IIOT-OXYS, Inc. 10-Q

Item 1. Financial Statements IIOT-OXYS, Inc. and Subsidiaries Consolidated Balance Sheets March 31, 2022 December 31, 2021 (Unaudited) ASSETS Current Assets Cash and Cash Equivalents $ 189,312 $ 46,821 Accounts Receivable, Net 11,280 11,280 Prepaid Expenses 7,773 7,773 Total Current Assets 208,365 65,874 Intangible Assets, Net 285,879 298,085 Total Assets $ 494,244 $ 363,959 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Accounts Payable $ 146,822 $ 161,171 Accrued Liabilities 286,353 247,155 Deferred Revenue 46,425 46,425 Notes Payable, Net of Discounts of $ 0 and $ 57,148 at March 31, 2022 and December 31, 2021, respectively 394,300 233,167 Salaries Payable to Related Parties 289,025 273,926 Derivative Liability 490,465 212,816 Total Current Liabilities 1,653,390 1,174,660 Notes Payable 163,167 267,152 Due to Stockholders 1,000 1,000 Total Liabilities 1,817,557 1,442,812 Commitments and Contingencies (Note 4) – – Series B Convertible Preferred Stock, 600 Shares Designated, $0.001 Par Value, $ 1,200 Stated Value; 342 Shares and 155 Shares Issued and Outstanding at March 31, 2022 and December 31, 2021, respectively. Liquidation Preference $ 411,400 and $186,000 as of March 31, 2022 and December 31, 2021, respectively 411,400 186,000 Stockholders' Equity (Deficit) Preferred Stock, $ 0.001 Par Value, 10,000,000 Shares Authorized; 25,896 shares and 25,896 Shares Issued and Outstanding at March 31, 2022 and December 31, 2021, respectively 26 26 Common Stock $ 0.001 Par Value, 1,000,000,000 shares Authorized; 237,205,464 Shares and 220,254,396 Shares Issued and Outstanding at March 31, 2022 and December 31, 2021, respectively 237,206 220,255 Additional Paid in Capital 6,783,471 7,059,098 Accumulated Deficit ( 8,755,416 ) ( 8,544,232 ) Total Stockholders' Equity (Deficit) ( 1,734,713 ) ( 1,264,853 ) Total Liabilities and Stockholders' Equity (Deficit) $ 494,244 $ 363,959 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 IIOT-OXYS, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) For The Three Months Ended March 31, 2022 2021 Revenues $ – $ – Cost of Sales – – Gross Profit – – Operating Expenses Amortization of Intangible Assets 12,205 12,477 General and Administrative 167,009 260,283 Total Operating Expenses 179,214 272,760 Other Income (Expense) Gain (Loss) on Change in FMV of Derivative Liability 115,799 84,700 Gain (Loss) on Extinguishment of Debt – 120,000 Loss on Derivatives ( 201,943 ) – Interest Expense ( 247,372 ) ( 121,447 ) Total Other Income (Expense) ( 333,516 ) 83,253 Net Loss Before Income Taxes ( 512,730 ) ( 189,507 ) Provision for Income Tax – – Net Loss $ ( 512,730 ) $ ( 189,507 ) Convertible Preferred Stock Dividend ( 12,430 ) ( 5,504 ) Net Loss Attributable to Common Stockholders $ ( 525,160 ) $ ( 195,011 ) Net Loss Per Share Attributable to Common Stockholders - Basic $ ( 0.00 ) $ ( 0.00 ) Net Loss Per Share Attributable to Common Stockholders - Diluted $ ( 0.00 ) $ ( 0.00 ) Weighted Average Shares Outstanding Attributable to Common Stockholders - Basic 224,759,740 160,406,294 Weighted Average Shares Outstanding Attributable to Common Stockholders - Diluted 224,759,740 160,406,294 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 IIOT-OXYS, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (Deficit) For the Three Months Ended March 31, 2022 and 2021 (Unaudited) Preferred Stock Common Stock Additional Paid-In Accumulated Total Stockholders' Equity Shares Amount Shares Amount Capital Deficit (Deficit) Balance - December 31, 2020 25,845 $ 26 145,110,129 $ 145,111 $ 4,794,261 $ ( 7,480,678 ) $ ( 2,541,280 ) Common Stock Issued for Conversion of Convertible Note Payable – – 16,850,978 16,851 151,669 – 168,520 Common Stock Sold for Cash – – 16,400,000 16,400 229,600 – 246,000 Beneficial Conversion Feature Discount on Note Payable – – – – 360,000 – 360,000 Commission paid for Raising Capital – – – – ( 4,920 ) – ( 4,920 ) Net Loss – – – – – ( 195,011 ) ( 195,011 ) Balance - March 31, 2021 25,845 26 178,361,107 178,362 5,530,610 ( 7,675,689 ) ( 1,966,691 ) Balance - December 31, 2021 25,896 26 220,254,396 220,255 7,059,098 ( 8,544,232 ) ( 1,264,853 ) Common Stock Issued for Financing Commitments – – 16,851,068 16,851 96,975 – 113,826 Sales Commissions Paid for Capital Raise – – – – ( 2,277 ) – ( 2,277 ) Effect of adopting ASU 2020-06 – – – – ( 371,125 ) 313,976 ( 57,149 ) Common Stock Issued for Services – – 100,000 100 800 – 900 Net Loss – – – – – ( 525,160 ) ( 525,160 ) Balance - March 31, 2022 25,896 $ 26 237,205,464 $ 237,206 $ 6,783,471 $ ( 8,755,416 ) $ ( 1,734,713 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 IIOT-OXYS, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) For The Three Months Ended March 31, 2022 2021 Cash Flows From Operating Activities Net Loss $ ( 525,160 ) $ ( 195,011 ) Adjustments to Reconcile Net Loss to Net Cash Used By Operating Activities Gain on Extinguishment of Debt – ( 120,000 ) Stock Compensation Expense for Services 900 – Amortization of Debt discount on Notes Payable and Preferred Stock 37,400 108,408 Amortization of Intangible Assets 12,205 12,477 Changes in Operating Assets and Liabilities (Increase) Decrease in: Prepaid Expense – ( 4,379 ) Increase (Decrease) in: Accounts Payable ( 14,349 ) ( 40,360 ) Accrued Liabilities 39,198 2,841 Derivative Liability 277,649 ( 84,700 ) Shares Payable to Related Parties – 179,236 Salaries Payable to Related Parties 15,099 15,947 Net Cash Used By Operating Activities ( 157,058 ) ( 125,541 ) Cash Flows From Financing Activities Cash Received from Sale of Common Stock 113,826 246,000 Cash Payments of Offering Costs ( 2,277 ) ( 4,920 ) Proceeds from Sale of Series B Preferred Stock 188,000 – Net Cash Provided By Financing Activities 299,549 241,080 Net Increase in Cash and Cash Equivalents 142,491 115,539 Cash and Cash Equivalents - Beginning of Period 46,821 103,074 Cash and Cash Equivalents - End of Period $ 189,312 $ 218,613 Supplement Disclosures of Cash Flow Information Interest Paid $ – $ – Income Taxes $ – $ – Supplemental Disclosures of Non-Cash Investing and Financing Activities Conversion of Convertible Notes Payable and Derivative Liabilities $ – $ 168,520 Beneficial Conversion Feature Discount on Notes Payable $ – $ 360,000 Effect of Adopting ASU-2020-06 $ ( 57,149 ) $ – The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 IIOT-OXYS, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements March 31, 2022 and 2021 (Unaudited) 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 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. On May 18, 2015, we changed our name to Gotham Capital Holdings. From January 1, 2009 until July 28, 2017, we had no operations. On March 16, 2017, our Board of Directors approved a name change to “IIOT-OXYS, Inc.” and authorized a change of domicile from New Jersey to Nevada. Impact of COVID-19 During the period ended March 31, 2022, 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 quarter ended March 31, 2022 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 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. 7 Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has suffered continuing operating losses, has a working capital deficit of $ 1,145,025 , used cash flows in operating activities of $ 157,058 , and has an accumulated deficit of $ 8,755,416 as of March 31, 2022. 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. The 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 will be able to generate sufficient liquidity to maintain its operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 condensed consolidated financial statements. Interim Financial Statements The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with GAAP for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2021. Principles of Consolidation The condensed consolidated financial statements for March 31, 2022 and 2021, 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. Reclassifications Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income. 8 Use of Estimates 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 parties. 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. Cash and Cash Equivalents 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 did not have any cash equivalents as of March 31, 2022 and December 31, 2021. The Company reported a cash balance of $ 189,312 and $ 46,821 as of March 31, 2022 and December 31, 2021, respectively. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts. The Company determines the allowance for doubtful accounts by identifying potential troubled accounts and by using historical experience and future expectations applied to an aging of accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded as income when received. The Company recorded accounts receivable of $ 11,280 at March 31, 2022 and December 31, 2021, and no allowance for doubtful accounts was deemed necessary as of March 31, 2022 and December 31, 2021, respectively. Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of its long-lived assets to determine whether indicators of impairment may exist that warrant adjustments to the carrying value or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. Definite-lived intangible assets are amortized on a straight-line basis over the estimated periods benefited and are reviewed when appropriate for possible impairment. 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, “ Earnings 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. 9 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 taxes. 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 to $ 250,000 . At March 31, 2022 and December 31, 2021, 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. 10 The Company’s condensed consolidated financial instruments consist of cash and cash equivalents, prepaid expenses, accounts payable, accrued liabilities, notes payable and related parties payable. 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. Income Taxes 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. Deferred 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 Stock 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. Effective January 1, 2022, we early adopted 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” using the modified retrospective method of adoption. ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470- 20, Debt—Debt with Conversion and Other Options , for convertible instruments. Under ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the interest rate of convertible debt instruments typically will be closer to the coupon interest rate when applying the guidance in Topic 835, Interest. We now account for our Convertible Notes as single liabilities measured at amortized cost. As a result, the adoption of the guidance had a material impact on the consolidated financial statements and accompanying notes, resulting in adjustments of $371,125, $313,976 and $57,149 to the opening balance of additional paid-in capital, retained earnings, and long-term debt, respectively, as of January 1, 2022. We have updated our debt note (Note 5) with additional and modified disclosures as required by the standard upon adoption. 11 Recent Accounting Pronouncements 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. 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 statements. Other accounting standards that have been issued or proposed by FASB and do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. NOTE 3 - INTANGIBLE ASSETS The Company’s intangible assets comprise of intellectual property revolving around their field tests, sensor integrations, and board designs. Intangible assets, net of amortization at March 31, 2022 and December 31, 2021 amounted to $ 285,879 and $ 298,085 , respectively. Intangible Assets Net of Amortization March 31, 2022 December 31, 2021 Intangible Assets $ 495,000 $ 495,000 Accumulated amortization ( 209,121 ) ( 196,915 ) Intangible Assets, net $ 285,879 $ 298,085 The Company determined that none of its intangible assets were impaired as of March 31, 2022 and December 31, 2021, respectively, 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 $ 12,205 and $ 12,477 for the three months ended March 31, 2022 and 2021, respectively. The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of March 31: Schedule of future amortization Amortization expense 2022 (Remainder of the year) $ 37,295 2023 49,500 2024 49,500 2025 49,500 2026 49,500 Thereafter 50,584 Total $ 285,879 NOTE 4 - COMMITMENTS AND CONTINGENCIES 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. At any time, the Consultant shall have the right to convert any accrued and unpaid fees into shares of Common Stock of the Company. The conversion price shall equal 90% multiplied by the market price (representing a discount rate of 10%). On June 4, 2021, the Consulting Agreement of the CEO terminated pursuant to its terms. As of March 31, 2022 and December 31, 2021, the Company recorded $ 153,376 and $ 145,844 in salaries payable to the CEO. 12 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. At any time, the Consultant shall have the right to convert any accrued and unpaid fees into shares of Common Stock of the Company. The conversion price shall equal 90% multiplied by the market price (representing a discount rate of 10%). As of March 31, 2022 and December 31, 2021, the Company recorded $ 135,649 and $ 127,864 in salaries payable to the COO. NOTE 5 - CONVERTIBLE NOTES PAYABLE The following table summarizes the outstanding balance of convertible notes payable, interest and conversion rates as of March 31, 2022 and December 31, 2021, respectively. Schedule of convertible notes payable March 31, 2022 December 31, 2021 A. Convertible note payable to an investor with interest at 12% per annum, convertible at any time into shares of common stock at $0.008 per share. The balance of principal and accrued and unpaid interest is payable on maturity on March 1, 2023, unless automatically extended for one-year periods if no Event of Default is existing. The note is secured by substantially all the assets of the Company. $ 295,000 $ 295,000 B. Convertible note payable to an investor with interest at 5% per annum, convertible at any time into shares of common stock at $0.00084 per share. Interest is payable annually with the balance of principal and interest due on maturity on March 1, 2024. The note is secured by substantially all the assets of the Company. 55,000 55,000 D. Convertible note payable to an investor with interest at 12% per annum, convertible at any time into shares of common stock at $0.008 per share. The balance of principal and accrued and unpaid interest is payable on March 1, 2023, unless automatically extended for one-year periods if no Event of Default is existing. The note is secured by substantially all the assets of the Company. 50,000 50,000 E. Convertible notes payable to a related party with interest at 12% per annum, convertible at any time into shares of common stock at $0.00084 per share. Interest is payable quarterly with the balance of principal and interest due on maturity on August 2, 2022. The notes are secured by substantially all the assets of the Company. 125,000 125,000 F. Convertible note payable to an investor with interest at 10% per annum, convertible at any time into shares of common stock at $0.01 per share. Principal and interest due on maturity on April 29, 2023. 33,167 33,167 G. Convertible note payable to an investor with interest at 10% per annum, convertible at any time into shares of common stock at $0.0099 per share. Note was issued as payment for future fees to be incurred under the related Equity Financing Agreement. Principal and interest due on maturity on April 29, 2023. 75,000 75,000 633,167 633,167 Less: deferred financing costs ( 75,700 ) ( 75,700 ) Less unamortized discount – (57,148 ) Net balance 557,467 500,319 Less current portion ( 394,300 ) ( 233,167 ) Long term portion $ 163,167 $ 267,152 13 A. January 18, 2018 Convertible Note and Warrants (“Note A”) On March 14, 2022, the noteholder of Note A agreed to extend the maturity date of March 1, 2022 of the Senior Secured Convertible Promissory Note to March 1, 2023, in exchange for the reduction of the conversion price to $0.008 per share, and all prior Events of Default (as defined in the Note A) including penalties were waived, and all future Events of Default (as defined in the Note A) pertaining to the future payment of interest were waived through maturity. On January 28, 2021, the noteholder of Note A agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to March 1, 2022, in exchange for the reduction of the conversion price to $0.01 per share, and all prior Events of Default (as defined in the Note A) including penalties of $100,000 were waived, and all future Events of Default (as defined in the Note A) pertaining to the future payment of interest were waived through maturity. On December 14, 2021, the Company entered into amendment to the Note A which limits the respective holder to conversions resulting in beneficial ownership by the holder and its affiliates of no more than 4.99% of the outstanding shares of common stock of the Company. The Company recorded $100,000 as extinguishment of debt in its statements of operations for the year ended December 31, 2021. In addition, the Company recorded interest expense of $ 8,729 and $ 15,041 for the three months ended March 31, 2022 and 2021, respectively. Accrued interest payable on Note A was $ 139,765 and $ 131,036 as of March 31, 2022 and December 31, 2021, respectively. The principal balance payable on Note A amounted to $ 295,000 on March 31, 2022 and December 31, 2021, respectively. B. January 2019 Convertible Note and Warrants (“Note B”) Effective March 1, 2021, the noteholder of Note B agreed to extend the maturity date of March 1, 2022 of the Senior Secured Convertible Promissory Note to March 1, 2024, and all prior Events of Default (as defined in the Note B) including penalties were waived, and all other terms of the Note B remain the same (Note 9). The Company recorded interest expense of $ 678 and $ 678 on Note B for the three months ended March 31, 2022 and 2021, respectively. Accrued interest payable on Note B was $ 8,770 and $ 8,092 as of March 31, 2022 and December 31, 2021, respectively. The principal balance payable on Note B amounted to $ 55,000 and $ 55,000 on March 31, 2022 and December 31, 2021, respectively. The Note B matures on March 1, 2024. D. March 2019 Convertible Note and Warrants (“Note D”) On March 14, 2022, the noteholder of Note D agreed to extend the maturity date of March 1, 2022 of the Senior Secured Convertible Promissory Note to March 1, 2023, in exchange for the reduction of the conversion price to $0.008 per share, and all prior Events of Default (as defined in the Note D) including penalties were waived, and all future Events of Default (as defined in the Note D) pertaining to the future payment of interest were waived through maturity. On January 28, 2021, the noteholder of Note D agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to March 1, 2022 in exchange for the reduction of the conversion price to $0.01 per share, and all prior Events of Default (as defined in the Note D) including penalties of $10,000 were waived, and all future Events of Default (as defined in the Note D) pertaining to the future payment of interest were waived through maturity. The Company recorded $10,000 as extinguishment of debt in its statements of operations for the nine months ended September 30, 2021. 14 Accrued interest payable on Note D was $ 16,177 and $ 14,698 as of March 31, 2022 and December 31, 2021, respectively. The principal balance payable on Note D amounted to $ 50,000 on March 31, 2022 and December 31, 2021, respectively. E. August 2019 Convertible Note and Warrants (“Note E”) On August 2, 2021, the noteholder of Note E agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to August 2, 2022 . All other terms and conditions of the Note E remain the same. The Company recorded interest expense of $ 3,699 and $ 3,699 on Note E for the three months ended March 31, 2022 and 2021, respectively. Accrued interest payable on Note E was $ 37,389 and $ 33,690 as of March 31, 2022 and December 31, 2021, respectively. The principal balance payable on Note E amounted to $ 125,000 and $ 125,000 on March 31, 2022 and December 31, 2021, respectively. The maturity date of the Note E is August 2, 2022. F. July 2020 Equity Financing Arrangement (“Note F”) On April 29, 2022, the noteholder of Note F agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to April 29, 2023 . All other terms and conditions of the Note F remain the same. On February 1, 2021, the noteholder of Note F converted the principal balance of $ 66,833 of its convertible promissory note and $ 5,177 of accrued interest into 7,200,000 shares of common stock of the Company. On November 4, 2021, the noteholder of Note F agreed to extend the maturity date of the Note F from October 29, 2021 to April 29, 2022 in exchange of receiving 625,000 shares of common stock valued at $ 5,563 as commitment fee for extending the maturity date of Note F. The Company recorded interest expense of $ 818 and $ 1,404 for the three months ended March 31, 2022 and 2021, respectively. Accrued interest payable on Note F was $ 2,530 and $ 1,712 as of March 31, 2022 and December 31, 2021, respectively. The principal balance payable on Note F amounted to $ 33,167 on March 31, 2022 and December 31, 2021, respectively. G . July 2020 Equity Financing Arrangement (“Note G”) On April 29, 2022, the noteholder of Note G agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to April 29, 2023 . All other terms and conditions of the Note G remain the same. On November 4, 2021, the noteholder of Note G agreed to extend the maturity date of the Note G from October 29, 2021 to April 29, 2022 in exchange of receiving 625,000 shares of common stock valued at $ 5,563 as commitment fee for extending the maturity date of Note G. The Company recorded interest expense of $ 1,849 and $ 1,849 for the three months ended March 31, 2022 and 2021, respectively. Accrued interest amounted to $ 11,589 and $ 9,740 at March 31, 2022 and December 31, 2021, respectively. The principal balance payable of Note G amounted to $ 75,000 at March 31, 2022 and December 31, 2021, respectively. NOTE 6 - EARNINGS (LOSS) PER SHARE The following table sets forth the computation of basic and diluted net loss per share of common stock for the three months ended March 31, 2022 and 2021: Schedule of earnings per share Three Months ended March 31, 2022 2021 Net loss attributable to common stockholders (basic) $ ( 525,160 ) $ ( 195,011 ) Shares used to compute net loss per common share, basic and diluted 224,759,740 160,406,294 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.00 ) $ ( 0.00 ) 15 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 period. 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 three months ended March 31, 2022 and 2021, respectively, because their inclusion would be anti-dilutive: Schedule of anti-dilutive shares As of March 31, 2022 2021 Warrants to purchase common stock 2,868,397 2,868,397 Potentially issuable shares related to convertible notes payable 347,878,284 323,988,444 Potentially issuable vested shares to directors and officers – 3,300,000 Potentially issuable unvested shares to officers – 2,700,000 Total anti-dilutive common stock equivalents 350,741,681 332,856,841 NOTE 7 - RELATED PARTIES At March 31, 2022 and December 31, 2021, respectively, the amount due to two stockholders was $ 1,000 relating to depositing funds for opening bank accounts for the Company. The Company executed an operating lease to rent its current office facility from a stockholder on a month-to-month basis at a monthly rent of $250 starting January 1, 2020. The Company recorded rent expense of $ 750 and $ 750 for the three months ended March 31, 2022 and 2021, respectively. The Company has recorded $ 250 and $ 750 of rent payable to the stockholder in accounts payable as of March 31, 2022 and December 31, 2021, respectively. NOTE 8 - STOCKHOLDERS' EQUITY The Company has an authorized capital of 1,000,000,000 shares, $ 0.001 par value common stock, and 10,000,000 shares of $0.001 par value preferred stock at March 31, 2022. The Company has 237,205,464 shares and 220,254,396 shares of common stock, and 25,896 shares and 25,896 shares of preferred stock, issued and outstanding as of March 31, 2022 and December 31, 2021, respectively. Common Stock 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 rights. 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 February 24, 2021, the Company entered into a Common Stock Purchase Agreement with an investor pursuant to which the investor agreed to purchase up to $5,000,000 of the Company’s registered common stock at $0.015 per share. Pursuant to the Agreement, purchases may be made by the Company during the Commitment Period (as defined in the Agreement) through the submission of a purchase notice to the investor no sooner than ten business days after the preceding closing. No purchase notice can be made in an amount less than $10,000 or greater than $500,000 or greater than two times the average of the daily trading dollar volume for the Company’s common stock during the ten business days preceding the purchase date. Each purchase notice is limited to the investor beneficially owning no more than 4.99% of the total outstanding common stock of the Company at any given time. There are certain conditions precedent to each purchase including, among others, an effective registration statement in place and the VWAP of the closing price of the Company’s common stock greater than $0.0175 for the Company's common stock during the five business days prior to the closing. On January 27, 2022, February 24, 2022, March 11, 2022 and March 24, 2022, the investor purchased 2,623,138 shares, 3,975,109 shares, 1,978,821 share and 8,274,000 shares of common stock for a cash consideration of $ 11,160 , $ 22,116 , $ 12,176 and $ 68,373 , aggregating to $ 113,826 , respectively. 16 On February 23, 2022, the Company issued to a consultant for services rendered, pursuant to a consulting agreement, 100,000 shares of common stock valued at the fair market price on the date of issuance of $ 900 . Stock Incentive Plans On December 14, 2017, the Board of Directors of the Company approved the 2017 Stock Incentive Plan (the “ 2017 Plan ”). 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 plan approval 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. On March 11, 2019, 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. No awards can be granted under the Plan after the expiration of 10 years from the plan approval 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 are issued under the 2017 Stock Incentive Plan and the 2019 Stock Incentive Plan (Note 4). 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 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 March 31, 2022 and 2021, and changes during the three months period then ended, is presented below: Summary of non-vested shares Non-vested Shares of Common Stock Weighted Average Fair Value Balance at December 31, 2021 – $ – Awarded – – Vested – – Forfeited – – Balance at March 31, 2022 – $ – Balance at December 31, 2020 3,600,000 $ 0.30 Awarded – – Vested ( 900,000 ) 0.30 Forfeited – – Balance at March 31, 2021 2,700,000 $ 0.30 Preferred Stock Series A Supervoting Convertible Preferred Stock On July 2, 2020, the Board of Directors of the Company authorized the issuance of 15,600 shares of preferred stock, $ 0.001 par value per share, designated as Series A Supervoting Convertible Preferred Stock. The Company had 25,896 shares of preferred stock issued and outstanding at March 31, 2022 and December 31, 2021, respectively. Series B Convertible Preferred Stock Equity Financing On November 16, 2020, the Board of Directors of the Company authorized the issuance of up to 600 shares of preferred stock, $ 0.001 par value per share, designated as Series B Convertible Preferred Stock. Each share of Preferred Stock has a par value of $0.001 per share and a stated value of $ 1,200 , subject to increase set forth in the Certificate of Designation. 17 On February 7, 2022 and March 24, 2022, the Company issued 51 shares and 136 shares of preferred stock, respectively, pursuant to an Securities Purchase Agreement for a cash consideration of $ 51,000 and $ 136,000 . The Company paid a sales commission to a third-party broker of $ 1,000 and $ 2,720 , respectively, on these sales. On November 19, 2020, pursuant to the terms of a Securities Purchase Agreement dated November 16, 2020 (the “ SPA ”), the Company entered into a new preferred equity financing agreement with GHS Investments, LLC (“ GHS ”) in the amount of up to $600,000. The SPA provides for GHS’s purchase, from time to time, of up to 600 shares of the newly-designated Series B Convertible Preferred Stock. The initial closing under the SPA consisted of 45 shares of Series B Convertible Preferred Stock, stated value $1,200 per share, issued to GHS for an initial purchase price of $45,000, or $1,000 per share. At the Company’s option, and subject to the terms of the SPA and the Certificate of Designation for the Series B Convertible Preferred Stock (the “ COD ”), additional closings in the amount of 40 shares of Series B Convertible Preferred Stock for a total purchase price of $40,000 may take place at a rate of up to once every 30 days. In connection with the initial closing in the amount of 45 shares of Series B Convertible Preferred Stock, the Company issued an additional 25 shares of Series B Convertible Preferred Stock to GHS as a service fee. On November 19, 2020 (the date of receipt of cash proceeds of $ 45,000 issuance), the Company valued the fair value of the derivative and recorded an initial derivative liability of $ 103,267 , $ 58,267 as day one loss on the derivative, $ 39,000 as interest expense, and $ 39,000 as Series B Convertible Preferred Stock mezzanine liability, and $ 84,000 as amortization. The Company recalculated the value of the derivative liability associated with the convertible note and recorded a gain of $ 13,228 and a gain of $ 39,465 for the three months ended March 31, 2022 and 2021, respectively, in connection with the change in fair market value of the derivative liability. In addition, the Company recorded $ 2,485 and $ 2,485 as preferred stock dividend for the three months ended March 31, 2022 and 2021, payable to GHS. Preferred stock dividend payable to GHS was $ 13,725 and $ 11,240 as of March 31, 2022 and December 31, 2021, respectively. The Company valued the fair value using the Black-Scholes option pricing model at March 31, 2022, with the following assumptions: conversion exercise price - $0.0096, the closing stock price of the Company's common stock on the date of valuation -$0.0178, an expected dividend yield - 0%, expected volatility – 160.41%, risk-free interest rate – 0.51%, and an expected term – 0.13 years. On December 16, 2020, pursuant to the terms of the SPA, GHS purchased an additional 85 shares of Series B Convertible Preferred Stock for gross proceeds of $ 85,000 . The Company paid $1,700 in selling commissions to complete this financing. On December 16, 2020 (the date of receipt of cash proceeds of $ 85,000 issuance), the Company valued the fair value of the derivative and recorded an initial derivative liability of $ 106,241 , $ 1,700 as interest expense, $ 102,000 as Series B Convertible Preferred Stock a mezzanine liability, and $ 102,000 as amortization. The Company recalculated the value of the derivative liability associated with the convertible note and recorded a gain of $ 20,784 and $ 45,235 for the three months ended March 31, 2022 and 2021, respectively, in connection with the change in fair market value of the derivative liability. In addition, the Company recorded $ 3,018 and $ 3,018 as preferred stock dividend for the three months ended March 31, 2022 and 2021, payable to GHS. Preferred stock dividend payable to GHS was $ 15,761 and $ 12,743 as of March 31, 2022 and December 31, 2021, respectively. The Company valued the fair value using the Black-Scholes option pricing model as of March 31, 2022, with the following assumptions: conversion exercise price - $0.0096, the closing stock price of the Company's common stock on the date of valuation - $0.0178, an expected dividend yield - 0%, expected volatility – 160.41%, risk-free interest rates – 0.51%, and an expected term of 0.21 years. On February 7, 2022 (the date of receipt of cash proceeds of $ 51,000 issuance), the Company valued the fair value of the derivative and recorded an initial derivative liability of $ 65,025 , $ 14,025 as day one loss on the derivative, $ 10,200 as interest expense, and $ 10,200 as Series B Convertible Preferred Stock mezzanine liability, and $ 61,200 as amortization. The Company recalculated the value of the derivative liability associated with the convertible note and recorded a loss of $ 16,929 for the three months ended March 31, 2022, in connection with the change in fair market value of the derivative liability. In addition, the Company recorded $ 1,046 as preferred stock dividend for the three months ended March 31, 2022, payable to GHS. Preferred stock dividend payable to GHS was $ 1,046 as of March 31, 2022. The Company valued the fair value using the Black-Scholes option pricing model at March 31, 2022, with the following assumptions: conversion exercise price - $0.0096, the closing stock price of the Company's common stock on the date of valuation -$0.0172, an expected dividend yield - 0%, expected volatility – 160.35%, risk-free interest rate – 1.63%, and an expected term – 1.35 years. 18 On March 24, 2022 (the date of receipt of cash proceeds of $ 136,000 issuance), the Company valued the fair value of the derivative and recorded an initial derivative liability of $ 328,422 , $ 192,422 as day one loss on the derivative, $ 27,200 as interest expense, and $ 27,200 as Series B Convertible Preferred Stock mezzanine liability, and $ 163,200 as amortization. The Company recalculated the value of the derivative liability associated with the convertible note and recorded a gain of $ 105,194 for the three months ended March 31, 2022, in connection with the change in fair market value of the derivative liability. In addition, the Company recorded $ 376 as preferred stock dividend payable to GHS for the three months ended March 31, 2022. Preferred stock dividend payable to GHS was $ 376 as of March 31, 2022. The Company valued the fair value using the Black-Scholes option pricing model at March 31, 2022, with the following assumptions: conversion exercise price - $0.0096, the closing stock price of the Company's common stock on the date of valuation -$0.0172, an expected dividend yield - 0%, expected volatility – 160.35%, risk-free interest rate – 1.63%, and an expected term – 1.63 years. As a result of receipt of cash proceeds relating to Series B Convertible Preferred Stock, the Company recorded derivative liability of $ 490,465 and $ 212,816 at March 31, 2022 and December 31, 2021, respectively. In addition, preferred stock dividend payable was $ 30,908 and $ 23,983 at March 31, 2022 and December 31, 2021, respectively. Warrants A summary of the status of the Company’s warrants as of March 31, 2022 and 2021, and changes during the three months then ended, is presented below: Summary of warrant activity Shares Under Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding at December 31, 2020 – – Issued 2,868,397 $ 0.00084 3.4 Years Exercised – – Expired/Forfeited – – Outstanding at March 31, 2021 2,868,397 $ 0.00084 3.2 Years Outstanding at December 31, 2021 – – Issued 2,868,397 $ 0.00084 2.4 Years Exercised – – Expired/Forfeited – – Outstanding at March 31, 2022 2,868,397 $ 0.00084 2.2 Years NOTE 9 - SUBSEQUENT EVENTS Management has evaluated subsequent events through the date of this Report, the date the financial statements were available to be issued, noting the following items that would impact the accounting for events or transactions in the current period or require additional disclosure. On April 4, 2022, the Company executed an unsecured convertible promissory note for a principal amount of $200,000, at an interest rate of 10% per annum, maturing on April 4, 2024, with an original issue discount of $7,500. The principal amount of convertible promissory note is convertible into shares of common stock equal to 3.23% of the fully diluted share capital of the Company as of the conversion date. The Company received a cash consideration of $192,500 on April 4, 2022. On April 6, 2022, the noteholder of Note B agreed to extend the maturity date of Note B from March 1, 2022 to March 1, 2024 and waiving all events of Default, known or unknown. All other terms of the Secured Convertible Promissory Note remain the same (Note 5). On April 8, 2022, the Company issued 7,828,223 shares of its common stock for cash consideration of $98,636 and paid sales commissions of $1,973, pursuant to the Equity Financing Agreement. On May 6, 2022, the Company issued 4,969,077 shares of its common stock for cash consideration of $43,095 and paid sales commissions of $4,310, pursuant to the Equity Financing Agreement. 19