What changed in this filing

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Item 9A. Controls and Procedures

2023-04-17 compared with 2022-04-15 · 775 added, 952 removed, 1041 unchanged (62% of the section changed)

82 unchanged sentences

in Certain Legal Proceedings

director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in

Item 401(f) of Regulation S-K in the past 10 years.

director, executive officer, significant employee, or control person of the Company has been involved in any legal proceeding listed

in Item 401(f) of Regulation S-K in the past 10 years.

Board has not established any committees, including an audit committee, a compensation committee or a nominating committee, or any committee

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such a proposal is made, all current members of our Board will participate in the consideration of director nominees.

with most small, early stage companies until such time as our Company further develops our business, achieves a revenue base and has

sufficient working capital to purchase directors’ and officers’ insurance, we do not have any immediate prospects to attract

independent directors.

When we are able to expand our Board to include one or more independent directors, we intend to establish an audit

committee of our Board of Directors.

It is our intention that one or more of these independent directors will also qualify as an audit

committee financial expert.

Our securities are not quoted on an exchange that has requirements that a majority of our Board members be

independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board

of Directors include “independent” directors, nor are we required to establish or maintain an audit committee or other committee

of our Board.

with most small, early-stage companies until such time as our Company further develops our business, achieves a greater revenue base,

and has sufficient working capital to purchase directors’ and officers’ insurance, we do not have any immediate prospects

to attract independent directors.

When we are able to expand our Board to include one or more independent directors, we intend to establish

an audit committee of our Board of Directors.

It is our intention that one or more of these independent directors will also qualify as

an audit committee financial expert.

Our securities are not quoted on an exchange that has requirements that a majority of our Board

members be independent, and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of

our Board of Directors include “independent” directors, nor are we required to establish or maintain an audit committee or

other committee of our Board.

adopted a Code of Ethics for Senior Financial Management to promote honest and ethical conduct and to deter wrongdoing.

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Chis was the CEO of PCTI from 2018 until her resignation in July 2021.

Value of Initial Fixed $100 Investment Based on:

Summary Compensation on Table Total for PEO

Compensation Actually Paid to PEO

Average Summary Compensation on Table Total for Non-PEO NEOs

Average Compensation Actually Paid to Non-PEO NEOs

Total Shareholder Return

Total Shareholder Return of Peer Group

Net Income (loss)

$ (195,047,946 )

$ (20,968,250 )

OPTION GRANTS

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an initial annual salary of $120,000, for his position of CEO of the Company, payable monthly.

Conway was also issued 2,500 shares

of Series C Preferred Stock.

The Company valued the shares at $5,000.

On August 28, 2020, Mr.

Conway was issued 1,333 shares of Series

D Preferred stock and 500 shares of series E Preferred Stock.

At the time of issuance the aggregate shares of Series D Preferred Stock

in its entirety, is convertible into three times the number of shares of common stock outstanding at the time of conversion.

28, 2020, Mr.

Conway owned 6.67% of the issued and outstanding Series D Preferred Stock, and based on the 3,107,037,634 shares outstanding

on August 28, 2020, Mr.

Conway’s Preferred Stock was convertible into 621,253,401 shares of common stock.

Based on the share price

of the common stock on that date of $0.0065, the shares were valued at $4,286,648 and recognized as compensation during the year ended

December 31, 2020.

Pursuant to the contract, Mr.

issued 2,500 shares of Series C Preferred Stock, and on August 28, 2020, Mr.

Conway was issued 1,333 shares of Series D Preferred stock

and 500 shares of series E Preferred Stock.

January 1, 2021, Mr.

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month from Ozop Capital.

than the foregoing, at this time, we do not have any written employment agreement or other formal compensation agreements with our officers

Effective January 1, 2022, the Company entered into a new employment agreement with Mr.

the agreement, Mr.

Conway received a $250,000 contract renewal bonus and will receive an annual compensation of $240,000 from the Company

and will also be eligible to receive bonuses and equity grants at the discretion of the BOD.

The Company also agreed to compensate Mr.

Conway for services provided directly to any of the Company’s subsidiaries.

Ozop Capital increased Mr.

Conway’s compensation

to $20,000 per month in January 2022 and OES and OED began compensating Mr.

Conway $20,000 in April 2022.

than the foregoing, currently, we do not have any written employment agreement or other formal compensation agreements with our officers

and directors.

Compensation arrangements are the subject of ongoing development and we will make appropriate additional disclosures as

they are further developed and formalized.

Compensation arrangements are the subject of ongoing development, and we will make appropriate additional disclosures

as they are further developed and formalized.

Compensation Policies

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

following table shows the beneficial ownership of the Company’s shares as of April 14, 2022, (unless otherwise noted) by (i) each

following table shows the beneficial ownership of the Company’s shares as of March 31, 2023, (unless otherwise noted) by (i) each

person known by the Company to own beneficially more than 5% of the outstanding shares, (ii) each director and director nominee of the

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The table includes shares that may be

acquired within 60 days of April 14, 2022, upon the exercise of stock options by employees or outside directors and shares of restricted

acquired within 60 days of March 31, 2023, upon the exercise of stock options by employees or outside directors and shares of restricted

otherwise indicated, each of the persons or entities listed below exercises sole voting and dispositive power over the shares that each

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Percentages are based on 4,879,032,132 shares of the Company’s common stock, 2,500 shares of Series C Preferred Stock and 1,334

shares of Series D Preferred stock issued and outstanding as of April 14, 2022.

shares of Series D Preferred stock issued and outstanding as of March 31, 2023.

The voting rights associated with the Series C Preferred

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CEO, parent- Series E Preferred Stock

CEO, parent- Series D Preferred Stock

President, subsidiary (resigned July 2021)

of December 31, 2020, included in related party payable is $9,120 for the amount owed the former CEO of PCTI.

Principal Accountant Fees and Services

1 unchanged sentence

services rendered for the fiscal years ended December 31, 2022, and 2021.

Audit Fees (1)

Fees are fees paid for professional services rendered for the audit of the Company’s annual consolidated financial statements,

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Certification of Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C.

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Filed herewith.

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FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm (PCAOB ID # 237 )

Balance Sheets as of December 31, 2021 and 2020

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

Statements of Stockholders’ Deficit as of December 31, 2021 and 2020

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

to Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firm (PCAOB ID # 237 )

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2022 and 2021

Consolidated Statements of Stockholders’ Deficit as of December 31, 2022 and 2021

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

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

Energy Solutions, Inc.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Ozop Energy Solutions, Inc.

(the Company) as of December 31, 2021, and 2020,

and the related consolidated statements of comprehensive loss, stockholders’ equity (deficit), and cash flows for the years then

ended, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and 2020, and the

results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in

the United States of America.

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

As described in

Note 3 to the consolidated financial statements, As of December 31, 2021, the Company had an accumulated deficit of $217,326,611 and

a working capital deficit of $28,225,908 (including derivative liabilities of $20,966,701).

As of December 31, 2021, the Company was

in default of $1,973,847 and accrued interest on debt instruments due to non-payment upon maturity dates, and subsequent to December

31, 2021, an additional $13,310,000 and accrued interest on debt instruments also were in default status due to non-payment upon

maturity dates.

To the Board of Directors and Stockholders of

Ozop Energy Solutions, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance

sheets of Ozop Energy Solutions, Inc.

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

changes in stockholders’ equity (deficit), and cash flows for the years then ended, 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 2021, and the results of its operations and its cash flows for the

years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that

the Company will continue as a going concern.

As described in Note 2 to the consolidated financial statements, As of December 31, 2022,

the Company had an accumulated deficit of $211,300,799 and a working capital deficit of $7,552,616 (including derivative liabilities of

As of December 31, 2022, the Company was in default of $1,470,000 plus accrued interest on debt instruments due to non-payment

upon maturity dates.

These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going

Management’s plans in regard to these matters are also described in Note 2 to the accompanying financial statements.

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

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

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

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.

accompanying 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 audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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

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.

Our audits included performing procedures to assess the

risks of material misstatement of the consolidated 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 consolidated

financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management,

as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable

basis for our opinion.

Critical Audit Matter

Critical audit matters are matters arising from

the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and

that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

We determined that there were no critical audit matters.

Prager Metis CPA’s LLC

have served as the Company’s auditor since 2018

/s/ Prager Metis CPA’s LLC

We have served as the Company’s auditor since 2018

Hackensack, New Jersey

April 17, 2023

ENERGY SOLUTIONS, INC.

1 unchanged sentence

Current Assets

Prepaid assets

Prepaid expenses

Accounts receivable

Vendor deposits

Assets of discontinued operations

Total Current Assets

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Accounts payable and accrued expenses

Related party liabilities

Convertible notes payable, net of discounts

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Operating lease liability, current portion

Current portion of deferred revenues

Liabilities of discontinued operations

Total Current Liabilities

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Operating lease liability, net of current portion

Deferred revenue, net of current portion

TOTAL LIABILITIES

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Preferred stock ( 10,000,000 shares authorized, par value $ 0.001 )

Series C Preferred Stock ( 50,000 shares authorized and 2,500 (2021) and 50,000 (2020) shares issued and outstanding, par value $ 0.001 )

Series D Preferred Stock ( 4,570 (2021) and 20,000 (2020) shares authorized and 1,334 (2021) and 20,000 (2020) shares issued and outstanding, par value $ 0.001 )

Series E Preferred Stock ( 3,000 shares authorized, - 0 - (2021) and 1,000 (2020) issued and outstanding, par value $ 0.001 )

Series C Preferred Stock ( 50,000 shares authorized and 2,500 and shares issued and

outstanding, par value $ 0.001 )

Series D Preferred Stock ( 4,570 shares authorized and 1,334 shares issued and outstanding, par value

Series E Preferred Stock ( 3,000 shares authorized, - 0 - issued and outstanding, par value

Preferred stock, value

Common stock ( 4,990,000,000 shares authorized par value $ 0.001 ;

4,617,362,997 (2021) and 3,397,958,292 (2020) shares issued and outstanding)

4,771,275,349 (2022) and 4,617,362,977 (2021) shares

issued and outstanding)

Treasury Stock, at cost, 47,500 shares of Series C Preferred Stock and 18,667 shares of Series D

Preferred Stock

( 11,249,934 )

Common stock to be issued;

637,755 shares as of December 31, 2021

637,755 shares as of December 31, 2022 and 2021

Additional paid in capital

Treasury Stock

( 11,249,934 )

Accumulated Deficit

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( 217,326,611 )

Accumulated comprehensive loss

Total Ozop Energy Systems, Inc.

Total Ozop Energy Solutions, Inc.

stockholders’ equity (deficit)

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notes to consolidated financial statements.

ENERGY SOLUTIONS, INC.

STATEMENT OF COMPREHENSIVE INCOME (LOSS)

OZOP ENERGY SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31,

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General and administrative, other

Impairment of intangible assets

Total operating expenses

Loss from operations

Loss from continuing operations

( 4,611,685 )

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Interest expense

Loss on change in fair value of derivatives

(Gain) loss on extinguishment of debt

(Gain) loss on change in fair value of derivatives

( 19,202,431 )

Loss on extinguishment of debt

Debt restructure expense

Total Other (Income) Expenses

Income (loss) before income taxes

( 10,763,570 )

Net income (loss) from continuing operations before income taxes

( 195,069,214 )

Income tax provision

Net Income (loss)

Net income (loss) from continuing operations

( 195,069,214 )

Discontinued Operations:

Loss on disposal of assets

Loss on discontinued operations

Net income (loss)

( 195,303,051 )

net loss attributable to noncontrolling interest

Net loss attributable to Ozop Energy Solutions, Inc.

$ ( 195,047,946 )

$ ( 20,968,243 )

Other comprehensive loss:

Foreign currency translation adjustment

Comprehensive income (loss)

( 195,303,051 )

( 20,968,250 )

comprehensive loss attributable to noncontrolling interest

Comprehensive loss attributable to Ozop Energy Solutions, Inc.

$ ( 195,047,946 )

Net income (loss) attributable to Ozop Energy Solutions, Inc.

$ ( 195,047,946 )

Income (loss) from continuing operations per share of common

stock basic and fully diluted

Income (loss) from discontinued operations per share of common stock basic and

fully diluted

Income (loss) per share basic and fully diluted

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notes to consolidated financial statements.

ENERGY SOLUTIONS, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

ENDED DECEMBER 31, 2021

Common stock to be issued

Series C Preferred Stock

Series D Preferred Stock

Series E Preferred Stock

Accumulated Comprehensive

Additional Paid-in

OZOP ENERGY SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

YEAR ENDED DECEMBER 31, 2022

stock to be issued

C Preferred Stock

D Preferred Stock

Noncontrolling

Total Stockholders’ Equity

Balances January 1, 2021

3,397,958,292

$ ( 22,278,665 )

$ ( 6,349,710 )

Shares issued for conversions of notes and interest payable

Shares issued upon cashless exercise of warrants

Issuance of Series E Preferred Stock

Redemption of Series E Preferred Stock

Stockholders’Equity

January 1, 2022

4,617,362,977

$ ( 11,249,934 ) -

Shares issued and to be issued for fees and services

Shares issued for lease agreement

Shares issued for debt restructure

Purchase of Series C and Series D stock for Treasury

$ 196,464,222

$ ( 217,326,611 )

Sale of Series D Preferred Stock and warrants

Foreign currency translation adjustment

$ ( 255,105 )

$ ( 27,749,423 )

Balances December 31, 2021

stock issued for services

of shares of common stock sold, net of issuance costs of $ 24,967

December 31, 2022

4,771,275,349

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$ ( 20,976,769 )

ENERGY SOLUTIONS, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

ENDED DECEMBER 31, 2020

Common stock to be issued

Series C Preferred Stock

Series D Preferred Stock

Series E Preferred Stock

Accumulated Comprehensive

Additional Paid-in

OZOP ENERGY SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

YEAR ENDED DECEMBER 31, 2021

stock to be issued

C Preferred Stock

D Preferred Stock

E Preferred Stock

Comprehensive

Noncontrolling

Total Stockholders’ Equity

Balances January 1, 2020

$ ( 1,310,422 )

$ ( 1,233,434 )

$ ( 1,310,422 )

$ ( 1,233,434 )

Reverse merger transaction

1,851,930,729

( 1,033,489 )

Shares issued for conversions of note and interest payable

1,411,815,206

Shares issued upon cashless exercise of warrants

Warrants issued in connection with issuance of debt

Shares issued pursuant to CEO contract

Foreign currency translation adjustment

( 20,968,243 )

Balances December 31, 2020

Stockholders’ Equity

January 1, 2021

3,397,958,292

issued for conversions of note and interest payable

issued upon cashless exercise of warrants

of Series E Preferred Stock

issued and to be issued for fees and services

issued for lease agreement

issued for debt restructure

of Series C and Series D stock for Treasury

of Series D Preferred Stock and warrants

currency translation adjustment

( 195,047,946

( 195,303,051 )

December 31, 2021

4,617,362,977

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notes to consolidated financial statements.

ENERGY SOLUTIONS, INC.

STATEMENT OF CASH FLOWS

OZOP ENERGY SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Year Ended December 31,

Cash flows from operating activities:

Net loss from continuing operations

$ ( 195,303,051 )

Net income (loss) from continuing operations

$ ( 195,069,214 )

Adjustments to reconcile net loss to net cash used in operations

Net loss from discontinued operations

Adjustments to reconcile net income (loss) to net cash used in continuing operations

Non-cash interest expense

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Debt restructure expense

Loss on fair value change of derivatives

Loss (gain) on extinguishment of debt

(Gain) loss on fair value change of derivatives

( 19,202,431 )

Loss on extinguishment of debt

Stock compensation expense

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( 1,292,800 )

( 2,812,916 )

Prepaid expenses

Vendor deposits

( 2,222,952 )

Accounts payable and accrued expenses

Deferred revenue

Operating lease liabilities

Customer deposits

Net cash used in continued operations

( 8,990,602 )

( 5,920,618 )

Net cash provided by (used in) discontinued operations

Net cash used in operating activities

2 unchanged sentences

Cash flows from investing activities:

Cash acquired in acquisition

Purchase of office and computer equipment

Net cash used in (provided by) investing activities

Net cash used in investing activities of continued operations

Net cash used in investing activities of discontinued operations

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuances of convertible notes payable

Proceeds from sale of common stock, net of costs

Proceeds from issuances of notes payable

Proceeds from sale of Series D preferred stock and warrants

Proceeds from Payroll Protection Program

Proceeds from Economic Disaster Loan

Proceeds received on deferred liability

Proceeds from shareholders

Payments to shareholders

Payments of principal of convertible note payable and notes payable

3 unchanged sentences

( 11,250,000 )

Advance from affiliate

Net cash provided by financing activities

Effects of exchange rate on cash

Net increase in cash

Net increase (decrease) in cash

( 5,262,984 )

Cash, Beginning of year

5 unchanged sentences

Original issue discount included in notes payable

Reclass from prepaid expenses to fixed assets

Issuance of common stock upon convertible note and accrued interest conversion

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on July 17, 2015, under the laws of the State of Nevada.

July 10, 2020, the Company entered into a Stock Purchase Agreement (the “SPA”) with Power Conversion Technologies, Inc.,

a Pennsylvania corporation (“PCTI”), and Catherine Chis (“Chis”), PCTI’s Chief Executive Officer (“CEO”)

and its sole shareholder.

Under the terms of the SPA, the Company acquired one thousand ( 1,000 ) shares of PCTI, which represents all

of the outstanding shares of PCTI, from Chis in exchange for the issuance of 47,500 shares of the Company’s Series C Preferred

Stock, 18,667 shares of the Company’s Series D Preferred Stock, and 500 shares of the Company’s Series E Preferred Stock

October 29, 2020, the Company formed a new wholly owned subsidiary, Ozop Surgical Name Change Subsidiary, Inc., a Nevada corporation

11 unchanged sentences

August 19, 2021, the Company formed Ozop Capital Partners, Inc.

(“Ozop Capital”), a Delaware corporation.

The Company is

the majority shareholder of Ozop Capital with PJN Holdings LLC (“PJN”), a New York limited liability company, being the minority

Brian Conway was appointed as the sole officer and director of Ozop Capital and has voting control of Ozop Capital.

(“Ozop Capital”), a Delaware corporation and a wholly owned

subsidiary of the Company.

Brian Conway was appointed as the sole officer and director of Ozop Capital and has voting control of Ozop

October 29, 2021, EV Insurance Company, Inc.

2 unchanged sentences

On January 7, 2022, EVCO filed with New Castle County, Delaware DBA OZOP Plus.

Purchase Agreement

July 10, 2020, the Company entered into a Stock Purchase Agreement (the “SPA”) with Power Conversion Technologies, Inc.,

a Pennsylvania corporation (“PCTI”), and Catherine Chis (“Chis”), PCTI’s Chief Executive Officer (“CEO”)

and its sole shareholder.

Under the terms of the SPA, the Company acquired one thousand ( 1,000 ) shares of PCTI, which represents all

of the outstanding shares of PCTI, from Chis in exchange for the issuance of 47,500 shares of the Company’s Series C Preferred

Stock, 18,667 shares of the Company’s Series D Preferred Stock, and 500 shares of the Company’s Series E Preferred Stock

The Acquisition was accounted for as a business combination and was treated as a reverse acquisition for accounting purposes

with PCTI as the accounting acquirer in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic

805, Business Combinations (“ASC 805”).

In accordance with the accounting treatment for a reverse acquisition, the Company’s

historical financial statements prior to the reverse merger were and will be replaced with the historical financial statements of PCTI

prior to the reverse merger, in all future filings with the U.S.

Securities and Exchange Commission (the “SEC”).

The consolidated

financial statements after completion of the reverse merger have and will include the assets, liabilities and results of operations of

the combined company from and after the closing date of the reverse merger.

designs, develops, manufactures and distributes standard and custom power electronic solutions.

PCTI serves clients in several industries

including energy storage, shore power, DEWs, microgrid, telecommunications, military, transportation, renewable energy, aerospace and

mission critical defense systems.

Customers include the United States military and other global military organizations.

All of its products

are manufactured in the United States.

Because of the Company’s product scope and the high-power niche that their products occupy,

the Company is targeting the rapidly growing renewable and energy storage markets.

The Company’s mission is to be a global leader

for high power electronics with a standard of continued innovation.

Company utilized the Option Pricing Method (the “OPM”) to value the transaction.

The OPM method treats all equity linked

instruments as call options on the enterprise value, with exercise prices and liquidation preferences based on the terms of the various

common, preferred, options, warrants, and convertible debt.

Under this method, the common stock only has value if the funds available

for distribution to the shareholders exceed the liquidation preferences of the preferred stock and face value of the convertible debt.

The timing of a liquidity event is required to utilize this method.

The OPM considers the various terms of the stockholder agreements—including

the level of seniority among the securities, dividend policy, conversion ratios, and cash allocations—upon liquidation of the enterprise.

In addition, the method implicitly considers the effect of the liquidation preference as of the future liquidation date, not as of the

valuation date.

A feature of the OPM is that it explicitly recognizes the option-like payoffs of the various share classes utilizing

information in the underlying asset (that is, estimated volatility) and the risk-free rate to adjust for risk by adjusting the probabilities

of future payoffs.

The following table summarizes the preliminary value of the consideration issued and the preliminary purchase price

allocation of the fair value of assets acquired and liabilities assumed in the transaction.

SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED

Fair value of OZOP equity consideration issued

Assets acquired

Liabilities assumed

( 11,612,618 )

Total purchase price

Company reviews the goodwill allocated to each of our reporting units for possible impairment annually and whenever events or changes

in circumstances indicate the carrying amount may not be recoverable.

Pursuant to that review, management has determined that the goodwill

arising from the above transaction has been impaired and accordingly $ 11,201,145 was recorded as an impairment expense for the year ended

December 31, 2020.

2 – RESTATEMENT

the preparation of the financial statements as of March 31, 2021, and for the three months ended March 31, 2021, the Company discovered

an error was made in the financial statements as of and for the period ended December 31, 2020.

The error relates to the recognition

of certain warrants as derivative liabilities due to the fact the Company has insufficient authorized shares to cover the exercises.

Management believes that the error as of and for December 31, 2020, does not materially impact the balance sheet as December 31, 2020.

New warrants issued in the year ended December 31, 2021, have been properly accounted for as derivatives, when necessary.

The following

table reflects the effect of the error on the balance sheet as of December 31, 2020:

SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS

December 31, 2020

Current liabilities

Total liabilities

Total stockholders’ deficit

( 6,349,710 )

( 5,007,942 )

change in the current and total liabilities is as a result of the fair value of $ 2,061,307 of warrants based on the Black-Scholes option

pricing valuation method, and an increase in notes payable of $ 719,539 as a result of reclassifying amounts previously recorded as discounts

on notes payable, related to the warrants.

February 25, 2022, the Company formed Ozop Engineering and Design, Inc.

(“OED”) a Nevada corporation, as a wholly owned subsidiary

of the Company.

OED was formed to become a premier engineering and lighting control design firm.

OED offers product and design support

for lighting and solar projects with a focus on fast lead times and technical support.

OED and our partners are able to offer the resources

needed for lighting, solar and electrical design projects.

OED will provide customers systems to coordinate the understanding of electrical

usage with the relationship between lighting design and lighting controls, by developing more efficient ecofriendly designs.

with architects, engineers, facility managers, electrical contractors and engineers.

2 – GOING CONCERN AND MANAGEMENT’S PLANS

accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of

assets and the satisfaction of liabilities in the normal course of business.

As of December 31, 2021, the Company had an accumulated

deficit of $ 217,326,611 and

a working capital deficit of $ 28,225,908 (including

derivative liabilities of $ 20,966,701 ).

of December 31, 2021, the Company was in default of $ 1,973,847

plus accrued interest on debt instruments due to non-payment upon maturity dates, and subsequent to December 31, 2021, an additional

plus accrued interest on debt instruments also were in default status due to non-payment upon maturity dates.

accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets

and the satisfaction of liabilities in the normal course of business.

As of December 31, 2022, the Company had an accumulated deficit

of $ 211,300,799 and a working capital deficit of $ 7,552,616 (including derivative liabilities of $ 4,314,270 ).

As of December 31, 2022,

the Company was in default of $ 1,470,000 plus accrued interest on debt instruments due to non-payment upon maturity dates.

These factors,

among others, raise substantial doubt about the ability of the Company to continue as a going concern for one year from the date of

the issuance of these financial statements.

The accompanying financial statements do not include any adjustments to

reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of

liabilities that may result from the possible inability of the Company to continue as a going concern.

among others, raise substantial doubt about the ability of the Company to continue as a going concern for one year from the date of the

issuance of these financial statements.

The accompanying financial statements do not include any adjustments to reflect the possible

future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from

the possible inability of the Company to continue as a going concern.

December 2019, a novel strain of coronavirus (COVID-19) emerged.

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sales and marketing and inventory requirements as we expand our distribution in the U.S.

On October 14, 2021, the Company received

a Notice of effectiveness related to the Company’s Form S-3 Registration Statement (the “Registration Statement”).

Pursuant to the Registration Statement the Company may offer and sell from time to time in one or more offerings of up to thirty million

dollars ($ 30,000,000 ) in aggregate offering price.

We may offer these securities in amounts, at prices and on terms determined at the

time of offering.

As of the date of this Report the Company has not sold any securities pursuant to this Registration Statement.

October 14, 2021, the Company received a Notice of effectiveness related to the Company’s Form S-3 Registration Statement (the

“Registration Statement”).

Pursuant to the Registration Statement the Company may offer and sell from time to time in one

or more offerings of up to thirty million dollars ($ 30,000,000 ) in aggregate offering price.

We may offer these securities in amounts,

at prices and on terms determined at the time of offering.

April 4, 2022, the Company, and GHS Investments LLC (“GHS”).

signed a Securities Purchase Agreement (the “GHS Purchase

Agreement”) for the sale of up to Two Hundred Million ( 200,000,000 ) shares of the Company’s common stock to GHS.

sell shares of our common stock from time to time over a six (6)- month period ending October 4, 2022 , at our sole discretion, to GHS

under the GHS Purchase Agreement.

signed a Securities Purchase Agreement (the “1 st

GHS Purchase Agreement”) for the sale of up to Two Hundred Million ( 200,000,000 ) shares of the Company’s common stock

We may sell shares of our common stock from time to time over a six (6)- month period ending October 4, 2022 , at our sole discretion,

to GHS under the GHS Purchase Agreement.

The purchase price shall be 85% of lowest VWAP for the ten (10) days preceding the Company’s

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Statement dated October 14, 2021, regarding the GHS Purchase Agreement .

The Company is in negotiations with its’

lenders related to the debt instruments that are currently in default, to extend the maturity dates.

the year ended December 31, 2021, the Company raised $ 28,100,000 (of which $ 11,250,000 was used to redeem Series C and Series D shares

of preferred stock from Chis) and has begun to implement the following business operations, plans and strategies:

On October 17, 2022, the Company and GHS extended the Maturity

Date to April 4, 2023 .

During the year ended December 31, 2022, the Company sold to GHS 148,912,372 shares of common stock and received

$ 1,141,514 , net of offering costs.

Subsequent to December 31, 2022, through January 23, 2023, the Company sold GHS 51,087,628 shares

of common stock for proceeds of $ 205,443 , net of offering costs.

As of January 23, 2023, the Company sold GHS 200,000,000 shares of common

January 18, 2023, the Company and GHS.

signed a Securities Purchase Agreement (the “2 nd GHS Purchase Agreement”)

for the sale of up to One Hundred Fifty Million ( 150,000,000 ) shares of the Company’s common stock to GHS.

The terms and conditions

of the 2 nd GHS Purchase Agreement are similar to the terms and conditions of the 1 st GHS Purchase Agreement.

of the date of this report the Company has sold GHS 63,698,905 shares of common stock for proceeds of $ 355,060 , net of offering costs.

is actively engaged in the renewable, electric vehicle (“EV”), energy storage and energy resiliency sectors.

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management-developed relationships and are distributed through our existing network and our in-house sales team.

Sales were approximately

$ 10.6 million for the year ended December 31, 2021.

Our PV business model involves the design and construction of electrical generating PV systems that can sell power to the

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methodologies as well as the financial arbitrage of how we produce, capture and distribute electrical energy for the EV markets.

OES has acquired the license rights to a proprietary system, the Neo-Grids TM System (patent pending),

for the capture and distribution of electrical energy for the EV market.

The Neo-Grids TM System

will serve both the private auto and the commercial sectors.

The exponential growth of the EV industry has been accelerated by the recent

major commitments of most of the major car manufacturers.

Our Neo-Grids TM System

leverages this accelerated growth by offering (1) charging locations that can be installed with reduced delays, restricted

areas or load limits and (2) EV charger electricity that is produced from renewable sources claiming little to no carbon footprint.

OES has acquired the license rights to a proprietary system, the Neo-Grids TM System (patent pending), for the capture

and distribution of electrical energy for the EV market.

The Neo-Grids TM System will serve both the private

auto and the commercial sectors.

The exponential growth of the EV industry has been accelerated by the recent major commitments of most

of the major car manufacturers.

Our Neo-Grids TM System leverages this

accelerated growth by offering (1) charging locations that can be installed with reduced delays, restricted areas or load limits and

(2) EV charger electricity that is produced from renewable sources claiming little to no carbon footprint.

has developed a business plan for the Neo Grids distribution, a solution to the stress forthcoming to the existing grid infrastructure.

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technology assessment.

Plus plans on producing vehicle service contracts (“VSC’s”) for electric vehicles (EV’s).

to respond to not only

in filling the gap of a manufacturer’s warranty but to bring added value to EV owners by utilizing our partnerships and strengths

in the renewable energy market to offer unique and innovative services.

Among EV owners’ concerns are the EV battery repair and

replacement costs, range anxiety, environmental responsibilities, roadside assistance, and the accelerated wear on additional components

that EV vehicles experience.

Management believes that the Ozop Plus VSC will give “peace of mind” to the EV buyer.

is currently in negotiations to complete the necessary agreements to launch the product in Q2 2022.

Additionally, the Company is also

in discussions with entities whereby Ozop Plus can re-insure the battery portion of another entity’s VSC.

Plus markets vehicle service contracts (“VSC’s”) for electric vehicles (EV’s) that offer consumers to be able

to purchase additional months and miles above the manufacturer’s warranty and to also bring added value to EV owners by utilizing

our partnerships and strengths in the energy market to offer unique and innovative services.

Among EV owners’ concerns are the

EV battery repair and replacement costs, range anxiety, environmental responsibilities, roadside assistance, and the accelerated wear

on additional components that EV vehicles experience.

Management believes that the Ozop Plus marketed VSC’s will give “peace

of mind” to the EV buyer.

May 2022, the Company entered into an agreement with GS Administrators, Inc., a member of Houston-based GSFSGroup.

Under the agreement,

the Company will market GSFSGroup’s EV VSC’s in all states (except, California, Florida, Massachusetts and Washington)

to Ozop’s network of new and used franchised dealerships and other eligible entities.

In addition to acting as an agent for

the marketing, Ozop also has the right to white label the product under its’ Ozop Plus brand.

Ozop’s role won’t

be limited to marketing the product.

GSFSGroup plans to tap into Ozop’s experience relative to battery collection and disposal

and has agreed to insurance risk sharing in connection with the insurance policies that back the VSC’s.

GSFSGroup is working

on getting the approvals needed for the above four (4) states.

June 22, 2022, the Company entered into an Agent Agreement with Royal Administration Services, Inc.

the agreement, the Company will market Royal’s EV VSC’s and has the right to white label it under Ozop Plus.

agreed to allow Ozop Plus on all VSC’s, marketed by Royal and the Company, to assume all the risk related to the electric battery

at an agreed upon premium.

The battery premium is dependent on the consumer’s selection of the duration of the VSC, the miles

selected for coverage and the type of vehicle that the consumer has purchased, with a key component being the kWh size of the battery.

These VSC’s have a maximum of 10 years and 150,000 miles and cover new and used cars from model year 2017 and newer.

VSCs are now effective in 46 states and the others have various waiting times or approvals needed.

October 13, 2022, EVCO entered into a Reinsurance Contract (the “Contract”) with American Bankers Insurance Company of

Florida (“ABIC” or the “Ceding Company”).

Royal is the Administrator of the Contract.

Pursuant to the terms

of the Contract, ABIC will cede 100% of the battery coverage portion of all electric vehicle service contracts to EVCO.

date ABIC and EVCO also entered into a Trust Agreement, whereas EVCO as the reinsurer agrees to deposit an amount equal to unearned

premium reserves, plus losses reported but unpaid, plus the estimated amount of losses incurred but not reported to the trust account.

Permissible investments (with a maturity of no more than five (5) years) of the assets of the Trust account include:

Treasury Securities

or cash instruments

agency issues

investments as Ceding Company approves

February 25, 2022, the Company formed Ozop Engineering and Design, Inc.

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by working with architects, engineers, facility managers, electrical contractors and engineers.

In April, 2022, OED began operations

and generated $ 92,100 of revenues for the year ended December 31, 2022, and currently has six employees in sales, marketing installation

and services.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING PRONOUNCEMENTS

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Systems, Inc.

and the Company’s other wholly owned subsidiaries PCTI, Ozop LLC, Ozop HK and Spinus, LLC (“Spinus”)

and the Company’s majority owned subsidiary Ozop Capital Partners, Inc.

All intercompany accounts and transactions have been eliminated

in consolidation.

and the Company’s other wholly owned subsidiaries Ozop Capital Partners, Inc., PCTI, Ozop LLC, Ozop HK and Spinus,

LLC (“Spinus”).

All intercompany accounts and transactions have been eliminated in consolidation.

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

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SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR

Ended December 31,

the year ended December 31, 2020, the above customers were of PCTI.

PCTI, historically does not have year to year many recurring clients

as the Company produces capital equipment for its’ customers.

Sales % Year Ended December 31, 2022

Sales % Year Ended December 31, 2021

Accounts receivable balance December 31, 2022

Company records accounts receivable at the time products and services are delivered.

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are valued at the lower of cost or net realizable value, with cost determined on the first-in, first-out basis.

Inventory costs include

finished goods, material, labor and manufacturing overhead.

Inventory costs consist of

finished goods.

In evaluating the net realizable value of inventory, management also considers,

if applicable, other factors, including known trends, market conditions, currency exchange rates and other such issues.

components of inventories at December 31, 2021, and 2020 are as follows:

SCHEDULE OF INVENTORY

Raw materials

Work in process

Finished goods

Inventory net

inventories at December 31, 2022, and 2021, were $ 3,601,026 and $ 788,110 , respectively.

As of December 31, 2022, the Company has on deposit

with vendor(s) approximately $ 3,043,000 and has a balance due of approximately $ 12,176,000 for open purchase orders.

The remaining balance

is partially due when the vendor ships the product, with the final balance due prior to delivery.

concentration

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that accounted for 61 % and 16.3 %, respectively.

There are only a handful of major suppliers, and we currently have supply arrangements

with some of those vendors.

One of these vendors requires a 20 % down payment with the balances due on shipment and delivery, while other

vendors terms are due immediately prior to delivery.

We also buy product from other distributors, if we are not able to purchase direct

from the manufacturer.

While management believes all of its relationships with its vendors are good, if we are unable to continue to

use and/or find alternative suppliers, when we cannot buy direct, it may have a material negative effect on our business.

principal purchases by PCTI are comprised of parts and raw materials that PCTI assembles and manufactures and sells to its customers.

There were no suppliers who accounted for more than ten percent (10%) of PCTI’s purchases for the years ended December 31, 2021,

Suppliers to PCTI vary from period to period dependent upon our customer’s order specifications.

In any specific reporting

period, we may be relying on certain vendors, however these vendors will vary dependent on the parts and materials needed.

PCTI believes

it is not reliant on any particular vendor for future needs.

For the year ended December 31, 2021, there were two suppliers that accounted for 42.6 %

and 20.4 %, respectively.

There are only a handful of major suppliers, and we currently have supply arrangements with some of those vendors.

One of these vendors requires a 20 % down payment with the balances due on shipment and delivery, while other vendors terms are due immediately

prior to delivery.

We also buy product from other distributors if we are not able to purchase direct from the manufacturer.

While management

believes all of its relationships with its vendors are good, if we are unable to continue to use and/or find alternative suppliers, when

we cannot buy direct, it may have a material negative effect on our business.

plant, and equipment

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is satisfied.

Under ASC 606, revenue is recognized when the following criteria are met:

(1) persuasive evidence of an arrangement exists;

(2) the performance of service has been rendered to a customer or delivery has occurred;

(3) the amount of fee to be paid by a customer

is fixed and determinable;

and (4) the collectability of the fee is reasonably assured.

Other than The Company has no outstanding contracts

with any of its’ customers.

The Company recognizes revenue when title, ownership, and risk of loss pass to the customer, all of

which occurs upon shipment or delivery of the product and is based on the applicable shipping terms.

The Company has no outstanding contracts with any of its’ customers.

The Company recognizes revenue when title, ownership,

and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product and is based on the applicable shipping

contracts with customers, ownership of the goods and associated revenue are transferred to customers at a point in time, generally upon

shipment of a product to the customer or receipt of the product by the customer and without significant judgments.

Advance payments are

typically required for commercial customers and are recorded as current liability until revenue is recognized.

Advance payments are not

required for government customers.

The majority of contracts typically require payment within 30 to 60 days after transfer of ownership

to the customer.

Any advance payments

are recorded as current liability until revenue is recognized.

the periods covered herein, we did not have post shipment obligations such as training or installation, customer acceptance provisions,

credits and discounts, rebates and price protection, or other similar privileges.

following table disaggregates our revenue by major source for the year ended December 31, 2021:

following table disaggregates our revenue by major source for the years ended December 31, 2022, and 2021:

DISAGGREGATION OF REVENUE

December 31, 2021

Sourced and distributed products

Manufactured products

Years ended December

and distributed products

Installations

from sourced and distributed products are purchased from suppliers as finished goods and the Company brings the finished goods into our

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we may have our suppliers ship directly to our customers to avoid extra shipping charges.

For manufactured products, there is usually

a bidding process by branches of the military or other large firms that need mostly battery charging and storage systems for large industrial

We would then purchase the raw materials and parts needed to build out the project in our Pennsylvania warehouse.

no disaggregation of revenues for the year ended December 31, 2020.

and Marketing Expenses

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For the years ended December

31, 2021, and 2020, the Company recorded $ 7,500 and - 0 - of research and development expenses.

31, 2022, and 2021, the Company recorded $- 0 - and $ 7,500 of research and development expenses, respectively.

Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and

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fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

accordance with ASC 205-20 Presentation of Financial Statements:

Discontinued Operations , a disposal of a component of an entity

or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift

that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meet the

criteria in paragraph 205-20-45-10.

In the period in which the component meets held-for-sale or discontinued operations criteria the

major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and

liabilities separate from those balances of the continuing operations.

At the same time, the results of all discontinued operations,

less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing

September 1, 2022, the BOD of the Company authorized the filing of a Chapter 7 proceeding (see Note 2) which meets the definition of

a discontinued operation.

Accordingly, the operating results of PCTI are reported as a loss from discontinued operations in the accompanying

consolidated financial statements for the years ended December 31, 2022, and 2021.

For additional information, see Note 14- Discontinued

Distinguishing

Liabilities from Equity

Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity , to classify certain redeemable

and/or convertible instruments.

The Company first determines whether a financial instrument should be classified as a liability.

Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument,

other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of

its equity shares.

the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial

instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”).

The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the

Company (i.e.

at the option of the holder).

Otherwise, the Company accounts for the financial instrument as permanent equity.

CEO and Chairman holds sufficient shares of the Company’s voting preferred stock that give sufficient voting rights under the articles

of incorporation and bylaws of the Company such that the CEO and Chairman can at any time unilaterally vote to increase the number of

authorized shares of common stock of the Company, without the need to call a general meeting of common shareholders of the Company.

Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value,

or cash received.

Measurement – Financial Instruments Classified as Liabilities

Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date.

in fair value of its financial instruments classified as liabilities are recorded as other income (expenses).

Value of Financial Instruments

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December 31, 2022

Derivative Liabilities

December 31, 2021

Derivative Liabilities

Company accounts for leases under ASU 2016-02 (see Note 13), applying the package of practical expedients to leases that commenced before

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Operating lease expense is recognized pursuant to on a straight-line

basis over the lease term and is included in rent in the condensed consolidated statements of operations.

basis over the lease term and is included in rent in the consolidated statements of operations.

taxes are accounted for under the asset and liability method.

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SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

December 31, 2021

December 31, 2020

Convertible preferred stock

preferred stock

7,156,913,024

6,918,544,466

Unexercised common stock purchase warrants

Convertible notes payable

Common stock to be issued

common stock purchase warrants

1,047,024,518

notes payable

notes payable (1)

8,332,973,619

7,592,474,061

potentially dilutive shares included in the above table are limited whereby the conversion or exercise cannot result in the beneficial

owner holding more than 4.99 % of the then outstanding shares of common stock subsequent to any conversion or exercise.

Accounting Pronouncements

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following table summarizes the Company’s property and equipment:

PROPERTY AND EQUIPMENT

SCHEDULE OF PROPERTY AND EQUIPMENT

December 31, 2022

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Office equipment

Building and building improvements

Accumulated Depreciation

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5 - CONVERTIBLE NOTES PAYABLE

transaction with PCTI is being accounted for as a business combination and was treated as a reverse acquisition for accounting purposes

with PCTI as the accounting acquirer in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic

805, Business Combinations (“ASC 805”).

In accordance with the accounting treatment for a reverse acquisition, the Company’s

historical financial statements prior to the reverse merger were and will be replaced with the historical financial statements of PCTI

prior to the reverse merger.

The consolidated financial statements after completion of the reverse merger have and will include the assets,

liabilities and results of operations of the combined company from and after the closing date of the reverse merger.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a past-due 15% convertible note issued by the Company on September

As of December 31, 2022, and 2021, the outstanding principal balance of this note was $ 25,000 .

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible promissory note issued by the Company on June

1, 2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 6 months after

the Issuance Date .

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $0.025

for the first three months after the Issuance Date .

After the first three months after the Issuance Date, the conversion price shall

be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five trading days prior to the conversion .

July 10, 2020, the outstanding principal balance of this note was $ 127,500 with a carrying value of $ 27,625 , net of unamortized discounts

of $ 99,875 .

In conjunction with this note, the Company issued a warrant to purchase 6,375,000 shares of common stock at an exercise price

of $ 0.02 , subject to adjustments and expiring on the five -year anniversary of the Issuance Date.

For the year December 31, 2021, the

investor converted a total of $ 127,500 of the face value and $ 14,433 of accrued interest and fees into 88,708,118 shares of common stock

at an average conversion price of $ 0.0016 .

On March 10, 2021, the investor received 6,355,008 shares of common stock upon the cashless

exercise of the warrants.

As of December 31, 2021, and 2020, the outstanding principal balance of this note was $- 0 - and $ 127,500 , respectively.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 15% convertible promissory note issued by the Company on June

30, 2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 6 months after

the Issuance Date.

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $ 0.025

for the first three months after the Issuance Date.

After the first three months after the Issuance Date, the conversion price shall

be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five trading days prior to the conversion .

July 10, 2020, the outstanding principal balance of this note was $ 129,500 with a carrying value of $ 8,375 , net of unamortized discounts

of $ 121,125 .

In conjunction with this note, the Company issued a warrant to purchase 6,375,000 shares of common stock at an exercise

price of $ 0.02 , subject to adjustments and expiring on the five -year anniversary of the Issuance Date.

For the year December 31, 2021,

the investor converted a total of $ 129,500 of the face value and $ 30,264 of accrued interest and fees into 110,946,972 shares of common

stock at an average conversion price of $ 0.00144 .

On March 10, 2021, the investor received 6,355,008 shares of common stock upon the

cashless exercise of the warrants.

As of December 31, 2021, and 2020, the outstanding principal balance of this note was $- 0 - and $ 129,500 ,

respectively, with a carrying value of $ 111,763 as of December 31, 2020, net of unamortized discounts of $ 10,416 .

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 15 % convertible promissory note issued by the Company on July

8, 2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 6 months after

the Issuance Date.

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $0.025

for the first three months after the Issuance Date .

After the first three months after the Issuance Date, the conversion price shall

be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five trading days prior to the conversion .

In conjunction

with this note, the Company issued a warrant to purchase 12,500,000 shares of common stock at an exercise price of $ 0.02 , subject to

adjustments and expiring on the five -year anniversary of the Issuance Date.

For the nine months ended December 31, 2021, amortization

of the debt discounts of $ 10,416 was charged to interest expense.

For the year December 31, 2021, the investor converted a total of $ 250,000

of the face value and $ 130,044 of accrued interest and fees into 243,012,455 shares of common stock at an average conversion price of

On March 10, 2021, the investor received 12,460,800 shares of common stock upon the cashless exercise of the warrants.

December 31, 2021, and December 31, 2020, the outstanding principal balance of this note was $- 0 - and $ 250,000 , respectively, with a

carrying value of $ 239,583 as of December 31, 2020, net of unamortized discounts of $ 10,416 .

February 26, 2020, (the “Issuance Date”) PCTI issued a 12 % Convertible Promissory Note (the “Note”), in the principal

amount of $ 106,950 , to an investor.

This note matures 12 months after the Issuance Date .

This note is convertible into shares of the

Company’s common stock beginning on the Issuance Date at 55 % of the lowest trading price for the twenty-five trading days prior

to the conversion.

If the trading price cannot be calculated for such security on such date, the trading price shall be the fair market

value as mutually determined by the Company and the investor for which the calculation of the trading price is required in order to determine

the conversion price.

PCTI received proceeds of $ 85,000 on February 26, 2020, and the Note included an original issue discount of $ 13,950

and lender costs of $ 8,000 .

This note proceeds were used by the Company for general working capital purposes.

The Note also required

a daily payment via ACH of $ 400 .

On June 25, 2020, the Note was amended to add $ 111,225 of additional principal to the outstanding balance.

Pursuant to the PCTI transaction with Ozop, on July 10, 2020, the conversion price is equal to 45 % multiplied by the lowest closing bid

price during the twenty-five-trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

Accordingly, the Company determined the conversion feature of the Notes represented an embedded derivative since the note is convertible

into a variable number of shares upon conversion, as the note was not considered to be conventional debt under ASC 815 and the embedded

conversion feature was bifurcated from the debt host and accounted for as a derivative liability.

The embedded feature included in the

note resulted in an initial debt discount of $ 85,000 , interest expense of $ 135,786 and initial derivative liability of $ 220,786 .

the year ended December 31, 2021, amortization of the debt discounts of $ 17,737 was charged to interest expense.

For the year December

31, 2021, the investor converted a total of $ 50,550 of the face value and $ 11,265 of accrued interest and fees into 20,218,562 shares

of common stock at an average conversion price of $ 0.00306 .

The Investor also amended the note to deduct the previously added principal

amount of $ 111,225 .

As of December 31, 2021, and 2020, the outstanding principal balance of this note was $- 0 - and $ 161,775 , respectively.

The Company accounted for the amendment as an extinguishment of debt.

July 15, 2020, (the “Issuance Date”) the Company issued a 15 % convertible promissory note, in the principal amount of $ 127,500 ,

to an investor.

This note matures 6 months after the Issuance Date .

This note is convertible into shares of the Company’s common

stock beginning on the Issuance Date at $0.011 for the first three months after the Issuance Date .

After the first three months after

the Issuance Date, the conversion price shall be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five

trading days prior to the conversion .

The Company received proceeds of $ 102,000 on July 22, 2020, and this note included an original

issue discount of $ 25,500 .

This note proceeds will be used by the Company for general working capital purposes.

In conjunction with this

note, the Company issued a warrant to purchase 6,375,000 shares of common stock at an exercise price of $ 0.02 , subject to adjustments

and expiring on the five -year anniversary of the Issuance Date.

The Company allocated the proceeds to the debt of $ 82,068 and to the

warrant $ 19,932 based on the relative fair value.

The embedded conversion feature included in this note resulted in an initial derivative

liability of $ 207,699 , a debt discount of $ 82,068 with the excess of $ 125,541 charged to interest expense of $ 125,541 .

On March 10, 2021,

the investor received 6,355,008 shares of common stock upon the cashless exercise of the warrants.

For the year ended December 31, 2021,

amortization of the debt discounts of $ 10,792 was charged to interest expense.

On May 6, 2021, the Company and the investor entered into

a Settlement and Mutual Release Agreement (the “Settlement Agreement”).

Pursuant to the Settlement Agreement, the investor

agreed to cancel the July 15, 2020, note.

The Company accounted for the cancelled note as a gain on debt extinguishment.

As of December

31, 2021, and December 31, 2020, the outstanding principal balance of this note was $- 0 - and $ 127,500 , respectively, with a carrying

value of $ 116,708 , net of unamortized discounts of $ 10,792 as of December 31, 2020.

July 29, 2020, (the “Issuance Date”) the Company issued a 15 % convertible promissory note, in the principal amount of $ 127,500 ,

to an investor.

This note matures 6 months after the Issuance Date.

This note is convertible into shares of the Company’s common

stock beginning on the Issuance Date at $0.011 for the first three months after the Issuance Date .

After the first three months after

the Issuance Date, the conversion price shall be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five

trading days prior to the conversion .

The Company received proceeds of $ 100,000 on August 3, 2020, and this note included an original

issue discount of $ 25,500 .

This note proceeds will be used by the Company for general working capital purposes.

In conjunction with this

note, the Company issued a warrant to purchase 12,750,000 shares of common stock at an exercise price of $ 0.01 , subject to adjustments

and expiring on the five -year anniversary of the Issuance Date.

The Company allocated the proceeds to the debt $ 61,733 and warrant $ 40,267

based on the relative fair value.

The embedded conversion feature included in this note resulted in an initial derivative liability of

$ 198,239 , a debt discount of $ 61,733 with the excess of $ 136,506 charged to interest expense.

On March 10, 2021, the investor received

12,710,016 shares of common stock upon the cashless exercise of the warrants.

For the year ended December 31, 2021, amortization of the

debt discounts of $ 21,583 was charged to interest expense.

On May 6, 2021, the investor, pursuant to the Settlement Agreement, agreed

to cancel the July 29, 2020, note.

The Company accounted for the cancelled note as a gain on debt extinguishment.

As of December 31,

2021, and 2020, the outstanding principal balance of this note was $- 0 - and $ 127,500 with a carrying value of $ 105,917 , net of unamortized

discounts of $ 21,583 as of December 31, 2020.

November 16, 2020, (the “Issuance Date”) the Company issued a promissory note, in the principal amount of $ 250,000 , to an

The note carries a guaranteed interest payment of 15 %, which is added to the principal on the Issuance Date.

Principal payments

shall be made in six instalments of $ 57,500 commencing May 21, 2021, and continuing each 30 days thereafter for 4 months.

shall have the right from time to time, and at any time following an event of default, as defined on the agreement, to convert all or

any part of the outstanding and unpaid principal, interest and any other amounts due into fully paid and non-assessable shares of common

stock of the Company.

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $ 0.01

for the first three months after the Issuance Date.

After the first three months after the Issuance Date, the conversion price shall

be equal to the lower of (i) $.01 or the volume weighted average price of the common stock during the five (5) Trading Day period ending

on the day prior to conversion .

The Company received proceeds of $ 200,000 on November 19, 2020, and this note included an original issue

discount of $ 50,000 .

This note proceeds will be used by the Company for general working capital purposes.

The embedded conversion feature

included in this note resulted in an initial derivative liability of $ 14,750 and a debt discount of $ 50,000 .

In conjunction with this

note, the Company issued a warrant to purchase 35,000,000 shares of common stock at an exercise price of $ 0.25 , subject to adjustments

and expiring on the five -year anniversary of the Issuance Date.

The warrants issued resulted in a debt discount of $ 3,050 , with the offset

to additional paid in capital.

For the year ended December 31, 2021, amortization of the debt discounts of $ 59,264 was charged to interest

On May 6, 2021, the investor, pursuant to the Settlement Agreement, agreed to cancel the November 16, 2020, note and the warrant

to purchase 35,000,000 shares.

The Company accounted for the cancelled note and warrant as a gain on debt extinguishment.

As of December

31, 2021, and December 31, 2020, the outstanding principal balance of this note was $- 0 - and $ 250,000 with a carrying value of $ 190,736 ,

as of December 31, 2020, net of unamortized discounts of $ 59,264 .

summary of the convertible note balance as of December 31, 2021, and 2020, is as follows:

SCHEDULE OF DEBT

December 31, 2021

December 31, 2020

Principal balance

Unamortized discount

Ending balance, net

6 – DERIVATIVE LIABILITIES

15 unchanged sentences

liability associated with convertible notes, the Company used the Monte Carlo simulation valuation model with the following assumptions

as of December 31, 2021, and 2020, risk free interest rates at 0.19 % and 0.09 %, respectively, and volatility of 92 % and 48 % to 61 %, respectively.

During the year ended December 31, 2021, the Company issued 375,000,000 warrants in conjunction with notes payable (see Note 8).

to insufficient authorized shares (see above), the Company recorded a discount to notes payable of $ 14,982,815 and interest expense of

$ 38,907,939 , with the offset to derivative liabilities for the initial fair value of the warrants based on the Black-Scholes option pricing

method of $ 53,890,754 .

The following assumptions were utilized in the Black-Scholes valuation, risk free interest rate of .48 % to .99 %,

volatility of 344 % to 366 %, and exercise prices of $ 0.039 to $ 0.15 .

The Company revaluated the warrants outstanding at December 31, 2020,

and based on the insufficient authorized shares, the Company determined that the warrants should have been classified as a liability,

The accompanying financial statements have been adjusted to reflect the change from an equity classification to a liability classification

(see Note 2).

as of December 31, 2022, and 2021, risk free interest rates at 4.76 % and 0.19 %, respectively, and volatility of 71 % and 92 %, respectively.

During the year ended December 31, 2022, the Company issued 375,000,000 warrants in conjunction with the extension of certain notes payable.

The Company recorded a discount to notes payable of $ 2,550,000 with the offset to derivative liabilities for the initial fair value of

the warrants based on the Black-Scholes option pricing model.

The following assumptions were utilized in the initial Black-Scholes valuation

of issued warrants during the year ended December 31, 2022, risk free interest rate of 4.45 %, volatility of 509 %, and an exercise price

of $ 0.0067 .

the year ended December 31, 2021, the Company issued 375,000,000 warrants in conjunction with notes payable (see Note 7).

Due to insufficient

authorized shares (see above), the Company recorded a discount to notes payable of $ 14,982,815 and interest expense of $ 38,907,939 , with

the offset to derivative liabilities for the initial fair value of the warrants based on the Black-Scholes option pricing method of $ 53,890,754 .

following assumptions were utilized in the Black-Scholes valuation of outstanding warrants as of December 31, 2022, and 2021, risk free

interest rate of 4.39 % to 4.73 %, and .48 % to .99 %, respectively, volatility of 109 % to 272 %, and 344 % to 366 %, respectively, and exercise

prices of $ 0.0061 to $ 0.15 .

summary of the activity related to derivative liabilities for the years ended December 31, 2022, and 2021, is as follows:

3 unchanged sentences

Total derivative liabilities

Balance- July 10, 2020, assumed pursuant to PCTI transaction

Issued during period

Converted or paid

( 8,322,188 )

Change in fair value recognized in operations

Balance December 31, 2020

Balance January 1, 2021

Fair value of issuances during period

10 unchanged sentences

Balance December 31, 2021

Fair value of issuances during period

Change in fair value

( 19,203,355 )

( 19,202,431 )

Balance December 31, 2022

7 – NOTES PAYABLE

3 unchanged sentences

December 31, 2021

Note payable bank, interest at 7.75 %, matured December 5, 2021 , currently in default

Note payable bank, interest at 6.5 %, matures December 26, 2021 , in default

Economic Injury Disaster Loan

Paycheck Protection Program loan

Notes payable, interest at 8 %, matured January 5, 2020 , in default

Other, due on demand, interest at 6 %, currently in default

Note payable $ 203,000 face value, interest at 12 %, matured June 25, 2021 , net of discount of $ 13,185 at December 31, 2020

Note payable $ 750,000 face value, interest at 12 %, matured August 24, 2021 , net of discount of $ 540,562 (2020), in default

Note payable $ 750,000 face value, interest at 12 %, matured August 24, 2021 , in default

Note payable $ 389,423 face value, interest at 18 %, matures November 6, 2023

Note payable $ 1,000,000 face value, interest at 12 %, matures November 13, 2021 , net of discount of $ 971,250 (2020), in default

Note payable $ 2,200,000 face value, interest at 12 %, matures February 9, 2022 , net of discount of $ 243,833

Note payable $ 11,110,000 face value, interest at 12 %, matures March 17, 2022 , net of discount of $ 2,314,583

Note payable $ 3,300,000 face value, interest at 12 %, matures December 7, 2022 , net of discount of $ 3,099,524

Note payable $ 1,000,000 face value, interest at 12 %, matures November 13, 2021 , in default

Note payable $ 2,200,000 face value, interest at 15 %, matures October 31, 2024 , net of discount of $ 311,667 (2022) and $ 243,833 (2021)

Note payable $ 11,110,000 face value, interest at 15 %, matures October 31, 2024 , net of discount of $ 1,558,333 (2022) and $ 2,314,583 (2021)

Note payable $ 3,300,000 face value, interest at 15 %, matures October 31, 2024 , net of discount of $ 467,500 (2022) and $ 3,099,524 (2021)

Note payable $ 3,020,000 face value, matures March 31, 2023 , net of discount of $ 181,818

Sub- total notes payable

1 unchanged sentence

Current portion of notes payable, net of discount

November 11, 2022, the Company entered into a non-interest bearing, $ 3,020,000

face value promissory note with a third-party lender with scheduled weekly payments and a maturity date of March

In exchange for the issuance of the $ 3,020,000

note, inclusive of an original issue discount of $ 250,000 ,

and the reclass of $ 260,000

from accounts and accrued expenses the Company received proceeds of $ 2,510,000

on November 11, 2022, from the lender.

For the year ended December 31, 2022, amortization of the original issue discount of $ 68,182

was charged to interest expense.

During the year ended December 31, 2022, the Company also repaid $ 250,000

of the principal of the note.

As of December 31, 2022, the outstanding principal balance of this note was $ 2,770,000

with a carrying value of $ 2,588,182 ,

net of unamortized discounts of $ 181,818 .

The Company is in default on the weekly payments.

During the three months ended March 31, 2023, the Company paid an additional $ 550,000 of principal.

As of March 31,

2023, the balance of the note of $ 2,220,000 is in default.

The Company is currently in discussions with the lender regarding an extension

of the maturity date.

December 7, 2021, the Company entered into a 12 %, $ 3,300,000 face value promissory note with a third- party lender with a maturity date

4 unchanged sentences

purchase 75,000,000 shares of common stock at $ 0.039 per share (subject to adjustments) with an expiry date on the three- year anniversary

For the year ended December 31, 2021, amortization of the costs of $ 16,750 was charged to interest expense.

The fair value

of the warrant calculated by the Black- Scholes option pricing method of $ 2,982,815 has been recorded as an initial debt and an initial

derivative liability of $ 2,982,815 .

For the year ended December 31, 2021, amortization of the warrant discount of $ 166,540 was charged

For the years ended December 31, 2022, and 2021, amortization of the costs of $ 283,250 and $ 16,750 , respectively, was charged

to interest expense.

As of December 31, 2021, the outstanding principal balance of this note was $ 3,300,000 with a carrying value of

$ 200,476 , net of unamortized discounts of $ 3,099,524 .

The fair value of the warrant calculated by the Black- Scholes option pricing method of $ 2,982,815 has been recorded

as an initial debt discount and an initial derivative liability of $ 2,982,815 .

For the years ended December 31, 2022, and 2021, amortization

of the warrant discount of $ 2,816,275 and $ 166,540 , respectively, was charged to interest expense.

On October 31, 2022, the maturity

date of the note was extended to October 31, 2024, and the interest rate was increased to 15 % per annum.

The Company issued 75,000,000

warrants at an exercise price of $ 0.0067 and with an expiration of October 31, 2025, in exchange for the extension.

The warrants were

valued at $ 510,000 by the Black-Scholes option pricing method and will be amortized through the new maturity date of the note.

determined that this transaction was a modification of the existing note.

For the year ended December 31, 2022, $ 42,500 was charged to

interest expense.

As of December 31, 2022, and 2021, the outstanding principal balance of this note was $ 3,300,000 with carrying values

of $ 2,832,500 and $ 200,476 , respectively, net of unamortized discounts of $ 467,500 and $ 3,099,524 , respectively.

March 17, 2021, the Company entered into a 12 %, $ 11,110,000 face value promissory note with a third- party lender with a maturity date

5 unchanged sentences

on the three- year anniversary of the note.

For the year ended December 31, 2021, amortization of the costs of $ 878,750 was charged to

interest expense.

The fair value of the warrant calculated by the Black- Scholes option pricing method of $ 33,248,433 has been recorded

as an initial debt discount of $ 10,000,000 , interest expense of $ 23,248,433 and initial derivative liability of $ 32,248,433 .

year ended December 31, 2021, amortization of the warrant discount of $ 7,916,667 was charged to interest expense.

As of December 31,

2021, the outstanding principal balance of this note was $ 11,110,000 with a carrying value of $ 8,795,417 , net of unamortized discounts

of $ 2,314,583 .

The Company is in discussions with the lender regarding the extension of the maturity date of this note.

For the years ended December 31, 2022, and 2021, amortization of the costs of $ 232,250 and

$ 878,750 , respectively, was charged to interest expense.

The fair value of the warrant calculated by the Black- Scholes option pricing

method of $ 33,248,433 has been recorded as an initial debt discount of $ 10,000,000 , interest expense of $ 23,248,433 and initial derivative

liability of $ 32,248,433 .

For the years ended December 31, 2022 and 2021, amortization of the warrant discount of $ 2,083,333 and $ 7,916,667 ,

respectively, was charged to interest expense.

On October 31, 2022, the maturity date of the note was extended to October 31, 2024, and

the interest rate was increased to 15 % per annum.

The Company issued 250,000,000 warrants at an exercise price of $ 0.0067 and with an

expiration of October 31, 2025 , in exchange for the extension.

The warrants were valued at $ 1,700,000 by the Black-Scholes option pricing

method and will be amortized through the new maturity date of the note.

The Company determined that this transaction was a modification

of the existing note.

For the year ended December 31, 2022, $ 141,667 was charged to interest expense.

As of December 31, 2022, and 2021,

the outstanding principal balance of this note was $ 11,110,000 with a carrying value of $ 9,551,667 and $ 8,795,417 , respectively, net

of unamortized discounts of $ 1,558,333 and $ 2,314,583 , respectively.

February 9, 2021, the Company entered into a 12 %, $ 2,200,000 face value promissory note with a third- party lender with a maturity date

4 unchanged sentences

purchase 50,000,000 shares of common stock at $ 0.15 per share (subject to adjustments) with an expiry date on the three- year anniversary

For the year ended December 31, 2021, amortization of the costs of $ 177,833 was charged to interest expense.

The fair value

of the warrant calculated by the Black- Scholes option pricing method of $ 17,659,506 has been recorded as an initial debt discount of

$ 2,000,000 , interest expense of $ 15,659,506 and initial derivative liability of $ 17,659,506 .

For the year ended December 31, 2021, amortization

of the warrant discount of $ 1,778,333 was charged to interest expense.

As of December 31, 2021, the outstanding principal balance of

this note was $ 2,200,000 with a carrying value of $ 1,956,167 , net of unamortized discounts of $ 243,833 .

The Company is in discussions

with the lender regarding the extension of the maturity date of this note.

November 13, 2020, the Company entered into a 12 %,

face value promissory note with a third-party

For the years ended December 31, 2022, and 2021, amortization of the costs of $ 22,167 and $ 177,833 , respectively, was charged

to interest expense.

The fair value of the warrant calculated by the Black- Scholes option pricing method of $ 17,659,506 has been recorded

as an initial debt discount of $ 2,000,000 , interest expense of $ 15,659,506 and initial derivative liability of $ 17,659,506 .

For the years

ended December 31, 2022, and 2021, amortization of the warrant discount of $ 221,667 and $ 1,778,333 , respectively, was charged to interest

On October 31, 2022, the maturity date of the note was extended to October 31, 2024, and the interest rate was increased to

15 % per annum.

The Company issued 50,000,000 warrants at an exercise price of $ 0.0067 and with an expiration of October 31, 2025, in

exchange for the extension.

The warrants were valued at $ 340,000 by the Black-Scholes option pricing method and will be amortized through

the new maturity date of the note.

The Company determined that this transaction was a modification of the existing note.

ended December 31, 2022, $ 28,333 was charged to interest expense.

As of December 31, 2022, and 2021, the outstanding principal balance

of this note was $ 2,200,000 with a carrying value of $ 1,888,333 and $ 1,956,167 , respectively, net of unamortized discounts of $ 311,667

and $ 243,833 , respectively.

November 13, 2020, the Company entered into a 12 %, $ 1,000,000 face value promissory note with a third-party due November 13, 2021 .

payments shall be made in six instalments of $166,667 commencing 180 days from the issue date and continuing each 30 days thereafter

for 5 months and the final payment of principal and interest due on the maturity date .

The Company received proceeds of $ 890,000

on November 20, 2020, and the Company reimbursed

the investor for expenses for legal fees and due diligence of $ 110,000 .

For the year ended December 31, 2021, amortization of the costs of $ 96,250

was charged to interest expense.

In conjunction

with this note, the Company issued 2 common stock purchase warrants;

each warrant entitles the Holder to purchase 125,000,000

shares of common stock at an exercise price of

subject to adjustments and expires on the five -year

anniversary of the issue date.

The Company received proceeds of $ 890,000 on November

20, 2020, and the Company reimbursed the investor for expenses for legal fees and due diligence of $ 110,000 .

For the year ended December

31, 2021, amortization of the costs of $ 96,250 was charged to interest expense.

In conjunction with this note, the Company issued 2 common

stock purchase warrants;

each warrant entitles the Holder to purchase 125,000,000 shares of common stock at an exercise price of $ 0.008 ,

subject to adjustments and expires on the five -year anniversary of the issue date.

The warrants issued resulted in a debt discount of

For the year ended December 31, 2021, amortization of the warrant discount of $ 875,000

was charged to interest expense.

As of December

31, 2021, and December 31, 2020, the outstanding principal balance of this note was $ 1,000,000

with a carrying value of $ 1,000,000

and $ 28,750 ,

respectively, net of unamortized discounts of $ 971,250 .

This note is in default and the interest rate from the date of default is the lesser of 24% or the highest amount permitted by law.

As of December 31, 2021, the accrued interest is $ 135,452 .

The Company is in discussions with the lender regarding the extension

of the maturity date of this note.

$ 1,000,000 .

For the year ended December 31, 2021, amortization of the warrant discount of $ 875,000 was charged to interest expense.

of December 31, 2022 and 2021, the outstanding principal balance of this note was $ 1,000,000 .

This note is in default and the interest

rate from the date of default is the lesser of 24% or the highest amount permitted by law.

As of December 31, 2022, and 2021, the accrued

interest is $ 375,452 and $ 135,452 , respectively.

The Company is in discussions with the lender regarding the extension of the maturity

date of this note.

November 6, 2020, the Company entered into a Settlement Agreement with the holder of $ 120,000 of convertible notes with accrued and unpaid

8 unchanged sentences

The investor exercised the warrant on January 14, 2021.

October 26, 2016, PCTI entered into a $ 210,000 note payable with a bank.

On March 15, 2021, due to defaults with the terms of the note,

the note was amended with the outstanding balance due December 5, 2021, and the interest rate changed to 7.75 %.

Borrowings are collateralized

by substantially all of the assets of PCTI and the personal guarantee of PCTI’s former President.

As of December 31, 2021, and

December 31, 2020, $ 134,681 and $ 151,469 , respectively, was outstanding on the note payable.

This note is in default.

March 15, 2021, PCTI renewed their $ 350,000 promissory note with a bank that provides for borrowings of up to $ 350,000 .

Interest is due

monthly and the principal is due on December 26, 2021 , interest rate changed to the prime rate plus 3.25 % ( 6.5 % at March 15, 2021).

are collateralized by substantially all of the assets of PCTI and the personal guarantee of PCTI’s former President.

As of December

31, 2021, and December 31, 2020, $ 344,166 and $ 345,211 , respectively, was outstanding on the promissory note.

This note is in default.

August 24, 2020 (the “Issue Date”), the Company entered into a 12 %,

face value promissory note with a third-party

August 24, 2020 (the “Issue Date”), the Company entered into a 12 %, $ 750,000 face value promissory note with a third-party

(the “Holder”) due August 24, 2021 (the “Maturity Date”).

payments shall be made in six instalments of $125,000 commencing 180 days from the Issue Date and continuing each 30 days thereafter

for 5 months and the final payment of principal and interest due on the Maturity Date.

The Holder shall have the right from time to time,

and at any time following an event of default, as defined on the agreement, to convert all or any part of the outstanding and unpaid

principal, interest and any other amounts due into fully paid and non-assessable shares of common stock of the Company, at the lower

of i) the Trading Price (as defined in the agreement) during the previous five trading days prior to the Issuance Date or ii) the volume

weighted average price during the five trading days ending on the day preceding the conversion date .

The Company received proceeds of $ 663,000

on August 25, 2020, and the Company reimbursed

Principal payments shall be made in six instalments

of $125,000 commencing 180 days from the Issue Date and continuing each 30 days thereafter for 5 months and the final payment of principal

and interest due on the Maturity Date.

The Holder shall have the right from time to time, and at any time following an event of default,

as defined on the agreement, to convert all or any part of the outstanding and unpaid principal, interest and any other amounts due into

fully paid and non-assessable shares of common stock of the Company, at the lower of i) the Trading Price (as defined in the agreement)

during the previous five trading days prior to the Issuance Date or ii) the volume weighted average price during the five trading days

ending on the day preceding the conversion date .

The Company received proceeds of $ 663,000 on August 25, 2020, and the Company reimbursed

the investor for expenses for legal fees and due diligence of $ 87,000 .

For the year ended December 31, 2021, amortization of the costs of $ 56,188

was charged to interest expense.

In conjunction

with this Note, the Company issued 2 common stock purchase warrants;

each warrant entitles the Holder to purchase 122,950,819

shares of common stock at an exercise price of

subject to adjustments and expires on the five -year

anniversary of the Issue Date.

For the year ended December 31, 2021, amortization of the costs

of $ 56,188 was charged to interest expense.

In conjunction with this Note, the Company issued 2 common stock purchase warrants;

warrant entitles the Holder to purchase 122,950,819 shares of common stock at an exercise price of $ 0.0061 , subject to adjustments and

expires on the five-year anniversary of the Issue Date.

The warrants issued resulted in a debt discount of $ 750,000 .

For the year ended December 31, 2021, amortization of the debt discount of $ 484,376

was charged to interest expense.

During the year

ended December 31, 2021, the Company paid $ 375,000

to the Holder.

On May 3, 2021, the Company issued

shares of common stock to the Holder, upon the

cashless exercise of a portion of the warrants.

As of December 31, 2021, and 2020, the outstanding principal balance of this note was

and $ 750,000 ,

respectively, with a carrying value of $ 375,000

and $ 209,438 ,

net of unamortized discounts of $ 540,562

as of December 31, 2020.

This note is in default

and the interest rate from the date of default is the lesser of 24% or the highest amount permitted by law.

As of December

31, 2021, the accrued interest is $ 90,247 .

The Company is in discussions with the lender regarding the extension of the maturity

date of this note.

April 20, 2020, PCTI was granted a loan from Huntington Bank in the amount of $ 100,400 , pursuant to the Paycheck Protection Program (“PPP”)

under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The loan matures on April 20, 2022 and bears interest at

a rate of 1.0 % per annum, payable monthly beginning on November 20, 2020.

The loan may be prepaid at any time prior to maturity with

no prepayment penalties.

Payments are deferred until the SBA determines the amount to be forgiven.

The Company utilized the proceeds

of the PPP loan in a manner which will enable qualification as a forgivable loan.

On March 26, 2021, the Company received notice from

Huntington Bank the they have determined that PCTI’s loan forgiveness application has been approved and has been submitted to the

On December 2, 2021, PCTI received a notice from Huntington Bank that the SBA has denied PCTI’s application for loan forgiveness,

due to inaccurate statements in the loan application as submitted by the former CEO of PCTI.

The balance on this PPP loan was $ 100,400

as of December 31, 2021, and 2020 and has been classified in notes payable.

July 14, 2020, PCTI received $ 10,000 grant under the Economic Injury Disaster Loan (“EIDL”) program.

Up to $ 10,000 of the

EIDL can be forgiven as long as such funds were utilized to provide working capital.

The first payment due is deferred one year.

loan as of December 31, 2021, and 2020 and has been classified in notes payable .

following note was assumed on July 10, 2020, pursuant to the PCTI transaction:

June 25, 2020, the Company entered into a 12 %, $ 203,000 face value promissory note with a third-party lender with a maturity date of

June 25, 2021 .

Principal payments shall be made in six instalments of $33,333 commencing 180 days from the issue date and continuing

each 30 days thereafter for 5 months and the final payment of principal and interest due on the maturity date.

The Holder shall have

the right from time to time, and at any time following an event of default, as defined on the agreement, to convert all or any part of

the outstanding and unpaid principal, interest and any other amounts due into fully paid and non-assessable shares of common stock of

the Company, at the lower of i) the Trading Price (as defined in the agreement) during the previous five trading days prior to the issuance

date or ii) the volume weighted average price during the five trading days ending on the day preceding the conversion date .

received proceeds of $ 176,000 on June 26, 2020, and the Company reimbursed the investor for expenses for legal fees and due diligence

of $ 27,000 .

For the year ended December 31, 2021, amortization of the costs of $ 13,185 was charged to interest expense.

In conjunction

with this Note, the Company issued 2 common stock purchase warrants;

each warrant entitles the Holder to purchase 10,000,000 shares of

common stock at an exercise price of $ 0.02 , subject to adjustments and expires on the five -year anniversary of the Issue Date.

the year ended December 31, 2021, the investor converted a total of $ 203,000 of the face value and $ 15,899 of accrued interest and fees

into 20,268,511 shares of common stock at an average conversion price of $ 0.0108 .

On January 8, 2021, and January 15, 2021, the investor

received 100,668,692 and 9,121,265 shares of common stock, respectively, upon the cashless exercise of the warrants.

As of December 31,

2021, and December 31, 2020, the outstanding principal balance of this note was $- 0 - and $ 203,000 , respectively.

For the year ended

December 31, 2021, amortization of the debt discount of $ 484,376 was charged to interest expense.

During the year ended December 31,

2021, the Company paid $ 375,000 to the Holder.

On May 3, 2021, the Company issued 75,000,000 shares of common stock to the Holder, upon

the cashless exercise of a portion of the warrants.

As of December 31, 2022, and 2021, the outstanding principal balance of this note

was $ 375,000 .

This note is in default and the interest rate from the date of default is the lesser of 24% or the highest amount permitted

As of December 31, 2022, and 2021, the accrued interest is $ 180,247 and $ 90,247 , respectively.

The Company is in discussions

with the lender regarding the extension of the maturity date of this note.

8 – DEFERRED LIABILITY

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December 31, 2020.

The Company has recorded the $ 750,000 as deferred liability on the December 31, 2021, and 2020, consolidated balance

No payments have been made and the Company is in default of the agreement.

On February 26, 2021, the agreement was assigned to

Ozop and on March 4, 2021, the note was amended, whereby in exchange for 175,000,000 shares of common stock, the royalty percentage was

amended to 1.8 %.

The Company valued the shares at $ 0.094 per share (the market value of the common stock on the date of the agreement)

and recorded $ 16,450,000 as debt restructure expense on the consolidated statement of operations for the year ended December 31, 2021.

As of December 31, 2021, the Company has recorded an expense and a liability of $ 215,151 on the consolidated financial statements.

10 – DEFERRED REVENUE

the year ended December 31, 2020, the Company received $ 64,353 form a customer for a payment of a three- year extended warranty .

extended warranty period is from, March 2021 through February 2024, and accordingly the Company will recognize the revenue over such

For the year ended December 31, 2021, the Company recognized $ 17,876 , of revenue.

Of the remaining deferred revenue of $ 46,477 ,

$ 21,451 is recognized as the current portion of deferred revenue and $ 25,026 is classified as a long- term liability on the consolidated

financial statements.

As of December 31, 2020, $ 17,876 is classified as the current portion and $ 46,477 is classified as a long- term

liability on the consolidated financial statements.

On February 26, 2021, the agreement was assigned to Ozop and on March 4, 2021, the note was amended, whereby in exchange

for 175,000,000 shares of common stock, the royalty percentage was amended to 1.8 %.

The Company valued the shares at $ 0.094 per share

(the market value of the common stock on the date of the agreement) and recorded $ 16,450,000 as debt restructure expense on the consolidated

statement of operations for the year ended December 31, 2021.

payments have been made and the Company is in default of the agreement.

On November 11, 2022, the third-party and the Company agreed

to reduce the liability by $ 260,000 and add $ 260,000 to the promissory note issued on November 11, 2022.

The deferred liability as of

December 31, 2022, and 2021, on the consolidated balance sheet is $ 490,000 and $ 750,000 , respectively.

9 – RELATED PARTY TRANSACTIONS

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Conway (the “Employment Agreement”).

Pursuant to the terms of the Employment Agreement, Mr.

to receive an initial annual salary of $ 120,000 , for his position of CEO of the Company, payable monthly.

Conway was issued 2,500

shares of Series C Preferred Stock.

The Company valued the shares at $ 5,000 .

On August 28, 2020, Mr.

Conway was issued 1,333 shares of

Series D Preferred stock and 500 shares of Series E Preferred Stock.

The aggregate shares of Series D Preferred Stock in its entirety,

is convertible into one and one-half times the number of shares of common stock outstanding at the time of conversion.

On August 28,

Conway owned 6.67 % of the issued and outstanding Series D Preferred Stock, and based on the 3,107,037,634 shares outstanding

on August 28, 2020, Mr.

Conway’s Preferred Stock was convertible into 621,253,401 shares of common stock.

Based on the share price

of the common stock on that date of $ 0.0065 , the shares were valued at $ 4,286,648 and recognized as compensation during the year ended

December 31, 2020.

Effective January 1, 2021, Mr.

Conway’s compensation is $ 20,000 per month, and effective September 1, 2021,

Conway is receiving $ 10,000 per month from Ozop Capital.

Conway’s compensation as adjusted was $ 20,000 per month,

and effective September 1, 2021, Mr.

Conway receives $ 10,000 per month from Ozop Capital.

Effective January 1, 2022, the Company entered

into a new employment agreement with Mr.

Pursuant to the agreement, Mr.

Conway received a $ 250,000 contract renewal bonus and

will receive annual compensation of $ 240,000 from the Company and will also be eligible to receive bonuses and equity grants at the discretion

The Company also agreed to compensate Mr.

Conway for services provided directly to any of the Company’s subsidiaries.

Ozop Capital increased Mr.

Conway’s compensation to $ 20,000 per month in January 2022, OES began compensating Mr.

Conway $ 20,000

in March 2022, and OED began compensation Mr.

Conway $ 20,000 per month beginning in April 2022.

E Preferred Stock

March 21, 2021, the Company issued 2,000 shares of Series E Preferred Stock (see Note 11), 1,800 of the shares were issued to Mr.

On April 16, 2021, the Board of Directors of the Company authorized the issuance of 2,000 shares of Series E Preferred stock, of which

1,050 were issued to Mr.

During the year ended December 31, 2021, the Company redeemed 2,850 shares issued to Mr.

pursuant to the terms and conditions of the Certificate of Designation of the Series E Preferred Stock, including the redemption value

of $ 1,000 per share, the Company recorded $ 1,800,000 as stock compensation expense for the Series E shares issued to Mr.

16, 2021, the Board of Directors (the “BOD”) of the Company authorized the issuance 2,000 shares of Series E Preferred stock,

of which 1,050 were issued to Mr.

The Company recorded $ 1,050,000 of expense related to the shares issued to Mr.

the year ended December 31, 2021, the Company redeemed the 2,850 shares issued to Mr.

of $ 1,000 per share, recorded stock compensation expense to Mr.

Conway of $ 2,850,000 for the year ended December 31, 2021.

Fees and related party payables

the years ended December 31, 2022, and 2021, the Company recorded expenses to its officers in the following amounts:

OF EXPENSES TO OFFICERS

CEO, parent (includes $ 5,000 stock-based compensation year ended December 31, 2020)

CEO, parent- Series E Preferred Stock

CEO, parent- Series D Preferred Stock

President, subsidiary (resigned July 2021)

of December 31, 2020, included in related party payable is $ 9,120 for the amount owed the former President of PCTI (resigned in July

SCHEDULE OF EXPENSES TO OFFICERS

ended December

CEO, parent- Series E Preferred

of Series C and Series D Preferred Stock

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10 – COMMITMENTS AND CONTINGENCIES

January 2, 2021, the Company entered into a ten ( 10 ) year lease for a 6-bay garage storage facility of approximately 2,500 square feet.

Pursuant to the lease the Company agreed to issue 100,000,000 shares of restricted common stock.

The shares were certificated on March

8, 2021, with an effective date of January 2, 2021.

The Company valued the shares $ 0.0063 , (the market value of the common stock on the

date of the agreement) and has recorded $ 630,000 as a prepaid expense.

The Company has not yet taken occupancy of the space,

September 1, 2021, Ozop Capital entered into an advisory agreement (the “RMA Agreement”) with Risk Management Advisors, Inc.

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became due on October 29, 2021, upon the issuance of the captive insurance company’s certificate of authority from the state of

The Company paid the $ 5,000 balance and recorded 637,755 shares of common stock to be issued.

The Company has paid the $ 25,000 balance and recorded 637,755 shares of common stock to be issued.

For the year ended December

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Pursuant to the terms of the new one- year agreement Ozop Capital agreed to compensate PJN $ 84,000 per month.

For the year ended

December 31, 2021, the Company recorded $ 436,000 ,of consulting expenses.

For the years

ended December 31, 2022, and 2021, the Company recorded $ 756,000 and $ 433,000 , respectively, of consulting expenses.

April 16, 2021, the Company signed a letter of agreement with Rubenstein Public Relations, Inc.

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letter of agreement, the Company agreed to engage RPR, effective May 1, 2021, on a month-to-month basis for $ 17,000 per month.

year ended December 31, 2021, the Company recorded $ 102,000 of consulting expenses.

The Company terminated the agreement in October 2021.

terminated the agreement in October 2021.

For the year ended December 31, 2021, the Company recorded $ 102,000 of consulting expenses.

March 30, 2021, OES hired 2 individuals as Co-Directors of Sales.

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$ 227,500 is included in stock-based compensation expense for the year ended December 31, 2021.

One of the individuals resigned on January

On January 14, 2022, the Company issued

each of the Co-Directors their final 2,500,000 shares due.

The shares were valued at $ 0.027 per share (the market price of the common

stock on the date of the issuance), and $ 135,000 is included in stock-based compensation expense for the year ended December 31, 2022.

One of the individuals resigned on January 24, 2022, and the other was terminated for cause on November 3, 2022.

March 15, 2021, the Company entered into a consulting agreement with Aurora Enterprises (“Aurora”).

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of the agreement), and $ 696,000 is included in stock-based compensation expense for the year ended December 31, 2021.

For the year ended

December 31, 2021, the Company has recorded $ 90,000 of consulting expenses.

For the years ended

December 31, 2022, and 2021, the Company has recorded $ 90,000 and $ 110,000 , respectively.

February 24, 2021, the Company entered into a consulting agreement with Christopher Ruppel.

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For the year ended December 31, 2021, the Company recorded $ 12,500 of consulting expenses.

February 19, 2021, the Company entered into a Joint Business Alliance agreement with Grid and Energy Master Planning, LLC (“GEMM”).

GEMM will provide advisory, financing and implementation solutions for behind-the-meter customers in the areas of energy efficiency,

solar, EV charging, and battery storage for OES.

The GEMM services allows OES to provide one-stop-shopping in these emerging and maturing

As of December 31, 2021, there has not been any transactions related to this agreement and the Company is continuing to evaluate

the accounting treatment of any future transactions.

January 22, 2021, the Company issued 10,000,000 shares of restricted common stock for legal services performed in 2020 and approved by

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The Company terminated Mr.

Sosis’s employment in October 2021, and accordingly, for the

year ended December 31, 2021, $ 1,000,000 is included in stock-based compensation expense.

For the year ended December 31, 2021, the Company

recorded $ 75,500 of consulting expenses, and effective June 1, 2021, Mr.

Sosis became an employee of the Company through his termination

with a $ 15,000 per month salary.

Sosis’s employment in October 2021.

For the year ended December

31, 2021, the Company recorded $ 75,500 of consulting expenses and effective June 1, 2021, Mr.

Sosis became an employee of the Company

through his termination with a $ 15,000 per month salary.

January 6, 2021, the Company entered into a consulting agreement with Ezra Green to begin on February 8, 2021.

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to be amortized over the one-year term of the agreement.

For the year ended December 31, 2021, the Company recorded $ 74,751 as stock-based

compensation expense.

For the years ended December 31, 2022, and 2021, the Company recorded $ 1,249

and $ 74,751 as stock-based compensation expense, respectively.

Effective April 1, 2021, the agreement was amended to $ 10,000 per month.

On March 9, 2021, Mr.

Green filed a provisional

patent with the USPTO.

The provisional patent covers proprietary methods and procedures that, will allow the expansion of OES into the

EV charging and support industry.

The provisional patent relates to the more efficient production, distribution, and delivery of energy,

particularly renewable energy, to the EV end consumer and enables OES to build the support systems for such.

For the year ended December

31, 2021, the Company recorded $ 94,500 of consulting expenses.

Effective June 30, 2022, Mr.

Green was no longer providing consulting services to the Company.

For the years ended December 31, 2022,

and 2021, the Company recorded $ 60,000 and $ 94,500 of consulting expenses respectively.

March 4, 2019, the Company entered into a Separation Agreement (the “Separation Agreement”) with Salman J.

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operations for the year ended December 31, 2021.

As of December 31, 2021, the Company has recorded $ 215,171 and is included in accounts

payable and accrued expenses on the consolidated balance sheet presented herein.

know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding

or pending litigation.

There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial

shareholder, is an adverse party or has a material interest adverse to our interest.

As of December 31, 2022, and 2021, the Company has recorded $ 230,054 and $ 215,171 , respectively,

and is included in accounts payable and accrued expenses on the consolidated balance sheet presented herein.

know of no material, existing or pending legal proceedings against our Company.

are involved as a plaintiff in a Complaint filed in the SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO NORTH

COUNTY (the “Complaint”) on November 14, 2022 .

The Complaint alleges that former employees would place an order

from a customer for purchase of product from OZOP with funds the exact source of which is presently unknown.

OZOP alleges that next,

the customer would sell that product to OZOP’s customers at a price marked up from the price for which the customer purchased from

OZOP – to the benefit of Defendants and to the detriment of OZOP, their employer at the time.

The Complaint further alleges that

the former employees falsely represented that the price the customer was obtaining from other suppliers and therefore was willing to

pay for OZOP product decreased, which allowed them to use the customer to then sell additional product to OZOP’s customers at increasingly

larger margins, thus further wrongfully enriching themselves to the detriment of their employer, OZOP.

The lawsuit also alleges that

the employees were also making false statements to Ozop’s customers regarding the financial condition of Ozop and the lack of module

are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse

party or has a material interest adverse to our interest.

11– STOCKHOLDERS’ EQUITY

the year ended December 31, 2022, the Company issued 148,912,372 shares of common stock and received net proceeds of $ 1,141,514 after

issuance costs of $ 35,822 .

The Company also issued 5,000,000 shares of restricted common stock in the aggregate for services.

the period from January 1, 2021, to December 31, 2021, holders of an aggregate of $ 760,550 in principal and $ 201,905 of accrued interest

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the year ended December 31, 2021, the Company also issued the following shares of restricted common stock:

shares of restricted common stock pursuant to a lease agreement (see Note 10).

shares of restricted common stock pursuant to a lease agreement.

shares of restricted common stock pursuant to restructuring agreement related to a deferred liability (see Note 8).

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As of December 31, 2022, and 2021,

there were 2,500 and 50,000 shares, respectively, of Series C Preferred Stock issued and outstanding, of which 2,500 shares are held

there were 2,500 shares of Series C Preferred Stock issued and outstanding and the shares are held by Mr.

D Preferred Stock

July 7, 2020, the Company filed a Certificate of Designation with the State of Nevada of the Company’s Series D Preferred Stock.

Under the terms of the Certificate of Designation of Series D Preferred Stock, 20,000 shares of the Company’s preferred stock have

been designated as Series D Convertible Preferred Stock.

The holders of the Series D Convertible Preferred Stock shall not be entitled

to receive dividends.

The holders as a group may, at any time convert all of the shares of Series D Convertible Preferred Stock into

a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares

of common stock of the Company on the date of conversion, by 3.

Except as provided in the Certificate of Designation or as otherwise

required by law, no holder of the Series D Convertible Preferred Stock shall be entitled to vote on any matter submitted to the shareholders

of the Company for their vote, waiver, release or other action.

The Series D Convertible Preferred Stock shall not bear any liquidation

On July 10, 2020, pursuant to the SPA with PCTI, the Company issued 18,667 shares of Series D preferred Stock to Chis, and on

August 28, 2020, pursuant to Mr.

Conway’s employment agreement, the Company issued 1,333 shares of Series D Preferred Stock to

Accordingly, on August 28, 2020, Mr.

Conway owned 6.67 % of the issued and outstanding Series D Preferred Stock, and based

on the 3,107,037,634 shares outstanding on August 28, 2020, Mr.

Conway’s Preferred Stock was convertible into 621,253,401 shares

of common stock.

Based on the share price of the common stock on that date of $ 0.0065 , the shares were valued at $ 4,286,648 .

13, 2021, the Company purchased 18,667 shares of the Company’s Series D Preferred Stock held by Chis (see Note 11).

On July 10, 2020, pursuant to the SPA with PCTI, the Company issued 18,667 shares of Series D preferred Stock to Chis, and on August

28, 2020, pursuant to Mr.

Conway’s employment agreement, the Company issued 1,333 shares of Series D Preferred Stock to Mr.

On July 13, 2021, the Company purchased 18,667 shares of the Company’s Series D Preferred Stock held by Chis (see Note 9).

July 27, 2021, the Company filed with the Secretary of State of the State of Nevada an Amended and Restated Certificate of Designation

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held by such holder into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued

and outstanding shares of common stock of the Company on the date of conversion, by 1.5 and dividing that number by the number of shares

of Series D Convertible Preferred Stock being converted.

Except as provided in the Series D Amendment or as otherwise required by law,

no holder of the Series D Convertible Preferred Stock shall be entitled to vote on any matter submitted to the shareholders of the Company

for their vote, waiver, release or other action.

and outstanding shares of common stock of the Company on the date of conversion, by 1.5 and dividing that number by the number of authorized

shares of Series D Convertible Preferred Stock and multiply that result by the number of shares of Series D Convertible Preferred Stock

being converted.

Except as provided in the Series D Amendment or as otherwise required by law, no holder of the Series D Convertible

Preferred Stock shall be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release

or other action.

The Series D Convertible Preferred Stock shall not bear any liquidation rights.

28, 2021, the Company closed on a Stock and Warrant Purchase Agreement (the “Series D SPA”).

Pursuant to the terms of Series

D SPA, an investor in exchange for $ 13,200,000 purchased one share of Series D Preferred Stock, and a warrant to acquire 3,236 shares

of Series D Preferred Stock.

As of December 31, 2021, and 2020, there were 1,334 and 20,000 shares, respectively, of Series D Preferred

Stock issued and outstanding and warrants to purchase 3,236 shares of Series D Preferred Stock are outstanding as of December 31, 2021.

On July 28, 2021, the Company closed

on a Stock and Warrant Purchase Agreement (the “Series D SPA”).

Pursuant to the terms of Series D SPA, an investor in exchange

for $ 13,200,000 purchased one share of Series D Preferred Stock, and a warrant to acquire 3,236 shares of Series D Preferred Stock.

of December 31, 2022, and 2021, there were 1,334 shares, respectively, of Series D Preferred Stock issued and outstanding and a warrant

to purchase 3,236 shares of Series D Preferred Stock are outstanding as of December 31, 2022, and 2021.

warrant has a 15- year term and Partial Warrant Lock Up and Leak-Out Period.

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Shares as follows:

to 162 (one hundred and sixty-two) Warrant Shares, at any time or times on or after the Initial Exercise Date and no later than on

or before the Termination Date;

to 162 (one hundred and sixty-two) Warrant Shares, at any time or times on or after five (5) business days from the closing of the

Series D SPA (“the Initial Exercise Date”) subject to up to a maximum number of Warrant Shares that, if converted, would

be equal to no more than a maximum of 4.99% of the total number of outstanding shares of Common Stock of the Company and no later

than on or before the 15 th year anniversary of the Initial Exercise Date (“the Termination Date”);

Remainder of the Warrant representing up to 3,074 (three thousand and seventy-four) Warrant Shares (“Remaining Warrant Shares”)

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the Remainder of the Warrant up to a maximum number of Remaining Warrant Shares that, if converted, would be equal to no more than

a maximum of 5% (five percent) of the total number of outstanding shares of Common Stock of the Company during such given year (“Leak-Out

a maximum of 4.99% of the total number of outstanding shares of Common Stock of the Company during such given year (“Leak-Out

The Leak-Out Period shall come into effect on the day that is the Lock Up Period Termination Date and remain effective

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of Designation of the Series E Preferred Stock, including the redemption value of $ 1,000 per share, the Company recorded $ 2,000,000 as

stock-based compensation expense for year ended December 31, 2021.

On March 24, 2021, the Company redeemed the 3,000 shares of Series

E Preferred Stock outstanding on that date.

On April 16, 2021, the BOD authorized the issuance of 2,000 shares of Series E Preferred

stock, of which 1,050 were granted to Mr.

stock-based compensation expense for expense for the year ended December 31, 2021.

On March 24, 2021, the Company redeemed the 3,000

shares of Series E Preferred Stock outstanding on that date.

On April 16, 2021, the BOD authorized the issuance of 2,000 shares of Series

E Preferred stock, of which 1,050 were granted to Mr.

The issuances were for services performed.

Pursuant to the terms and conditions of

the Certificate of Designation of the Series E Preferred Stock, including the redemption value of $ 1,000 per share, the Company recorded

Pursuant to the terms and conditions

of the Certificate of Designation of the Series E Preferred Stock, including the redemption value of $ 1,000 per share, the Company recorded

$ 2,000,000 as stock-based compensation expense for the year ended December 31, 2021.

As of December 31, 2022, and 2021, there were - 0 -

and 1,000 shares of Series E Preferred Stock issued and outstanding, respectively.

shares of Series E Preferred Stock issued and outstanding, respectively.

12 – NONCONTROLLING INTEREST

August 19, 2021, the Company formed Ozop Capital.

Upon formation, the Company owned 51 % with PJN owning 49 %.

Brian Conway was appointed

as the sole officer and director of Ozop Capital and has voting control of Ozop Capital.

The Company presents interest held by noncontrolling

interest holders within noncontrolling interest in the consolidated financial statements.

During the year ended December 31, 2021, there

was no change in the ownership percentages.

For the year ended December 31, 2021, Ozop Capital incurred a loss of $ 520,623 , of which

$ 255,105 is the loss attributed to the noncontrolling interest.

The Company initially owned 51 % with PJN Holdings, LLC (“PJN”) owning 49 %.

Brian Conway was appointed as the sole officer and director of Ozop Capital and has voting control of Ozop Capital.

The Company presents

interest held by noncontrolling interest holders within noncontrolling interest in the consolidated financial statements.

13, 2022, there was a change in the ownership percentages, as PJN returned 490,000 shares, representing their 49 % ownership.

date, Ozop Capital is a wholly owned subsidiary of the Company.

For the year ended December 31, 2022, Ozop Capital incurred losses of

$ 1,217,911 , of which $ 529,672 , is the loss attributed to the noncontrolling interest for the year ending December 31, 2022.

As of December

31, 2022, the accumulative noncontrolling interest is $ 784,777 .

13 - OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES

October 25, 2019, PCTI executed a non-cancellable lease for office and industrial space which began December 1, 2019 and expires on November

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the

lease commencement date.

The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 7.5 %,

as the interest rate implicit in most of our leases is not readily determinable.

Prior to July 10, 2020, PCTI recorded monthly lease

expense pursuant to the lease agreement and effective July 10, 2020, pursuant to the PCTI transaction, operating lease expense is recognized

pursuant to ASC Topic 842.

Leases (Topic 842) over the lease term.

During the years ended December 31, 2020, the Company recorded $ 84,278

for rent expense.

During the year ended December 31, 2020, upon adoption of ASC Topic 842, the Company recorded right-of-use assets and

lease liabilities of $ 185,139 for this lease.

April 14, 2021, the Company entered into a five -year lease which began on June 1, 2021, for approximately 8,100 square feet of office

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to be 7.5 %, as the interest rate implicit in most of our leases is not readily determinable.

During the six months ended June 1, 2021,

During the year ended December 31, 2021,

upon adoption of ASC Topic 842, the Company recorded right-of-use assets and lease liabilities of $ 702,888 for this lease.

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use assets are summarized below:

OF RIGHT-OF-USE ASSETS

SCHEDULE OF RIGHT-OF-USE ASSETS

December 31, 2022

December 31, 2021

Office and warehouse lease

Less accumulated amortization

Right-of-us assets, net

Accumulated amortization

Right-of-use assets, net

lease liabilities are summarized as follows:

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December 31, 2022

December 31, 2021

Lease liability

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For the year ended December 31, 2026

present value discount

Lease liability

14 – DISCONTINUED OPERATIONS

September 1, 2022, the BOD of the Company authorized the filing of a Chapter 7 proceeding (see Note 2) which meets the definition of

a discontinued operation.

Accordingly, the operating results of PCTI are reported as a loss from discontinued operations in the accompanying

consolidated financial statements for the years ended December 31, 2022, and 2021.

On October 3, 2022, PCTI filed a Voluntary Petition

for Non- Individuals Filing for Bankruptcy.

On November 30, 2022, the Trustee filed a Notice of Abandonment of Estate Property, as it

is over encumbered by the secured creditors.

No objections were filed, and as such the inventory and equipment is now considered abandoned

to the secured creditors to do with what they wish.

In March 2023, the Trustee declared this a no-asset case and closed the bankruptcy.

results of operations of this component, for all periods, are separately reported as “discontinued operations”.

A reconciliation

of the major classes of line items constituting the loss from discontinued operations, net of income taxes as is presented in the Consolidated

Statements of Comprehensive Loss for the years ended December 31, 2022, and 2021 are summarized below:

SCHEDULE OF LOSS FROM DISCONTINUED OPERATIONS

ended December

of goods sold

on disposal of assets

from discontinued operations

$ ( 655,745 )

$ ( 233,837 )

assets and liabilities of discontinued operations are separately reported as “assets and liabilities held for disposal” as

of December 31, 2022, and 2021.

All asset and liabilities are classified as current, as the Company expects the liquidation to occur

in the short-term.

The following tables present the reconciliation of carrying amounts of major classes of assets and liabilities of

the Company classified as discontinued operations in the consolidated balance sheet at December 31, 2022, and 2021:

ended December

expenses and other assets

assets of discontinued operations

ended December

payable and accrued liabilities

portion of notes payable

lease liability

from customers

current liabilities of discontinued operations

May 16, 2022, Huntington National Bank (“Huntington”) filed a Complaint for Confession of Judgment (“COJ”) against

Catherine Chis (“Chis”).

Chis was the former CEO of PCTI and a Guarantor on Huntington’s Letter of Credit financing

(“LOC”) and a Term Loan (“Term Loan”).

The Chis COJ for the LOC was for $ 352,415 and accrues per diem interest

of $ 63.65 , and the Chis COJ for the Term Loan was for $ 141,415 and accrues per diem interest of $ 28.60 .

On June 24, 2022, Huntington

filed a COJ against Power Conversion Technologies, Inc (“PCTI”).

The PCTI COJ for the LOC was for $ 354,774 and accrues per

diem interest of $ 63.65 and the PCTI COJ for the LOC was for $ 142,473 and accrues per diem interest of $ 28.60 .

On July 20, 2022, Huntington

assigned the PCTI judgment against PCTI to Meraki Advisors, LLC.

The Company’s understanding is Meraki

is a Pennsylvania limited liability company, controlled by Chis.

Company wrote off the book value of the inventory of $ 237,091 and fixed assets of $ 15,447 during the year ended December 31, 2022, with

the offset to Loss on Disposal of Assets of Discontinued Operations.

Included in the Current portion of notes payable are the principal

balances of Huntington’s LOC of $ 344,166 and Term Loan of $ 134,681 .

Accrued interest and fees on the LOC and Term Loan debt $ 54,256

is included in accounts payable and accrued liabilities.

15 - INCOME TAXES

Company provides for income taxes under ASC 740, Accounting for Income Taxes.

ASC 740 requires the use of an asset and liability approach

in accounting for income taxes.

Deferred tax assets and liabilities are recorded based on the differences between the financial statement

and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

ASC 740 requires

the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely- than

not that some or all of the deferred tax assets will not be realized.

assessing the need for a valuation allowance, management must determine that there will be sufficient taxable income to allow for the

realization of deferred tax assets.

Based upon the historical and anticipated future income, management has determined that the deferred

tax assets do not meet the more-likely-than-not threshold for realizability.

Accordingly, there is a full valuation allowance provided

against the Company’s deferred tax assets as of December 31, 2022.

reconciliation of the provision for income taxes determined at the U.S.

statutory rate to the Company’s effective income tax rate

is as follows:

SCHEDULE OF PROVISION FOR INCOME TAXES

Year Ended December 31,

Pre-tax income (loss)

$ ( 195,047,946 )

federal corporate income tax rate

Expected U.S.

income tax (credit)

( 40,960,069 )

Permanent differences

( 2,756,788 )

Change of valuation allowance

Effective tax expense

Company had deferred tax assets as follows:

SCHEDULE OF DEFERRED TAX ASSETS

December 30, 2022

December 30, 2021

Net operating losses carried forward

Valuation allowance

( 3,799,242 )

( 2,307,875 )

Net deferred tax assets

assessing the need for a valuation allowance, management must determine that there will be sufficient taxable income to allow for the

realization of deferred tax assets.

Based upon the historical and anticipated future income, management has determined that the deferred

tax assets meet the more-likely-than-not threshold for realizability.

Accordingly, a full valuation allowance has been recorded against

the Company’s deferred tax assets as of December 31, 2022.

of December 31, 2022, the Company has approximately $ 17,623,000 net operating loss carryforwards available to reduce future taxable income.

As of December 31, 2022, and 2021, the Company has no material unrecognized tax benefits which would favorably affect the effective income

tax rate in future periods, and does not believe that there will be any significant increases or decreases of unrecognized tax benefits

within the next twelve months.

No interest or penalties relating to income tax matters have been imposed on the Company during the years

ended December 31, 2022, and 2021, and no provision for interest and penalties is deemed necessary as of December 31, 2022, and 2021.

16 – SUBSEQUENT EVENTS

January 1, 2022, the Company entered into a new employment agreement with Mr.

Pursuant to the agreement, Mr.

Conway received

a $ 250,000 contract renewal bonus and will receive an annual compensation of $ 240,000

from the Company and will also be eligible to

receive bonuses and equity grants at the discretion of the BOD.

The Company also agreed to compensate Mr.

Conway for services provided

directly to any of the Company’s subsidiaries.

Ozop Capital began compensating Mr.

Conway $ 20,000

per month in January 2022 and OES began compensating

Conway $ 20,000

in March 2022.

February 25, 2022, the Company formed Ozop Engineering and Design, Inc.

(“OED”) a Nevada corporation, as a wholly owned subsidiary

of the Company.

OED was formed to become a premier engineering and lighting control design firm.

OED offers product and design support

for lighting and solar projects with a focus on fast lead times and technical support.

OED and our partners are able to offer the resources

needed for lighting, solar and electrical design projects.

OED will provide customers systems to coordinate the understanding of electrical

usage with the relationship between lighting design and lighting controls, by developing more efficient ecofriendly designs.

with architects, engineers, facility managers, electrical contractors and engineers.

April 4th, 2022, the Company and GHS Investments LLC (“GHS”).

signed a Securities Purchase Agreement (the “GHS Purchase

Agreement”) for the sale of up to Two Hundred Million ( 200,000,000 ) shares of the Company’s common stock to GHS.

sell shares of our common stock from time to time over a six (6)- month period ending October 4, 2022 , at our sole discretion, to GHS

under the GHS Purchase Agreement.

The purchase price shall be 85% of lowest VWAP for the ten (10) days preceding the Company’s

notice to GHS for the sale of the Company’s common stock.

On April 8, 2022, the Company filed a Prospectus Supplement to the Registration

Statement dated October 14, 2021, regarding the GHS Purchase Agreement.

January 1, 2023, through January 23, 2023, the Company sold GHS 51,087,628 shares of common stock for proceeds of $ 205,443 net of offering

These sales were under the February 23, 2022, GHS SPA.

As of January 23, 2023, the Company has sold in the aggregate the 200,000,000

shares of common stock registered in the April 4, 2022, GHS Securities Purchase Agreement.

January 18, 2023, the Company and GHS.

signed a Securities Purchase Agreement (the “2 nd GHS Purchase Agreement”)

for the sale of up to One Hundred Fifty Million ( 150,000,000 ) shares of the Company’s common stock to GHS.

The terms and conditions

of the 2 nd GHS Purchase Agreement are similar to the terms and conditions of the 1 st GHS Purchase Agreement.

of the date of this report the Company has sold GHS 63,698,905 shares of common stock for proceeds of $ 355,060 , net of offering costs.

February 22, 2023, with an effective date of March 1, 2023, the Company entered into a Sublease for a Single Subleasee Agreement (the

“Sublease”) with the landlord and a third party for the office and warehouse in Carlsbad California (see Note 13).

to the Sublease agreement, the third party will be responsible for all of the Company’s lease obligations through May 31, 2026 ,

the lease termination date.

The Company and the subleasee have agreed to work together regarding any existing Company inventory in the

Company has evaluated subsequent events through the date the financial statements were issued.

2 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures