VIVOS INC 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Disclosure Controls and Procedures Based on an evaluation as of the date of the end of the period covered by this report, the Company’s Chief Executive Officer and Interim Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, the Company’s Chief Executive Officer and Interim Chief Financial Officer concluded that, because of the disclosed material weaknesses in the Company’s internal control over financial reporting, the Company’s disclosure controls and procedures were ineffective as of the end of the period covered by this report to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and the Company’s Interim Chief Financial Officer, to allow timely decisions regarding required disclosure. Management’s Annual Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of the internal control over financial reporting as of December 31, 2021, using the criteria established in Internal Control – Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“ COSO ”). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As a result of management’s assessment, management has determined that there are material weaknesses due to the lack of segregation of duties and, due to the limited resources based on the size of the Company. Due to the material weaknesses management concluded that as of December 31, 2021, the Company’s internal control over financial reporting was ineffective. In order to address and resolve the weaknesses, the Company will endeavor to locate and appoint additional qualified personnel to the board of directors and pertinent officer positions as the Company’s financial means allow. To date, the Company’s limited financial resources have not allowed the Company to hire the additional personnel necessary to address the material weaknesses. Management’s Annual Report on Internal Control Over Financial Reporting This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report. 33 Changes in Internal Control Over Financial Reporting There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (a) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant; (b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and (c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements. ITEM 9B. OTHER INFORMATION. None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. The Company’s current directors and executive officers are as follows: NAME AGE POSITION Michael K. Korenko 75 President, Chief Executive Officer, and Director Michael Pollack 55 Interim Chief Financial Officer Carlton M. Cadwell 77 Chairman of the Board and Secretary Term of Office All the Company’s directors hold office until the next annual meeting of the stockholders or until their successors is elected and qualified. The Company’s executive officers are appointed by the Company’s board of directors and hold office until their resignation, removal, death or retirement. Background and Business Experience The business experience during the past five years of each of the Company’s directors and executive officers is as follows: Dr. Michael K. Korenko , President and Chief Executive Officer of the Company since December 2016, and a member of the Board of Directors since August 2017, joined the Company as an Advisor to the Board of the Company during 2009 and served as member of the Board from May 2009 to March 2010. Dr. Korenko has also served on the Hanford Advisory Board since 2009. Dr. Korenko served as Business Development Manager for Curtiss-Wright from 2006 to 2009, as Chief Operating Officer for Curtiss-Wright from 2000 to 2005 and was Executive Vice President of Closure for Safe Sites of Colorado at Rocky Flats from 1994 to 2000. Dr. Korenko served as Vice President of Westinghouse from 1987 to 1994 and was responsible for the 300 and 400 areas, including the Fast Flux Testing Facility (“ FFTF ”) and all engineering, safety analysis, and projects for the Hanford site. 34 Dr. Korenko is the author of 28 patents and has received many awards, including the National Energy Resources Organization Research and Development Award, the U.S. Steelworkers Award for Excellence in Promoting Safety, and the Westinghouse Total Quality Award for Performance Manager of the Year. Dr. Korenko has a Doctor of Science from MIT, was a NATO Postdoctoral Fellow at Oxford University, and was selected as a White House Fellow for the Department of Defense, reporting to Secretary Cap Weinberger. Dr. Korenko brings to the Board over seven years’ experience working with and advising various small businesses, including companies involved in turnarounds. Dr. Korenko has also been involved as an advisor to the Company since 2009 in the development of medical isotopes. Carlton M. Cadwell , Chairman of the Board and Secretary since December 2016, joined the Company as a director in 2006. Dr. Cadwell brings over 30 years of experience in business management, strategic planning, and implementation. He co-founded Cadwell Laboratories, Inc. in 1979 and has served as its President since its inception. Cadwell Laboratories, Inc. is a major international provider of neurodiagnostic medical devices. After receiving his bachelor’s degree from the University of Oregon in 1966 and a doctoral degree from the University of Washington in 1970, he began his career serving in the United States Army as a dentist for three years. From 1973 to 1980, Dr. Cadwell practiced dentistry in private practice and since has started several businesses. Mr. Cadwell brings to the Board over ten years of service on the Board and over forty-five years of experience as a successful entrepreneur, as well as medical expertise. Michael Pollack CPA, the Interim Chief Financial Officer, joined the Company as interim Chief Financial Officer in December 2018. Mr. Pollack has been a partner in a certified public accounting firm for the past fifteen years and specializes in accounting and auditing for small public companies. Mr. Pollack has approximately 30 years of experience in public accounting and consulting to over 100 publicly traded and 250 private companies. Mr. Pollack has also held CFO and Controller positions in an array of industries. Mr. Pollack graduated from the University of Maryland with a Bachelor of Arts in Economics. Mr. Pollack is a member of the American Institute of Certified Public Accountants, as well as licensed to practice in New Jersey, and New York. Identification of Significant Consultants David J. Swanberg, M.S., P.E. Mr. Swanberg has over 30 years’ experience in radiochemical processing, medical isotope production, nuclear waste management, materials science, regulatory affairs, and project management. Mr. Swanberg has worked in diverse organizations ranging from small start-up businesses to corporations with multi-billion dollar annual revenues. From 2005 to 2008, he served as Executive Vice President of Operations and as a member of the Board of Directors for IsoRay Medical Inc. from 2005 to 2008 managing day-to-day operations, R&D, and New Product Development. Mr. Swanberg was a co-founder of IsoRay and led the initial Cs-131 brachytherapy seed product development, FDA 510(k) submission/clearance, and NRC Sealed Source review and registration. Mr. Swanberg led the radiation dosimetry evaluations to meet American Association of Physicists in Medicine guidelines and is a current member of the AAPM. Mr. Swanberg and participated in several capital financing rounds totaling over $30.0 million. Mr. Swanberg also served as Assistant General Manager of IsoRay LLC from 2000 to 2003, and in additionally in key management roles as IsoRay transitioned from IsoRay LLC to IsoRay Medical, Inc. Mr. Swanberg holds a BA in Chemistry from Bethel University (MN) and an MS in Chemical Engineering from Montana State University. Mr. Swanberg has numerous technical publications and holds several patents. Medical and Veterinarian Advisory Boards Dr. Barry D. Pressman MD, FACR - Chairman Medical Advisory Board. Dr. Pressman is Professor and Chairman of the S. Mark Taper Foundation Imaging Centre and Department, and Chief of the Section of Neuroradiology and Head and Neck Radiology at Cedars-Sinai Medical Center , located in Los Angeles, California. Dr. Pressman is a past President of The American College of Radiology, the Western Neuroradiological Society, as well as past President of the California Radiological Society. Currently he is a member of the American Society of Neuroradiology and the American Society of Pediatric Neuroradiology. 35 Dr. Pressman earned his medical degree Cum Laude from Harvard Medical School after graduating Summa Cum Laude from Dartmouth College. After a surgical internship at Harvard’s Peter Bent Brigham Hospital in Boston, he completed a diagnostic radiology residency at Columbia-Presbyterian Medical Center in New York and a Neuroradiology fellowship at George Washington University Hospital. During this period, he wrote many original papers for Computer Tomography (CT). Dr. Albert S. DeNittis MD, MS, FCPP - Medical Advisory Board. Dr. Albert S. DeNittis is currently is the Chief of Radiation Oncology at Lankenau Medical Center and Clinical Professor at Lankenau Institute for Medical Research in Wynnewood, Pennsylvania and the Director of Radiation Oncology at Brodesseur Cancer Center in New Jersey. He is also the Principal Investigator and in charge of a grant awarded by the NIH for its National Cancer Oncology Research Program (NCORP) at Main Line Health. Dr. DeNittis’ practice experience includes image-guided radiosurgery, stereotactic body radiation therapy (SBRT), intensity modulated radiation therapy (IMRT), image guided radiation therapy (IGRT), high-dose rate (HDR) brachytherapy, cranial and extracranial stereotactic radiosurgery, respiratory gating, and Cyberknife. Dr. DeNittis has served on numerous regional, national and government committees related to key issues in Dr. DeNittis earned a BA and a MS at Rutgers University and a MD from the Robert Wood Johnson Medical School at the University of Medicine and Dentistry of New Jersey. He completed postdoctoral training internships and residency at the Department of Radiation Oncology at the Hospital of the University of Pennsylvania. Dr. DeNittis is board certified by the American Board of Radiology and Licensed in New Jersey and Pennsylvania. Dr. Alice Villalobos, DVM, FNAP - Chair of the Veterinary Medicine Advisory Board. Dr. Alice Villalobos is a well-known pioneer in the field of cancer care for companion animals and a founding member of the Veterinary Cancer Society. A 1972 graduate of UC Davis, she completed Dr. Gordon Theilen’s first mock residency program in oncology and has served the profession by consulting, writing and lecturing in the rapidly growing field of veterinary oncology and end of life care. Dr. Alice Villalobos is President Emeritus of the Society for Veterinary Medical Ethics, Past President of the American Association of Human Animal Bond Veterinarians and Chair of the Veterinary Academy for the National Academies of Practice. She operated Coast Pet Clinic/Animal Cancer Center for 25 years, which is now VCA Coast Animal Hospital. She is the author of numerous articles, papers, and including her classic veterinarian textbook, Canine and Feline Geriatric Oncology: Honoring the Human-Animal Bond. She has lectured worldwide on oncology, quality of life, the human-animal bond and end of life care and bioethics. She founded Pawspice, an end of life care program that embraces kinder, gentler palliative cancer medicine and integrative care for pets with cancer and terminal illness (www.Pawspice.com). Dr. Alice is Director of Animal Oncology Consultation Service in Woodland Hill, California and Pawspice at VCA Coast Animal Hospital in Hermosa Beach, California. Dr. Alice was elected 2016 Hermosa Beach Woman of the Year. Dr. Villalobos’ role with the Company is to support the commercialization of the Company’s yttrium-90 brachytherapy products for use in companion animals. Dr. Richard Weller, DVM, DACVIM (Internal Medicine; Oncology) DipMS - Veterinary Medicine Advisory Board Member . Prior to his retirement in 2014, Dr. Weller was a Senior Program Manager in the Radiation Biology Group of the Biological Sciences Division at Pacific Northwest National Laboratory (PNNL), where he was involved in the development of RadioGel. A 1973 graduate of Washington State University. Dr. Weller has extensive experience in designing and executing clinical studies, treatment planning, mechanisms of carcinogenesis, radiation biology, targeted delivery systems for chemotherapeutic and radio-therapeutic agents, bio-markers of disease, and comparative oncology; as well as over 30 years of experience developing and using animal models, including the use of spontaneous tumors in companion animals, for bio-medical applications. Dr. Weller is board-certified by the American College of Veterinary Internal Medicine in Internal Medicine (1980) and Oncology (1987), Past Chairperson of the Organizing Committee for the Specialty of Veterinary Medical Oncology, Past Chairperson of the Board of Regents of the American College of Veterinary Internal Medicine, Past President of the Board of Regents of the American College of Veterinary Internal Medicine, Past President of the Specialty of Oncology, and a Charter Member of the Veterinary Cancer Society which he served as Treasurer for 16 years. He is an Honorary Professor of the Institute of Veterinary Medicine in Kyiv, Ukraine. Dr. Weller has lectured and trained veterinarians worldwide and has authored or co-authored over 250 articles, technical reports, book chapters, and presentations in his fields of expertise. 36 Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers, directors and persons who own more than 10% of the Company’s common stock to file with the SEC initial reports of beneficial ownership on Form 3, changes in beneficial ownership on Form 4, and an annual statement of beneficial ownership on Form 5. Such executive officers, directors and greater than 10% stockholders are required by SEC rules to furnish the Company with copies of all such forms that they have filed. Based solely on its review of such forms filed with the SEC and received by the Company and representations from certain reporting persons, the Company believes that all reports required to be filed by each of each of its executive officers, directors and 10% stockholders were filed during the year ended December 31, 2021 and that such reports were timely. Code of Ethics The Company’s Board of Directors has not adopted a code of ethics that applies to the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, because of the Company’s limited number of executive officers and employees that would be covered by such a code and the Company’s limited financial resources. The Company anticipates that it will adopt a code of ethics after it increases the number of executive officers and employees and obtain additional financial resources. Audit Committee and Audit Committee Financial Expert As of the date of this report, the Company has not established an audit committee, and therefore, the Company’s full board of directors performs the functions that customarily would be undertaken by an audit committee. The Company’s board of directors during 2021 and 2020 was comprised of two directors, one of whom the Company had determined satisfied the general independence standards of the NASDAQ listing requirements. The Company’s Board of Directors has determined that none of its current members qualifies as an “audit committee financial expert,” as defined by the rules of the SEC. In the future, the Company intends to establish board committees and to appoint such persons to those committees as are necessary to meet the corporate governance requirements imposed by a national securities exchange, although it is not required to comply with such requirements until the Company elects to seek listing on a national securities exchange. Board of Directors; Attendance at Meetings The Board held two meetings and acted by unanimous written consent two times during the year ended December 31, 2020. Each director attended both Board meetings during the year ended December 31, 2020. In 2021, we conducted no board of director meetings. We have no formal policy with respect to the attendance of Board members at annual meetings of shareholders but encourage all incumbent directors and director nominees to attend each annual meeting of shareholders. ITEM 11. EXECUTIVE COMPENSATION. Summary Compensation Table The following table sets forth the compensation paid to the Company’s Chief Executive Officer and those executive officers that earned in excess of $100,000 during the year ended December 31, 2021 (collectively, the “ Named Executive Officers ”): Name and Principal Position (1) Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) (2) Total ($) Dr. Michael K. Korenko 2021 $ 232,500 (3) $ 30,000 $ - $ - $ 262,500 CEO, President and Director 2020 $ 120,086 (3) $ 98,165 $ - $ - $ 218,251 37 (1) Michael Pollack began serving as the Company’s Interim Chief Financial Officer in December 2018 and was paid no compensation directly in 2020 or 2021. Accordingly, he has not been included in this table. (2) The amounts in this column represent the grant date fair value of stock option awards, computed in accordance with FASB ASC Topic 718. (3) Of the $120,000 due Mr. Korenko for 2019, $69,914 is accrued for as of December 31, 2020, and as of December 31, 2021, the Company has no accrued compensation to Mr. Korenko. Narrative Disclosure to Summary Compensation Table Dr. Michael K. Korenko. On October 24, 2018, Mr. Korenko entered into an employment agreement with the Company (the “ Old Employment Agreement ”), which was scheduled to terminate on December 31, 2019. On June 4, 2019, Mr. Korenko and the Company entered into a new employment agreement, effective June 11, 2019, which shall terminate on December 31, 2020 and December 31 of subsequent years (the “ Termination Date ”) if the agreement is extended pursuant to its terms. Under the terms of his employment agreement, the Company may terminate Dr. Korenko’s employment either with or without cause prior to the Termination Date, but in the event of a termination without cause, Dr. Korenko shall be entitled to receive monthly payments of his base salary for a period of six months thereafter, all of Dr. Korenko’s outstanding options, if any, shall vest, and Dr. Korenko shall be entitled to receive all past due compensation within three weeks of the date of termination. The employment agreement automatically renewed for another year through December 31, 2021. The Company shall pay to Dr. Korenko an annual base compensation of $180,000, which is payable in equal monthly intervals. Of the $180,000 in annual base salary, $60,000 of annual pay shall be deferred and accrued until the Company’s cash balance exceeds $1,000,000, which occurred in December 2020. Dr. Korenko’s employment agreement provides that he shall receive a stock option grant issued under the Company’s 2015 Omnibus Securities and Incentive Plan in an amount equal to 21 million options ten days after the Company’s 1-for-8 reverse split, which was consummated in late June 2019. The options shall have a seven-year term, shall be exercisable at a price of $0.024 per share, and shall vest as follows: 50% shall vest in equal amounts at the end of each quarter for the two quarters after grant date, 25% shall vest upon the Company filing for a patent, and the remaining 25% shall vest upon the first commercial sale of IsoPet. In December 2020, Mr. Korenko exercised 2,500,000 of these options for $60,000. The Company paid bonuses to certain employees based on their performance, the Company’s need to retain such employees, and funds available. All bonus payments were approved by the Company’s Board of Directors. On June 4, 2019, the Company entered into an Executive Employment Agreement (“Employment Agreement”) with Dr. Michael K. Korenko, the Company’s Chief Executive Officer. The employment term under the Employment Agreement commenced with an effective date of June 11, 2019 and expires on December 31, 2020, and December 31 of each successive year if the Employment Agreement is extended, unless terminated earlier as set forth in the Employment Agreement. The Company on December 31, 2020 extended this agreement through December 31, 2021 while renegotiating terms of a new Employment Agreement. On May 3, 2021, the Company and the Chief Executive Officer agreed the terms of a new Employment Agreement with an effective date of January 1, 2021 that has a term of three years and expires December 31, 2023. Under the terms of the Employment Agreement, the Company shall pay to Dr. Korenko a base compensation of $225,000. In addition, there is a discretionary bonus to be earned in the amount of $7,500 per quarter upon the satisfaction of conditions to be determined by the Board of Directors of the Company. 38 Outstanding Equity Awards at Fiscal Year-End Table The following table sets forth all outstanding equity awards held by the Company’s Named Executive Officers as of the end of last fiscal year. Option Awards Name Number of Securities Underlying Unexercised Options(#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Exercise Date NONE Compensation of Directors During the year ended December 31, 2021, the Company’s non-employee directors were not paid any compensation. The following table sets forth, for each of the Company’s non-employee directors who served during 2021, the aggregate number of stock awards and the aggregate number of stock option awards that were outstanding as of December 31, 2021: Outstanding Outstanding Stock Stock Name Awards (#) Options (#) Carlton M. Cadwell - - During June 2016, the Company granted to Mr. Cadwell options to purchase 12,500 shares of common stock at an exercise price of $8.00 per share, which options expired June 21, 2019. These options had a grant date fair value of $34,771, which amounts were calculated in accordance with ASC Topic 718. Additionally, the Company granted warrants to purchase 6,425,503 shares of Company common stock to Carlton Cadwell in 2018 as a result of the Path Forward Agreements and conversion of his advances to the Company. These warrants expired in October 2020. There are no employment contracts or compensatory plans or arrangements with respect to any director that would result in payments by the Company to such person because of his or her resignation as a director or any change in control of the Company. Compensation Committee Interlocks and Insider Participation None of our officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more officers serving as a member of our board of directors. 39 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Beneficial Ownership of the Company’s Common Stock The following table sets forth, as of March 1, 2022, the number of shares of common stock beneficially owned by the following persons: (i) all persons the Company knows to be beneficial owners of at least 5% of the Company’s common stock, (ii) the Company’s current directors, (iii) the Company’s current executive officers, and (iv) all current directors and executive officers as a group. As of March 1, 2022, there were 343,530,678 shares of common stock outstanding and up to 69,287,379 shares issuable upon exercise of common stock equivalents, assuming exercise and conversion occurred as of that date, for a total of 412,818,057 shares. Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership (2) Percent of Class Cadwell Family Irrevocable Trust 26,912 * % Carlton M. Cadwell (3) 15,406,979 3.73 % Michael K. Korenko (4) 9.461,374 2.29 % Michael Pollack 16,000 * All Current Directors and Executive Officers as a group (3 individuals) 24,895,265 6.02 % *Less than 1% (1) The address of each of the beneficial owners above is c/o Vivos Inc, 719 Jadwin Avenue, Richland, WA 99336, except that the address of the Cadwell Family Irrevocable Trust (the “ Cadwell Trust ”) is 909 North Kellogg Street, Kennewick, WA 99336. (2) In determining beneficial ownership of the Company’s common stock as of a given date, the number of shares shown includes shares of common stock which may be acquired upon exercise of the common stock equivalents within 60 days of that date. In determining the percent of common stock owned by a person or entity on March __, 2022, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days on exercise of the common stock equivalents, and (b) the denominator is the sum of (i) the total shares of common stock outstanding on March __, 2022, and (ii) the total number of shares that the beneficial owner may acquire upon conversion of the common stock equivalents. Subject to community property laws where applicable, the Company believes that each beneficial owner has sole power to vote and dispose of its shares, except that under the terms of the Cadwell Trust, Dr. Cadwell does not have or share voting or investment power over the shares beneficially owned by the Cadwell Trust. (3) Includes 1,136,137 shares issuable upon conversion of Series A Preferred; and 4,816,275 shares issuable upon conversion of Series C Preferred, and 2,316,830 shares of common stock issued to AMIC Gift, LLC, an LLC controlled by Carlton and his wife. (4) Includes 75,000 shares issuable upon exercise of warrants. 40 Beneficial Ownership of the Company’s Series A Convertible Preferred Stock As of March 1, 2022, there were 2,071,007 shares of Series A Preferred issued and outstanding, convertible into 2,588,758 shares of the Company’s common stock. The following table sets forth, as of March 1, 2022, the number of shares of Series A Preferred beneficially owned by the following persons: (i) all persons the Company known to be beneficial owners of at least 5% of the Company’s Series A Preferred, (ii) the Company’s current directors, (iii) the Company’s current executive officers, and (iv) all current directors and executive officers as a group. Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership (2) Percent of Class Cadwell Family Irrevocable Trust 148,309 7.16 % Carlton M. Cadwell 908,910 43.89 % Michael K. Korenko - - % All Current Directors and Executive Officers as a group (2 individuals) (3) 1,057,219 51.05 % Major Shareholder(s): L. Bruce Jolliff 197,979 9.56 % Stoel Rives 133,333 6.44 % (1) The address of each of the beneficial owners above is c/o Vivos Inc, 719 Jadwin Avenue, Richland, WA 99336, except that the address of (i) the Cadwell Family Irrevocable Trust (the “ Cadwell Trust ”) is 909 North Kellogg Street, Kennewick, WA 99336; (ii) L. Bruce Jolliff is 206 N 41st St. Unit 1, Yakima, WA 98901; and (iii) Stoel Rives is One Union Square, 600 University Street, Suite 3600, Seattle, WA 98101. (2) Subject to community property laws where applicable, the Company believes that each beneficial owner has sole power to vote and dispose of its shares, except that Dr. Cadwell under the terms of the Cadwell Trust does not have or share voting or investment power over the Series A Convertible Preferred beneficially owned by the Cadwell Trust. (3) Michael Pollack, the Company’s Interim Chief Financial Officer, does not hold any Company Series A Convertible Preferred, and has therefore been omitted from this table. 41 Beneficial Ownership of the Company’s Series B Convertible Preferred Stock As of March 1, 2022, there were 200,363 shares of Series B Preferred issued and outstanding, convertible into 2,504.538 shares of the Company’s common stock. The following table sets forth, as of March 1, 2022, the number of shares of Series B Preferred beneficially owned by the following persons: (i) all persons the Company known to be beneficial owners of at least 5% of the Company’s Series B Preferred, (ii) the Company’s current directors, (iii) the Company’s current executive officers, and (iv) all current directors and executive officers as a group. Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership (2) Percent of Class All Current Directors and Executive Officers as a group (3 individuals) - * % Major Shareholder(s): Jason Adelman (3) 200,000 99 % *Less than 1% (1) None of the Company’s directors and executive officers hold any shares of the Company’s Series B Convertible Preferred, and they have therefore been omitted from this table. The address of the beneficial owners is as follows: (i) Jason Adelman (JTA Resources LLC. is 40 East 66th St., New York, NY 10065. (2) Subject to community property laws where applicable, the Company believes that each beneficial owner has sole power to vote and dispose of its shares. (3) Represents 200,000 shares of Series B Preferred held by JTA Resources LLC. Beneficial Ownership of the Company’s Series C Convertible Preferred Stock As of March 1, 2022, there were 385,302 shares of Series C Preferred issued and outstanding, convertible into 4,816,275 shares of the Company’s common stock. The following table sets forth, as of March 1, 2022, the number of shares of Series C Preferred beneficially owned by the following persons: (i) all persons the Company known to be beneficial owners of at least 5% of the Company’s Series C Preferred, (ii) the Company’s current directors, (iii) the Company’s current executive officers, and (iv) all current directors and executive officers as a group. Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership (2) Percent of Class Carlton M. Cadwell 385,302 100 % All Current Directors and Executive Officers as a group (3 individuals) (3) 385,302 100 % 42 (1) The address of each of the beneficial owners above is c/o Vivos Inc, 719 Jadwin Avenue, Richland, WA 99336., (2) Subject to community property laws where applicable, the Company believes that each beneficial owner has sole power to vote and dispose of its shares, except that Dr. Cadwell under the terms of the Cadwell Trust does not have or share voting or investment power over the Series C Preferred beneficially owned by the Cadwell Trust. (3) Neither Michael Korenko, the Company’s Chief Executive Officer, nor Michael Pollack, the Company’s Interim Chief Financial Officer, hold any shares of the Company’s Series C Preferred, and they have therefore been omitted from this table. Changes in Control The Company does not know of any arrangements, including any pledges of the Company’s securities that may result in a change in control of the Company. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. Indebtedness from Related Parties On January 24, 2019, the Company entered into a note payable with a trust related to Mr. Cadwell in the amount of $60,000. The note is for a one-year period maturing January 24, 2020 and bears interest at an annual rate of 8.0%. This note was converted into shares of common stock in December 2021. 43 On March 27, 2019 the Company entered into a note payable with a trust related to Mr. Cadwell in the amount of $48,000. The note is for a one-year period maturing March 27, 2020 and bears interest at an annual rate of 8.0%. This note was repaid in December 2021. On April 29, 2019, the Company entered into a note payable with a trust related to Mr. Cadwell in the amount of $29,000. The note is for a one-year period maturing April 29, 2020 and bears interest at an annual rate of 8.0%. This note was repaid in December 2021. On May 20, 2019 and May 23, 2019, Mr. Korenko advanced $20,000 collectively to the Company. Mr. Korenko is not charging interest on these amounts advanced and they are short-term advances, due on demand. Of this amount $5,000 was repaid and the balance of $15,000 was converted into a convertible note payable at an annual interest rate of 8% due January 15, 2020. This note was converted in April 2020. On July 5, 2019, the Company entered into a note payable with a trust related to Mr. Cadwell in the amount of $50,000. The note is for a one-year period maturing July 5, 2020 and bears interest at an annual rate of 8.0%. Of this amount, $23,000 was paid in December 2021, and the balance was converted into shares of common stock in December 2021. On November 25, 2019, the Company entered into a note payable with a trust related to Mr. Cadwell in the amount of $50,000. The note is for a one-year period maturing November 25, 2020 and bears interest at an annual rate of 8.0%. This note was converted into shares of common stock in December 2021. The Company borrowed $107,000 in the year ended December 31, 2020 from its CEO and repaid these amounts in full. Independent Directors The Company’s common stock is traded on the OTCQB Marketplace, which does not impose any independence requirements on the Board of Directors or the board committees of the companies whose stock is traded on that market. The Company has decided to adopt the independence standards of the Nasdaq listing rules in determining whether the Company’s directors are independent. Generally, under those rules a director does not qualify as an independent director if the director or a member of the director’s immediate family has had in the past three years certain relationships or affiliations with the Company, the Company’s auditors, or other companies that do business with the Company. The Company’s Board of Directors has determined that Mr. Cadwell is qualified as an independent director under those Nasdaq rules, and accordingly, would have been qualified under those rules to serve on a compensation committee or a nominating committee, if the Company had established such committees of the Company’s Board of Directors. Dr. Korenko is not an independent director due to his employment by the Company as an executive officer. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Audit Fees The aggregate fees incurred by the Company’s principal accountant for the audit of the Company’s annual financial statements, review of financial statements included in the quarterly reports and other fees that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the years ended December 31, 2021 and 2020 were $36,000 and $61,500, respectively, all of which was paid to Fruci & Associates II, PLLC. Audit Related Fees The aggregate fees billed for professional services that are reasonably related to the performance of the audit or review of the Company’s financial statements but are not reported “Audit Fees” for the years ended December 31, 2021 and 2020 in the amounts of $2,250 and $7,250, respectively. All services performed by the Company’s Registered Public Accounting Firm, Fruci & Associates II, PLLC have been pre-approved by the Company’s Board of Directors. 44 Tax Fees The aggregate fees billed for professional services rendered by principal accountant for tax compliance, tax advice and tax planning during the years ended December 31, 2021 and 2020 were $3,250 and $2,750, respectively, all of which was paid to Fruci & Associates II, PLLC. All Other Fees Other fees billed for products or services provided by the Company’s principal accountant during the years ended December 31, 2021 and 2020 There were no fees incurred to Fruci & Associates II, PLLC related to all other fees. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Documents filed as part of this Report. 1. Financial Statements . The Vivos Inc. Balance Sheets as of December 31, 2021 and 2020, the Statements of Operations for the years ended December 31, 2021 and 2020, the Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2021 and 2020, and the Statements of Cash Flows for the years ended December 31, 2021 and 2020, together with the notes thereto and the reports of Fruci & Associates II, PLLC as required by Item 8 are included in this 2021 Annual Report on Form 10-K as set forth in Item 8 above. 2. Financial Statement Schedules . All financial statement schedules have been omitted since they are either not required or not applicable, or because the information required is included in the financial statements or the notes thereto. 3. Exhibits . The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K. Exhibit Number Description 3.1 Certificate of Incorporation of Savage Mountain Sports Corporation, dated January 11, 2000 (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008). 3.2 By-Laws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008). 3.3 Certificate of Amendment of Certificate of Incorporation changing the name of the Company to Advanced Medical Isotope Corporation, dated May 23, 2006 (incorporated by reference to Exhibit 3.5 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008). 3.4 Certificate of Amendment of Certificate of Incorporation increasing authorized capital dated September 26, 2006 (incorporated by reference to Exhibit 3.6 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008). 3.5 Certificate of Amendment to the Certificate of Incorporation increasing authorized common stock and authorizing preferred stock, dated May 18, 2011 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 18, 2011). 3.6 Certificate of Amendment to the Certificate of Incorporation authorizing a series of Preferred Stock to be named “Series A Convertible Preferred Stock”, consisting of 2,500,000 shares, which series shall have specific designations, powers, preferences and relative and other special rights, qualifications, limitations and restrictions as outlined in the Certificate of Designations, filed June 30, 2015 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 7, 2015). 45 3.7 Certificate of Amendment to the Certificate of Incorporation increasing the authorized series of “Series A Convertible Preferred Stock” to 5,000,000 shares, filed March 31, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 7, 2016). 3.8 Certificate of Amendment to the Certificate of Incorporation authorizing a series of Preferred Stock to be named “Series B Convertible Preferred Stock”, consisting of 5,000,000 shares, which series shall have specific designations, powers, preferences and relative and other special rights, qualifications, limitations and restrictions as outlined in the Certificate of Designations, filed October 10, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 17, 2018). 4.1 Form of Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 17, 2018). 10.1 Agreement and Plan of Reorganization, dated as of December 15, 1998, by and among HHH Entertainment, Inc. and Earth Sports Products, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497) filed on November 12, 2008). 10.2 Agreement and Plan of Merger of HHH Entertainment, Inc. and Savage Mountain Sports Corporation, dated as of January 6, 2000 (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497), filed on November 12, 2008). 10.3 Agreement and Plan of Acquisition by and between Neu-Hope Technologies, Inc., UTEK Corporation and Advanced Medical Isotope Corporation, dated September 22, 2006 (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497), filed on November 12, 2008). 10.4 Agreement and Plan of Acquisition by and between Isonics Corporation and Advanced Medical Isotope Corporation dated June 13, 2007 (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form 10-12G (File No. 000-53497), filed on November 12, 2008). 10.5 Form of Non-Statutory Stock Option Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 15, 2012). 10.6 Promissory Note dated December 16, 2008 between Advanced Medical Isotope Corporation and Carlton M. Cadwell (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on March 3, 2012). 10.7 2015 Omnibus Securities and Incentive Plan (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K, filed May 25, 2016). 10.8 Washington State University Sub-Award Agreement for the period December 15, 2017 through January 31, 2018.(incorporated by reference to Exhibit 10.13 to the Company’s Annual report on Form 10-K, filed April 2, 2018). 10.9 The Curators of the University of Missouri Sponsored Research Contract for the period November 1, 2017 through October 31, 2018. (incorporated by reference to Exhibit 10.14 to the Company’s Annual report on Form 10-K, filed April 2, 2018). 10.10 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 17, 2018). 10.11 Employment Agreement by and between Vivos Inc. and Michael Korenko, dated June 4, 2019 (incorporated by reference to Exhibit 6.18 to the Company’s Offering Statement on Form 1-A filed on July 29, 2019). 23 Consent of Independent Registered Public Accounting Firm 31.1* Certification of Chief Executive Officer pursuant to Sec. 302 of the Sarbanes-Oxley Act of 2002 (4) 31.2* Certification of Chief Financial Officer pursuant to Sec. 302 of the Sarbanes-Oxley Act of 2002 (4) 32.1* Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (4) 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith. 46 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. VIVOS INC. Date: March 7, 2022 By: /s/ Michael K. Korenko Name: Michael K. Korenko Title: Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Date: March 7, 2022 By: /s/ Michael K. Korenko Name: Michael K. Korenko Title: Chief Executive Officer (Principal Executive Officer) Date: March 7, 2022 By: /s/ Michael Pollack Name: Michael Pollack Title: Interim Chief Financial Officer (Principal Financial and Accounting Officer) Date: March 7, 2022 By: /s/ Carlton M. Cadwell Name: Carlton M. Cadwell Title: Secretary and Chairman of the Board 47 Vivos Inc. Index to Financial Statements Pages Report of Independent Registered Public Accounting Firm Auditor Name: Fruci & Associates II, PLLC (PCAOB ID No. 5525 ) F-1 Financial Statements: Balance Sheets as of December 31, 2021 and 2020 F-3 Statements of Operations for the years ended December 31, 2021 and 2020 F-4 Statement of Changes in Stockholders’ Equity for the years ended December 31, 2021 and 2020 F-5 Statements of Cash Flow for the years ended December 31, 2021 and 2020 F-6 Notes to Financial Statements F-7 48 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Vivos, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Vivos, Inc. (“the Company”) as of December 31, 2021 and 2020, and the related statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses, has utilized significant cash in operations, and its cash position is not sufficient to support operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our 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 financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. F- 1 Recognition of common stock warrant transactions (Note 6 to the financial statements) Description of the Critical Audit Matter The Company’s evaluation of common shares issued in exchange for stock warrants involved complexity and judgement in applying the relevant accounting standards when auditing management’s conclusions on the classification and recognition of warrants on issuance and on exercise. How the Critical Audit Matter Was Addressed in the Audit Our principal audit procedures to evaluate management’s calculation of common shares issued for exchange of stock warrants included the following: ● We evaluated the appropriateness and consistency of management’s methods and assumptions used in the identification, recognition, measurement, and disclosure of considerations of the underlying warrants, including the classification with respect to the terms and in considering applicable generally accepted accounting standards. ● We read the applicable agreements and compared the key terms to management’s analysis of the transaction. ● We read, evaluated, and tested the reasonableness of management’s calculation utilized in the determination of common shares issued in exchange for stock warrants. ● We evaluated whether management had appropriately considered new information that could significantly change the measurement or disclosure of common shares issued in exchange for stock warrants, and evaluated the disclosures related to the financial statement impacts of the transactions. We have served as the Company’s auditor since 2016. Spokane, Washington March 7, 2022 F- 2 VIVOS INC BALANCE SHEETS DECEMBER 31, 2021 AND 2020 DECEMBER 31, DECEMBER 31, 2021 2020 ASSETS Current Assets: Cash $ 1,606,123 $ 903,704 Prepaid expenses 28,175 33,835 Total Current Assets 1,634,298 937,539 TOTAL ASSETS $ 1,634,298 $ 937,539 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Current Liabilities: Accounts payable and accrued expenses $ 166,915 $ 361,880 Related party accounts payable - 32,110 Accrued interest payable - 100,954 Payroll liabilities payable - 66,143 Convertible notes payable, net - 107,418 Related party promissory note - 237,000 Total Current Liabilities 166,915 905,505 Total Liabilities 166,915 905,505 Commitments and contingencies - - STOCKHOLDERS’ EQUITY Preferred stock, par value, $ 0.001 , 20,000,000 shares authorized, Series A Convertible Preferred, 5,000,000 shares authorized, 2,071,007 and 2,171,007 shares issued and outstanding, respectively 2,071 2,171 Additional paid in capital - Series A Convertible preferred stock 8,842,458 8,857,358 Series B Convertible Preferred, 5,000,000 shares authorized, 200,363 and 436,653 shares issued and outstanding, respectively 200 436 Additional paid in capital - Series B Convertible preferred stock 290,956 385,235 Series C Convertible Preferred, 5,000,000 shares authorized, 385,302 and 385,302 shares issued and outstanding, respectively 385 385 Additional paid in capital - Series C Convertible preferred stock 500,507 500,507 Preferred stock, value Additional paid in capital Common stock, par value, $ 0.001 , 950,000,000 shares authorized, 343,530,678 and 292,278,591 issued and outstanding, respectively 343,531 292,279 Additional paid in capital - common stock 68,573,142 64,551,764 Accumulated deficit ( 77,085,867 ) ( 74,558,101 ) Total Stockholders’ Equity 1,467,383 32,034 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,634,298 $ 937,539 The accompanying notes are an integral part of these financial statements. F- 3 VIVOS INC STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 2021 2020 Revenues, net $ 14,887 $ 7,000 Cost of Goods Sold ( 12,000 ) ( 5,608 ) Gross profit 2,887 1,392 OPERATING EXPENSES Professional fees (including stock-based compensation of $ 1,614,000 and $ 2,176 , respectively) 1,838,323 246,118 Payroll expenses 267,477 234,094 Research and development 286,848 84,668 General and administrative expenses 112,037 109,033 Total Operating Expenses 2,504,685 673,913 OPERATING LOSS ( 2,501,798 ) ( 672,521 ) NON-OPERATING INCOME (EXPENSE) Interest expense ( 25,375 ) ( 287,471 ) Other income - SBA - 3,000 Forgiveness of debt 136,445 - Loss on debt extinguishment ( 137,038 ) - Total Non-Operating Income (Expenses) ( 25,968 ) ( 284,471 ) NET LOSS BEFORE PROVISION FOR INCOME TAXES ( 2,527,766 ) ( 956,992 ) Provision for income taxes - - NET LOSS $ ( 2,527,766 ) $ ( 956,992 ) Net loss per share - basic and diluted $ ( 0.01 ) $ ( 0.00 ) Weighted average common shares outstanding - basic 325,851,906 222,804,039 The accompanying notes are an integral part of these financial statements. F- 4 VIVOS INC STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 Shares Amount Series A Preferred Shares Amount Series B Preferred Shares Amount Series C Preferred Shares Amount Capital - Common Accumulated Deficit Total Additional Additional Additional Series A Preferred Paid-In Capital - Series B Preferred Paid-In Capital - Series C Preferred Paid-In Capital - Common Stock Additional Paid-In Shares Amount Series A Preferred Shares Amount Series B Preferred Shares Amount Series C Preferred Shares Amount Capital - Common Accumulated Deficit Total Balance - December 31, 2019 2,552,642 $ 2,553 $ 8,870,626 1,113,245 $ 1,113 $ 665,195 821,292 $ 821 $ 674,457 184,845,821 $ 184,846 $ 61,721,809 $ ( 73,601,109 ) $ ( 1,479,689 ) Stock issued for: Cash - - - - - - - - - 60,617,778 60,618 1,576,062 - 1,636,680 Note conversions/settlements - - - - - - - - - 25,964,594 25,965 675,079 - 701,044 Accounts payable Accounts Payable, shares Services Services, shares Stock option exercises Stock option exercises, shares Stock option exercises, shares 2,500,000 RSUs RSUs, shares Warrant exercises - - - - - - - - - 8,193,185 8,193 51,807 - 60,000 Redemption of preferred stock in convertible note agreement - - - ( 100,000 ) ( 100 ) ( 49,900 ) - - - - - - - ( 50,000 ) Redemption of preferred stock for cash ( 381,635 ) ( 382 ) ( 13,268 ) - - - - - - - - - - ( 13,650 ) Conversion of preferred stock into common stock - - - ( 576,592 ) ( 577 ) ( 230,060 ) ( 435,990 ) ( 436 ) ( 173,950 ) 12,657,275 12,657 392,366 - - Warrants issued with notes payable (discount) - - - - - - - - - - - 28,482 - 28,482 Warrants purchased for cash - - - - - - - - - - - 26,100 - 26,100 Options and warrants issued for services - - - - - - - - - - - 80,059 - 80,059 Share adjustment - - - - - - - - - (62 ) - - - - RSUs granted to consultants that have vested Net loss for the year - - - - - - - - - - - - ( 956,992 ) ( 956,992 ) Balance - December 31, 2020 2,171,007 2,171 8,857,358 436,653 436 385,235 385,302 385 500,507 292,278,591 292,279 64,551,764 ( 74,558,101 ) 32,034 Balance 2,171,007 2,171 8,857,358 436,653 436 385,235 385,302 385 500,507 292,278,591 292,279 64,551,764 ( 74,558,101 ) 32,034 Stock issued for: Cash - - - - - - - - - 22,500,000 22,500 1,777,500 - 1,800,000 Note conversions/settlements - - - - - - - - - 3,576,080 3,576 408,435 - 412,011 Accounts payable - - - - - - - - - 1,305,298 1,305 120,805 - 122,110 Services - - - - - - - - - 77,768 78 3,678 - 3,756 Stock option exercises ( 100,000 ) ( 100 ) ( 14,900 ) - - - - - - 2,125,000 2,125 12,875 - - RSUs - - - - - - - - - 12,000,000 12,000 ( 12,000 ) - - Warrant exercises - - - - - - - - - 6,714,316 6,714 ( 6,714 ) - - Conversion of preferred shares to common shares - - - ( 236,290 ) ( 236 ) ( 94,279 ) - - - 2,953,625 2,954 91,561 - - Warrants purchased for cash - - - - - - - - - - - 11,238 - 11,238 RSUs granted to consultants that have vested - - - - - - - - - - - 1,614,000 - 1,614,000 Net loss for the year - - - - - - - - - - - - ( 2,527,766 ) ( 2,527,766 ) Balance - December 31, 2021 2,071,007 $ 2,071 $ 8,842,458 200,363 $ 200 $ 290,956 385,302 $ 385 $ 500,507 343,530,678 $ 343,531 $ 68,573,142 $ ( 77,085,867 ) $ 1,467,383 Balance 2,071,007 $ 2,071 $ 8,842,458 200,363 $ 200 $ 290,956 385,302 $ 385 $ 500,507 343,530,678 $ 343,531 $ 68,573,142 $ ( 77,085,867 ) $ 1,467,383 The accompanying notes are an integral part of these financial statements. F- 5 VIVOS INC STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 2021 2020 CASH FLOW FROM OPERTING ACTIVIITES Net loss $ ( 2,527,766 ) $ ( 956,992 ) Adjustments to reconcile net loss to net cash used in operating activities Amortization of convertible debt discount - 53,527 Amortization of BCF discount - 6,187 Common stock, stock options and warrants for services 3,756 2,176 RSUs issued for services 1,614,000 - Loss on conversion of debt 137,038 - Forgiveness of debt ( 136,445 ) - Warrants issued for interest expense - 77,883 Exchange premium in conversion of notes - 98,508 Changes in assets and liabilities Accounts receivable Prepaid expenses and other assets 5,660 ( 10,343 ) Accounts payable and accrued expenses 31,480 ( 149,937 ) Accounts payable and accrued expenses from related party - - Payroll liabilities ( 66,143 ) ( 33,857 ) Accrued interest ( 25,399 ) 37,041 Total adjustments 1,563,947 81,185 Net cash used in operating activities ( 963,819 ) ( 875,807 ) CASH FLOWS FROM FINANCING ACTIVITES Redemption of preferred stock - ( 63,650 ) Payments of convertible debt ( 45,000 ) - Payments of related party notes ( 100,000 ) - Proceeds from sale of common stock and warrants - 1,722,780 Proceeds from convertible debt - 150,000 Proceeds from common stock and warrants 1,811,238 - Payment of notes payable - ( 50,000 ) Net cash provided by financing activities 1,666,238 1,759,130 NET INCREASE IN CASH 702,419 883,323 CASH - BEGINNING OF YEAR 903,704 20,381 CASH - END OF YEAR $ 1,606,123 $ 903,704 CASH PAID DURING THE PERIOD FOR: Interest expense $ 50,773 $ 13,442 Income taxes $ - $ - SUPPLEMENTAL INFORMATION - NON-CASH INVESTING AND FINANCING ACTIVITIES: Conversion of preferred stock into common stock $ 94,515 $ 405,023 Recognition of debt discount at inception of notes payable $ - $ 28,482 Conversion of notes payable and accrued interest into common stock $ 50,370 $ 701,044 Conversion of notes payable - related parties and accrued interest into common stock $ 185,346 $ - Common stock issued in cashless exercise of warrants $ 6,714 $ - Common stock issued in settlement of accounts payable $ 90,000 $ - Common stock issued in settlement of accounts payable - related parties $ 32,110 $ - Stock options exercised for recission of common and preferred stock $ 60,000 $ - RSUs vested into common stock $ 12,000 $ - The accompanying notes are an integral part of these financial statements. F- 6 Vivos Inc Notes to Financial Statements For the Years Ended December 31, 2021 and 2020 NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Business Overview The Company was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“ SMSC ”). On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation, and on December 28, 2017, the Company began operating as Vivos Inc. The Company has authorized capital of 950,000,000 shares of common stock, $ 0.001 par value per share, and 20,000,000 shares of preferred stock, $ 0.001 par value per share. Our principal place of business is located at 719 Jadwin Avenue, Richland, WA 99352. Our telephone number is (509) 736-4000. Our corporate website address is http://www.radiogel.com. Our common stock is currently quoted on the OTC Pink Marketplace under the symbol “RDGL.” The Company is a radiation oncology medical device company engaged in the development of its yttrium-90 based brachytherapy device, RadioGel ™ , for the treatment of non-resectable tumors. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. The Company’s overall vision is to globally empower physicians, medical researchers and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer. In January 2018, the Center for Veterinary Medicine Product Classification Group ruled that RadioGel ™ should be classified as a device for animal therapy of feline sarcomas and canine soft tissue sarcomas. Additionally, after a legal review, the Company believes that the device classification obtained from the Food and Drug Administration (“ FDA ”) Center for Veterinary Medicine is not limited to canine and feline sarcomas, but rather may be extended to a much broader population of veterinary cancers, including all or most solid tumors in animals. We expect the result of such classification and label review will be that no additional regulatory approvals are necessary for the use of IsoPet ® for the treatment of solid tumors in animals. The FDA does not have premarket authority over devices with a veterinary classification, and the manufacturers are responsible for assuring that the product is safe, effective, properly labeled, and otherwise in compliance with all applicable laws and regulations. Based on the FDA’s recommendation, RadioGel ™ will be marketed as “IsoPet ® ” for use by veterinarians to avoid any confusion between animal and human therapy. The Company already has trademark protection for the “IsoPet ® ” name. IsoPet ® and RadioGel ™ are used synonymously throughout this document. The only distinction between IsoPet ® and RadioGel ™ is the FDA’s recommendation that we use “IsoPet ® ” for veterinarian usage, and reserve “RadioGel ™” for human therapy. Based on these developments, the Company has shifted its primary focus to the development and marketing of Isopet ® for animal therapy, through the Company’s IsoPet ® Solutions division. IsoPet Solutions The Company’s IsoPet Solutions division was established in May 2016 to focus on the veterinary oncology market, namely engagement of university veterinarian hospital to develop the detailed therapy procedures to treat animal tumors and ultimately use of the technology in private clinics. The Company has worked with three different university veterinarian hospitals on IsoPet ® testing and therapy. Washington State University treated five cats for feline sarcoma and served to develop the procedures which are incorporated in our label. They concluded that the product was safe and effective in killing cancer cells. Colorado State University demonstrated the CT and PET-CT imaging of IsoPet ® . A contract was signed with University of Missouri to treat canine sarcomas and equine sarcoids starting in November 2017. The dogs were treated for canine soft tissue sarcoma. Response evaluation criteria in solid tumors (“ RECIST ”) is a set of published rules that define when tumors in cancer patients improve (respond), stay the same (stabilize), or worsen (progress) during treatment. The criteria were published by an international collaboration including the European Organisation for Research and Treatment of Cancer (“EORTC”), National Cancer Institute of the United States, and the National Cancer Institute of Canada Clinical Trials Group. The testing at the University of Missouri met its objective to demonstrate the safety of IsoPet ® . Using its advanced CT and PET equipment it was able to demonstrate that the dose calculations were accurate and that the injections perfused into the cell interstices and did not stay concentrated in a bolus. This results in a more homogeneous dose distribution. There was insignificant spread of Y-90 outside the points of injection demonstrating the effectiveness of the particles and the gel to localize the radiation with no spreading to the blood or other organs nor to urine or fecal material. This confirms that IsoPet ® is safe for same day therapy. The effectiveness of IsoPet ® for life extension was not the prime objective, but it resulted in valuable insights. Of the cases one is still cancer-free but the others eventually recurred since there was not a strong focus on treating the margins. The University of Missouri has agreed to become a regional center to administer IsoPet ® therapy and will incorporate the improvements suggested by the testing program. The Company anticipates that future profits, if any, will be derived from direct sales of RadioGel ™ (under the name IsoPet ® ) and related services, and from licensing to private medical and veterinary clinics in the U.S. and internationally. The Company intends to report the results from the IsoPet ® Solutions division as a separate operating segment in accordance with GAAP. F- 7 Commencing in July 2019, the Company recognized its first commercial sale of IsoPet ® . A veterinarian from Alaska brought his cat with a re-occurrent spindle cell sarcoma tumor on his face. The cat had previously received external beam therapy, but now the tumor was growing rapidly. He was given a high dose of 400Gy with heavy therapy at the margins. This sale met the revenue recognition requirements under ASC 606 as the performance obligation was satisfied. The Company completed sales for an additional four animals that received the IsoPet ® during 2019. Our plan is to incorporate the data assembled from our work with Isopet ® in animal therapy to support the Company’s efforts in the development of our RadioGel ™ device candidate, including obtaining approval from the FDA to market and sell RadioGel ™ as a Class II medical device. RadioGel ™ is an injectable particle-gel for brachytherapy radiation treatment of cancerous tumors in people and animals. RadioGel ™ is comprised of a hydrogel, or a substance that is liquid at room temperature and then gels when reaching body temperature after injection into a tumor. In the gel are small, less than two microns, yttrium-90 phosphate particles (“ Y-90 ”). Once injected, these inert particles are locked in place inside the tumor by the gel, delivering a very high local radiation dose. The radiation is beta, consisting of high-speed electrons. These electrons only travel a short distance so the device can deliver high radiation to the tumor with minimal dose to the surrounding tissue. Optimally, patients can go home immediately following treatment without the risk of radiation exposure to family members. Since Y-90 has a half-life of 2.7 days, the radioactivity drops to 5% of its original value after ten days . Recently, the Company modified its Indication for Use from skin cancel to cancerous tissue or solid tumors pathologically associated with locoregional papillary thyroid carcinoma and recurrent papillary thyroid carcinoma having discernable tumors associated with metastatic lymph nodes or extranodal disease in patients who are not surgical candidates or who have declined surgery, or patients who require post-surgical remnant ablation (for example, after prior incomplete radioiodine therapy). Papillary thyroid carcinoma belongs to the general class of head and neck tumors for which tumors are accessible by intraoperative direct needle injection. The Company’s Medical Advisory Board felt that demonstrating efficacy in clinical trials was much easier with this new indication. The Company’s lead brachytherapy products, including RadioGel ™ , incorporate patented technology developed for Battelle Memorial Institute (“ Battelle ”) at Pacific Northwest National Laboratory, a leading research institute for government and commercial customers. Battelle has granted the Company an exclusive license to patents covering the manufacturing, processing and applications of RadioGel ™ (the “ Battelle License ”). This exclusive license is to terminate upon the expiration of the last patent included in this agreement (March 2022). Other intellectual property protection includes proprietary production processes and trademark protection in 17 countries. Intellectual Property Our original license with Battelle National Laboratory is reaching its end of life in 2022. During the past several years, in anticipation of this we have expanded our proprietary knowledge and our trademark and patent protection. We have expanded our trademark protection from RadioGel to now include IsoPet. We obtained the International Certificate of Registration for ISOPET, which is the first step to file in several countries . The Company received the Patent Cooperation Treaty (“PCT”) International Search Report on our patent application (No.1811.191). Seven of our claims were immediately ruled as having novelty, inventive step and industrial applicability. This gives us the basis to extend for many years the patent protection for our proprietary Yttrium-90 phosphate particles utilized in Isopet ® and Radiogel™. Vivos Inc filed its particle patent in several counties and in parallel is pursuing amendments to increase the number of claims. In addition to the USA the new patent team filed in Canada, the European Union, Japan, Australia, Brazil, China, India, South Korea, and the Russian Eurasian (Russia, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan) . We have just filed a new provisional patent to protect our current and planned developments. It includes a summary of our improved hydrogel formulation and production process, the use of other particles incorporating other isotopes beyond Y-90, and the anti-circumvention techniques we discovered that would make it more difficult for competitors to engineer around our proprietary hydrogel with other hydrogels from our defensive effort we call our “knock-off red team exercise”. F- 8 Following the provisional patent, we will file for utility patents on our polymer/hydrogel improvements. These include reducing the polymer production time and increasing the output by a factor of three. We have also further reduced the level of trace contaminants to be well below the FDA guidelines. We currently are developing a micro-injection system for small tumor therapy. This will provide more precise controls for treating cancerous thyroid lymph nodes. It will also be valuable if the company pursues other future indications for use that will require precise micro-injections, e.g. ocular melanoma, spinal tumors and brain cancers. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities as well as a series of grants. The Company requires funding of approximately $ 2.5 million annually to maintain current operating activities. The Company completed its reverse stock split which was approved by FINRA and went effective on June 28, 2019. The Company’s stock offering under Regulation A+ was qualified by the Securities and Exchange Commission (“SEC”) on June 3, 2020. A second Regulation A+ was qualified by the SEC on September 15, 2021 to raise capital for 50,000,000 shares at a price of $ 0.10 for a maximum of $ 5,000,000 . The Company’s initial Regulation A+ raised approximately $ 4,000,000 from the sale of shares under Regulation A+, and intends to use the proceeds generated as follows: For the animal therapy market: ● Fund the effort to communicate the benefits of IsoPet® to the veterinary community and the pet parents. ● Conduct additional clinical studies to generate more data for the veterinary community ● Subsidize some IsoPet ® therapies, if necessary, to ensure that all viable candidates are treated. ● Assist new regional clinics with their license and certification training. For the human market: ● Enhance the pedigree of the Quality Management System. ● Complete the previously defined pre-clinical testing and additional testing on an animal model closely aligned with our revised indication for use. Report the results to the FDA in a pre-submission meeting. ● Use the feedback from that meeting to write the IDE (Investigational Device Exemption), which is required to initiate clinical trials. Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities. The Company may require additional funding of approximately $2.5 million annually to maintain current operating activities. Over the next 12 to 48 months, the Company believes it will cost approximately $9 million to: (1) fund the FDA approval process to conduct human clinical trials, (2) conduct Phase I, pilot, clinical trials, (3) activate several regional clinics to administer IsoPet ® across the county, (4) create an independent production center within the current production site to create a template for future international manufacturing, and (5) initiate regulatory approval processes outside of the United States. The proceeds to be raised from the recent qualified Regulation A+ will be used to continue to fund this development. F- 9 The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12 to 24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or from proceeds to be raised from the recent qualified Regulation A+. Following receipt of required regulatory approvals and financing, in the U.S., the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the U.S., the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy. In the longer-term, subject to the Company receiving adequate funding, regulatory approval for RadioGel ™ and other brachytherapy products, and thereafter being able to successfully commercialize its brachytherapy products, the Company intends to consider resuming research efforts with respect to other products and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses. Based on the Company’s financial history since inception, the Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and may not be able to continue operations. The Company has been impacted from the effects of COVID-19. The Company’s headquarters are in Northeast Washington however there focus of the animal therapy market has been the Northwestern sector of the United States, the initial epicenter of the COVID-19 outbreak in the United States. The Company has started to in recent weeks to continue their marketing to the animal therapy market and attempt to increase the exposure to their product and generate revenue accordingly. As of December 31, 2021, the Company has $ 1,606,123 cash on hand. There are currently commitments to vendors for products and services purchased. To continue the development of the Company’s products, the current level of cash may not be enough to cover the fixed and variable obligations of the Company. There is no guarantee that the Company will be able to raise additional funds or to do so at an advantageous price. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There is no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates the Company considers include criteria for stock-based compensation expense, and valuation allowances on deferred tax assets. Actual results could differ from those estimates. F- 10 Financial Statement Reclassification Certain account balances from prior periods have been reclassified in these financial statements so as to conform to current period classifications. Cash Equivalents For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. The Company occasionally maintains cash balances in excess of the FDIC insured limit. The Company does not consider this risk to be material. Fair Value of Financial Instruments Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2021 and 2020, the balances reported for cash, prepaid expenses, accounts receivable, accounts payable, and accrued expenses, approximate the fair value because of their short maturities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ ASC ”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The Company measures certain financial instruments including options and warrants issued during the period at fair value on a recurring basis. Derivative Liabilities and Beneficial Conversion Feature The Company evaluates its convertible debt, options, warrants or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities (“ ASC 815 ”) as well as related interpretations of this standard and Accounting Standards Update 2017-11, which was adopted by the Company effective January 1, 2018. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. The result of this accounting treatment is that the fair value of the derivative instrument is marked-to-market each balance sheet date and with the change in fair value recognized in the statement of operations as other income or expense. F- 11 Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation than that the related fair value is removed from the books. Gains or losses on debt extinguishment are recognized in the statement of operations upon conversion, exercise or cancellation of a derivative instrument after any shares issued in such a transaction are recorded at market value. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Instruments that become a derivative after inception are recognized as a derivative on the date they become a derivative with the offsetting entry recorded in earnings. The Company determines the fair value of derivative instruments and hybrid instruments, considering all of the rights and obligations of each instrument, based on available market data using a binomial model, adjusted for the effect of dilution, because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk-free rates) necessary to fair value these instruments. For instruments in default with no remaining time to maturity the Company uses a one-year term for their years to maturity estimate unless a sooner conversion date can be estimated or is known. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of our common stock. The Company accounts for the beneficial conversion feature on its convertible instruments in accordance with ASC 470-20. The Beneficial Conversion Feature (“BCF”) is normally characterized as the convertible portion or feature that provides a rate of conversion that is below market value or in the money when issued. The Company records a BCF when these criteria exist, when issued. BCFs that are contingent upon the occurrence of a future event are recorded when the contingency is resolved. To determine the effective conversion price, the Company first allocates the proceeds received to the convertible instrument, and then use those allocated proceeds to determine the effective conversion price. The intrinsic value of the conversion option should be measured using the effective conversion price for the convertible instrument on the proceeds allocated to that instrument. The accounting for a BCF requires that the BCF be recognized by allocating the intrinsic value of the conversion option to additional paid in capital, resulting in a discount to the convertible instrument. This discount should be accreted from the date on which the BCF is first recognized through the earliest conversion date for instruments that do not have a stated redemption date. Fixed Assets Fixed assets are carried at the lower of cost or net realizable value. Production equipment with a cost of $ 2,500 or greater and other fixed assets with a cost of $ 1,500 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. Depreciation is computed using the straight-line method over the following estimated useful lives: SCHEDULE OF DEPRECIATION ESTIMATED USEFUL LIFE Production equipment: 3 to 7 years Office equipment: 2 to 5 years Furniture and fixtures: 2 to 5 years Leasehold improvements and capital lease assets are amortized over the shorter of the life of the lease or the estimated life of the asset. F- 12 Management of the Company reviews the net carrying value of all of its equipment on an asset by asset basis whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. These reviews consider the net realizable value of each asset, as measured in accordance with the preceding paragraph, to determine whether impairment in value has occurred, and the need for any asset impairment write-down. License Fees License fees are stated at cost, less accumulated amortization. Amortization of license fees is computed using the straight-line method over the estimated economic useful life of the assets. Effective March 2012, the Company entered into an exclusive license agreement with Battelle Memorial Institute regarding the use of its patented RadioGel ™ technology. This license agreement originally called for a $ 17,500 nonrefundable license fee and a royalty based on a percent of gross sales for licensed products sold; the license agreement also contains a minimum royalty amount to be paid each year starting with 2013. The license agreement was most recently amended on December 20, 2018, and pursuant to the amendment the maintenance fee schedule was updated for minimum royalties, as well as the increase in royalties from one percent (1%) to two percent (2%), then on October 8, 2019 to reduce the fee back to one percent (1%) . Future minimum royalties for the years ending December 31 are noted below: SCHEDULE OF FUTURE MINIMUM ROYALTIES Minimum Royalties per Calendar Year Calendar Year 2022 $ 4,000 Total $ 14,000 The Company periodically reviews the carrying values of capitalized license fees and any impairments are recognized when the expected future operating cash flows to be derived from such assets are less than their carrying value. Patents and Intellectual Property While patents are being developed or pending, they are not being amortized. Management has determined that the economic life of the patents to be ten years and amortization, over such 10 -year period and on a straight-line basis will begin once the patents have been issued and the Company begins utilization of the patents through production and sales, resulting in revenues. The Company evaluates the recoverability of intangible assets, including patents and intellectual property on a continual basis. Several factors are used to evaluate intangibles, including, but not limited to, management’s plans for future operations, recent operating results and projected and expected undiscounted future cash flows. There have been no such capitalized costs in the years ended December 31, 2021 and 2020, respectively. However, a patent was filed on July 1, 2019 (No. 1811.191) filed by Michael Korenko and David Swanberg and assigned to the Company based on the Company’s proprietary particle manufacturing process. The timing of this filing was important given the Company’s plans to make IsoPet ® commercially available, which it did on or about July 9, 2019. This additional patent protection will strengthen the Company’s competitive position. It is the Company’s intention to further extend this patent protection to several key countries within one year, as permitted under international patent laws and treaties. F- 13 Revenue Recognition In May 2014, the Financial Accounting Standards Board (“F ASB ”) issued Accounting Standard Update (“ ASU ”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective January 1, 2018 using the full retrospective method. Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to preform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows. The Company recognized revenue as they (i) identified the contracts with each customer; (ii) identified the performance obligation in each contract; (iii) determined the transaction price in each contract; (iv) were able to allocate the transaction price to the performance obligations in the contract; and (v) recognized revenue upon the satisfaction of the performance obligation. Upon the sales of the product to complete the procedures on the animals, the Company recognized revenue as that was considered the performance obligation. All revenue recognized in the years ended December 31, 2021 and 2020 relate to consulting income with respect to the IsoPet ® therapies. Loss Per Share The Company accounts for its loss per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic loss per share is computed by dividing loss available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive common stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. For the given periods of loss, of the periods ended in the years ended December 31, 2021 and 2020, the basic earnings per share equals the diluted earnings per share. The following represent common stock equivalents that could be dilutive in the future as of December 31, 2021 and 2020, which include the following: SCHEDULE OF DILUTIVE EARNINGS PER SHARE December 31, 2021 December 31, 2020 Convertible debt - 2,492 Preferred stock 9,909,570 12,863,195 Restricted stock units 25,262,500 262,500 Common stock options 2,252,809 2,252,809 Common stock warrants 31,862,500 35,362,500 Total potential dilutive securities 69,287,379 50,743,496 Research and Development Costs Research and developments costs, including salaries, research materials, administrative expenses and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed. The Company incurred $ 286,848 and $ 84,668 research and development costs for the years ended December 31, 2021 and 2020, respectively, all of which were recorded in the Company’s operating expenses noted on the statements of operations for the periods then ended. F- 14 Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. During the years ended December 31, 2021 and 2020, the Company incurred no advertising and marketing costs. Contingencies In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. The Company has entered into various agreements that require them to pay certain fees to consultants and/or employees that have been fully accrued for as of December 31, 2021 and 2020. Income Taxes To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition. The Company files income tax returns in the U.S. federal jurisdiction. The Company did no t have any tax expense for the years ended December 31, 2021 and 2020. The Company did no t have any deferred tax liability or asset on its balance sheet on December 31, 2021 and 2020. Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company’s financial statements. For the years ended December 31, 2021 and 2020, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months. Stock-Based Compensation The Company recognizes compensation costs under FASB ASC Topic 718, Compensation – Stock Compensation and ASU 2018-07. Companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. F- 15 Recent Accounting Pronouncements In August, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contract’s in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU simplifies the diluted net income per share calculation in certain areas. The ASU is effective for annual and interim periods beginning after December 31, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact that this new guidance will have on its financial statements. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. NOTE 2: RELATED PARTY TRANSACTIONS Related Party Convertible Notes Payable The Company from time to time receives non-interest bearing advancers from its Chief Executive Officer that are due on demand. During the year ended December 31, 2019, the Company received $ 20,000 in advances and repaid $ 5,000 of these and had $ 15,000 outstanding at September 24, 2019. On September 24, 2019, these advances were converted into a convertible note at 8 % interest which matures January 15, 2020 . Interest on this note for the period ended December 31, 2019 amounted to $ 321 , and this amount is accrued at December 31, 2019. The Chief Executive Officer received 150,000 warrants when the advances were converted into this convertible note payable. The Company recognized a discount on the convertible note of $ 3,721 as a result of the warrants which are being amortized over the life of the note through January 15, 2020 . The Company was in default of this note. As a result of the default, the interest rate charged was changed to 12.5 % through conversion of this note in April 2020. Interest expense for the years ended December 31, 2021 and 2020 on the related party convertible notes payable amounted to $ 0 and $ 298 , respectively. F- 16 Related Party Notes Payable As of December 31, 2021 and 2020, the Company had the following related party notes outstanding: SCHEDULE OF RELATED PARTY TRANSACTION December 31, 2021 December 31, 2020 January 2019 $ 60,000 Note, 8 % interest, due January 2020 $ - $ 60,000 March 2019 $ 48,000 Note, 8 % interest, due March 2020 - 48,000 April 2019 $ 29,000 Note, 8 % interest, due April 2020 - 29,000 July 2019 $ 50,000 Note 8 % interest, due July 2020 - 50,000 November 2019 $ 50,000 Note 8 % interest, due November 2020 - 50,000 Total Related Party Notes Payable, Net $ - $ 237,000 On January 24, 2019 the Company entered into a note payable with a trust related to one of the Company’s directors in the amount of $ 60,000 . The note is for a one -year period which was to mature January 24, 2020 and bears interest at an annual rate of 8.00 %. On March 27, 2019 the Company entered into a note payable with a trust related to one of our directors in the amount of $ 48,000 . The note is for a one-year period maturing March 27, 2020 and bears interest at an annual rate of 8 %. On April 29, 2019 the Company entered into a note payable with a trust related to one of our directors in the amount of $ 29,000 . On July 5, 2019 the Company entered into a note payable with a trust related to one of our directors in the amount of $ 50,000 . The note is for a one-year period maturing July 5, 2020 and bears interest at an annual rate of 8 %. On November 25, 2019 the Company entered into a note payable with a trust related to one of our directors in the amount of $ 50,000 . The note is for a one-year period maturing November 25, 2020 and bears interest at an annual rate of 8 %. Interest expense for these notes for the years ended December 31, 2021 and 2020 was $ 18,079 and $ 18,960 , respectively. In December 2021, the Company repaid $ 100,000 of these notes and converted the remaining balance of $ 137,000 plus accrued interest of $ 48,346 into 2,316,830 shares of common stock valued at $ 185,346 . No balances remain as of December 31, 2021. The Company borrowed $ 15,000 in March 2020 from its CEO and repaid this amount in April 2020. Related Party Payables The Company periodically receives advances for operating funds from related parties or has related parties make payments on the Company’s behalf. As a result of these activities the Company had related party payables of $ 0 and $ 32,110 as of December 31, 2021 and 2020, respectively. In December 2021, the Company converted the $ 32,110 into 401,373 shares of common stock. Preferred and Common Shares Issued to Officers and Directors The Company’s Chairman converted the Series B Convertible Preferred Shares into Series C Convertible Preferred Shares and as of April 2020, the 385,302 shares that are issued in the Series C Convertible Preferred Stock are all to the Chairman. In April 2020, effective March 31, 2020, the Company converted the $ 15,000 convertible note payable along with $ 619 in accrued interest and an exchange premium of $ 3,124 into 694,178 shares of common stock. This was part of the Regulation A+. These shares were issued on June 10, 2020 following the qualification of the Regulation A+. The Company’s Chief Executive Officer exercised 2,500,000 stock options for $ 60,000 in December 2020. In addition, in June 2021, the Company’s Chief Executive Officer exercised 2,500,000 stock options for a value of $ 60,000 that was paid through the cancelation of 375,000 common shares and 100,000 Series A Convertible Preferred shares. The Chief Executive Officer in May 2021 rescinded 8,120,152 stock options and in June 2021 rescinded 16,000,000 stock options. In September 2021, the Chief Executive Officer exercised 150,000 warrants in a cashless exercise into 91,304 shares of common stock. F- 17 NOTE 3: CONVERTIBLE NOTES PAYABLE As of December 31, 2021 and 2020, the Company had the following convertible notes outstanding. All prior notes that have been converted into common stock or repaid prior to December 31, 2020 have been excluded from the chart: SCHEDULE OF CONVERTIBLE NOTES PAYABLE 2021 2020 July and August 2012 $ 1,060,000 Notes convertible into common stock at $ 4.60 per share, 12 % interest, due December 2013 and January 2014 $ - $ 45,000 November 2020 $ 50,000 Note convertible into common shares at $ 0.04 , 6 % interest, due May 30, 2021 - 50,000 Penalties on notes in default - 12,418 Principal $ - $ 107,418 The Company entered into a $ 50,000 convertible promissory note on November 30, 2020, that matures May 30, 2021 . The convertible promissory notes bear interest at a rate of 6 %, The convertible promissory note is convertible into shares of common stock at a price of $ 0.04 per share. Upon the closing of an equity financing pursuant to an effective registration statement with gross proceeds to the Company totaling at least $ 350,000 exclusive of any exchanges (“Qualified Financing”), the outstanding principal amount of this convertible promissory notes together with all accrued and unpaid interest shall be exchanged into such securities as are issued in the Qualified Financing at a rate of 1.20 . Upon an exchange, the Payee shall be granted all rights afforded to an investor in the Qualified Financing. The Company along with the noteholder agreed to exchange 1,867,500 warrants into 933,750 common shares. These shares were issued in December 2020. The convertible note was converted into shares of common stock in January 2021. All of the remaining convertible notes were repaid in November 2021 along with the accrued interest. Interest expense for the years ended December 31, 2021 and 2020 on the convertible notes payable amounted to $ 7,296 and $ 21,394 , respectively. As of December 31, 2021, there remains no outstanding balances in the convertible notes payable. NOTE 4: PROMISSORY NOTES PAYABLE The Company issued two separate promissory notes on February 20, 2019 at $ 50,000 each (total of $ 100,000 ) that were to mature on August 20, 2019 and accrued interest at 8.00 % per annum. In connection with the promissory notes, the Company issued warrants to purchase 1,250,000 shares of common stock. The Company recorded the relative fair value of the warrants as a debt discount of $ 28,721 and amortized the discount over the life of the note (6 months). On August 20, 2019, the two noteholders agreed to extend these notes another six-months to February 20, 2020, then amended again for six-months and the notes were to mature August 20, 2020 . In consideration for the extension, the note holders received 750,000 warrants ( 375,000 each) and the interest rate on the notes increased from 8 % to 15 % per annum. The interest expense on these notes for the years ended December 31, 2021 and 2020 amounted to $ 0 and $ 8,032 . The Company repaid $ 50,000 of these notes plus $ 13,442 in accrued interest in July 2020 and settled the remaining $ 50,000 into 1,851,852 shares of common stock effective July 14, 2020. F- 18 NOTE 5: STOCKHOLDERS’ DEFICIT Common Stock The Company has 950,000,000 shares of common stock authorized, with a par value of $ 0.001 , and as of December 31, 2021 and December 31, 2020, the Company has 343,530,678 and 292,278,591 shares issued and outstanding, respectively. On March 28, 2019, the Company’s board of directors approved a reverse 1-for-8 stock split , and a decrease in the authorized shares from 2,000,000,000 to 950,000,000 . The reverse stock split went effective by FINRA on June 28, 2019. Preferred Stock As of December 31, 2021 and 2020, the Company has 20,000,000 shares of Preferred stock authorized with a par value of $ 0.001 . The Company’s Board of Directors is authorized to provide for the issuance of shares of preferred stock in one or more series, fix or alter the designations, preferences, rights, qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, term of redemption including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designations of such series without further vote or action by the shareholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of management without further action by the shareholders and may adversely affect the voting and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of common stock, including the loss of voting control to others. On October 8, 2018 the Company created out of the shares of Preferred Stock, par value $ 0.001 per share, of the Company, as authorized in Article IV of the Company’s Certificate of Incorporation, a series of Preferred Stock of the Company, to be named “Series B Convertible Preferred Stock,” consisting of Five Million ( 5,000,000 ) shares. On March 27, 2019 the Company created out of the shares of Preferred Stock, par value $ 0.001 per share, of the Company, as authorized in Article IV of the Company’s Certificate of Incorporation, a series of Preferred Stock of the Company, to be named “Series C Convertible Preferred Stock,” consisting of Five Million ( 5,000,000 ) shares. Series A Convertible Preferred Stock (“Series A Convertible Preferred”) In June 2015, the Series A Certificate of Designation was filed with the Delaware Secretary of State to designate 2.5 million shares of our preferred stock as Series A Convertible Preferred. Effective March 31, 2016, the Company amended the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred of the Registrant, increasing the maximum number of shares of Series A Convertible Preferred from 2,500,000 shares to 5,000,000 shares. The following summarizes the current rights and preferences of the Series A Convertible Preferred: Liquidation Preference . The Series A Convertible Preferred has a liquidation preference of $ 5.00 per share. Dividends . Shares of Series A Convertible Preferred do not have any separate dividend rights. Conversion . Subject to certain limitations set forth in the Series A Certificate of Designation, each share of Series A Convertible Preferred is convertible, at the option of the holder, into that number of shares of common stock (the “ Series A Conversion Shares ”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series A Certificate of Designation), currently $ 4.00 . In the event the Company completes an equity or equity-based public offering, registered with the SEC, resulting in gross proceeds to the Company totaling at least $ 5.0 million, all issued and outstanding shares of Series A Convertible Preferred at that time will automatically convert into Series A Conversion Shares. Redemption . Subject to certain conditions set forth in the Series A Certificate of Designation, in the event of a Change of Control (defined in the Series A Certificate of Designation as the time at which as a third party not affiliated with the Company or any holders of the Series A Convertible Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent 50% of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series A Convertible Preferred in cash at a price per share of Series A Convertible Preferred equal to 100 % of the Liquidation Preference . F- 19 Voting Rights . Holders of Series A Convertible Preferred are entitled to vote on all matters, together with the holders of common stock, and have the equivalent of five (5) votes for every Series A Conversion Share issuable upon conversion of such holder’s outstanding shares of Series A Convertible Preferred. However, the Series A Conversion Shares, when issued, will have all the same voting rights as other issued and outstanding common stock of the Company, and none of the rights of the Series A Convertible Preferred. Liquidation . Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “ Liquidation ”), the holders of Series A Convertible Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series A Convertible Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company is insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Convertible Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. Certain Price and Share Adjustments . a) Stock Dividends and Stock Splits . If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents; (ii) subdivides outstanding shares of common stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the common stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly. b) Merger or Reorganization . If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series A Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of common stock issuable upon conversion of one share of Series A Convertible Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction. In June 2021, 100,000 shares of Series A Convertible Preferred were canceled as partial payment for the exercise of stock options by the Chief Executive Officer. Series B Convertible Preferred Stock (“Series B Convertible Preferred”) In October 2018, the Series B Certificate of Designation was filed with the Delaware Secretary of State to designate 5.0 million shares of our preferred stock as Series B Convertible Preferred. The following summarizes the current rights and preferences of the Series B Convertible Preferred: Liquidation Preference . The Series B Convertible Preferred has a liquidation preference of $ 1.00 per share. Dividends . Shares of Series B Convertible Preferred do not have any separate dividend rights. Conversion . Subject to certain limitations set forth in the Series B Certificate of Designation, each share of Series B Convertible Preferred is convertible, at the option of the holder, into that number of shares of common stock (the “ Series B Conversion Shares ”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series B Certificate of Designation), currently $ 0.08 . Redemption . Subject to certain conditions set forth in the Series B Certificate of Designation, in the event of a Change of Control (defined in the Series B Certificate of Designation as the time at which as a third party not affiliated with the Company or any holders of the Series B Convertible Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent 50% of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series B Convertible Preferred in cash at a price per share of Series B Convertible Preferred equal to 100 % of the Liquidation Preference . F- 20 Voting Rights . Holders of Series B Convertible Preferred are entitled to vote on all matters, together with the holders of common stock, and have the equivalent of two (2) votes for every Series B Conversion Share issuable upon conversion of such holder’s outstanding shares of Series B Convertible Preferred. However, the Series B Conversion Shares, when issued, will have all the same voting rights as other issued and outstanding common stock of the Company, and none of the rights of the Series A Convertible Preferred. Liquidation . Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “ Liquidation ”), the holders of Series B Convertible Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series B Convertible Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company is insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series B Convertible Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. Certain Price and Share Adjustments . a) Stock Dividends and Stock Splits . If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents; (ii) subdivides outstanding shares of common stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the common stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly. b) Merger or Reorganization . If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series B Convertible Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of common stock issuable upon conversion of one share of Series B Convertible Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction. In December 2021, 236,290 Series B Convertible Preferred shares were converted into 2,953,625 shares of common stock. Series C Convertible Preferred Stock (“Series C Convertible Preferred”) In March 2019, the Series C Certificate of Designation was filed with the Delaware Secretary of State to designate 5.0 million shares of our preferred stock as Series C Convertible Preferred. The following summarizes the current rights and preferences of the Series C Convertible Preferred: Liquidation Preference . The Series C Convertible Preferred has a liquidation preference of $ 1.00 per share. Dividends . Shares of Series C Convertible Preferred do not have any separate dividend rights. Conversion . Subject to certain limitations set forth in the Series C Certificate of Designation, each share of Series C Convertible Preferred is convertible, at the option of the holder, into that number of shares of common stock (the “ Series C Conversion Shares ”) equal to the liquidation preference thereof, divided by Conversion Price (as such term is defined in the Series C Certificate of Designation), currently $ 0.08 . The Series C Convertible Preferred will only be convertible at any time after the date that the Company shall have amended its Certificate of Incorporation to increase the number of shares of common stock authorized for issuance thereunder or effect a reverse stock split of the outstanding shares of common stock by a sufficient amount to permit the conversion of all Series C Convertible Preferred into shares of common stock (“ Authorized Share Approval ”) (such date, the “ Initial Convertibility Date ”), each share of Series C Convertible Preferred shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock on the terms and conditions set forth in the Series C Certificate of Designation under the definition “ Conversion Rights ”. F- 21 Redemption . Subject to certain conditions set forth in the Series C Certificate of Designation, in the event of a Change of Control (defined in the Series C Certificate of Designation as the time at which as a third party not affiliated with the Company or any holders of the Series C Convertible Preferred shall have acquired, in one or a series of related transactions, equity securities of the Company representing more than fifty percent 50% of the outstanding voting securities of the Company), the Company, at its option, will have the right to redeem all or a portion of the outstanding Series C Convertible Preferred in cash at a price per share of Series C Convertible Preferred equal to 100 % of the Liquidation Preference . Voting Rights . Holders of Series C Convertible Preferred are entitled to vote on all matters, together with the holders of common stock, and have the equivalent of thirty-two (32) votes for every Series C Conversion Share issuable upon conversion of such holder’s outstanding shares of Series C Convertible Preferred. However, the Series C Conversion Shares, when issued, will have all the same voting rights as other issued and outstanding common stock of the Company, and none of the rights of the Series C Convertible Preferred. Liquidation . Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “ Liquidation ”), the holders of Series C Convertible Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the liquidation preference of the Series C Convertible Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company is insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series C Convertible Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. Certain Price and Share Adjustments . a) Stock Dividends and Stock Splits . If the Company (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents; (ii) subdivides outstanding shares of common stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the common stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly. b) Merger or Reorganization . If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which the Common Stock is converted into or exchanged for securities, cash or other property than each share of Series C Convertible Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of common stock issuable upon conversion of one share of Series C Convertible Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction. Common and Preferred Stock Issuances - 2021 In January 2021, the Company issued 384,445 shares of common stock in a settlement of accounts payable valued at $ 50,000 . In May 2021, the Company issued 519,480 shares of common stock in a settlement of accounts payable valued at $ 40,000 . In January 2021, the Company issued 1,259,250 shares of common stock in conversion of a note payable and accrued interest totaling $ 50,370 . The conversion resulted in a loss on conversion of $ 176,295 that is reflected in the Condensed Statement of Operations for the nine months ended September 30, 2021. In March 2021, the Company issued 22,500,000 shares of common stock along with 11,237,500 warrants under the Regulation A+ for cash proceeds of $ 1,800,000 for the common stock and the warrants were purchased for $ 11,238 . Between January 8, 2021 and January 29, 2021, the Company issued 3,870,428 shares of common stock in the cashless exercise of 5,430,000 warrants. F- 22 On June 28, 2021, the Company issued 2,500,000 shares of common stock for the exercise of 2,500,000 stock options to the Chief Executive Officer. In this transaction, the Company canceled 375,000 shares of common stock as partial payment for the exercise of the stock options. In June 2021, the Company issued 12,000,000 shares of common stock for vested RSUs with a fair value of $ 1,080,000 . From July 9 through September 24, 2021, the Company issued 838,195 shares of common stock in the cashless exercise of 1,800,000 warrants. In October 2021, the Company issued 2,005,693 shares of common stock in the cashless exercise of 3,500,000 warrants. In November 2021, the Company issued 77,768 shares of common stock for services valued at $ 3,756 . In December 2021, the Company issued 401,373 shares of common stock in conversion of accounts payable to a related party in the amount of $ 32,110 ; issued 2,316,830 shares of common stock in conversion of related party note payables and accrued interest valued at $ 185,346 ; and issued 2,953,625 shares of common stock in conversion of 236,290 Series B Convertible Preferred stock. Common and Preferred Stock Issuances - 2020 The Company in January 2020 paid $ 50,000 to redeem 100,000 shares of Series B Convertible Preferred Stock. The redemption price was agreed to by the investor. In January 2020, the Company converted 435,990 shares of Series C Convertible Preferred stock into 5,449,875 shares of common stock. In March 2020, the Company entered into agreements to issue 4,640,000 shares of common stock conditioned upon the qualification of the offer and sale of such shares under Regulation A+ for $ 125,280 . Additionally, the Company agreed to issue 2,320,000 warrants with a term of two years and an exercise price of $ .045 for a purchase price of $ 1,243 . These shares were issued on June 10, 2020 following the qualification of the Regulation A+ and are reflected as shares to be issued as of March 31, 2020. In March 2020, certain holders of convertible promissory notes entered into agreements to exchange certain notes totaling $ 526,113 , including $ 425,000 in principal amount, $ 23,430 in accrued interest and an exchange premium as provided for in the note agreements of $ 77,683 into 19,485,668 shares of common stock effective upon the qualification of the offer and sale of such shares under Regulation A+. In connection with the holder’s agreement to enter into the exchange, the Company intends to issue 2,200,000 warrants with a two-year term and an exercise price of $ 0.045 per share and amend 4,400,000 previously issued warrants to provide for a $ .045 exercise price and an expiration date of March 31, 2022 . These shares were issued on June 10, 2020 following the qualification of the Regulation A+ and are reflected as shares to be issued as of March 31, 2020. NOTE 6: COMMON STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS Common Stock Options The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options and warrants, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests. F- 23 The following schedule summarizes the changes in the Company’s stock options: SCHEDULE OF CHANGES IN STOCK OPTION Weighted Weighted Options Outstanding Average Average Number Exercise Remaining Aggregate Exercise Of Price Contractual Intrinsic Price Shares Per Share Life Value Per Share Balance at December 31, 2019 34,524,580 $ 0.024 - 120.00 6.49 years $ 277,973 $ 0.08 Options granted - $ - - $ - Options exercised ( 2,500,000 ) $ - - $ - Options expired ( 3,139,119 ) $ - - $ - Balance at December 31, 2020 28,885,461 $   0.024 - 120.00 5.57 years $ 1,661,429 $ 0.05 Options granted - $ - - $ - Options exercised ( 2,500,000 ) $ - - $ - Options expired/canceled ( 24,132,652 ) $ - - $ - Balance at December 31, 2021 2,252,809 $ 0.024 - 0.04 7.70 years $ 83,992 $ 0.04 Exercisable at December 31, 2021 2,252,809 $ 0.024 - 0.04 7.70 years $ 83,992 $ 0.04 During the year ended December 31, 2021, the Company’s CEO exercised 2,500,000 stock options, and rescinded 24,120,152 , stock options. In addition, 12,500 options expired. During the year ended December 31, 2021 and 2020, the Company recognized $ 0 and $ 2,176 , respectively, worth of stock based compensation related to the vesting of it stock options. Common Stock Warrants The following schedule summarizes the changes in the Company’s stock warrants: SCHEDULE OF CHANGES IN STOCK WARRANTS Warrants Outstanding Weighted Weighted Number Of Shares Exercise Price Per Share Average Remaining Contractual Life Aggregate Intrinsic Value Average Exercise Price Per Share Balance at December 31, 2019 31,286,847 $ 0.08 - 80.00 0.97 years $ - $ 0.10 Warrants granted 31,870,000 $ 0.045 - 0.06 - $ - Warrants exercised ( 8,727,500 ) $ - - $ Warrants expired/cancelled ( 22,364,972 ) $ - - $ Balance at December 31, 2020 32,064,375 $ 0.04 - 80.00 1.65 years $ 1,614,567 $ 0.06 Warrants granted 11,237,500 $ 0.10 - $ - Warrants exercised ( 10,730,000 ) $ - - $ Warrants expired/cancelled ( 709,375 ) $ - - $ Balance at December 31, 2021 31,862,500 $ 0.04 - 0.10 1.02 years $ 538,875 $ 0.07 Exercisable at December 31, 2021 31,862,500 $ 0.04 - 0.10 1.02 years $ 538,875 $ 0.07 F- 24 Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each option/warrant is estimated using the Black-Scholes valuation model. The following assumptions were used for the periods as follows: SCHEDULE OF ASSUMPTIONS USED IN FAIR VALUE MEASUREMENT Year Ended Year Ended December 31, 2021 December 31, 2020 Expected term - 2 - 5 years Expected volatility - % 109 - 147 % Expected dividend yield - - Risk-free interest rate - % 0.20 - 0.58 % The Company issued a convertible note in the amount of $ 100,000 to an accredited investor. The note bears interest at 8 % per annum and matures June 30, 2020 . The Company granted 1,250,000 warrants with an exercise price of $ 0.06 per share and a term of two years with this note and amended 1,312,500 previously issued warrants held by the investor to provide for a $ .06 exercise price and an expiration date of March 31, 2022 . This issuance resulted in a debt discount of $ 28,482 . In March through June 2020, the Company entered into agreements to issue 18,440,000 shares of common stock conditioned upon the qualification of the offer and sale of such shares under Regulation A+ for $ 497,880 . Additionally, the Company agreed to issue 9,220,000 warrants with a term of two years and an exercise price of $ .045 for a purchase price of $ 8,143 . These shares were issued in June 2020 and July 2020 following the qualification of the Regulation A+. In March through June 2020, certain holders of convertible promissory notes entered into agreements to exchange certain notes totaling $ 651,044 , including $ 525,000 in principal amount, $ 27,536 in accrued interest and an exchange premium as provided for in the note agreements of $ 98,508 into 21,770,668 shares of common stock effective upon the qualification of the offer and sale of such shares under Regulation A+. In connection with the holder’s agreement to enter into the exchange, the Company issued 2,200,000 warrants with a two-year term and an exercise price of $ 0.045 per share and amend 4,400,000 previously issued warrants to provide for a $ .045 exercise price and an expiration date of March 31, 2022 . These shares were issued on June 10, 2020 following the qualification of the Regulation A+. The issuance of the warrants resulted in $ 77,883 in additional warrant expense. Between November 30, 2020 and December 2, 2020 the Company sold 19,200,000 warrants for $ 19,200 . These warrants have a two-year term and have an exercise price of $ 0.06 per share. On November 30, 2020, the Company exchanged 1,867,500 warrants into 933,750 shares of common stock, and between December 14, 2020 and December 28, 2020, there were cashless exercises of 6,860,000 warrants into 4,759,435 shares of common stock. In the Company’s quarter ended December 31, 2020, 22,364,972 warrants expired. Between January 8, 2021 and January 29, 2021, the Company issued 3,870,428 shares of common stock in the cashless exercise of 5,430,000 warrants. In March 2021 the Company sold 11,237,500 warrants for $ 11,238 . These warrants have a two-year term and have an exercise price of $ 0.10 per share. From July 9 through September 24, 2021, the Company issued 838,195 shares of common stock in the cashless exercise of 1,800,000 warrants. F- 25 In October 2021, the Company issued 2,005,693 shares of common stock in the cashless exercise of 3,500,000 warrants. Restricted Stock Units The following schedule summarizes the changes in the Company’s restricted stock units: SCHEDULE OF CHANGES IN RESTRICTED STOCK UNITS Number Weighted Average Of Grant Date Shares Fair Value Balance at December 31, 2020 and 2019 262,500 $ 0.59 RSU’s granted 42,700,000 $ 0.08 RSU’s vested ( 17,700,000 ) $ - RSU’s forfeited - $ - Balance at December 31, 2021 25,262,500 $ 0.08 During the year ended December 31, 2021 and 2020, the Company recognized $ 1,614,000 and $ 0 worth of expense related to the vesting of its RSU’s. As of December 31, 2021, the Company had $ 2,405,400 worth of expense yet to be recognized for RSU’s not yet vested. On May 3, 2021, the Company has granted 12,000,000 RSUs to a consultant that vest on the grant date, and 700,000 RSUs to consultants that vest on the grant date. The Company has issued 12,000,000 common shares to the one consultant in June 2021. On May 3, 2021, as part of an Employment Agreement with the CEO, the Company granted 30,000,000 RSUs to the CEO. Of the 30,000,000 RSUs, 15,000,000 of them vest as follows: 5,000,000 on the grant date, 5,000,000 on the first anniversary and 5,000,000 on the second anniversary. The remaining 15,000,000 RSUs vest as performance-based grants, with the Board of Directors determining the criteria of each 5,000,000 RUSs at the nine-month anniversary, eighteen-month anniversary and twenty-seven month anniversary intervals. The Board of Directors has 90 days from May 3, 2021 to determine the performance criteria. NOTE 7: COMMITMENT On June 4, 2019, the Company entered into an Executive Employment Agreement (“Employment Agreement”) with Dr. Michael K. Korenko, the Company’s Chief Executive Officer. The employment term under the Employment Agreement commenced with an effective date of June 11, 2019 and expires on December 31, 2020, and December 31 of each successive year if the Employment Agreement is extended, unless terminated earlier as set forth in the Employment Agreement. The Company on December 31, 2020 extended this agreement through December 31, 2021 while renegotiating terms of a new Employment Agreement. On May 3, 2021, the Company and the Chief Executive Officer agreed the terms of a new Employment Agreement with an effective date of January 1, 2021 that has a term of three years and expires December 31, 2023. Under the terms of the Employment Agreement, the Company shall pay to Dr. Korenko a base compensation of $ 225,000 . In addition, there is a discretionary bonus to be earned in the amount of $ 7,500 per quarter upon the satisfaction of conditions to be determined by the Board of Directors of the Company. F- 26 NOTE 8: INCOME TAXES Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Net deferred tax assets consist of the following components as of December 31, 2021 and 2020: SCHEDULE OF NET DEFERRED TAX ASSETS December 31, 2021 December 31, 2020 Deferred tax assets: Net operating loss carryover $ 6,280,000 $ 6,080,000 Interest expense - - Related party accrual - 6,400 Capital Loss Carryover 3,400 3,400 Deferred tax liabilities Depreciation ( - ) ( - ) Valuation allowance ( 6,283,400 ) ( 6,089,800 ) Net deferred tax asset $ - $ - The income tax provision differs from the amount of income tax determined by applying the U.S. Federal income tax rate to pretax income from continuing operations for the years ended December 31, 2021 and 2020 due to the following: SCHEDULE OF FEDERAL INCOME TAX RATE December 31, 2021 December 31, 2020 Book income (loss) $ ( 530,800 ) $ ( 201,000 ) Forgiveness of debt ( 28,700 ) ( 600 ) Depreciation ( 1,100 ) ( 1,100 ) Interest expense - - Related party accrual ( 6,400 ) 4,000 Stock for services 339,700 - Options expense - 500 Other non-deductible expenses 25,700 5,900 Valuation allowance 201,600 192,300 Income tax expense $ - $ - At December 31, 2021, the Company had net operating loss carryforwards of approximately $ 29,919,800 . Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. At the adoption date of January 1, 2007, the Company had no unrecognized tax benefit, which would affect the effective tax rate if recognized. The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction. The Company is located in the state of Washington and Washington state does not require the filing of income taxes. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2017. NOTE 9: SUBSEQUENT EVENTS The Company in January 2022 settled $ 60,961 of accounts payable and recognized forgiveness of debt of $ 43,961 on these settlements. F- 27