Mitesco, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA MITESCO, INC. INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS PAGE 40 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB 3289 ) 41 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB 587) 43 CONSOLIDATED BALANCE SHEETS 44 CONSOLIDATED STATEMENTS OF OPERATIONS 45 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) 46 CONSOLIDATED STATEMENTS OF CASH FLOWS 48 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 39 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Mitesco, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Mitesco, Inc. (the “Company”) as of December 31, 2023, and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company ’ s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has incurred net losses and negative cash flow from operations since inception. These factors, and the need for additional financing in order for the Company to meet its business plans raises substantial doubt about the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter. 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. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Accell Audit & Compliance, P.A. We have served as the Company’s auditor since 2024. Tampa, Florida April 16, 2024 40 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Mitesco, Inc. and subsidiaries We have audited the accompanying consolidated balance sheet of Mitesco, Inc. & Subsidiaries (the Company) as of December 31, 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2022, 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, 2022, and the consolidated results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. The Company's Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has an accumulated deficit, recurring losses, and expects continuing future losses that raises substantial doubt about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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. The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 41 Table of Contents Derivative liability on Convertible Promissory Notes – Refer to Note 9 and 11 of the financial statements Critical Audit Matter Description During the year ended December 31, 2022, the Company entered into five Securities Purchase Agreements with respect to the sale and issuance to the investors of (i) an initial commitment fee in the form of shares (Commitment Fee Shares) of the Company's common stock which Commitment Fee Shares can be decreased if the Company repays the notes on or prior to their maturity, (ii) a promissory note and (iii) common stock purchase warrant to purchase shares of common stock. As described in Note 9 and 11 to the financial statements, as of December 31, 2022, the Company utilized a Monte Carlo Simulation and PWERM model to value a derivative liability relating to the "True-Up Share Obligations and Warrants", respectively in accordance with ASC 820, “Fair Value Measurement”. A Monte Carlo simulation is used to model the probability of different outcomes in a process that cannot easily be predicted due to the intervention of random variables. It is a technique used to understand the impact of risk and uncertainty and establishes a fair value based on the most likely outcome. The PWERM Model develops an estimate based on the probability-weighted present value of various future outcomes. We identified the valuation of the derivative liability relating to the above note payable as a critical audit matter because the results cannot be duplicated and requires a high degree of auditor judgment. The principal considerations for our determination that performing procedures relating to the valuation of the note features as a critical audit matter are (1) there was a high degree of auditor judgment and subjectivity in applying procedures relating to the fair value of the derivative liability due to the significant judgments made by management when developing the estimates and (2) significant audit effort was required in evaluating the significant assumptions relating to the estimates, including the assumptions used in the simulations. In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing the following procedures and evaluating the audit evidence obtained. How the Critical Audit Matter was Addressed in the Audit Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included the following: ● Performed an analysis of the Company's Convertible Note, Warrants and True-Up Obligation including various conversion and other provisions ● Inquiry of management regarding the development of the assumptions used in the valuation of the derivative liability. ● Testing management’s process included evaluating the appropriateness of the valuation models, testing the completeness, accuracy, and relevance of underlying data used in the model, and testing the reasonableness of significant assumptions, including the stock price, term, volatility, annual expected return, discount rate and dividend yield. ● Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of significant assumptions. ● Evaluated the experience and qualifications of the Company’s external consultant assisting with the estimate of fair value. Made inquiries of the Company’s external consultant to ascertain objectivity or bias of the external consultant. ● Obtained an understanding of the nature of the work the Company’s external consultant performed, including the objectives and scope of the external consultant’s work and the methods or assumptions used. Identified and evaluated assumptions utilized by the external consultant and the supporting evidence provided. ● Identified and evaluated significant assumptions used by the Company’s external consultant for reasonableness. RBSM LLP We served as the Company’s auditor from 2020 through 2023. Las Vegas, NV July 14, 2023 42 Table of Contents MITESCO, INC. CONSOLIDATED BALANCE SHEETS December 31, December 31, ASSETS 2023 2022 Current assets Cash and cash equivalents $ 2,838 $ 35,623 Prepaid expenses - 51,632 Current assets of discontinued operations - 93,033 Total current assets 2,838 180,288 Right to use operating leases, net - 83,810 Fixed assets, net - 44,655 Non-current assets of discontinued operations - 2,293,227 Total Assets $ 2,838 $ 2,601,980 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable and accrued liabilities $ 7,838,112 $ 7,353,215 Accrued interest 375,346 358,165 Accrued interest - related parties 35,267 52,643 Derivative liabilities 152,945 568,912 Lease liability - operating leases, current 99,477 442,866 Notes payable, net of discounts 1,078,529 5,047,995 Notes payable - related parties, net of discounts 166,912 846,001 SBA loan payable 421,788 460,406 Other current liabilities 121,136 96,136 Preferred stock dividends payable 1,551,833 395,407 Preferred stock dividends payable - related parties 73,364 35,019 Legal settlements 2,219,886 - Current liabilities from discontinued operations - 2,145,706 Total current liabilities 14,134,595 17,802,471 Lease Liability- operating leases, non-current - 3,936,858 Total Liabilities 14,134,595 21,739,329 Commitments and contingencies Stockholders' equity (deficit) Preferred stock, $0.01 par value, 100,000,000 shares authorized; 500,000 shares designated Series A; 3,000,000 shares designated Series C; 10,000,000 shares designated Series D; 10,000 shares designated as Series E; 140,000 shares designated as Series F; and 27,324 shares designated Series X: - - Preferred stock, Series A, $ 0.01 par value, 0 shares issued and outstanding as of December 31, 2023 and 2022 - - Preferred stock, Series C, $ 0.01 par value, 0 and 1,047,619 shares issued and outstanding as of December 31, 2023 and 2022, respectively - 10,476 Preferred stock, Series D, $ 0.01 par value, 250,000 and 3,100,000 shares issued and outstanding as of December 31, 2023 and 2022 2,500 31,000 Preferred stock, Series E, $ 0.01 par value, no shares issued and outstanding as of December 31, 2023 and 2022 - - Preferred stock, Series F, $ 0.01 par value, 20,057 and no shares issued and outstanding as of December 31, 2023 and 2022 201 - Preferred stock, Series X, $ 0.01 par value, 24,227 shares issued and outstanding at December 31, 2023 and 2022 242 242 Common stock subscribed - 36,575 Common stock, $ 0.01 par value, 500,000,000 shares authorized, 5,567,957 and 4,630,372 shares issued and outstanding as of December 31, 2023 and 2022, respectively 55,680 46,305 Additional paid-in capital 47,856,444 29,452,514 Accumulated deficit ( 62,046,824 ) ( 48,714,461 ) Total stockholders' equity (deficit) ( 14,131,757 ) ( 19,137,349 ) Total liabilities and stockholders' equity (deficit) $ 2,838 $ 2,601,980 The accompanying notes are an integral part of these audited consolidated financial statements. 43 Table of Contents MITESCO, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2023 2022 Revenue $ - $ - Cost of goods sold - - Gross (loss) profit - - Operating expenses: General and administrative 2,454,668 4,330,734 Impairment of fixed assets 132,000 - Total operating expenses 2,586,668 4,330,734 Net Operating Loss ( 2,586,668 ) ( 4,330,734 ) Other income (expense): Interest expense ( 1,615,591 ) ( 3,034,402 ) Interest expense - related parties ( 109,502 ) ( 314,745 ) Equity investment incentives ( 7,644,077 ) - Financing costs ( 18,617 ) - Loss on legal settlement ( 18,759 ) - Loss on true-up shares ( 119,370 ) ( 9,007 ) Gain on waiver and commitment fee shares - 91,444 Gain on waiver and commitment fee shares - related parties - 81,129 Gain on settlement of accrued salary - 15,032 (Loss) Gain on settlement of accounts payable 25,000 ( 88,235 ) Gain on issuance of shares to service provider 33,092 - Gain on sale of assets 8,876 - Gain on conversion of notes and accounts payable into common stock – related party 114,942 - (Loss) on conversion of accrued salaries and Series D preferred stock into Series F preferred stock ( 25,000 ) - Gain on conversion of notes payable and accounts payable to common stock 37,453 - Other Income 40,622 - Loss on revaluation of derivative liabilities ( 85,773 ) ( 687,178 ) Total other expense ( 9,376,704 ) ( 3,945,962 ) Loss before provision for income taxes ( 11,963,372 ) ( 8,276,696 ) Provision for income taxes - - Net loss from continuing operations $ ( 11,963,372 ) $ ( 8,276,696 ) Net loss from discontinued operations ( 1,368,991 ) ( 14,959,433 ) Net loss ( 13,332,363 ) ( 23,236,129 ) Preferred stock dividends ( 1,600,241 ) ( 249,868 ) Preferred stock dividends - related parties ( 119,540 ) ( 72,442 ) Net loss available to common shareholders $ ( 15,052,144 ) $ ( 23,558,439 ) Net loss per share from continuing operations - basic and diluted $ ( 0.97 ) $ ( 2.14 ) Net loss per share from discontinued operations - basic and diluted ( 0.07 ) ( 3.15 ) Net loss per share - basic and diluted ( 1.04 ) ( 5.29 ) Weighted average shares outstanding - basic and diluted 14,440,218 4,451,962 The accompanying notes are an integral part of these audited consolidated financial statements. 44 Table of Contents MITESCO, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (DEFICIT) FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2023 and 2022 Preferred Stock Series A Preferred Stock Series C Preferred Stock Series D Preferred Stock Series F Preferred Stock Series X Common Stock Additional Common Stock Accumulated Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Paid-in capital Subscribed Deficit Total Balance, December 31, 2021 - $ - 940,644 $ 9,406 3,100,000 $ 31,000 24,227 $ 242 4,266,669 $ 42,667 $ 26,385,728 $ 132,163 $ ( 25,478,332 ) $ 1,122,874 Vesting of common stock issued to employees - - - - - - - - - - - - 4,387 - - 4,387 Vesting of stock options issued to employees - - - - - - - - - - - - 345,578 - - 345,578 Issuance of shares for services - - - - - - - - - - 6,329 63 101,187 - - 101,250 Conversion of accounts payable to common stock - - - - - - - - - - 63,593 636 577,599 - - 578,235 Issuance of Waiver fee shares - - - - - - - - - - 45,235 452 366,706 - - 367,158 Commitment fee shares - - - - - - - - - - 119,527 1,196 1,218,466 - - 1,219,662 Shares issued for services - - - - - - - - - - 27,064 271 180,302 - - 180,573 Warrants issued with note payable - - - - - - - - - - - - 94,672 - - 94,672 Shares issued for Series X dividends - - - - - - - - - - 8,103 82 86,971 - - 87,053 Gain on settlement of accrued payroll - - - - - - - - - - ( 8,000 ) ( 80 ) 80 - - - Issuance of shares previously subscribed for conversion of accounts payable - - - - - - - - - - 7,648 76 95,512 ( 95,588 ) - - Shares issued in connection with make-good agreement - - - - - - - - - - 91,329 913 913,735 - - 319,648 Series C Preferred Stock adjusted for prior conversions - - 106,975 1,070 - - - - - - - - ( 1,070 ) - - - Preferred stock dividends - - - - - - - - - - - - ( 322,310 ) - - ( 322,310 ) Shares issued due to rounding in reverse split - - - - - - - - - - 2,875 29 ( 29 ) - - - Net loss - - - - - - - - - - - - - - ( 23,236,129 ) ( 23,236,129 ) Balance, December 31, 2022 - $ - 1,047,619 $ 10,476 3,100,000 $ 31,000 - $ - 24,227 $ 242 46,305,375 $ 46,305 $ 29,452,514 $ 36,575 $ ( 48,714,461 ) $ ( 19,137,349 ) Shares issued for conversion of note payable - - - - - - - - - - 57,138 571 82,885 - - 83,456 Shares issued as commission for fundraising - - - - - - - - - - 2,952 30 3,778 - - 3,808 Shares issued for true-up agreement - - - - - - - - - - 94,738 947 118,423 - - 119,370 Conversion of accrued salary, debt, and board fees to common stock by a related party - - - - - - - - - - 181,606 1,816 3,632 - - 5,448 Conversion of accounts payable to common stock - - - - - - - - - - 247,776 2,476 77,027 - - 79,503 Issuance of common stock to a service provider - - - - - - - - - - 300,000 3,000 894,000 - - 897,000 Shares issued pursuant to legal settlement - - - - - - - - - - 22,174 222 18,537 - - 18,759 Shares issued previously subscribed - - - - - - - - - - 2,926 30 36,545 ( 36,575 ) - - Vesting of stock options issued to employees - - - - - - - - - - - - 3,732 - - 3,732 Series A Dividends previously satisfied - - - - - - - - - - - - 10,967 - - 10,967 Shares issued for Series X dividends - - - - - - - - - - 28,275 283 60,281 - - 60,564 Shares issued for conversion of accounts payable - - - - - - 147 2 - - - - 146,212 - - 146,214 Shares sold for cash, net of costs - - - - - - 1,746 17 - - - - 1,583,483 - - 1,583,500 Conversion of Series C Preferred Stock to Series F Preferred Stock - - ( 1,047,619 ) ( 10,476 ) - - 2,289 22 - - - - 1,198,450 - - 1,187,996 Conversion of Series D Preferred Stock to Series F Preferred Stock - - - - ( 2,350,000 ) ( 23,500 ) 4,055 41 - - - - 1,610,965 - - 1,587,506 Conversion of Series D Preferred Stock and accrued salaries to Series F Preferred Stock by related party - - - - ( 500,000 ) ( 5,000 ) 655 65 - - - - 159,899 - - 154,906 Conversion of Debt to Series F Preferred Stock - - - - - - 9,027 90 - - - - 9,523,088 - - 9,523,178 Conversion of debt and accrued salaries to Series F Preferred Stock by related parties - - - - - - 2,138 22 - - - - 2,137,033 - - 2,137,055 Forgiveness of related party loans for sale of assets - - - - - - - - - - - - 2,454,774 2,454,774 Preferred stock dividends - - - - - - - - - - - - ( 1,719,781 ) - - ( 1,719,781 ) Loss for the year ended December 31, 2023 - - - - - - - - - - - - - - ( 13,332,363 ) ( 13,332,363 ) Balance, December 31, 2023 - $ - - $ - 250,000 $ 2,500 20,507 $ 201 24,227 $ 242 5,567,957 $ 55,680 $ 47,856,444 $ - $ ( 62,046,824 ) $ ( 14,131,757 ) The accompanying notes are an integral part of these audited consolidated financial statements. 45 Table of Contents MITESCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from continuing operations $ ( 11,963,372 ) $ ( 8,276,696 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment of assets 132,000 - Depreciation - 8,916 Amortization of right-to-use asset - 80,379 Penalties on notes payable 1,027,778 - Conversion fees on notes payable 75,000 - Equity investment incentives 7,644,077 - Financing cost - waiver fee shares - 565,431 Gain on waiver fee shares - ( 198,273 ) Loss on commitment shares 119,370 34,707 (Gain) loss on conversion of accrued salary 25,000 ( 15,032 ) Gain on forgiveness of notes payable ( 205,459 ) - (Gain) loss on revaluation of derivative liabilities 85,773 687,178 Loss on settlement of accounts payable 24,895 88,235 Loss on legal settlement 18,759 - Amortization of discount on notes payable 32,011 2,116,194 Amortization of discount on notes payable - related parties 19,587 264,385 Share-based compensation 904,540 451,215 Changes in assets and liabilities: Prepaid expenses 51,632 165,671 Accounts payable and accrued liabilities 1,491,390 2,489,404 Operating lease liability, net ( 38,948 ) ( 44,033 ) Other current liabilities 25,000 ( 73,286 ) Accrued interest 471,564 350,508 Accrued interest - related parties ( 1,716 ) 202,682 Net cash provided by operating activities – continuing operations ( 61,119 ) ( 1,102,415 ) Net cash used in operating activities – discontinued operations ( 698,611 ) ( 4,071,425 ) Net cash used in operating activities ( 759,730 ) ( 5,173,840 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for acquisition of fixed assets and construction in progress - ( 15,709 ) Net cash used in investing activities – continuing operations - ( 15,709 ) Net cash used in investing activities – discontinued operations - ( 1,733,117 ) Net cash used in investing activities - ( 1,748,826 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from sales of Series F Preferred Stock, net of fees 738,500 - Principal payments on SBA Loan ( 11,555 ) - Proceeds from notes payable - related parties, net of discounts - 698,750 Proceeds from notes payable, net of discounts - 4,359,350 Principal payments on notes payable related parties - ( 235,294 ) Net cash provided by financing activities – continuing operations 726,945 4,822,806 Net cash provided by financing activities – discontinued operation - 971,000 Net cash provided by financing activities 726,945 5,793,806 Net change in cash and cash equivalents ( 32,785 ) ( 1,128,860 ) Cash and cash equivalents at beginning of period 35,623 1,164,483 Cash and cash equivalents at end of period $ 2,838 $ 35,623 The accompanying notes are an integral part of these audited consolidated financial statements. 46 Table of Contents MITESCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2023 2022 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ - $ - Income taxes paid $ - $ - NON-CASH INVESTING AND FINANCING ACTIVITIES: Stock issued for common stock subscribed $ 36,575 $ 95,512 Preferred stock dividend $ 1,719,781 $ 322,310 Conversion of accounts payable to Series F Preferred Stock $ 146,214 $ - Conversion of Series C Preferred Stock to Series F Preferred Stock $ 1,198,472 $ - Conversion of Series D Preferred Stock to Series F Preferred Stock $ 1,611,006 $ - Conversion of accounts payable to common stock $ 79,503 $ 578,235 Conversion of Series D Preferred Stock and accrued salaries to Series F Preferred Stock by related party $ 159,906 $ - Conversion of notes payable and accrued interest to Series F Preferred Stock $ 9,523,178 $ - Conversion of debt and accrued salaries to Series F Preferred Stock by related parties $ 2,137,055 $ - Conversion of accounts payable, accrued salaries, and board fees to common stock $ 5,448 $ - Conversion of notes payable and accrued interest to common stock $ 83,456 $ - Series A accrued dividends reclassified to APIC from prior transactions $ 10,967 $ - Shares issued for Series X dividends $ 60,564 $ - Forgiveness of notes for purchase of subsidiary assets $ 2,454,774 $ - Discount on notes payable due to warrants $ - $ 94,672 (Decrease) Increase in capital expenditures included in accounts payable $ - $ ( 51,587 ) The accompanying notes are an integral part of these audited consolidated financial statements. 47 Table of Contents MITESCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Note 1: Description of Business Company Overview Mitesco, Inc. (the “Company,” “we,” “us,” or “our”) was formed in the state of Delaware on January 18, 2012. On December 9, 2015, we restructured our operations and acquired Newco4pharmacy, LLC, a development stage company which sought to acquire compounding pharmacy businesses. As a part of the restructuring, we completed a “spin out” of our former business line. On April 24, 2020, we changed our name to Mitesco, Inc. In October 2023, the Company completed a move of its corporate status to Nevada from Delaware in order to effect reduced costs. The details can be found at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0000802257/000118518523001074/mitesco20231016_8k.htm . From 2020 through 2022, our operations were 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. We opened our first The Good Clinic in Minneapolis, Minnesota in the first quarter of 2021 and had six operating clinics during the year ended December 31, 2022, with two additional sites under contract. In the fourth quarter of fiscal 2022, we made the strategic decision to reduce our capital needs by closing our clinic operations and releasing our staff. We are a holding company seeking to provide products, services and technology. We have a number of near-term opportunities that we hope to pursue, assuming the capital markets make sufficient funding available at reasonable rates. Note 2: Going Concern The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions. The COVID-19 pandemic, decades-high inflation and concerns about an economic recession in the United States or other major markets has resulted in, among other things, volatility in the capital markets that may have the effect of reducing the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity. In addition, a recession or market correction due to these factors could materially affect the Company’s business and the value of its common stock. Note 3: Summary of Significant Accounting Policies Basis of Accounting – The consolidated financial statements are prepared in conformity with accounting principles accepted in the United States of America (“GAAP”). 48 Table of Contents Principles of Consolidation – The accompanying consolidated financial statements include the accounts of Mitesco, Inc., and its wholly owned subsidiaries Mitesco NA, LLC and The Good Clinic, LLC. In addition, we relied on the operating activities of certain legal entities in which we did not maintain a controlling ownership interest, but over which we had indirect influence and of which we were considered the primary beneficiary. These entities are typically subject to nominee ownership and transfer restriction agreements that effectively transfer the majority of the economic risks and rewards of their ownership to the Company. The Company’s management, restriction and other agreements concerning such nominee-owned entities typically includes both financial terms and protective and participating rights to the entities’ operating, strategic and non-clinical governance decisions which transfer substantial powers over and economic responsibility for these entities to the Company. As such, the Company applies the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 – Consolidation (“ASC 810”), to determine when an entity that is insufficiently capitalized or not controlled through its voting interests, referred to as a variable interest entity should be consolidated. All intercompany balances and transactions have been eliminated. Use of Estimates - The preparation of these financial statements requires our management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Cash - The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. Property 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. Property acquired in a business combination is recorded at estimated initial fair value. Property and equipment are depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based upon the following life expectancy: Years Office equipment 3 to 5 Furniture & fixtures 3 to 7 Machinery & equipment 3 to 10 Leasehold improvements Term of lease 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. For changes in credit issues 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. 49 Table of Contents 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. Share-based compensation cost for stock options are estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. Equity instruments issued to those other than employees are recognized pursuant to FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This ASU relates to the accounting for non-employee share-based payments. The amendment in this update expands the scope of Topic 718 to include all share-based payment transactions in which a grantor acquired goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The ASU excludes share-based payment awards that relate to: (1) financing to the issuer; or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts from Customers. The share-based payments are to be measured at grant-date fair value of the equity instruments that the entity is obligated to issue when the goods or service has been delivered or rendered and all other conditions necessary to earn the right to benefit from the equity instruments have been satisfied. Convertible Instruments - The Company reviews the terms of convertible debt and equity instruments to determine whether there are conversion features or embedded derivative instruments including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where the convertible instrument contains more than one embedded derivative instrument, including conversion options that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single compound instrument. Also, in connection with the sale of convertible debt and equity instruments, the Company may issue free standing warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. When convertible debt or equity instruments contain embedded derivative instruments that are to be bifurcated and accounted for separately, the total proceeds allocated to the convertible host instruments are first allocated to the fair value of the bifurcated derivative instrument. The remaining proceeds, if any, are then allocated to the convertible instruments themselves, usually resulting in those instruments being recorded at a discount from their face amount. When the Company issues debt securities, which bear interest at rates that are lower than market rates, the Company recognizes a discount, which is offset against the carrying value of the debt. Such discount from the face value of the debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to income. In addition, certain conversion features are recognized as beneficial conversion features to the extent the conversion price as defined in the convertible note is less than the closing stock price on the issuance of the convertible notes. Derivative Financial Instruments - Derivatives are recorded on the consolidated balance sheet at fair value. The conversion features of the convertible notes are embedded derivatives and are separately valued and accounted for on the consolidated balance sheet with changes in fair value recognized during the period of change as a separate component of other income/expense. Fair values for exchange-traded securities and derivatives are based on quoted market prices. The pricing model the Company uses for determining the fair value of its derivatives is the Monte Carlo Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Common Stock Purchase Warrants - The Company accounts for common stock purchase warrants in accordance with the FASB ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities. As is consistent with its handling of stock compensation and embedded derivative instruments, the Company’s cost for stock warrants is estimated at the grant date based on each warrant’s fair-value as calculated by the BSM option-pricing model value method for valuing the impact of the expense associated with these warrants. Per Share Data - Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to warrants, options, and convertible instruments. As of December 31, 2023 and 2022, all potentially dilutive instruments were excluded from the calculation of net loss per share as their effect was antidilutive. 50 Table of Contents 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 consolidated financial statements or tax returns. 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 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 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. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as components of interest expense and other expense, respectively, in arriving at pretax income or loss. The Company does not have any interest and penalties accrued. The Company is no longer subject to U.S. federal, state, and local income tax examinations for the years before 2012. Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. Financial Instruments and Fair Values - The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use various valuation methodologies and prioritize the use of observable inputs. We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market: Level 1 – inputs include exchange quoted prices for identical instruments and are the most observable. Level 2 – inputs include brokered and/or quoted prices for similar assets and observable inputs such as interest rates. Level 3 – inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the asset or liability. 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 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 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 . Recent Accounting Standards – In November 2023, the FASB issued ASU 2023-07 , Segment Reporting ( Topic 280 ) : Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company is currently evaluating the effect of this pronouncement on its disclosures. In December 2023, the FASB issued ASU 2023-09 , Income Taxes ( Topic 740 ) : Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures. 51 Table of Contents There are various other updates recently issued, most of which represent technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Note 4: Discontinued Operations On December 8, 2023, the Company sold the remaining assets of The Good Clinic, LLC to Leading Primary Care LLC, a company organized by Michael C. Howe, the former CEO of The Good Clinic, LLC for total consideration of approximately $ 2.5 million. ASC 360-10-45-9 requires that a long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which a set of criteria have been met, including criteria that the sale of the asset (disposal group) is probable and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. This criteria was achieved on December 8, 2023. Additionally, the discontinued operations are comprised of the entirety of The Good Clinic, LLC. For comparability purposes certain prior period line items relating to the assets held for sale have been reclassified and presented as discontinued operations for all periods presented in the accompanying condensed consolidated statements of net loss and comprehensive loss and the condensed consolidated balance sheets. The following information presents the major classes of line item of assets and liabilities included as part of discontinued operations in the consolidated balance sheets: December 31, December 31, 2023 2022 Current assets - discontinued operations: Accounts receivable - 30,943 Prepaid expenses and deposits - 62,090 Total current assets - discontinued operations $ - $ 93,033 Noncurrent assets - discontinued operations: Property and equipment $ - $ 1,832,973 Right-of-use assets - 460,254 Total noncurrent assets - discontinued operations $ - $ 2,293,227 Accrued interest – related party - 150,039 Note payable – related party - 1,995,667 Total current liabilities - discontinued operations $ - $ 2,145,706 The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations: Year Ended December 31, December 31, 2023 2022 Revenue $ 181,012 $ 690,533 Cost of goods sold - 76,530 Gross margin 181,012 614,003 Selling, general, and administrative expenses ( 1,166,121 ) ( 7,046,984 ) Impairment of assets ( 2,211,462 ) ( 7,597,558 ) Other (income) expense: Interest expense ( 306,032 ) ( 1,105,256 ) Gain on sale of assets 11,268 - Gain on settlement of accounts payable 81,263 - Gain on settlement of operating lease 2,041,080 - Loss from discontinued operations, net of tax $ ( 1,368,991 ) $ ( 14,959,433 ) 52 Table of Contents The following information presents the major classes of line items constituting significant operating and investing cash flow activities in the consolidated statements of cash flows relating to discontinued operations: Year Ended December 31, December 31, 2023 2022 Depreciation expense $ 81,765 $ 804,882 Cash used for construction in progress and fixed assets $ - $ ( 1,733,117 ) Impairment of RTU assets $ 544,063 $ - Impairment of property and equipment $ 1,667,399 $ - Note 5: Related Party Transactions The Company was involved in a significant number of fundraising transactions with related parties during the years ended December 31, 2023 and 2022. See notes 10 and 12. Note 6: Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following at December 31, 2023 and 2022: December 31, December 31, 2023 2022 Trade accounts payable $ 7,094,334 $ 6,761,793 Accrued payroll and payroll taxes 743,778 590,915 Other - 507 Total accounts payable and accrued liabilities $ 7,838,112 $ 7,353,215 Accounts Payable Exchanged for Common Stock On January 5, 2022, we entered into an exchange agreement with Gardner Builders Holdings, LLC (“Gardner”, the “Gardner Agreement”). Pursuant to the Gardner Agreement, we have authorized the issuance of shares of the Company’s restricted common stock to Gardner in exchange for the certain accounts payable and additional amounts due to Gardner as defined below. The Gardner Agreement settles certain amounts owed by us to Gardner (the “Accounts Payable Amount”) as well as upcoming amounts that will become due between the date of the Gardner Agreement and April 1, 2022. The Gardner Agreement also settled incurred interest and penalties on the amounts owed 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 $ 294,913 and the conversion price is $ 12.50 . As a result, 63,593 Restricted Shares were authorized to be issued. Our Board of Directors approved the Gardner Agreement on January 5, 2022. Note 7: Right to Use Assets and Lease Liabilities – Operating Leases The Company had operating leases for its clinics for which the Company is currently in negotiations with the Lessors to settle the remaining amounts owed after closing the clinic facilities. The Company’s lease expense was entirely comprised of operating leases and is reported as a component of discontinued operations as a result closing of the clinics and the subsequent sale of the assets. During the year ended December 31, 2022, the Company recognized an impairment of RTU assets in the amount of $ 3,185,591 in connection with the closing of its clinics during the period. During the year ended December 31, 2023, the Company recognized an additional impairment in the amount of $ 0.5 million in connection with its remaining leased properties. Right to use assets – operating leases are summarized below: December 31, 2023 December 31, 2022 Right to use assets, net $ - $ 83,810 53 Table of Contents Operating lease liabilities are summarized below: December 31, 2023 December 31, 2022 Lease liability $ 99,477 $ 4,379,724 Less: current portion ( 99,477 ) ( 442,866 ) Lease liability, non-current $ - $ 3,936,858 As a result of closing the facilities, the Company has made no further lease payments during the year ending December 31, 2023. As of December 31, 2023 the Company has either settled amounts owed or entered in into default judgements for all leases except for the office lease. For all leases for which a legal settlement have been entered into, all amounts have been reclassified to legal settlements as of December 31, 2023. For the period ended December 31, 2024 $ 99,477 For the period ended December 31, 2025 - For the period ended December 31, 2026 - For the period ended December 31, 2027 - For the period ended December 31, 2028 - Thereafter - Total $ 99,477 Less: Present value discount - Lease liability $ 99,477 As of December 31, 2023, the Company has entered into settlement agreements for certain of our lease in the amount of $ 2,219,886 which is recorded as Legal Settlements in the accompanying balance sheet. Note 8: SBA Loan Payable PPP Loan Conversion to SBA Loan 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 (the “SBA”). On April 25, 2020, the Company entered an unsecured Promissory Note with Bank of America for a loan in the original principal amount of $ 460,400 , and the Company received the full amount of the loan proceeds on May 4, 2020 (the “PPP Loan”). The PPP Loan bears interest at the rate of 1 % per year. During the year ended December 31, 2022, the Company accrued interest in the amount of $ 4,632 . On July 12, 2023, the Company received confirmation of a payment plan arrangement from the SBA. Pursuant to this payment plan, the Company agreed to pay a minimum of $ 2,595 each month until the loan is paid in full in July 2028. The SBA confirmed the balance due on the loan, including principal and interest, was $ 467,117 . The Company will amortize the balance due on the loan including interest at the original PPP loan rate of 1% per annum; a gain on restructure of debt in the amount of $ 40,622 was recorded on this transaction during the year ended December 31, 2023, and the balance of the loan was recorded at the amount of $ 433,343 representing the net cash flows discounted at 1 %. During the year ended December 31, 2023, the Company made principal payments of $ 11,555 on this loan and recorded interest in the amount of $ 5,719 . 54 Table of Contents Note 9: Notes Payable The following table summarizes the outstanding notes payable as of December 31, 2023 and 2022, respectively: December 31, 2023 December 31, 2022 AJB Note $ - $ 750,000 Anson Investments note - 562,500 Anson East note - 187,500 GS Capital note - 277,777 Kishon Note 431,666 277,777 Finnegan Note 1 51,765 51,765 Finnegan Note 2 32,353 32,353 Dragon Note - 647,059 Mackay Note - 323,530 Schrier Note 25,882 25,882 Nommsen Note 64,705 64,705 Caplan Note 64,705 64,705 Finnegan Note 3 32,353 32,353 Enright Note - 132,000 Mitchell Note 78,100 78,100 Lightmas Note 66,000 66,000 Lewis Note 33,000 33,000 Goff Note 33,000 33,000 Hagan Note 110,000 110,000 Darling Note - 220,000 Leath Note 55,000 55,000 Cavalry Note - 500,000 Mercer Note 1 - 300,000 Pinz Note - 30,000 Mercer Note 2 - 100,000 Mercer Note 3 - 125,000 Notes Payable $ 1,078,529 $ 5,080,006 Less: Discount - ( 32,010 ) Notes payable - net of discount $ 1,078,529 $ 5,047,996 Current Portion, net of discount $ 1,078,529 $ 5,047,996 Long-term portion, net of discount $ - $ - AJB Note On March 18, 2022, the Company entered into a Securities Purchase Agreement (the “AJB Agreement”) with AJB Capital Investments, LLC (“AJB”) with respect to the sale and issuance to AJB of: (i) an initial commitment fee in the amount of $ 430,000 in the form of 34,400 shares (the “AJB Commitment Fee Shares”) of the Company’s Common Stock, (ii) a promissory note in the aggregate principal amount of $ 750,000 (the “AJB Note”), and (iii) Common Stock Purchase Warrants to purchase 15,000 shares of the Company’s Common Stock (the “AJB Warrants”). The AJB Note and AJB Warrants were issued on March 17, 2022 and were held in escrow pending effectiveness of the AJB Agreement. Should AJB receive net proceeds of less than $430,000 from the sale of the AJB Commitment Fee Shares, the Company will issue additional shares to AJB or pay the shortfall amount to AJB in cash (the “AJB True-up Obligation”. The terms of the AJB Agreement resulted in the Company recording a derivative liability in the initial amount of $ 106,608 . On November 18, 2022, the Company issued 91,328 shares of common stock to AJB and recorded a loss in the amount of $ 9,007 in connection with the settlement of the AJB True-up Obligation. See notes 12 and 14. 55 Table of Contents The AJB Note was issued in the principal amount of $750,000 for a purchase price of $ 675,000 , resulting in an original issue discount of $ 75,000 , and has a due date, as extended, of March 17, 2023 . The AJB Note bears interest at the rate of 10 % per year for the first six months and 12 % thereafter. In the event of default as defined in the AJB Note this rate will increase to 18 % and the AJB Note will become convertible at a price per share equal to the lowest trading price during the previous twenty trading days prior to the conversion date. The AJB Note entered default status on October 6, 2022. The AJB Commitment Fee Shares and AJB Warrants resulted in a discount to the AJB Note in the amount of $ 349,914 . The Company charged the amount of $ 62,000 to interest on the AJB Note during the year ended December 31, 2022. Discounts in the amount of $ 424,914 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 750,000 and $ 22,833 , respectively, were due on the AJB Note at December 31, 2022. During the year ended December 31, 2023, a default penalty in the amount of $ 375,000 and an additional fee in the amount of $ 15,000 were added to the principal amount of the AJB note. During the year ended December 31, 2023, interest in the amount of $ 69,167 was accrued on the AJB Note. On April 11, 2023, an equity investment incentive in the amount of $ 800,800 representing 65% of the total amount due under the AJB Note, along with original principal of $ 750,000 , the default penalty of $ 375,000 , the fee of $ 15,000 , and accrued interest of $ 92,000 (a total of $ 2,032,800 ) was converted to 2,033 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $800,800, there was no additional gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the AJB Note. Anson Investments Note On April 6, 2022, the Company entered into a Securities Purchase Agreement (the “Anson Investments Agreement”) with Anson Investments Master Fund LP (“Anson Investments”) with respect to the sale and issuance to Anson Investments of: (i) an initial commitment fee in the amount of $ 322,500 in the form of 25,800 shares (the “Anson Investments Commitment Fee Shares”) of the Company’s Common Stock, (ii) a promissory note in the aggregate principal amount of $ 562,500 (the “Anson Investments Note”), and (iii) Common Stock Purchase Warrants to purchase 11,250 shares of the Common Stock (the “Anson Investments Warrants”). Should Anson Investments receive net proceeds of less than $322,500 from the sale of the Anson Investments Commitment Fee Shares, the Company will issue additional shares to Anson Investments or pay the shortfall amount to Anson Investments in cash. The terms of the Anson Investments Agreement resulted in the Company recording a derivative liability in the initial amount of $ 27,040 . The Anson Investments Note was issued in the principal amount of $562,500 for a purchase price of $ 506,250 resulting in an original issue discount of $ 56,250 . The Anson Investments Note has a due date of October 6, 2022 and bears interest at the rate of 10 % per year for the first six months and 12 % thereafter. In the event of default as defined in the Anson Investments Note this rate will increase to 18 % and the Anson Investment Note will become convertible at a price per share equal to the lowest trading price during the previous twenty trading days prior to the conversion date. The Anson Investments Note entered default status on October 6, 2022. The Anson Investments Commitment Fee Shares and Anson Investments Warrants resulted in a discount to the Anson Investments Note in the amount of $ 416,375 . The Company charged the amount of $ 68,844 to interest on the Anson Investments note during the year ended December 31, 2022. Discounts in the amount of $ 472,625 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 562,500 and $ 41,500 , respectively, were due on the AJB Note at December 31, 2022. During the year ended December 31, 2023, a default penalty in the amount of $ 281,250 and an additional fee in the amount of $ 15,000 were added to the principal amount of the Anson Investments Note. During the year ended December 31, 2023, interest in the amount of $ $ 27,157 was accrued on the Anson Investments Note. On April 11, 2023, an equity investment incentive in the amount of $ 602,815 representing 65% of the total amount due under the Anson Investments Note, along with original principal of $ 562,500 , the default penalty of $ 281,250 , the fee of $ 15,000 , and accrued interest of $ 68,657 (a total of $ 1,530,222 ) was converted to 1,531 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $602,815, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Anson Investments Note. 56 Table of Contents Anson East Note On April 6, 2022, the Company entered into a Securities Purchase Agreement (the “Anson East Agreement”) with Anson East Master Fund LP (“Anson East”) with respect to the sale and issuance to Anson East of: (i) an initial commitment fee in the amount of $ 107,500 in the form of 8,600 shares (the “Anson East Commitment Fee Shares”) of the Company’s Common Stock, (ii) a promissory note in the aggregate principal amount of $ 187,500 (the “Anson East Note”), and (iii) Common Stock Purchase Warrants to purchase 3,750 shares of the Company’s common stock (the “Anson East Warrants”). Should Anson East receive net proceeds of less than $107,500 from the sale of the Anson East Commitment Fee Shares, the Company will issue additional shares to Anson East or pay the shortfall amount to Anson East in cash. The terms of the Anson East Agreement resulted in the Company recording a derivative liability in the initial amount of $ 9,014 . The Anson East Note was issued in the principal amount of $187,500 for a purchase price of $ 168,750 resulting in an original issue discount of $ 18,750 . The Anson East Note has a due date of October 6, 2022 and bears interest at the rate of 10 % per year for the first six months and 12 % thereafter. In the event of default as defined in the Anson East Note this rate will increase to 18 %, and the Anson East Note will become convertible at a price per share equal to the lowest trading price during the previous twenty trading days prior to the conversion date. The Anson East Note entered default status on October 6, 2022. The Anson East Commitment Fee Shares and Anson East Warrants resulted in a discount to the Anson East Note in the amount of $ 147,290 . The Company charged the amount of $ 22,948 to interest on the Anson Investments note during the year ended December 31, 2022. Discounts in the amount of $ 166,040 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 187,500 and $ 13,833 , respectively, were due on the Anson East Note at December 31, 2022. During the year ended December 31, 2023, a default penalty in the amount of $ 93,750 and an additional fee in the amount of $ 15,000 were added to the principal amount of the Anson East Note. During the year ended December 31, 2023, the amount of $ 9,552 was accrued on the Anson East Note. On April 11, 2023, an equity investment incentive in the amount of $ 207,763 representing 65% of the total amount due under the Anson East Note, along with original principal of $ 187,500 , the default penalty of $ 93,750 , the fee of $ 15,000 , and accrued interest of $ 23,385 (a total of $ 527,398 ) was converted to 528 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $207,763, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Anson East Note. GS Capital Note On April 18, 2022, the Company entered into a Securities Purchase Agreement (the “GS Capital Agreement”) with GS Capital Investments, LLC (“GS Capital”) with respect to the sale and issuance to GS Capital of: (i) an initial commitment fee in the amount of $ 159,259 in the form of 12,741 shares (the “GS Capital Commitment Fee Shares”) of the Company’s Common Stock, (ii) a promissory note in the aggregate principal amount of $ 277,777 (the “GS Capital Note”), and (iii) Common Stock Purchase Warrants to purchase 5,556 shares of the Company’s common stock (the “GS Capital Warrants”). Should GS Capital receive net proceeds of less than $159,259 from the sale of the GS Capital Commitment Fee Shares, the Company will issue additional shares to GS Capital or pay the shortfall amount to GS Capital in cash. The terms of the GS Capital Agreement resulted in the Company recording a derivative liability in the initial amount of $ 21,920 . The GS Capital Note was issued in the principal amount of $277,777 for a purchase price of $ 250,000 resulting in an original issue discount of $ 27,777 . The GS Capital Note has a due date of November 10, 2022 and bears interest at the rate of 10 % per year for the first six months and 12 % thereafter. In the event of default as defined in the GS Capital Note this rate will increase to 18 %, and the GS Capital Note will become convertible at a price per share equal to the lowest trading price during the previous twenty trading days prior to the conversion date. The GS Capital Note entered default status on October 19, 2022. The GS Capital Commitment Fee Shares and GS Capital Warrants resulted in a discount to the GS Capital Note in the amount of $ 162,158 . The Company charged the amount of $ 32,155 to interest on the GS Capital Note during the year ended December 31, 2022. Discounts in the amount of $ 212,435 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 277,777 and $ 19,578 , respectively, were due on the GS Capital Note at December 31, 2022. 57 Table of Contents During the year ended December 31, 2023, GS Capital converted an aggregate amount of $ 72,777 of principal and $ 8,679 of accrued interest in the GS Capital Note into an aggregate of 57,140 shares of the Company’s common stock at an average price of $ 1.46 per share. These conversions were made pursuant to the terms of the GS Capital Note, and no gain or loss was recorded on these transactions. During the year ended December 31, 2023, a default penalty in the amount of $ 138,889 and an additional fee in the amount of $ 15,000 were added to the principal amount of the GS Capital Note. During the year ended December 31, 2023, interest in the amount $ 13,965 was accrued on the GS Capital Note. On April 11, 2023, an equity investment incentive in the amount of $ 249,439 representing 65% of the total amount due under the GS Capital Note, along with original principal of $ 205,000 , the default penalty of $ 138,889 , the fee of $ 15,000 , and accrued interest of $ 24,864 (a total of $ 633,192 ) was converted to 634 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $249,439, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the GS Capital Note. Kishon Note On May 10, 2022, the Company entered into a Securities Purchase Agreement (the “Kishon Agreement”) with Kishon Investments, LLC (“Kishon”) with respect to the sale and issuance to Kishon of: (i) an initial commitment fee in the amount of $ 159,259 in the form of 12,741 shares (the “Kishon Commitment Fee Shares”) of the Company’s Common Stock, (ii) a promissory note in the aggregate principal amount of $277,777 (the “Kishon Note”), and (iii) Common Stock Purchase Warrants to purchase 5,556 shares of the Company’s common stock (the “Kishon Warrants”). Should Kishon receive net proceeds of less than $159,259 from the sale of the Kishon Commitment Fee Shares, the Company will issue additional shares to Kishon or pay the shortfall amount to Kishon in cash. The terms of the Kishon Agreement resulted in the Company recording a derivative liability in the initial amount of $ 27,793 . The Kishon Note was issued in the principal amount of $ 277,777 for a purchase price of $ 250,000 resulting in an original issue discount of $ 27,777 . The Kishon Note has a due date of November 10, 2022 and bears interest at the rate of 10 % per year for the first six months and 12 % thereafter. In the event of default as defined in the Kishon Note this rate will increase to 18 %, and the Kishon Note will become convertible at a price per share equal to the lowest trading price during the previous twenty trading days prior to the conversion date. The Kishon Note entered default status on November 11, 2022. The Kishon Commitment Fee Shares and Kishon Warrants resulted in a discount to the Kishon Note in the amount of $ 138,492 . The Company charged the amount of $ 28,624 to interest on the Kishon Note during the year ended December 31, 2022. Discounts in the amount of $ 181,269 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 277,777 and $ 17,822 , respectively, were due on the Kishon Note at December 31, 2022. During the year ended December 31, 2023, a default penalty in the amount of $ 138,889 and an additional fee in the amount of $ 15,000 were added to the principal amount of the Kishon Note. During the year ended December 31, 2023, interest in the amount of $ 71,087 was accrued on the Kishon Note. At December 31, 2023, principal and interest in the amount of $ 431,666 and $ 88,909 , respectively, were due on the Kishon Note. This note was in default at December 31, 2023 and 2022. Finnegan Note 1 On May 23, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 47,059 to Jessica Finnegan (the “Finnegan Note 1”). The Finnegan Note 1 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 20, 2022 , as extended, or (ii) five (5) business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Finnegan Note 1 was $ 40,000 ; the amount payable at maturity will be $47,059 plus 10% of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Finnegan Note 1, 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 Finnegan Note 1 entered default status on November 21, 2022, and the interest rate increased to 18%. The Finnegan Note 1 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Ms. Finnegan reasonably believes contains a term that is more favorable than those in the Finnegan Note 1, the Company shall notify Ms. Finnegan of such term, and such term, at the option of Ms. Finnegan, shall become a part of the Finnegan Note 1. In addition, Ms. Finnegan received five-year warrants to purchase 386 shares of common stock at a price of $ 25.00 per share with a fair value of $ 2,000 at the date of issuance, and 1,930 shares of common stock with a value of $ 3,240 ; these amounts were recorded as discounts to the Finnegan Note 1. Interest in the amount of $ 3,285 was accrued on the Finnegan Note 1 during the year ended December 31, 2022. Discounts in the amount of $ 17,005 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 51,765 and $ 3,285 , respectively, were due on the Finnegan Note 1 at December 31, 2022. 58 Table of Contents During the year ended December 31, 2023, interest in the amount of $ 8,604 was accrued on the Finnegan Note 1; principal and accrued interest in the amount of $ 51,765 and $ 11,889 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Finnegan Note 2 On May 26, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 29,412 to Jessica Finnegan (the “Finnegan Note 2”). The Finnegan Note 2 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Finnegan Note 2 was $ 25,000 ; the amount payable at maturity will be $29,412 plus 10% of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Finnegan Note 2, 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 Finnegan Note 2 entered default status on December 1, 2022, and the interest rate increased to 18%. The Finnegan Note 2 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Ms. Finnegan reasonably believes contains a term that is more favorable than those in the Finnegan Note 2, the Company shall notify Ms. Finnegan of such term, and such term, at the option of Ms. Finnegan, shall become a part of the Finnegan Note 2. In addition, Ms. Finnegan received five-year warrants to purchase 242 shares of common stock at a price of $ 25.00 per share with a fair value of $ 1,250 at the date of issuance, and 242 shares of common stock with a value of $ 2,025 ; these amounts were recorded as discounts to the Finnegan Note 2. Interest in the amount of $ 1,965 was accrued on the Finnegan Note 2 during the year ended December 31, 2022. Discounts in the amount of $ 10,625 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 32,353 and $ 1,965 , respectively, were due on the Finnegan Note 2 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 5,376 was accrued on the Finnegan Note 2; principal and accrued interest in the amount of $ 32,353 and $ 7,341 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Dragon Note On June 9, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 588,235 (the “Dragon Note”) to Dragon Dynamic Funds Platform Ltd (“Dragon Dynamic”). The Dragon Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) December 9, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Dragon Note was $ 500,000 ; the amount payable at maturity will be $588,235 plus 10 % of that amount plus any accrued and unpaid interest. Costs in the amount of $ 47,500 were charged to discount on the Dragon Note. Following an event of default as defined in the Dragon 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 Dragon Note entered default status on December 10, 2022, and the interest rate increased to 18%. The Dragon 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 Dragon Dynamic reasonably believes contains a term that is more favorable than those in the Dragon Note, the Company shall notify Dragon Dynamic of such term, and such term, at the option of Dragon Dynamic, shall become a part of the Dragon Note. In addition, Dragon Dynamic received five-year warrants to purchase 4,824 shares of common stock at a price of $ 25.00 per share with a fair value of $ 21,500 at the date of issuance, and 4,824 shares of common stock with a value of $ 44,000 ; these amounts were recorded as discounts to the Dragon Note. Interest in the amount of $ 35,874 was accrued on the Dragon Note during the year ended December 31, 2022. Discounts in the amount of $ 260,059 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 647,059 and $ 35,874 , respectively, were due on the Dragon Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 30,204 was accrued on the Dragon Note. On April 11, 2023, an equity investment incentive in the amount of $ 463,539 representing 65% of the total amount due under the Dragon Note, along with original principal of $ 647,059 and accrued interest of $ 66,078 (a total of $ 1,176,676 ) was converted to 1,177 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $463,539, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Dragon Note. 59 Table of Contents Mackay Note On July 7, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 294,118 to Mackay Investments, LLC (the “Mackay Note”). The Mackay Note bears interest at the rate of 10 % per annum accrued monthly and has a maturity date that is the earlier of (i) August 10, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Mackay Note was $ 250,000 ; the amount payable at maturity will be $294,118 plus 10% of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Mackay 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 Mackay Note entered default status on August 11, 2022, and the interest rate increased to 18%. The Mackay 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 Mackay Investments, LLC reasonably believes contains a term that is more favorable than those in the Mackay Note, the Company shall notify Mackay Investments, LLC of such term, and such term, at the option of Mackay Investments, LLC , shall become a part of the Mackay Note. In addition, Mackay Investments, LLC received five-year warrants to purchase 2,412 shares of common stock at a price of $ 25.00 per share with a fair value of $ 10,250 at the date of issuance, and 2,412 shares of common stock with a value of $ 44,118 ; these amounts were recorded as discounts to the Mackay Note. Interest in the amount of $ 20,193 was accrued on the Mackay Note during the year ended December 31, 2022. Discounts in the amount of $ 96,280 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 323,530 and $ 20,193 , respectively, were due on the Mackay Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 43,614 was accrued on the Mackay Note. On September 29, 2023, an equity investment incentive in the amount of $ 258,269 representing 65% of the total amount due under the Mackay Note, along with original principal of $ 294,118 , premium of $ 29,412 , accrued interest of $ 63,807 , and fee of $ 10,000 (a total of $ 655,606 ) was converted to 656 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $ 258,269 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Mackay Note. Schrier Note On July 7, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 23,259 to Charles Schrier (the “Schrier Note”). The Schrier Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) January 8, 2023 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Schrier Note was $ 20,000 ; the amount payable at maturity will be $23,529 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Schrier 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 Schrier 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 Mr. Schrier reasonably believes contains a term that is more favorable than those in the Schrier Note, the Company shall notify Mr. Schrier of such term, and such term, at the option of Mr. Schrier, shall become a part of the Schrier Note. In addition, Mr. Schrier received five-year warrants to purchase 193 shares of common stock at a price of $ 25.00 per share with a fair value of $ 820 at the date of issuance, and 193 shares of common stock with a value of $ 1,000 ; these amounts were recorded as discounts to the Schrier Note. Interest in the amount of $ 1,141 was accrued on the Schrier Note during the year ended December 31, 2022. Discounts in the amount of $ 7,367 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 335 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 25,882 and $ 1,141 , respectively, were due on the Schrier Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 4,242 was accrued on the Schrier Note and $ 335 of discount was amortized to interest expense; principal and accrued interest in the amount of $ 25,882 and $ 5,383 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. 60 Table of Contents Nommsen Note On July 26, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 58,823 to Eric S. Nommsen (the “Nommsen Note”). The Nommsen Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , as extended, or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Nommsen Note was $ 50,000 ; the amount payable at maturity will be $58,823 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Nommsen 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 Nommsen Note entered default status on December 1, 2022, and the interest rate increased to 18 %. The Nommsen 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 Mr. Nommsen reasonably believes contains a term that is more favorable than those in the Nommsen Note, the Company shall notify Mr. Nommsen of such term, and such term, at the option of Mr. Nommsen, shall become a part of the Nommsen Note. In addition, Mr. Nommsen received five-year warrants to purchase 483 shares of common stock at a price of $ 25.00 per share with a fair value of $ 1,850 at the date of issuance, and 483 shares of common stock with a value of $ 2,350 ; these amounts were recorded as discounts to the Nommsen Note. Interest in the amount of $ 2,946 was accrued on the Nommsen Note during the year ended December 31, 2022. Discounts in the amount of $ 18,905 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 64,705 and $ 2,946 , respectively, were due on the Nommsen Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 10,739 was accrued on the Nommsen Note; principal and accrued interest in the amount of $ 64,705 and $ 13,685 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Caplan Note On July 27, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 58,823 to James H. Caplan (the “Caplan Note”). The Caplan Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) January 21, 2023 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Caplan Note was $ 50,000 ; the amount payable at maturity will be $58,823 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Caplan 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 Caplan 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 Mr. Caplan reasonably believes contains a term that is more favorable than those in the Caplan Note, the Company shall notify Mr. Caplan of such term, and such term, at the option of Mr. Caplan, shall become a part of the Caplan Note. In addition, Mr. Caplan received five-year warrants to purchase 483 shares of common stock at a price of $ 25.00 per share with a fair value of $ 1,850 at the date of issuance, and 483 shares of common stock with a value of $ 2,350 ; these amounts were recorded as discounts to the Caplan Note. Interest in the amount of $ 2,531 was accrued on the Caplan Note during the year ended December 31, 2022. Discounts in the amount of $ 16,675 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 2,230 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 64,705 and $ 2,531 , respectively, were due on the Caplan Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 10,458 was accrued on the Caplan Note and $ 2,230 of discount was amortized to interest expense; principal and accrued interest in the amount of $ 64,705 and $ 12,989 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. 61 Table of Contents Finnegan Note 3 On August 4, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 29,412 (the “Finnegan Note 3”) to Jessica, Kevin C., Brody, Isabella and Jack Finnegan (collectively, the “Finnegans”). The Finnegan Note 3 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) February 3, 2023 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Finnegan Note 3 was $ 25,000 ; the amount payable at maturity will be $29,412 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Finnegan Note 3, 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 Finnegan Note 3 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 Finnegans reasonably believes contains a term that is more favorable than those in the Finnegan Note 3, the Company shall notify The Finnegans of such term, and such term, at the option of The Finnegans, shall become a part of the Finnegan Note 3. In addition, The Finnegans received five-year warrants to purchase 242 shares of common stock at a price of $ 25.00 per share with a fair value of $ 850 at the date of issuance, and 242 shares of common stock with a value of $ 1,100 ; these amounts were recorded as discounts to the Finnegan Note 3. Interest in the amount of $ 1,200 was accrued on the Finnegan Note 3 during the year ended December 31, 2022. Discounts in the amount of $ 7,575 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 1,728 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 32,353 and $ 1,200 , respectively, were due on the Finnegan Note 3 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 5,150 was accrued on the Finnegan Note 3; principal and accrued interest in the amount of $ 32,353 and $ 6,350 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Enright Note On August 4, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 120,000 to Jack Enright (the “Enright Note”). The Enright Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) February 3, 2023 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Enright Note was $ 102,000 ; the amount payable at maturity will be $120,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Enright 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 Enright 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 Mr. Enright reasonably believes contains a term that is more favorable than those in the Enright Note, the Company shall notify Mr. Enright of such term, and such term, at the option of Mr. Enright, shall become a part of the Enright Note. In addition, Mr. Enright received 984 shares of common stock with a value of $ 6,317 ; this amount was recorded as a discount to the Enright Note. Interest in the amount of $ 4,899 was accrued on the Enright Note during the year ended December 31, 2022. Discounts in the amount of $ 29,571 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 6,746 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 132,000 and $ 4,899 , respectively, were due on the Enright Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 15,481 was accrued on the Enright Note. On September 29, 2023, an equity investment incentive in the amount of $ 102,116 representing 65% of the total amount due under the Enright Note, along with original principal of $ 120,000 , premium of $ 12,000 , and accrued interest of $ 20,380 (a total of $ 254,496 ) was converted to 255 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $ 102,116 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Enright Note. 62 Table of Contents Mitchell Note On September 2, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 71,000 to John Mitchell (the “Mitchell Note”). The Mitchell Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Mitchell Note was $ 60,350 ; the amount payable at maturity will be $71,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Mitchell 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 Mitchell Note entered default status on December 1, 2022, and the interest rate increased to 18 %. The Mitchell 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 Mr. Mitchell reasonably believes contains a term that is more favorable than those in the Mitchell Note, the Company shall notify Mr. Mitchell of such term, and such term, at the option of Mr. Mitchell, shall become a part of the Mitchell Note. In addition, Mr. Mitchell received 582 shares of common stock with a value of $ 3,124 ; this amount was recorded as a discount to the Mitchell Note. Interest in the amount of $ 2,817 was accrued on the Mitchell Note during the year ended December 31, 2022. Discounts in the amount of $ 20,874 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 78,100 and $ 2,817 , respectively, were due on the Mitchell Note at December 31, 2022. The Mitchell Note was in default at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 12,951 was accrued on the Mitchell Note; principal and accrued interest in the amount of $ 78,100 and $ 15,768 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Lightmas Note On September 2, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 60,000 to Frank Lightmas (the “Lightmas Note”). The Lightmas Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Lightmas Note was $ 51,000 ; the amount payable at maturity will be $60,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Lightmas 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 Lightmas Note entered default status on December 1, 2022, and the interest rate increased to 18 %. The Lightmas 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 Mr. Lightmas reasonably believes contains a term that is more favorable than those in the Lightmas Note, the Company shall notify Mr. Lightmas of such term, and such term, at the option of Mr. Lightmas, shall become a part of the Lightmas Note. In addition, Mr. Lightmas received 492 shares of common stock with a value of $ 2,640 ; this amount was recorded as a discount to the Lightmas Note. Interest in the amount of $ 2,380 was accrued on the Lightmas Note during the year ended December 31, 2022. Discounts in the amount of $ 17,640 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 66,000 and $ 2,380 , respectively, were due on the Lightmas Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 10,945 was accrued on the Lightmas Note; principal and accrued interest in the amount of $ 66,000 and $ 13,325 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. 63 Table of Contents Lewis Note On September 2, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 30,000 to Lisa Lewis (the “Lewis Note”). The Lewis Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Lewis Note was $ 25,500 ; the amount payable at maturity will be $30,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Lewis 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 Lewis Note entered default status on December 1, 2022, and the interest rate increased to 18 %. The Lewis 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 Ms. Lewis reasonably believes contains a term that is more favorable than those in the Lewis Note, the Company shall notify Ms. Lewis of such term, and such term, at the option of Ms. Lewis, shall become a part of the Lewis Note. In addition, Ms. Lewis received 246 shares of common stock with a value of $ 1,320 ; this amount was recorded as a discount to the Lewis Note. Interest in the amount of $ 1,190 was accrued on the Lewis Note during the year ended December 31, 2022. Discounts in the amount of $ 8,820 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 33,000 and $ 1,190 , respectively, were due on the Lewis Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 5,473 was accrued on the Lewis Note; principal and accrued interest in the amount of $ 33,000 and $ 6,663 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Goff Note On September 2, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 30,000 to Sharon Goff (the “Goff Note”). The Goff Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Goff Note was $ 25,500 ; the amount payable at maturity will be $30,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Goff 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 Goff Note entered default status on December 1, 2022, and the interest rate increased to 18 %. The Goff 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 Ms. Goff reasonably believes contains a term that is more favorable than those in the Goff Note, the Company shall notify Ms. Goff of such term, and such term, at the option of Ms. Goff, shall become a part of the Goff Note. In addition, Ms. Goff received 246 shares of common stock with a value of $ 1,320 ; this amount was recorded as a discount to the Goff Note. Interest in the amount of $ 1,190 was accrued on the Goff Note during the year ended December 31, 2022. Discounts in the amount of $ 8,820 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 33,000 and $ 1,190 , respectively, were due on the Goff Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 5,473 was accrued on the Goff Note; principal and accrued interest in the amount of $ 33,000 and $ 6,663 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. 64 Table of Contents Hagan Note On September 2, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 100,000 to Cliff Hagan (the “Hagan Note”). The Hagan Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) December 10, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Hagan Note was $ 85,000 ; the amount payable at maturity will be $100,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Hagan 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 Hagan Note entered default status on December 11, 2022, and the interest rate increased to 18 %. The Hagan 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 Mr. Hagan reasonably believes contains a term that is more favorable than those in the Hagan Note, the Company shall notify Mr. Hagan of such term, and such term, at the option of Mr. Hagan, shall become a part of the Hagan Note. In addition, Mr. Hagan received 820 shares of common stock with a value of $ 4,715 ; this amount was recorded as a discount to the Hagan Note. Interest in the amount of $ 3,556 was accrued on the Hagan Note during the year ended December 31, 2022. Discounts in the amount of $ 29,715 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 110,000 and $ 3,556 , respectively, were due on the Hagan Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 18,237 was accrued on the Hagan Note; principal and accrued interest in the amount of $ 110,000 and $ 21,793 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Darling Note On September 14, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 200,000 to Darling Capital, LLC (“Darling”), (the “Darling Note”). The Darling Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) December 15, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Darling Note was $ 170,000 ; the amount payable at maturity will be $200,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Darling 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 Darling Note entered default status on December 15, 2022, and the interest rate increased to 18 %. The Darling 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 Darling reasonably believes contains a term that is more favorable than those in the Darling Note, the Company shall notify Darling of such term, and such term, at the option of Darling shall become a part of the Darling Note. In addition, Darling received 1,640 shares of common stock with a value of $ 10,824 ; this amount was recorded as a discount to the Darling Note. Interest in the amount of $ 6,619 was accrued on the Darling Note during the year ended December 31, 2022. Discounts in the amount of $ 60,824 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 220,000 and $ 6,619 , respectively, were due on the Darling Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 10,192 was accrued on the Darling Note. On April 11, 2023, an equity investment incentive in the amount of $ 153,927 representing 65% of the total amount due under the Darling Note, along with original principal of $ 220,000 and accrued interest of $ 16,811 (a total of $ 390,738 ) was converted to 391 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $153,927, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Darling Note. 65 Table of Contents Leath Note On September 15, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 50,000 to Mack Leath (the “Leath Note”). The Leath Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) December 15, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Leath Note was $ 42,500 ; the amount payable at maturity will be $ 55,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Leath 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 Leath Note entered default status on December 16, 2022, and the interest rate increased to 18 %. The Leath 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 Mr. Leath reasonably believes contains a term that is more favorable than those in the Leath Note, the Company shall notify Mr. Leath of such term, and such term, at the option of Mr. Leath, shall become a part of the Leath Note. In addition, Mr. Leath received 410 shares of common stock with a value of $ 2,868 ; this amount was recorded as a discount to the Leath Note. Interest in the amount of $ 1,641 was accrued on the Leath Note during the year ended December 31, 2022. Discounts in the amount of $ 15,368 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 55,000 and $ 1,641 , respectively, were due on the Leath Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 9,116 was accrued on the Leath Note; principal and accrued interest in the amount of $ 55,000 and $ 10,757 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Cavalry Note On October 5, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 500,000 to the Cavalry Fund LLP (“Cavalry”), (the “Cavalry Note”) with a due date of December 31, 2022. The Cavalry Note is subject to an exchange agreement (the “Series E Exchange Agreement”) whereby Cavalry will exchange (a) amounts due under the Cavalry Note, (b) 1,000,000 shares of the Company’s Series C Convertible Preferred Stock, and (c) 750,000 shares of the Company’s Series D Convertible Preferred Stock for a number of shares of the Company’s Series E Convertible Preferred Stock equal to 150% of the principal amount of the Cavalry Note plus 150% of the stated value of the Series C and Series D convertible Preferred Stock. See note 13. The Cavalry Note bears interest at the rate of 10 % per annum which will accrue from the date of the note only if the Cavalry Note is not converted pursuant to the Series E Exchange Agreement by December 10, 2022. Following an event of default as defined in the Cavalry 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 Cavalry 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 Cavalry reasonably believes contains a term that is more favorable than those in the Cavalry Note, the Company shall notify the Cavalry of such term, and such term, at the option of Cavalry, shall become a part of the Cavalry Note. In addition, Cavalry received five-year warrants to purchase 750 shares of common stock at a price equal to the price of any warrant included in an offering in connection with listing at the Nasdaq Global Market. These warrants are not deemed issued at December 31, 2022 because the exercise price was not yet determined. Costs in the amount of $ 7,500 were also charged to discount on the Cavalry Note. Discounts in the amount of $ 10,500 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 500,000 and $ 11,918 , respectively, were due on the Cavalry Note at December 31, 2022. Concurrent with the Cavalry Note, the Company entered into an exchange agreement (the “Cavalry Exchange Agreement”). Pursuant to the Cavalry Exchange Agreement, Cavalry shall exchange (a) 1,000,000 shares of the Company’s Series C Convertible Preferred Stock (b) 750,000 shares of the Company’s Series D Convertible Preferred Stock and (c) amounts owing under the Cavalry Note, for a number of Series E Convertible Preferred Stock (the “Series E Shares”) equal to 150% of the principal amount of the Cavalry Note, plus 150% of the stated value of the Series C Shares and Series D Shares (the “Series E Exchange Value”). No transactions occurred pursuant to the Cavalry Exchange Agreement during the year ended December 31, 2022. See note 13. During the year ended December 31, 2023, interest in the amount of $ 25,415 was accrued on the Cavalry Note. On April 11, 2023, an equity investment incentive in the amount of $ 349,266 representing 65% of the total amount due under the Cavalry Note, along with original principal of $ 500,000 and accrued interest of $ 37,333 (a total of $ 886,599 ) was converted to 887 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $349,266, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Cavalry Note. 66 Table of Contents Mercer Note 1 On October 7, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 300,000 to the Mercer Street Global Opportunity Fund (“Mercer”), (the “Mercer Note 1”) with a due date of December 31, 2022 . The Mercer Note 1 is subject to the Series E Exchange Agreement whereby Mercer will exchange (a) amounts due under the Mercer Note 1, (b) 47,619 shares of the Company’s Series C Convertible Preferred Stock, and (c) 750,000 shares of the Company’s Series D Convertible Preferred Stock for a number of shares of the Company’s Series E Convertible Preferred Stock equal to 150% of the principal amount of the Mercer Note 1 plus 150% of the stated value of the Series C and Series D convertible Preferred Stock. See note 13. The Mercer Note 1 bears interest at the rate of 10 % per annum which will accrue from the date of the note only if the Mercer Note 1 is not converted pursuant to the Series E Exchange Agreement by December 10, 2022. Following an event of default as defined in the Mercer Note 1, 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 Mercer Note 1 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mercer reasonably believes contains a term that is more favorable than those in the Mercer Note 1, the Company shall notify Mercer of such term, and such term, at the option of Mercer, shall become a part of the Mercer Note 1. In addition, Mercer received five-year warrants to purchase 750 shares of common stock at a price equal to the price of any warrant included in an offering in connection with listing at the Nasdaq Global Market. These warrants are not deemed issued at December 31, 2022 because the exercise price was not yet determined. Interest in the amount of $ 6,986 was accrued on the Mercer Note 1 during the year ended December 31, 2022. Discounts in the amount of $ 10,500 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 300,000 and $ 6,986 , respectively, were due on the Mercer Note 1 at December 31, 2022. Concurrent with the Mercer Note 1, the Company entered into an exchange agreement (the “Mercer Exchange Agreement”). Pursuant to the Mercer Exchange Agreement, Mercer shall exchange (a) 47,619 shares of the Company’s Series C Convertible Preferred Stock, (b) 750,000 shares of the Company’s Series D Convertible Preferred Stock, and (c) amounts owing under the Mercer Note, for a number of Series E Convertible Preferred Stock (the “Series E Shares”) equal to 150% of the principal amount of the Mercer Note, plus 150% of the stated value of the Series C Shares and Series D Shares (the “Series E Exchange Value”). No transactions occurred pursuant to the Cavalry Exchange Agreement during the year ended December 31, 2022. See note 13. During the year ended December 31, 2023, interest in the amount of $ 15,247 , respectively, was accrued on the Mercer Note 1. On April 11, 2023, an equity investment incentive in the amount of $ 209,452 representing 65% of the total amount due under the Mercer Note 1, along with original principal of $ 300,000 and accrued interest of $ 22,233 (a total of $ 531,685 ) was converted to 531 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $209,452, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Mercer Note 1. Pinz Note On October 10, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 30,000 to the Pinz Capital Special Opportunities Fund (“Pinz”), (the “Pinz Note”) with a due date of December 31, 2022 . The Pinz Note is subject to the Series E Exchange Agreement whereby Pinz will exchange (a) amounts due under the Pinz Note, (b) 100,000 shares of the Company’s Series D Convertible Preferred Stock for a number of shares of the Company’s Series E Convertible Preferred Stock equal to 150% of the principal amount of the Pinz Note plus 150% of the stated value of the Series D convertible Preferred Stock. See note 13. The Pinz Note bears interest at the rate of 10 % per annum which will accrue from the date of the note only if the Pinz Note is not converted pursuant to the Series E Exchange Agreement by December 10, 2022. Following an event of default as defined in the Pinz 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 Pinz 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 Pinz Fund LLP reasonably believes contains a term that is more favorable than those in the Pinz Note, the Company shall notify the Pinz Fund LLP of such term, and such term, at the option of the Pinz Fund, LLP, shall become a part of the Pinz Note. In Interest in the amount of $ 6,986 was accrued on the Pinz Note during the year ended December 31, 2022. Discounts in the amount of $ 2,100 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 30,000 and $ 674 , respectively, were due on the Pinz Note at December 31, 2022. 67 Table of Contents Concurrent with the Pinz Note, the Company entered into an exchange agreement (the “Pinz Exchange Agreement”). Pursuant to the Pinz Exchange Agreement, Pinz shall exchange (a) 100,000 shares of the Company’s Series D Convertible Preferred Stock, and (b) amounts owing under the Pinz Note, for a number of Series E Convertible Preferred Stock equal to 150% of the principal amount of the Pinz Note, plus 150% of the stated value of the Series D Shares. No transactions occurred pursuant to the Pinz Exchange Agreement during the year ended December 31, 2022. See note 13. During the months ended December 31, 2023, interest in the amount of $ 15,247 , respectively, was accrued on the Pinz Note. On April 11, 2023, an equity investment incentive in the amount of $ 20,929 representing 65% of the total amount due under the Pinz Note, along with original principal of $ 30,000 and accrued interest of $ 2,198 (a total of $ 53,127 ) was converted to 54 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $20,929, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Pinz Note. Mercer Note 2 On October 24, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 100,000 to Mercer (the “Mercer Note 2”) with a due date of December 31, 2022 . The Mercer Note 2 is subject to the Series E Exchange Agreement whereby Mercer will exchange (a) amounts due under the Mercer Note 2 for a number of shares of the Company’s Series E Convertible Preferred Stock equal to 150% of the principal amount of the Mercer Note 2. See note 13. The Mercer Note 2 bears interest at the rate of 10% per annum which will accrue from the date of the note only if the Mercer Note 2 is not converted pursuant to the Series E Exchange Agreement by December 10, 2022. Following an event of default as defined in the Mercer Note 2, 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 Mercer Note 2 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mercer reasonably believes contains a term that is more favorable than those in the Mercer Note 2, the Company shall notify Mercer of such term, and such term, at the option of Mercer, shall become a part of the Mercer Note 2. In addition, Mercer received five-year warrants to purchase 750 shares of common stock at a price equal to the price of any warrant included in an offering in connection with listing at the Nasdaq Global Market. These warrants are not deemed issued at December 31, 2022 because the exercise price was not yet determined. Interest in the amount of $ 1,863 was accrued on the Mercer Note 2 during the year ended December 31, 2022. Discounts in the amount of $ 1,900 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 100,000 and $ 1,863 , respectively, were due on the Mercer Note 2 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 5,076 , respectively, was accrued on the Mercer Note 2. On April 11, 2023, an equity investment incentive in the amount of $ 69,510 representing 65% of the total amount due under the Mercer Note 2, along with original principal of $ 100,000 and accrued interest of $ 6,939 (a total of $ 176,449 ) was converted to 177 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $69,510, there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Mercer Note 2. Mercer Note 3 On December 2, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 125,000 to Mercer (the “Mercer Note 3”) with a due date of May 21, 2023 . The Mercer Note 3 is subject to the Series E Exchange Agreement whereby Mercer will exchange amounts due under the Mercer Note 3 for a number of shares of the Company’s Series E Convertible Preferred Stock equal to 150% of the principal amount of the Mercer Note 3. See note 13. The Mercer Note 3 bears interest at the rate of 10 % per annum which will accrue from the date of the note only if the Mercer Note 3 is not converted pursuant to the Series E Exchange Agreement by May 10, 2023. Following an event of default as defined in the Mercer Note 3, 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 Mercer Note 3 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mercer reasonably believes contains a term that is more favorable than those in the Mercer Note 3, the Company shall notify Mercer of such term, and such term, at the option of Mercer, shall become a part of the Mercer Note 3. In addition, Mercer received five-year warrants to purchase 750 shares of common stock at a price equal to the price of any warrant included in an offering in connection with listing at the Nasdaq Global Market. These warrants are not deemed issued at December 31, 2022 because the exercise price was not yet. determined. Discounts in the amount of $ 4,028 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 20,972 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 125,000 and $ 993 , respectively, were due on the Mercer Note 3 at December 31, 2022. 68 Table of Contents During the year ended December 31, 2023, interest in the amount of $ 3,521 was accrued on the Mercer Note 3. Also during the year ended December 31, 2023, discounts in the amount of $ 20,972 were amortized to interest expense. On April 11, 2023, an equity investment incentive in the amount of $ 67,934 representing 65% of the total amount due under the Mercer Note 3, along with original principal of $ 100,000 and accrued interest of $ 4,514 (a total of $ 172,448 ) was converted to 173 shares of the Company’s Series F Preferred Stock. The premium on the Mercer Note 3 in the amount of $ 25,000 was forgiven by Mercer, and the Company recognized a gain on forgiveness of debt in the amount of $ 25,000 . Other than the equity investment incentive of $67,934, there was no other gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Mercer Note 3. Aggregate interest expense as described on the above notes payable was $ 463,136 and $ 3,210,763 for the year ended December 31, 2023 and 2022, respectively. Accrued interest on notes payable was $ 375,346 and $ 358,165 at December 31, 2023 and 2022, respectively. Note 10: Notes Payable – Related Parties The following table summarizes the outstanding related party notes payable as of December 31, 2023 and 2022, respectively December 31, 2023 December 31, 2022 Howe Note 1 $ - $ 1,100,000 Howe Note 2 - 330,000 Howe Note 3 - 330,000 Howe Note 4 - 220,000 Diamond Note 1 - 192,500 Diamond Note 2 - 23,529 Diamond Note 3 - 258,823 Diamond Note 4 - 51,765 Diamond Note 5 - 64,706 M Diamond Note 64,706 64,706 Dobbertin Note 19,412 19,412 Iturregui Note 1 - 32,353 Lindstrom Note 45,294 45,294 November 29, 2022 Notes 37,500 131,250 Notes Payable 166,912 2,864,338 Less: Discount - ( 22,670 ) Less: Amounts classified as current liabilities of discontinued operations - ( 1,995,667 ) Notes payable – net of discounts $ 166,912 $ 846,001 Current Portion, net of discount $ 166,912 $ 846,001 Long-term portion, net of discount $ - $ - 69 Table of Contents Howe Note 1 On December 30, 2021, we issued a 10% Promissory Note in the principal amount of $ 1,000,000 in a related party transaction to the Michael C. Howe Living Trust (the “Howe Note 1”). Michael C. Howe was the Chief Executive Officer of the Good Clinic LLC, one of our subsidiaries. The Howe Note 1 bears interest at the rate of 10% interest rate per annum and has a maturity date that is the earlier of (i) November 30, 2022 , as extended, or (ii) five (5) business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Howe Note 1 was $ 850,000 ; 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 Howe Note 1, 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 Howe Note 1 entered delinquent status on December 1, 2022, and the interest rate increased to 18 %. The Howe Note 1 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security, which Mr. Howe reasonably believes contains a term that is more favorable than those in the Howe Note 1, we shall notify Mr. Howe of such term, and such term, at the option of Mr. Howe, shall become a part of the Howe Note 1. In addition, Mr. Howe five-year warrants to purchase 42,000 shares of common stock at a price of $ 25.00 per share, and five-year warrants to purchase 42,000 shares of common stock at $ 37.50 per share with an aggregate fair value of $ 261,568 at the date of issuance, which was recorded as a discount to this note. Interest in the amount of $ 106,795 was accrued on the Howe Note 1 during the year ended December 31, 2022. Discounts in the amount of $ 511,568 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 1,100,000 and $ 106,795 , respectively, were due on the Howe Note 1 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 168,761 , respectively, was accrued on the Howe Note 1; principal and accrued interest in the amount of $ 0 were due on this note at December 31, 2023. Howe Note 2 On June 9, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 300,000 in a related party transaction to the Michael C. Howe Living Trust (the “Howe Note 2”). Michael C. Howe was the Chief Executive Officer of the Good Clinic LLC, one of our subsidiaries. The Howe Note 2 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Howe Note 2 was $ 255,000 ; the amount payable at maturity will be $300,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Howe Note 2, 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 Howe Note 2 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Howe Note 2 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Howe reasonably believes contains a term that is more favorable than those in the Howe Note 2, the Company shall notify Mr. Howe of such term, and such term, at the option of Mr. Howe, shall become a part of the Howe Note 2. In addition, Mr. Howe received five-year warrants to purchase 2,460 shares of common stock at a price of $ 25.00 per share with a fair value of $ 10,965 at the date of issuance, and 2,460 shares of common stock with a value of $ 22,440 ; these amounts were recorded as discounts to the Howe Note 2. Interest in the amount of $ 18,888 was accrued on the Howe Note 2 during the year ended December 31, 2022. Discounts in the amount of $ 108,405 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 330,000 and $ 18,888 , respectively, were due on the Howe Note 2 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 50,362 was accrued on the Howe Note 2; principal and accrued interest in the amount of $ 0 were due on this note at December 31, 2023. 70 Table of Contents Howe Note 3 On July 21, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 300,000 in a related party transaction to the Michael C. Howe Living Trust (the “Howe Note 3”). Michael C. Howe was the Chief Executive Officer of the Good Clinic LLC, one of our subsidiaries. The Howe Note 3 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , as extended, or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Howe Note 3 was $ 255,000 ; the amount payable at maturity will be $300,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Howe Note 3, 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 Howe Note 3 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Howe Note 3 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Howe reasonably believes contains a term that is more favorable than those in the Howe Note 3, the Company shall notify Mr. Howe of such term, and such term, at the option of Mr. Howe, shall become a part of the Howe Note 3. In addition, Mr. Howe received five-year warrants to purchase 2,460 shares of common stock at a price of $ 25.00 per share with a fair value of $ 9,945 at the date of issuance, and 2,460 shares of common stock with a value of $ 12,495 ; these amounts were recorded as discounts to the Howe Note 3. Interest in the amount of $ 15,436 was accrued on the Howe Note 3 during the year ended December 31, 2022. Discounts in the amount of $ 97,440 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 330,000 and $ 15,436 , respectively, were due on the Howe Note 3 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 50,314 , respectively, was accrued on the Howe Note 3; principal and accrued interest in the amount of $ 0 were due on this note at December 31, 2023. Howe Note 4 On August 18, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 200,000 in a related party transaction to the Michael C. Howe Living Trust (the “Howe Note 4”). Michael C. Howe was the Chief Executive Officer of the Good Clinic LLC, one of our subsidiaries. The Howe Note 4 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Howe Note 4 was $ 170,000 ; the amount payable at maturity will be $200,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Howe Note 4, 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 Howe Note 4 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Howe Note 4 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Howe reasonably believes contains a term that is more favorable than those in the Howe Note 4, the Company shall notify Mr. Howe of such term, and such term, at the option of Mr. Howe, shall become a part of the Howe Note 4. In addition, Mr. Howe received 1,640 shares of common stock with a value of $ 10,775 ; this amount was recorded as a discount to the Howe Note 4. Interest in the amount of $ 8,756 was accrued on the Howe Note 4 during the year ended December 31, 2022. Discounts in the amount of $ 60,775 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 220,000 and $ 8,756 , respectively, were due on the Howe Note 4 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of 34,077 was accrued on the Howe Note 4; principal and accrued interest in the amount of $ 0 , respectively, were due on this note at December 31, 2023. Howe Debt Exchange Agreement On December 8, 2023, the Company sold the remaining assets of The Good Clinic, LLC to Leading Primary Care LLC, a company organized by Michael C. Howe, the former CEO of The Good Clinic, LLC. As consideration for the transaction, Mr. Howe cancelled the existing notes payable and accrued interest owed to Mr. Howe in the amount of $ 2,454,821 . 71 Table of Contents Diamond Note 1 On February 24, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 175,000 in a related party transaction to Lawrence Diamond, who was Chief Executive Officer and a member of our Board of Directors (the “Diamond Note 1”). The Diamond Note 1 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , as extended, or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Diamond Note 1 was $ 148,750 ; the amount payable at maturity will be $175,000 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Diamond Note 1, 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 1 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Diamond Note 1 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Diamond reasonably believes contains a term that is more favorable than those in the Diamond Note 1, the Company shall notify Mr. Diamond of such term, and such term, at the option of Mr. Diamond, shall become a part of the Diamond Note 2. In addition, Mr. Diamond received five-year warrants to purchase 7,350 shares of common stock at a price of $ 25.00 per share, and five-year warrants to purchase 7,350 shares of common stock at $ 37.50 per share with an aggregate fair value of $ 2,914 at the date of issuance, which was recorded as a discount to this note. Interest in the amount of $ 16,052 was accrued on the Diamond Note 1 during the year ended December 31, 2022. Discounts in the amount of $ 46,664 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 192,500 and $ 16,052 , respectively, were due on the Diamond Note 1 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 24,024 was accrued on the Diamond Note 1. On September 29, 2023, an equity investment incentive in the amount of $ 151,174 representing 65% of the total amount due under the Diamond Note 1, along with original principal of $ 175,000 , premium of $ 17,500 , and accrued interest of $ 40,076 (a total of $ 383,750 ) was converted to 384 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $ 151,174 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Diamond Note 1. Diamond Note 2 On March 18, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 235,294 in a related party transaction to Lawrence Diamond, who was Chief Executive Officer and a member of our Board of Directors (the “Diamond Note 2). The Diamond Note 2 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , as extended, or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Diamond Note 2 was $ 200,000 ; 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 2, 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 2 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Diamond Note 2 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Diamond reasonably believes contains a term that is more favorable than those in the Diamond Note 2, the Company shall notify Mr. Diamond of such term, and such term, at the option of Mr. Diamond, shall become a part of the Diamond Note 2. In addition, Mr. Diamond received five-year warrants to purchase 1,930 shares of common stock at a price of $ 25.00 per share a fair value of $ 2,213 at the date of issuance, which was recorded as a discount to this note. Interest in the amount of $ 1,676 was accrued on the Diamond Note 2 during the year ended December 31, 2022. Principal in the amount of $ 235,294 was paid on the Diamond Note 2 during the year ended December 31, 2022. Discounts in the amount of $ 61,036 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 23,529 and $ 1,676 , respectively, were due on the Diamond Note 2 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 23 was accrued on the Diamond Note 2 On September 29, 2023, an equity investment incentive in the amount of $ 16,398 representing 65% of the total amount due under the Diamond Note 2, along with the premium of $ 23,529 and accrued interest of $ 1,699 (a total of $ 41,626 ) was converted to 42 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $ 16,398 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Diamond Note 2. 72 Table of Contents Diamond Note 3 On April 27, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 235,294 in a related party transaction to Lawrence Diamond, who was Chief Executive Officer and a member of our Board of Directors (the “Diamond Note 3”). The Diamond Note 3 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , as extended, or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Diamond Note 3 was $ 200,000 ; 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 3, 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 3 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Diamond Note 3 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Diamond reasonably believes contains a term that is more favorable than those in the Diamond Note 3, the Company shall notify Mr. Diamond of such term, and such term, at the option of Mr. Diamond, shall become a part of the Diamond Note 3. In addition, Mr. Diamond received five-year warrants to purchase 1,930 shares of common stock at a price of $ 25.00 per share with a fair value of $ 8,800 at the date of issuance, and 1,930 shares of common stock with a value of $ 16,200 ; these amounts were recorded as discounts on the Diamond Note 3. Interest in the amount of $ 17,586 was accrued on the Diamond Note 3 during the year ended December 31, 2022. Discounts in the amount of $ 83,823 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 258,823 and $ 17,586 , respectively, were due on the Diamond Note 3 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 32,244 was accrued on the Diamond Note 3. On September 29, 2023, an equity investment incentive in the amount of $ 200,624 representing 65% of the total amount due under the Diamond Note 3, along with original principal of $ 235,294 , premium of $ 23,529 , and accrued interest of $ 49,830 (a total of $ 509,277 ) was converted to 509 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $ 200,624 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Diamond Note 3. Diamond Note 4 On May 18, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 47,059 in a related party transaction to Lawrence Diamond, who was Chief Executive Officer and a member of our Board of Directors (the “Diamond Note 4”). The Diamond Note 4 bears interest at the rate of 10 % per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , as extended, or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Diamond Note 4 was $ 40,000 ; the amount payable at maturity will be $47,059 plus 10% of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Diamond Note 4, 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 4 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Diamond Note 4 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Diamond reasonably believes contains a term that is more favorable than those in the Diamond Note 4, the Company shall notify Mr. Diamond of such term, and such term, at the option of Mr. Diamond, shall become a part of the Diamond Note 4. In addition, Mr. Diamond received five-year warrants to purchase 386 shares of common stock at a price of $ 25.00 per share with a fair value of $ 2,960 at the date of issuance, and 1,930 shares of common stock with a value of $ 3,160 ; these amounts were recorded as discounts on the Diamond Note 4. Interest in the amount of $ 3,245 was accrued on the Diamond Note 4 during the year ended December 31, 2022. Discounts in the amount of $ 17,885 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 51,765 and $ 3,245 , respectively, were due on the Diamond Note 4 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 6,446 was accrued on the Diamond Note 4. On September 29, 2023, an equity investment incentive in the amount of $ 39,946 representing 65% of the total amount due under the Diamond Note 4, along with original principal of $ 47,059 , premium of $ 4,706 , and accrued interest of $ 9,691 (a total of $ 101,402 ) was converted to 101 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $ 200,624 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Diamond Note 4. 73 Table of Contents Diamond Note 5 On May 26, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 58,823 in a related party transaction to Lawrence Diamond, who was Chief Executive Officer and a member of our Board of Directors (the “Diamond Note 5”). The Diamond Note 5 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Diamond Note 5 was $ 50,000 ; the amount payable at maturity will be $58,823 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Diamond Note 5, 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 5 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Diamond Note 5 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Diamond reasonably believes contains a term that is more favorable than those in the Diamond Note 5, the Company shall notify Mr. Diamond of such term, and such term, at the option of Mr. Diamond, shall become a part of the Diamond Note 5. In addition, Mr. Diamond received five-year warrants to purchase 483 shares of common stock at a price of $ 25.00 per share with a fair value of $ 2,500 at the date of issuance, and 483 shares of common stock with a value of $ 4,050 ; these amounts were recorded as discounts to the Diamond Note 5. Interest in the amount of $ 3,929 was accrued on the Diamond Note 5 during the year ended December 31, 2022. Discounts in the amount of $ 21,256 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 64,705 and $ 3,929 , respectively, were due on the Diamond Note 5 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 8,055 was accrued on the Diamond Note 5. On September 29, 2023, an equity investment incentive in the amount of $ 49,849 representing 65% of the total amount due under the Diamond Note 5, along with original principal of $ 58,824 , premium of $ 5,882 , and accrued interest of $ 11,984 (a total of $ 126,539 ) was converted to 127 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $ 200,624 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Diamond Note 5. M Diamond Note On May 26, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 58,823 to Melissa Diamond (the “M Diamond Note”). Ms. Diamond is the daughter of Larry Diamond, former CEO. The M Diamond Note bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the M Diamond Note was $ 50,000 ; the amount payable at maturity will be $58,823 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the M 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 M Diamond Note entered default status on December 1, 2022, and the interest rate increased to 18%. The M 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 Ms. Diamond reasonably believes contains a term that is more favorable than those in the M Diamond Note, the Company shall notify Ms. Diamond of such term, and such term, at the option of Ms. Diamond, shall become a part of the M Diamond Note. In addition, Ms. Diamond received five-year warrants to purchase 483 shares of common stock at a price of $ 25.00 per share with a fair value of $ 2,500 at the date of issuance, and 483 shares of common stock with a value of $ 4,050 ; these amounts were recorded as discounts to the M Diamond Note. Interest in the amount of $ 3,929 was accrued on the M Diamond Note during the year ended December 31, 2022. Discounts in the amount of $ 21,256 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 64,705 and $ 3,929 , respectively, were due on the M Diamond Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 10,753 was accrued on the M Diamond Note; principal and accrued interest in the amount of $ 64,705 and $ 14,682 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. 74 Table of Contents Lindstrom Note On May 26, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 41,176 in a related party transaction to Jenny Lindstrom, who was the Company’s Chief Legal Officer (the “Lindstrom Note 1”). The Lindstrom Note 1 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Lindstrom Note 1 was $ 35,000 ; the amount payable at maturity will be $41,176 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Lindstrom Note 1, 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 Lindstrom Note 1 entered default status on December 1, 2022, and the interest rate increased to 18 %. The Lindstrom Note 1 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Ms. Lindstrom reasonably believes contains a term that is more favorable than those in the Lindstrom Note 1, the Company shall notify Ms. Lindstrom of such term, and such term, at the option of Ms. Lindstrom, shall become a part of the Lindstrom Note 1. In addition, Ms. Lindstrom received five-year warrants to purchase 338 shares of common stock at a price of $ 25.00 per share with a fair value of $ 1,750 at the date of issuance, and 338 shares of common stock with a value of $ 2,835 ; these amounts were recorded as discounts to the Lindstrom Note 1. Interest in the amount of $ 2,750 was accrued on the Lindstrom Note 1 during the year ended December 31, 2022. Discounts in the amount of $ 14,879 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 45,294 and $ 2,750 , respectively, were due on the Lindstrom Note 1 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 7,527 was accrued on the Lindstrom Note; principal and accrued interest in the amount of $ 45,294 and $ 10,277 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. Dobbertin Note On May 26, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 17,647 in a related party transaction to Alexander Dobbertin (the “Dobbertin Note”). Mr. Dobbertin is the spouse of Jenny Lindstrom, who was the Company’s Chief Legal Officer. The Dobbertin Note bears interest at the rate of 10 % per annum accrued monthly and has a maturity date that is the earlier of (i) November 30, 2022 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Dobbertin Note was $ 15,000 ; the amount payable at maturity will be $17,647 plus 10% of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Dobbertin 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 Dobbertin Note entered default status on December 1, 2022, and the interest rate increased to 18 %. The Dobbertin 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 Mr. Dobbertin reasonably believes contains a term that is more favorable than those in the Dobbertin Note, the Company shall notify Mr. Dobbertin of such term, and such term, at the option of Mr. Dobbertin, shall become a part of the Dobbertin Note. In addition, Mr. Dobbertin received five-year warrants to purchase 145 shares of common stock at a price of $ 25.00 per share with a fair value of $ 750 at the date of issuance, and 145 shares of common stock with a value of $ 1,215 ; these amounts were recorded as discounts to the Dobbertin Note. Interest in the amount of $ 1,179 was accrued on the Dobbertin Note during the year ended December 31, 2022. Discounts in the amount of $ 6,377 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 0 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 19,412 and $ 1,179 , respectively, were due on the Dobbertin Note at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 3,226 was accrued on the Dobbertin Note; principal and accrued interest in the amount of $ 19,412 and $ 4,405 , respectively, were due on this note at December 31, 2023. This note was in default at December 31, 2023. 75 Table of Contents Iturregui Note 1 On July 21, 2022, the Company issued a 10% Promissory Note in the principal amount of $ 29,412 in a related party transaction to Juan Carlos Iturregui, who was a member of the Company’s Board of Directors (the “Iturregui Note 1”). The Iturregui Note 1 bears interest at the rate of 10% per annum accrued monthly and has a maturity date that is the earlier of (i) January 21, 2023 , or (ii) five business days after the date on which the Company successfully lists its shares of common stock on Nasdaq or NYSE. The purchase price of the Iturregui Note 1 was $ 25,000 ; the amount payable at maturity will be $29,412 plus 10 % of that amount plus any accrued and unpaid interest. Following an event of default as defined in the Iturregui Note 1, 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 Iturregui Note 1 contains a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which Mr. Iturregui reasonably believes contains a term that is more favorable than those in the Iturregui Note 1, the Company shall notify Mr. Iturregui of such term, and such term, at the option of Mr. Iturregui, shall become a part of the Iturregui Note 1. In addition, Mr. Iturregui received five-year warrants to purchase 242 shares of common stock at a price of $ 25.00 per share with a fair value of $ 975 at the date of issuance, and 242 shares of common stock with a value of $ 1,225 ; these amounts were recorded as discounts to the Iturregui Note 1. Interest in the amount of $ 1,313 was accrued on the Iturregui Note 1 during the year ended December 31, 2022. Discounts in the amount of $ 8,464 were amortized to interest expense during the year ended December 31, 2022, and total discounts in the amount of $ 1,089 remained outstanding at December 31, 2022. Principal and accrued interest in the amounts $ 32,353 and $ 1,313 , respectively, were due on the Iturregui Note 1 at December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 3,881 was accrued on the Iturregui Note 1. On September 29, 2023, an equity investment incentive in the amount of $ 24,406 representing 65% of the total amount due under the Iturregui Note 1, along with original principal of $ 29,412 , premium of $ 2,941 , and accrued interest of $ 5,194 (a total of $ 61,953 ) was converted to 62 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentive of $ 24,406 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. At December 31, 2023, there were no amounts due under the Iturregui Note 1. November 29, 2022 Notes On November 29, 2022, the Company issued seven identical promissory notes (the “November 29 Notes”) in related party transactions to the following individuals: (1) Thomas Brodmerkel, who was the Company’s CFO and Board Member; (2) Lawrence Diamond, who was the Company’s Chief Executive Officer and Board Member; (3) Sheila Schweitzer, who was a Board Member; (4) Faraz Naqvi, a former Board Member; (5) Juan Carlos Iturregui, who was a Board Member; (6) Jenny Lindstrom, who was the Company’s former Vice President and Chief Legal Officer; and (7) Michael C. Howe, who was the Chief Executive Officer of The Good Clinic, one of our subsidiaries (collectively, the “November 29 Lenders”). The November 29 notes have due dates of May 28, 2023 . The November 29 Notes are subject to the Series E Exchange Agreement whereby each of the November 29 Lenders will exchange (a) amounts due under the November 29 Notes for a number of shares of the Company’s Series E Convertible Preferred Stock equal to 150% of the principal amount of each November 29 Note. See note 13. The November 29 Notes bear interest at the rate of 10% per annum which will accrue from the date of the note only if the November 29 Notes are not converted pursuant to the Series E Exchange Agreement by May 10, 2023. Following an event of default as defined in the November 29 Notes, 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 November 29 Notes contain a “most favored nations” clause that provides that, so long as the note is outstanding, if the Company issues any new security which November 29 Lender reasonably believes contains a term that is more favorable than those in the November 29 Note, the Company shall notify the November 29 Lenders of such term, and such term, at the option of the November 29 Lenders, shall become a part of the November 29 Note. In addition, each of the November 29 Lenders will receive five-year warrants to purchase 750 shares of the Company’s common stock at a price equal to the price of any warrant included in an offering in connection with listing at the Nasdaq Global Market. These warrants are not deemed issued at December 31, 2022 because the exercise price was not yet determined. Discounts in the amount of $ 667 were amortized to interest expense for each of the November 29 Notes during the year ended December 31, 2022, and discounts in the amount of $ 3,083 remained outstanding for each of the November 29 Notes at December 31, 2022. Principal and accrued interest in the amounts $ 18,750 and $ 164 , respectively, were due on each of the seven November 29 Note at December 31, 2022. 76 Table of Contents Concurrent with the November 29 Notes, the Company entered into separate exchange agreements (the “November 29 Notes Exchange Agreements”). Pursuant to the November 29 Notes Exchange Agreements, amounts due under the November 29 Notes will be exchanged for a number Series E Convertible Preferred Stock equal to 150% of the principal amount of the Notes. No transactions occurred pursuant to the November 29 Notes Exchange Agreements during the year ended December 31, 2022. During the year ended December 31, 2023, interest in the amount of $ 11,967 was accrued on the November 29 Notes. On September 29, 2023, three of the November 29 Lenders (1) Thomas Brodmerkel, (2) Lawrence Diamond, and (3) Faraz Naqvi converted their November 29 Notes into shares of the Company’s Series F Preferred Stock as follows: Each of the noteholders converted an equity investment incentive in the amount of $ 13,553 representing 65% of the total amount due under the November 29 Note , along with original principal of $ 18,750 and accrued interest of $ 2,101 (a total of $ 34,404 ) into 34 shares of the Company’s Series F Preferred Stock. Other than the equity investment incentives of $ 13,553 , there was no gain or loss recognized on this transaction as the Series F Preferred Stock was issued at its face value of $1,000 per share. On September 29, 2023, one of the November 29 Lenders, Sheila Schweitzer, converted her November 29 Note into shares of the Company’s restricted common stock as follows: principal of $ 18,750 and accrued interest of $ 2,101 were converted at a price of $ 0.80 per share into 26,064 shares of the Company’s common stock. On December 8, 2023 pursuant to the Howe debt exchange agreement, Mr. Howe exchanged his note in the principal amount of $ 18,750 and accrued interest of $ 2,682 for certain assets of the company. No amounts were due under the Howe note as of December 31, 2023. At December 31, 2023, there was principal and interest in the aggregate amount of $ 37,500 and $ 5,903 , respectively, due on the two November 29 Notes that are still outstanding. Aggregate interest expense as described on the above notes payable – related parties was $ 404,781 and $ 1,243,639 for the year ended December 31, 2023 and 2022, respectively, of which $ 306,032 and $ 928,894 were included in net loss from discontinued operations. Accrued interest on notes payable – related parties was $ 35,267 and $ 52,643 at December 31, 2023 and 2022, respectively. Note 11: Derivative Liabilities Certain of the Company’s convertible notes and warrants contain features that create derivative liabilities. The pricing model the Company uses for determining fair value of its derivatives is the Monte Carlo Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income. 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, 2023 and 2022 is summarized in the table below: December 31, 2021 $ - True-up features issued 192,375 Settled upon conversion or exercise ( 310,641 ) Loss on revaluation 687,178 December 31, 2022 $ 568,912 True-up features issued - Settled upon conversion or exercise ( 501,740 ) Loss on revaluation 85,773 December 31, 2023 $ 152,945 77 Table of Contents The Company uses a Monte Carlo model to value certain features of its notes payable that create derivative liabilities. The following tables summarize the assumptions for the valuations: December 31, December 31, 2023 2022 Volatility 475.7 % 95.1 % to 123.2 % Stock Price $ 0.0250 $ 1.06 to 3.50 Risk-free interest rates 5.21 % 4.35 % to 4.37 % Term (years) 0.39 0.73 to 0.86 Certain of our notes payable contain a commitment fee obligation with a true-up feature. The following assumptions were used for the valuation of the derivative liability associated with this obligation: ● The stock price would fluctuate with the Company projected volatility. ● The projected volatility curve from an annualized analysis for each valuation date was based on the historical volatility of the Company and the term remaining for the True-Up obligation. ● The Company expected the note would be repaid 90% of the time by the maturity date, at which point the Company would redeem the 1,000,000 redeemable commitment fee shares for $1. ● In the event the Company did not repay the note in time, the shareholders would sell their shares subject to volume restrictions. ● Discount rates were based on risk free rates in effect based on the remaining term. 50,000 simulations were run for each Monte Carlo simulation. Note 12: Stockholders ’ Equity (Deficit) Common Stock The Company has authorized 500,000,000 shares of common stock, par value $ 0.01 ; 5,567,957 and 4,630,372 shares were issued and outstanding at December 31, 2023 and 2022, respectively. On December 12, 2022, the Company effected one-for-fifty reverse-split of its common stock. The number of shares of common stock outstanding immediately before the reverse-split was 231,374,330 ; the number of shares of common stock immediately following the reverse-split was 4,630,372 , a decrease of 226,743,958 shares. Common Stock Transactions During the Year Ended December 31, 2023 On January 23, 2023, the Company issued 150,000 shares of common stock at the market price of $ 3.45 per share to a service provider. The aggregate value of $ 517,500 was charged to operations during the year ended December 31, 2023. On February 21, 2023, the Company issued 150,000 shares of common stock at the market price of $ 2.53 per share to a service provider. The aggregate value of $ 379,500 was charged to operations during the year ended December 31, 2023. During the year ended December 31, 2023, GS Capital converted principal and accrued interest in a convertible note payable into shares of common stock as follows: On February 14, 2023, principal of $ 15,000 and accrued interest of $ 1,632 were converted at a price of $ 1.74 per share into 9,846 shares of common stock; on February 28, 2023, principal of $ 17,777 and accrued interest of $ 2,057 were converted at a price of $ 1.50 per share into 13,555 shares of common stock; on March 9, 2023, principal of $ 20,000 and accrued interest of $ 2,399 were converted at a price of $ 1.50 per share into 15,265 shares of common stock; and on March 28, 2023, principal of $ 20,000 and accrued interest of $ 2,581 were converted at a price of $ 1.25 per share into 18,472 shares of common stock. These conversions were made pursuant to the terms of the convertible note agreement and no gain or loss was recognized on these transactions. On March 31, 2023, the Company issued a total of 8,063 shares of common stock for accrued dividends on its Series X Preferred Stock. Of this amount, a total of 1,066 shares were issued to officers and directors, 4,160 were issued to a related party shareholder, and 2,837 were issued to non-related parties. 78 Table of Contents On April 4, 2023, the Company issued 2,952 shares of common stock to a consultant at a price of $ 1.29 per share as a commission on funds previously raised. The Company recorded a gain in the amount of $ 33,092 on this transaction. On April 4, 2023, the Company issued 94,738 shares of common stock to GS Capital at an average price of pursuant to a make-whole agreement entered into in connection with the GS Capital Warrants. See note 10. A gain in the amount of $ 21,506 was recorded on the settlement of this derivative liability. See note 12. On May 5, 2023, the Company issued 2,552 shares of common stock to a vendor at a price of $ 0.85 per share, and on May 9, 2023, the Company issued 19,622 shares of common stock at a price of $ 0.85 per share to the Michael C. Howe Living Trust (the “Howe Trust”), an entity controlled by a related party. These shares were issued in satisfaction of a vendor dispute. The shares issued to the Howe Trust were reimbursement for shares previously issued to the vendor by the Howe Trust with regard to this dispute. There was no gain or loss recorded on these transactions. On June 29, 2023, the Company issued a total of 20,212 shares of common stock for accrued dividends on its Series X Preferred Stock. Of this amount, a total of 2,673 shares were issued to officers and directors, 10,426 were issued to a related party shareholder, and 7,113 were issued to non-related parties. Effective June 30, 2023, the Company issued 2,926 shares of common stock at a price of $ 12.50 to a previous board member for the conversion of accounts payable in the amount of $ 36,575 . These shares had been carried on the Company balance sheet as Common Stock Subscribed. On August 21, 2023, the Company issued 131,362 shares of common stock at a price of $ 0.80 per share for accounts payable in the amount of $ 105,089 . A gain in the amount of $ 59,112 was recorded on this transaction. On August 21, 2023, the Company issued 43,750 shares of common stock at a price of $ 0.80 per share for accounts payable in the amount of $ 35,000 . A gain in the amount of $ 19,687 was recorded on this transaction. On August 21, 2023, the Company issued 49,226 shares of common stock at a price of $ 0.80 per share for accounts payable in the amount of $ 39,380 . A gain in the amount of $ 22,151 was recorded on this transaction. Effective September 29, 2023, the Company’s now former Chief Operating Officer and now former board member converted a note in the amount of $ 18,750 , accrued interest of $ 2,101 , accrued salary of $ 64,434 , and board of director fees of $ 60,000 (a total of $ 145,285 ) at a price of $ 0.80 per share into 181,606 shares of the Company’s common stock. A gain in the amount of $ 138,531 was recorded on this transaction. On October 10, 2023, the Company issued 23,438 shares of common stock to a service provider at a price of $0.80 per share for accounts payable in the amount of $ 18,750 . Common Stock Transactions During the Year Ended December 31, 2022 On January 12, 2022, the Company entered into a settlement agreement with an ex-employee. Pursuant to the terms of this agreement, the Company agreed to pay the amount of $ 19,032 for accrued salary, and the employee returned to the Company for cancellation 8,000 shares of common stock previously issued as compensation. These shares were valued at par value of $ 0.01 or a total value of $ 80 ; the Company recorded a gain on cancellation of these shares in the amount of $ 15,032 . The Company entered into a debt-for-equity exchange agreement with Gardner Builders Holdings, LLC (“Gardner”) on January 7, 2022 (the “Gardner Equity Agreement”). Pursuant to Gardner Equity Agreement, the Company issued shares of restricted common stock to Gardner in exchange for the Company Debt Obligations, as defined below. The Gardner Equity Agreement settled for certain accounts payable amounts owed by the Company to Gardner. The Gardner Equity Agreement also settled accrued interest and penalties on the amounts due through January 5, 2022, as well as interest payments on amounts 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 was $ 500,000 , the Additional Costs were $ 294,912 and the conversion price was $ 12.50 . As a result, 63,593 Restricted Shares were authorized to be issued. 79 Table of Contents On March 22, 2022 and March 31, 2022, the Company issued an aggregate 30,835 shares of common stock as waiver fees to holders of the Series C and Series D Preferred Stock for their waivers of certain covenants as set forth and defined in the Series C and Series D Certificates of Designations. The Company valued these shares at their contractual price of $ 12.50 per share and recorded the amount of $ 385,431 as waiver fees. The Company recorded an aggregate gain upon issuance of these shares in the amount of $ 198,273 based on the market price of the Company’s common stock on the date of issuance. On March 31, 2022, the Company issued 34,400 Commitment Fee Shares to AJB Capital Investors, LLC. A Monte Carlo model was used to value the warrants and call features, and a probability weighted expected return model was used to value the True-Up Provision. The contractual price of the common stock $ 12.50 per share; valuation purposes, the common stock was valued at the market price on the date of the transaction of $ 6.35 per share. The discount on the notes due to the Commitment Fee Shares and warrants was valued at $ 349,914 . The Company recorded the amount of $ 226,106 to additional paid-in capital pursuant to this transaction. On March 31, 2022, the Company issued 7,648 shares of common stock at a price of $ 12.50 per share which were previously subscribed for the conversion of accounts payable in the amount of $ 95,558 . On April 27, 2022, the Company issued 14,400 shares of stock to Cavalry Fund 1 LP at a price of $ 6.35 per share for a total value of $ 91,440 as compensation for the waiver of certain covenants as set forth in the Series C Certificate of Designation. The Company recorded a gain in the amount of $ 88,560 on this transaction. On April 27, 2022, the Company issued 1,929 shares of common stock with a contract price of $ 12.50 per share or $ 24,118 and a grant date market value of $ 8.00 or $ 15,434 to Larry Diamond, it’s Chief Executive as commitment shares as set forth and defined in Diamond Note 3. The Company recorded these shares at their relative fair value of the components of Diamond Note 3, or $ 16,200 , and recorded a loss in the amount of $ 765 on this transaction. The Company also issued five-year warrants to purchase 1,929 shares of common stock at a price of $ 12.50 to Mr. Diamond pursuant to Diamond Note 3. On May 1, 2022, the Company issued 15,000 shares of common stock to a service provider at a price of $ 6.88 per share. On May 10, 2022, the Company entered into a securities purchase agreement with Kishon Investments, LLC with respect to the sale and issuance of: (i) an initial commitment fee in the amount of $ 159,259 in the form of 12,741 shares of the Company’s common stock, (ii) promissory note in the principal amount of $ 277,777 due on November 10, 2022 , and (iii) warrants to purchase up to 5,556 shares of the common stock. The note and warrants were issued on May 10, 2022 and were held in escrow pending effectiveness of the Purchase Agreement. Pursuant to the terms of the purchase agreement, the initial shares were issued at a value of $ 159,259 , the note was issued in the principal amount of $277,777 for a purchase price of $ 250,000 , resulting in the original issue discount of $ 27,777 ; and the warrants were issued, with an initial exercise price of $ 12.50 per share, subject to adjustment. On May 18, 2022, the Company issued 386 shares of common stock to Larry Diamond, it’s Chief Executive Officer at a contractual price of $ 12.50 per share and a market price at issuance date of $ 7.585 per share as commitment shares as set forth and defined in Diamond Note 4. The Company recorded these shares at their relative fair value of the components of Diamond Note 4, or $ 3,160 and recorded a loss in the amount of $ 249 on this transaction. The Company also issued five-year warrants to purchase 386 shares of common stock at a price of $ 12.50 to Mr. Diamond pursuant to Diamond Note 4. On May 23, 2022, the Company issued 386 shares of common stock to Jessica Finnegan at a contractual price of $ 12.50 per share and a market price at issuance date of $ 8.97 per share as commitment shares as set forth and defined in Finnegan Note 1. The Company recorded these shares at their relative fair value of the components of Finnegan Note 1, or $ 3,240 , and recorded a gain in the amount of $ 222 on this transaction. The Company also issued five-year warrants to purchase 386 shares of common stock at a price of $ 12.50 to Ms. Finnegan pursuant to Finnegan Note 1. On May 26, 2022, the Company issued 1,688 shares of common stock to the May 26 Lenders at a contractual price of $ 12.50 per share and a market price at issuance date of $ 7.585 per share as commitment shares as set forth and defined in the May 26, 2022 Notes. The Company recorded these shares at their relative fair value of the components of the May 26 Note, or $ 14,175 , and recorded a loss in the amount of $ 1,369 on these transactions. The Company also issued five-year warrants to purchase 1,688 shares of common stock at a price of $ 25.00 to the May 26 Lenders pursuant to the May 26, 2022. On June 7, 2022, the Company issued 8,103 shares of common stock at a price of $ 12.50 per share to investors for accumulated dividends on Series X Preferred Stock. See Note 12. 80 Table of Contents On June 9, 2022, the Company issued 7,284 shares of common stock to the June 9 Lenders at a contractual price of $ 12.50 per share and a market price at issuance date of $ 7,425 per share as commitment shares as set forth and defined in the June 9 Notes. The Company recorded these shares at the relative fair value of the components of June 9 Notes, or $ 66,400 , and recorded an aggregate loss in the amount of $ 9,356 on these transactions. The Company also issued five-year warrants to purchase 7,284 shares of common stock at a price of $ 25.00 to the May 26 Lenders pursuant to the June 9 notes. On June 22, 2022, the Company issued 4,824 shares of common stock at fair value of $ 10.45 per share to Dragon Dynamic at a fair value of $ 10.45 per share as a commitment fee. On June 22, 2022, the Company issued 12,741 shares of common stock at fair value of $ 10.45 per share to GS Capital at a fair value of $ 10.45 per share as a commitment fee. On June 22, 2022, the Company issued 8,600 shares of common stock at fair value of $ 10.45 per share to Anson East and an additional 25,800 shares of common stock at a fair value of $ 10.45 per share to Anson Investments as a commitment fee. On July 7, 2022, the Company issued 2,412 shares of common stock to William Mackay at a contractual price of $ 12.50 per share and a market price at issuance date of $ 7.445 per share as commitment shares as set forth and defined in the Mackay Note. The Company recorded these shares at their relative fair value of the components of Mackay Note, or $ 12,500 , and recorded a gain in the amount of $ 5,456 on this transaction. The Company also issued five-year warrants to purchase 2,412 shares of common stock at a price of $ 12.50 to Mr. Mackay pursuant to the Mackay Note. On July 7, 2022, the Company issued 193 shares of common stock to Charlies Schrier at a contractual price of $ 12.50 per share and a market price at issuance date of $ 7.445 per share as commitment shares as set forth and defined in the Schrier Note. The Company recorded these shares at their relative fair value of the components of Schrier Note, or $ 1,000 , and recorded a gain in the amount of $ 436 on this transaction. The Company also issued five-year warrants to purchase 193 shares of common stock at a price of $ 25.00 to Mr. Schrier pursuant to the Schrier Note. On July 21, 2022, the Company issued 241 shares of common stock to Juan Carlos Iturregui, a related party, at a contractual price of $ 12.50 per share and a market price at issuance date of $ 7.225 per share as commitment shares as set forth and defined in the Iturregui Note. The Company recorded these shares at their relative fair value of the components of Schrier Note, or $ 1,225 , and recorded a gain in the amount of $ 518 on this transaction. The Company also issued five-year warrants to purchase 241 shares of common stock at a price of $ 25.00 to Mr. Iturregui pursuant to the Iturregui Note. On July 21, 2022, the Company issued 2,460 shares of common stock to the Michael C. Howe Living Trust, a related party, at a contractual price of $ 12.50 per share and a market price at issuance date of $ 7.225 per share as commitment shares as set forth and defined in the Howe Note 3. The Company recorded these shares at their relative fair value of the components of Howe Note 3, or $ 12,495 , and recorded a gain in the amount of $ 5,729 on this transaction. The Company also issued five-year warrants to purchase 2,460 shares of common stock at a price of $ 25.00 to the Michael C. Howe Living Trust pursuant to the Howe Note 3. On July 26, 2022, the Company issued 482 shares of common stock to Eric S. Nommsen at a contractual price of $ 12.50 per share and a market price at issuance date of $ 6.84 per share as commitment shares as set forth and defined in the Nommsen Note. The Company recorded these shares at their relative fair value of the components of Nommsen Note, or $ 2,350 , and recorded a gain in the amount of $ 949 on this transaction. The Company also issued five-year warrants to purchase 482 shares of common stock at a price of $ 25.00 to Mr. Nommsen pursuant to the Nommsen Note. On July 27, 2022, the Company issued 482 shares of common stock to James H. Caplan at a contractual price of $ 12.50 per share and a market price at issuance date of $ 6.935 per share as commitment shares as set forth and defined in the Caplan Note. The Company recorded these shares at their relative fair value of the components of the Caplan Note, or $ 2,350 , and recorded a gain in the amount of $ 995 on this transaction. The Company also issued five-year warrants to purchase 482 shares of common stock at a price of $ 25.00 to Mr. Caplan pursuant to the Caplan Note. On August 4, 2022, the Company issued a total of 241 shares of common stock to Jessica, Kevin C., Brody, Isabella, and Jack Finnegan at a contractual price of $ 25.00 per share and a market price at issuance date of $ 6.42 per share as commitment shares as set forth and defined in the Finnegan Note 3. The Company recorded these shares at their relative fair value of the components of the Finnegan Note 3, or $ 1,000 , and recorded a gain in the amount of $ 448 on this transaction. The Company also issued five-year warrants to purchase a total of 241 shares of common stock at a price of $ 25.00 to the holders of the Finnegan Note 3. 81 Table of Contents On August 4, 2022, the Company issued 984 shares of common stock to Jack Enright at a contractual price of $ 12.50 per share and a market price at issuance date of $ 6.42 per share as commitment shares as set forth and defined in the Caplan Note. The Company recorded these shares at their fair value of $ 6,317 . On August 4, 2022, the Company issued 12,064 shares of common stock to a service provider as payment for investor relations services. The transaction was effective August 1, 2022 and has a six month term. The shares were valued at the closing price of the Company’s common stock on August 4, 2022, of $ 6.42 per share or $ 77,448 . On August 18, 2022, the Company issued 1,640 shares of common stock to the Michael C. Howe Living Trust, a related party, at a contractual price of $ 12.50 per share and a market price at issuance date of $ 6.57 per share as commitment shares as set forth and defined in the Howe Note 4. The Company recorded these shares at their fair value of $ 10,775 . On September 2, 2022, the Company issued 582 shares of common stock to John Mitchell at a contractual price of $ 12.50 per share and a market price at issuance date of $ 5.365 per share as commitment shares as set forth and defined in the Mitchell Note. The Company recorded these shares at their fair value of $ 3,124 . On September 2, 2022, the Company issued 492 shares of common stock to Frank Lightmas at a contractual price of $ 12.50 per share and a market price at issuance date of $ 5.365 per share as commitment shares as set forth and defined in the Lightmas Note. The Company recorded these shares at their fair value of $ 2,640 . On September 2, 2022, the Company issued 246 shares of common stock to Lisa Lewis at a contractual price of $ 12.50 per share and a market price at issuance date of $ 5.365 per share as commitment shares as set forth and defined in the Lewis Note. The Company recorded these shares at their fair value of $ 1,320 . On September 2, 2022, the Company issued 246 shares of common stock to Sharon Goff at a contractual price of $ 12.50 per share and a market price at issuance date of $ 5.65 per share as commitment shares as set forth and defined in the Goff Note. The Company recorded these shares at their fair value of $ 1,320 . On September 9, 2022, the Company issued 820 shares of common stock to Cliff Hagan at a contractual price of $ 12.50 per share and a market price at issuance date of $ 5.75 per share as commitment shares as set forth and defined in the Hagan Note. The Company recorded these shares at their fair value of $ 4,715 . On September 14, 2022, the Company issued 1,640 shares of common stock to Darling Capital at a contractual price of $ 12.50 per share and a market price at issuance date of $ 6.60 per share as commitment shares as set forth and defined in the Darling Capital Note. The Company recorded these shares at their fair value of $ 10,824 . On September 15, 2022, the Company issued 410 shares of common stock to Mack Leath at a contractual price of $ 12.50 per share and a market price at issuance date of $ 6.995 per share as commitment shares as set forth and defined in the Leath Note. The Company recorded these shares at their fair value of $ 2,868 . On October 1, 2022, the Company issued 6,329 shares of common stock at a price of $ 16.00 per share to a service provider. On November 18, 2022, the Company issued 91,328 shares of common stock to AJB in settlement of the AJB True-up Obligation. See note 9. 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 500,000 shares of series A stock, 3,000,000 shares of Series C Preferred, 10,000,000 shares of Series D Preferred, 10,000 shares of Series E Preferred, and 24,227 shares as Series X Preferred Stock. Series A Preferred Stock 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 accrued dividends at the rate of 12 % on $ 25.00 per share. The Company had no shares of Series A Preferred Stock outstanding at December 31, 2023 and 2022. 82 Table of Contents Series C Preferred Stock The Series C Preferred Stock has the following terms: Ranking . 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. Conversion. 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. Dividends. 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. 83 Table of Contents 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 therefore 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, 2023 The Company accrued dividends in the amount of $ 17,603 on the Series C Preferred Stock. On April 11, 2023, a total of 1,047,619 shares of Series C Preferred Stock with a stated value of $ 1,100,000 , accrued dividends in the amount $ 171,109 , and equity investment incentives in the amount of $ 1,016,888 were exchanged for 2,289 shares of Series F Preferred Stock. Series C Preferred Stock Transactions During the Year Ended December 31, 2022 During the year ended December 31, 2022, the Company accrued dividends on the Series C Preferred Stock in the amount of $ 66,447 . The Company also adjusted the number of shares of Series C Preferred Stock outstanding by an increase in the amount of 98,064 shares in connection with previous conversions of Series C Preferred Stock to common stock; the amount of $ 981 was charged to additional paid-in capital pursuant to this adjustment. Series D Preferred Stock The Series D Preferred Stock has the following terms: Ranking . 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. 84 Table of Contents Conversion. 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. Dividends. 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. 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 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 therefore 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. 85 Table of Contents 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, 2023 The Company accrued dividends in the amount of $ 85,541 on the Series D Preferred Stock. On April 11, 2023, a total of 2,350,000 shares of Series D Preferred Stock with a stated value of $ 2,467,500 , accrued dividends in the amount $ 215,659 , and equity investment incentives in the amount of $ 1,371,846 were exchanged for 4,055 shares of Series F Preferred Stock. There was no gain or loss recorded in connection with these transactions. On December 8, 2023, Mr. Howe exchanged (i) 500,000 shares of Series D Preferred Stock with a stated value of approximately $ 0.5 million and accrued dividends of approximately $ 67,000 , and (ii) accrued salary owed to Mr. Howe in the amount of approximately $ 38,000 plus a conversion incentive of 65% or approximately $ 25,000 for 655 shares of the Company’s Series F Preferred Stock with a liquidation value of approximately $ 0.6 million. Other than the conversion of incentive of the approximately $ 25,000 , there was no gain or loss recorded on this transaction. Series D Preferred Stock Transactions During the Year Ended December 31, 2022 During the year ended December 31, 2022, the Company accrued dividends on the Series D Preferred Stock in the amount of $ 195,299 . Series E Preferred Stock On November 7, 2022, the Company filed a Certificate of Designations, Preferences and Rights of Series E Convertible Perpetual Preferred Stock (the “Series E”) with the Delaware Secretary of State. The number of shares of Series E designated is 10,000 and each share of Series E has a stated value equal to $ 1,000 . Each share of Series E Preferred Stock shall have a par value of $ 0.01 . There are 0 shares of Series E Preferred Stock outstanding at December 31, 2023 and 2022. No shares of Series E Preferred Stock have ever been issued. As long as any shares of Series E are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series E, (a) alter or change the preferences, rights, privileges or powers given to the Series E or alter or amend the Certificate of Incorporation or bylaws, (b) increase or decrease (other than by conversion) the number of authorized shares of Series E, or (c) create or authorize any new class of shares that has a preference over Series E. Unless previously converted into shares of Common Stock, any shares of Series E issued and outstanding, shall be redeemable at the option of the Company for cash at a redemption price per share equal to 110% of the initial issuance price, or $ 1,100 , plus all dividends declared thereon. Each share of Series E shall become convertible, at the option of the holder, commencing on the date of issuance, into such number of fully paid and non-assessable shares of Common Stock. The conversion price shall be, as of the conversion date, (a) prior to the date of the qualified offering the average VWAP per share of the Common Stock for the five (5) trading days prior to the date of conversion and (b) on or following the date of the qualified offering, the qualified offering price (the “Conversion Price”). Immediately following the 120th day following the qualified offering, the Conversion Price shall be adjusted to the lesser of (a) the average VWAP per share of the Common Stock for the five (5) trading days immediately following the 120th day following the qualified offering and (b) the Conversion Price on such date, which shall in no event be less than $ 0.05 . Series E Exchange Agreements During the year ended December 31, 2022, the Company entered into the following agreements to exchange certain debt and equity amounts for shares of Series E Preferred Stock (see notes 9, 10, and 16): 86 Table of Contents On October 5, 2022, the Company entered into the Cavalry Exchange Agreement, pursuant to which Cavalry shall exchange (a) 1,000,000 shares of the Company’s Series C Convertible Preferred Stock (b) 750,000 shares of the Company’s Series D Convertible Preferred Stock and (c) amounts owing under the Cavalry Note, for a number of Series E Convertible Preferred Stock (the “Series E Shares”) equal to 150% of the principal amount of the Cavalry Note, plus 150% of the stated value of the Series C Shares and Series D Shares (the “Series E Exchange Value”). No transactions occurred pursuant to the Cavalry Exchange Agreement during the year ended December 31, 2022. See note 9 and 16. On October 7, 2022, the Company entered into the Mercer Exchange Agreement whereby Mercer shall exchange (a) 47,619 shares of the Company’s Series C Convertible Preferred Stock, (b) 750,000 shares of the Company’s Series D Convertible Preferred Stock, and (c) amounts owing under the Mercer Note, for a number of Series E Convertible Preferred Stock (the “Series E Shares”) equal to 150% of the principal amount of the Mercer Note, plus 150% of the stated value of the Series C Shares and Series D Shares (the “Series E Exchange Value”). No transactions occurred pursuant to the Mercer Exchange Agreement during the year ended December 31, 2022. See note 9. Amounts due under the Mercer Note 2 will also convert pursuant to the terms of the Mercer Exchange Agreement into shares of the Company’s series E Preferred Stock. See note 9 and 16. On October 10, 2022, the Company entered into the Pinz Exchange Agreement whereby Pinz shall exchange (a) 100,000 shares of the Company’s Series D Convertible Preferred Stock, and (b) amounts owing under the Pinz Note, for a number of Series E Convertible Preferred Stock equal to 150% of the principal amount of the Pinz Note, plus 150% of the stated value of the Series D Shares. No transactions occurred pursuant to the Pinz Exchange Agreement during the year ended December 31, 2022. See note 9 and 16. On October 18, 2022, the Company entered into separate exchange agreements with each of Anson East Master Fund LP and Anson Investments Master Fund LP (collectively, “Ansons”), (the “Ansons Exchange Agreements”). Pursuant to the Ansons Exchange Agreements, Ansons shall exchange an aggregate of 750,000 shares of the Company’s Series D Stock for a number of Series E Convertible Preferred Stock (the “Series E Shares”) equal to 150% of the stated value of the Series D Shares (the "Series E Exchange Value"), and the Funds have agreed to invest no less than an aggregate amount of $ 375,000 into the uplisting offering. No transactions occurred pursuant to the terms of the Ansons Exchange Agreements during the year ended December 31, 2022. See notes 9 and 16. On November 29, 2022, the Company entered into the November 29 Notes Exchange Agreements whereby amounts due under the November 29 Notes will be exchanged for a number Series E Convertible Preferred Stock equal to 150% of the principal amount of the Notes. No transactions occurred pursuant to the November 29 Notes Exchange Agreements during the year ended December 31, 2022. See notes 10 and 16. Series F Preferred Stock On March 23, 2023, the Company filed a Certificate of Designations, Preferences and Rights of Series F 12% PIK $ 0.01 par value Convertible Perpetual Preferred Stock with the Delaware Secretary of State. The number of shares of Series F Preferred Stock designated is 140,000 and each share of Series F Preferred Stock has a liquidation preference of $ 1,000 . The Series F Preferred Stock will rank senior to the Corporation’s Common Stock and on parity with all Preferred Stock of the Corporation with terms specifically providing that such Preferred Stock rank on parity with the Series F Preferred Stock with respect to rights to the distribution of assets upon any liquidation, dissolution or winding up of the Corporation; and (iii) junior to all Preferred Stock of the Corporation with terms specifically providing that such Preferred Stock rank senior to the Series F Preferred Stock with respect to rights to the distribution of assets upon any liquidation, dissolution or winding up of the Company. Holders of shares of the Series F Preferred Stock are entitled to receive payment-in-kind dividends payable only in additional shares of Series F Preferred Stock (“PIK Dividends”) at rate of 12% per annum. The Series F Preferred Stock will be convertible into common stock of the Company upon the listing of the Company’s stock on any of the following trading markets: the NYSE, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, or the Nasdaq Global Select Market. The conversion price will be calculated as 65% of the volume-weighted average price of the Company’s common stock on the conversion date. The number of shares issuable upon conversion will be calculated as the liquidation preference of the Series F Preferred stock plus any accrued but unpaid dividends divided by the conversion price. Series F Preferred Stock Transactions During the Year Ended December 31, 2023 On April 11, 2023, the Company issued a total of 8,116 shares of Series F Preferred Stock at its liquidation value of $ 1,000 per share to nine investors upon the conversion of notes payable. The total amount converted was $ 8,111,334 , consisting of principal $ 3,602,059 , default penalties of $ 888,889 , fees of $ 60,000 , accrued interest of $ 365,012 , and equity investment incentives of $ 3,195,374 . Other than the equity investment incentive, there were no gains or losses recorded in connection with these transactions. See note 10. 87 Table of Contents On April 11, 2023, the Company issued a total of 2,289 shares of Series F Preferred Stock at its liquidation value of $ 1,000 per share to two investors upon the conversion of Series C Preferred Stock. The total amount converted was $ 2,287,997 , consisting of the Series C Preferred Stock stated value of $ 1,100,000 , accrued dividends of $ 171,109 , and equity investment incentives of $ 1,016,888 . Other than the equity investment incentive, there were no gains or losses recorded in connection with these transactions. On April 11, 2023, the Company issued a total of 4,055 shares of Series F Preferred Stock to two investors at its liquidation value of $ 1,000 per share upon the conversion of Series D Preferred Stock. The total amount converted was $ 4,055,005 consisting of the Series D Preferred Stock stated value of $ 2,467,500 , accrued dividends of $ 215,659 , and equity investment incentives of $ 1,371,846 . Other than the equity investment incentive, there were no gains or losses recorded in connection with these transactions. On April 11, 2023, the Company sold a total of 1,746 shares of Series F Preferred Stock to three investors at its liquidation value of $ 1,000 per share for cash. The total value of Series F Preferred Stock of issued was $ 1,745,000 consisting of cash proceeds of $ 900,000 and an equity investment incentive of $ 845,000 , less costs of $ 161,500 . Other than the equity investment incentive, there were no gains or losses recorded in connection with these transactions. On June 29, 2023, the Company issued a total of 147 shares of Series F Preferred Stock at its liquidation value of $ 1,000 per share to two service providers for accounts payable in the amount of $ 146,214 . There was no gain or loss recorded on these transactions. On September 29, 2023, the Company issued a total of 2,138 shares of Series F Preferred Stock to three related parties at its liquidation value of $ 1,000 per share upon the conversion of notes payable in the amount of $ 601,839 , premium on notes payable of $ 78,087 , accrued interest of $ 124,777 , accrued salary of $ 376,625 , accrued board fees of $ 112,500 , and equity investment incentives of $ 843,228 . Other than the equity investment incentives, there were no gains or losses recorded in connection with these transactions. On September 29, 2023, the Company issued a total of 911 shares of Series F Preferred Stock to two investors at its liquidation value of $1,000 per share upon the conversion of notes payable in the aggregate amount of $ 414,118 , premium on notes payable in the aggregate amount of $ 41,412 , accrued interest in the aggregate amount of $ 84,187 , and fees of $ 10,000 , and equity investment incentive of $ 360,385 . Other than the equity investment incentive, there were no gains or losses recorded in connection with these transactions. On December 8, 2023, Mr. Howe also exchanged (i) 500,000 shares of Series D Preferred Stock with a stated value of approximately $ 0.5 million and accrued dividends of approximately $ 67,000 , and (ii) accrued salary owed to Mr. Howe in the amount of approximately $ 38,000 plus a conversion incentive of 65% or approximately $ 25,000 for 655 shares of the Company’s Series F Preferred Stock with a liquidation value of approximately $ 0.6 million. Other than the conversion of incentive of the approximately $ 25,000 , there was no gain or loss recorded on this transaction. The Company accrued dividends in the amount of $ 1,566,073 on the Series F Preferred Stock. Series F Preferred Stock Transactions During the Year Ended December 31, 2022 None. Series X Preferred Stock The Company has 24,227 shares of its 10% Series X Cumulative Redeemable Perpetual Preferred Stock (the “Series X Preferred Stock”) outstanding as of December 31, 2023 and 2022. 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; the Series X Preferred Stock is not redeemable prior to November 4, 2020. The Series X Preferred Stock will rank senior to all classes of the Company’s common and preferred stock and accrues dividends at the rate of 10% on $25.00 per share. The Company reserves the right to pay the dividends in shares of the Company’s common stock at a price equal to the average closing price over the five days prior to the date of the dividend declaration. Beginning in July 2023 the Company elected to use a price per share of $ .80 , a 20 % discount to the average price of its common stock of $ 1.00 , before the trading of its common stock was moved to the OTC Expert Market system. Each one share of the Series X Preferred Stock is entitled to 400 votes on all matters submitted to a vote of our shareholders. 88 Table of Contents Series X Preferred Stock Transactions During the Year Ended December 31, 2023 During the year ended December 31, 2023, the Company accrued dividends on its Series X Preferred Stock in the total amount of $ 60,564 . During the year ended December 31, 2023, the Company issued a total of 28,275 shares of common stock for accrued dividends on its Series X Preferred Stock. Of this amount, a total of 3,739 shares were issued to officers and directors, 14,586 were issued to a related party shareholder, and 9,950 were issued to non-related parties. Series X Preferred Stock Transactions During the Year Ended December 31, 2022 During the year ended December 31, 2022, the Company accrued dividends on the Series X Preferred Stock in the amount of $ 60,564 . Stock Options On January 21, 2021 the Company filed a Form S-8 containing the Mitesco Omnibus Securities and Incentive Plan (“the Plan”) with the SEC. In Sections 4.2 and 4.3 of the Plan it is noted that the Board of Directors has the authority for administration of the Plan. On January 7, 2024 the Board of Directors voted to a) cancel, revoke and terminate any previously issued options that have not already been exercised. For a number of technical reasons the Plan is no longer valid, and in addition to cancellation of any outstanding options, the Board has voted to formally terminate the Plan. Any costs associated with the termination of the Plan will be reflected in the financials reports for the period ending March 31, 2024. A copy of the Form S-8 which references the Plan can be found at: https://www.sec.gov/Archives/edgar/data/802257/000118518521000098/ex_221520.htm The following table summarizes the options outstanding at December 31, 2023 and the related prices for the options to purchase shares of the Company’s common stock: Weighted Weighted Weighted average average average exercise exercise Range of Number of remaining price of Number of price of exercise options contractual outstanding options exercisable prices outstanding life (years) options exercisable options $ 1.50 - 16.00 100,934 7.16 $ 10.05 80,934 $ 9.25 100,934 7.16 $ 10.05 80,934 $ 9.25 Transactions involving stock options are summarized as follows: Shares Weighted- Average Exercise Price ($) Outstanding at December 31, 2021 366,591 $ 10.29 Granted 4,000 $ 12.50 Cancelled/Expired ( 59,899 ) $ 12.18 Outstanding at December 31, 2022 310,692 $ 10.01 Granted - - Cancelled/Expired ( 209,758 ) $ 10.00 Exercised - - Outstanding at December 31, 2023 100,934 $ 10.05 Options vested and exercisable 80,934 $ 9.25 At December 31, 2023, the total stock-based compensation cost related to unvested awards not yet recognized was $ 812,621 of which $808,584 vest upon various contingent requirements. 89 Table of Contents Warrants The following table summarizes the warrants outstanding on December 31, 2023, and the related prices for the warrants to purchase shares of the Company’s common stock: Shares Weighted- Average Exercise Price ($) Outstanding at December 31, 2021 596,400 $ 31.25 Granted 75,934 $ 26.21 Exercised - $ - Outstanding at December 31, 2022 672,334 $ 30.68 Granted 874 $ 2.50 Exercised - $ - Outstanding at December 31, 2023 673,208 $ 30.64 Note 13: Income Taxes Deferred income taxes result from the temporary differences primarily attributable to amortization of intangible assets and debt discount and an accumulation of net operating loss carryforwards for income tax purposes with a valuation allowance against the carryforwards for book purposes. 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 $ 13.5 million and $ 1.6 million, respectively, 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. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Due to significant changes in the Company’s ownership, the Company’s future use of its existing net operating losses may be limited. For the years ended December 31, 2023 and 2022, the expected tax expense (benefit) based on the U. S. federal statutory rate is reconciled with the actual tax provision (benefit) as follows: For the Years Ended December 31, 2023 2022 Expected tax at statutory rates $ ( 3,463,000 ) 21 % $ ( 4,879,000 ) 21 % Permanent Differences 7,000 0 % 1,610,000 ( 7 )% State Income Tax, Net of Federal benefit ( 418,000 ) 1 % ( 380,000 ) 2 % Other ( 95,000 ) 2 % 286,000 ( 1 )% Current Year Change in Valuation Allowance 3,969,000 ( 24 )% 2,611,000 ( 9 )% Prior Year True-Ups - 0 % 752,000 ( 6 )% Income tax expense $ - 0 % $ - 0 % 90 Table of Contents Deferred income taxes reflect the tax impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. Deferred income taxes include the net tax effects of net operating loss (NOL) carryforwards and the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2023, and 2022 significant components of the Company’s deferred tax assets are as follows: For the Years Ended December 31, 2023 2022 Deferred Tax Assets (Liabilities): Accrued payroll $ 141,000 $ 112,000 ASC842-ROU Asset - ( 68,000 ) ASC842-ROU (Liability) 822,000 830,000 Loss from derivatives ( 16,000 ) ( 130,000 ) Waiver and commitment fee shares - ( 32,000 ) Stock based compensation ( 171,000 ) ( 85,000 ) Depreciation 3,000 33,000 Net operating loss 13,529,000 9,679,000 Net deferred tax assets (liabilities) 14,308,000 10,339,000 Valuation allowance ( 14,308,000 ) ( 10,339,000 ) Net deferred tax assets (liabilities) $ - $ - Note 14: Fair Value of Financial Instruments The following summarizes the Company’s derivative financial liabilities that are recorded at fair value on a recurring basis at December 31, 2023 and 2022. December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 152,945 $ 152,945 December 31, 2022 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 568,912 $ 568,912 Note 15: Commitments and Contingencies Legal From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. On June 23, 2022, The Good Clinic LLC was notified that a former employee had filed a lawsuit for wrongful termination. The Good Clinic believes the lawsuit is without merit. Mitesco (Company) was not named in the suit. We have settled this matter as of January 11, 2024 for total consideration consisting of a cash payment of $3,000. 91 Table of Contents On June 23, 2022, The Good Clinic LLC was notified that a former employee had filed a lawsuit for wrongful termination. The Good Clinic believes the lawsuit is without merit. Mitesco (Company) was not named in the suit. We have settled this matter as of January 11, 2024 for total consideration consisting of a cash payment of $ 3,000 . On October 25, 2022, the Company was notified that a vendor filed a lawsuit related to a contract dispute naming both The Good Clinic and The CEO of the Good Clinic. This suit was settled on May 5, 2023, and dismissed with prejudice on May 12, 2023. The settlement included the issuance of the Company’s restricted common stock. As a part of the settlement the Company issued 2,552 shares of its restricted common stock to the plaintiff and it issued to the CEO of The Good Clinic 19,622 of its restricted common stock, plus $ 3,000 in cash for reimbursement of expenses related to settling the suit with the vendor. The Company has a number of legal situations involved with the winding down of its clinic business activities. These include claims regarding certain construction contracts and cancellation of leases as noted below: Nordhaus Clinic On November 1, 2020, we entered into an agreement to open a clinic in Minneapolis, Minnesota. The initial lease term is eight years . Fixed rent payments under the initial term are approximately $ 511,000 . On November 6, 2023, the Company received a termination notice from the landlord indicating the lease had been terminated. No additional claims have been received by the landlord and the Company believes no additional amounts are owed. Egan Clinic a.k.a Vikings On October 14, 2021, we entered into an agreement to open a clinic in Eagan, Minnesota, which began operations in the fourth quarter of 2021. The initial lease term is for 96 months. Fixed rent payments under the initial term are approximately $ 767,000 . A Summary Judgment was granted on December 4, 2023, in the amount of $ 488,491 , and the entry of final judgment was entered on December 15, 2023 and the Company has released the property back to the leaseholder. St. Paul Clinic a.k.a. The Grove On August 31, 2021, we entered into an agreement to open a clinic in St. Paul, Minnesota, which began operations in the fourth quarter of 2021. The initial lease term is for 114 months. Fixed rent payments under the initial term are approximately $ 1,153,000 . A stipulation for Judgment was filed on December 21, 2023 in the amount of $415,266. The stipulated judgment includes $178,542 in unpaid back rent, $172,124 in resolution of mechanics’ liens, and $64,600 in attorneys’ fees. Final entry of judgment by the Court was entered against the Company on January 19, 2024, and the Company has released the property back to the leaseholder. St. Louis Park Clinic a.k.a Excelsior & Grand On May 24, 2021, we entered into an agreement to open a clinic in St. Louis Park, Minnesota, which began operations in the third quarter of 2021. The initial lease term is seven years . Fixed rent payments under the initial term are approximately $ 673,000 . The Company agreed to and executed a Confession of Judgment in the amount of $ 425,351 on April 2, 2024 and has released the property back to the leaseholder. We received the fully executed and recorded judgement on April 10, 2024. Eden Prairie Clinic a.k.a TP Elevate On June 8, 2021, we entered into an agreement to open a clinic in Eden Prairie, Minnesota, which began operation in the third quarter of 2021. The initial lease term is eight years . Fixed rent payments under the initial term are approximately $ 620,000 . The Company has surrendered possession of the property and is currently in negotiations the amounts owed and is in the process of settling the remaining amounts owed. Maple Grove Clinic a.k.a Arbor Lakes On October 8, 2021, we entered into an agreement to open a clinic in Maple Grove, Minnesota which began operation in the fourth quarter of 2021. The initial lease term is for 108 months. Fixed rent payments under the initial term are approximately $ 1,153,127 . On October 22, 2022, the Company entered into a settlement agreement with the leaseholder for $ 219,576 and the Company has released the property back to the leaseholder. 92 Table of Contents Radiant Clinic a.k.a LMC Welton On September 9, 2021, we entered into an agreement to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been relinquished to the landlords. The initial lease term is for 90 months. Fixed rent payments under the initial term are approximately $ 782,000 . As of April 10, 2024, the Company has settled the amounts owed to the leaseholder and full resolution of all liens for approximately $ 530,000 and the Company has released the property back to the leaseholder. Quincy Clinic a.k.a 1776 Curtis On September 28, 2021, we entered into an agreement to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been relinquished to the landlords. The initial lease term is for 94 months. Fixed rent payments under the initial term are approximately $ 1,079,000 . A Final Judgment was granted on November 14, 2023, in the amount of $ 348,764 including interest, fees and other costs. The Company has released the property back to the leaseholder. The following table summarizes the status of our property settlements as noted above and the total settlement amounts as of the date of the filing: LOCATION ALSO KNOWN AS: PROPERTY NAME/OWNER ORIGINAL OBLIGATION (NOT INC. CAPX) SETTLEMENT AMOUNT TYPE OF SETTLEMENT MINNEAPOLIS, MN NORDHAUS LENNAR $ 511,000 $ - N.A. WAYZETTA, MN PROMINADE WAZETTA BAY $ 407,000 $ 25,000 CASH PAYMENT OBLIGATION EAGAN, MN EAGAN CLINIC VIKINGS $ 767,000 $ 488,491 DEFAULT JUDGEMENT ST. LOUIS PARK, MN EXCELSIOR & GRAND EXCELSIOR $ 673,000 $ 425,350 DEFAULT JUDGEMENT ST. PAUL, MN THE GROVE CONTINENTAL 560 $ 1,153,000 $ 415,606 DEFAULT JUDGEMENT EDEN PRARIE ELEVATE TP ELEVATE $ 620,000 $ - IN PROCESS MAPLE GROVE, MN ARBOR LAKES BUTTNICK $ 1,153,127 $ 219,575 SETTLEMENT AGREE DENVER, CO LMC WELTON RADIANT $ 782,000 $ 530,000 DEFAULT JUDGEMENT DENVER, CO 1776 CURTIS QUINCY $ 1,079,000 $ 348,764 DEFAULT JUDGEMENT TOTAL $ 7,145,127 $ 2,452,768 Administrative offices On June 24, 2021, we entered into an agreement to open an administrative office in St. Louis Park, Minnesota. The initial lease term is 2.5 years. Fixed rent payments under the initial term are approximately $ 244,000 . We have not entered into a settlement agreement on this site as of the date of this filing but expect to shortly. Note 16: Subsequent Events On January 17, 2024, because of the substantially lower price realized on the OTC Expert Market the holders of the Series X Preferred shares have modified their policy on pricing of the restricted common stock used for the dividend payments. Until further notice the number of dividend shares will be determined using a price per share of $ .80 in computing the number of shares to be issued. This represents a 20% discount to the average closing price immediately before the trading of the common stock was moved onto the OTC Expert Market. On January 24, 2024 the Company received funding after entering into a lending agreement with each of two (2) of its historical institutional investors, Cavalry Fund and Mercer Street Capital (“the Lenders”). The notes provide $ 25,000 of proceeds each, are for 12 -month period, and earn interest at ten percent ( 10 %) per year. The Lenders and the Company have agreed that the use of the proceeds are intended to fund compliance related costs such as SEC reporting, audit, legal and accounting related. 93 Table of Contents On February 9, 2024, the Company issued 41,057 shares of common stock for dividends payable on its Series X Preferred Stock for the period from July 2023 through December 31, 2023. On February 20, 2024 the Board of Directors of Mitesco unanimously voted to terminate a previously approved authorization for a reverse split of its common stock at a ratio of up to 4:1 , previously disclosed on January 4, 2023. On March 20, 2024, the Company issued a total of 25,013 shares of restricted common stock for the payment of dividends due for its Series X Preferred stock during the first quarter of 2024 using the $.80 price per share as noted above. Effective April 1, 2024 the Company intends to return to the dividend payment terms as defined in the Certificate of Designation for the Series X Preferred stock, as such the share price used in future dividend payment shall be determined using the closing price of the common stock on the 15 th day of each month, and the shares shall be issued quarterly to reduce administrative costs. Advisory Board The Board of Directors recently authorized the creation of a new Advisory Board whose participants shall include subject matter experts in certain business areas under consideration by the Company. These positions are “non-executive” and as such are not governed by Section 16 of the Securities Act. The compensation for the participants shall be $60,000 per year paid through the issuance of restricted common stock. The per share valuation to be used shall be determined by the Board of Directors based on the market of the Company’s common stock at the time of the appointment. On March 19, 2024, the Company announced its first participants to that Board. Each will receive $60,000 of restricted common stock for their services over the next 12 months. The Board has determined that the price per share for the restricted stock shall be $.80, the same pricing used for the payment of dividends to Series X Preferred shareholders. This results in the issuance of 75,000 shares for each member, in aggregate 225,000 shares of restricted common stock. Issuance of Series X Preferred share dividends The Series X Preferred shares accrue dividends at a rate of 10% annually and may be paid in cash or the issuance of restricted common stock. To date the dividends have only been paid through the issuance of restricted common stock. While the documented policy for determining the share price used in such dividend payment states the closing price of the common stock on the 15 th day of each month, this policy was recently modified such that starting in July 2023 and continuing until such time that the common stock of the Company trading on a market other than the OTC Expert Market the Company intends to pay the Series X dividends using restricted common stock with a valuation of $.80 per share, a 20% discount to the average price of the stock before it was moved to the OTC Expert Market Quote platform. The effect of this change was to substantially reduce the number of shares to be issued for the payment of the dividends. On February 27, 2024 the Company entered into a lending agreements with each of three (3) of its historical institutional investors, Cavalry Fund, AJB and Mercer Street Capital (“the Lenders”). The notes provide $ 50,000 of proceeds each, are for 12 -month period, and earn interest at ten percent ( 10 %) per year. On March 20, 2024, the Company issued a total of 25,013 shares of restricted common stock for the payment of dividends during the first quarter of 2024 using the $.80 price per share as noted above. 94 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE On February 27, 2024, we retained Accell Audit & Compliance, P.A. (“Accell”) to perform our audit work for the year ended December 31, 2023. There were no disagreements with accountants.