note Payables

Beneficial Conversion Feature Discount on Note Payable

Common Stock Issued for Extinguishment of Debt

Common Stock Issued to Officers for Services

Balance - December 31, 2020

$ (7,480,678 )

$ (2,541,280 )

See accompanying notes to audited condensed

consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

IIOT-OXYS, Inc.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Years Ended September 30, 2019 and

Year Ended December 31,

Consolidated Statements of Cash Flows

For The Years Ended December 31,

Cash Flows From Operating Activities

3 unchanged sentences

Loss on Extinguishment of Debt

Stock Based Compensation

Acquisition of Net Assets

Loss on Issuance of Default Warrants

Loss due to Change in Fair Market Value of Derivative Liability

Loss on Derivative Liability

Preferred Stock Issued for Services

Penalty and Fees Incurred due to Default Increase in Notes Payable

Stock Based Compensation Expense

Amortization of Discount on Notes Payable

Amortization of Intangible Assets

Amortization of Series B Preferred Stock to redemption

Forgiveness of Salaries Payable to Related Parties

Changes in assets and liabilities:

Changes in Operating Assets and Liabilities

(Increase) Decrease in:

1 unchanged sentence

Prepaid Expense

Licensing Agreement

Increase (Decrease) in:

Shares Payable to Related Parties

Salaries Payable to Related Parties

Accounts Payable

Accrued Liabilities

Deferred Revenue

Shares Payable to Related Parties

Salaries Payable to Related Parties

Net Cash Used by Operating Activities

1 unchanged sentence

Cash Received from Convertible Note Payable

Cash Payments of Notes Payable

Proceeds from sale of Series B Preferred Stock

Proceeds from PPP Loan

Net Cash Provided By Financing Activities

Net Decrease in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents at End of Period

Supplemental disclosure of cash flow information:

Cash and Cash Equivalents - Beginning of Period

Cash and Cash Equivalents - End of Period

Supplement Disclosures of Cash Flow Information

Interest Paid During the Period

Taxes paid during the period

Supplemental disclosure of non-cash investing and financing activities:

Fair value of shares issued in acquisition of subsidiary

Fair value of intangible assets received in acquisition of subsidiary

Income Taxes Paid During the Period

Supplemental Disclosures of Non-Cash Investing and Financing Activities

Discount on Notes Payable

See accompanying notes to audited condensed

consolidated financial statements.

Conversion of Convertible Notes Payable and Derivative Liabilities

Warrant Anti-Dilution Issuance

Discount on Series B Preferred Stock

The accompanying notes are an integral part of these consolidated financial statements.

IIOT-OXYS, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2019

NATURE OF OPERATIONS

The Company was only recently formed and

is currently devoting substantially all its efforts in identifying, developing and marketing engineered products, software and

services for applications in the Industrial Internet which involves collecting and processing data collected from a wide variety

of industrial systems and machines.

SUMMARY OF SIGNIFICANT ACCOUNTING

Notes to Consolidated

Financial Statements

December 31, 2020 and 2019

NOTE 1 - NATURE OF OPERATIONS, BASIS

OF PRESENTATION AND GOING CONCERN

Unless otherwise indicated, any reference

to “the Company”, “our company”, “we”, “us”, or “our”

refers to IIOT-OXYS,

Inc., a Nevada corporation, and as applicable to its wholly-owned subsidiaries, OXYS Corporation, a Nevada corporation, and HereLab,

Inc., a Delaware corporation.

IIOT-OXYS, Inc., a Nevada corporation (the

“Company”) was originally established for the purpose of designing, building, testing, and selling Edge Computing Systems

for the Industrial Internet.

The Company is currently devoting substantially all its efforts in identifying, developing and marketing

engineered products, software and services for applications in the Industrial Internet which involves collecting and processing

data collected from a wide variety of industrial systems and machines.

We were incorporated in the state of New

Jersey on October 1, 2003 under the name of Creative Beauty Supply Corporation and commenced operations as of January 1, 2004.

On November 30, 2007, our Board of Directors approved a plan to dispose of our wholesale and retail beauty supply business.

May 18, 2015, we changed our name to Gotham Capital Holdings.

From January 1, 2009 until July 28, 2017, we had no operations.

March 16, 2017, our Board of Directors approved to change our name to “IIOT-OXYS, Inc.”

and authorized a change of

domicile from New Jersey to Nevada.

Impact of COVID-19

During the year ended December 31, 2020,

the effects of a new coronavirus (“COVID-19”) and related actions to attempt to control its spread began to impact

our business.

The impact of COVID-19 on our operating results for the year ended December 31, 2020 was limited, in all material

respects, due to the government mandated numerous measures, including closures of businesses, limitations on movements of individuals

and goods, and the imposition of other restrictive measures, in its efforts to mitigate the spread of COVID-19 within the country.

On March 11, 2020, the World Health Organization

designated COVID-19 as a global pandemic.

Governments around the world have mandated, and continue to introduce, orders to slow

the transmission of the virus, including but not limited to shelter-in-place orders, quarantines, significant restrictions on travel,

as well as work restrictions that prohibit many employees from going to work.

Uncertainty with respect to the economic effects

of the pandemic has introduced significant volatility in the financial markets.

Basis of Presentation

The Company's financial statements are

prepared on the accrual method of accounting.

The accounting and reporting policies of the Company conform with generally accepted

accounting principles (“

GAAP ”).

The accompanying financial statements have

been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)

and include the accounts of the Company.

The financial statements and accompanying notes are the representations of the Company’s

management, who is responsible for their integrity and objectivity.

In the opinion of the Company’s management, the financial

statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

Principles of Consolidation

The consolidated financial statements for

December 31, 2019 include the accounts of IIOT-OXYS, Inc., OXYS Corporation, and HereLab, Inc.

All significant intercompany balances

and transactions have been eliminated.

The consolidated financial statements for

December 31, 2018 include the accounts of IIOT-OXYS, Inc., OXYS Corporation, and HereLab, Inc.

as of the closing date of the acquisition

agreement dated January 11, 2018.

the years ended December 31, 2020 and 2019, respectively, include the accounts of Company, and its wholly-owned subsidiaries OXYS

Corporation and HereLab, Inc.

All significant intercompany balances and transactions have been eliminated.

Revenue Recognition

The Company’s revenue is derived

primarily from providing services under contractual agreements.

The Company recognizes revenue in accordance with ASC Topic No.

606, Revenue from Contracts with Customers (“

ASC 606 ”) which was adopted on January 1, 2018, using the modified

retrospective method, which was elected to apply to all active contracts as of the adoption date.

Application of the modified retrospective

method did not impact amounts previously reported by the Company, nor did it require a cumulative effect adjustment upon adoption,

as the Company's method of recognizing revenue under ASC 606 yielded similar results to the method utilized immediately prior to

Accordingly, there was no effect to each financial statement line item as a result of applying the new revenue standard.

According to ASC 606, the Company recognizes

revenue based on the following criteria:

Identification of a contract or contracts, with a customer.

Identification of the performance obligations in the contract.

Determination of contract price.

Allocation of transaction price to the performance obligation.

Recognition of revenue when, or as, performance obligation is satisfied.

The Company used a practical expedient

available under ASC 606-10-65-1(f)4 that permits it to consider the aggregate effect of all contract modifications that occurred

before the beginning of the earliest period presented when identifying satisfied and unsatisfied performance obligations, transaction

price, and allocating the transaction price to the satisfied and unsatisfied performance obligations.

The Company has elected to treat shipping

and handling activities as cost of sales.

Additionally, the Company has elected to record revenue net of sales and other similar

Use of Estimates

Management uses estimates and assumptions

in preparing these financial statements in accordance with generally accepted accounting principles.

These estimates and assumptions

affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial

statements, and the reported revenues and expenses during the reporting period.

Actual results could vary from the estimates that

The preparation of financial statements

in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues

and expenses during the reporting period.

The Company regularly evaluates estimates and assumptions related to the valuation of

accounts payable, accrued liabilities and payable to related party.

The Company bases its estimates and assumptions on current

facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of

which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses

that are not readily apparent from other sources.

The actual results experienced by the Company may differ materially and adversely

from the Company’s estimates.

To the extent there are material differences between the estimates and the actual results,

future results of operations will be affected.

Going Concern

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As shown in the accompanying financial statements, the

Company was only recently formed, has incurred continuing operating losses and has an accumulated deficit of $5,040,307 and $3,153,020

at December 31, 2019 and 2018, respectively.

These factors raise substantial doubt about the ability of the Company to continue

as a going concern.

Management believes that it will be able

to achieve a satisfactory level of liquidity to meet the Company’s obligations for the next 12 months by generating cash

through additional borrowings and/or issuances of equity securities, as needed.

Company has suffered continuing operating losses, used cash flows in operating activities of $117,138 and has an accumulated deficit

of $7,480,678 as of December 31, 2020.

These factors, among others, raise a substantial doubt about the Company’s ability

to continue as a going concern.

If the Company is unable to obtain adequate capital, it could be forced to cease operations.

accompanying financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset

amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management believes that the Company will

be able to achieve a satisfactory level of liquidity to meet the Company’s obligations for the next 12 months by generating

cash through additional borrowings and/or sale of equity securities, as needed.

However, there can be no assurance that the Company

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that might result from the outcome of these uncertainties.

Concentration of Risk

Financial instruments that potentially

expose the Company to concentrations of risk consist primarily of cash and cash equivalents which are generally not collateralized.

The Company’s policy is to place its cash and cash equivalents with high quality financial institutions, in order to limit

the amount of credit exposure.

Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC), up

At December 31, 2019 and 2018, the Company had no amounts in excess of the FDIC insurance limit.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING

The following summary of significant accounting

policies of the Company is presented to assist in the understanding of the Company’s financial statements.

These accounting

policies conform to GAAP in all material respects and have been consistently applied in preparing the accompanying financial statements.

Cash and Cash Equivalents

For purposes of the statement of cash flows,

the Company considers all unrestricted highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

The Company considers all highly liquid

instruments with maturity of three months or less at the time of issuance to be cash equivalents.

The Company reported a cash balance

of $103,074 and $24,212 as of December 31, 2020 and 2019, respectively.

Accounts Receivable and Allowance for

Doubtful Accounts

Trade accounts receivable are carried at

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off are recorded as income when received.

There was no allowance for doubtful accounts at December 31, 2019 and 2018.

Fair Value of Financial Instruments

The fair value of the Company’s financial

instruments is determined in accordance with ASC 820, Fair Value Measurements and Disclosures.

The Company accounts for income taxes in

accordance with FASB ASC 740, Income Taxes.

There was no allowance for doubtful accounts as of December 31, 2020 and December 31,

2019, respectively.

Long-Lived Assets

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on a straight-line basis over the estimated periods benefited and are reviewed when appropriate for possible impairment.

Convertible Debt

Basic and Diluted Earnings (Loss) Per Common Share

The Company computes earnings (loss) per

share in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”), ASC 260, “

per Share”

ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face

of the income statement.

Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the

weighted average number of shares outstanding (denominator) during the period.

Diluted EPS gives effect to all dilutive potential

common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the

if-converted method.

In computing diluted EPS, the average stock price for the period is used in determining the number of shares

assumed to be purchased from the exercise of stock options or warrants.

Diluted EPS excludes all dilutive potential shares if their

effect is anti-dilutive.

Revenue Recognition

The Company’s revenue is derived

primarily from providing services under contractual agreements.

The Company recognizes revenue in accordance with ASC Topic No.

606, Revenue from Contracts with Customers (“ASC 606”) which was adopted on January 1, 2018.

According to ASC 606, the Company recognizes

revenue based on the following criteria:

Identification of a contract or contracts, with a customer.

Identification of the performance obligations in the contract.

Determination of contract price.

Allocation of transaction price to the performance obligation.

Recognition of revenue when, or as, performance obligation is satisfied.

The Company used a practical expedient

available under ASC 606-10-65-1(f)4 that permits it to consider the aggregate effect of all contract modifications that occurred

before the beginning of the earliest period presented when identifying satisfied and unsatisfied performance obligations, transaction

price, and allocating the transaction price to the satisfied and unsatisfied performance obligations.

The Company has elected to treat shipping

and handling activities as cost of sales.

Additionally, the Company has elected to record revenue net of sales and other similar

Concentration of Credit Risk

Financial instruments that potentially

expose the Company to concentrations of risk consist primarily of cash and cash equivalents which are generally not collateralized.

The Company’s policy is to place its cash and cash equivalents with high quality financial institutions, in order to limit

the amount of credit exposure.

Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC), up

At December 31, 2020 and December 31, 2019, the Company had no amounts in excess of the FDIC insurance limit.

Fair Value of Financial Instruments

and Fair Value Measurements

ASC 820, “

Fair Value Measurements

and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs

when measuring fair value.

ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding

the inputs used to measure fair value.

A financial instrument’s categorization within the fair value hierarchy is based upon

the lowest level of input that is significant to the fair value measurement.

ASC 820 prioritizes the inputs into three levels that

may be used to measure fair value:

Level 1 applies to assets or liabilities

for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities

for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar

assets or liabilities in active markets;

quoted prices for identical assets or liabilities in markets with insufficient volume

or infrequent transactions (less active markets);

or model-derived valuations in which significant inputs are observable or can

be derived principally from, or corroborated by, observable market data.

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 3 applies to assets or liabilities

for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value

of the assets or liabilities.

The Company’s consolidated financial

instruments consist principally of cash, prepaid expenses, accounts payable, accrued liabilities, notes payable and related parties

The Company believes that the recorded values of all the financial instruments approximate their current fair values because

of their nature and respective maturity dates or durations.

The Company accounts for income taxes using

the asset and liability method in accordance with ASC 740, “

Income Taxes”

The asset and liability method provide

that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between

the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards.

tax assets and liabilities are measured using the currently enacted tax rates and laws.

The Company records a valuation allowance

to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The Company follows the provisions of ASC

740-10, “

Accounting for Uncertain Income Tax Positions .”

When tax returns are filed, it is highly certain that

some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about

the merits of the position taken or the amount of the position that would be ultimately sustained.

In accordance with the guidance

of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all

available evidence, management believes it is more likely than not that the position will be sustained upon examination, including

the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is

more than 50 percent likely of being realized upon settlement with the applicable taxing authority.

The portion of the benefits

associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for

unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that

would be payable to the taxing authorities upon examination.

Convertible Debt and Convertible Preferred

When the Company issues convertible debt

or convertible preferred stock, it first evaluates the balance sheet classification of the convertible instrument in its entirety

to determine whether the instrument should be classified as a liability under ASC 480, Distinguishing Liabilities from Equity ,

and second whether the conversion feature should be accounted for separately from the host instrument.

A conversion feature of

a convertible debt instrument or certain convertible preferred stock would be separated from the convertible instrument and classified

as a derivative liability if the conversion feature, were it a standalone instrument, meets the definition of an “embedded

derivative”

in ASC 815, Derivatives and Hedging .

Generally, characteristics that require derivative treatment include,

among others, when the conversion feature is not indexed to the Company’s equity, as defined in ASC 815-40, or when it must

be settled either in cash or by issuing stock that is readily convertible to cash.

When a conversion feature meets the definition

of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried on the

consolidated balance sheet at fair value, with any changes in its fair value recognized currently in the consolidated statements

of operations.

If a conversion feature does not meet the

conditions to be separated and accounted for as an embedded derivative liability, the Company then determines whether the conversion

feature is “beneficial”.

A conversion feature would be considered beneficial if the conversion feature is “in

the money”

when the host instrument is issued or, under certain circumstances, later.

If convertible debt contains a beneficial

conversion feature (“BCF”), the amount of the amount of the proceeds allocated to the BCF reduces the balance of the

convertible debt, creating a discount which is amortized over the debt’s term to interest expense in the consolidated statements

of operations.

When a convertible preferred stock contains

a BCF, after allocating the proceeds to the BCF, the resulting discount is either amortized over the period beginning when the

convertible preferred stock is issued up to the earliest date the conversion feature may be exercised, or if the convertible preferred

stock is immediately exercisable, the discount is fully amortized at the date of issuance.

The amortization is recorded similar

to a dividend.

Convertible debt is accounted for under

FASB ASC 470, Debt –

the ASC 470-20, Debt –

Debt with Conversion and Other Options.

Basic and Diluted Net Loss Per Common

The Company computes basic and diluted

net loss attributable to common stockholders for the period under ASC 260-10, Earnings Per Share.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02,

Leases (Topic 842).

The new standard establishes a right-of-use ("

ROU ") model that requires a lessee to record

a ROU asset and a lease liability on the consolidated balance sheet for all leases with terms longer than 12 months.

be classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated

statement of operations.

ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods

within those annual periods, with early adoption permitted.

A modified retrospective transition approach is required for lessees

for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented

in the financial statements, with certain practical expedients available.

On January 1, 2019, the Company adopted ASU 2016-02.

The Company is not a lessee of a lease longer than 12 months nor has the Company been a lessee of a lease longer than 12 months

in prior periods therefore there is no impact of the adoption of this standard.

In June 2018, the FASB issued ASU 2018-07,

Compensation –

Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting, which aligned

certain aspects of share-based payments accounting between employees and nonemployees.

Specifically, nonemployee share-based payment

awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated

to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right

to benefit from the instruments have been satisfied and an entity considers the probability of satisfying performance conditions

when nonemployee share-based payment awards contain such conditions.

On January 1, 2019, the Company adopted ASU 2018-17.

standard did not have a significant impact on the Company’s financial statements or disclosures.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related

to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies

and amends existing guidance to improve consistent application.

This guidance is effective for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2021, and interim periods within fiscal years beginning after December

15, 2022, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial

In December 2019, the Financial Accounting

Standards Board issued Accounting Standards Update (“ASU”) ASU No.

2019-12, Income Taxes (Topic 740) , Simplifying

the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes.

removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December

15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted.

is currently evaluating the impact of this guidance on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06,

Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s

Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies

accounting for convertible instruments by removing major separation models required under current GAAP.

The ASU also removes certain

settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted

earnings per share calculation in certain areas.

The amendments in this ASU are effective for annual and interim periods beginning

after December 15, 2023, although early adoption is permitted.

The Company is in the process of evaluating the impact of this new

guidance on its financial statements.

Other accounting standards that have been

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on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

FAIR VALUE MEASUREMENTS

ASC 820 "Fair Value Measurements,"

defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances

disclosures about fair value measurements.

Fair value is defined under ASC 820 as the exchange price that would be received for

an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability

in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value

under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs.

The standard describes a

fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable,

that may be used to measure fair value which are the following:

Level 1—Observable inputs such as quoted prices (unadjusted) for identical instruments in active markets.

Level 2—Observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations whose significant inputs are observable.

Level 3—Unobservable inputs that reflect the reporting entity’s own assumptions.

The following tables set forth the liabilities

measured at fair value on a non-recurring basis presented in the Company’s consolidated financial statements as of December

31, 2019 and 2018:

December 31, 2019

Shares issued in acquisition of HereLab

Accrued share compensation

Total fair value

December 31, 2018

Shares issued in acquisition of HereLab

Accrued share compensation

Total fair value

The shares of common stock associated with

the Level 3 accrued share compensation liability are the unvested shares earned on a pro-rata basis as of December 31, 2019 and

2018 related to the consulting agreements discussed in Note 7.

The fair value was calculated based on comparable adjusted amounts

the Company was raising funds at multiplied by the total shares agreed upon on the effective date of the respective agreements.

The share compensation amount is amortized over the life of the agreements.

The shares of common stock associated with

the Level 1 accrued share compensation liability are shares issued to a consultant in exchange for work provided during the period,

but not yet issued as of December 31, 2018, related to a settlement agreement discussed in Note 7.

The fair value was calculated

based on market prices for the shares in an active market on the effective date of the agreement.

The shares of common stock associated with

the Level 3 shares issued in the acquisition of Herelab as of December 31, 2018 were valued based on comparable adjusted amounts

the Company was raising funds at on the effective date of the agreement.

The Company accounts for income taxes in

accordance with ASC Topic No.

This standard requires the Company to provide a net deferred tax asset or liability equal to

the expected future tax benefit or expense of temporary reporting differences between book and tax accounting methods and any available

operating loss or tax credit carryforwards.

Income tax returns open for examination by the Internal Revenue Service consist of

tax years ended December 31, 2019, 2018 and 2017.

The Company has available at December 31,

2019, unused operating loss carryforwards of approximately $5,040,911 which may be applied against future taxable income and which

expire in various years through 2036.

However, if certain substantial changes in the Company’s ownership should occur, there

could be an annual limitation on the amount of net operating loss carryforward which can be utilized.

The amount of and ultimate

realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws

in effect, the future earnings of the Company and other future events, the effects of which cannot be determined.

Because of the

uncertainty surrounding the realization of the loss carryforwards, the Company has established a valuation allowance equal to the

tax effect of the loss carryforwards and other temporary differences of approximately $1,303,076 and $815,056 at December 31, 2019

and 2018, respectively, and therefore, no deferred tax asset has been recognized for the loss carryforwards.

The change in the

valuation allowance is approximately $488,020 and $417,038 for the years ended December 31, 2019 and 2018, respectively.

Deferred tax assets are comprised of the

NOL carryover

Valuation allowance

Net deferred tax asset

The reconciliation of the provisions for

income taxes computed at the U.S.

federal statutory tax rate (21%) to the Company’s effective tax rate for the periods ended

December 31, 2019 and 2018 is as follows:

Change in valuation allowance

Provision for income taxes

INTANGIBLE ASSETS, NET

NOTE 3 - INTANGIBLE ASSETS

The Company’s intangible assets comprise

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amortization at December 31, 2020 and 2019 amounted to $347,856 and $397,492, respectively.

December 31,2020

December 31,2019

Intangible Assets

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Intangible Assets, net

At December 31, 2019 the Company determined

that none of its intangible assets were impaired.

Amortizable intangible assets are amortized using the straight-line method over

their estimated useful lives of ten years.

Amortization expense of finite-lived intangibles was $49,500 and $48,220 for the years

ended December 31, 2019 and 2018, respectively.

At December 31, 2020 and 2019, respectively,

the Company determined that none of its intangible assets were impaired.

Amortizable intangible assets are amortized using the

straight-line method over their estimated useful lives of ten years.

Amortization expense of finite-lived intangibles was $49,636

and $49,500 for the years ended December 31, 2020 and 2019, respectively.

The following table summarizes the Company’s

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Amortization expense

COMMITMENTS AND CONTINGENCIES

NOTE 4 - COMMITMENTS AND CONTINGENCIES

In prior years, the Company entered into

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and shares have been issued in conjunction with the related separation agreements, but the vested shares related to the remaining

consulting agreements with the three executive officers have not yet been issued and therefore remain a liability.

the remaining three agreements, 1,269,000 shares vested in 2019, 2,400,000 shares of common stock will vest in 2020, and 3,600,000

shares of common stock will vest in 2021.

According to the agreements with the executive

officers the shares vest annually over three years on the anniversary of each agreement.

consulting agreements with the three executive officers have not yet been issued in full, and therefore, remain a liability.

to the remaining three agreements, 1,319,000 shares vested in 2019, 2,400,000 shares vested in 2020, and 3,600,000 shares of common

stock will vest in 2021.

In the event that the agreement is terminated

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at the end of each reporting period.

The Company accrued $1,102,645 and $944,467 in shares payable in conjunction with these agreements

as of December 31, 2019 and 2018, respectively.

The Company has accrued $730,836 and $1,102,645 in shares payable in conjunction with these

agreements as of December 31, 2020 and 2019, respectively.

A summary of these agreements is as follows.

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customary for the position in which the CEO is serving.

The CEO shall receive a monthly fee of $15,000 which accrues unless converted

into shares of common stock of the Company at a conversion rate specified in the agreement.

Until the Company closes a minimum

$500,000 capital raise, the monthly fee accrues and, upon the closing of such a capital raise, $5,000 of the monthly fee will be

paid to the CEO in cash and the remainder will continue to accrue.

Upon the closing of a capital raise of at least $2,000,000,

the entire monthly fee will be paid to the CEO in cash and all accrued and unpaid monthly fees will be paid by the Company within

one year of the closing of such a capital raise.

As of the effective date, the Company shall issue to the CEO an aggregate of 3,060,000

shares of the Company’s common stock which vest as follows:

As of the effective date, the Company shall issue to the CEO an aggregate

of 3,060,000 shares of the Company’s common stock which vest as follows:

560,000 shares on the first-year anniversary of the effective date;

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As of December

31, 2019, 560,000 shares had vested, but were not yet issued.

31, 2020 and 2019, 0 shares and 560,000 shares had vested, respectively, but were not yet issued.

As part of the Consulting Agreement dated

June 4, 2018 the CEO shall also receive a monthly fee of $15,000 which accrues unless converted into shares of common stock of

the Company at a conversion rate specified in the agreement.

Until the Company closes a minimum $500,000 capital raise, the monthly

fee accrues and, upon the closing of such a capital raise, $5,000 of the monthly fee will be paid to the CEO in cash and the remainder

will continue to accrue.

Upon the closing of a capital raise of at least $2,000,000, the entire monthly fee will be paid to the

CEO in cash and all accrued and unpaid monthly fees will be paid by the Company within one year of the closing of such a capital

On June 11, 2020, the Company entered into

a Debt Forgiveness Agreement with the CEO, pursuant to which the CEO forgave $185,000 of accrued and unpaid consulting fees owed

to him pursuant to his consulting agreement with the Company.

On June 12, 2020, the Company entered into an amendment effective

January 1, 2020 to the Consulting Agreement with the CEO.

The amendment stated that from January 1, 2020 until April 23, 2020,

the Consultant shall be paid an hourly wage of $12.75 per hour for services performed.

From April 24, 2020 onward, the Consultant

shall be paid an hourly wage of $48.08 an hour for services performed.

Fees may accrue at the discretion of management.

time, the Consultant shall have the right to convert any accrued and unpaid fees into shares of Common Stock of the Company.

conversion price shall equal 90% multiplied by the market price (representing a discount rate of 10%).

As of December 31, 2020

and 2019, the Company recorded $138,602 and $117,001 is in salaries payable to related parties due and payable to the CEO, respectively.

On March 11, 2019, the Company’s

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customary for the position in which the COO is serving.

The COO shall receive a monthly fee of $12,750 which accrues unless converted

into shares of common stock of the Company at a conversion rate specified in the agreement.

Until the Company closes a minimum

$500,000 capital raise, the monthly fee accrues and, upon the closing of such a capital raise, $4,250 of the monthly fee will be

paid to the COO in cash and the remainder will continue to accrue.

Upon the closing of a capital raise of at least $2,000,000,

the entire monthly fee will be paid to the COO in cash and all accrued and unpaid monthly fees will be paid by the Company within

one year of the closing of such a capital raise.

As of the effective date, the Company shall issue to the COO an aggregate of 2,409,000

shares of the Company’s common stock which vest as follows:

409,000 shares on the first-year anniversary of the effective date;

800,000 shares on the second-year anniversary of the effective date;

1,200,000 shares on the third-year anniversary of the effective date.

As of the effective date, the Company shall issue to the COO an aggregate

of 2,409,000 shares of the Company’s common stock which vest as follows:

409,000 shares on the first-year anniversary of the effective

800,000 shares on the second-year anniversary of the effective

1,200,000 shares on the third-year anniversary of the effective

The shares are issued under the 2017 Stock

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As of December

31, 2019, 409,000 shares had vested, but were not yet issued.

31, 2020 and 2019, 0 shares and 409,000 shares, respectively, had vested, but were not yet issued.

As part of the Consulting Agreement dated

October 1, 2018 the COO shall receive a monthly fee of $12,750 which accrues unless converted into shares of common stock of the

Company at a conversion rate specified in the agreement.

Until the Company closes a minimum $500,000 capital raise, the monthly

fee accrues and, upon the closing of such a capital raise, $4,250 of the monthly fee will be paid to the COO in cash and the remainder

will continue to accrue.

Upon the closing of a capital raise of at least $2,000,000, the entire monthly fee will be paid to the

COO in cash and all accrued and unpaid monthly fees will be paid by the Company within one year of the closing of such a capital

On June 11, 2020, the Company entered into

a Debt Forgiveness Agreement with the COO, pursuant to which the COO forgave $103,250 of accrued and unpaid consulting fees owed

to her pursuant to her consulting agreement with the Company.

On June 12, 2020, the Company entered into an amendment effective

January 1, 2020 to the Consulting Agreement with the COO.

The amendment stated that from January 1, 2020 until April 23, 2020,

the Consultant shall be paid an hourly wage of $12.75 per hour for services performed.

From April 24, 2020 onward, the Consultant

shall be paid an hourly wage of $48.08 an hour for services performed.

Fees may accrue at the discretion of management.

time, the Consultant shall have the right to convert any accrued and unpaid fees into shares of Common Stock of the Company.

conversion price shall equal 90% multiplied by the market price (representing a discount rate of 10%).

As of December 31, 2020

and 2019, the Company recorded $139,078 and $118,000 is in salaries payable to related parties due and payable to the COO, respectively.

On March 11, 2019, the Company’s

4 unchanged sentences

to the agreement are those customary for the position in which the CTO is serving.

The CTO shall receive a monthly fee of $9,375

which accrues unless converted into shares of common stock of the Company at a conversion rate specified in the agreement.

the Company closes a minimum $500,000 capital raise, the monthly fee accrues and, upon the closing of such a capital raise, $3,125

of the monthly fee will be paid to the CTO in cash and the remainder will continue to accrue.

Upon the closing of a capital raise

of at least $2,000,000, the entire monthly fee will be paid to the CTO in cash and all accrued and unpaid monthly fees will be

paid by the Company within one year of the closing of such a capital raise.

As of the effective date, the Company shall issue to

the CTO an aggregate of 1,800,000 shares of the Company’s common stock which vest as follows:

300,000 shares on the first-year anniversary of the effective date;

600,000 shares on the second-year anniversary of the effective date;

900,000 shares on the third-year anniversary of the effective date.

As of December 31, 2019, 300,000 shares

had vested, but were not yet issued.

STOCKHOLDERS' EQUITY

The Company has authorized 190,000,000

shares of $0.001 par value common stock and 10,000,000 shares of $0.001 par value preferred stock.

At December 31, 2019 and 2018,

the Company had 43,313,547 and 40,633,327 shares of common stock and no shares of preferred stock issued and outstanding, respectively.

Holders of shares of common stock are entitled

to one vote for each share on all matters to be voted on by the stockholders.

Holders of common stock do not have cumulative voting

Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the

Board of Directors in its discretion from funds legally available, therefore.

In the event of liquidation, dissolution, or winding

up of the Company, the holders of common stock are entitled to share pro rata in all assets remaining after payment in full of

all liabilities.

All of the outstanding shares of common stock are fully paid and non-assessable.

Holders of common stock have

no preemptive rights to purchase the Company’s common stock.

There are no conversion or redemption rights or sinking fund

provisions with respect to the common stock.

On March 16, 2017, the Board of Directors

of IIOT-OXYS, Inc.

and a majority of the shareholders of IIOT-OXYS, Inc.

approved the IIOT-OXYS, Inc.

2017 Stock Awards Plan, (the

Plan ”).

The Plan provided for granted incentive stock options, options that do not constitute incentive stock

options, stock appreciation rights, restricted stock awards, phantom stock awards, or any combination of the foregoing, as is best

suited to the particular circumstances.

The Plan was effective upon its adoption by the Board.

The aggregate number of common shares that

may be issued under the Plan were 7,000,000 common shares.

No further awards were to be granted under the Plan after ten years

following the effective date.

The Plan was to remain in effect until all awards granted under the Plan had been satisfied or expired.

This Plan was terminated and replaced by the 2017 Stock Inventive Plan (the “

2017 Plan ”) on December 14, 2017

Effective Date ”) as approved by the Board of Directors of the Company.

Awards may be made under the 2017 Plan

for up to 4,500,000 shares of common stock of the Company.

All of the Company’s employees, officers and directors, as well

as consultants and advisors to the Company are eligible to be granted awards under the 2017 Plan.

No awards can be granted under

the 2017 Plan after the expiration of 10 years from the Effective Date but awards previously granted may extend beyond that date.

Awards may consist of both incentive and non-statutory options, restricted stock units, stock appreciation rights, and restricted

stock awards.

With the approval of the 2017 Stock Incentive Plan, the Board terminated the 2017 Stock Awards Plan with no awards

having been granted thereunder.

On March 11, 2019 (the “

Date ”) the Board of Directors of the Company approved the 2019 Stock Incentive Plan (the “

Plan ”).

Awards may be made under the Plan for up to 5,000,000 shares of common stock of the Company.

All of the Company’s employees,

officers and directors, as well as consultants and advisors to the Company are eligible to be granted awards under the Plan.

awards can be granted under the Plan after the expiration of 10 years from the Effective Date but awards previously granted may

extend beyond that date.

Awards may consist of both incentive and non-statutory options, restricted stock units, stock appreciation

rights, and restricted stock awards.

Shares earned and issued related to the

consulting agreements discussed in Note 7 are issued under the 2017 Stock Incentive Plan and the 2019 Stock Incentive Plan.

of the shares is subject to acceleration of vesting upon the occurrence of certain events such as a Change of Control (as defined

in the agreement) or the listing of the Company’s common stock on a senior exchange.

A summary of the status of the Company’s

non-vested shares as of December 31, 2019 and changes during the year then ended, is presented below:

Non-vested Shares of Common Stock

Weighted Average Fair Value

Balance at December 31, 2018

Balance at December 31, 2019

As of December 31, 2019 and 2018, there

was $1,078,055 and $1,854,873, respectively, of total unrecognized compensation costs related to the non-vested share-based compensation

arrangements awarded to consultants.

That cost is expected to be recognized over a weighted-average period of 1.4 years.

fair value of shares vested during the year ended December 31, 2019 and 2018 was $723,068 and $449,729, respectively.

A consulting agreement with an engineer

was terminated upon the resignation of the engineer on August 30, 2019 as of which 50,000 earned shares were vested and were issued

on October 10, 2019 amounting to $6,250.

A consulting agreement with a director was terminated upon the resignation of the director

on September 20, 2018 and, pursuant to a Settlement Agreement, 104,673 earned shares were vested and issued on January 1, 2019

amounting to $21,458.

On January 11, 2018 the Company issued

1,650,000 shares in acquisition of HereLab, Inc.

in the amount of $495,000.

On October 5, 2018 the Company entered

into a Settlement Agreement with a consultant in which 650,000 shares were issued on February 28, 2019 in the amount of $7,800.

On January 10, 2019, the Company entered

into a Strategic Advisory Agreement with a consultant.

The initial term of the agreement is 90 days from the date of the agreement

and will be renewed for an additional 90-day term unless either party gives written notice at least ten days prior to the expiration

of the initial term.

Pursuant to the agreement, the consultant provided the Company consulting services pertaining to strategic

planning for marketing and capital raising.

In consideration of receipt of the services, the Company issued to the consultant 1,885,547

shares of the Company’s common stock amounting to $249,402 as of December 31, 2019.

The agreement was terminated August 31,

On March 7, 2019, the Board of Directors

of the Company approved the Financial Consulting Agreement dated effective March 4, 2019 with a consultant pursuant to which the

Company issued to the consultant 500,000 shares of the Company’s common stock amounting to $60,000 in exchange for consulting

services provided by the consultant to the Company.

The term of the agreement was six months and was not renewed.

On July 12, 2019 the Board of Directors

of the Company approved an issuance of 25,000 shares of the Company’s common stock amounting to $2,500 to a consultant as

a bonus for services performed.

On September 6, 2019, the Company entered

into a Financial Public Relations Agreement.

The term of the Agreement is 45 days from the date of the Agreement and will be renewed

upon written consent of the parties.

The agreement was not renewed.

Pursuant to the Agreement, the consultant provided the Company

consulting services pertaining to investor relations.

In consideration of receipt of the services the Company issued to the consultant

50,000 shares of the Company’s common stock amounting to $6,950.

Total share-based compensation for the

year ended December 31, 2019 and 2018 was $1,035,454 and $449,729, respectively.

A summary of the status of the Company’s

warrants as of December 31, 2019 and 2018 and changes during the year then ended, is presented below:

Shares Under Warrants

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life

Outstanding at December 31, 2017

Expired/Forfeited

Outstanding at December 31, 2018

Expired/Forfeited

Outstanding at December 31, 2019

EARNINGS PER SHARE

The following table sets forth the computation

of basic and diluted net loss per share of common stock for the year ended December 31, 2019 and 2018:

Net loss attributable to common stockholders (basic)

$ (1,887,287 )

$ (1,613,229 )

Shares used to compute net loss per common share, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

Basic net loss per share is calculated

by dividing net loss by the weighted-average number of common shares outstanding during the period.

Diluted net loss per share

is computed by dividing net loss by the weighted-average number of common shares and common share equivalents outstanding for the

Common stock equivalents are only included when their effect is dilutive.

The Company’s potentially dilutive securities

which include stock options, convertible debt, convertible preferred stock and common stock warrants have been excluded from the

computation of diluted net loss per share as they would be anti-dilutive.

For all periods presented, there is no difference in

the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position.

The following outstanding common stock

equivalents have been excluded from diluted net loss per common share for the year ended December 31, 2019 and 2018 because their

inclusion would be anti-dilutive:

Warrants to purchase common stock

Potentially issuable shares related to convertible notes payable

Potentially issuable vested shares to directors and officers

Potentially issuable unvested shares to officers

Total anti-dilutive common stock equivalents

CONVERTIBLE NOTE PAYABLE

As of the effective date, the Company shall

issue to the CTO an aggregate of 1,800,000 shares of the Company’s common stock which vest as follows:

300,000 shares on the first-year anniversary of the effective

600,000 shares on the second-year anniversary of the effective

900,000 shares on the third-year anniversary of the effective

As of December 31, 2020 and 2019, 0 shares

and 300,000 shares had vested, respectively, but were not yet issued.

As part of the Amended and Restated Consulting

Agreement dated effective April 23, 2018 the CTO shall receive a monthly fee of $9,375 which accrues unless converted into shares

of common stock of the Company at a conversion rate specified in the agreement.

Until the Company closes a minimum $500,000 capital

raise, the monthly fee accrues and, upon the closing of such a capital raise, $3,125 of the monthly fee will be paid to the CTO

in cash and the remainder will continue to accrue.

Upon the closing of a capital raise of at least $2,000,000, the entire monthly

fee will be paid to the CTO in cash and all accrued and unpaid monthly fees will be paid by the Company within one year of the

closing of such a capital raise.

On June 11, 2020, the Company entered into

a Debt Forgiveness Agreement with the CTO pursuant to which the CTO forgave $82,475 of accrued and unpaid consulting fees owed

to him pursuant to his consulting agreement with the Company.

On June 12, 2020, the Company entered into an amendment effective

January 1, 2020 to the Consulting Agreement with the CTO.

The amendment stated that from January 1, 2020 until April 23, 2020,

the Consultant shall be paid an hourly wage of $12.75 per hour for services performed.

From April 24, 2020 onward, the Consultant

shall be paid an hourly wage of $48.08 an hour for services performed.

Fees may accrue at the discretion of management.

time, the Consultant shall have the right to convert any accrued and unpaid fees into shares of Common Stock of the Company.

conversion price shall equal 90% multiplied by the market price (representing a discount rate of 10%).

As of December 31, 2020

and 2019, the Company recorded $129,590 and $108,226 in salaries payable to related parties due and payable to the CTO, respectively.

CONVERTIBLE NOTES PAYABLE

The following table summarizes the outstanding

balance of convertible notes payable, interest and conversion rates as of December 31, 2020 and December 31, 2019, respectively.

December 31, 2020

December 31, 2019

Convertible note payable to an investor with interest at 12% per annum, convertible at any time into shares of common stock at $0.10 per share.

Interest is payable quarterly with the balance of principal and interest due on maturity on March 1, 2021.