IIOT-OXYS, Inc. 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), is recorded, processed, summarized and reported within the time periods specified 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 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. Mr. 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, 2023. 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 31, 2023. In light of the material weakness in internal control over financial reporting, we completed substantive procedures, including validating the completeness and accuracy of the underlying data used for accounting prior to filing this Annual Report. These additional procedures have allowed us to conclude that, notwithstanding the material weakness in our internal control over financial reporting, the consolidated financial statements included in this report fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 based upon Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“ COSO ”). During its evaluation, management noted certain matters involving internal control and its operation that we consider to be significant deficiencies or material weaknesses under standards of the Public Company Accounting Oversight Board (“ PCAOB ”). A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. We noted deficiencies involving lack of segregation of duties, lack of governance/oversight, and lack of internal control documentation that we believe to be material weaknesses. 17 Because of this material weaknesses, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2023, based on criteria described in Internal Control – Integrated Framework (2013) issued by COSO. Remediation of the Material Weakness We are evaluating the material weaknesses and developing a plan of remediation to strengthen our overall internal control over financial reporting. The remediation plan will include the creation and adoption of a formal policy manual specifically dealing with financial controls. Due to a material weakness as disclosed in the 2022 Annual Report on Form 10-K, we committed to the same remediation plan, as disclosed above; however, due to lack of resources, we were unable to execute the contemplated remediation plan sans appointing an interim Chief Financial Officer. If we are unable to increase our workforce, we may never be able to implement the remediation plan proposed above. We are committed to maintaining a strong internal control environment and we believe that these remediation efforts will represent significant improvements in our controls. We have started to implement these steps, as disclosed above; however, some of these steps will take time to be fully integrated and confirmed to be effective and sustainable. Additional controls may also be required over time. Until the remediation steps set forth above are fully implemented and tested, the material weakness described above will continue to exist. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during our most recent fiscal quarter ended December 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information During the quarter ended December 31, 2023, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable to the Company. 18 PART III Item 10. Directors, Executive Officers and Corporate Governance Current Management The following table sets forth information concerning our directors and executive officers: Name Position Age Executive Officers : Clifford L. Emmons Chief Executive Officer, President, and Interim Chief Technical Officer 62 Karen McNemar Chief Operating Officer and Interim Chief Financial Officer 55 Directors : Clifford L. Emmons Director 62 Vidhyadhar Mitta Director 52 Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified. A majority of the authorized number of directors constitutes a quorum of the Board of Directors for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all members of the Board of Directors individually or collectively consent in writing to the action. Business Experience of Executive Officers and Directors The principal occupation and business experience during the past five years for our executive officers and directors is as follows: Clifford L. Emmons: Mr. Emmons has served as our Chief Executive Officer, President, and director since June 4, 2018 and as our Interim Chief Technology Officer since June 2, 2022. 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. Mr. Emmons is also the founder of AHI, LLC, a consultancy firm. Mr. 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: Ms. McNemar has served 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. Ms. 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. Ms. 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. Ms. McNemar received her Bachelor of Science in Industrial Engineering and Operations Research. 19 Vidhyadhar Mitta: Mr. Mitta has served as a director of the Company since the closing of the reverse acquisition on July 28, 2017. Mr. Mitta has also served as a director of OXYS since its inception on August 4, 2016. Since 2000, he has been the founder and President of Synergic Solutions Inc., a software development company that designs custom software for a variety of industries including radio-medicine and associate allied health fields. In his position as President, Mr. Mitta has responsibility for all aspects of Synergic Solutions including technical program guidance, employee supervision, business development, and profit and loss responsibility. Mr. Mitta received a BS in Information Science & Technology from BMS College of Engineering in 1995. Legal Proceedings During the past ten years there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any of our directors or executive officers, and none of these persons has been involved in any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity, any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws or regulations, or any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization. Family Relationships There are no family relationships between any of our directors and executive officers. Director Independence We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.” We currently have not established any committees of the Board of Directors. Our Board of Directors may designate from among its members an executive committee and one or more other committees in the future. We do not have a nominating committee or a nominating committee charter. Further, we do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, other than as described above, no security holders have made any such recommendations. The entire Board of Directors performs all functions that would otherwise be performed by committees. Given the present size of our board it is not practical for us to have committees. If we are able to grow our business and increase our operations, we intend to expand the size of our board and allocate responsibilities accordingly. Delinquent Section 16(a) Reports Under U.S. 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 people who did not file these reports when due. Based solely on our review of copies of the reports filed with the SEC, we believe that all reporting requirements for fiscal year 2023 were complied with by each person who at any time during the 2023 fiscal year was a director or an executive officer or held more than 10% of our common stock. 20 Code of Ethics On March 9, 2018, the Board of Directors adopted a Code of Ethics (the “ Code ”). The purpose of the Code of Ethics is to deter wrongdoing and to promote: · honest and ethical conduct; · full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by the Company; · avoidance and ethical handling of actual or apparent conflicts of interest, including disclosure to an appropriate person of any material transaction or relationship that reasonably could be expected to give rise to such a conflict; · confidentiality of corporate information; · protection and proper use of corporate assets and opportunities; · compliance with applicable governmental laws, rules, and regulations; · prompt internal reporting of any violations of this Code to an appropriate person; and · accountability for adherence to the Code. The Code of Ethics applies to all directors, officers, and employees of the Company and its subsidiaries, including, but not limited to, the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Ethics is available at www.oxyscorp.com and is included as an exhibit to this Annual Report. The Company will provide any person, without charge and upon request through our website, a copy of the Code of Ethics. Item 11. Executive Compensation The following table sets forth information concerning the annual compensation awarded to, earned by, or paid to the following named executive officers for all services rendered in all capacities to our company and its subsidiaries for the years ended December 31, 2023 and 2022. Summary Compensation Table Name and principal position Year Salary ($) Stock Awards ($) Total ($) Clifford Emmons (1) 2023 100,000 (2) 2,221 (3) 102,221 2022 100,000 (4) – 100,000 Karen McNemar (5) 2023 100,000 (6) 2,221 (7) 102,221 2022 100,000 (8) – 100,000 ________________________ (1) Mr. Emmons was appointed as our CEO, President, and interim CFO on June 4, 2018. (2) As of December 31, 2023, Mr. Emmons was owed $138,619 in accrued and unpaid consulting fees and $10,630 in reimbursable expenses. (3) As of December 31, 2023, Mr. Emmons earned 1,500,000 shares of common stock valued at $2,221. (4) As of December 31, 2022, Mr. Emmons was owed $139,575 in accrued and unpaid consulting fees and $2,849 in reimbursable expenses. (5) Ms. McNemar was appointed as our COO effective as of September 20, 2018. (6) As of December 31, 2023, Ms. McNemar was owed $121,092 in accrued and unpaid consulting fees and $1,600 in reimbursable expenses. (7) As of December 31, 2023, Mc. McNemar earned 1,500,000 shares of common stock valued at $2,221. (8) As of December 31, 2022, Ms. McNemar was owed $134,849 in accrued and unpaid consulting fees. 21 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 Contract ”). The term of the Emmons Contract is from the effective date until the Emmons Contract is terminated pursuant to its terms. The services to be provided by Mr. Emmons pursuant to the Emmons Contract are those customary for the positions in which he is serving. 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. 1,500,000 shares on the first-year anniversary of the effective date; 2. 2,500,000 shares on the second-year anniversary of the effective date; and 3. 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 exchange. 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. The services 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 $200,000, commencing the following month. As of the effective date, the Company will award to Ms. McNemar an aggregate of 7,000,000 shares of the Company’s Common Stock which will vest as follows (the “ McNemar Contract Shares ”): 1. 1,500,000 shares on the first-year anniversary of the effective date; 2. 2,500,000 shares on the second-year anniversary of the effective date; and 3. 3,000,000 shares on the third-year anniversary of the effective date. The McNemar Contract Shares are awarded under the 2022 Plan. Vesting of the McNemar Contract Shares is subject to acceleration of vesting upon the occurrence of certain events such as a Change of Control (as defined in the McNemar Contract) or the listing of the Company’s Common Stock on a senior exchange. 22 Equity Awards The following table provides information on stock and option awards held by the named executive officers as of December 31, 2023: Stock Awards Market Value of Number of Shares Shares of Units of or Units of Stock that Stock that Have Not Grant Have Not Vested Vested Name Date (#) ($) Clifford L. Emmons 6/2/22 5,500,000 (1) 3,575 Karen McNemar 6/2/22 5,500,000 (1) 3,575 (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 Besides Mr. Emmons’ compensation (whose compensation is disclosed above), no compensation was awarded to, earned by, or paid to any remaining directors for services rendered in all capacities to our Company and its subsidiaries for the year ended December 31, 2023. Item 12. Security Ownership of Certain Beneficial Owners and Management The following table and footnotes thereto set 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 May 10, 2024. In calculating any percentage in the following table of common stock beneficially owned by one or more persons named therein, the following table assumes 560,015,293 shares of common stock outstanding. Unless otherwise further indicated in the following table, the footnotes thereto and/or elsewhere in this report, the persons and entities named in the following table have sole voting and sole investment power with respect to the shares set forth opposite the shareholder’s name, subject to community property laws, where applicable. Unless otherwise indicated in the following table and/or the footnotes thereto, the address of our named executive officers and directors in the following tables is: 705 Cambridge Street, Cambridge, MA 02141. Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership (1) Percent of Class (1) Named Executive Officers and Directors Clifford Emmons 326,874,827 (2) 37.12% Karen McNemar 300,599,058 (3) 35.17% Vidhyadhar Mitta 229,130,295 (4) 29.10% Executive Officers, Named Executive Officers, and Directors as a Group (3 Persons) 856,604,180 61.06% _____________________ (1) Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on the May 10, 2024. 23 (2) Includes 319,814,327 shares of Common Stock issuable upon the conversion of $218,753 in accrued and unpaid consulting fees. Also includes 780,000 shares issuable upon the conversion of shares of Series A Preferred Stock owned by Mr. Emmons. (3) Includes 294,190,058 shares of Common Stock issuable upon the conversion of $201,226 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. McNemar. (4) Includes 1,562,500 shares issuable upon the exercise of warrants. Also includes 224,630,952 shares issuable upon the conversion of a note issued to Mr. Mitta. Lastly, includes 1,200,000 shares issuable upon the conversion of shares of Series A Preferred Stock owned by Mr. Mitta. The following table sets forth information known to us regarding the beneficial ownership of our Series A Supervoting Preferred Stock as of May 10, 2024. Title of Class Name and address of beneficial owner Amount and nature of beneficial ownership Percent of Class Series A Supervoting Preferred Stock Vidhyadhar Mitta 12,000 46.43% Clifford L. Emmons 7,800 30.18% Karen McNemar 6,045 23.39% The following table sets forth information known to us regarding the beneficial ownership of our Series B Convertible Preferred Stock as of May 10, 2024. Title of Class Name and address of beneficial owner (1) Amount and nature of beneficial ownership Percent of Class Series B Convertible Preferred Stock GHS Investments, LLC 536 100% The following table sets forth information known to us regarding the beneficial ownership of our Series C Convertible Preferred Stock as of May 10, 2024. Title of Class Name and address of beneficial owner (1) Amount and nature of beneficial ownership Percent of Class Series C Convertible Preferred Stock Cambridge MedSpace LLC 57 100% Item 13. Certain Relationships and Related Transactions, and Director Independence Certain Relationships and Related Transactions For transactions with our executive officers, please see the disclosure under “ Item 11. Executive Compensation. ” above. Cambridge MedSpace Note On January 22, 2019, we entered into a Securities Purchase Agreement with Cambridge MedSpace, LLC, a Massachusetts limited liability company for the purchase of a 5% Secured Convertible Note in the principal amount of $55,000. The note was convertible, in whole or in part, into shares of our Common Stock, at any time at a rate of $0.65 per share with fractions rounded up to the nearest whole share, unless paid in cash at our election. The note bears interest at a rate of 5% per annum and interest payments will be made on an annual basis. The original maturity date of the note was January 22, 2020. The note is governed by the SPA and is secured by all our assets (but is not a senior secured note) pursuant to the Security Agreement. In addition to the issuance of the note, we issued Cambridge MedSpace warrants to purchase one share of our Common Stock for 50% of the number of shares of Common Stock issuable upon conversion of the note. Each warrant was originally immediately exercisable at $0.75 per share and expires on January 22, 2024. The lender is owned by shareholders of the Company, or their affiliates, including Clifford L. Emmons, our Chief Executive Officer, Interim Chief Financial Officer, and director. 24 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. On April 6, 2022, the Company entered into Amendment No. 2 to the note with Cambridge MedSpace pursuant to which the maturity date as extended to March 1, 2024. Debt Exchange Agreement On February 5, 2024 we entered into the Debt Exchange Agreement with Cambridge MedSpace LLC, an entity of which the Company’s CEO, Clifford L. Emmons shares ownership. Under the agreement, we agreed to issue to the Lender 57 shares of Series C Preferred Stock in exchange for the forgiveness of $68,825 of principal ($55,000) and accrued and unpaid interest. Mitta Note On August 2, 2019, we entered into a Securities Purchase Agreement with Vidhyadhar Mitta, a director of the Company, for the purchase of a 12% Secured Convertible Note in the principal amount of up to $125,000. The note was originally convertible, in whole or in part, into shares of our 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 our election. The note bears interest at a rate of 12% per annum and interest payments were originally to be made on a quarterly basis. The note originally matured August 2, 2021. On August 2, 2019, the first closing of the note occurred pursuant to which we received $75,000. On September 6, 2019, the second closing occurred pursuant to which the Company received $25,000. On October 16, 2019, the third closing occurred pursuant to which the Company received $25,000. The note is governed by the SPA and is secured by all the assets of the Company (but is not a senior secured note) pursuant to the Security Agreement. In addition to the issuance of the note, we issued to the Mr. Mitta warrants to purchase one share our Common Stock for 50% of the number of shares of Common Stock issuable upon conversion of the funds received. Each warrant was originally immediately exercisable at $0.12 per share and expires on August 2, 2024. On August 2, 2021, 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, 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, 2024. Due to adjustments to the conversion price of the note, the conversion price is currently $0.0008. Director Independence We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.” Although we have not adopted the independence standards any national securities exchange to determine the independence of directors, the NYSE MKT LLC provides that a person will be considered an independent director if he or she is not an officer of the company and is, in the view of our board of directors, free of any relationship that would interfere with the exercise of independent judgment. Under this standard, our board of directors has determined that Mr. Mitta would meet this standard, and therefore, would be considered to be independent. 25 Item 14. Principal Accountant Fees and Services Fees Paid Audit Fees The aggregate fees billed for professional services rendered by our principal accountants for the audit of our annual financial statements, review of financial statements included in the quarterly reports and other fees that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the year ended December 31, 2023 were $50,543 and $50,250 for the period ended December 31, 2022. Audit-Related Fees There were no fees billed for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of the financial statements, other than those reported above, for the years ended December 31, 2023 and 2022. Tax Fees The aggregate fees billed for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning in the years ended December 31, 2023 were $0 and $3,500 in 2022. All Other Fees There were no other fees billed for products or services provided by the principal accountants, other than those previously reported above, for the years ended December 31, 2023 and 2022. Audit Committee We do not have an Audit Committee; therefore, the Board of Directors has considered whether the non-audit services provided by our auditors to us are compatible with maintaining the independence of our auditors and concluded that the independence of our auditors is not compromised by the provision of such services. Our Board of Directors pre-approves all auditing services and permitted non-audit services, including the fees and terms of those services, to be performed for us by our independent auditor prior to engagement. 26 PART IV Item 15. Exhibits, Financial Statement Schedules Financial Statements The following financial statements are filed with this Annual Report: Report of Independent Registered Public Accounting Firm for the year ended December 31, 2022 Report of Independent Registered Public Accounting Firm for the year ended December 31, 2023 Audited Consolidated Balance Sheets at December 31, 2023 and 2022 Audited Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 Audited Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2023 and 2022 Audited Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 Notes to Audited Consolidated Financial Statements Exhibits The following exhibits are included with this Annual Report: Incorporated by Reference Filed Exhibit Filing Here- Number Exhibit Description Form File No. Exhibit Date with 2.1 & 10.1 Securities Exchange Agreement dated March 16, 2017, by and among Gotham Capital Holdings, Inc., OXYS Corp. and the Shareholders of OXYS Corp. 8-K 000-50773 2.1 8/3/2017 2.2 & 10.2 Agreement and Plan of Merger dated July 10, 2017 8-K 000-50773 2.1 11/1/2017 3.1 Nevada Articles of Incorporation for IIOT-OXYS, Inc. 8-K 000-50773 3.1 11/1/2017 3.2 Bylaws for IIOT-OXYS, Inc. 8-K 000-50773 3.2 11/1/2017 3.3 Nevada Articles of Merger dated July 14, 2017 8-K 000-50773 3.3 11/1/2017 3.4 New Jersey Certificate of Merger dated October 26, 2017 8-K 000-50773 3.4 11/1/2017 3.5 Articles of Exchange 8-K 000-50773 2.1 1/12/2018 3.6 Certificate of Amendment to Articles of Incorporation filed with the Nevada Secretary of State effective January 18, 2021 8-K 000-50773 3.1 1/19/2021 3.7 Certificate of Designation for Series B Convertible Preferred Stock 8-K 000-50773 3.1 11/24/2020 27 3.8 Certificate of Designation filed with the Nevada Secretary of State on July 2, 2020 8-K 000-50773 3.1 11/13/2020 3.9 Certificate of Designation filed with the Nevada Secretary of State on November 9, 2020 8-K 000-50773 3.2 11/13/2020 3.10 Certificate of Designation filed with the Nevada Secretary of State on January 18, 2024 8-K 000-50773 3.1 1/24/2024 3.11 Amendment No. 1 to the Certificate of Designation filed with the Nevada Secretary of State on February 12, 2024 8-K 000-50773 3.1 2/16/2024 4.1 & 10.3* 2017 Stock Incentive Plan 8-K 000-50773 4.1 12/19/2017 4.2 & 10.4* 2019 Stock Incentive Plan 8-K 000-50773 4.1 3/12/2019 10.5 Form of 12% Senior Secured Convertible Note 8-K 000-50773 99.1 2/13/2018 10.6 Amendment No. 1 to the 12% Senior Secured Convertible Promissory Note Issued to Sergey Gogin on January 22, 2018 8-K 000-50773 99.3 3/12/2019 10.7 Amendment dated January 28, 2021 to Senior Secured Convertible Promissory Note with Sergey Gogin 10-Q 000-50773 10.1 5/17/2021 10.8 Amendment dated December 14, 2021 to Senior Secured Convertible Promissory Note with Sergey Gogin 10-K 000-50773 10.10 4/14/2022 10.9 Amendment dated March 14, 2022 to Senior Secured Convertible Promissory Note with Sergey Gogin 10-Q 000-50773 10.1 5/16/2022 10.10 Amendment No. 5 to 12% Senior Secured Convertible Promissory Note dated effective March 1, 2023 with Sergey Gogin 10-Q 000-50773 10.1 11/13/23 10.11 Form of Securities Purchase Agreement 8-K 000-50773 99.2 2/13/2018 10.12 Form of Security and Pledge Agreement 8-K 000-50773 99.3 2/13/2018 10.13 Form of Warrant 8-K 000-50773 99.4 2/13/2018 10.14 Amendment No. 1 to the Warrant Agreement Issued to Sergey Gogin on January 22, 2018 8-K 000-50773 99.4 3/12/2019 10.15 Form of 12% Senior Secured Convertible Note 8-K 000-50773 99.5 3/12/2019 10.16 Amendment No. 1 to Senior Secured Convertible Promissory Note with Catalytic Capital LLC 10-Q 000-50773 10.2 11/16/2020 10.17 Amendment dated January 28, 2021 to Senior Secured Convertible Promissory Note with Catalytic Capital, LLC 10-Q 000-50773 10.2 5/17/2021 10.18 Amendment No. 1 to Senior Secured Convertible Promissory Note with YVSGRAMORAH LLC 10-Q 000-50773 10.3 11/16/2020 10.19 Amendment dated January 28, 2021 to Senior Secured Convertible Promissory Note with YVSGRAMORAH LLC 10-Q 000-50773 10.3 5/17/2021 10.20 Amendment dated December 14, 2021 to Senior Secured Convertible Promissory Note with YVSGRAMORAH LLC 10-K 000-50773 10.20 4/14/2022 10.21 Amendment dated March 14, 2022 to Senior Secured Convertible Promissory Note with YVSGRAMORAH LLC 10-Q 000-50773 10.2 5/16/2022 10.22 Amendment No. 5 to 12% Senior Secured Convertible Promissory Note dated effective March 1, 2023 with YVSGRAMORAH LLC 10-Q 000-50773 10.2 11/13/2023 10.23 Form of Securities Purchase Agreement 8-K 000-50773 99.6 3/12/2019 10.24 Form of Security and Pledge Agreement 8-K 000-50773 99.7 3/12/2019 10.25 Form of Warrant 8-K 000-50773 99.8 3/12/2019 10.26 Securities Purchase Agreement with Cambridge MedSpace, LLC dated January 22, 2019 8-K 000-50773 99.1 1/23/2019 28 10.27 5% Convertible Secured Note with Cambridge MedSpace, LLC dated January 22, 2019 8-K 000-50773 99.2 1/23/2019 10.28 Security Agreement with Cambridge MedSpace, LLC dated January 22, 2019 8-K 000-50773 99.3 1/23/2019 10.29 Warrant Agreement with Cambridge MedSpace, LLC dated January 22, 2019 8-K 000-50773 99.4 1/23/2019 10.30 Securities Purchase Agreement with Vidhyadhar Mitta dated August 2, 2019 8-K 000-50773 99.1 8/8/2019 10.31 12% Convertible Secured Note with Vidhyadhar Mitta dated August 2, 2019 8-K 000-50773 99.2 8/8/2019 10.32 Amendment No. 1 to the 12% Secured Convertible Promissory Note dated effective August 2, 2021 with Vidhyadhar Mitta 10-Q 000-50773 10.1 11/15/2021 10.33 Amendment No. 2 to the 12% Secured Convertible Promissory Note dated effective August 2, 2022 with Vidhyadhar Mitta 10-K 000-50773 10.35 4/13/2023 10.34 Amendment No. 2 to the 12% Secured Convertible Promissory Note dated effective August 2, 2022 with Vidhyadhar Mitta 10-Q 000-50773 10.1 5/22/2023 10.35 Security Agreement with Vidhyadhar Mitta dated August 2, 2019 8-K 000-50773 99.3 8/8/2019 10.36 Warrant Agreement with Vidhyadhar Mitta dated August 2, 2019 8-K 000-50773 99.4 8/8/2019 10.37 Warrant Agreement with Vidhyadhar Mitta dated September 6, 2019 10-K 000-50773 10.31 6/23/2020 10.38 Warrant Agreement with Vidhyadhar Mitta dated October 16, 2019 10-K 000-50773 10.32 6/23/2020 10.39 Equity Financing Agreement dated November 1, 2021 with GHS Investments, LLC S-1 333-261484 10.35 12/3/2021 10.40 Registration Rights Agreement dated November 1, 2021 with GHS Investments, LLC S-1 333-261484 10.36 12/3/2021 10.41 $75,000 Convertible Promissory Note dated July 29, 2020 issued to GHS Investments LLC 8-K 000-50773 99.4 8/3/2020 10.42 Extension No. 1 to Convertible Promissory Note dated April 29, 2021 ($75,000) with GHS Investments LLC 10-Q 000-50773 10.2 8/13/2021 10.43 Amendment No. 2 dated November 4, 2021 to $75,000 Convertible Promissory Note issued to GHS Investments LLC S-1 333-261484 10.42 12/3/2021 10.44 Amendment No. 3 dated April 29, 2022 to $75,000 Convertible Promissory Note issued to GHS Investments LLC S-1 333-266351 10.48 7/27/2022 10.45 Extension No. 4 to the Convertible Promissory Note issued July 29, 2020 with GHS Investments LLC 10-Q 000-50773 10.1 8/18/2023 10.46 Collaboration Agreement effective March 18, 2020 with Aingura IIoT, S.L. 10-Q 000-50773 10.1 8/19/2020 10.47 Finder’s Fee Agreement dated August 17, 2023 with J.H. Darbie & Co., Inc. 10-Q 000-50773 10.3 11/13/2023 10.48* Debt Forgiveness Agreement with Clifford L. Emmons effective as of December 31, 2019 10-Q 000-50773 10.3 9/14/2020 10.49* Debt Forgiveness Agreement with Karen McNemar effective as of December 31, 2019 10-Q 000-50773 10.4 9/14/2020 10.50 Securities Purchase Agreement dated November 16, 2020 with GHS Investments, LLC S-1 333-252887 10.52 2/9/2021 10.51 Securities Purchase Agreement dated August 24, 2023 with GHS Investments, LLC 10-Q 000-50773 10.4 11/13/23 29 10.52* Exchange Agreement Dated November 9, 2020 with Clifford L. Emmons S-1 333-252887 10.55 2/9/2021 10.53* Exchange Agreement Dated November 9, 2020 with Vidhyadhar Mitta S-1 333-252887 10.56 2/9/2021 10.54* Exchange Agreement Dated November 9, 2020 with Karen McNemar S-1 333-252887 10.57 2/9/2021 10.55 Common Stock Purchase Agreement dated February 24, 2021 with GHS Investments, LLC 10-Q 000-50773 10.4 5/17/2021 10.56* Employment Contract dated Effective April 1, 2022 with Clifford L. Emmons S-1 333-266351 10.63 7/27/2022 10.57* Employment Contract dated Effective April 1, 2022 with Karen McNemar S-1 333-266351 10.64 7/27/2022 10.58 Debt Exchange Agreement dated February 5, 2024 with Cambridge MedSpace LLC X 14.1 Code of Ethics 10-K 000-50773 14.1 4/17/2018 16.1 Letter from Haynie & Company Dated December 1, 2023 Regarding Change in Certifying Accountant 8-K 000-50773 16.1 12/1/23 21.1 List of Subsidiaries 10-K 000-50773 21.1 4/17/2018 31.1 Rule 13a-14(a) Certification by Principal Executive Officer X 31.2 Rule 13a-14(a) Certification by Principal Financial and Accounting Officer X 32.1 Section 1350 Certification of Principal Executive Officer X 32.2 Section 1350 Certification of Principal Financial and Accounting Officer X 101.INS Inline XBRL Instance Document. X 101.SCH Inline XBRL Taxonomy Extension Schema Document. X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X 104 Cover Page Interactive Data File (formatted in iXBRL, and included in exhibit 101) X _________________ *Management contract or compensatory plan or arrangement. Item 16 Form 10-K Summary None. SIGNATURE PAGE FOLLOWS 30 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. IIOT-OXYS, INC. Date: July 3, 2024 By: /s/ Clifford L. Emmons Clifford L. Emmons, Chief Executive Officer (Principal Executive Officer) Date: July 3, 2024 By: /s/ Karen McNemar Karen McNemar, Interim Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. NAME TITLE DATE /s/ Clifford L. Emmons Clifford L. Emmons Director and Chief Executive Officer (Principal Executive Officer) July 3 , 2024 /s/ Karen McNemar Karen McNemar Interim Chief Financial Officer (Principal Financial and Accounting Officer July 3 , 2024 /s/ Vidhyadhar Mitta Director July 3 , 2024 Vidhyadhar Mitta 31 INDEX TO FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm for the year ended December 31, 2023 F-2 Report of Independent Registered Public Accounting Firm for the year ended December 31, 2022 F-4 Audited Consolidated Balance Sheets at December 31, 2023 and 2022 F-6 Audited Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 F-7 Audited Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2023 and 2022 F-8 Audited Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 F-9 Notes to Audited Consolidated Financial Statements F-10 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of IIOT-OXYS, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of IIOT-OXYS, Inc. (“the Company”) as of December 31, 2023, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the year then ended, 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, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed 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, among others, 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. The 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 audit. 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 audit 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 audit, 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 audit 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 audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. F- 2 Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the 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 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 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 Equity Transactions As discussed in Note 9, the Company has outstanding Series B Convertible Preferred stock that is required to be analyzed pursuant to ASC 815, Derivatives and Hedging. Management uses an option pricing model to evaluate the fair value of its derivative liabilities, which requires management to make assumptions related to fair value measurements. Calculations and accounting for these features require management’s judgments related to initial and subsequent recognition of the debt and related features, use of a valuation model, and value of the inputs used in the selected valuation model. How We Addressed the Matter Our audit procedures related to the evaluation of the Company’s accounting for these instruments included the following, among others: o We obtained an understanding of management’s process and methodology. o We independently evaluated the inputs utilized by management in order to determine the relevance and reliability of data used. o We evaluated the underlying contracts and agreements and recalculated the fair value of derivative liabilities and related disclosures. Fruci & Associates II, PLLC – PCAOB ID # 5525 We have served as the Company’s auditor since 2024. Spokane, Washington July 3, 2024 F- 3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of IIOT-OXYS, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of IIOT-OXYS, Inc. (the Company) as of December 31, 2022, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the year 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 the results of its consolidated operations and its cash flows for the year ended December 31, 2022, 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 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 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 audit. 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 audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion. /s/ Haynie & Company Haynie & Company Salt Lake City, Utah April 13, 2023 PCAOB ID: 457 We began serving as the Company’s auditors in 2018. We became the predecessor auditor in 2023. F- 4 IIOT-OXYS, Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2023 December 31, 2022 ASSETS Current Assets Cash and cash equivalents $ 644 $ 33,336 Accounts receivable, net 5,460 28,941 Prepaid expenses and other current assets 2,306 7,773 Total Current Assets 8,410 70,050 Note receivable, net of discount of $ 0 and $ 4,716 at December 31, 2023 and 2022, respectively – 195,284 Intangible assets, net 199,085 248,585 Total Assets $ 207,495 $ 513,919 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Accounts payable $ 219,551 $ 133,408 Accrued liabilities 534,138 395,714 Deferred revenue 31,425 31,425 Unearned interest – 5,151 Notes payable - current 435,000 363,167 Shares payable to related parties 15,225 14,624 Salaries payable to related parties 380,579 263,516 Derivative liabilities 535,653 469,873 Total Current Liabilities 2,151,571 1,676,878 Notes payable 58,988 104,300 Due to stockholders 1,000 1,000 Total Liabilities 2,211,559 1,782,178 Commitments and Contingencies (Note 5) – – Series B Convertible Preferred Stock, 600 shares designated, $ 0.001 Par Value, $ 1,200 stated value; 516 shares and 454 shares issued and outstanding at December 31, 2023 and 2022, respectively. Liquidation preference $ 619,200 and $ 544,800 at December 31, 2023 and 2022, respectively 619,200 544,800 Stockholders' Equity (Deficit) Preferred Stock, $ 0.001 par value, 10,000,000 Shares authorized – – Series A Preferred Stock, 25,845 shares issued and outstanding at December 31, 2023 and 2022, respectively 26 26 Common Stock $ 0.001 Par Value, 1,000,000,000 shares authorized; 470,015,293 shares and 352,174,583 shares issued and outstanding at December 31, 2023 and 2022, respectively 470,016 352,175 Additional paid in capital 7,350,291 7,141,877 Accumulated deficit ( 10,443,597 ) ( 9,307,137 ) Total Stockholders' Equity (Deficit) ( 2,623,264 ) ( 1,813,059 ) Total Liabilities and Stockholders' Equity $ 207,495 $ 513,919 The accompanying notes are an integral part of these consolidated financial statements. F- 5 IIOT-OXYS, Inc. and Subsidiaries Consolidated Statements of Operations For The Year Ended December 31, 2023 2022 Revenues $ 114,666 $ 88,904 Cost of Sales 76,645 10,499 Gross Profit 38,021 78,405 Operating Expenses Amortization of intangible assets 49,500 49,500 Bad Debt 214,103 – General and administrative 467,817 683,571 Total Operating Expenses 731,420 733,071 Other Income (Expense) Gain (Loss) on change in FMV of derivative liability ( 4,100 ) 190,462 Gain (Loss) on derivative ( 185,973 ) ( 200,519 ) Interest income 25,969 17,634 Interest expense ( 210,426 ) ( 377,138 ) Total Other Income (Expense) ( 374,530 ) ( 369,561 ) Net Loss Before Income Taxes ( 1,067,929 ) ( 1,024,227 ) Provision for Income Tax – – Net Loss ( 1,067,929 ) ( 1,024,227 ) Convertible Preferred Stock Dividend ( 68,531 ) ( 52,654 ) Net Loss Attributable to Common Stockholders $ ( 1,136,460 ) $ ( 1,076,881 ) Net Profit (Loss) Per Share Attributable to Common Stockholders - Basic and Diluted $ ( 0.00 ) $ ( 0.00 ) Weighted Average Shares Outstanding Attributable to Common Stockholders - Basic and Diluted 406,685,267 273,238,664 The accompanying notes are an integral part of these consolidated financial statements. F- 6 IIOT-OXYS, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (Deficit) For the Years Ended December 31, 2023 and 2022 Preferred Stock Common Stock Series A Series B Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Total Stockholders' Equity (Deficit) Balance - December 31, 2021 25,845 – – – $ 26 220,254,395 $ 220,255 $ 7,008,098 $ ( 8,544,232 ) $ ( 1,315,853 ) Common Stock Issued for Financing Commitments – – – 120,570,188 120,570 436,495 – 557,065 Sales commissions paid on capital raise – – – – – ( 11,141 ) – ( 11,141 ) Common Stock Issued for Services – – – 100,000 100 800 – 900 Common stock issued for conversion of convertible note payables – – – 11,250,000 11,250 78,750 – 90,000 Beneficial Conversion Feature Associated with Discounts – – – – – ( 371,125 ) 313,976 ( 57,149 ) Net Loss – – – – – – – – ( 1,076,881 ) ( 1,076,881 ) Balance - December 31, 2022 25,845 – – – 26 352,174,583 352,175 7,141,877 ( 9,307,137 ) ( 1,813,059 ) Common stock issued for financing commitments – – – 31,603,364 31,604 22,592 – 54,196 Sales commissions paid on capital raise – – – – – ( 2,324 ) – ( 2,324 ) Common stock issued for services – – – 3,450,000 3,450 1,215 – 4,665 Common stock issued for settlement of accrued interest on note payable – – – 20,000,000 20,000 ( 2,000 ) – 18,000 Common stock issued for conversion of convertible note payables – – – 62,787,345 62,787 2,637 – 65,424 Loss on extinguishment of notes payable – – – – – 186,294 – 186,294 Net loss – – – – – – – – ( 1,136,460 ) ( 1,136,460 ) Balance - December 31, 2023 25,845 – – – $ 26 470,015,292 $ 470,016 $ 7,350,291 $ ( 10,443,597 ) $ ( 2,623,264 ) The accompanying notes are an integral part of these consolidated financial statements. F- 7 IIOT-OXYS, Inc. and Subsidiaries Consolidated Statements of Cash Flows For the Year Ended December 31, 2023 2022 Cash Flows From Operating Activities Net loss $ ( 1,136,460 ) $ ( 1,076,881 ) Adjustments to reconcile net loss to net cash (used) by operating activities Stock compensation expense for services 4,665 900 Bad debts 214,103 – Discount on note receivable – 4,716 Amortization of debt discount on notes payable and preferred stock 12,400 – Amortization of intangible assets 49,500 49,500 Loss on extinguishment of notes payable 186,294 – Changes in Operating Assets and Liabilities Decrease (increase) in accounts receivable 4,663 ( 17,661 ) Decrease in prepaid expenses and other current assets 5,467 – Increase (decrease) in accounts payable 86,145 ( 27,763 ) Increase in accrued liabilities 248,368 148,558 Increase in derivative liability 65,779 267,257 (Decrease) increase in unearned interest ( 5,151 ) 5,151 (Decrease) in deferred revenue – ( 15,000 ) Increase in shares payable to related parties 601 14,624 Increase (decrease) in salaries payable to related parties 117,063 ( 10,410 ) Net Cash Used by Operating Activities ( 146,564 ) ( 657,009 ) Cash Flows from Investing Activities Cash paid for note receivable – ( 200,000 ) Net Cash used in Investing Activities – ( 200,000 ) Cash Flows from Financing Activities Cash received from sale of common stock, net 51,872 545,924 Proceeds from sale of Series B Preferred Stock 62,000 297,600 Net Cash Provided by Financing Activities 113,872 843,524 Net (Decrease) in Cash and Cash Equivalents ( 32,692 ) ( 13,485 ) Cash and Cash Equivalents - Beginning of Period 33,336 46,821 Cash and Cash Equivalents - End of Period $ 644 $ 33,336 Supplement Disclosures of Cash Flow Information Interest paid $ – $ – Income taxes paid $ – $ – Supplemental Disclosures of Non-Cash Investing and Financing Activities Discount on notes payable $ – $ 32,852 Conversion of convertible notes payable and derivative liabilities $ 4,665 $ 90,000 Deferred financing cost on notes payable $ 75,700 $ – Discount on Series B Convertible Preferred Stock $ – $ 297,600 The accompanying notes are an integral part of these consolidated financial statements. F- 8 IIOT-OXYS, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2023 and 2022 NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND GOING CONCERN Unless otherwise indicated, any reference to “the Company”, “we”, “us”, or “its” refers to IIOT-OXYS, Inc., a Nevada corporation, and as applicable to its wholly-owned subsidiaries, OXYS Corporation, a Nevada corporation, and HereLab, Inc., a Delaware corporation. IIOT-OXYS, Inc., incorporated in Nevada on July 6, 2017, (the “ Company ”) was established for the purpose of designing, building, testing, and selling Edge Computing Systems for the Industrial Internet. The Company is currently devoting substantially all its efforts in identifying, developing and marketing engineered products, software and services for applications in the Industrial Internet which involves collecting and processing data collected from a wide variety of industrial systems and machines. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“ GAAP ”) and include the accounts of the Company. The financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. In the opinion of the Company’s management, the financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. Principles of Consolidation The consolidated financial statements for the years ended December 31, 2023 and 2022, respectively, include the accounts of Company, and its wholly-owned subsidiaries OXYS Corporation and HereLab, Inc. All significant intercompany balances and transactions have been eliminated. Reclassifications Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income. F- 9 Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of accounts payable, accrued liabilities and payable to related party. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Going Concern 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 $ 1,136,460 for the year ended December 31, 2023, used cash flows in operating activities of $ 146,564 and has recorded an accumulated deficit of $ 10,443,597 as of December 31, 2023. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that the Company will be able to achieve a satisfactory level of liquidity to meet the Company’s obligations for the next 12 months by generating cash through additional borrowings and/or sale of equity securities, as needed. However, there can be no assurance that the Company will be able to generate sufficient liquidity to maintain its operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following summary of significant accounting policies of the Company is presented to assist in the understanding of the Company’s financial statements. These accounting policies conform to GAAP in all material respects and have been consistently applied in preparing the accompanying financial statements. Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company reported a cash balance of $ 644 and $ 33,336 as of December 31, 2023 and 2022, respectively. Customer Concentration For the year ended December 31, 2023, 100 % of revenue was derived from sales to one customer. For the year ended December 31, 2022, 100 % of the revenues were derived from sales to two customers. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts. The Company determines the allowance for doubtful accounts by identifying potential troubled accounts and by using historical experience and future expectations applied to an aging of accounts and follows the guidelines and processes of measuring both current and expected future credit losses. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded as income when received. The Company has adopted and implemented Accounting Standards Codification (“ASC”) Topic 326 Financial Instruments – Credit Losses during 2023 which has no impact on the financial statements as of December 31, 2023. There was no allowance for doubtful accounts as of December 31, 2023 and December 31, 2022, respectively. F- 10 Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of its long-lived assets to determine whether indicators of impairment may exist that warrant adjustments to the carrying value or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. Definite-lived intangible assets are amortized on a straight-line basis over the estimated periods benefited and are reviewed when appropriate for possible impairment. Basic and Diluted Earnings (Loss) Per Common Share The Company computes earnings (loss) per share in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”), ASC 260, “ Earnings per Share” . ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Revenue Recognition The Company recognize revenues when the products are delivered to the customer or services are performed in accordance with the contractual terms of the contract with its customer. The Company recognizes revenue in accordance with ASC Topic No. 606, Revenue from Contracts with Customers (“ASC 606”) which was adopted on January 1, 2018. According to ASC 606, the Company recognizes revenue based on the following criteria: · Identification of a contract or contracts, with a customer. · Identification of performance obligations in the contract. · Determination of contract price. · Allocation of transaction price to the performance obligation. · Recognition of revenue when, or as, performance obligation is satisfied. Advance payments received from customers for products or services that are to be delivered or performed in the future are recorded as deferred revenues. The Company has elected to treat shipping and handling activities as cost of sales. Additionally, the Company has elected to record revenue net of sales and other similar taxes. F- 11 Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of risk consist primarily of cash and cash equivalents which are generally not collateralized. The Company’s policy is to place its cash and cash equivalents with high quality financial institutions, in order to limit the amount of credit exposure. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC), up to $250,000. At December 31, 2023 and December 31, 2022, the Company had no amounts in excess of the FDIC insurance limit. Fair Value of Financial Instruments and Fair Value Measurements ASC 820, “ Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company recorded derivative liabilities as Level 3 to measure the fair value of the change in derivative liabilities. The Company’s consolidated financial instruments 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. Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “ Income Taxes” . The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company follows the provisions of ASC 740-10, “ Accounting for Uncertain Income Tax Positions .” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. F- 12 Convertible Debt and Convertible Preferred Stock When the Company issues convertible debt or convertible preferred stock, it first evaluates the balance sheet classification of the convertible instrument in its entirety to determine whether the instrument should be classified as a liability under ASC 480, Distinguishing Liabilities from Equity , and second whether the conversion feature should be accounted for separately from the host instrument. A conversion feature of a convertible debt instrument or certain convertible preferred stock would be separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone instrument, meets the definition of an “embedded derivative” in ASC 815, Derivatives and Hedging . Generally, characteristics that require derivative treatment include, among others, when the conversion feature is not indexed to the Company’s equity, as defined in ASC 815-40, or when it must be settled either in cash or by issuing stock that is readily convertible to cash. When a conversion feature meets the definition of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried on the consolidated balance sheet at fair value, with any changes in its fair value recognized currently in the consolidated statements of operations. Effective January 1, 2022, we early adopted ASU 2020-06, “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” using the modified retrospective method of adoption. ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470- 20, Debt—Debt with Conversion and Other Options , for convertible instruments. Under ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the interest rate of convertible debt instruments typically will be closer to the coupon interest rate when applying the guidance in Topic 835, Interest . We now account for our Convertible Notes as single liabilities measured at amortized cost. As a result, the adoption of the guidance had a material impact on the consolidated financial statements and accompanying notes, resulting in adjustments of $371,125, $313,976 and $57,149 to the opening balance of additional paid-in capital, retained earnings, and long-term debt, respectively, as of January 1, 2022. We have updated our debt note (Note 5) with additional and modified disclosures as required by the standard upon adoption. Recent Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 720): Improvements to Income Tax Disclosures (“ASU 2023-09”) , which prescribes standard categories for the components of the effective tax rate reconciliation and requires disclosure of additional information for reconciling items meeting certain quantitative thresholds, requires disclosure of disaggregated income taxes paid, and modifies certain other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and allows for adoption on a prospective basis, with a retrospective option. The Company is currently evaluating the potential impact of the adoption of ASU 2023-09 on its consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The disclosures requirements included in ASU 2023-07 are required for all public entities, including those with a single reportable segment. ASU 2023-07 is effective for annual periods beginning after December 15, 2024, on a retrospective basis, and early adoption is permitted. The Company is currently evaluating the potential impact of ASU 2023-07 on its consolidated financial statements. NOTE 3 - NOTE RECEIVABLE On April 4, 2022, the Company issued an unsecured convertible promissory note with the principal sum of $ 200,000 (“Note”) with a company incorporated under the laws of the Province of British Columbia. The Note bears an original issuance discount of $ 7,500 and matures on April 4, 2024 . The interest on the Note accrues at the rate of 10% per annum from the date of the Note, and will continue to accrue on the outstanding principal until the entire balance is paid or converted into shares of common stock equal to 3.23% of the fully diluted share capital of the borrower on the conversion date. The terms of the Note require the borrower to prepay (i) within 30 days of April 4, 2022, the first twelve months of interest totaling $20,000, and (ii) within six months of April 4, 2022, the interest for the second twelve months under the Note totaling $20,000. The Company will have the right, at its option on the maturity date, to convert all the principal sum into the common stock equal to 3.23% of the fully diluted share capital of the borrower as of the conversion date. On April 4, 2022, the Company advanced to the borrower $ 192,500 cash and recorded an original issuance discount on note receivable of $7,500. On April 21, 2022, the Company received $ 20,000 as prepaid interest from the borrower for the first twelve months of the Note. F- 13 The Company recorded interest income earned on the Note of $ 20,000 and $ 14,849 for the years ended December 31, 2023 and 2022, respectively. The Company amortized the discount on note receivable and recorded it as interest income of $ 3,750 and $ 2,784 for the years ended December 31, 2023 and 2022, respectively. The Company recorded unearned interest of $ 0 and $ 5,151 , and reported unamortized original debt discount of $ 966 and $ 4,716 at December 31, 2023 and 2022, respectively. The noteholder is in default of paying $20,000 in interest payments within the six months of April 4, 2022, and has not made any principal payments on the Note to the Company. The Company has provided an allowance for bad debt for the total amount of $ 200,000 of the Note and $ 15,068 of interest receivable on the Note as of December 31, 2023. NOTE 4 - INTANGIBLE ASSETS The Company’s intangible assets comprise of intellectual property revolving around their field tests, sensor integrations, and board designs. Intangible assets, net of amortization at December 31, 2023 and 2022, amounted to $ 199,085 and $ 248,585 , respectively. Schedule of intangible assets December 31, 2023 December 31, 2022 Intangible Assets $ 495,000 $ 495,000 Accumulated amortization ( 295,915 ) ( 246,415 ) Intangible Assets, net $ 199,085 $ 248,585 The Company determined that none of its intangible assets were impaired at December 31, 2023 and 2022, respectively. Amortizable intangible assets are amortized using the straight-line method over their estimated useful lives of ten years. Amortization expense of finite-lived intangibles was $ 49,500 and $ 49,500 for the years ended December 31, 2023 and 2022, respectively. The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of December 31, 2023: Schedule of future amortization Amortization expense 2024 $ 49,500 2025 49,500 2026 49,500 2027 49,500 Thereafter 1,085 Total $ 199,085 NOTE 5 - COMMITMENTS AND CONTINGENCIES In prior years, the Company entered into consulting 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 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, 2023 and 2022, respectively, and 3,530,000 shares 3,080,000 shares were vested and issued per the Company’s 2019 Stock Incentive Plan as of December 31, 2023 and 2022, respectively. In the event that the agreement is terminated by either party pursuant to the terms of the agreement, all unvested shares which have been earned shall vest on a pro-rata basis as of 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. F- 14 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. Pursuant to the terms of the 2022 Plan, 3,100,000 shares and 0 shares of common stock were vested and issued as of December 31, 2023 and 2022, respectively. Employment Agreement - CEO On 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 fair value of the average share price of the shares of 30 trading days at the end of each quarter. The Company has recorded $ 199,053 and $ 142,424 in salaries payable to the CEO as of December 31, 2023 and 2022, 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 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 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 fair value of the average share price of the shares of 30 trading days at the end of each quarter. The Company recorded $ 181,526 and $ 121,092 in salaries payable to the COO/Interim CFO as of December 31, 2023 and 2022, respectively. F- 15 NOTE 6 - CONVERTIBLE NOTES PAYABLE The following table summarizes the outstanding balance of convertible notes payable, interest and conversion rates as of December 31, 2023 and December 31, 2022, respectively. Schedule of convertible notes payable December 31, 2023 December 31, 2022 A. Convertible note payable to an investor with interest at 12% per annum, convertible at any time into shares of common stock at the lowest VWAP of $0.001 per share on December 31, 2023. The balance of principal and accrued and unpaid interest is payable on maturity on March 1, 2024, unless automatically extended for one-year periods if no Event of Default is existing. The note is secured by substantially all the assets of the Company. $ 205,000 $ 205,000 B. Convertible note payable to an investor with interest at 5% per annum, convertible at any time into shares of common stock at $0.00084 per share. Interest is payable annually with the balance of principal and interest due on maturity on March 1, 2024. The note is secured by substantially all the assets of the Company. 55,000 55,000 D. Convertible note payable to an investor with interest at 12% per annum, convertible at any time into shares of common stock at the lowest VWAP of $0.001 per share on December 31, 2023. The balance of principal and accrued and unpaid interest is payable on March 1, 2024, unless automatically extended for one-year periods if no Event of Default is existing. The note is secured by substantially all the assets of the Company. 50,000 50,000 E. Convertible 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. 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. 125,000 125,000 F. Convertible note payable to an investor with interest at 10% per annum, convertible at any time into shares of common stock at $0.01 per share. Principal and interest due on maturity on April 29, 2023. – 33,167 G. Convertible note payable to an investor with interest at 10% per annum, convertible at any time into shares of common stock at $0.0009 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, 2025. the note is secured by substantially all the assets of the Company. 58,988 75,000 493,988 543,167 Less deferred financing costs – ( 75,700 ) Net balance 493,988 467,467 Less current portion ( 435,000 ) ( 363,167 ) Long term portion $ 58,988 $ 104,300 F- 16 A. January 18, 2018 Convertible Note and Warrants (“Note A”) On March 14, 2022, the noteholder of Note A agreed to extend the maturity date of March 1, 2022 of the Senior Secured Convertible Promissory Note to March 1, 2023, in exchange for the reduction of the conversion price to $0.008 per share, and all prior Events of Default (as defined in the Note A) including penalties were waived, and all future Events of Default (as defined in the Note A) pertaining to the future payment of interest were waived through maturity. On July 21, 2023, the noteholder of Note A agreed to extend the maturity date to March 1, 2024 , and Note A convertible into shares of common stock on December 31, 2023 at the lowest VWAP of $0.001 per share during the look back period, provided: · Upon request of the noteholder of Note A, the Company shall issue twenty thousand dollars ($20,000) worth of common shares (the “1 st Incentive Shares) and the price per 1 st Incentive Share shall be the Volume-Weighted Average Price (VWAP) per common share of the Company (subject to adjustments) for the previous ten trading days. · The Company shall use its best efforts to file a registration statement registering the resales of the 1 st Incentive Shares within 45 calendar days from the date hereof. The Company shall use is best efforts to have the registration statement declared “effective” within sixty (60) calendar days from its filing. The Company shall use its best efforts to have a registration statement registering the resales of the 1st Incentive Shares remain effective until such time that the noteholder of Note A no longer holds any such 1st Incentive Shares. · Upon full conversion of the Note A and Note D, the Company shall issue to the holder of Note A fifty thousand dollars ($50,000) worth of common shares (the “2nd Incentive Shares”) and the price per 2nd Incentive Share shall be the VWAP per common share of the Company (subject to adjustments) for the previous ten (10) Trading Days. · The Company shall use its best efforts to file a registration statement registering the resales of the 2nd Incentive Shares within forty-five (45) calendar days from the date of issuance. The Company shall use is best efforts to have the registration statement declared “effective” within sixty (60) calendar days from its filing. The Company shall use its best efforts to have a registration statement registering the resales of the 2nd Incentive Shares remain effective until such time that the noteholder of Note A no longer holds any such 2nd Incentive Shares. All other terms and conditions of the convertible promissory note remain the same. The noteholder of Note A waives all events of default pertaining to the Note A, known or unknown to the noteholder, by the Company prior to the date hereof. The noteholder also waives all defaults of the transaction documents, known or unknown to the noteholder of Note A by the Company prior to the date hereof. The Company recorded interest expense of $ 24,600 and $ 28,832 for the years ended December 31, 2023 and 2022, respectively. Accrued interest payable on Note A was $ 184,468 and $ 159,868 as of December 31, 2023 and 2022, respectively. The principal balance payable on Note A amounted to $ 205,000 at December 31, 2023 and 2022, respectively. B. January 2019 Convertible Note and Warrants (“Note B”) Effective March 1, 2021, the noteholder of Note B agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to March 1, 2024, and all prior Events of Default (as defined in the Note B) including penalties were waived, and all other terms of the Note B remain the same. The Company recorded interest expense of $ 2,750 and $ 2,750 for the years ended December 31, 2023 and 2022, respectively. This note and accrued interest is due to a related party. Accrued interest payable on Note B totaled $ 13,592 and $ 10,842 as of December 31, 2023 and 2022, respectively. The Company recorded a loss on extinguishment of $ 149,766 due to the change in the conversion price of this convertible note as of December 31, 2023. The principal balance payable on Note B amounted to $ 55,000 at December 31, 2023 and 2022, respectively. F- 17 D. March 2019 Convertible Note and Warrants (“Note D”) On March 14, 2022, the noteholder of Note D agreed to extend the maturity date of March 1, 2022 of the Senior Secured Convertible Promissory Note to March 1, 2023, in exchange for the reduction of the conversion price to $0.008 per share, and all prior Events of Default (as defined in the Note D) including penalties were waived, and all future Events of Default (as defined in the Note D) pertaining to the future payment of interest were waived through maturity. On July 21, 2023, the noteholder of Note A agreed to extend the maturity of March 1, 2023 date to March 1, 2024 and Note D convertible into shares of common stock at December 31, 2023 at the lowest VWAP of $0.001 per share during the look back period (see Note A above”). The Company recorded interest expense of $ 6,000 and $ 6,000 for the years ended December 31, 2023 and 2022, respectively. Accrued interest payable on Note D was $ 26,698 and $ 20,698 as of December 31, 2023 and 2022, respectively. The Company recorded a loss on extinguishment of $ 36,528 due to the change in the conversion price of this convertible note as of December 31, 2023. The principal balance payable on Note D amounted to $ 50,000 at December 31, 2023 and 2022, respectively. E. August 2019 Convertible Note and Warrants (“Note E”) On August 2, 2021, the noteholder of Note E agreed to extend the maturity date of the Senior Secured Convertible Promissory Note to August 2, 2024. All other terms and conditions of the Note E remain the same. The Company recorded interest expense of $ 15,000 and $ 15,000 on Note E for the years ended December 31, 2023 and 2022, respectively. Accrued interest payable on Note E was $ 63,690 and $ 48,690 as of December 31, 2023 and 2022, respectively. This note is payable to a related party. The principal balance payable on Note E amounted to $ 125,000 as of December 31, 2023 and 2022, respectively. F. August 29, 2019 Convertible Note and Warrants (“Note F”) On April 29, 2022, the noteholder of Note F agreed to extend the maturity date of the Secured Convertible Promissory Note to April 29, 2023 . All other terms and conditions of the Note F remain the same. On March 23, 2023, the noteholder of Note F converted the principal balance of its convertible promissory note of $ 25,814 and $ 5,787 of accrued interest into 17,837,838 shares of common stock of the Company valued at the fair value of $0.00185 per share. Per the terms of Note F, the conversion rate is 100% of the lowest traded price for the 15 days prior to the conversion date, with the lowest traded price of $0.00185 on March 22, 2023. On April 27, 2023, the noteholder of Note F converted the remaining principal balance of $ 7,353 and accrued interest of $ 71 into 4,949,507 shares of common stock of the Company at the lowest traded price of $0.0015 on April 21, 2023. The Company recorded interest expense of $ 829 and $ 3,317 for the years ended December 31, 2023 and 2022, respectively. Accrued interest payable on Note F was $ 0 and $ 5,029 as of December 31, 2023 and 2022, respectively. The principal balance payable on Note F amounted to $ 0 and $ 33,167 as of December 31, 2023 and 2022, respectively. G . July 2020 Equity Financing Arrangement (“Note G”) On April 29, 2022, the noteholder of Note G agreed to extend the maturity date of the Secured Convertible Promissory Note to April 29, 2023 . On May 1, 2023, the noteholder of Note G agreed to extend the maturity date of the Secured Convertible Promissory Note to April 29, 2025. All other terms and conditions of the Note G remain the same. On October 1, 2023, the noteholder G converted $ 18,000 of accrued interest into 20 million shares of common stock at the conversion price of $ 0.0009 per share. Per the terms of Note G, the conversion rate is 100% of the lowest traded price for the 15 days prior to the conversion date, with the lowest traded price of $0.0009 on September 27, 2023. On November 14, 2023, the noteholder of Note G converted $ 3,137 of principal and $ 7,863 of accrued interest into 20 million shares of common stock as the lowest traded price of $ 0.00055 on November 6, 2023. On December 14, 2023, the noteholder of note G converted $ 12,875 of principal and $ 1,125 of accrued interest into 20 million shares of common stock at the conversion price of $ 0.0007 per share, with the lowest traded price of $0.0007 on November 28, 2023. The Company recorded interest expense of $ 11,148 and $ 7,500 on Note G for the years ended December 31, 2023 and 2022, respectively. Accrued interest payable on Note G was $ 0 and $ 17,240 as of December 31, 2023 and 2022, respectively. In addition, as of December 31, 2023, the Company recorded interest expense of $ 75,700 as historical deferred financing costs relating to the noteholder G’s equity line commitment to the Company. The principal balance payable of Note G amounted to $ 58,988 and $ 75,000 at December 31, 2023 and 2022, respectively. F- 18 NOTE 7 - EARNINGS (LOSS) PER SHARE The following table sets forth the computation of basic and diluted net loss per share of common stock for the years ended December 31, 2023 and 2022: Schedule of earnings per share Year ended December 31, 2023 2022 Net loss attributable to common stockholders (basic) $ ( 1,136,460 ) $ ( 1,076,881 ) Shares used to compute net loss per common share, basic and diluted 406,685,267 273,238,664 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.00 ) $ ( 0.00 ) Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common shares and common share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities which include stock options, convertible debt, convertible preferred stock and common stock warrants have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position. The following outstanding common stock equivalents have been excluded from diluted net loss per common share for the years ended December 31, 2023 and 2022, respectively, because their inclusion would be anti-dilutive: Schedule of anti dilutive shares As of December 31, 2023 2022 Warrants to purchase common stock 2,868,397 2,868,397 Potentially issuable shares related to convertible notes payable 837,994,510 366,996,915 Total anti-dilutive common stock equivalents 840,862,907 369,865,312 NOTE 8 - RELATED PARTIES At December 31, 2023 and 2022, the amount due to two stockholders was $ 1,000 relating to depositing funds for opening bank accounts for the Company. The Company leases its current office facility from these stockholders on a month-to-month basis at a monthly rent of $250 starting January 1, 2020. Rent expense totaled $ 3,000 for each of the years ended December 31, 2023 and 2022, respectively. The Company has recorded $ 250 as rent payable to the stockholder in accounts payable as of December 31, 2023 and 2022, respectively. The Company executed a convertible promissory note payable with an officer and director (see Note B) and indebted in the principal amount of $ 55,000 and accrued interest payable of $ 13,592 and $ 10,842 as of December 31, 2023 and 2022, respectively. The Company executed three convertible promissory notes payable with a director (see Note E) and indebted in the principal amount of $ 125,000 and accrued interest payable of $ 63,690 and $ 48,690 as of December 31, 2023 and 2022, respectively. The Company awarded shares payable to officers and a director valued at $ 4,441 and $ 13,941 for the years ended December 31, 2023 and 2022, respectively, pursuant to the terms of an exchange agreement (Note 5). Shares payable to officers and a director were $ 15,225 and $ 14,624 at December 31, 2023 and 2022, respectively. No convertible preferred stock was issued to related parties in 2023 and 2022, respectively. F- 19 NOTE 9 - STOCKHOLDERS' EQUITY Common Stock The Company has an authorized capital of 3,000,000,000 shares of $ 0.001 par value common stock and 10,000,000 shares of $ 0.001 par value preferred stock. The Company had 470,015,293 shares and 352,174,583 shares of common stock, and 25,845 shares of preferred stock, issued and outstanding as of December 31, 2023 and 2022, respectively. The Company’s authorized common stock was increased to 3,000,000,000 shares of $0.001 par value on May 28, 2024. Common Stock Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available, therefore. In the event of liquidation, dissolution, or winding up of the Company, the holders of common stock are entitled to share pro rata in all assets remaining after payment in full of all liabilities. All of the outstanding shares of common stock are fully paid and non-assessable. Holders of common stock have no preemptive rights to purchase the Company’s common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock. On February 24, 2021, the Company entered into a Common Stock Purchase Agreement with an investor pursuant to which the investor agreed to purchase up to $5,000,000 of the Company’s registered common stock at $0.015 per share. Pursuant to the Agreement, purchases may be made by the Company during the Commitment Period (as defined in the Agreement) through the submission of a purchase notice to the investor no sooner than ten business days after the preceding closing. No purchase notice can be made in an amount less than $10,000 or greater than $500,000 or greater than two times the average of the daily trading dollar volume for the Company’s common stock during the ten business days preceding the purchase date. Each purchase notice is limited to the investor beneficially owning no more than 4.99% of the total outstanding common stock of the Company at any given time. There are certain conditions precedent to each purchase including, among others, an effective registration statement in place and the VWAP of the closing price of the Company’s common stock greater than $0.0175 for the Company's common stock during the five business days prior to the closing. From January 1, 2023 to December 31, 2023, the investor purchased 31,603,364 shares of common stock for a cash consideration of $ 54,196 . The Company issued to consultants 3,450,000 shares of common stock valued at $ 4,665 for services rendered pursuant to consulting agreements for the year ended December 31, 2023. The common stock issued to consultants was valued at the fair market value of the common stock on the date of issuance. On March 23, 2023, the noteholder of Note F converted the principal balance of $ 25,814 and accrued interest of $ 7,186 into 17,837,838 shares of common stock. The shares issued were valued at the fair value of common stock on the date of issuance. On April 27, 2023, the noteholder of Note F converted the principal balance of $ 7,353 and accrued interest of $ 71 into 4,949,507 shares of common stock. The shares issued were valued at the fair value of common stock on the date of issuance. On October 17, 2023, the Company issued to noteholder of Note G 20,000,000 shares of common stock in settlement of accrued interest due of $ 18,000 on the convertible promissory note. The Company reclassified $2,000 from additional paid in capital due to below par-value issuance of shares. On November 14, 2023, the noteholder of Note G converted the principal balance of $ 3,132 and accrued interest of $ 7,862 totaling $ 11,000 into 20,000,000 shares of common stock. The shares issued were valued at the fair value of common stock on the date of issuance. The Company reclassified $9,000 from additional paid in capital due to below par-value issuance of shares. F- 20 On December 14, 2023, the noteholder of Note G converted the principal balance of $ 12,875 and accrued interest of $ 1,125 totaling $ 14,000 into 20,000,000 shares of common stock. The shares issued were valued at the fair value of common stock on the date of issuance. The Company reclassified $6,000 from additional paid in capital due to below par-value issuance of shares. The Company recorded a loss on extinguishment on Note B and Note D of $ 186,294 as a result of changes in conversion prices of the convertible promissory notes. The offset of the loss was recorded to additional paid in capital as of December 31, 2023. As a result of all common stock issuances, the Company recorded 470,015,293 shares and 352,174,583 shares of common stock issued and outstanding at December 31, 2023 and 2022, respectively. Stock Incentive Plans On December 14, 2017 (the “Effective Date”), the Board of Directors of the Company approved the 2017 Stock Inventive Plan (the “2017 Plan”). Awards may be made under the 2017 Plan for up to 4,500,000 shares of common stock of the Company. All of the Company’s employees, officers and directors, as well as consultants and advisors to the Company are eligible to be granted awards under the 2017 Plan. No awards can be granted under the 2017 Plan after the expiration of 10 years from the 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. On March 11, 2019 (the “Effective Date”) the Board of Directors of the Company approved the 2019 Stock Incentive Plan (the “2019 Plan”). Awards may be made under the Plan for up to 5,000,000 shares of common stock of the Company. All of the Company’s employees, officers and directors, as well as consultants and advisors to the Company are eligible to be granted awards under the 2019 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. On March 18, 2022, the Board of Directors approved and adopted the 2022 Stock Incentive Plan (the “2022 Plan”). Awards may 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 5), both 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 3,100,000 shares at December 31, 2023 and the 11,200,000 shares remain unvested as of that date. For the years ended December 31, 2023 and 2022, under the 2022 Plan, the Company recorded stock compensation expense of $ 4,441 and $ 14,624 for 3,000,000 shares and 2,568,493 shares payable to an officer, an advisor and a director. The shares earned are valued at the 90% of the average market price of the shares of 30 trading days at the end of each quarter. Shares earned and issued related to the consulting agreements are issued under the 2017 Plan and the 2019 Plan (Note 5). 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. F- 21 A summary of the status of the Company’s non-vested shares at December 31, 2023 and 2022 and changes during the year then ended, is presented below: Schedule of summary of non-vested shares 2022 Stock Incentive Plan Shares of Common Stock Weighted Average Exercise Price Balance at December 31, 2021 – $ – Awarded 14,300,000 0.006146 Vested – – Forfeited – – Balance at December 31, 2022 14,300,000 0.006146 Awarded – – Vested ( 3,100,000 ) – Forfeited – – Balance at December 31, 2023 – (Unvested) 11,200,000 $ 0.006146 Balance at December 31, 2023 – (Vested) 3,100,000 – Total Options outstanding – December 31, 2023 14,300,000 $ 0.006146 Preferred Stock Series A Supervoting Convertible Preferred Stock On July 2, 2020, the Board of Directors of the Corporation had authorized issuance of 15,600 shares of preferred stock, $ 0.001 par value per share, designated as Series A Supervoting Preferred Stock. Dividends: Initially, there will be no dividends due or payable on the Series A Supervoting Preferred Stock. Any future terms with respect to dividends shall be determined by the Board consistent with the Corporation’s Articles of Incorporation. Liquidation and Redemption Rights : Upon the occurrence of a Liquidation Event (as defined below), the holders of Series A Supervoting Preferred Stock are entitled to receive net assets on a pro-rata basis. Each holder of Series A Supervoting Preferred Stock is entitled to receive ratably any dividends declared by the Board, if any, out of funds legally available for the payment of dividends. Liquidation Event means (i) the liquidation, dissolution or winding-up, whether voluntary or involuntary, of the corporation, (ii) the purchase or redemption by the corporation of the shares of any class of stock or the merger or consolidation of the corporation with or into any other corporation or corporations, or (iii) the sale, license or lease of all or substantially all, or any material part of, the Corporation’s assets. Conversion : Each holder of Series A Supervoting Preferred Stock may voluntarily convert its shares into shares of common stock of the Corporation at a rate of 1:100 (as may be adjusted for any combinations or splits with respect to such shares). Rank : All shares of the Series A Supervoting Preferred Stock shall rank senior to the Corporation’s (A) common stock, par value $0.001 per share, and any other class or series of capital stock of the Corporation hereafter created. F- 22 Voting Rights : A. If at least one share of Series A Super Voting Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series A Super Voting Preferred Stock at any given time, regardless of their number, shall have voting rights equal to 20 times the sum of: i) the total number of shares of Common stock which are issued and outstanding at the time 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. B. Each individual share of Series A Super Voting Preferred Stock shall have the voting rights equal to: [twenty times the sum of: {all shares of Common stock issued and outstanding at the time of voting + all shares of Series A and any newly designated Preferred stock issued and outstanding at the time of voting}] Divided by: [the number of shares of Series A Super Voting Preferred Stock issued and outstanding at the time of voting] With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent , the holders of the outstanding shares of Series A Super Voting Preferred Stock shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Articles of Incorporation or Bylaws. The Company had 25,845 shares of Series A Preferred Stock issued and outstanding at December 31, 2023 and 2022, respectively. Series B Convertible Preferred Stock Equity Financing On November 16, 2020, the Board of Directors of the Corporation had authorized issuance of up to 600 shares of preferred stock, $ 0.001 par value per share, designated as Series B Convertible Preferred Stock. Each share of Preferred Stock shall have a par value of $0.001 per share and a stated value of $ 1,200 , subject to increase set forth in the Certificate of Designation. Dividends: Each share of Series B Convertible Preferred Stock shall be entitled to receive, and the Corporation shall pay, cumulative dividends of 12% per annum, payable quarterly, beginning on the Original Issuance Date and ending on the date that such share of Series B Convertible Preferred Share has been converted or redeemed (the “Dividend End Date”). Dividends may be paid in cash or in shares of Series B Convertible Preferred Stock. From and after the initial Closing Date, in addition to the payment of dividends pursuant to Section 2(a), each Holder shall be entitled to receive, and the Corporation shall pay, dividends on shares of Series B Convertible Preferred Stock equal to (on an as-if-converted-to-Common-Stock basis) and in the same form as dividends actually paid on shares of the common stock when, as and if such dividends are paid on shares of the common stock. The Corporation shall pay no dividends on shares of the common stock unless it simultaneously complies with the previous sentence. Voting Rights : The Series B Convertible Preferred Stock will vote together with the common stock on an as converted basis subject to the Beneficial Ownership Limitations (not in excess of 4.99% conversion limitation). However, as long as any shares of Series B Convertible Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Series B Convertible Preferred Stock directly and/or indirectly (a) alter or change adversely the powers, preferences or rights given to the Series b Convertible Preferred Stock or alter or amend this Certificate of Designation, (b) authorize or create any class of stock ranking as to redemption or distribution of assets upon a Liquidation (as defined in Section 5) senior to, or otherwise pari passu with, the Series b Convertible Preferred Stock or, authorize or create any class of stock ranking as to dividends senior to, or otherwise pari passu with, the Series b Convertible Preferred Stock, (c) amend its Articles of Incorporation or other charter documents in any manner that adversely affects any rights of the Holders, (d) increase the number of authorized shares of Series B Convertible Preferred Stock, or (e) enter into any agreement with respect to any of the foregoing. F- 23 Liquidation : Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to the Stated Value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon under this Certificate of Designation, for each share of Series B Convertible Preferred Stock before any distribution or payment shall be made to the holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among the Holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. Conversion : Each share of Series B Convertible Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof, into that number of shares of common stock (subject to the limitations) determined by dividing the Stated Value of such share of Series B Convertible Preferred Stock by the Conversion Price. The Conversion Price for the Series b Convertible Preferred Stock shall be the amount equal to the lowest traded price for the Company’s common stock for the fifteen (15) Trading Days immediately preceding the date of such conversion. All such foregoing determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the common stock during such measuring period. Following an event of default, the Conversion price shall equal the lower of : (a) the then applicable Conversion Price; or (b) a price per share equaling 80% of the lowest traded price for the Company’s common stock during the ten (10) trading days preceding the relevant Conversion. Redemption: The Series B Convertible Preferred Stock may be redeemed by payment of the stated value thereof, with the following premiums based on the time of the redemption. · 115% of the stated value if the redemption takes place within 90 days of issuance; · 120% of the stated value if the redemption takes place after 90 days and within 120 days of issuance · 125% of the stated value if the redemption takes place after 120 days and within 180 days of issuance; and · each share of Preferred Stock is redeemed one year from the day of issuance November 19, 2020 On November 19, 2020, pursuant to the terms of a Securities Purchase Agreement dated November 16, 2020 (the “SPA”), the Company entered into a new preferred equity financing agreement with GHS Investments, LLC (“GHS”) in the amount of up to $600,000. The SPA provides for GHS’s purchase, from time to time, of up to 600 shares of the newly-designated Series B Convertible Preferred Stock. The initial closing under the SPA consisted of 45 shares of Series B Convertible Preferred Stock, stated value $1,200 per share, issued to GHS for an initial purchase price of $ 45,000 , or $1,000 per share. At the Company’s option, and subject to the terms of the SPA and the Certificate of Designation for the Series B Convertible Preferred Stock (the “COD”), additional closings in the amount of 40 shares of Series B Convertible Preferred Stock for a total purchase price of $40,000 may take place at a rate of up to once every 30 days. In connection with the initial closing in the amount of 45 shares of Series B Convertible Preferred Stock, the Company issued an additional 25 shares of Series B Convertible Preferred Stock to GHS as a commitment fee. No additional closings may take place after the two-year anniversary of the SPA, or once the entire $600,000 amount has been funded. If the average daily dollar trading volume for the Company’s common stock for the 30 trading days preceding a particular additional closing is at least $50,000 per day, the Company may, at its option, increase the amount of that additional closing to 75 shares of Series B Convertible Preferred Stock ($75,000). The Series B Convertible Preferred Stock is classified as temporary equity, as it is convertible upon issuance at an amount equal to the lowest traded price for the Company’s common stock for the fifteen trading days immediately preceding the date of conversion. 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. F- 24 On November 19, 2020, GHS purchased a total of 70 shares of Series B Convertible Preferred Stock for gross proceeds of $ 45,000 . The Company paid $ 900 in selling commissions to complete this financing. On November 19, 2020 (the date of receipt of cash proceeds of $45,000 issuance), the Company valued the fair value of the derivative and recorded an initial derivative liability of $ 103,267 , $ 58,267 as day one loss on the derivative, $ 39,000 as interest expense, and $ 39,000 as Series B Convertible Preferred Stock mezzanine liability, and $ 45,000 as amortization. The Company recalculated the value of the derivative liability associated with this convertible preferred stock recording a loss of $ 211 and a gain of $ 21,393 for the years ended December 31, 2023 and 2022, respectively, in connection with the change in fair market value of the derivative liability. The Company recorded $ 10,080 as preferred stock dividend expense for each of the years ended December 31, 2023 and 2022, respectively. The Company recorded $ 31,400 and $ 21,320 as preferred stock dividend payable as of December 31, 2023 and 2022, respectively. Derivative liability payable for this transaction totaled $ 72,667 and $ 72,456 at December 31, 2023 and 2022, and Series B Convertible Preferred Stock mezzanine liability was $ 84,000 at December 31, 2023 and 2022, respectively. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion exercise prices ranging from $0.0006 to $0.0141, the closing stock price of the Company's common stock on the date of valuation ranging from $0.00065 to $0.0184, an expected dividend yield of 0%, expected volatility ranging from 160.41% to 440.99%, risk-free interest rates ranging from 0.07% to 5.46%, and an expected term ranging from 0.13 years to 1.50 years. December 16, 2020 On December 16, 2020, pursuant to the terms of the SPA, GHS purchased an additional 85 shares of Series B Convertible Preferred Stock for gross proceeds of $ 85,000 . The Company paid $ 1,700 in selling commissions to complete this financing. On December 16, 2020 (the date of receipt of cash proceeds of $85,000 issuance), the Company valued the fair value of the derivative and recorded an initial derivative liability of $ 106,241 , $ 21,241 as day one loss on the derivative, $ 17,000 as interest expense, and $ 17,000 as Series B Convertible Preferred Stock mezzanine liability, and $ 85,000 as amortization. The Company recalculated the value of the derivative liability associated with this convertible preferred stock and recorded a loss of $ 256 and a gain of $ 31,043 for the years ended December 31, 2023 and 2022, respectively, in connection with the change in fair market value of the derivative liability. The Company recorded preferred stock dividend expense of $ 12,240 for each of the years ended December 31, 2023 and 2022, respectively. The Company recorded $ 37,223 and $ 24,983 as preferred stock dividend payable as of December 31, 2023 and 2022, respectively. Derivative liability payable for this transaction totaled $ 88,238 and $ 87,982 at December 31, 2023 and 20222, and Series B Convertible Preferred Stock mezzanine liability was $ 102,000 at December 31, 2023 and 2022, respectively. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion exercise prices ranging from $0.0006 to $0.0141, the closing stock price of the Company's common stock on the date of valuation ranging from $0.00065 to $0.0184, an expected dividend yield of 0%, expected volatility ranging from 160.41% to 437.59%, risk-free interest rates ranging from 0.07% to 5.46%, and an expected term ranging from 0.21 years to 1.50 years. December 20, 2021 On December 20, 2021, 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. 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 F- 25 The Company recalculated the value of the derivative liability associated with this convertible preferred stock recording a loss of $ 154 and $ 52,789 for the years ended December 31, 2023 and 2022, respectively, 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 $ 7,344 and $ 7,565 as preferred stock dividend expense for the years ended December 31, 2023 and 2022, and $ 14,909 and $ 7,565 as preferred stock dividend payable as of December 31, 2023 and 2022, respectively. Derivative liability payable for this transaction totaled $ 52,943 and $ 52,789 at December 31, 2023 and 2022 and Series B Convertible Preferred Stock mezzanine liability was $ 61,200 at December 31, 2023 and 2022, respectively. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion exercise prices ranging from $0.0006 to $0.005 the closing stock price of the Company's common stock on the date of valuation ranging from $0.00065 to $0.0070, an expected dividend yield of 0%, expected volatility ranging from 174.58% to 221.64%, risk-free interest rates ranging from 0.91% to 5.46%, and an expected term of 1.50 years. 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 , $ 14,025 as day one loss on the derivative, $ 10,200 as interest expense, and $ 10,200 as Series B Convertible Preferred Stock mezzanine liability, and $ 51,000 as amortization. The Company recalculated the value of the derivative liability associated with the convertible note and recorded a loss of $ 154 and a gain of $ 12,234 for the years ended December 31, 2023 and 2022, respectively, in connection with the change in fair market value of the derivative liability. In addition, the Company recorded $ 7,344 and $ 6,579 as preferred stock dividend expense for the years ended December 31, 2023 and 2022, and preferred stock dividend payable to GHS on this derivative totaled $ 13,923 and $ 6,579 as of December 31, 2023 and 2022, respectively. Derivative liability payable for this transaction totaled $ 52,943 and $ 52,789 at December 31, 2022 and Series B Convertible Preferred Stock mezzanine liability was $ 61,200 at December 31, 2023 and 2022, respectively. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion exercise prices ranging from $0.0006 to $0.0096, the closing stock price of the Company's common stock on the date of valuation ranging from $0.00065 to $0.0172, an expected dividend yield of 0%, expected volatility ranging from 160.35% to 201.38%, risk-free interest rates ranging from 1.09% to 5.46%, 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 , $ 192,422 as day one loss on the derivative, $ 27,200 as interest expense, and $ 27,200 as Series B Convertible Preferred Stock mezzanine liability, and $ 136,000 as amortization. The Company recalculated the value of the derivative liability associated with the convertible note and recorded a loss of $ 410 and a gain of $ 187,650 for the years ended December 31, 2023 and 2022, in connection with the change in fair market value of the derivative liability. In addition, the Company recorded preferred stock dividend expense of $ 19,584 and $ 15,131 for the years ended December 31, 2023 and 2022. Preferred stock dividend payable to GHS for this derivative totaled $ 34,715 and $ 15,131 at December 31, 2023 and 2022. Derivative liability payable for this transaction totaled $ 141,182 and $ 140,772 at December 31, 2023 and 2022, and Series B Convertible Preferred Stock mezzanine liability was $ 163,200 at December 31, 2023 and 2022, respectively. F- 26 The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion exercise prices ranging from $0.0006 to $0.0096, the closing stock price of the Company's common stock on the date of valuation ranging from $0.00065 to $0.00183, an expected dividend yield of 0%, expected volatility ranging from 160.35% to 201.38%, risk-free interest rates ranging from 1.55% to 5.46%, 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, $ 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 $ 184 and $ 9,069 for the years ended December 31, 2023 and 2022, respectively, in connection with the change in fair market value of the derivative liability. In addition, the Company recorded preferred stock dividend expense of $ 8,784 and $ 1,059 for the years ended December 31, 2023 and 2022. Preferred stock dividend payable to GHS for this derivative totaled $ 9,843 and $ 1,059 at December 31, 2023 and 2022. Derivative liability payable for this transaction totaled $ 63,324 and $ 63,140 at December 31, 2023 and 2022, and Series B Convertible Preferred Stock mezzanine liability was $ 73,200 at December 31, 2023 and 2022, respectively. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion exercise prices ranging from $0.0006 to $0.0020, the closing stock price of the Company's common stock on the date of valuation ranging from $0.00065 to $0.0022, an expected dividend yield of 0%, expected volatility ranging from 174.58% to 201.388%, risk-free interest rates ranging from 4.68% to 5.46%, and an expected term of 1.5 years. August 24, 2023 On August 24, 2023, pursuant to the terms of the SPA, GHS purchased 62 shares of Series B Convertible Preferred Stock for gross proceeds of $ 62,000 . The Company paid $ 1,240 in selling commissions to complete this financing. On August 24, 2023 (the date of receipt of cash proceeds of $62,000 issuance), the Company valued the fair value of the derivative and recorded an initial derivative liability of $ 61,679 , $ 321 as day one gain on the derivative, $ 12,400 as interest expense, and $ 12,400 as Series B Convertible Preferred Stock mezzanine liability, and $ 62,000 as amortization. The Company recalculated the value of the derivative liability associated with the convertible note at December 31, 2023 and recorded a loss of $ 2,732 for the year ended December 31, 2023, in connection with the change in fair market value of the derivative liability. In addition, the Company recorded preferred stock dividend expense of $ 3,155 for the year ended December 31, 2023. Preferred stock dividend payable to GHS for this derivative totaled $ 3,155 at December 31, 2023. Derivative liability payable for this transaction totaled $ 64,411 at December 31, 2023 and Series B Convertible Preferred Stock mezzanine liability was $ 74,400 at December 31, 2023. F- 27 The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion exercise prices ranging from $0.0006 to $0.0014, the closing stock price of the Company’s common stock on the date of valuation ranging from $0.00065 to $0.0015, an expected dividend yield of 0%, expected volatility ranging from 189.98% to 201.38%, risk-free interest rates ranging from 4.79% to 5.46%, and an expected term of 1.5 years. The following table represents the change in the fair value of the derivative liabilities for the years ended December 31, 2023 and 2022, respectively. Level 1 Level 2 Level 3 Balance at December 31, 2021 $ – $ – $ 237,544 Change in the fair value of derivative liability – – 232,328 Balance at December 31, 2022 – – 469,872 Change in the fair value of derivative liability – – 65,781 Balance at December 31, 2023 $ – $ – $ 535,653 As a result of issuance of derivative instruments, the Company recorded a derivative liability of $ 535,653 and $ 469,873 as of December 31, 2023 and 2022, and Series B Convertible Preferred Stock liability of $ 619,200 and $ 544,800 as of December 31, 2023 and 2022, respectively. Warrants A summary of the status of the Company’s warrants as of December 31, 2023 and 2022 and changes during the years then ended, is presented below: Schedule of summary of warrant activity Shares Under Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding at December 31, 2021 2,868,397 $ 0.00084 2.4 Years Issued – – Expired/Forfeited – – Outstanding at December 31, 2022 2,868,397 $ 0.00084 1.4 Years Issued – – Exercised – – Expired/Forfeited – – Outstanding at December 31, 2023 2,868,397 $ 0.00084 0.4 Years F- 28 NOTE 10 - INCOME TAXES Income tax expense for the year ended December 31, 2023 and 2022 is summarized as follows: Schedule of components of income tax expense (benefit) December 31, 2023 December 31, 2022 Deferred: Federal $ ( 238,657 ) $ ( 226,145 ) State ( 55,118 ) ( 52,229 ) Change in valuation allowance 293,775 278,374 Income tax expense (benefit) $ – $ – The following is a reconciliation of the provision for income taxes at the U.S. federal income tax rate to the income taxes reflected in the Statement of Operations: Schedule of effective income tax rate reconciliation December 31, 2023 December 31, 2022 Tax at statutory tax rate 21.00 % 21.00 % State taxes 4.85 % 4.85 % Other permanent items ( 0.02 )% ( 0.24 )% Valuation allowance - 25.83 % - 25.61 % Income tax expense – – The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2023 and 2022 are as follows: Schedule of deferred tax assets and liabilities December 31, 2023 December 31, 2022 Deferred tax assets: Net operating loss carry forward $ 2,700,136 $ 2,405,788 Total gross deferred tax assets 2,700,136 2,405,788 Less: valuation allowance ( 2,700,136 ) ( 2,405,788 ) Net deferred tax assets $ – $ – Deferred income taxes are provided for the tax effects of transactions reported in the financial statements and consist of deferred taxes related primarily to differences between the bases of certain assets and liabilities for financial and tax reporting. The deferred taxes represent the future tax return consequences of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. F- 29 At December 31, 2023 and 2022, the Company had accumulated net operating losses of approximately $ 10,444,000 and $ 9,307,000 , 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 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 income tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessment by these taxing authorities. Accordingly, the Company believes that it is more likely than not that it will realize the benefits of tax positions it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with FASB ASC 740. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, 2023, tax years 2022, 2021 and 2020 remain open for examination by the Internal Revenue Service and the Massachusetts Division of Revenue. The Company has received no notice of audit from the Internal Revenue Service or the Massachusetts Division of Revenue for any of the open tax years. NOTE 11 - SUBSEQUENT EVENTS Management has evaluated subsequent events through the date of this Report, the date the financial statements were available to be issued, noting the following items that would impact the accounting for events or transactions in the current period or require additional disclosure. On January 4, 2024, the noteholder of Convertible Promissory Note G elected to convert $9,381 of the principal amount of the note and accrued and unpaid interest of $619 into 20,000,000 shares of common stock at the conversion price the lowest traded price of $0.0005 per share. On January 25, 2024, the noteholder of Convertible Promissory Note G elected to convert $9,480 of the principal amount of the note and accrued and unpaid interest of $520 into 20,000,000 shares of common stock at the conversion price of the lowest traded price of $0.0005 per share. On February 5, 2024, the Company and the noteholder of Convertible Promissory Note B entered into a Debt Exchange Agreement to convert $55,000 principal balance of Note B and $14,600 of accrued and unpaid interest as of the maturity date of Note B on March 1, 2024. In exchange for the cancellation of all indebtedness of the Company owed to the noteholder B as evidenced by the Convertible Note, and for no additional consideration, the Company agreed to issue to the noteholder B, 57 shares of the Company’s Series C convertible preferred stock at the stated value of $1,200 per share. On February 19, 2024, the noteholder of Convertible Promissory Note G elected to convert $11,499 of the principal amount of the note and accrued and unpaid interest of $501 into 20,000,000 shares of common stock at the conversion price the lowest traded price of $0.0006 per share. On March 12, 2024, the noteholder of Convertible Promissory Note G elected to convert $14,686 of the principal amount of the note and accrued and unpaid interest of $314 into 25,000,000 shares of common stock at the conversion price the lowest traded price of $0.0006 per share. On April 15, 2024, pursuant to the terms of the SPA, GHS purchased 20 shares of Series B Convertible Preferred Stock for gross proceeds of $20,000. The Company paid $400 in selling commissions to complete this financing and $2,000 in purchaser’s legal fees. On May 28, 2024, the Company filed an amendment to its Articles of Incorporation increasing its authorized common shares to 3,000,000,000. F- 30