What changed in this filing

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Item 9A. Controls and Procedures

2023-04-13 compared with 2022-04-14 · 712 added, 930 removed, 1378 unchanged (54% of the section changed)

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in the rules and forms of the Securities and Exchange Commission and, as such, is accumulated and communicated to our Chief Executive

Officer and Interim Chief Financial Officer, Clifford Emmons, who serves as our principal executive officer and principal financial officer,

as appropriate to allow timely decisions regarding required disclosure.

Emmons, evaluated the effectiveness of our disclosure controls

and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of December 31, 2021.

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, 2021.

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.

Officer and Interim Chief Financial Officer, Clifford Emmons and Karen McNemar, respectively, who serve as our principal executive officer

and principal financial and accounting officer, respectively, as appropriate, to allow timely decisions regarding required disclosure.

Emmons and Ms.

McNemar, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the

Exchange Act, as of December 31, 2022.

Based on their evaluation, Mr.

Emmons and Ms.

McNemar 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

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

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Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable to the

Directors, Executive Officers and Corporate Governance

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Executive Officers :

Chief Executive Officer, President, and Interim Chief Financial Officer

Chief Executive Officer, President, and Interim Chief Technical Officer

Karen McNemar

Chief Operating Officer

Chief Operating Officer and Interim Chief Financial Officer

Vidhyadhar Mitta

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

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

From 1995 to 2017,

Emmons worked for Medtronic, a global leader in medical technology, services, and solutions, where he served in various capacities

including several Vice President and Director positions.

Emmons is also the founder of AHI, LLC, a consultancy firm.

Emmons received

an Executive Certificate in Strategy & Innovation from MIT, a Master’s of Science in Management Engineering from the University

of Bridgeport, a Bachelor of Science in Electrical Engineering from the University of New Haven, and a Bachelor of Science in Mechanical

Engineering from the University of Connecticut.

served as our Chief Executive Officer, President, and director since June 4, 2018 and as our Interim Chief Technology Officer since June

From 1995 to 2017, Mr.

Emmons worked for Medtronic, a global leader in medical technology, services, and solutions, where

he served in various capacities including several Vice President and Director positions.

Emmons is also the founder of AHI, LLC, a

consultancy firm.

Emmons received an Executive Certificate in Strategy & Innovation from MIT, a Master’s of Science in Management

Engineering from the University of Bridgeport, a Bachelor of Science in Electrical Engineering from the University of New Haven, and a

Bachelor of Science in Mechanical Engineering from the University of Connecticut.

Karen McNemar:

McNemar has served

as our Chief Operating Officer since September 20, 2018.

From 1998 until August 2017, Ms.

McNemar served in many capacities 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 Research.

as our Chief Operating Officer since September 20, 2018 and as our Interim Chief Financial Officer since June 2, 2022.

From 1998 until

August 2017, Ms.

McNemar served in many capacities for Medtronic which included as a Senior Director of R&D Operations.

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

Vidhyadhar Mitta:

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Section 16(a) Reports

laws, directors, certain officers and persons holding more than 10% of our common stock must report their initial ownership of our common

stock and any changes in their ownership to the SEC.

The SEC has designated specific due dates for these reports and we must identify

in this Proxy Statement those persons who did not file these reports when due.

Based solely on our review of copies of the reports filed

with the SEC and the written representations of our directors and executive officers, we believe that all reporting requirements for fiscal

year 2021 were complied with by each person who at any time during the 2021 fiscal year was a director or an executive officer or held

more than 10% of our common stock, except for the following:

McNemar filed a Form 4 late.

McNemar failed to timely file the vesting

of an award of restricted shares.

securities laws, directors, certain officers and persons holding more than 10% of our common stock must report their initial

ownership of our common stock and any changes in their ownership to the SEC.

The SEC has designated specific due dates for these

reports and we must identify in this Annual Report those persons who did not file these reports when due.

Based solely on our review

of copies of the reports filed with the SEC and the written representations of our directors and executive officers, we believe that

all reporting requirements for fiscal year 2022 were complied with by each person who at any time during the 2022 fiscal year was a

director or an executive officer or held more than 10% of our common stock.

Code of Ethics

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Karen McNemar (5)

________________________

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

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Emmons was owed $139,575 in accrued and unpaid consulting fees and $2,849 in reimbursable expenses.

On June 4, 2021, 1,500,000 shares of Common Stock previously granted to Mr.

Emmons vested.

As of December 31, 2021, Mr.

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As of December 31, 2022, Ms.

McNemar was owed $118,767 in accrued and unpaid consulting fees and $9,314 in reimbursable expenses.

On October 1, 2021, 1,200,000 shares of Common Stock previously granted to Ms.

McNemar vested.

McNemar was owed $134,849 in accrued and unpaid consulting fees.

As of December 31, 2021, Ms.

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

McNemar was owed $121,092 in accrued and unpaid consulting fees.

On October 1, 2021, 1,200,000 shares of Common Stock previously granted to Ms.

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also eliminated from the Emmons Agreement.

On June 4, 2021, the Emmons Agreement terminated

pursuant to its terms.

Emmons Employment Contract

On June 2, 2022, the

Board of Directors (with Mr.

Emmons abstaining) approved the Employment Contract dated effective April 1, 2022 with Mr.

Emmons (the “ Emmons

The term of the Emmons Contract is from the effective date until the Emmons Contract is terminated pursuant to its

The services to be provided by Mr.

Emmons pursuant to the Emmons Contract are those customary for the positions in which he is

Pursuant to the Emmons

Contract, Mr.

Emmons shall receive an annual salary of $100,000 which accrues unless converted into shares of Common Stock of the Company

at a conversion rate specified in the Emmons Contract.

If the Company reaches $1,000,000 in cumulative sales over a 12-month period, the

annual salary will increase to $150,000, commencing the following month.

If the Company reaches $5,000,000 in cumulative sales over a

12-month period, the annual salary will increase to $200,000, commencing the following month.

As of the effective date,

the Company will award to Mr.

Emmons an aggregate of 7,000,000 shares of the Company’s Common Stock which will vest as follows (the

“ Emmons Contract Shares ”):

1,500,000 shares on the first-year anniversary of the effective date;

2,500,000 shares on the second-year anniversary of the effective date;

3,000,000 shares on the third-year anniversary of the effective date.

The Emmons Contract Shares

are awarded under the 2022 Plan.

Vesting of the Emmons Contract Shares is subject to acceleration of vesting upon the occurrence of certain

events such as a Change of Control (as defined in the Emmons Contract) or the listing of the Company’s Common Stock on a senior

McNemar Consulting Agreement

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was also eliminated from the McNemar Agreement.

On October 1, 2021, the McNemar Agreement terminated

pursuant to its terms.

McNemar Employment Contract

On June 2, 2022, the

Board of Directors of Company approved the Employment Contract dated effective April 1, 2022 with Ms.

McNemar (the “ McNemar Contract ”).

The term of the McNemar Contract is from the effective date until the McNemar Contract is terminated pursuant to its terms.

to be provided by Ms.

McNemar pursuant to the McNemar Contract are those customary for the positions in which she is serving.

Pursuant to the McNemar

Contract, Ms.

McNemar shall receive an annual salary of $100,000 which accrues unless converted into shares of Common Stock of the Company

at a conversion rate specified in the McNemar Contract.

If the Company reaches $1,000,000 in cumulative sales over a 12-month period,

the annual salary will increase to $150,000, commencing the following month.

If the Company reaches $5,000,000 in cumulative sales over

a 12-month period, the annual salary will increase to $200,000, commencing the following month.

As of the effective date,

the Company will award to Ms.

McNemar an aggregate of 7,000,000 shares of the Company’s Common Stock which will vest as follows

(the “ McNemar Contract Shares ”):

1,500,000 shares on the first-year anniversary of the effective date;

2,500,000 shares on the second-year anniversary of the effective date;

3,000,000 shares on the third-year anniversary of the effective date.

The McNemar Contract

Shares are awarded under the 2022 Plan.

Vesting of the McNemar Contract Shares is subject to acceleration of vesting upon the occurrence

of certain events such as a Change of Control (as defined in the McNemar Contract) or the listing of the Company’s Common Stock

on a senior exchange.

Debt Forgiveness Agreements

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Equity Awards

As of December 31, 2021, there were no unvested

equity awards to our named executive officers.

The following table provides information on stock

and option awards held by the named executive officers as of December 31, 2022:

Market Value of

Number of Shares

Shares of Units of

or Units of Stock that

Stock that Have Not

Have Not Vested

7,000,000 (1)

Karen McNemar

7,000,000 (1)

1,500,000 shares on the first-year anniversary of the grant date;

2,500,000 shares on the second-year anniversary of the grant date;

and 3,000,000 shares on the third-year anniversary of the grant date

Compensation of Directors

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The following table and footnotes thereto sets

forth information regarding the number of shares of common stock beneficially owned by (i) each director and named executive 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 as of April 7, 2022.

In calculating any

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

forth information regarding the number of shares of common stock beneficially owned by (i) each director and named executive 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 as of March 30, 2023.

In calculating

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

401,865,786 shares of common stock outstanding.

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Ownership (1)

Percent of Class (1)

Named Executive Officers and Directors

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83,176,667 (5)

______________________

*Less than 1%

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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 April 7, 2022.

Includes 13,333 shares issuable upon the exercise of

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

Includes 13,333 shares issuable upon the exercise of warrants issued to Cambridge MedSpace LLC, an entity of which Mr.

Emmons is a 36.36% owner.

Also includes 29,010,735 shares issuable

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

Includes 11,313,980 shares of Common Stock issuable upon the

conversion of $145,844 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 9,935,999 shares of Common Stock issuable upon the conversion of $128,081 in accrued and unpaid salary.

Also includes 30,229,704 shares issuable upon the conversion of a note issued to Cambridge MedSpace LLC.

Includes 64,233,945 shares of Common Stock issuable upon the conversion of $142,424 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 60,817,582 shares of Common Stock issuable upon the conversion of $134,849 in accrued and unpaid consulting fees.

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

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The following table sets forth information known

to us regarding the beneficial ownership of our Series A Supervoting Preferred Stock as of April 8, 2022.

to us regarding the beneficial ownership of our Series A Supervoting Preferred Stock as of March 30, 2023.

Title of Class

Name and address of beneficial owner

Amount and nature of beneficial ownership

Name and address of

beneficial owner

Amount and nature of

beneficial ownership

Percent of Class

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The following table sets forth information known

to us regarding the beneficial ownership of our Series B Convertible Preferred Stock as of April 8, 2022.

to us regarding the beneficial ownership of our Series B Convertible Preferred Stock as of March 30, 2023.

Title of Class

Name and address of beneficial owner (1)

Amount and nature of beneficial ownership

Name and address of

beneficial owner (1)

Amount and nature of

beneficial ownership

Percent of Class

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

On June 12, 2020, the Company entered into Amendment

On June 12, 2020, the Company entered into

Amendment No.

1 to the note with Cambridge MedSpace pursuant to which the note was amended to extend the maturity date to March 1, 2021.

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the note, the conversion price is currently $0.0008.

Vidhyadhar Note

On August 2, 2019, we entered into a Securities

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Each warrant was originally immediately exercisable at $0.12 per share and expires on August 2,

On August 2, 2021, the Company entered into Amendment

1 to the note with Vidhyadhar Mitta pursuant to which the note was amended to extend the maturity date to August 2, 2022.

Effective August 2, 2022, the Company entered

into Amendment No.

1 to the note with Vidhyadhar Mitta pursuant to which the note was amended to extend the maturity date to August 2,

Due to adjustments to the conversion price of

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rendered by our principal accountants for tax compliance, tax advice and tax planning in the years ended December 31, 2022 were $3,500

and there were no fees in 2020.

and $2,000 in 2021.

All Other Fees

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this Annual Report:

Report of Independent Registered Public

Accounting Firm

Balance Sheets at December

31, 2021 and 2020

Statements of Operations for the years

ended December 31, 2021 and 2020

Statements of Changes in Stockholders’

Deficit for the years ended December 31, 2021 and 2020

Statements of Cash Flows for the years

ended December 31, 2021 and 2020

Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

Audited Consolidated Balance Sheets at December 31, 2022 and 2021

Audited Consolidated Statements of Operations for the years ended December 31, 2022 and 2021

Audited Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2022 and 2021

Audited Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021

Notes to Audited Consolidated Financial Statements

The following exhibits are included with this

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Amendment dated December 14, 2021 to Senior Secured Convertible Promissory Note with Sergey Gogin

Amendment dated March 14, 2022 to Senior Secured Convertible Promissory Note with Sergey Gogin

Form of Securities Purchase Agreement

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Amendment dated December 14, 2021 to Senior Secured Convertible Promissory Note with YVSGRAMORAH LLC

Amendment dated March 14, 2022 to Senior Secured Convertible Promissory Note with YVSGRAMORAH LLC

Form of Securities Purchase Agreement

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1 to the 12% Secured Convertible Promissory Note dated effective August 2, 2021 with Vidhyadhar Mitta

Amendment No.

2 to the 12% Secured Convertible Promissory Note dated effective August 2, 2022 with Vidhyadhar Mitta

Security Agreement with Vidhyadhar Mitta dated August 2, 2019

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Amendment No.

3 dated April 29, 2022 to $100,000 Convertible Promissory Note issued to GHS Investments LLC

Amendment No.

2 dated November 4, 2021 to $75,000 Convertible Promissory Note issued to GHS Investments LLC

Amendment No.

3 dated April 29, 2022 to $75,000 Convertible Promissory Note issued to GHS Investments LLC

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

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Termination Agreement with Antony Coufal dated effective March 31, 2021

Employment Contract dated Effective April 1, 2022 with Clifford L.

Employment Contract dated Effective April 1, 2022 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

Rule 13a-14(a) Certification by Principal Financial and Accounting Officer

Section 1350 Certification of Principal Executive Officer

Section 1350 Certification of Principal Financial and Accounting Officer

Inline XBRL Instance Document.

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Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Cover Page Interactive Data File (formatted in iXBRL, and included in exhibit 101)

_________________

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/s/ Clifford L.

Emmons, Chief Executive Officer and Interim Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

Emmons, Chief Executive Officer

(Principal Executive Officer)

April 13, 2023

/s/ Karen McNemar

Karen McNemar, Interim Chief Financial Officer

(Principal Financial and Accounting Officer)

Pursuant to the requirements of Section 13 or

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/s/ Clifford L.

Director and Chief Executive Officer (Principal Executive Officer)

April 13, 2023

/s/ Karen McNemar

Karen McNemar

Interim Chief Financial Officer (Principal Financial and Accounting Officer

April 13, 2023

/s/ Vidhyadhar Mitta

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INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Balance Sheets at December 31, 2021 and 2020

Statements of Operations for the years ended December 31, 2021 and 2020

Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2021 and 2020

Statements of Cash Flows for the years ended December 31, 2021 and 2020

Notes to Financial Statements

Report of Independent

Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

Audited Consolidated Balance Sheets at December 31, 2022 and 2021

Audited Consolidated Statements of Operations for the years ended December 31, 2022 and 2021

Audited Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2022 and 2021

Audited Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021

Notes to Audited Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

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Opinion on the Financial Statements

We have audited the accompanying balance sheets

of IIOT-OXYS, Inc.

(the Company) as of December 31, 2021 and 2020, and the related statements of operations, stockholders’ equity

(deficit), and cash flows for each of the years in the two-year period ended December 31, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2021, 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 1 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 1 to the financial statements.

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

We have audited the accompanying consolidated balance sheets of IIOT-OXYS,

(the Company) as of December 31, 2022, and 2021, and the related consolidated statements of operations, stockholders’ equity

(deficit), and cash flows for each of the years in the two-year period ended December 31, 2022, and the related consolidated notes (collectively

referred to as the financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects,

the consolidated financial position of the Company as of December 31, 2022, and 2021 and the results of its consolidated operations and

its cash flows for each of the years in the two-year period ended December 31, 2022 and 2021, in conformity with accounting principles

generally accepted in the United States of America.

Consideration of the Company’s Ability to Continue as a Going

The accompanying consolidated financial statements have been prepared

assuming that the Company will continue as a going concern.

As more fully described in Note 1 to the consolidated 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 1 to the consolidated financial statements.

The consolidated financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

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

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 audit 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.

These consolidated financial statements are the responsibility of the

Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated 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 audit to obtain reasonable assurance about whether the consolidated 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.

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 consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising

from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the

audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2)

involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in

any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Complex Debt and Equity Transactions

Description of the Matter

As discussed in Note 9, the Company holds Series B Convertible Preferred

Stock that qualifies for derivative treatment under ASC 815, Derivatives and Hedging.

Management uses the Black Scholes Model to value

their derivatives.

This model requires management to make assumptions, use judgment, and can be complex.

How We Addressed the Matter in Our Audit

We gained an understanding of management’s processes and methodology

to develop the estimates.

We reviewed the underlying agreement.

We evaluated management’s selection of a valuation method, tested

the inputs used in the Black-Scholes calculation by agreeing terms of the underlying agreements and market information to third-party

sites, and recalculated the value of the derivatives.

We also evaluated the adequacy of the disclosures related to these fair value measurements

and related gains and losses.

/s/ Haynie & Company

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April 13, 2023

We have served as the Company’s auditor

We have served as auditors for the company since 2018.

IIOT-OXYS, Inc.

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Total Current Assets

Note receivable, net of discount of $ 4,716 and $ 0

as of December 31, 2022 and 2021, respectively

Intangible assets, net

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Deferred revenue

Notes Payable, net of discounts of $ 57,148 and $ 111,781 at December 31, 2021 and 2020, respectively

Unearned interest

Notes payable - current, net of discounts of $ 0 and $ 57,148 at December 31, 2022 and 2021, respectively

Shares payable to related parties

Salaries payable to related parties

Derivative Liability

Derivative liabilities

Total Current Liabilities

PPP Liability

Notes payable

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Series B Convertible Preferred Stock, 600 shares designated, $0.001 Par Value, $ 1,200 stated value;

155 Shares Issued and Outstanding at December 31, 2021 and 2020, Respectively.

Liquidation Preference $ 186,000 as of December 31, 2021 and 2020, respectively

Stockholders' Equity (Deficit)

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

454 shares and 206 shares issued and outstanding at December 31, 2022 and 2021, respectively.

Liquidation preference $ 544,800 and $ 247,200 as of December 31, 2022 and 2021, respectively

Stockholders' Equity (Deficit)

Series A Preferred Stock, $ 0.001 par value, 10,000,000 Shares authorized;

25,845 shares issued and outstanding at December 31, 2022 and 2021, respectively

Common Stock $ 0.001 Par Value, 1,000,000,000 shares authorized;

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Operating Expenses

Bank Service Charges

Office Expenses

Organization Costs

Payroll Expense

Patent License Fee

General and administrative

Amortization of intangible assets

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Gain (loss) on extinguishment of debt

Interest income

Interest expense

Total Other Income (Expense)

( 1,208,467 )

Net Loss Before Income Taxes

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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.

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.

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Consolidated Statements of Stockholders' Equity (Deficit)

For the Years Ended December 31, 2021 and 2020

Stockholders' Equity (Deficit)

Balance - December 31, 2019

$ ( 5,040,307 )

$ ( 1,919,021 )

Preferred Stock Issued in Exchange of Shares Exchange

Common Stock Issued for Conversion of Convertible Note

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

Beneficial Conversion Feature Discount on Note Payable

Common Stock Issued for Extinguishment of Debt

Common Stock Issued to Officers for Services

( 2,236,774 )

For the Years Ended

December 31, 2022 and 2021

Additional Paid-In

Stockholders’ Equity

Balance - December 31, 2020

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$ ( 2,541,280 )

Common Stock Issued for Conversion of Convertible Note

Common stock issued for conversion of convertible note payable

Common stock sold for cash

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Common stock issued for financing commitment

Preferred Stock Sold for Cash

Beneficial conversion feature discount on notes payable

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$ ( 1,315,853 )

Common stock issued for conversion of convertible note payable

Common stock issued for financing commitment

Sales commissions paid on capital raise

Common stock issued for services

Beneficial Conversion Feature Associated with Discounts

( 1,076,881 )

Balance - December 31, 2022

$ ( 9,307,137 )

$ ( 1,813,059 )

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

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Adjustments to reconcile net loss to net cash (used) by operating activities

Loss on Extinguishment of Debt

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 compensation expense for services

Discount on note receivable

Forgiveness of PPP Loan

Debt discount on notes payable

Beneficial conversion feature

Amortization of beneficial conversion feature

Amortization of Intangible Assets

Amortization of Series B Preferred Stock to redemption

Changes in Operating Assets and Liabilities

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Derivative liability

Unearned interest

Deferred revenue

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Net Cash Used by Operating Activities

Cash Flows from Investing Activities

Cash paid for note receivable

Net Cash used in Investing Activities

Cash Flows From Financing Activities

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

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Supplement Disclosures of Cash Flow Information

Interest Paid During the Period

Income Taxes Paid During the Period

Interest paid

Income taxes paid

Supplemental Disclosures of Non-Cash Investing and Financing Activities

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Warrant anti-dilution issuance

Discount on Series B Preferred Stock

Discount on Series B Convertible Preferred Stock

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

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and Subsidiaries

Notes to Consolidated Financial

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

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Going Concern

The accompanying 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, used cash flows in operating activities of $ 628,103

and has an accumulated deficit of $ 8,544,232

as of December 31, 2021.

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.

The accompanying 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 and reported a net loss of $ 1,076,881 for the year ended December 31, 2022, used cash flows in operating

activities of $ 657,009 and has recorded an accumulated deficit of $ 9,307,137 as of December 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

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The Company’s consolidated financial instruments

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

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.

consist principally of cash, accounts receivable, prepaid expenses, note receivable, 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.

The Company accounts for income taxes using the

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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 the ASC

470-20, Debt – Debt with Conversion and Other Options.

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

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

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.

Recent Accounting Pronouncements

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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.

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

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.

The Company has adopted this guidance and it does not have

any material impact on its consolidated financial statements.

Other accounting standards that have been issued

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at December 31, 2022 and 2021, amounted to $ 248,585

and $ 347,856 ,

respectively.

and $ 298,085 , respectively.

Schedule of intangible assets

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Intangible Assets, net

At December 31, 2021 and 2020, respectively, the

Company determined that none of its intangible assets were impaired.

The Company determined that none of its intangible

assets were impaired at December 31, 2022 and 2021, respectively.

Amortizable intangible assets are amortized using the straight-line

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Schedule of future amortization

Amortization expense

NOTE 4 - COMMITMENTS AND CONTINGENCIES

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agreements with one director, three executive officers, and one engineer of the Company, which include commitments to issue shares of

the Company’s common stock from the Company’s Stock Incentive Plans.

All the agreements have been terminated and shares have

been issued in conjunction with the related separation agreements.

According to the terms of the three agreements, 1,319,000 shares vested

in 2019, 2,400,000 shares vested in 2020, and 3,600,000 shares of common stock vested in 2021.

the Company’s common stock from the Company’s 2017 Stock Incentive Plan and 2019 Stock Incentive Plans.

All the consulting

agreements have been terminated and shares have been issued in conjunction with the related separation agreements.

According to the terms

of the agreements, 3,547,788 shares were vested and issued per the Company’s 2017 Stock Incentive Plan as of December 31, 2022 and

2021, respectively, and 3,080,000 shares and 2,980,000 shares were vested and issued per the Company’s 2019 Stock Incentive Plan

as of December 31, 2022 and 2021, respectively.

In the event that the agreement is terminated

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the effective date of the termination of the agreement and all unearned, unvested shares shall be terminated.

The value of the shares was assigned at fair market

value on the effective date of the agreement and the pro-rata number of shares earned was calculated and amortized at the end of each

reporting period.

The Company has accrued $ 0 and $ 730,836 in shares payable in conjunction with these agreements as of December 31, 2021

and 2020, respectively.

A summary of these agreements is as follows.

On March 11, 2019, the Company’s Board of

Directors approved the Consulting Agreement dated effective June 4, 2018 with its CEO.

The term of the 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 CEO pursuant to the agreement are those customary for the position in which

the CEO is serving.

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

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 issued under the 2019 Stock Incentive

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.

As of December 31, 2021 and 2020, 3,060,000

shares and 1,560,000 shares had vested and issued, respectively.

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%).

As of December 31, 2021 and 2020, the Company recorded $ 145,844 and $ 138,602 is in salaries

payable to related parties due and payable to the CEO, respectively.

On March 11, 2019, the Company’s Board of

Directors approved the Consulting Agreement dated effective October 1, 2018 with its COO.

The term of the 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 COO pursuant to the agreement are those customary for the position

in which the COO is serving.

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 Incentive

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.

As of December 31, 2021 and 2020, 24,090,000

shares and 1,209,000 shares, respectively, had vested and issued, respectively.

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 December 31, 2021 and 2020, the Company recorded $ 128,081 and $ 139,078 in salaries

payable to related parties due and payable to the COO, respectively.

On March 11, 2019, the Company’s Board of

Directors approved the Amended and Restated Consulting Agreement dated effective April 23, 2018 with its CTO.

The term of the 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 CTO pursuant to the agreement are those customary

for the position in which the CTO is serving.

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 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 April 1, 2021, the Company and CTO mutually

agreed to terminate the Amended and Restated Consulting Agreement.

The Company and CTO agreed to settle for 843,288 shares of common stock

for past services which were valued at the fair value of $270,493.

The Company issued 843,288 shares of common stock to the CTO on April

As of December 31, 2021 and 2020, 0 shares and 900,000 shares had vested and issued, respectively.

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.

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%).

The value of the shares

was assigned at fair market value on the effective date of the agreement and the pro-rata number of shares earned was calculated and amortized

at the end of each reporting period.

On March 18, 2022, the Company adopted 2022 Stock

Incentive Plan and reserved for issuance 20,000,000 shares of common stock for incentivizing its management team.

Employment Agreement - CEO

June 2, 2022, the Board approved an Employment Agreement with the CEO dated effective April 1, 2022 whereby, the CEO will receive an

annual salary of $100,000 which accrues unless converted into shares of common stock of the Company at a stipulated conversion rate.

If the Company reaches $1,000,000 in cumulative sales over a 12-month period, the annual salary will increase to $150,000 commencing

the following month.

If the Company reaches $5,000,000 in cumulative sales over a 12-month period, the annual salary will increase

to $200,000 commencing the following month.

The Company awarded the CEO an aggregate of 7,000,000

shares of the Company’s common stock under the 2022 Stock Incentive Plan, which will vest (i) 1,500,000 shares

on April 1, 2023, (ii) 2,500,000 shares

on April 1, 2024, and (iii) 3,000,000 shares

on April 1, 2025.

The shares are valued at the 90% of the average market price of the shares of 30 trading days at the end of each

The Company has recorded $ 142,424

and $ 1 28,082

in salaries payable to the CEO as of December 31, 2022 and December 31, 2021, respectively.

Employment Agreement – COO/Interim CFO

On June 2, 2022, the Board approved an

Employment Agreement with the COO/Interim CFO dated effective April 1, 2022, whereby, the officer will receive an annual salary of

$100,000 which accrues unless converted into shares of common stock of the Company at a stipulated conversion rate.

If the Company

reaches $1,000,000 in cumulative sales over a 12-month period, the annual salary will increase to $150,000 commencing the following

If the Company reaches $5,000,000 in cumulative sales over a 12-month period, the annual salary will increase to $200,000

commencing the following month.

The Company awarded the COO/Interim CFO an aggregate of 7,000,000 shares

of the Company common stock under the 2022 Stock Incentive Plan, which will vest (i) 1,500,000 shares

on April 1, 2023, (ii) 2,500,000 shares

on April 1, 2024, and (iii) 3,000,000 shares

on April 1, 2025.

The shares are valued at the 90% of the average market price

of the shares of 30 trading days at the end of each quarter.

The Company recorded $ 121,092

and $ 145,844

in salaries payable to the COO/Interim CFO as of December 31, 2022 and December 31, 2021, respectively.

Consulting Agreement – CTO

Effective March 31, 2021, the Company entered

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in reimbursable expenses and $ 130,451 in accrued and unpaid consulting fees to the CTO within five business days of the effective date.

The Termination Agreement also provided for the issuance to the CTO 843,288 shares of the Company’s Common Stock within five business

days of the effective date.

As of December 31, 2021 and 2020, the Company recorded

$ 0 and $ 129,590 in salaries payable to related parties due and payable to the CTO, respectively.

NOTE 5 - CONVERTIBLE

NOTES PAYABLE

The Termination Agreement also provided for the issuance to the CTO 843,288 shares of the Company’s Common Stock for the past services

which were valued at $270,493, within five business days of the effective date.

The Company recorded $ 0 in salaries payable to the CTO

at December 31, 2022 and 2021, respectively.

NOTE 5 - CONVERTIBLE NOTES PAYABLE

The following table summarizes the outstanding

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Schedule of convertible notes payable

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.

is payable quarterly with the balance of principal and interest due on maturity on March 1, 2023.

The note is secured by substantially

all the assets of the Company.

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.

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.

Convertible note payable to

an investor with interest at 12% per annum.

On February 3, 2021, the investor settled the note and accrued interest, in exchange

for common stock of the Company.

Convertible note payable to

an investor with interest at 12% per annum.

$10,000 of the principal is currently convertible into shares of common stock at $0.01

per share, with remaining principal and interest convertible 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, 2023.

The note is secured by substantially all the

assets of the Company.

Convertible note 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.

is payable quarterly with the balance of principal and interest due on maturity on August 2, 2022.

The note is secured by substantially

all the assets of the Company.

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, 2022.

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.

December 31, 2022

December 31, 2021

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.

Interest is payable quarterly with the balance of principal and interest due on maturity on March 1, 2023.

The note is secured by substantially all the assets of the Company.

Convertible note payable to an investor with interest at 5% per annum, convertible at any time into shares of common stock at $0.0008 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.

Convertible note payable to an investor with interest at 12% per annum, principal and interest convertible into shares of common stock at $0.008 per share.

Interest is payable quarterly with the balance of principal and interest due on maturity on March 1, 2023.

The note is secured by substantially all the assets of the Company.

Convertible note payable to a related party with interest at 12% per annum, convertible at any time into shares of common stock at $0.0008 per share.

Interest is payable quarterly with the balance of principal and interest due on maturity on August 2, 2024.

The note is secured by substantially all the assets of the Company.

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.

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, 2022.

Less unamortized

Principal and interest due on maturity on April 29, 2023.

Less deferred financing costs

Less Unamortized discount

Less current portion

Long term portion

January 18, 2018 Convertible Note and Warrants (“Note A”)

On January 18, 2018, the Board of Directors of

the Company approved a non-public offering of up to $1,000,000 aggregate principal amount of its 12% Senior Secured Convertible Notes.

The notes are convertible, in whole or in part, into shares of the Company’s 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 the Company’s election.

The notes bear interest at

a rate of 12% per annum and interest payments will be made on a quarterly basis.

The notes matured on January 15, 2020.

The notes are governed by a Securities Purchase

Agreement and are secured by all the assets of the Company pursuant to a Security and Pledge Agreement.

In addition to the issuance of

the notes in the offering, the Company’s Board of Directors approved, as part of the offering, the issuance of warrants to purchase

one share of the Company’s common stock for 50% of the number of shares of common stock issuable upon conversion of each note.

warrant is immediately exercisable at $0.75 per share, contains certain anti-dilution down-round features and expires on January 15, 2023.

If the Company ever defaults on the loan, the warrants to be issued will increase from 50% of the number of shares of common stock issuable

upon conversion to 100%.

On March 7, 2019, the Board of Directors of the

Company approved Amendment No.

1 to the 12% Senior Secured Convertible Promissory Note and the Warrant Agreement, each issued January

22, 2018, respectively, to the note holder.

The amendments (i) extend the maturity date of the note to March 1, 2021 and extend the term

of the warrants to March 6, 2024, (ii) lower the conversion price of the note and the exercise price of the warrants to $0.20 and $0.30,

respectively, and (iii) add an adjustment to the conversion and exercise price of the note and warrants, respectively, in the event the

Company does not achieve certain milestones during calendar 2019.

The fair value of the warrants is $ 25,162 determined using the Black-Scholes

valuation model with the following assumptions:

expected term of 2.5 years;

risk free interest rate of 2.6%;

and volatility of 127%.

effective conversion rate resulted in a discount of $ 23,956 and is amortized to interest expense using the effective interest method over

the term of the note.

The Company recognized a loss on extinguishment of debt of $ 221,232 related to the decrease in conversion price.

On January 1, 2020, the Company failed to achieve

certain milestones during calendar 2019 and, as such, the conversion/exercise prices of the note and warrants were adjusted to $0.10 and

$0.15, respectively.

This resulted in an adjustment to retained earnings of $ 201 based on the change in fair value.

Effective January 15, 2020, the Company went into

technical default of the note agreement as a result of not making the December 31, 2019 interest payment within the required period.

a result, the principal was increased by 20%, or $100,000, and the Company was required to issue an additional 384,615 warrants at the

then effective exercise price of $0.15 per share.

The fair value of the warrants was $ 44,297 , determined using the Black-Scholes valuation

model with the following assumptions:

expected term of 4.14 years;

risk free interest rate of 1.6%;

and volatility of 243%.

default, this value was immediately expensed.

As of March 31, 2020, the exercise price of the

warrants was further adjusted to $0.00084 as a result of the down-round features being triggered.

This resulted in an adjustment to retained

earnings of $ 71 based on the change in fair value.

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.

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.

Company recorded $100,000 as extinguishment of debt in its statements of operations for the year ended December 31, 2021.

recorded $ 300,000 as the beneficial conversion feature discount on note payable of $ 500,000 on January 28, 2021.

March 14, 2022, the noteholder of Note A, effective March 1, 2022, agreed to extend the maturity date of the Senior Secured Convertible

Note to March 1, 2023 in exchange for the reduction of the conversion price to $0.008 per share and one-year extensions as long as the

Note A is not in default.

On February 4, 2021, the noteholder A converted

the principal balance of $ 50,000 of its convertible promissory note into 5,000,000 shares of common stock of the Company (Note 9).

April 15, 2021, the noteholder A converted the principal balance of $ 75,000 of its convertible promissory note into 7,500,000 shares of

common stock of the Company (Note 9).

On July 28, 2021, the noteholder A converted the principal balance of $ 80,000 of its convertible

promissory note into 8,000,000 shares of common stock of the Company (Note 9).

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.

O n 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.

The Company recorded $ 300,000 as the beneficial conversion feature discount on note payable of $ 500,000

on January 28, 2021.

On March 14, 2022, the noteholder of Note A, effective March 1, 2022, agreed to extend the maturity date of the Senior

Secured Convertible Note to March 1, 2023 in exchange for the reduction of the conversion price to $0.008 per share and one-year extensions

as long as the Note A is not in default.

On February 4, 2021,

the noteholder A converted the principal balance of $ 50,000 of its convertible promissory note into 5,000,000 shares of common stock of

the Company (Note 9).

On April 15, 2021, the noteholder A converted the principal balance of $ 75,000 of its convertible promissory note

into 7,500,000 shares of common stock of the Company (Note 9).

On July 28, 2021, the noteholder A converted the principal balance of $ 80,000

of its convertible promissory note into 8,000,000 shares of common stock of the Company (Note 9).

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

On May 23, 2022, the noteholder of Note A converted $ 90,000 of the principal note balance into 11,250,000 shares

of the Company’s common stock at the conversion price of $ 0.008 per share (Note 9).

The conversion shares totaled 45,608,457 and 42,603,642

shares of common stock, upon conversion of the total principal and accrued interest of $ 426,036 and $ 685,824 , as of December 31, 2021

and 2020, respectively.

shares of common stock, upon conversion of the total principal and accrued interest of $ 364,868 and $ 426,036 as of December 31, 2022 and

2021, respectively.

The Company amortized the beneficial conversion

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discount totaled $ 0 and $ 45,340 at December 31, 2022 and 2021, respectively.

In addition, the Company recorded interest expense of

$ 45,212 and $ 70,701 for the year ended December 31, 2021 and 2020, respectively.

Accrued interest payable on Note A was $ 131,036 and $ 85,824

as of December 31, 2021 and 2020, respectively.

The Company adopted ASU 2020-06 in 2022 eliminating the use

of beneficial conversion feature, hence no beneficial conversion feature expense was recorded for 2022 extensions.

In addition, the Company

recorded interest expense of $ 28,832 and $ 45,212 for the years ended December 31, 2022 and 2021, respectively.

Accrued interest payable

on Note A was $ 159,868 and $ 131,036 as of December 31, 2022 and 2021, respectively.

The principal balance payable on Note A amounted

to $ 295,000 and $ 600,000 on December 31, 2021 and 2020, respectively.

to $ 205,000 and $ 295,000 at December 31, 2022 and 2021, respectively.

January 2019 Convertible Note and Warrants (“Note B”)

On January 22, 2019, the Company entered into

a Securities Purchase Agreement and Security and Pledge Agreement with a single investor and issued a Secured Convertible Promissory Note

to the investor in the principal amount of $ 55,000 .

In addition to the note, the Company issued to the investor 36,667 warrants.

warrant is immediately exercisable at $ 0.75 per share, contains certain anti-dilution down-round features and expires on January 22, 2024 .

If the Company ever defaults on the loan, the warrants to be issued will increase from 50% of the number of shares of common stock issuable

upon conversion to 100%.

The warrants are considered equity instruments based on the Company’s adoption of ASU 2017-11.

As of March 31, 2020, the exercise price of the

warrants was adjusted to $ 0.00084 as a result of the down-round features being triggered.

This resulted in an adjustment to retained earnings

of $ 7 based on the change in fair value.

The unpaid principal balance of the note and accrued

interest is $ 55,000 and $ 8,092 at December 31, 2021 and $ 55,000 and $ 5,342 as of December 31, 2020, respectively.

The Company recorded

interest expense of $ 2,750 and $ 2,758 for the years ended December 31, 2021 and 2020, respectively.

The Company amortized the discount

to interest expense $ 0 and $ 194 for the years ended December 31, 2021 and 2020, respectively.

The unamortized discount on the Note B was

$0 at December 31, 2021 and 2020, respectively.

This note and accrued interest is due to a related party.

On June 12, 2020, this note

was amended to extend the maturity date to March 1, 2022, and all events of default were waived.

The conversion

shares totaled 78,864,418 and 75,426,918 shares of common stock upon the conversion of the total principal and accrued interest of $ 63,092

and $ 60,342 as of December 31, 2021 and 2020, respectively.

On April 6, the Noteholder of Note B agreed to extend the maturity date of

the Note B to March 1, 2024.

March 2019 Convertible Note

and Warrants (“Note C”) and (“Note D”)

On March 7, 2019, the Board of Directors of the

Company approved a non-public offering of up to $500,000 aggregate principal amount of its 12% Senior Secured Convertible Notes (Note

C and Noted D), collectively called “Notes” unless specifically specified otherwise.

The Notes are convertible, in whole or

in part, into shares of the Company’s common stock, at any time at a rate of $0.20 per share with fractions rounded up to the nearest

whole share, unless paid in cash at the Company’s election.

The Notes bear interest at a rate of 12% per annum and interest payments

will be made on a quarterly basis.

The Notes matured on March 1, 2021.

The conversion price of the Notes is also subject to adjustments

if the Company does not achieve certain milestones during the calendar year 2019.

The Notes are governed by a Securities Purchase

Agreement and are secured by all the assets of the Company pursuant to a Security and Pledge Agreement.

Funding is subject to the occurrence

of certain milestones, as stated in the SPA.

In addition to the issuance of the Notes in the offering, the Company’s Board of Directors

approved, as part of the offering, the issuance of warrants to purchase one share of the Company’s common stock for 50% of the number

of shares of common stock issuable upon conversion of each Note.

Each warrant is immediately exercisable at $ 0.30 per share and expires

five years from the issuance date.

The exercise price of the warrants is also subject to adjustments if the Company does not achieve certain

milestones during the calendar year 2019.

On March 6, 2019, the Company entered into SPAs

and Security and Pledge Agreements with its first two investors (Note C and Note D) in the offering and issued Notes to the investors

in the principal amount of $ 50,000 each totaling in the aggregate if $ 100,000 .

Subscription funds were received by the Company from the

investors on March 6, 2019.

In addition to the Notes, the Company issued to the investors an aggregate of 250,000 warrants.

is immediately exercisable at $0.30 per share, contains certain anti-dilution down-round features and expires on March 6, 2024.

Company ever defaults on the loan the warrants to be issued will increase from 50% of the number of shares of common stock issuable upon

conversion to 100%.

The warrants are considered equity instruments based on the Company’s adoption of ASU 2017-11.

The proceeds received upon issuing the Notes and

warrants were allocated to each instrument on a relative fair value basis.

The initial fair value of the warrants was $ 12,646 determined

using the Black-Scholes valuation model with the following assumptions:

expected term of 2.5 years;

risk free interest rate of 2.5%;

volatility of 127%.

The effective conversion rate resulted in a discount of $ 11,226 and is amortized to interest expense using the effective

interest method over the term of the Notes.

On January 1, 2020, the Company failed to achieve

certain milestones during calendar 2019 and, as such, the conversion/exercise prices of the Notes and warrants were adjusted to $0.10

and $0.15, respectively.

This resulted in an adjustment to retained earnings of $ 131 based on the change in fair value.

Effective January 15, 2020, the Company went into

technical default of the Note agreement as a result of not making the December 31, 2019 interest payment within the required period.

a result, the principal was increased by 20%, or $20,000, in aggregate, and the Company was required to issue an additional 250,000 warrants

at the then effective exercise price of $0.15 per share.

The fair value of the warrants was $ 28,793 , determined using the Black-Scholes

valuation model with the following assumptions:

expected term of 4.14 years;

risk free interest rate of 1.6%;

and volatility of 243%.

Due to the default, this value was immediately expensed.

As of March 31, 2020, the exercise price of the

warrants was further adjusted to $0.00084 as a result of the down-round features being triggered.

This resulted in an adjustment to retained

earnings of $ 46 based on the change in fair value.

On September 21, 2020, these Notes were amended

to reduce the conversion price of an aggregate of $20,000 of the total outstanding principal value of $ 120,000 from $0.10 to $0.01 per

The remaining aggregate principal of $100,000 remains convertible at $0.10 per share.

This modification to the Notes was considered

substantial (i.

the change in fair value of the conversion feature was greater than 10% of the carrying value of the debt).

the modification was accounted for as an extinguishment of debt, resulting in the recognition of an extinguishment loss of $ 18,360 for

the year ended December 31, 2020.

On October 15, 2020, the holder of Note C converted

$ 10,000 of the principal note amount into 1,000,000 shares of common stock.

On January 28, 2021, the noteholder of Note C

Effective March 1, 2021, the noteholder of Note

B agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to March 1, 2022, 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).

On April 6, 2022,

the Noteholder of Note B agreed to extend the maturity date of the Note B to March 1, 2024.

The unpaid principal balance of the Note B and

accrued interest is $ 55,000 and $ 10,842 at December 31, 2022 and $ 55,000 and $ 8,092 as of December 31, 2021, respectively.

recorded interest expense of $ 2,750 and $ 2,750 for the years ended December 31, 2022 and 2021, respectively.

This note and accrued interest

is due to a related party.

The conversion shares totaled 82,301,918 and 78,864,418 shares of common stock upon the conversion of the total

principal and accrued interest of $ 65,842 and $ 63,092 as of December 31, 2022 and 2021, respectively.

March 2019 Convertible Note and Warrants (“Note D”)

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 C) including penalties of $10,000 were

waived, and all future Events of Default (as defined in the Note C) 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 year ended December 31, 2021.

recorded $ 30,000 as debt discount on note payable and amortized it to interest expense since the Note C was converted into common stock

of the Company immediately.

The Company amortized the discount to interest expense of $ 30,000 and $ 2,037 for the year ended December 31,

2021 and 2020, respectively.

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.

O n December 14, 2021, the Company entered into amendment to the Note D 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 $10,000 as extinguishment of debt in its statements of operations for the

year ended December 31, 2021.

The Company recorded $ 30,000 as the beneficial conversion feature discount on note payable of $ 50,000 on

January 28, 2021.

The Company amortized the beneficial conversion feature discount to interest expense of $ 0 and $ 25,466 for the years

ended December 31, 2022 and 2021, respectively.

The unamortized discount was $ 0 and $ 4,534 at December 31, 2022 and 2021, respectively.

In addition, the Company

recorded interest expense on Note C of $ 460 and $ 6,686 for the years ended December 31, 2021 and 2020, respectively.

Accrued interest

payable on Note C was $ 0 and $ 6,050 at December 31, 2021 and December 31, 2020, respectively.

On January 28, 2021, the noteholder of Note C

converted the principal balance of $ 40,000 of its convertible promissory note and $ 6,510 of accrued interest, into 4,650,978 shares of

common stock of the Company (Note 9).

The principal balance payable on Note C amounted to $ 0 and $ 50,000 on December 31, 2021 and 2020.

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.

O n December 14, 2021, the Company entered into

amendment to the Note D 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.

Company recorded $ 10,000 as extinguishment of debt in its statements of operations for the year ended December 31, 2021.

The Company recorded

$ 30,000 as the beneficial conversion feature discount on note payable of $50,000 on January 28, 2021.

The Company amortized the beneficial

conversion feature discount to interest expense of $ 25,466 and $ 1,019 for the years ended December 31, 2021 and 2020, respectively.

unamortized discount was $ 4,534 and $ 0 at December 31, 2021 and 2020, respectively.

In addition, the Company recorded interest expense

of $ 6,115 and $ 7,070 for the years ended December 31, 2021 and 2020, respectively.

Accrued interest payable on Note D was $ 14,698 and

$ 6,768 as of December 31, 2021 and 2020, respectively.

The principal balance payable on Note D amounted to $ 50,000 and $ 60,000 on December

31, 2021 and 2020, respectively.

In addition, the Company recorded interest expense of $ 6,000 and $ 6,115 for the years ended December 31, 2022 and 2021, respectively.

Accrued interest payable on Note D was $ 20,698 and $ 14,698 as of December 31, 2022 and 2021, respectively.

The principal balance payable

on Note D amounted to $ 50,000 and $ 50,000 on December 31, 2022 and 2021, respectively.

On March 14, 2022, the noteholder of Note D, effective

1 unchanged sentence

of the conversion price to $ 0.008 per share and one-year extensions as long as the Note D is not in default.

The Company adopted ASU 2020-06

in 2022 eliminating the use of beneficial conversion feature, hence no beneficial conversion feature expense was recorded for 2022 extensions.

The conversion shares of Note D totaled 8,837,192

and 1,588,520 shares of common stock upon the conversion of the total principal and accrued interest of $ 64,698 and $ 68,582 as of December

31, 2021 and 2020, respectively.

shares and 6,469,754 shares of common stock upon the conversion of the total principal and accrued interest of $ 70,698 and $ 64,698 as

of December 31, 2022 and 2021, respectively.

August 2019 Convertible Note and Warrants (“Note E”)

On August 2, 2019, the Company entered into a

Securities Purchase Agreement with an investor for the purchase of a 12 % Secured Convertible Note in the principal amount of up to $ 125,000 .

The note is convertible, in whole or in part, into shares of the Company’s common stock, at any time at a rate of $0.08 per share

with fractions rounded up to the nearest whole share, unless paid in cash at the Company’s election.

The note bears interest at

a rate of 12% per annum and interest payments will be made on a quarterly basis.

The note matured on August 2, 2021 .

$ 75,000 , $ 25,000 ,

and $ 25,000 subscription funds were received by the Company from the investor on August 2, 2019, September 6, 2019, and October 16, 2019,

respectively.

In addition to the note, the Company issued to the investor an aggregate of 781,250 warrants.

The warrants were considered

equity instruments based on the Company’s adoption of ASU 2017-11.

The proceeds received upon issuing the note and

warrants were allocated to each instrument on a relative fair value basis.

The initial fair value of the warrants was $ 71,035 determined

using the Black-Scholes valuation model with the following assumptions:

expected term of 2.5 years;

risk free interest rate of 1.6 %;

volatility of 132 %.

The effective conversion rate resulted in a discount of $ 104,941 and is amortized to interest expense using the effective

interest method over the term of the note.

Effective January 30, 2020, the Company went into

technical default of the note agreement as a result of not making the December 31, 2019 interest payment within the required period.

a result, the Company was required to issue an additional 781,250 warrants at the then effective exercise price of $0.12 per share.

fair value of the warrants was $ 90,342 , determined by using the Black-Scholes valuation model with the following assumptions:

term of 4.76 years;

risk free interest rate of 1.6 %;

and volatility of 233 %.

Due to the default, this value was immediately expensed.

As of March 31, 2020, the exercise price of the

warrants was adjusted to $ 0.00084 as a result of the down-round features being triggered.

This resulted in an adjustment to retained earnings

of $ 70 based on the change in fair value.

On August 2, 2021, the noteholder of Note E agreed

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Note E remain the same.

The Company amortized the debt discount on Note E to interest expense of $ 34,104 and $ 52,539 for the years ended

December 31, 2021 and 2020, respectively.

The unamortized discount was $ 0 and $ 34,104 at December 31, 2021 and 2020, respectively.

Company recorded interest expense of $ 15,000 and $ 15,051 on Note E for the years ended December 31, 2021 and 2020, respectively.

interest payable on Note E was $ 33,690 and $ 18,690 as of December 31, 2021 and 2020, respectively.

The principal balance payable on Note

E amounted to $ 125,000 and $ 125,000 on December 31, 2021 and 2020, respectively.

The maturity date of the Note E is August 2, 2022.

note is payable to a related party.

The conversion shares totaled 188,916,781 shares of common stock upon conversion of the total principal

and accrued interest of $ 158,690 as of December 31, 2021.

The Company adopted ASU 2020-06 in 2022 eliminating the use of beneficial conversion feature, hence no beneficial

conversion feature expense was recorded for 2022 extensions.

The Company amortized the debt discount on Note E to interest expense of

$ 0 and $ 34,104 for the years ended December 31, 2022 and 2021, respectively.

The unamortized discount was $ 0 at December 31, 2022 and

2021, respectively.

The Company recorded interest expense of $ 15,000 and $ 15,000 on Note E for the years ended December 31, 2022 and 2021,

respectively.

Accrued interest payable on Note E was $ 48,690 and $ 33,690 as of December 31, 2021 and 2020, respectively.

The principal

balance payable on Note E amounted to $ 125,000 and $ 125,000 on December 31, 2022 and 2021, respectively.

This note is payable to a related

The conversion shares totaled 217,112,620 shares and 188,916,781 shares of common stock upon conversion of the total principal

and accrued interest of $ 173,690 and $ 158,690 as of December 31, 2022 and 2021, respectively.

August 29, 2019 Convertible Note and Warrants (“Note F”)

On August 29, 2019, the Company entered into a

Securities Purchase Agreement with an investor for the purchase of a Convertible Promissory Note in the principal amount of up to $ 105,000 .

The Note is not convertible within 180 days of receipt of funds for the first closing and is then convertible, in whole or in part, into

shares of the Company’s Common Stock at a rate of $ 0.20 per share.

Upon an “Event of Default,” as defined in the note,

the conversion price becomes the “Variable Conversion Price” which is defined in the note as “60% multiplied by the

Marked Price.” “Market Price” is defined in the note as “the lowest one (1) Trading Price (as defined in the note)

for the common stock during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date.”

The note bears interest at a rate of 10 % per annum with principal and accrued and unpaid interest payable six months from the receipt

of funds for each tranche under the note.

Subscription funds of $ 30,000 were received by the Company from the investor on September 6,

2019 for which the Company paid a purchase price of $35,000.

In addition to the notes, the Company issued to the investor an aggregate

of 175,000 warrants.

The warrants are considered equity instruments based on the Company’s adoption of ASU 2017-11.

The proceeds received upon issuing the notes and

warrants were allocated to each instrument on a relative fair value basis.

The initial fair value of the warrants was $ 15,868 determined

using the Black-Scholes valuation model with the following assumptions:

expected term of 2.5 years;

risk free interest rate of 1.4 %;

volatility of 132 %.

The effective conversion rate resulted in a discount of $ 10,378 and is amortized to interest expense using the effective

interest method over the term of the notes.

As of March 31, 2020, the exercise price of the

warrants was adjusted to $ 0.00084 and the number of warrants was increased to 41,666,667 as a result of the down-round features being

This resulted in an adjustment to retained earnings of $ 203,002 based on the change in fair value.

During the three months ended March 31, 2020,

the note went into default upon passing its maturity date.

As a result, a default penalty of $ 26,250 was recorded and added to the principal

In addition, the conversion price became the “Variable Conversion Price” as defined above.

This note became convertible

into a variable number of shares of common stock for which there is no floor to the number of shares that might be required to be issued.

Based on the requirements of ASC 815, Derivatives and Hedging, the conversion feature represents an embedded derivative that is required

to be bifurcated and accounted for as a separate derivative liability.

The derivative liability is originally recorded at its estimated

fair value and is required to be revalued at each conversion event and reporting period.

Changes in the derivative liability fair value

are reported in operating results each reporting period.

The Company valued the conversion feature on the

date of default resulting in initial liability of $ 159,888 , which was immediately expensed as loss on derivative.

At each conversion date,

the Company recalculated the value of the derivative liability associated with the convertible note recording a gain (loss) in connection

with the change in fair market value.

In addition, the pro-rata portion of the derivative liability as compared to the portion of the

convertible note converted was reclassed to additional paid-in capital.

For the year ended December 31, 2020, the Company recorded a loss

of $ 114,051 related to the change of fair value of the derivative liability to additional paid-in capital.

Upon issuance and at each conversion, reporting

period date, and extinguishment date, the Company valued the conversion feature using the Black-Scholes option pricing model with the

following assumptions:

conversion prices ranging from $ 0.0008 to $ 0.0073 , the closing stock price of the Company's common stock on the

date of valuation ranging from $0.0022 to $0.021, an expected dividend yield of 0 %, expected volatility ranging from 459 % to 574 %, risk-free

interest rates ranging from 0.11 % to 0.39 %, and an expected term of 0.25 years.

On May 20, 2020, the second closing of the Convertible

Promissory Note occurred pursuant to which the Company paid a purchase price of $ 35,000 and received gross proceeds of $ 29,300 .

to the issuance of the note, the Company issued to the holder warrants to purchase one share of the Company’s Common Stock for 100%

of the number of shares of Common Stock issuable upon conversion of the funds received in the second closing.

Each warrant is immediately

exercisable at $ 0.20 per share, unless adjusted, and expires on May 20, 2025 .

On July 29, 2020, the Company entered into a Settlement

and Mutual Release Agreement with the lender pursuant to which the Company paid $ 100,000 to the lender in exchange for the full extinguishment

of the remaining principal amount and all accrued and unpaid interest and penalties associated with the Convertible Promissory Note dated

August 29, 2019 issued to the lender (approximately $62,000).

All remaining unexercised warrants to purchase the Company’s Common

Stock issued to the lender were also extinguished pursuant to the Settlement Agreement.

Upon receipt of the Settlement Amount by the lender,

the lender agreed to release all reserved shares of the Company’s Common Stock.

The Settlement Agreement also provides for a full

mutual release of the parties.

The settlement payment was allocated to the extinguished debt and warrants based on their relative fair

The difference in the settlement amount allocated to the debt components, including the related derivative liability, and the

actual value of the debt components of $ 2,155 was recorded as a gain on extinguishment for the year ended December 31, 2020.

The settlement

amount allocated to the warrants of $ 1,609 was recorded as a reduction to additional paid-in capital.

In addition, the remaining unamortized

discount was fully amortized to interest expense upon the settlement.

On February 1, 2021, the noteholder of Note F

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The Company recorded amortization of debt to interest expense of $ 3,637 and $ 1,925 for the years

ended December 31, 2021 and 2020, leaving an unamortized debt balance of $ 3,637 and $ 0 at December 31, 2021 and 2020, respectively.

Company recorded interest expense of $ 3,903 and $ 742 for the years ended December 31, 2021 and 2020, respectively.

ended December 31, 2022 and 2021, and unamortized debt balance of $ 0 and $ 3,637 at December 31, 2022 and 2021, respectively.

recorded interest expense of $ 3,317 and $ 3,903 for the years ended December 31, 2022 and 2021, respectively.

Accrued interest payable

1 unchanged sentence

The principal balance payable on Note F amounted to $ 33,167

and $ 100,000 on December 31, 2021 and 2020, respectively.

The noteholder of Note F agreed to extend the maturity date of the note from

April 29, 2021 to April 29, 2022 (Note 11).

The conversion shares totaled 3,487,893 shares of common stock upon conversion of the total

principal and accrued interest of $ 34,879 as of December 31, 2021.

2020 Equity Financing Arrangement (“Note G”)

On July 29, 2020, the Company entered an Equity

Financing Agreement and Registration Rights Agreement with an investor, pursuant to which the investor agreed to purchase up to $5,000,000

in shares of the Company’s Common Stock, from time to time over the course of 36 months after effectiveness of a registration statement

on Form S-1 of the underlying shares of Common Stock.

In connection with entering into the Equity Financing

Agreement, on July 29, 2020, the Company issued to the investor a Convertible Promissory Note in the principal amount of $ 100,000 (the

“$100k Note”).

The $100k Note matured on April 29, 2021 upon which time all accrued and unpaid interest was due and payable.

Interest accrued on the $100k Note at 10% per annum based on a 360-day year.

The $100k Note was convertible at any time, upon the election

of the investor, into shares of the Company’s Common Stock at $0.01 per share.

The $100k Note was subject to various “Events

of Default,” which were disclosed in the $100k Note.

Upon the occurrence of an uncured “Event of Default,” the $100k

Note will become immediately due and payable and will be subject to penalties and adjustments to the conversion price (the lesser of:

(a) $0.01 or (b) 70% multiplied by the Market Price (as defined in the $100k Note) (representing a discount rate of 30%).

Upon the issuance

of the $100k Note, the Company has agreed to reserve one times the number of shares of Common Stock into which the $100k Note is convertible

and, 101 days from the issuance of the $100k Note, the Company will reserve two-and-a-half times the number of shares of Common Stock

into which the $100k Note is convertible.

Within three Trading Days (as defined in the $100k Note) of the sale by the investor of all

of the Common Stock issued upon the conversion of the $100k Note, the Company is required to issue to investor a number of shares of Common

Stock priced at the lowest traded price for the relevant Trading Day, which represents the difference between $130,000 and the net proceeds

to the investor from the sale of aggregate Common Stock issued upon the conversion of the $100k Note.

Also, in connection with entering into the Equity

Financing Agreement, on July 29, 2020, the Company issued to the investor a Convertible Promissory Note in the principal amount of $75,000

(the “$75k Note”).

No proceeds were received for this note as it was issued to offset future transaction costs related

to any future issuances of equity under the agreement.

As a result, the amount has been capitalized as deferred offering costs in the

accompanying balance sheet and will be offset against any future proceeds received under the agreement.

The $75k Note matures on April

29, 2022 upon which time all accrued and unpaid interest will be due and payable.

Interest accrues on the $75k Note at 10% per

annum based on a 360-day year.

The $75k Note is convertible at any time, upon the election of the investor, into shares of the Company’s

Common Stock at $0.01 per share.

The $75k Note is subject to various “Events of Default,” which are disclosed in the $75k

Upon the occurrence of an uncured “Event of Default,” the $75k Note will become immediately due and payable (multiplied

by 130% of the unpaid principal and accrued and unpaid interest) and will be subject to penalties and adjustments to the conversion price

(the lesser of:

(a) $0.01 or (b) 70% multiplied by the Market Price (as defined in the $75k Note) (representing a discount rate of 30%).

Upon the issuance of the $75k Note, the Company has agreed to reserve one time the number of shares of Common Stock into which the $75k

Note is convertible and, 101 days from the issuance of the $75k Note, the Company will reserve two-and-a-half times the number of shares

of Common Stock into which the $75k Note is convertible.

on December 31, 2022 and 2021, respectively.

July 2020 Equity Financing Arrangement (“Note G”)

As of December 31, 2022 and 2021, the unpaid principal

balance of Note G was $ 75,000 , and the accrued interest was $ 9,740 and $ 2,240 .

The Company recorded interest expense of $ 7,500 and $ 5,226

for the years ended December 31, 2021 and 2020, respectively.

The Company recorded amortization of debt to interest expense of $ 1,925

and $ 25,484 for the years ended December 31, 2021 and 2020, leaving an unamortized debt balance of $ 3,637 and $ 0 at December 31, 2021

balance of Note G was $ 75,000 , and the accrued interest was $ 17,240 and $ 9,740 , respectively.

The Company recorded interest expense of

$ 7,500 and $ 7,500 for the years ended December 31, 2022 and 2021, respectively.

The Company recorded amortization of debt to interest

expense of $ 3,637 and $ 1,925 for the years ended December 31, 2022 and 2021, leaving an unamortized debt balance of $ 0 and $ 3,637 at December

31, 2022 and 2021, respectively.

The conversion shares totaled 8,473,973 shares of common stock upon conversion of the total principal and accrued

interest of $ 84,740 as of December 31, 2021.

The conversion shares totaled 9,317,144 and 8,473,973 shares of common stock upon conversion of the total

principal and accrued interest of $ 92,240 and $ 84,740 as of December 31, 2022 and 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 and nine months ended December 31, 2021 and 2020:

of basic and diluted net loss per share of common stock for the years ended December 31, 2022 and 2021:

Schedule of earnings per share

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inclusion would be anti-dilutive:

of antidilutive shares

Schedule of antidilutive shares

As of December 31,

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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

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Loan in the amount of $ 36,700 .

The Company recorded the PPP Loan of $ 0 and $ 36,700 as a liability on its Balance Sheet at December 31,

2021 and 2020, respectively.

The Company recorded the PPP Loan of $ 36,700 as other income in its statements of operations for the year

ended December 31, 2021.

Supplemental Target Advance

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earned by the stockholder amounted to $ 3,000 and $ 3,000 , respectively.

The Company has recorded $ 750 and $ 16,500 of rent payable to the

stockholder in accounts payable as of December 31, 2021 and 2020, respectively.

The Company recorded professional fees paid to

officers and a director amounting to $ 7,182 and $ 0 for the year ended December 31, 2020 and 2019, respectively.

The Company has recorded $ 250 and $ 750 of rent payable to the stockholder

in accounts payable as of December 31, 2022 and 2021, respectively.

The Company awarded shares payable to officers

and a director valued at $ 349,657 and $ 728,892 for the years ended December 31, 2021 and 2020, respectively, pursuant to the terms of

an exchange agreement (Note 4).

and a director valued at $ 13,941 and $ 349,657 for the years ended December 31, 2022 and 2021, respectively, pursuant to the terms of an

exchange agreement (Note 4).

Shares payable to officers and a director were $ 13,941 and $ 0 at December 31, 2022 and 2021, respectively.

The officers and a director converted shares payable valued at $ 1,062,986 into 3,543,288 shares of common stock for the year ended December

31, 2021, and shares payable valued at $ 415,350 into 15,845 shares of Series A Supervoting Convertible Preferred Stock during the year

ended December 31, 2020.

No convertible preferred stock was issued to related parties in 2021.

No convertible preferred stock was issued to related parties in 2022 and 2021, respectively.

NOTE 9 - STOCKHOLDERS' EQUITY

The Company has an authorized capital of 1,000,000,000

shares of $ 0.001 par value common stock and 10,000,000 shares of $ 0.001 par value preferred stock at December 31, 2021.

shares of $ 0.001 par value common stock

and 10,000,000 shares of $ 0.001

par value preferred stock at December 31, 2022.

The Company had 352,174,583

220,254,395 shares and 145,110,129 shares of common stock, and 25,896 shares and 25,845 shares of preferred stock, issued and outstanding

as of December 31, 2021 and 2020, respectively.

shares and 220,254,395 shares of common

stock, and 25,845

shares of preferred stock, issued and outstanding as of December 31, 2022 and 2021, respectively.

On January 4, 2021, pursuant to the authorization

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the five business days prior to the closing.

On February 26, 2021, March 16, 2021, April 14, 2021 and August 3, 2021, the investor purchased

8,000,000 shares, 8,400,000 shares, 8,900,000 shares and 10,200,000 shares of common stock for a cash consideration of $ 120,000 , $ 126,000 ,

$ 133,500 , and $ 153,000 , respectively.

From February 26, 2021 to December 31, 2021, the investor purchased 35,500,000 shares of

common stock for a cash consideration of $ 532,500 , and from January 1, 2022 to December 31, 2022, the investor purchased 120,570,188 shares

of common stock for a cash consideration of $ 557,065 , respectively.

On April 1, 2021, the Company’s Chief Technology

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at $ 1,800 in satisfaction of accrued shares payable compensation (Note 8).

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 .

On May 23, 2022, the noteholder of Note A converted

$ 90,000 of the principal note balance into 11,250,000 shares of the Company’s common stock at the agreed conversion

price of $0.008 per share (Note 6)

As a result of all common stock issuances, the

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of both incentive and non-statutory options, restricted stock units, stock appreciation rights, and restricted stock awards.

March 18, 2022, the Board of Directors approved and adopted the 2022 Stock Incentive Plan (the “2022 Plan”).

be made under the 2022 Plan for up to 20,000,000 shares

of common stock of the Company, subject to adjustment as to the number and kind of shares awarded.

Only employees and directors of

the Company or an Affiliated company are eligible to receive Incentive Options under the 2022 Plan.

The Company awarded 7,000,000 shares

of the Company’s common stock to an officer and 7,000,000

shares of common stock to a director of the Company (see Note 4) vesting 1,500,000 shares vesting on the first anniversary on the

date of issuance, 2,500,000 shares vesting on the second anniversary of the date of issuance, and 3,000,000 shares on the third

anniversary of the date of issuance.

In addition, on October 3, 2022, the Company awarded 300,000

shares of common stock to an advisor vesting 100,000 shares on the first anniversary date of issuance, 100,000 shares vesting on the

second anniversary, and the remaining 100,000 vesting the third anniversary of the date of issuance.

The common shares vested

pursuant to the 2022 Plan amounted to 0 shares

at December 31, 2022 and the 14,300,000 shares

remain unvested as of that date.

the year ended December 31, 2022, under the 2022 Plan, the Company recorded stock compensation expense of $ 14,624

for 2,568,493

shares payable to an officer, an advisor and a director that remain unvested as of December 31, 2022.

shares earned are valued at the 90% of the average market price of the shares of 30 trading days at the end of each

Shares earned and issued related to the consulting

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A summary of the status of the Company’s

non-vested shares as December 31, 2021 and 2020 and changes during the year then ended, is presented below:

non-vested shares at December 31, 2022 and 2021 and changes during the year then ended, is presented below:

Summary of non-vested shares

Balance at December 31, 2019

2017 Stock Incentive Plan

Authorized Shares

Balance – December 31, 2020

Awarded and issued

( 3,547,788 )

Balance at December 31, 2021

Awarded and issued

Balance at December 31, 2022

Unvested common shares - December 31, 2022

2019 Stock Incentive Plan

Authorized Shares

Balance - December 31, 2020

Awarded and issued

( 2,980,000 )

Balance at December 31, 2021

Awarded and issued

Balance at December 31, 2022

Unvested common shares - December 31, 2022

2022 Stock Incentive Plan

Authorized Shares

Balance at December 31, 2021

Balance at December 31, 2022

Unvested common shares - December 31, 2022

Preferred Stock

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of voting, plus ii) the total number of shares of all Series of Preferred stocks which are issued and outstanding at the time of voting.

Each individual share of Series A Super Voting Preferred Stock shall have the voting

rights equal to:

Each individual share of Series A Super Voting Preferred

Stock shall have the voting rights equal to:

[twenty times the

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law or the Articles of Incorporation or Bylaws.

On November 9, 2020, the Company awarded a director

for services rendered, 1,000,000 shares of common stock valued at its fair value on the date of issuance of $8,600 and concurrently, exchanged

the common stock for Series A Supervoting Convertible Preferred Stock, and accrued interest of $168 relating to the outstanding convertible

note which was convertible into common stock, was converted into Series A Supervoting Convertible Preferred Stock.

The Company issued

12,000 shares of Series A Supervoting Convertible Preferred Stock in exchange of $8,768 of services rendered and accrued interest for

the year ended December 31, 2020.

On December 31, 2020, the officers and a director

converted $685,350 of their vested shares payable compensation costs into 2,284,500 shares of the Company’s common stock and $415,350

of their unrecognized compensation costs into 13,845 shares of the Company’s Series A Convertible Preferred Stock.

total unrecognized compensation costs related to the non-vested share-based compensation arrangements awarded to employees were $730,836

and $1,102,645 as of December 31, 2020 and 2019, respectively.

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

0.5 years and 1.4 years as of December 31, 2020 and December 31, 2019, respectively.

The total fair value of shares compensation recognized

during the year ended December 31, 2020 and 2019, was $728,892 and $685,416, respectively.

during the years ended December 31, 2022 and 2021, was $0 and $351,457, respectively.

On October 1, 2022, the Company cancelled 51 shares

of Series A Preferred stock valued at $ 51,000 , and issued Series B Convertible Preferred Stock, valued at $ 51,000 for equity financing

to GHS Investments (See Series B Convertible Preferred Stock Equity Financing dated December 20, 2021).

The Company did not issue any Series A Supervoting

Convertible Preferred Stock during the year ended December 31, 2021.

The Company had 25,845 shares of Series A Supervoting Convertible

Preferred Stock issued and outstanding at December 31, 2021 and December 31, 2020, respectively.

Convertible Preferred Stock during the years ended December 31, 2022 and 2021, respectively.

The Company reported 25,845 shares of Series

A Supervoting Convertible Preferred Stock issued and outstanding at December 31, 2022 and December 31, 2021, respectively.

Series B Convertible Preferred Stock Equity

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Preferred Stock to GHS as a commitment fee.

The Company’s ability to conduct additional

closings under the SPA is subject to certain conditions, including the following:

The Company’s continued compliance with all covenants and agreements under the SPA and the COD, with no uncured defaults under the Company’s agreements with GHS;

The continued quotation of the Company’s common stock on the over-the-counter market or another trading market or exchange;

The average daily dollar trading volume for the Company’s common stock for the 30 trading days preceding each additional closing must be at least $10,000 per day;

The closing market price for the Company’s common stock must be at least $0.01 for each of the 30 trading days preceding each additional closing.

No additional closings may take place after the

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Changes in the derivative liability fair value are reported in operating results each reporting

On November 19, 2020 (the date of receipt of cash

proceeds of $45,000 issuance), the Company valued the conversion feature 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 $ 84,000 as Series B Convertible Preferred Stock

mezzanine liability and $ 84,000 as amortization.

At December 31, 2020, the Company recalculated the value of the derivative liability

associated with the convertible note and recorded a loss of $ 39,266 in connection with the change in fair market value of the derivative

In addition, the Company recorded $900 as sales commission to complete this financing as of December 31, 2020.

recalculated the value of derivative liability associated with the convertible note in connection with the change in the fair market value

of the derivative liability and recorded a gain of $ 48,683 for the year ended December 31, 2021.

In addition, the Company recorded $ 10,080

and $ 1,160 as preferred dividend payable to GHS for the years ended December 31, 2021 and 2020, respectively.

On November 19, 2020, December 31, 2020, March

31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021, the Company valued the conversion feature using the Black-Scholes option

pricing model with the following assumptions:

conversion exercise prices ranging from $0.004 to $0.0141, the closing stock price of the

Company's common stock on the date of valuation ranging from $0.0070 to $0.0184, an expected dividend yield of 0%, expected volatility

ranging from 200.53% to 440.99%, risk-free interest rates ranging from 0.07% to 0.38%, and an expected term of 1.50 to 0.38 years.

December 20, 2021

On December 20, 2021, pursuant to the terms of

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$ 1,000 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 conversion feature 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.

At December 31, 2020, the Company recalculated the value of the derivative liability associated with the convertible note recording a

loss of $ 67,008 in connection with the change in fair market value of the derivative liability.

In addition, the Company recorded $ 503

as preferred stock dividend payable to GHS as of December 31, 2020.

At December 31, 2021, the Company recalculated the value of derivative

liability and recorded a gain of $ 54,223 in connection with the change in fair market value of the derivative liability.

For the year ended December 31, 2021, the Company inadvertently reported this

sale of 51 shares as Series A Preferred stock (See Series A Supervoting Preferred Stock).

The accompanying financial statements reflect

the correct purchase of Series B Convertible Preferred Stock rather than Series A Convertible Preferred Stock.

The overall effect of this

correction was not significant to the December 31, 2021 financial statements

The Company recalculated the value of the derivative

liability associated with this convertible preferred stock recording a loss of $ 52,789 for the year ended December 31, 2022 in connection

with the change in fair market value of the derivative liability.

In addition, the Company recorded $ 9,200 in interest expense to record

the fair value of derivative liability.

The Company recorded $ 7,565 as preferred stock dividend expense for the year ended December 31,

2022, and $ 7,565 as preferred stock dividend payable as of December 31, 2022.

Derivative liability payable for this transaction totaled

$ 52,789 at December 31, 2022 and Series B Convertible Preferred Stock mezzanine liability was $ 61,200 at December 31, 2022

The Company valued the conversion feature using

the Black-Scholes option pricing model with the following assumptions:

conversion exercise prices ranging from $0.0019 to $0.005 the closing

stock price of the Company's common stock on the date of valuation ranging from $0.0022 to $0.0060, an expected dividend yield of 0%,

expected volatility ranging from 174.58% to 208.19%, risk-free interest rates ranging from 0.91% to 4.737%, and an expected term of 1.50

February 7, 2022

On February 7, 2022, pursuant to the terms of

the SPA, GHS purchased an additional 51 shares of Series B Convertible Preferred Stock for gross proceeds of $ 51,000 .

The Company paid

$ 1,000 in selling commissions to complete this financing.

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 ,

as day one loss on the derivative, $ 10,200

as interest expense, and $ 10,200

as Series B Convertible Preferred Stock mezzanine liability, and $ 51,000

as amortization.

The Company recalculated the value of the derivative liability associated with the convertible note and recorded a

gain of $ 12,234

for the year ended December 31, 2022 in connection with the change in fair market value of the derivative liability.

the Company recorded $ 6,579

$ 12,240 as preferred stock dividend expense for the year ended December 31, 2021 and $ 12,743 as preferred stock dividend payable as of

as preferred stock dividend expense for the year ended December 31, 2022, and preferred stock dividend payable to GHS on this

derivative totaled $ 6,579

as of December 31, 2022.

Derivative liability payable for this transaction totaled $ 52,789

at December 31, 2022 and Series B Convertible Preferred Stock mezzanine liability was $ 61,200

at December 31, 2022.

The Company valued the conversion feature using

the Black-Scholes option pricing model with the following assumptions:

conversion exercise prices ranging from $0.0019 to $0.0096, the

closing stock price of the Company's common stock on the date of valuation ranging from $0.0022 to $0.0172, an expected dividend yield

of 0%, expected volatility ranging from 160.35% to 177.44%, risk-free interest rates ranging from 1.09% to 4.73%, and an expected term

of 1.35 to 1.5 years.

March 24, 2022

On March 24, 2022, pursuant to the terms of the

SPA, GHS purchased an additional 136 shares of Series B Convertible Preferred Stock for gross proceeds of $ 136,000 .

The Company paid $ 2,720

in selling commissions to complete this financing.

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 ,

as day one loss on the derivative, $ 27,200

as interest expense, and $ 27,200

as Series B Convertible Preferred Stock mezzanine liability, and $ 136,000

as amortization.

The Company recalculated the value of the derivative liability associated with the convertible note and recorded a

gain of $ 187,650

for the year ended December 31, 2022, in connection with the change in fair market value of the derivative liability.

the Company recorded preferred stock dividend expense of $ 15,131

for the year ended December 31, 2022.

Preferred stock dividend payable to GHS for this derivative totaled $ 15,131 at

December 31, 2022.

On December 16, 2020, December 31, 2020, March

31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021, the Company valued the conversion feature using the Black-Scholes option

pricing model with the following assumptions:

conversion exercise prices ranging from $ 0.004 to $ 0.0141 , the closing stock price of the

Company's common stock on the date of valuation ranging from $ 0.0063 to $ 0.0184 , an expected dividend yield of 0 %, expected volatility

ranging from 431.65 % to 200.59 %, risk-free interest rates ranging from 0.39 % to 0.07 %, and an expected term of 1.50 to 0.46 years.

As a result of receipt of cash proceeds relating

to Series B Convertible Preferred Stock, the Company recorded derivative liability of $ 212,816 and $ 315,782 and Series B Convertible Preferred

Stock liability of $ 186,000 and $ 186,000 at December 31, 2021 and 2020, respectively.

Derivative liability payable for this transaction totaled $ 140,772

at December 31, 2022 and Series B Convertible Preferred Stock mezzanine liability was $ 163,200

at December 31, 2022.

The Company valued the conversion feature using

the Black-Scholes option pricing model with the following assumptions:

conversion exercise prices ranging from $0.0019 to $0.0096, the

closing stock price of the Company's common stock on the date of valuation ranging from $0.0022 to $0.0183, an expected dividend yield

of 0%, expected volatility ranging from 160.35% to 177.44%, risk-free interest rates ranging from 1.55% to 4.73%, and an expected term

of 1.48 to 1.5 years.

November 17, 2022

On November 17, 2022, pursuant to the terms of

the SPA, GHS purchased an additional 61 shares of Series B Convertible Preferred Stock for gross proceeds of $ 61,000 .

The Company paid

$ 1,220 in selling commissions to complete this financing.

On November 17, 2022 (the date of receipt of

cash proceeds of $61,000 issuance), the Company valued the fair value of the derivative and recorded an initial derivative liability

of $ 54,072 , $ 6,928 as day one gain on the derivative, $ 12,200 as interest expense, and $ 12,200 as Series B Convertible

Preferred Stock mezzanine liability, and $ 61,000 as amortization.

The Company recalculated the value of the derivative liability

associated with the convertible note and recorded a loss of $ 9,069 for the year ended December 31, 2022, in connection with the

change in fair market value of the derivative liability.

In addition, the Company recorded preferred stock dividend expense of

$ 1,059 for the year ended December 31, 2022.

Preferred stock dividend payable to GHS for this derivative totaled $ 1,059 at

December 31, 2022.

Derivative liability payable for this transaction totaled $ 63,140 at December 31, 2022 and Series B Convertible

Preferred Stock mezzanine liability was $ 73,200 at December 31, 2022.

The Company valued the conversion feature using

the Black-Scholes option pricing model with the following assumptions:

conversion exercise prices ranging from $0.0019 to $0.0020, the

closing stock price of the Company's common stock on the date of valuation ranging from $0.0020 to $0.0022, an expected dividend yield

of 0%, expected volatility ranging from 174.58% to 179.98%, risk-free interest rates ranging from 4.68% to 4.73%, and an expected term

of 1.5 years.

As a result of issuance of derivative instruments,

the Company recorded a derivative liability of $ 469,873 and $ 202,616 as of December 31, 2022 and 2021, and Series B Convertible Preferred

Stock liability of $ 544,800 and $ 247,200 as of December 31, 2022 and 2021, respectively.

A summary of the status of the Company’s

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Summary of warrant activity

Shares Under Warrants

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life

Exercise Price

Contractual Life

Outstanding at December 31, 2020

Expired/Forfeited

( 41,666,667 )

Outstanding at December 31, 2021

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of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled.

On December 22, 2017, the 2017 Tax Cuts and Jobs

Act (the “Tax Reform Act”) was enacted into law and the new legislation contains several key tax provisions that impact the

Company, including a reduction of the corporate income tax rate to 21% effective for tax years beginning after December 31, 2017 and the

Transition Tax, among others.

The staff of the US Securities and Exchange Commission (SEC) has recognized the complexity of reflecting

the impacts of the Tax Reform Act, and issued guidance in Staff Accounting Bulletin 118 (“SAB 118”) in December 2017, which

clarifies accounting for income taxes under ASC 740 if information is not yet available or complete and provides for up to a one-year

period in which to complete the required analyses and accounting (the measurement period).

Adjustments to incomplete and unknown amounts

will be recorded and disclosed prospectively during the measurement period.

The Company has completed the required analysis and

accounting for substantially all the effects.

Except for the reduction of the income tax rate from 34% to 21%, there were no

material impact on the Company’s financial statements.

At December 31, 2022 and 2021, the Company had

accumulated net operating losses of approximately $ 8,340,000 and $ 7,481,000 , respectively, for U.S.

federal and Massachusetts income tax

purposes available to offset future taxable incomes.

The net operating losses generated in tax years prior to December 31, 2017, can be

carry forward for twenty years, whereas the net operating losses generated after December 31, 2017 can be carry forward indefinitely.

Management determined that it was unlikely that the Company’s deferred tax assets would be realized and have provided for a full

valuation allowance associated with the net deferred tax assets.

At December 31, 2021

and 2020, the Company’s deferred income tax assets and valuation allowance were $ 1,465,996 and $ 1,287,319 , respectively.

accumulated net operating losses of approximately $ 9,307,000

and $ 8,242,000 , respectively, for U.S.

and Massachusetts income tax purposes available to offset future taxable incomes.

The net operating losses generated in tax years prior

to December 31, 2017, can carry forward for twenty years, whereas the net operating losses generated after December 31, 2017 can carry

forward indefinitely.

Management determined that it was unlikely that the Company’s deferred tax assets would be realized and have

provided for a full valuation allowance associated with the net deferred tax assets.

In the ordinary course of business, the Company’s

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accounting for events or transactions in the current period or require additional disclosure.

On February 7, 2022, the Company sold 51 shares

of Series B preferred stock to GHS Investments, LLC for a cash consideration of $51,000.

On January 16, 2023, the Company issued 10,650,921

shares of common stock to GHS Investments, LLC for a cash consideration of $16,557.

The Company paid a sales commission of $331.

14, 2022, the Company entered into amendments to each of the Notes A and D effective March 1, 2022 which extend the maturity dates to

March 1, 2023, reduce the conversion price to $0.008 per share, add an additional Event of Default (as defined in the Notes) that the

closing price of the shares of Common Stock on the Trading Market (as defined in the Notes) is less than $0.008 per share for ten (10)

consecutive Trading Days (as defined in the Notes), and adding automatic one-year extensions as long at either Note is not in default.

18, 2022, the Board of Directors of the Company approved the 2022 Stock Incentive Plan (the “ Plan ”).

Awards may be

made under the Plan for up to 20,000,000 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 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.

24, 2022, the Company issued 136 shares of Series B Preferred stock to GHS Investments, LLC at the purchase price of $1,000 per share

for cash proceeds of $136,000.

On April 4, 2022 (the

“Issuance Date”), the Company was issued a 10% Unsecured Convertible Promissory Note (the “Note”) in the principal

amount of $200,000 by Aretas Sensor Networks Inc., a company incorporated under the laws of the Province of British Columbia (“ Aretas ”).

The purchase price of the Note was $192,500 with a discount of $7,500.

The Note matures on April 4, 2024 at which time the Company has

the option to either receive the principal amount or shares of Aretas representing 3.23% of the fully-diluted share capital of Aretas.

Within 30 days of the Issuance Date of the Note, an interest payment of $20,000 is due and, within six months of the Issuance Date, a

final interest payment of $20,000 is due.

The Note may be prepaid at any time by Aretas upon 10 days’ written notice to the Company.

Upon an Event of Default, as defined in the Note, interest will accrue at 20% and, if conversion shares are not issued to the Company

by Aretas, Aretas will pay to the Company $1,000 per day until the shares are issued.

On April 6, 2022, the Company and noteholder of

Note B agreed to extend the maturity date of the promissory note to March 1, 2024.

On April 8, 2022, the Company sold 7,828,223 shares

of common stock to GHS Investments LLC for $98,635.60.

The Company paid selling commissions to the broker of $1,972.71.

On February 6, 2023, the Company issued 16,854,990

shares of common stock to GHS Investments, LLC for a cash consideration of $27,581.

The Company paid a sales commission of $552.

On February 10, 2023, the Company issued 50,000

shares of common stock under 2019 Plan to an employee for past services.

The shares were valued at the fair value of common stock on the

date of issuance.

On February 21, 2023, the Company issued 100,000

shares of common stock under 2019 Plan to an advisor of the Company.

The shares were valued at their fair value on the date of issuance.

On February 22, 2023, the Company issued 4,097,453

shares of common stock to GHS Investments, LLC for a cash consideration of $10,057.

The Company paid a sales commission of $201.

On March 13, 2023, the Company issued 100,000

shares of common stock under 2019 Plan to an advisor of the Company.

The shares were valued at their fair value on the date of issuance.

On March 23, 2023, the noteholder of Convertible

Promissory Note F elected to convert $27,814 of the principal amount of the note and accrued and unpaid interest of $7,186 into 17,837,838

shares of common stock at the conversion price of $0.00185 per share.

1, 2023, pursuant to their respective employment agreements, 1,500,000 shares of common stock previously awarded to each of the Company’s

CEO and COO vested.

date of this filing, the Company is in default with the terms of the Notes A and D, which matured for payment on March 1, 2023.

is negotiating with the noteholders to extend the maturity date to cure the default.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures