What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-04-05 compared with 2021-03-25 · 372 added, 655 removed, 474 unchanged (68% of the section changed)

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INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS (PCAOB 587 )

CONSOLIDATED BALANCE SHEETS

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Mitesco, Inc.

and subsidiaries (the Company) as of December 31, 2020, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the consolidated results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Mitesco, Inc.

and subsidiaries (the Company) as of December 31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the two years ended December 31, 2021, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cash flows for the two years then ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

The Company's Ability to Continue as a Going Concern

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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 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.

Critical Audit Matters:

Critical audit matters 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.

We determined that there are no critical audit matters.

We have served as the Company’s auditor since 2020.

Henderson, NV

March 24, 2021

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of True Nature Holding, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of True Nature Holding, Inc.

(the Company) as of December 31, 2019 and 2018, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2019, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

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 audits.

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

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

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

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 14 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern.

Management’s plans regarding those matters are described in Note 14.

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

/s/ M&K CPAS, PLLC

Critical Audit Matters:

Critical audit matters 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.

We determined that there are no critical audit matters.

We have served as the Company’s auditor since 2020.

March 31, 2020

Henderson, NV

April 4, 2022

MITESCO, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND DECEMBER 31, 2019

Current assets

Cash and cash equivalents

Accounts receivable

Prepaid expenses

Total current assets

Right to use asset

Right to use operating leases, net

Construction in progress

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Derivative liabilities

Lease liability – operating leases, current portion

Lease liability - operating leases, current

Notes Payable, net of discount

Convertible notes payable, net of discount of $ 0 and $ 317,405

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Total current liabilities

Lease Liability

Lease Liability- operating leases, non-current

Total Liabilities

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500,000 shares designated Series A;

400,000 shares designated Series X:

Preferred Stock, Series A, $0.01 par value, 4,800 and 0 shares issued and outstanding as of December 31, 2020 and 2019

Preferred Stock, Series X, $0.01 par value, 26,227 shares issued and outstanding as of December 31, 2020 and 2019

3,000,000 shares designated Series C;

10,000,000 shares designated as Series D Preferred Stock and 400,000 shares designated Series X:

Preferred stock, Series A, $ 0.01 par value, 0 and 4,800 shares issued and outstanding as of December 31, 2021 and 2020, respectively

Preferred stock, Series C, $ 0.01 par value, 940,644 and 0 shares issued and outstanding as of December 31, 2021 and 2020, respectively

Preferred stock, Series D, $ 0.01 par value, 3,100,000 and 0 shares issued and outstanding as of December 31, 2021 and 2020, respectively

Preferred stock, Series X, $ 0.01 par value, 24,227 and 26,227 shares issued and outstanding at December 31, 2021 and 2020, respectively

Common stock subscribed

Common stock, $ 0.01 par value, 500,000,000 shares authorized, 213,333,170 and 155,381,183 shares issued and outstanding as of December 31, 2021 and 2020, respectively

Additional paid-in capital

Stock payable

Accumulated deficit

Total (deficiency in) stockholders' equity

Total liabilities and stockholders' equity

Total stockholders' equity (deficit)

Total liabilities and stockholders' equity (deficit)

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

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CONSOLIDATED STATEMENTS OF OPERATIONS

Cost of goods sold

Operating expenses:

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Interest expense

Loss on conversion of liabilities to Preferred Stock

Loss on legal settlement

Gain on settlement of accounts payable

Gain on settlement of notes payable

Gain on settlement of accrued salary

Gain (loss) on revaluation of derivative liabilities

Gain on settlement of notes payable

Gain on settlement of warrants

Loss on legal settlement

Loss on conversion of notes

(Loss) Gain on revaluation of derivative liabilities

Total other expense

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Provision for income taxes

Preferred Stock dividend

Preferred stock dividends

Preferred stock deemed dividends

Net loss available to common shareholders

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (DEFICIT)

FOR THE TWELVE MONTHS ENDED DECEMBER 31

Preferred Stock

Balance, December 31, 2018

Common stock issued for services

Cancellation of common stock

Common stock issued to employees, subject to vesting

Vesting of shares by employees

Common stock issued for the conversion of convertible debt and accrued interest

Common stock issued for legal settlement

Settlement of derivative liabilities

Discount on convertible note due to beneficial conversion features

Discount on convertible note due to warrants

Imputed interest

Common stock issued for the cashless exercise of warrants

Gain on settlement of accounts payable with related party

Issuance of Preferred X for accounts payable and accrued liabilities

Net loss for the period

Balance, December 31, 2019

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2021 and 2020

Preferred Stock Series A

Preferred Stock Series C

Preferred Stock Series D

Preferred Stock Series X

Balance, December 31, 2019

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Vesting of stock options issued to employees

Common stock issued for accrued salary

Common stock issued for accrued salaries

Common stock issued for services

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Gain on settlement of stock payable

Common stock issued for conversion of debt and accrued interest

Common stock issued for conversion of notes payable and accrued interest

Issuance of Preferred A stock to consultants

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Issuance of Preferred X stock for dividends payable

Loss for the period

Loss for the year ended December 31, 2020

Balance, December 31, 2020

Vesting of common stock issued to employees

Vesting of stock options issued to employees

Common stock issued for services

Common stock issued for conversion of notes payable and accrued interest

Sale of common stock in private placement

Sale of Preferred Stock Series C

Warrants issued with Preferred Stock Series C

Sale of Preferred Stock Series D

Warrants issued with Preferred Stock Series D

Conversion of Preferred Stock Series A to common stock

Shares issued for exercise of stock options

Net shares issued in connection with settlement agreement

Shares of common stock issued for conversion of Preferred Stock Series C

Common stock subscribed for accounts payable and accrued liabilities

Stock issued from common stock subscribed

Deemed dividend on conversion of Preferred Stock Series A to common stock

Deemed dividend on Preferred Stock Series C

Deemed dividend on Preferred Stock Series D

Preferred stock dividends, $ 3.62 per share ( 10 % of stated value per year)

Warrants issued with note payable

Loss for the year ended December 31, 2021

Balance, December 31, 2021

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

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Adjustments to reconcile net loss to net cash used in operating activities:

Preferred A stock issued to consultants

Amortization of right-to-use asset

Loss on conversion of notes payable to common stock

Loss on conversion of liabilities to Preferred Stock

Loss on legal settlement

Gain on settlement of notes payable

Net gain on settlement of notes payable

Gain on settlement of accounts payable

Gain on conversion of accrued salary

(Gain) loss on revaluation derivative liabilities

(Gain) on settlement of warrants

Loss on conversion of Pref Stock Series A to common stock

Gain (Loss) on revaluation of derivative liabilities

Derivative expense

Amortization of discount on notes payable

Amortization of loan fees

Amortization of discount on notes payable

Share-based compensation

Imputed interest

Changes in assets and liabilities:

Accounts receivables

Prepaid expenses

Due from related party

Accounts payable and accrued liabilities

Operating lease liability

Due to related parties

Other current liabilities

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CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from private placement of common stock

Proceeds from sales of Series C Preferred Stock, net of fees

Proceeds from sales of Series D Preferred Stock, net of fees

Proceeds from notes payable, net of discount

Proceeds from sale of common stock

Proceeds from convertible notes payable, net of discount

Principal payments on notes payable

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

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

MITESCO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid

Income taxes paid

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Consulting fee prepaid with note payable and stock

Par value of shares returned for cancellation

Stock issued for conversion of debt and accrued interest

Stock issued for legal settlement

Preferred Stock issued for conversion of liabilities

Discount on notes payable due to warrants

Settlement of derivative liabilities

Discount on notes payable due to derivative liabilities

Beneficial conversion features

Preferred stock dividend

Deemed dividends on Preferred Stock

Settlement of derivative liabilities

Conversion of Series A Preferred stock to common stock

Conversion of Series C Preferred stock to common stock

Conversion of accounts payable to common stock

Conversion of accrued payroll to common stock

Conversion of accounts payable to common stock subscribed

Cashless exercise of warrants

Gain on settlement of accounts payable - related parties

Preferred Stock dividends payable converted to common stock

Discount on note payable due to warrants

Capital expenditures in accounts payable

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

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On April 24, 2020, we changed our name to Mitesco, Inc.

During 2020, our operations have focused on establishing medical clinics utilizing nurse practitioners under The Good Clinic name and development and acquisition of telemedicine technology.

In March of 2020, we formed The Good Clinic LLC, a Colorado limited liability company for our clinic business.

We entered into an agreement with four senior executives from Minute Clinic James Woodburn, Kevin Lee Smith, Michael Howe and Rebecca Hafner-Fogarty (the “Sellers”) with the skills and know-how to assist the Company in the establishment of a series of clinics utilizing nurse practitioners and telemedicine technology in States where full practice authority for nurse practitioners is supported.

We issued 4,800 shares of our Series A Preferred Stock to these individuals as compensation.

We valued the 4,800 shares of the Series A Preferred Stock at $71,558 or approximately $14.91 per share based upon an analysis performed by an independent valuation consultant.

We opened our first The Good Clinic in Minneapolis, MN in the first quarter of 2021.

N ote 2 - Financial Condition, Going Concern and Management Plans

As of December 31, 2020, the Company had cash of $64,789, current liabilities of $3,028,640, and has incurred a loss from operations.

Since 2020, our operations have focused on establishing medical clinics utilizing Nurse Practitioners under The Good Clinic name and development and acquisition of telemedicine technology.

In March of 2020, we formed an owned subsidiary, Mitesco NA LLC, which holds The Good Clinic LLC, a Colorado limited liability company for our clinic business.

The Company had previously established a strategy to address opportunities in Europe seeking technology solutions, or financing situations, through a Dublin based subsidiary, Acelerar Healthcare Holdings Ltd.

After a review of its near-term opportunities in North America, the Board of Directors has determined that any efforts in the European community should be discontinued so that it can best focus on its North American operations.

In conjunction with this decision the Company for the period ending December 31, 2021, we will take a one-time charge of $12,500 related to the discontinuation and wind down of our European efforts.

We opened our first The Good Clinic in Minneapolis, Minnesota in the first quarter of 2021 and have six operating at the time of this filing.

We have two additional sites under contract with build-out underway in the Denver metropolitan areas before the end of 2022.

We are making plans for up to opening up to 50 new clinics in the next three years, in addition to any existing sites we might acquire.

Note 2 - Financial Condition, Going Concern and Management Plans

On November 19, 2021, the Company closed a bridge financing round totaling $ 3.1 million of a Series D preferred stock sold to investors in a private placement.

Each Series D Unit will have a purchase price of $ 1.00 per Unit, with each Unit consisting of (a) one share of a newly formed Series D Convertible Preferred Stock, par value $ 0.01 per share (the “Series D Preferred Stock”), (b) one warrant (the “Series A Warrants”) to purchase 2.1 shares of the Company’s Common Stock at a purchase price of $0.50 per whole share of Common Stock, and (c) one warrant (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase 2.1 shares of Common Stock at a purchase price of $0.75 per whole share .

Pursuant to the Certificate of Designations, Preferences and Rights of the Series D Convertible Preferred Stock of the Company, Inc., filed with the Secretary of State of the State of Delaware on October 18, 2021 (the “COD”), there are 10,000,000 shares of the Company’s preferred stock that have been designated as the Series D Preferred Stock and each share of the Series D Preferred Stock is convertible at the option of the holder thereof, or automatically upon the request of the Company’s underwriters that the Series D Preferred Stock convert to shares of Common Stock or upon listing of the Company’s Common Stock on a national securities exchange.

The number of shares of Common Stock issuable upon the conversion of each share of Series D Preferred Stock is calculated by dividing the Conversion Amount (defined in the COD as the Stated Value, $ 1.05 per share, plus accrued and unpaid dividends) by the $ 0.25 conversion price (the “Conversion Price”).

As of the date of this filing the Company has closed on $ 3,100,000 of its Series D Preferred stock.

To achieve our growth strategy, it is anticipated the Company will need to raise additional financing prior to up listing on Nasdaq.

We will not proceed with this offering in the event our Common Stock is not approved for listing on the Nasdaq Capital Market though we will continue to seek financing for our expansion and operating needs in the debt or equity markets.

Mitesco, Inc.

(the “Company”) issued a 10% Promissory Note due June 30, 2022 (the “Note”), dated December 30, 2021, to the Michael C.

Howe Living Trust (the “Lender”).

Howe is the Chief Executive Officer of the Good Clinic LLC, one of our subsidiaries.

The principal amount of the Note is $ 1,000,000 , carries a 10% interest rate per annum, payable in monthly installments, and has a maturity date that is the earlier of (i) six (6) months from the date of execution, or (ii) the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE.

The purchase price of the Note payable to the Company for the Note was $ 850,000 and was funded on December 30, 2021.

The amount payable at maturity will be $ 1,000,000 plus 10 % of that amount plus any accrued and unpaid interest.

Following an event of default, as defined in the Note, the principal amount shall bear interest for each day until paid, at a rate per annum equal to the lesser of the maximum interest permitted by applicable law and 18 %.

The Note contains a “most favored nations” clause that provides that, so long as the Note is outstanding, if the Company issues any new security, which the Lender believes contains a term that is more favorable than those in the Note, the Company shall notify the Lender of such term, and such term, at the option of the Lender, shall become a part of the Note.

The Company entered into a debt-for-equity exchange agreement with Gardner Builders Holdings, LLC (the “Creditor”) on January 7, 2022 (the “Agreement”).

Pursuant to the Agreement, the Company issued shares of restricted common stock, par value $ 0.01 per share, of MITI (the “Restricted Shares”) to the Creditor in exchange for the Company Debt Obligations, as defined below.

The Agreement settles for certain accounts payable amounts owed by the Company to the Creditor (the “Accounts Payable Amount”) as well as upcoming amounts that will become due between the date of the Agreement and April 1, 2022.

The Agreement also settles incurred interest and penalties on the amounts due through January 5, 2022, as well as future interest payments on amounts to be incurred in the first quarter of 2022 (collectively, the “Additional Costs”, and combined with the Accounts Payable Amount, the “Company Debt Obligations”).

The Accounts Payable Amount is $ 500,000 , the Additional Costs is $ 294,912.56 and the conversion price is $ 0.25 .

As a result, 3,179,650 Restricted Shares were authorized to be issued.

The Company’s Board of Directors approved the Agreement on January 5, 2022.

As of December 31, 2021, the Company had cash and cash equivalents of $ 1.2 million, current liabilities of $ 5.6 million, and has incurred a loss from operations.

The Company’s principal operation is the development and deployment of software and systems for the healthcare marketplace.

The Company intends to:

a) develop and own primary care clinics operated by nurse practitioners, b) develop and acquire telemedical technologies, and c) evaluate other healthcare related opportunities both domestically and on an international basis.

The Company intends to a) develop and own primary care clinics operated by nurse practitioners, b) develop and acquire telemedical technologies, and c) evaluate other healthcare related opportunities both domestically and on an international basis.

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to execute its business plan.

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Small Business Administration.

On April 18, 2020, the Company’s former President and COO completed and submitted an application on behalf of the Company to Bank of America, NA (“Bank of America”) for a PPP loan, which was subsequently approved.

On April 25, 2020 the Company entered into an unsecured Promissory Note (the “Note”) with Bank of America for a loan in the original principal amount of approximately $460,000, and the Company received the full amount of the loan proceeds on May 4, 2020.

On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds disbursed under the Note.

The Company investigated the terms of the application and discovered its former President had erroneously represented it was refinancing an Economic Injury Disaster Loan when no such loan had been received.

Bank of America requested that the Company remit the funds received back to Bank of America.

The Company is currently working with Bank of America on a repayment plan.

If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.

During management's review of the loan application after the loan had been disbursed to the Company, it was determined that the information provided by its former President and COO in the application was not representative of the Company’s situation.

After consulting with legal counsel and conferring with the Board of Directors, the Board of Directors, in executive session, voted to remove the Company’s former President and Chief Operating Officer (“COO”) from its Board of Directors, and all operating roles due to the inaccuracy of the loan application.

Subsequent to that decision, the former President & COO submitted a resignation from all positions with the Company, which was accepted by the Board and management.

In August 2020, the former President and COO filed a complaint alleging discrimination under certain provisions of the anti-discrimination laws of that state.

The Company believes that the action is without merit and it intends to vigorously defend itself.

The Company does not believe it the action will have a material impact on the Company.

As of the date of this filing the Company has been advised by the convening judicial organization that it has dismissed this matter, and as such the individual who initiated this action is open to pursue litigation in other venues if they desire.

We have had some impact on our operations as a result of the effect of the pandemic, primarily with accessibility to staffing, consultants and in the capital markets, and we are adjusting as needed within our available resources.

On April 25, 2020, the Company entered an unsecured Promissory Note (the “Note”) with Bank of America for a loan in the original principal amount of approximately $ 460,000 , and the Company received the full amount of the loan proceeds on May 4, 2020.

The current balance is $ 460,406 and the Company is currently in discussions for a) a partial forgiveness and b) the conversion of any remaining balance into a term note.

COVID -19 Impact

The Company has had some impact on its operations because of the effects of the COVID-19 pandemic, primarily with accessibility to staffing, consultants and in the capital markets, and it is adjusting as needed within its available resources.

The Company will continue to assess the effect of the pandemic on its operations.

The extent to which the COVID-19 pandemic will impact the Company’s business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the duration and effect of possible business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease.

The extent to which the COVID-19 pandemic will continue to impact the Company’s business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the duration and effect of possible business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease.

While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity.

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Note 3 – Summary of Significant Accounting Policies

Basis of Accounting – The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of Mitesco, Inc., and its wholly owned subsidiaries MitescoNA, LLC, The Good Clinic, LLC, and Acelerar Healthcare Holdings, LTD.

Basis of Accounting – The consolidated financial statements are prepared in conformity with accounting principles accepted in the United States of America (“GAAP”).

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of Mitesco, Inc., and its owned subsidiaries Mitesco NA, LLC, The Good Clinic, LLC, and Acelerar Healthcare Holdings, LTD.

In addition, we anticipate that we will rely on the operating activities of certain legal entities in which we will not maintain a controlling ownership interest but over which we will have indirect influence and of which we will be considered the primary beneficiary.

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Cash - The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.

The Company had cash and cash equivalents of $64,789 and $83,245 as of December 31, 2020 and 2019.

The Company had cash and cash equivalents of $ 1.2 million and $ 0.1 million as of December 31, 2021 and 2020.

Property, Plant, and Equipment - Property and equipment is recorded at the lower of cost or estimated net recoverable amount and is depreciated using the straight-line method over its estimated useful life.

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Term of lease

Revenue Recognition – On January 1, 2018, we adopted Accounting Standards Update No.

2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition (Topic 605).

Results for reporting periods beginning after January 1, 2018 are presented under Topic 606.

The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on January 1, 2018.

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

identification of the contract, or contracts, with a customer;

identification of the performance obligations in the contract;

determination of the transaction price;

allocation of the transaction price to the performance obligations in the contract;

recognition of revenue when, or as, we satisfy a performance obligation.

Construction in Progress - Costs for capital assets not yet placed into service are capitalized as construction in progress on the consolidated balance sheets and will be depreciated once placed into service.

Revenue Recognition – On January 1, 2018, the Company adopted the new revenue recognition accounting standard issued by the Financial Accounting Standards Board (“FASB”) and codified in the ASC as Topic 606 (“ASC 606”).

The revenue recognition standard in ASC 606 outlines a single comprehensive model for recognizing revenue as performance obligations, defined in a contract with a customer as goods or services transferred to the customer in exchange for consideration, are satisfied.

The standard also requires expanded disclosures regarding the Company’s revenue recognition policies and significant judgments employed in the determination of revenue.

The Company applied the modified retrospective approach to all contracts when adopting ASC 606.

As a result, at the adoption of ASC 606 what was previously classified as the provision for bad debts in the statement of operations is now reflected as implicit price concessions (as defined in ASC 606) and therefore included as a reduction to net operating revenues in 2018.

For changes in credit issues not assessed at the date of service, the Company will prospectively recognize those amounts in other operating expenses on the statement of operations.

For periods prior to the adoption of ASC 606, the provision for bad debts has been presented consistent with the previous revenue recognition standards that required it to be presented separately as a component of net operating revenues.

Our revenues generally relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide services to the patients.

Revenues are recorded during the period our obligations to provide services are satisfied.

The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers.

The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates for services or discounted fee-for-service rates.

Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

Stock-Based Compensation - We recognize the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services.

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The model uses market-sourced inputs such as interest rates and stock price volatilities.

The following assumptions were used for the valuation of the derivative liability related to the convertible notes that contain a derivative component during the year ended December 31, 2020:

- The stock prices of $0.0198 to $0.0425 in these periods would fluctuate with the Company projected volatility.

- The projected volatility curve from an annualized analysis for each valuation period was based on the historical volatility of the Company and the term remaining for each note or warrant ranged from 135.6% through 220.0% at derivative treatment, issuance, conversion, exercise, and quarters ends.

The Company continues to trade with high volatility.

- The Holder would automatically convert the note at the maximum of 2 times the conversion price if the company was not in default.

- The Holder would automatically convert the note before maturity if the registration was effective and the company was not in default.

The Holder would automatically convert the note early based on ownership or trading volume limitations and the Company would redeem the unconverted balances at maturity.

- A change of control and fundamental transaction would occur initially 0% of the time and increase monthly by 0% to a maximum of 0% – based on management being in control and no desire to sell the Company.

- A reset event would adjust the Notes conversion price triggered by either a capital raise;

stock issuance;

or conversion/exercise.

The reset events are projected to occur annually starting 3 months following the date of valuation.

- For the variable rate Notes (30%, 39% or 45% discount), the Holder would convert with effective discount rates of 35.95% to 56.00% (based on the lookback terms).

- The Company would redeem the notes at maturity if the conversion value was less than the payment with penalties.

For the majority of the notes during the period redemption is projected 0% of the time, increasing 0% per month to a maximum of 0%.

- The cash flows are discounted to net present values using risk free rates.

Discount rates were based on risk free rates in effect based on the remaining term.

- An event of default would occur 10% of the time, increasing 0% per month to a maximum of 10%.

Common Stock Purchase Warrants- The Company accounts for common stock purchase warrants in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Accounting for Derivative Instruments and Hedging Activities.

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Income Taxes- The Company accounts for income taxes under the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s condensed consolidated financial statements or tax returns.

In estimating future tax consequences, the Company generally considers all expected future events other than possible enactments of changes in the tax laws or rates.

In estimating future tax consequences, the Company considers all expected future events other than enactments of changes in the tax laws or rates.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized.

The Company has determined that a valuation allowance is needed due to recent taxable net operating losses, the sale of profitable divisions and the limited taxable income in the carry back periods.

The Company has determined that a valuation allowance is needed due to recent taxable net operating losses and the limited taxable income in the carry back periods.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and certain tax loss carryforwards, less any valuation allowance.

The Company accounts for uncertain tax positions as required in that a position taken or expected to be taken in a tax return is recognized in the consolidated financial statements when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities.

A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

The Company accounts for uncertain tax positions as required in that a position taken or expected to be taken in a tax return is recognized in the consolidated financial statements when it is more likely than not (i.e., a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities.

A recognized tax position is then measured at the largest amount of benefit that is greater than 50% of being realized upon ultimate settlement.

The Company does not have any material unrecognized tax benefits.

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The Company does not have any interest and penalties accrued.

The Company is generally no longer subject to U.S.

The Company is no longer subject to U.S.

federal, state, and local income tax examinations for the years before 2012.

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The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our hierarchy assessment.

The carrying amount of cash, prepaid assets, accounts payable and accrued liabilities approximates fair value due to the short-term maturities of these instruments.

The carrying amount of cash, prepaid assets, accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments.

Because cash and cash equivalents are readily liquidated, management classifies these values as Level 1.

The fair value of the derivative liabilities approximate their book value as the instruments are short-term in nature and contain market rates of interest.

The fair value of the derivative liabilities approximates their book value as the instruments are short-term in nature and contain market rates of interest.

Because there is no ready market or observable transactions, management classifies the derivative liabilities as Level 3.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842):

Accounting for Leases.

This update requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at lease commencement date.

The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will largely remain unchanged and shall continue to depend on its classification as a finance or operating lease.

We have performed a comprehensive review in order to determine what changes were required to support the adoption of this new standard.

We adopted the ASU and related amendments on January 1, 2019.

We elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods.

During the year ended December 31, 2020, we recorded a right-to-use asset and an operating lease liability in the amount of $328,500.

This pronouncement is not expected to have an ongoing material effect on our financial statements.

In January 2017, the FASB issued ASU No.

2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test.

In computing the implied fair value of goodwill under Step 2, current U.S.

GAAP requires the performance of procedures to determine the fair value at the impairment testing date of assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination.

Instead, the amendments under this ASU require the goodwill impairment test to be performed by comparing the fair value of a reporting unit with its carrying amount.

An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value;

however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

We implemented this ASU on January 1, 2020, and the implementation of this pronouncement did not have a material effect on our financial statements.

In June 2018, the FASB issued ASU 2018-07 "Improvements to Non-employee Share-Based Payment Accounting”, which simplifies the accounting for share-based payments granted to non-employees for goods and services.

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The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

The Company does not anticipate that the adoption of this standard will have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No.

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Simplifying the Accounting for Income Taxes ("ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements and related disclosures.

The Company has adopted ASU No.

2019-12, "Income Taxes (Topic 740) however giving the Company’s historical losses and full valuation allowance it did not have an impact on its condensed consolidated financial statements and related disclosures.

Recent Accounting Standards Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, "Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”.

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The following table sets forth the computation of loss per share for the years ended December 31, 2021 and 2020, respectively:

For the Years Ended

Net loss applicable to common shareholders

Weighted average common shares outstanding

Net loss per share data:

Net loss per share:

Basic and diluted

The Company excluded all common equivalent shares outstanding for warrants, options and convertible instruments to purchase common stock from the calculation of diluted net loss per share because all such securities are antidilutive for the periods presented.

The Company excluded all common equivalent shares for warrants, options, and convertible instruments from the calculation of diluted net loss per share because all such securities are antidilutive for the periods presented.

As of December 31, 2021 and 2020, the following shares were issuable and excluded from the calculation of diluted loss:

Convertible Notes

Accrued interest on Preferred Stock

Preferred Stock

Accrued Interest

Note 5 – Related Party Transactions

For the year ended December 31, 2021:

On July 21, 2021, the Company issued a total of 3,000,000 stock option awards to the Company’s executive officers:

1,500,000 to its Chief Executive Officer, 750,000 to its Chief Financial Officer and 750,000 to its Chief Legal Officer.

The options will expire on the ten-year anniversary of the grant date and will vest following the Company’s achievement of a total of $30 million of revenues over four consecutive quarters, as recorded under accepted accounting principles of the United States of America.

The options have a strike price of $ 0.25 the amount was based on the price of the lowest investment amount offered to outside investors in 2021 and is higher than the closing price on the date they were granted.

On August 26, 2021, the Company issued 312,800 restricted shares of the Company’s common stock priced at $ 0.25 , vesting immediately, in lieu of $ 78,200 of cash compensation owed to the Company’s Chief Executive Officer for services rendered to the Company prior to 2021.

On December 30, 2021, the Company issued a 10 % Promissory Note due June 30, 2022 to the Chief Executive Officer of the Good Clinic LLC, one of our subsidiaries.

During the year ended December 31, 2021, the Company accrued dividends on its Series X Preferred Stock in the total amount of $ 61,818 .

Of this amount, a total of $ 7,890 was payable to officers and directors, $ 30,827 was payable to a related party shareholder, and $ 23,101 was payable to non-related parties.

For the year ended December 31, 2020:

On February 27, 2020, the Company agreed to issue 1,000,000 ten-year options to its two non-management directors (a total of 2,000,000 options).

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and 863,212 shares in the amount of $ 26,310 were issued to non-related parties.

For the year ended December 31, 2019:

On March 11, 2019, the Company issued 100,000 shares of common stock to its President as compensation.

These shares were valued at the market price of the Company’s common stock on the date of the grant, and the amount of $8,740 was charged to operations during the year ended December 31, 2019.

On March 11, 2019, the Company issued 100,000 shares of common stock to a Board member as compensation These shares were valued at the market price of the Company’s common stock on the date of the grant, and the amount of $8,740 was charged to operations during the year ended December 31, 2019.

On July 29, 2019, the Company cancelled 300,000 shares of common stock previously issued to its former President.

The par value of these shares in the amount of $3,000 was charged to paid-in capital during the year ended December 31, 2019.

On August 10, 2019, the Company issued 1,000,000 shares of common stock with a fair value of $60,000 to a Board member pursuant to a director advisory agreement.

These shares were valued at the market price of the Company’s common stock on the date of the grant.

The fair value of these shares will be recognized ratably over the vesting period;

during the year ended December 31, 2019, the amount of $60,000 was charged to operations in connection with these shares.

On August 10, 2019, the Company issued 775,000 shares of common stock with a fair value of $46,500 to a Board member pursuant to a director advisory agreement.

These shares were valued at the market price of the Company’s common stock on the date of the grant.

The fair value of these shares will be recognized ratably over the vesting period;

during the year ended December 31, 2019, the amount of $46,500 was charged to operations in connection with these shares.

On August 10, 2019, the Company issued 200,000 shares of common stock with a fair value of $12,000 to a Board member pursuant to a director advisory agreement.

These shares were valued at the market price of the Company’s common stock on the date of the grant.

The fair value of these shares will be recognized ratably over the vesting period;

during the year ended December 31, 2019, the amount of $12,000 was charged to operations in connection with these shares.

During the year ended December 31, 2019, the Company recognized the amount of $16,085 each to its Chief Executive Office and its President and Chief Operating Officer in connection with the vested portion of common stock awards for their duties as Board members;

in addition, the Company recognized the amount of $5,7133 each to its Chief Executive Office and its President and Chief Operating Officer in connection with the vested portion of common stock awards for their duties as Executives.

On December 31, 2019, the Company issued a total of 26,227 shares of Series X Preferred Stock in settlement of various liabilities.

All of the entities who received these shares were related parties, either because they were officer and or directors, or because the voting rights attached to these shares created a related party relationship.

The shares of Series X Preferred Stock were issued as follows:

As of December 31, 2021, the shares of Series X Preferred Stock issued and outstanding is as follows:

Ronald Riewold, Director

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Deferred Compensation

Smith, Director, COO and President (c) (now ex-Officer and Director)

Deferred Compensation

James Crone, ex-Officer, and Director

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Irish Italian Retirement Fund

Consulting services, notes payable (a)

Consulting services, notes payable

Frank Lightmas

(a) Amount consists of accounts payable for consulting services of $174,813, and principal plus interest due on notes payable in the amount of $137,759.

(b) Amount consists of $71,279 in legal fees due and $9,721 in prepaid legal fees.

Smith resigned effective July 1, 2020.

Note 6 – Accounts Payable and Accrued Liabilities

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Accrued payroll and payroll taxes

Credit card payable

During the year ended December 31, 2020, the amount of $26,049 was reclassified from accrued liabilities to other current liabilities.

Total accounts payable and accrued liabilities

Note 7 - Right to Use Assets and Lease Liabilities – Operating Leases

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August 2014 Series C Convertible Debenture

As part of the restructuring, all debentures issued by Trunity Holdings, Inc., to fund the former, educational business, were eligible to participate in a debt conversion;

however, one debenture holder that was issued a Series C Convertible Debenture (the “Series C Debenture”) in August 2014 with an aggregate face value of $100,000 in exchange for the cancellation of Series B Convertible Debentures with a carrying value of $110,833 did not convert such debenture.

The Series C Convertible Debenture accrues interest at an annual rate of 10%, matured November 2015, and is convertible into our common stock at a conversion rate of $20.20 per share.

The holders of the Series C Debenture also received five-year warrants to acquire up to 4,950 shares post-split of common stock for an exercise price of $20.20 per share.

The former educational business allocated the face value of the Series C Debenture to the warrants and the debentures based on its relative fair values, and allocated to the warrants, which was recorded as a discount against the Series C Debenture, with an offsetting entry to additional paid-in capital.

The discount was fully expensed upon execution of the new debentures as debt extinguishment costs within discontinued operations.

The Series C Debenture is currently in default.

Details of activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

November 2014 Series D Convertible Debenture

As part of the restructuring all debentures issued by Trunity Holdings, Inc., to fund the former, educational business were eligible to participate in a debt conversion;

however, one debenture holder that was issued a Series D Convertible Debenture (the “Series D Debenture”) in November 2014 with an aggregate face value of $10,000 in exchange for the cancellation of Series B Convertible Debenture with a carrying value of $11,333 did not participate in the debt conversion restructuring.

The Series D Debenture accrues interest at an annual rate of 12%, matured November 2015, and is convertible into our common stock at a conversion rate of $16.67 per share.

The holders of the Series D Debenture also received five-year warrants to acquire up to 495 shares of common stock for an exercise price of $20.20 per share on a post-split basis.

The former educational business allocated the face value of the Series D Debenture to the warrants and the debentures based on their relative fair values, and allocated to the warrants, which was recorded as a discount against the Series D Debenture, with an offsetting entry to additional paid-in capital.

The discount was fully expensed upon execution of the new debentures as debt extinguishment costs within discontinued operations.

The Series D Debenture is currently in default.

Details of activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

On March 30, 2021, the Company issued 272,837 shares of common stock and paid cash in the amount of $ 122,166 as settlement of principal and accrued interest in the amounts of $ 110,833 and $ 71,526 , respectively, due under the Series C Debenture and principal and accrued interest in the amounts of $ 11,333 and $ 8,722 due under the Series C Debenture.

The Company recognized a gain in the amount of $ 3,035 on this transaction.

These obligations have been fully satisfied as of the date of this filing and the Company has no further requirements related to these matters.

March 2016 Convertible Note A

On March 18, 2016, the Company issued a 12% Convertible Promissory Note (the “Convertible Note A”) in the principal amount of $60,000 to a lender.

Pursuant to the terms of the Convertible Note A, the Company is obligated to pay monthly installments of not less than $1,000 the first of each month commencing the month following the execution of the Convertible Note A until its maturity on September 16, 2016 at which time the Company was obligated to repay the full principal amount of the Convertible Note A.

The Convertible Note A is convertible by the holder at any time into shares of the Company’s common stock at price of $1.00 per share, and throughout the duration of the note, the holder has the right to participate in any financing the Company may engage in upon the same terms and conditions as all other investors.

The Company allocated the face value of the Convertible Note A to the shares and the note based on relative fair values, and the amount allocated to the shares of $18,750 was recorded as a discount against the note.

The beneficial conversion feature of $9,375 was recorded as a debt discount with an offsetting entry to additional paid-in capital decreasing the note payable and increasing debt discount.

The debt discount was amortized to interest expense during the year ended December 31, 2016.

Upon issuance of the Convertible Note A, the lender was awarded 15,000 restricted common stock as an origination fee which includes piggy-back registration rights.

On September 19, 2016, the Company issued the lender an additional 15,000 restricted common stock at a price of $0.30 per share to extend the term of the loan agreement indefinitely.

The cost to the Company was $4,050 in interest expense.

On August 10, 2017, the Company issued 25,000 shares of common stock with a fair value of $3,750 for accrued interest through August 1, 2017 in the amount of $7,860.

In April 2018, the Company issued 75,000 shares of common stock with a value of $7,500 as consideration for an extension of the term of the loan to July 1, 2018, and on August 13, 2018, the Company issued an additional 75,000 shares of common stock with a value of $6,750 for an extension of the term of the loan to October 31, 2018.

During the year ended December 31, 2019, the lender converted principal in the amount of $15,000 into 120,000 shares of common stock.

The Company recorded a loss in the amount of $13,867 on this conversion.

Also, during the year ended December 31, 2019, the Company made a principal payment in the amount of $4,000 on this note.

Details of activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Power Up Note 11

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On September 12, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 11”) in the aggregate principal amount of $45,000.

The Power Up Note 11 entitled the holder to 12% interest per annum and matures on July 15, 2020.

Under the Power Up Note 11, Power Up had the right to convert all or a portion of the outstanding principal of the Power Up Note 11 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Power Up Note 11, at a price equal to the higher of the variable conversion price or $0.00006 per share.

The variable conversion price meant 55% of lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up could not convert the Power Up Note 11 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Power Up Note 11 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Power Up Note 11, then such redemption premium was 120%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium 125%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 130%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 135%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Power Up Note 11, there shall be no further right of prepayment.

The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 11;

$3,000 was amortized to interest expense during the year ended December 31, 2019.

The Company accrued interest in the amount of $1,642 on the Power Up Note 11 during the year ended December 31, 2019.

During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $47,187 existed in connection with the variable rate conversion feature of the Power Up Note 11.

$45,000 of this amount was charged to discount on the Power Up Note 11, and $2,187 was charged to interest expense.

During the year ended December 31, 2020, the Company made a cash payment in the amount of $74,195 on the Power Up Note 11 which fully satisfied this obligation.

This amount consisted of $45,000 of principal, $2,680 of accrued interest, and $23,815 of prepayment penalty.

The Company revalued the derivative liability associated with the Power Up Note 11 at the time of payment, and recorded a gain on revaluation in the amount of $35,420.

The Company credited the fair value of the derivative liability at the time of payment in the amount of $21,266 to additional paid-in capital.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Power Up Note 12

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On October 7, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 12”) in the aggregate principal amount of $53,000 and an original issue discount of $3,000.

The Power Up Note 12 entitled the holder to 12% interest per annum and matured on August 15, 2020.

Under the Power Up Note 12, Power Up had the right to convert all or a portion of the outstanding principal of the Power Up Note 12 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Power Up Note 12, at a price equal to the higher of the variable conversion price or $0.00006 per share.

The variable conversion price meant 55% of lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up could not convert the Power Up Note 12 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Power Up Note 12 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Power Up Note 12, then such redemption premium was 120%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 125%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 130%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 135%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Power Up Note 12, there shall be no further right of prepayment.

The Company accrued interest in the amount of $1,499 on the Power Up Note 12 during the year ended December 31, 2019.

During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $54,969 existed in connection with the variable rate conversion feature of the Power Up Note 12.

$53,000 of this amount was charged to discount on the Power Up Note 12, and $2,187 was charged to interest expense.

$6,502 of the discount was charged to operations during the year ended December 31, 2019.

During the year ended December 31, 2020, the Company made a cash payment in the amount of $84,231 on the Power Up Note 12 which fully satisfied this obligation.

This amount consisted of $53,000 of principal, $3,312 of accrued interest, and $27,919 of prepayment penalty.

The Company revalued the derivative liability associated with the Power Up Note 12 at the time of payment, and recorded a gain on revaluation in the amount of $4,247.

The Company credited the fair value of the derivative liability at the time of payment in the amount of $62,569 to additional paid-in capital.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Power Up Note 13

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On November 11, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 13”) in the aggregate principal amount of $73,000 and an original issue discount of $3,000.

The Power Up Note 13 entitled the holder to 12% interest per annum and matures on August 30, 2020.

Under the Power Up Note 13, Power Up had the right to convert all or a portion of the outstanding principal of the Power Up Note 13 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Power Up Note 12, at a price equal to the higher of the variable conversion price or $0.00006 per share.

The variable conversion price meant 55% of lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up could not convert the Power Up Note 13 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Power Up Note 13 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Power Up Note 13, then such redemption premium was 120%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 125%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 130%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 135%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Power Up Note 13, there shall be no further right of prepayment.

The Company accrued interest in the amount of $1,414 on the Power Up Note 13 during the year ended December 31, 2019.

During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $73,529 existed in connection with the variable rate conversion feature of the Power Up Note 13.

$73,000 of this amount was charged to discount on the Power Up Note 13, and $529 was charged to interest expense.

$6,091 of the discount was charged to operations during the year ended December 31, 2019.

During the year ended December 31, 2020, the Company made a cash payment in the amount of $115,980 on the Power Up Note 13 which fully satisfied this obligation.

This amount consisted of $73,000 of principal, $4,728 of accrued interest, and $38,252 of prepayment penalty.

The Company revalued the derivative liability associated with the Power Up Note 13 at the time of payment, and recorded a gain on revaluation in the amount of $4,882.

The Company credited the fair value of the derivative liability at the time of payment in the amount of $86,380 to additional paid-in capital.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 1

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On November 22, 2019, the Company entered into a Securities Purchase Agreement with Eagle Equities, LLC (“Eagle Equities”) pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 1”) in the aggregate principal amount of $256,000 and an original issue discount of $6,000.

The Eagle Equities Note 1 entitled the holder to 12% interest per annum and matures on November 22, 2020.

Under the Eagle Equities Note 1, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 1 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 1, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities could not convert the Eagle Equities Note 1 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 1 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 1, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 1, there shall be no further right of prepayment.

The Company accrued interest in the amount of $3,367 on the Eagle Equities Note 1 during the year ended December 31, 2019.

During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $271,694 existed in connection with the variable rate conversion feature of the Eagle Equities Note 1.

$256,000 of this amount was charged to discount on the Eagle Equities Note 1, and $15,694 was charged to interest expense.

$7,784 of the discount was charged to operations during the year ended December 31, 2019.

During the year ended December 31, 2020, the holder of the Eagle Equities Note 1 converted the following amounts of principal and accrued interest to common stock:

On June 5, 2020, principal of $25,000 and accrued interest of $1,608 were converted at a price of $0.0132 per share into 2,015,783 shares of common stock;

On June 17, 2020, principal of $25,000 and accrued interest of $1,708 were converted at a price of $0.0132 per share into 2,023,358 shares of common stock;

On June 23, 2020, principal of $40,000 and accrued interest of $2,813 were converted at a price of $0.0132 per share into 3,243,434 shares of common stock;

on June 26, 2020, principal of $26,000 and accrued interest of $1,855 were converted at a price of $0.01362 per share into 2,045,130 shares of common stock;

on July 9, 2020, principal of $45,000 and accrued interest of $3,405 were converted at a price of $0.01518 per share into 3,188,735 shares of common stock;

on July 17, 2020, principal of $50,000 and accrued interest of $3,917 were converted at a price of $0.01572 per share into 3,429,814 shares of common stock;

and on July 30, 2020, principal of $45,000 and accrued interest of $3,720 were converted at a price of $0.021 per share into 2,320,000 shares of common stock.

There were no gains or losses recorded, as these conversions were made pursuant to the terms of the agreement.

Details of activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 2

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On December 19, 2019, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 2”) in the aggregate principal amount of $256,000 and an original issue discount of $6,000.

The Eagle Equities Note 2 entitled the holder to 12% interest per annum and matures on December 19, 2020.

Under the Eagle Equities Note 2, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 2 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 2, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities could not convert the Eagle Equities Note 2 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 2 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 2, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 2, there shall be no further right of prepayment.

The Company accrued interest in the amount of $1,094 on the Eagle Equities Note 2 during the year ended December 31, 2019.

During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $277,476 existed in connection with the variable rate conversion feature of the Eagle Equities Note 2.

$256,000 of this amount was charged to discount on the Eagle Equities Note 2, and $21,476 was charged to interest expense.

$8,393 of the discount was charged to operations during the year ended December 31, 2019.

During the year ended December 31, 2020, the holder of the Eagle Equities Note 2 converted the following amounts of principal and accrued interest to common stock:

On August 20, 2020, principal of $56,000 and accrued interest of $4,573 were converted at a price of $0.01896 per share into 3,194,796 shares of common stock;

On September 1, 2020, principal of $50,000 and accrued interest of $4,283 were converted at a price of $0.01806 per share into 3,005,721 shares of common stock;

On September 9, 2020, principal of $50,000 and accrued interest of $4,417 were converted at a price of $0.0153 per share into 3,556,645 shares of common stock;

on September 25, 2020, principal of $50,000 and accrued interest of $4,683 were converted at a price of $0.0153 per share into 3,574,074 shares of common stock;

and on October 6, 2020, principal of $50,000 and accrued interest of $4,867 were converted at a price of $0.0153 into 3,586,078 shares of common stock.

Details of activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 3

On March 24, 2021, the Company paid cash in the amount of $ 55,368 as settlement of principal and accrued interest in the amount of $ 41,000 and $ 13,167 , respectively, due under the March 2016 Convertible Note A.

The Company recognized a loss in the amount of $ 1,201 on this transaction.

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On January 24, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 3”) in the aggregate principal amount of $256,000 and an original issue discount of $6,000.

The Eagle Equities Note 3 entitled the holder to 12% interest per annum and matures on January 24, 2021.

Under the Eagle Equities Note 3, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 3 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 3, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities could not convert the Eagle Equities Note 3 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 3 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 3, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 3, there shall be no further right of prepayment.

During the three months ended March 31, 2020, the Company determined that a derivative liability in the amount of $272,412 existed in connection with the variable rate conversion feature of the Eagle Equities Note 3.

$250,000 of this amount was charged to discount on the Eagle Equities Note 3, and $22,412 was charged to interest expense.

During the year ended December 31, 2020, the holder of the Eagle Equities Note 3 converted the following amounts of principal and accrued interest to common stock:

On October 15, 2020, principal of $50,000 and accrued interest of $4,367 were converted at a price of $0.01566 per share into 3,471,711 shares of common stock;

On October 29, 2020, principal of $50,000 and accrued interest of $4,600 were converted at a price of $0.023 per share into 4,439,024 shares of common stock;

On November 11, 2020, principal of $33,000 and accrued interest of $3,179 were converted at a price of $0.011 per share into 3,259,369 shares of common stock;

on November 17, 2020, principal of $35,000 and accrued interest of $3,442 were converted at a price of $0.011 per share into 3,482,065 shares of common stock;

on November 25, 2020, principal of $44,000 and accrued interest of $4,444 were converted at a price of $0.0108 per share into 4,485,556 shares of common stock;

and on December 4, 2020, principal of $44,000 and accrued interest of $4,576 were converted at a price of $0.0108 per share into 4,497,778 shares of common stock.

Details of activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 4

On January 4, 2021, the Company issued 4,123,750 shares of common stock at a price of $ 0.012 per share pursuant to the conversion of $ 45,000 of principal and $ 4,485 of accrued interest in Eagle Equities Note 4.

On January 6, 2021, the Company issued 3,505,964 shares of common stock at a price of $ 0.01224 per share pursuant to the conversion of $ 39,000 of principal and $ 3,913 of accrued interest in Eagle Equities Note 4.

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On March 10, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 4”) in the aggregate principal amount of $129,000 and an original issue discount of $4,000.

The Eagle Equities Note 4 entitled the holder to 12% interest per annum and matured on March 10, 2021.

Under the Eagle Equities Note 4, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 4 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 4, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 4 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 4 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 4, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 4, there shall be no further right of prepayment.

During the three months ended March 31, 2020, the Company determined that a derivative liability in the amount of $139,021 existed in connection with the variable rate conversion feature of the Eagle Equities Note 4.

$125,000 of this amount was charged to discount on the Eagle Equities Note 4, and $14,021 was charged to interest expense.

During the year ended December 31, 2020, the holder of the Eagle Equities Note 4 converted the following amounts of principal and accrued interest to common stock:

On December 16, 2020, principal of $45,000 and accrued interest of $4,200 were converted at a price of $0.0108 per share into 4,555,556 shares of common stock.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 5

On January 11, 2021, the Company issued 4,463,507 shares of common stock at a price of $ 0.01224 per share pursuant to the conversion of $ 50,000 of principal and $ 4,633 of accrued interest in Eagle Equities Note 5.

On January 14, 2021, the Company issued 4,319,378 shares of common stock at a price of $ 0.01266 per share pursuant to the conversion of $ 50,000 of principal and $ 4,683 of accrued interest in Eagle Equities Note 5.

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On April 8, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 5”) in the aggregate principal amount of $100,000 and an original issue discount of $4,000.

The Eagle Equities Note 5 entitled the holder to 12% interest per annum and matures on April 8, 2021.

Under the Eagle Equities Note 5, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 5 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 5, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities could not convert the Eagle Equities Note 5 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 5 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 5, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 5, there shall be no further right of prepayment.

During the three months ended June 30, 2020, the Company determined that a derivative liability in the amount of $106,576 existed in connection with the variable rate conversion feature of the Eagle Equities Note 5.

$100,000 of this amount was charged to discount on the Eagle Equities Note 5, and $6,576 was charged to interest expense.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 6

On January 21, 2021, the Company issued 6,449,610 shares of common stock at a price of $ 0.0154 per share pursuant to the conversion of $ 93,000 of principal and $ 6,324 of accrued interest in Eagle Equities Note 6.

On January 28, 2021, the Company issued 7,285,062 shares of common stock at a price of $ 0.01575 per share pursuant to the conversion of $ 107,200 of principal and $ 7,540 of accrued interest in Eagle Equities Note 6.

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On July 1, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 6”) in the aggregate principal amount of $200,200 with an original issue discount of $18,200.

The amount received was also net of fees in the amount of $7,000, which were charged to interest expense during the period.

The Eagle Equities Note 6 entitled the holder to 12% interest per annum and matures on July 1, 2021.

Under the Eagle Equities Note 6, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 6 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 6, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities could not convert the Eagle Equities Note 6 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 6 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 6, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 6, there shall be no further right of prepayment.

The Company determined that a derivative liability in the amount of $218,148 existed in connection with the variable rate conversion feature of the Eagle Equities Note 6.

$200,200 of this amount was charged to discount on the Eagle Equities Note 6, and $17,948 was charged to interest expense.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 7

On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 7 whereby the Company issued 1,184,148 shares of common stock at a price of $ 0.24984 per share in satisfaction of $ 200,200 of principal and all accrued interest and prepayment penalties due under this note.

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On August 20, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 7”) in the aggregate principal amount of $200,200 with an original issue discount of $18,200.

The amount received was also net of fees in the amount of $7,000, which were charged to interest expense during the period.

The Eagle Equities Note 7 entitled the holder to 12% interest per annum and matures on August 20, 2021.

Under the Eagle Equities Note 7, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 7 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 7, at a price equal to 70% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 7 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepays the Eagle Equities Note 7 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 7, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 7, there shall be no further right of prepayment.

The Company determined that a derivative liability in the amount of $215,403 existed in connection with the variable rate conversion feature of the Eagle Equities Note 7.

$200,200 of this amount was charged to discount on the Eagle Equities Note 7, and $15,203 was charged to interest expense.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 8

On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 8 whereby the Company issued 639,593 shares of common stock at a price of $ 0.23851 per share in satisfaction of $ 114,400 of principal and all accrued interest and prepayment penalties due under this note.

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On September 30, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 8”) in the aggregate principal amount of $114,400 with an original issue discount of $10,400.

The amount received was also net of fees in the amount of $4,000, which were charged to interest expense during the period.

The Eagle Equities Note 8 entitled the holder to 12% interest per annum and matures on September 30, 2021.

Under the Eagle Equities Note 8, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 8 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 8, at a price equal to 70% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities could not convert the Eagle Equities Note 8 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 8 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 8, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 8, there shall be no further right of prepayment.

The Company determined that a derivative liability in the amount of $117,309 existed in connection with the variable rate conversion feature of the Eagle Equities Note 8.

$114,400 of this amount was charged to discount on the Eagle Equities Note 8, and $2,909 was charged to interest expense.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 9

On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 9 whereby the Company issued 605,177 shares of common stock at a price of $ 0.24984 per share in satisfaction of $ 114,400 of principal and all accrued interest and prepayment penalties due under this note.

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On October 29, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 9”) in the aggregate principal amount of $114,400 with an original issue discount of $10,400.

The amount received was also net of fees in the amount of $4,000, which were charged to discount on convertible notes during the period.

The Eagle Equities Note 9 entitled the holder to 12% interest per annum and matures on October 29, 2021.

Under the Eagle Equities Note 9, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 9 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 9, at a price equal to 70% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities could not convert the Eagle Equities Note 9 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 9 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment was made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 9, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 9, there shall be no further right of prepayment.

The Company determined that a derivative liability in the amount of $86,432 existed in connection with the variable rate conversion feature of the Eagle Equities Note 9;

this amount was charged to discount on the Eagle Equities Note 9.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Eagle Equities Note 10

On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 10 whereby the Company issued 1,095,131 shares of common stock at a price of $ 0.23748 per share in satisfaction of $ 200,200 of principal and all accrued interest and prepayment penalties due under this note.

This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.

On December 9, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 10”) in the aggregate principal amount of $220,000 with an original issue discount of $20,000.

The amount received was also net of fees in the amount of $8,000, which were charged to discount on convertible notes during the period.

The Eagle Equities Note 10 entitled the holder to 12% interest per annum and matures on December 9, 2021.

Under the Eagle Equities Note 10, Eagle Equities had the right to convert all or a portion of the outstanding principal of the Eagle Equities Note 8 into shares of Common Stock beginning on the date which was 180 days from the issuance date of the Eagle Equities Note 9, at a price equal to 70% of lowest traded price during the 20 day trading period ending on the day the conversion notice was received by the Company, provided, however, that Eagle Equities could not convert the Eagle Equities Note 10 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepaid the Eagle Equities Note 10 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%;

if such prepayment is made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 10, then such redemption premium was 116%;

if such prepayment was made from the sixty first 61st to the 90th day after issuance, then such redemption premium was 122%;

and if such prepayment was made from the 91st to the 120th day after issuance, then such redemption premium was 128%;

and if such prepayment was made from the 121st to the 150th day after issuance, then such redemption premium was 134%;

and if such prepayment was made from the 151st to the 180th day after issuance, then such redemption premium was 140%.

After the 180th day following the issuance of the Eagle Equities Note 9, there shall be no further right of prepayment.

The Company determined that a derivative liability in the amount of $118,160 existed in connection with the variable rate conversion feature of the Eagle Equities Note 10;

this amount was charged to discount on the Eagle Equities Note 10.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

On May 4, 2020, the Company received loan proceeds from Bank of America in the amount of $460,406 under the Paycheck Protection Program (the “PPP Loan”).

On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds disbursed under the Note.

Bank of America requested that the Company return the funds it received back to Bank of America.

The Company is currently negotiating a repayment plan with Bank of America.

If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.

Details of additional activity for the year ended December 31, 2020 are presented in Notes Payable Table 1, below.

Notes Payable Table 1:

Principal Balance

Accrued Interest

Series C Convertible Debenture

Series D Convertible Debenture

Convertible Note A

Power Up Note 11

Power Up Note 12

Power Up Note 13

Eagle Equity Note 1

Eagle Equity Note 2

Eagle Equity Note 3

Eagle Equity Note 4(a)

Eagle Equity Note 5(b)

Eagle Equity Note 6(c)

Eagle Equity Note 7(d)

Eagle Equity Note 8(e)

Eagle Equity Note 9(f)

Eagle Equity Note 10(g)

(a) Subsequent to December 31, 2020, $84,000 of principal and $8,398 of accrued interest of this note were converted to a total of 7,629,714 shares of the Company’s common stock.

As of the date of this filing this note is fully satisfied and there are no further obligations.

(b) Subsequent to December 31, 2020, $100,000 of principal and $9,317 of accrued interest of this note were converted to a total of 8,782,885 shares of the Company’s common stock.

As of the date of this filing this note is fully satisfied and there are no further obligations.

(c) Subsequent to December 31, 2020, $200,000 of principal and $13,864 of accrued interest of this note were converted to a total of 13,734,672 shares of the Company’s common stock.

As of the date of this filing this note is fully satisfied and there are no further obligations.

(d) Subsequent to December 31, 2020, the Company entered into a settlement agreement whereby principal of $200,200 and all accrued interest and prepayment penalties due under this note were converted to a total of 1,184,148 shares of the Company’s common stock.

As of the date of this filing this note is fully satisfied and there are no further obligations

(e) Subsequent to December 31, 2020, the Company entered into a settlement agreement whereby principal of $114,400 and all accrued interest and prepayment penalties due under this note were converted to a total of 639,593 shares of the Company’s common stock.

As of the date of this filing this note is fully satisfied and there are no further obligations

(f) Subsequent to December 31, 2020, the Company entered into a settlement agreement whereby principal of $114,400 and all accrued interest and prepayment penalties due under this note were converted to a total of 605,177 shares of the Company’s common stock.

As of the date of this filing this note is fully satisfied and there are no further obligations

(g) Subsequent to December 31, 2020, the Company entered into a settlement agreement whereby principal of $200,200 and all accrued interest and prepayment penalties due under this note were converted to a total of 1,095,131 shares of the Company’s common stock.

As of the date of this filing this note is fully satisfied and there are no further obligations

The total amount of notes payable at December 31, 2020 and December 31, 2019 is presented in Notes Payable Table 2 below:

During March 2020, in response to the COVID-19 crisis, the federal government announced plans to offer loans to small businesses in various forms, including the Payroll Protection Program, or "PPP", established as part of the Corona Virus Aid, Relief and Economic Security Act ("CARES Act”) and administered by the U.S.

Small Business Administration.

On April 25, 2020, the Company entered an unsecured Promissory Note (the "Note”) with Bank of America for a loan in the original principal amount of approximately $ 460,000 , and the Company received the full amount of the loan proceeds on May 4, 2020.

The current balance is $ 460,406 and the Company is currently in discussions for a) a partial forgiveness and b) the conversion of any remaining balance into a term note.

Mitesco, Inc.

(the “Company”) issued a 10% Promissory Note due June 30, 2022 (the “Note”), dated December 30, 2021, to the Michael C.

Howe Living Trust (the “Lender”).

Howe is the Chief Executive Officer of the Good Clinic LLC, one of our subsidiaries.

The principal amount of the Note is $ 1,000,000 , carries a 10 % interest rate per annum, payable in monthly installments, and has a maturity date that is the earlier of (i) six (6) months from the date of execution, or (ii) the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE .

The purchase price of the Note payable to the Company for the Note was $ 850,000 and was funded on December 30, 2021.

The amount payable at maturity will be $1,000,000 plus 10% of that amount plus any accrued and unpaid interest.

The Note contains a “most favored nations” clause that provides that, so long as the Note is outstanding, if the Company issues any new security, which the Lender reasonably believes contains a term that is more favorable than those in the Note, the Company shall notify the Lender of such term, and such term, at the option of the Lender, shall become a part of the Note.

As further consideration for the Purchase Price payable hereunder, promptly following the Issue Date, the Borrower shall issue to the Lender two common stock purchase warrants, entitling the Lender to purchase (i) 2,100,000 shares of the Borrower’s common stock on substantially the same terms as the Series A warrant issued in connection with the Borrower’s Series D Convertible Preferred Stock, and (ii) 2,100,000 shares of the Borrower’s common stock on substantially the same terms as the Series B warrant issued in connection with the Borrower’s Series D Convertible Preferred Stock.

one warrant (the “Series A Warrants”) to purchase 2.1 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) at a purchase price of $0.50 per whole share of Common Stock, and one warrant (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase 2.1 shares of Common Stock at a purchase price of $0.75 per whole share .

The Warrants had a fair value of $ 261,568 at the date of issuance, which was recorded as a discount to the Note.

These amounts are reflected in the table below:

Notes Payable Table 1:

Total notes payable

Notes Payable

Notes payable - net of discount

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The derivative components of these notes are valued at issuance, at conversion, at restructure, and at each period end.

Derivative liability activity for the years ended December 31, 2019 and 2020 are summarized in the table below:

December 31, 2018

Conversion features issued

Warrants issued

Settled upon conversion or exercise

Settled upon payment of note

Loss on revaluation

December 31, 2019

Derivative liability activity for the year ended December 31, 2021 was $ 0 .

Derivative liability activity for the years ended December 31, 2020 is summarized in the table below:

Conversion features issued

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Common Stock Transactions During the Year Ended December 31, 2021

On January 14, 2021, the Company issued 4,319,378 shares of common stock at a price of $0.01266 per share pursuant to the conversion of $ 50,000 of principal and $ 4,683 of accrued interest in Eagle Equities Note 5.

On February 1, 2021, the Company issued 6,672,000 shares of common stock in a private placement (the "2021 Private Placement”) at a price of $ 0.25 per share for cash proceeds of $ 1,668,000 .

On February 22, 2021, the Company issued 336,000 shares of common stock for the exercise of options at a price of $ 0.03 per share.

On March 11, 2021, the Company issued 600,000 shares of common stock to four officers of The Good Clinic in exchange for 4,800 shares of Series A Preferred Stock.

The 4,800 shares of Series A Preferred Stock were cancelled.

On March 17, 2021, the Company issued 300,000 shares of common stock at a price of $ 0.31 per share to a service provider.

On March 23, 2021, the Company issued 461,358 shares of common stock at a price of $ 0.26 per share to the underwriters of the 2021 Private Placement.

On April 19, 2021, the Company issued 1,962 shares of common stock for professional fees which had been performed in a prior period.

The Company recorded these shares at the par value of $ 0.01 per share.

On May 4 through May 26, 2021, the Company issued 4,237,424 shares of common stock for the conversion of 1,059,356 shares of Series C Preferred Stock at a price of $ 0.25 per share.

On May 12, 2021, the Company issued 2,500,000 shares of common stock at a price of $ 0.03 per share for the exercise of stock options by an investor.

On June 10 through June 29, 2021, the Company issued 5,116,668 shares of common stock at a price of $ 0.03 per share for the exercise of stock options by officers and directors.

On June 23, 2021, the Company cancelled 2,000,000 shares of common stock held by an ex-officer in connection with a settlement agreement.

The cancellation of these shares was recorded at the par value of $ 0.01 per share.

Also, in connection with the settlement agreement, the Company issued 637,953 shares to the ex-officer at the market price of $.20 per share.

On August 17, 2021, accrued liabilities in the amount of $ 156,441 were converted to 625,764 shares of common stock.

479,464 shares were issued during December 2021 and the remaining 146,300 shares was not issued and recorded in common stock subscribed as of December 31, 2021.

Among the 625,764 shares, 312,800 restricted shares of the Company’s common stock was issued to settled $ 78,200 cash compensation owed to the Company’s Chief Executive Officer for services rendered to the Company prior to 2021.

Between August 11, 2021 and September 2, 2021, the Company issued 4,000,001 shares of the Company common stock in connection with the conversion of Series C preferred stock issued in the first quarter.

Also, during the year ended December 31, 2021, the Company charged the amount of $ 13,032 to operations in connection with the vesting of stock granted to its officers, employees, and board members;

the Company also charged the amount of $ 676,423 to operations in connection with the vesting of options granted to its officers, employees, and board members.

Common Stock Transactions During the Year Ended December 31, 2020

The Company entered into agreements with two note holders regarding the exercise price of warrants held by the note holders.

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The Company charged the amount of $ 421,502 to operations in connection with the vesting of stock options granted to its officers, Board members, consultants, and employees.

On December 31, 2020.

the Company issued 2,151,204 shares of common stock at a price of $0.0305 per share as payment of accrued dividends on the Series X Preferred Stock.

Common Stock Transactions During the Year Ended December 31, 2019

The Company issued 300,000 restricted shares of the Company’s common stock with a fair value of $22,005 in exchange for services conducted on behalf of the Company.

The value of these shares was based on the closing market price on the respective date of grants.

The Company issued 38,179,083 shares of common stock with a fair value of $788,937 for the conversion of convertible debt and accrued interest in the amount of $627,479.

The Company recorded a loss in the amount of $161,458 on these transactions.

The Company issued 1,401,224 shares of common stock for the conversion of a note payable and accrued interest pursuant to a legal settlement;

the Company had a liability on its balance sheet in the amount of $74,104 in connection with this matter, and recorded a loss in the amount of $26,924 on this transaction.

The Company cancelled 700,000 shares of common stock returned by a former executive officer;

the par value in the amount of $7,000 was charged to additional paid-in capital.

The Company issued 6,975,000 shares of common stock with a fair value at the date of the grant of $273,300 to employees, officer, and directors, subject to vesting requirements;

the par value in the amount of $69,750 was charged to additional paid-in capital and the remaining fair value will be charged to operations over the term of the vesting period.

The Company recognized the amount of $212,187 for the vesting of shares issued to employees, officer, and directors;

this amount was charged to additional paid-in capital.

The Company settled derivative liabilities in the amount of $881,296 and charged this amount to additional paid-in capital.

The Company recognized discounts on convertible notes payable in connection with beneficial conversion features and charged the amount of $225,393 to additional paid-in capital.

The Company recognized discounts on convertible notes payable in connection with warrants and charged the amount of $34,500 to additional paid-in capital.

The Company issued 3,514,900 shares of common stock in connection with the cashless exercise of warrants and credited the amount of $35,149 from additional paid-in capital.

The Company credited the amount of $35,532 to additional paid-in capital in connection with a reduction in the amount of accounts payable due to a related party due to a settlement agreement.

The Company recorded imputed interest on a note payable to a related party and charged the amount of $9,018 to additional paid-in capital.

On December 31, 2020, the Company issued 2,151,204 shares of common stock at a price of $ 0.0305 per share as payment of accrued dividends on the Series X Preferred Stock.

Preferred Stock

We have authorized to issue 100,000,000 shares of Preferred Stock with such rights designations and preferences as determined by our Board of Directors.

We have designated 27,324 shares as Series X Preferred Stock, and 3,000,000 as Series A Preferred Stock.

There are no Series A Preferred shares issued as of the date of this filing.

Series A Preferred Stock

We issued 4,800 and 0 shares of our 12% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) as of December 31, 2020 and December 31, 2019, respectively.

The Series A Preferred Stock has a par value of $0.01 per share, no stated maturity, a liquidation preference of $25.00 per share, and is not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase the Series A Preferred Stock.

The Series A Preferred Stock is not redeemable prior to March 3, 2022.

The Series A Preferred Stock will accrue dividends at the rate of 12% on $25.00 per share.

The designation includes, among other terms, that:

The Series A Preferred Stock ranks junior to our Series X Preferred Stock;

The Series A Preferred Stock has limited voting rights only on matters impacting certain of our securities that are senior to the Series A and in transactions involving mergers or similar transactions that adversely affects and deprives holders of the Series A Preferred Stock;

The Series A Preferred Stock is on a parity with all equity securities issued by us with terms specifically providing that those equity securities rank on a parity with the Series A Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up;

The Series A Preferred Stock is junior to all equity securities issued by us with terms specifically providing that those equity securities rank senior to the Series A Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up;

The Series A Preferred Stock is effectively junior to all of our existing and future indebtedness;

The Series A Preferred Stock will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase it at our option;

The Series A Preferred Stock will accrue cumulative cash dividends at the rate of 10% of the $25.00 per share liquidation preference per annum which will accrue if we do not have funds to pay the dividend;

We have not yet generated revenues from our current business plan and we do not presently have a reserve to pay dividends that will be due in the future on the Series A Preferred Stock;

No dividends will be paid or set apart for payment by us at any time if it would violate the terms of any agreement in which we are a party to or that we may enter into in the future;

The Series A Preferred Stock may be redeemed by us on or after March 3, 2022, for a cash redemption price of $25.00 per share if certain requirements are met;

The Series A Preferred Stock is not convertible into our Common Stock;

If we fail to pay a dividend on the Series A Preferred, holders will not receive additional interest or fees in respect to such dividend.

We have designated 500,000 shares of series A stock, 3,000,000 shares of Series C Preferred, 10,000,000 shares of Series D Preferred and we have designated 27,324 shares as Series X Preferred Stock.

Series A Preferred Stock Transactions During the Year Ended December 31, 2021

During the year ended December 31, 2021, the Company accrued dividends in the amount of $ 1,000 on the Series A Preferred Stock.

On March 11, 2021, the Company issued 600,000 shares of common stock to the four officers of The Good Clinic in exchange for the previously issued Series A Preferred Stock and accrued dividends.

The Series A preferred stock was canceled and there are no Series A Preferred shares outstanding at December 31, 2021.

Series A Preferred Stock Transactions During the Year Ended December 31, 2020

On March 2, 2020, the Company issued 4,800 shares of its Series A Preferred Stock to four individuals with certain skills and know-how to assist the Company in the development of its newly-formed subsidiary The Good Clinic, LLC.

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Subsequent to year end the Company cancelled these shares and instead issued a total of 600,000 shares of restricted common stock to the holders.

Series A Preferred Stock Transactions During the Year Ended December 31, 2019

Series C Preferred Stock

On March 25, 2021, the Company entered into Securities Purchase Agreements with four institutional investors (the “Investors” and each an “Investor”) pursuant to which the Company sold to the Investors in a private placement an aggregate of 3,000,000 units (the “Units” and each a “Unit”) with a purchase price of $ 1.00 per Unit, with each Unit consisting of (a) one share of a newly formed Series C Convertible Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), (b) one warrant (the “Series A Warrants”) to purchase 2.1 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) at a purchase price of $0.50 per whole share of Common Stock, and (c) one warrant (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase 2.1 shares of Common Stock at a purchase price of $0.75 per whole share .

The aggregate gross proceeds to the Company were $ 3,000,000 and the number of shares of Common Stock initially issuable upon conversion of the Series C Preferred Stock is 12,600,000 shares of Common stock and the aggregate number of shares of Common Stock initially issuable upon exercise of the Warrants is 12,600,000 shares of Common Stock.

The Series C Preferred Stock has the following terms:

The Series C Preferred Stock and the Series D Preferred, discussed below, ranks senior to all other preferred stock of the Company except in relation to the Series X Cumulative Redeemable Perpetual Preferred Stock, which ranks Pari passu to the Series C Preferred Stock, with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company.

Voting Rights.

Holders of the Series C Preferred Stock have the right to vote on any matter presented to holders of our Common Stock for their action or consideration at any meeting of the stockholders (or by written consent of stockholders in lieu of meeting), each holder of our Series C Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series C preferred Stock held by such holder, as described below, are convertible as of the record date for determining stockholders entitled to vote on (or consent to) such matter, voting with the Common Stock as a single class.

Each holder of our Series C Preferred Stock is entitled to convert their shares of Series C Preferred Stock, in whole or in part, at the Conversion Rate, which is determined by dividing the Conversion Amount (the Stated Value of $1.05, plus any accrued but unpaid dividends) by the Conversion Price ($0.25 per share).

In addition, upon certain triggering events, the holders of our Series C Preferred Stock have the right to convert their Series C Preferred Stock at the lesser of the Conversion Price or 75% of the average VWAP for the five trading days prior to the date of the notice of conversion.

The Conversion Price is subject to adjustment upon certain stock splits and recapitalization as well as upon the sale of Common Stock or Common Stock Equivalents.

Each share of the Series C Preferred Stock is convertible at the option of the holder thereof, or automatically or upon the closing of an underwritten offering of at least $10 million of the Company’s securities or upon listing of the Company’s Common Stock on a national securities exchange .

Each share of Series C Preferred Stock accrues dividends on a quarterly basis in arrears, at the rate of 6 % per annum of the Stated Value ($1.05 per share plus any accrued but unpaid dividends) and is to be paid within 15 days after the end of each of our fiscal quarters.

Each holder of the Series C Preferred Stock is entitled to receive dividends or distributions on each share of the Series C Preferred Stock on an as converted into Common Stock basis when and if dividends are declared on the Common Stock by our Board of Directors.

Liquidation Rights.

The holders of our Series C Preferred stock are entitled to receive in cash out of our assets, whether from capital or from earnings available for distribution to our stockholders (the “Liquidation Funds”), before any amount shall be paid to the holders of any of shares of capital stock that rank junior to the Series C Preferred Stock, but Pari passu with any shares of capital stock that have a parity ranking with the Series C Preferred stock (“Parity Stock”) then outstanding, an amount per share of Series C Preferred Stock equal to the greater of (A) the Conversion Amount on the date of such payment or (B) the amount per share such holder of the Series C Preferred Stock would receive if such holder converted their Series C Preferred Stock into Common Stock immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the holders of the Series C Preferred Stock and holders of shares of Parity Stock, then each holder Series C Preferred Stock and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Series C Preferred Stock and all holders of shares of Parity Stock.

All such amounts shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Corporation to the holders of shares of capital stock that may rank junior to that of the Series C Preferred Stock Junior Stock.

Rights and Preferences.

The rights, preferences, and privileges of holders of our Series C Preferred Stock are subject to, and may be adversely affected by, the rights of holders of shares of any series of Preferred Stock that we may designate and issue in the future that may rank senior to the Series C Preferred Stock.

Redemption Rights.

Upon receipt of a conversion notice, we have the right (but not the obligation) to redeem all or part of the Series C Preferred Stock (which the applicable holder of the Series C Preferred Stock is seeking to convert) at a price per share equal to the product of 125% of the (1) Stated Value plus (2) the Additional Amount (the “Redemption Price”).

If we decide to exercise the redemption right, within one trading day, we shall deliver written notice to such holder(s) of Series C Preferred Stock that the Series C Preferred Stock will be redeemed (the “Redemption Notice”) on the date that is three trading days following the date of the Redemption Notice (such date, the “Redemption Date”).

On the Redemption Date, we shall redeem the shares of Series C Preferred Stock specified in such request by paying in cash therefor a sum per share equal to the Redemption Price.

In no event shall a Redemption Notice be given if we may not lawfully redeem our capital stock.

On or before the Redemption Date, the Redemption Price for such shares shall be paid by wire transfer of immediately available funds to an account designated in writing by the applicable holder.

Price Adjustments Protection .

The conversion price is subject to appropriate adjustment in the event of share dividends, share splits, reorganizations or similar events affecting our shares of Common Stock.

Other than for certain exempt issuances, in the event we issue or sell any securities, including options or convertible securities, or amend outstanding securities, at an effective price, with an exercise price or at a conversion price less than the Conversion Price, then the Conversion Price shall be reduced to such lower price.

Preemptive or Similar Rights Additionally, except for a public offering or certain exempt issuances of our securities, holders of the Series C Preferred Stock shall have the right to participate in any offering of our Common Stock or Common Stock Equivalents (as defined in the COD) in a transaction exempt from registration under the Securities Act in an amount equal to an aggregate of 30% of the financing on the same terms, conditions and price provided to investors in such an offering, such right shall expire on the 15 month anniversary of the issuance date of the Series C Preferred Stock.

Further, until the earlier of 18 months from the issuance date of the Series C Preferred Stock and the date that there are less than 20% of the shares of Series C Preferred Stock outstanding, the Investors have most favored nations protection in the event we issue or sell Common Stock or Common Stock Equivalents that the Investors believe are more favorable than the terms and conditions under the Private Placement.

Fully Paid and Nonassessable .

All our issued and outstanding shares of Series C Preferred Stock are fully paid and nonassessable.

Series C Preferred Stock Transactions During the Year Ended December 31, 2021

On March 25, 2021, the Company sold 3,000,000 shares of its Series C Preferred Stock along with (i) five-year warrants to purchase 6,300,000 shares of the Company’s common stock at a price of $ 0.50 per share, and (ii) five -year warrants to purchase 6,300,000 shares of the Company’s common stock at a price of $ 0.75 per share for proceeds of $ 3,000,000 .

On May 4 through May 26, 2021, 1,059,356 shares of Series C Preferred Stock were converted at a price of $ 0.25 per share to 4,237,424 shares of common stock.

Between August 11,2021 through September 2, 2021, 1,000,000 shares of Series C Preferred Stock were converted at a price of $ 0.25 per share to 4,000,001 shares of common stock.

During the year ended December 31, 2021, the Company accrued dividends on the Series C Preferred Stock in the amount of $ 87,059 .

Series C Preferred Stock Transactions During the Year Ended December 31, 2020

Series D Preferred Stock

On November 19, 2021, the Company closed a bridge financing round totaling $ 3,100,000 of Series D preferred stock sold to investors in a private placement.

Each Series D Unit will had a purchase price of $ 1.00 per Unit, with each Unit consisting of (a) one share of a newly formed Series D Convertible Preferred Stock, par value $ 0.01 per share (the “Series D Preferred Stock”), (b) one warrant (the “Series A Warrants”) to purchase 2.1 shares of the Company’s Common Stock at a purchase price of $0.50 per whole share of Common Stock, and (c) one warrant (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase 2.1 shares of Common Stock at a purchase price of $0.75 per whole share .

The Series D Preferred Stock has the following terms:

The Series D Preferred Stock and the Series C Preferred Stock ranks senior to all other preferred stock of the Company except in relation to the Series X Cumulative Redeemable Perpetual Preferred Stock, which ranks Pari passu to the Series D Preferred Stock, with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company.

Voting Rights.

Holders of the Series D Preferred Stock have the right to vote on any matter presented to holders of our Common Stock for their action or consideration at any meeting of the stockholders (or by written consent of stockholders in lieu of meeting), each holder of our Series C Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series D preferred Stock held by such holder, as described below, are convertible as of the record date for determining stockholders entitled to vote on (or consent to) such matter, voting with the Common Stock as a single class.

Each holder of our Series D Preferred Stock is entitled to convert their shares of Series D Preferred Stock, in whole or in part, at the Conversion Rate, which is determined by dividing the Conversion Amount (the Stated Value of $1.05, plus any accrued but unpaid dividends) by the Conversion Price ($0.25 per share).

In addition, upon certain triggering events, the holders of our Series C Preferred Stock have the right to convert their Series D Preferred Stock at the lesser of the Conversion Price or 75% of the average VWAP for the five trading days prior to the date of the notice of conversion.

The Conversion Price is subject to adjustment upon certain stock splits and recapitalization as well as upon the sale of Common Stock or Common Stock Equivalents.

Each share of the Series D Preferred Stock is convertible at the option of the holder thereof, or automatically or upon the closing of an underwritten offering of at least $10 million of the Company’s securities or upon listing of the Company’s Common Stock on a national securities exchange.

Each share of Series D Preferred Stock accrues dividends on a quarterly basis in arrears, at the rate of 6 % per annum of the Stated Value ($1.05 per share plus any accrued but unpaid dividends) and is to be paid within 15 days after the end of each of our fiscal quarters.

Each holder of the Series C Preferred Stock is entitled to receive dividends or distributions on each share of the Series D Preferred Stock on an as converted into Common Stock basis when and if dividends are declared on the Common Stock by our Board of Directors.

Liquidation Rights.

The holders of our Series D Preferred stock are entitled to receive in cash out of our assets, whether from capital or from earnings available for distribution to our stockholders (the “Liquidation Funds”), before any amount shall be paid to the holders of any of shares of capital stock that rank junior to the Series C Preferred Stock, but Pari passu with any shares of capital stock that have a parity ranking with the Series D Preferred stock (“Parity Stock”) then outstanding, an amount per share of Series D Preferred Stock equal to the greater of (A) the Conversion Amount on the date of such payment or (B) the amount per share such holder of the Series C Preferred Stock would receive if such holder converted their Series C Preferred Stock into Common Stock immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the holders of the Series C Preferred Stock and holders of shares of Parity Stock, then each holder Series D Preferred Stock and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Series D Preferred Stock and all holders of shares of Parity Stock.

Rights and Preferences.

The rights, preferences, and privileges of holders of our Series D Preferred Stock are subject to, and may be adversely affected by, the rights of holders of shares of any series of Preferred Stock that we may designate and issue in the future that may rank senior to the Series D Preferred Stock.

Redemption Rights.

Upon receipt of a conversion notice, we have the right (but not the obligation) to redeem all or part of the Series D Preferred Stock (which the applicable holder of the Series D Preferred Stock is seeking to convert) at a price per share equal to the product of 125% of the (1) Stated Value plus (2) the Additional Amount (the “Redemption Price”).

If we decide to exercise the redemption right, within one trading day, we shall deliver written notice to such holder(s) of Series D Preferred Stock that the Series D Preferred Stock will be redeemed (the “Redemption Notice”) on the date that is three trading days following the date of the Redemption Notice (such date, the “Redemption Date”).

On the Redemption Date, we shall redeem the shares of Series D Preferred Stock specified in such request by paying in cash therefor a sum per share equal to the Redemption Price.

In no event shall a Redemption Notice be given if we may not lawfully redeem our capital stock.

On or before the Redemption Date, the Redemption Price for such shares shall be paid by wire transfer of immediately available funds to an account designated in writing by the applicable holder.

Price Adjustments Protection .

The conversion price is subject to appropriate adjustment in the event of share dividends, share splits, reorganizations or similar events affecting our shares of Common Stock.

Preemptive or Similar Rights Additionally, except for a public offering or certain exempt issuances of our securities, holders of the Series D Preferred Stock shall have the right to participate in any offering of our Common Stock or Common Stock Equivalents (as defined in the COD) in a transaction exempt from registration under the Securities Act in an amount equal to an aggregate of 30% of the financing on the same terms, conditions and price provided to investors in such an offering, such right shall expire on the 15 month anniversary of the issuance date of the Series D Preferred Stock.

Further, until the earlier of 18 months from the issuance date of the Series D Preferred Stock and the date that there are less than 20% of the shares of Series D Preferred Stock outstanding, the Investors have most favored nations protection in the event we issue or sell Common Stock or Common Stock equivalents that the Investors believe are more favorable than the terms and conditions under the Private Placement.

Series D Preferred Stock Transactions During the Year Ended December 31, 2021

On October 18, 2021, the Company sold 2,050,000 shares of Series D Preferred Stock and (i) five-year warrants to acquire 4,252,500 shares of the Company’s common stock at a price of $ 0.50 per shares, and (ii) five -year warrants to acquire 4,252,500 shares of the Company’s common stock at a price of $ 0.75 per share for proceeds of $ 1,874,450 , net of costs in the amount of $ 125,500 .

On November 10, 2021, the Company sold 1,075,000 shares of Series D Preferred Stock and (i) five-year warrants to acquire 2,257,500 shares of the Company’s common stock at a price of $ 0.50 per shares, and (ii) five-year warrants to acquire 2,257,500 shares of the Company’s common stock at a price of $ 0.75 per share for proceeds of $ 999,250 , net of costs in the amount of $ 75,750 .

During the year ended December 31, 2021, the Company accrued dividends on the Series D Preferred Stock in the amount of $ 35,327 .

Series D Preferred Stock Transactions During the Year Ended December 31, 2020

Series X Preferred Stock

The Company has 26,227 shares of its 10% Series X Cumulative Redeemable Perpetual Preferred Stock (the “Series X Preferred Stock”) outstanding as of December 31, 2020 and December 31, 2019.

The Company has 24,227 and 26,227 shares of its 10 % Series X Cumulative Redeemable Perpetual Preferred Stock (the “Series X Preferred Stock”) outstanding as of December 31, 2021 and December 31, 2020, respectively.

The Series X Preferred Stock has a par value of $ 0.01 per share, no stated maturity, a liquidation preference of $ 25.00 per share, and will not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase the Series X Preferred Stock;

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Series X Preferred Stock Transactions During the Year Ended December 31, 2021

On June 23, 2021, 2,000 shares of Series X Preferred Stock were cancelled pursuant to a settlement agreement with an ex-officer.

During the year ended December 31, 2021, the Company accrued dividends on the Series X Preferred Stock in the amount of $ 61,818 .

Series X Preferred Stock Transactions During the Year Ended December 31, 2020

During the year ended December 31, 2020, the Company accrued dividends in the amount of $ 65,568 on the Series X Preferred Stock.

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At December 31, 2020, dividend payable on the Series X Preferred Stock was $ 0 .

Series X Preferred Stock Transactions During the Year Ended December 31, 2019

On December 31, 2019, the Company issued a total of 26,227 shares of Series X Preferred Stock in settlement of various liabilities.

The shares of Series X Preferred Stock were issued as follows:

Ronald Riewold, Director

Deferred Compensation

Larry Diamond, Director and CEO

Deferred Compensation

Smith, Director and President (now ex-Officer and Director)

Deferred Compensation

James Crone, ex-Officer and Director

Deferred Compensation

Louis Deluca, ex-Officer and Director

Deferred Compensation

Irish Italian Retirement Fund

Consulting services, notes payable (a)

Frank Lightmas

(a) amount consists of accounts payable for consulting services of $174,813, and principal plus interest due on notes payable in the amount of $137,759.

(b) Amount consists of $71,279 in legal fees due and $9,721 in prepaid legal fees.

Stock Options

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Exercise Price ($) (A)

Outstanding at December 31, 2018

Outstanding at January 1, 2020

Cancelled/Expired

Outstanding at December 31, 2020

Cancelled/Expired

Outstanding at December 31, 2021

Exercisable at December 31, 2020 (B)

Options vested and exercisable

On December 14, 2020, the Company reset the exercise price of all the options then outstanding options to $ 0.03 per share.

17 unchanged sentences

Outstanding at December 31, 2019

Additional warrants due to trigger of ratchet feature

Exercised – cashless conversion

Outstanding at December 31, 2020

3 unchanged sentences

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Included in deferred tax assets are Federal and State net operating loss carryforwards of approximately $5,860,000, which will expire through 2040.

Included in deferred tax assets are Federal and State net operating loss carryforwards of approximately $ 8.1 million, which will expire through 2040.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

2 unchanged sentences

The provision (benefit) for income taxes for the years ended December 31, 2021 and 2020 consist of the following:

The provision (benefit) for income taxes differs from the amount of income tax determined by applying the applicable statutory income tax rate of 21.0% for the years ended December 31, 2020 and 2019 to the loss before taxes as a result of the following differences:

Loss before income taxes

Statutory tax rate

Total tax benefit at statutory rate

Permanent difference – meals and entertainment,

Preferred Stock dividend

Changes in valuation allowance

For the years ended December 31, 2021 and 2020, the expected tax expense (benefit) based on the U.

federal statutory rate is reconciled with the actual tax provision (benefit) as follows:

For the Years Ended

Expected tax at statutory rates

Permanent Differences

State Income Tax, Net of Federal benefit

Current Year Change in Valuation Allowance

Prior Year True-Ups

Income tax expense

2 unchanged sentences

As of December 31, 2021, and 2020 significant components of the Company’s deferred tax assets are as follows:

For the Years Ended

Deferred Tax Assets (Liabilities):

15 unchanged sentences

Note 13 – Commitments and Contingencies

There are no pending or anticipated legal actions at this time except as noted below in “Other”.

On May 4, 2020, we received a loan in the amount of $460,406 from the United States Small Business Administration under the Payroll Protection Program.

Subsequent to June 30, 2020, we determined that errors had been made in the application submitted to obtain the loan.

On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds, representing an amount for the refinancing of an Economic Injury Disaster Loan which we did receive.

Bank of America has requested that we remit such funds back to Bank of America.

We are presently attempting to negotiate repayment of the loan.

If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.

During management's review of the Company’s recent PPP loan application after the loan had been disbursed to the Company, it was determined that the information provided by Ms.

Smith, the Company’s former President and COO, was not representative of the Company’s situation.

After consulting with legal counsel, the Board of Directors voted to remove Ms.

Smith from its Board of Directors, and all other capacities due to the misstatements she made in the loan application.

Subsequent to that decision, effective July 1, 2020, Ms.

Smith submitted a resignation from all positions with the Company, which was accepted by the Board and management.

Smith subsequently retained counsel and has indicated her intent to file an administrative charge of discrimination in Colorado under certain provisions of the anti-discrimination laws of that state.

On August 18, 2020, the Company received formal notice that a complaint has been filed with the Colorado Civil Rights Division by Ms.

Smith naming the Company as the Respondent.

The Company believes the claims are frivolous and intends to vigorously defend against the allegations.

As of the date of this filing the Company has been advised that the Colorado Civil Rights Division has dismissed this matter effective March 1, 2021.

Smith requested a “Right-to-Sue” letter, which she received, giving her a right to sue in District Court for 90 days from the date of the dismissed action.

There is no pending or anticipated legal actions at this time except as noted below in “Other.”

Small Business Administration.

The current balance is $ 460,406 and the Company is currently in discussions for a) a partial forgiveness and b) the conversion of any remaining balance into a term note.

As of December 31, 2021, based on communication with Bank of America, it is expected that approximately $ 25,000 of the PPP loan will be forgiven and we have received conditional approval to pay the loan off over sixty months .

Note 14 – Subsequent Events

Increase of Shares in Stock Option Plan

On January 19, 2021, the Company increased the number of shares of common stock available in its stock option plan to 25,000,000 shares.

Common Stock Issued for Conversion of Notes Payable

On January 4, 2021, the Company issued 4,123,750 shares of common stock at a price of $0.012 per share pursuant to the conversion of $45,000 of principal and $4,485 of accrued interest in Eagle Equities Note 4.

On January 6, 2021, the Company issued 3,505,964 shares of common stock at a price of $0.01224 per share pursuant to the conversion of $39,000 of principal and $3,913 of accrued interest in Eagle Equities Note 4.

On January 11, 2021, the Company issued 4,463,507 shares of common stock at a price of $0.01224 per share pursuant to the conversion of $50,000 of principal and $4,633 of accrued interest in Eagle Equities Note 5.

On January 14, 2021, the Company issued 4,319,378 shares of common stock at a price of $0.01266 per share pursuant to the conversion of $50,000 of principal and $4,683 of accrued interest in Eagle Equities Note 5.

On January 21, 2021, the Company issued 6,449,610 shares of common stock at a price of $0.0154 per share pursuant to the conversion of $93,000 of principal and $6,324 of accrued interest in Eagle Equities Note 6.

On January 28, 2021, the Company issued 7,285,062 shares of common stock at a price of $0.01575 per share pursuant to the conversion of $107,200 of principal and $7,540 of accrued interest in Eagle Equities Note 6.

From January 29, 2021 through March 21, 2021, the Company entered into Securities Purchase Agreements with 45 investors for the sale of 6,192,000 shares of the Company’s restricted common stock at a price of $0.25 per share for aggregate proceeds of $1,548,000.

The price was determined based on the prior day ten day average closing price, less a 20% discount for the risk associated with restricted stock.

These transactions were executed directly by the Company and no brokers, dealers or representatives were involved.

On February 1, 2021, the Company opened the first location of The Good Clinic in Minneapolis, Minnesota.

The Good Clinic is a PLLC and is operated by third party shareholders.

The Company considers The Good Clinic a variable interest entity, and will include the financial statements of The Good Clinic in its consolidated financial statements beginning with the quarter ending March 31, 2021.

On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 7 whereby the Company issued 1,184,148 shares of common stock at a price of $0.24984 per share in satisfaction of $200,200 of principal and all accrued interest and prepayment penalties due under this note.

On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 8 whereby the Company issued 639,593 shares of common stock at a price of $0.23851 per share in satisfaction of $114,400 of principal and all accrued interest and prepayment penalties due under this note.

On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 9 whereby the Company issued 605,177 shares of common stock at a price of $0.24984 per share in satisfaction of $114,400 of principal and all accrued interest and prepayment penalties due under this note.

On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 10 whereby the Company issued 1,095,131 shares of common stock at a price of $0.23748 per share in satisfaction of $200,200 of principal and all accrued interest and prepayment penalties due under this note.

On February 22, 2021, the Company issued 336,000 shares of common stock for the exercise of options at a price of $0.03 per share.

On March 1, 2021, the State of Colorado Department of Regulatory Agencies sent a letter to Julie R.

Smith dismissing her right to sue the Company pursuant to CCRD Complaint Number:

E2100009516x – Julie R.

True Nature Holdings.

On March 11, 2021, the Company issued 600,000 shares of common stock to four officers of The Good Clinic in exchange for 4,800 shares of Series A Preferred Stock.

The 4,800 shares of Series A Preferred Stock were cancelled.

On March 14, 2021, the Board of Directors appointed Philip Keller its Chief Financial Officer.

In connection with Mr.

Keller’s appointment as Chief Financial Officer, Mr.

Lawrence Diamond will no longer serve as the Company’s Interim Chief Financial Officer.

Diamond will continue to lead the Company’s growth and development as Chief Executive Officer and as a Director of the Board.

The Company entered into a debt-for-equity exchange agreement with Gardner Builders Holdings, LLC (the “Creditor”) on January 7, 2022 (the “Agreement”).

The Accounts Payable Amount is $ 500,000 , the Additional Costs is $ 294,912.56 and the conversion price is $ 0.25 .

As a result, 3,179,650 Restricted Shares were authorized to be issued.

The Company’s Board of Directors approved the Agreement on January 5, 2022.

The Company issued a 10% Promissory Note due August 14, 2022 (the “Note”), dated February 14, 2022, to Lawrence Diamond (the “Lender”).

Diamond is the Chief Executive Officer of the Company and a member of its Board of Directors.

The principal amount of the Note is $ 175,000 , carries a 10 % interest rate per annum, payable in monthly installments, and has a maturity date that is the earlier of (i) six ( 6 ) months from the date of execution, or (ii) the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE.

The purchase price of the Note payable to the Company for the Note was $ 148,750 and was funded on February 14, 2022.

The amount payable at maturity will be $175,000 plus 10% of that amount plus accrued and unpaid interest.

In addition to the Note and Lender will be issued 367,500 5 -year warrants that may be exercised at $.50 per share and 367,500 5 -year warrants that may be exercised at $ .75 per share.

These warrants have all of the same terms as those previously issued in conjunction with the Company’s Series C Preferred shares and its Series D Preferred shares.

The Company issued a 10% Promissory Note due June 18, 2022 (the “Diamond Note”), dated March 18, 2022, to Lawrence Diamond (the “Lender”), which was subsequently amended.

Lawrence Diamond is the Chief Executive Officer of the Company.

The principal amount of the Diamond Note is $ 235,294.00 , carries a 10 % interest rate per annum, payable in monthly installments, and has a maturity date that is the earlier of (i) April 4, 2022, (ii) the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE, or (iii) the date of receipt of the Company of the next round of debt or equity financing in an amount of at least $1,000,000 .

The purchase price of the Diamond Note payable to the Company for the Diamond Note was $ 200,000 and was funded on March 18, 2022.

The amount payable at maturity will be $235,294 plus 10% of that amount plus any accrued and unpaid interest.

Following an event of default, as defined in the Diamond Note, the principal amount shall bear interest for each day until paid, at a rate per annum equal to the lesser of the maximum interest permitted by applicable law and 18 %.

The Diamond Note contains a “most favored nations” clause that provides that, so long as the Note is outstanding, if the Company issues any new security, which the Lender reasonably believes contains a term that is more favorable than those in the Diamond Note, the Company shall notify the Lender of such term, and such term, at the option of the Lender, shall become a part of the Note.

In addition, the Lender will be issued 200,000 5 -year warrants that may be exercised on substantially the same terms as the Series A warrant issued in connection with the Company’s Series D Convertible Preferred Stock.

On March 18, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with AJB Capital Investments, LLC (the “Investor”) with respect to the sale and issuance to the Investor of:

(i) an initial commitment fee in the amount of $ 430,000 in the form of 1,720,000 shares (the “Commitment Fee Shares”) of the Company’s common stock (the “Common Stock”), which Commitment Fee Shares can be decreased to 720,000 shares ($180,000) if the Company repays the Note on or prior its maturity , (ii) a promissory note in the aggregate principal amount of $ 750,000 (the “Note”), and (iii) Common Stock Purchase Warrants to purchase up to an aggregate of 750,000 shares of the Common Stock (the “Warrants”).

The Note and Warrants were issued on March 17, 2022 (the “Original Issue Date”) and were held in escrow pending effectiveness of the Purchase Agreement.

Pursuant to the terms of the Purchase Agreement, the initial Commitment Fee Shares were issued at a value of $430,000, the Note was issued in a principal amount of $750,000 for a purchase price of $ 675,000 , resulting in an original issue discount of $ 75,000 ;

and the Warrants were issued, with an initial exercise price of $ 0.50 per share, subject to adjustment as described herein.

The aggregate cash subscription amount received by the Company from the Investor for the issuance of the Commitment Fee Shares, Note and Warrants was $ 616,250.00 , due to a reduction in the $675,000 purchase price as a result of broker, legal, and transaction fees.

As previously disclosed on the Company’s form 8-K filed on March 26, 2021 and October 22, 2021, the Company issued the Series C Convertible Preferred Stock and Series D Convertible Preferred Stock to the investors named therein (the “Series C Investors” and “Series D Investors”).

The Company obtained consents and waivers (the “Consents”) from the Series D and Series D Investors to allow the Company to enter into the Purchase Agreement.

The Company issued 411,000 shares of Common Stock to the Series C Investors 1,271,000 shares of Common Stock to the Series D Investors in connection with obtaining the Consents.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data