What changed in this filing

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Item 9A. Controls and Procedures

2023-03-31 compared with 2021-05-19 · 918 added, 845 removed, 308 unchanged (85% of the section changed)

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Our Chief Executive Officer and Chief Financial Officer

have evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2021, and have concluded that our disclosure

controls and procedures were effective as of March 31, 2021.

Management’s

have evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022 and have concluded that our disclosure

controls and procedures were effective as of December 31, 2022.

Annual Report on Internal Control over Financial Reporting

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Internal control over financial reporting is defined in Rule 13a-15(f) and 15(d)-15(f) under the Exchange Act as a process

designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair

presentation of published financial statements.

Management conducted an assessment of the Company’s internal control over financial

reporting as of March 31, 2021 based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway

Commission in Internal Control-Integrated Framework (2013) (COSO).

Based on the assessment, management concluded that, as of March 31,

2021, the Company’s internal controls over financial reporting were effective.

Management conducted an assessment of the Company’s internal control over financial

reporting as of December 31, 2022 based on the framework and criteria established by the Committee of Sponsoring Organizations of the

Treadway Commission in Internal Control-Integrated Framework (COSO).

Based on the assessment, management concluded that, as of December

31, 2022, the Company’s internal controls over financial reporting were effective.

in Internal Control over Financial Reporting

are no changes in our internal control over financial reporting during

the quarter ended March 31, 2021, that have materially affected, or is reasonably likely to materially affect, our internal control

over financial reporting.

are no changes in our internal control over financial reporting during the year ended December 31, 2022, that have materially affected,

or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

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The Board believes Mr.

Feighan’s extensive operational and executive

experience with growth companies pursuing business combination transactions, as well as his fundraising and regulatory insight and public

service experience, provides the Company a critical voice and perspective as the Company continues to develop its business and grow its

Richard Celeste, Director,

is a consultant and Chair of the Board of Health Effects Institute (Boston, MA), Founding Chair and Member of the Board of the US

Olympic Museum (Colorado Springs, CO) and Chair of the Board of Global Communities (Silver Spring, MD).

Celeste, Director, is a consultant and Founding Chair and Member of the Board of the US Olympic Museum (Colorado Springs, CO), Chair

of the Board of Global Communities (Silver Spring, MD), Chair of Organic India Pvt Ltd.

(India), and Chair of Organic India USA (Boulder,

In addition, Mr.

serves on the Boards of Battelle for Kids (Columbus, OH) and The Gates Family Foundation (Denver, CO).

Celeste served as the Director

of the Peace Corps from 1979-1981, as Governor of Ohio from 1983 to 1991, and as the United States Ambassador to India from 1997 to 2001.

Celeste serves on the Boards of Battelle for Kids (Columbus, OH), The Gates Family Foundation (Denver, CO), and

Fabindia Ltd.

Celeste served as the Director of the Peace Corps from 1979-1981, as Governor of Ohio from 1983 to 1991, and

as the United States Ambassador to India from 1997 to 2001.

Celeste also served as the President of Colorado College from 2002-2011.

The Board believes Mr.

Celeste’s fundraising and regulatory

insight and public service experience provides the Company a critical voice and perspective as the Company continues to develop its business

and grow its operations.

Celeste’s fundraising and regulatory insight and public service experience provides the Company a critical

voice and perspective as the Company continues to develop its business and grow its operations.

Cavanaugh, Chief Executive Officer and Director, is currently the Chief Investment Officer of Tower 1 Partnership, LLC, an investment

firm focused on private and public investments in a variety of industries and manager of several affiliated investment partnerships.

Cavanaugh was Managing Director and Chief Financial Officer of Kaulig Companies, a single-member family office with

interests in private equity, real estate and wealth management.

Cavanaugh was Managing Director and Chief Financial Officer of Kaulig Companies, a single-member family office with interests

in private equity, real estate and wealth management.

From 2016 to 2018, Mr.

Cavanaugh was Managing Director of Conway MacKenzie,

a national turnaround consulting firm, where he established and managed the firm’s Cleveland, Ohio office and provided interim

management and restructuring services to distressed and underperforming businesses.

Cavanaugh was Managing Director of Conway MacKenzie, a national

turnaround consulting firm, where he established and managed the firm’s Cleveland, Ohio office and provided interim management

and restructuring services to distressed and underperforming businesses.

From 2006 to 2009 and 2011 to 2015, Mr.

was an executive with Resilience Capital Partners, a private equity firm focused on special situation control equity investments, where

he served in several capacities, including as a Partner and member of the firm’s Investment Committee and as an officer and director

of numerous portfolio companies.

Cavanaugh was an executive

with Resilience Capital Partners, a private equity firm focused on special situation control equity investments, where he served in several

capacities, including as a Partner and member of the firm’s Investment Committee and as an officer and director of numerous portfolio

Cavanaugh received a B.A.

from Columbia University in 1996, an M.B.A.

from the University of Michigan

Business School in 2003, and a J.D.

from the University of Michigan Business School

in 2003, and a J.D.

from the University of Michigan Law School in 2003.

Cavanaugh’s extensive executive management experience and financial, legal and capital raising expertise will be valuable

to the Company as it continues to develop its business and grow its operations.

The Board believes Mr.

Cavanaugh’s extensive executive management experience and financial, legal and capital raising expertise will be valuable to the

Company as it continues to develop its business and grow its operations.

McKilligan, Chief Financial Officer and Counsel, joined the Company in April 2012 as Controller, Counsel and Secretary.

McKilligan is also a director of Bristol Investment Fund, Ltd, a private investment fund.

He served as Chief Financial Officer,

General Counsel and Secretary of Research Solutions, Inc.

RSSS) from 2007 to 2011 and Chief Compliance Officer and Counsel

to Bristol Capital Advisors, LLC, an SEC-registered investment adviser, from 2006 to 2008.

McKilligan earned his law degree from

Cornell Law School, his MBA from the University of Chicago Booth School of Business, and his undergraduate degree in Accountancy

from the University of Illinois at Urbana-Champaign.

He is a member of the State Bar of California, the New York State Bar

Association and the Florida Bar.

is also a director of Bristol Investment Fund, Ltd, a private investment fund.

He served as Chief Financial Officer, General Counsel

and Secretary of Research Solutions, Inc.

RSSS) from 2007 to 2011 and Chief Compliance Officer and Counsel to Bristol Capital

Advisors, LLC, an SEC-registered investment adviser, from 2006 to 2008.

McKilligan earned his law degree from Cornell Law School,

his MBA from the University of Chicago Booth School of Business, and his undergraduate degree in Accountancy from the University of Illinois

at Urbana-Champaign.

He is a member of the State Bar of California, the New York State Bar Association and the Florida Bar.

Brandon Zipp, Chief Science Officer, joined the Company in December 2012 as Staff Scientist.

Zipp became Director of

Research and Development in 2014, and was appointed as Chief Science Officer in 2020.

Zipp became Director of Research

and Development in 2014, and was appointed as Chief Science Officer in 2020.

Zipp received a Ph.D.

in Biochemistry

and Molecular Biology and a B.S.

in Biochemistry and Molecular

Biology and a B.S.

in Molecular and Cellular Biology from the University of California at Davis.

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of stockholders or until their successor has been duly elected and qualified, or until their earlier death, resignation or removal.

Nomination and Corporate Governance Committee reviews the independence of each director annually and makes recommendations to the Board

based on its findings.

During these reviews, the Nomination and Corporate Governance Committee will consider transactions and relationships

between each director (and his or her immediate family and affiliates) and the Company and our management to determine whether any such

transactions or relationships are inconsistent with a determination that the director was independent under the independence standards

established by the Board from time to time and under the applicable rules of any applicable stock exchange, except to the extent permitted

by such rules.

The Nomination and Corporate Governance Committee has conducted its annual review of director independence, and in accordance

with the recommendation of the Nomination and Corporate Governance Committee, the Board has determined that all of our directors are

to its charter, the Nomination and Corporate Governance Committee reviews the independence of each director annually and makes

recommendations to the Board based on its findings.

During these reviews, the Nomination and Corporate Governance Committee is to

consider transactions and relationships between each director (and his or her immediate family and affiliates) and the Company and

our management in order to determine whether any such transactions or relationships are inconsistent with a determination that the

director was independent under the independence standards established by the Board from time to time and under the applicable rules

of any applicable stock exchange, except to the extent permitted by such rules.

While the Nomination and Corporate Governance

Committee did not conduct its annual review of director independence in 2022, the Board has determined that all of our directors are

independent other than Mr.

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and Committee Meetings

Board of Directors held six meetings during fiscal 2021.

The directors also, on occasion, communicate informally to discuss

the affairs of the Company and, when appropriate, take formal action by written consent of all of the directors, in accordance with our

Certificate of Incorporation, Bylaws and Nevada law.

Board of Directors held four meetings during the year ended December 31, 2022.

The directors also, on occasion, communicate informally

to discuss the affairs of the Company and, when appropriate, take formal action by written consent of all of the directors, in accordance

with our Certificate of Incorporation, Bylaws and Nevada law.

Our Board has three standing committees:

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Members of such committees met formally and informally from time to

time throughout the fiscal year ended March 31, 2021 on committee matters, with the Audit Committee holding six meetings,

the Compensation Committee holding no meetings, and the Nomination and Corporate Governance Committee holding no meetings.

Each director

attended, in person or by telephone, at least 75% of the meetings of the Board and any committee of which he or she was a member.

time throughout the year ended December 31, 2022 on committee matters, with the Audit Committee holding four meetings, the Compensation

Committee holding one meeting, and the Nomination and Corporate Governance Committee holding no meetings.

Each director attended, in

person or by telephone, at least 75% of the meetings of the Board and any committee of which he or she was a member.

at Annual Meeting

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all directors are encouraged to attend.

The Company did not hold a stockholders meeting last year.

The Board of Directors has three standing committees:

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Our Board has determined that Messrs.

Feighan and Celeste meet the definition of a “non-employee director”

under Rule 16b-3

under the Securities Exchange Act of 1934, as amended, the requirements of Section 162(m) of the Internal Revenue Code for “outside

directors.”

The duties of our Compensation Committee include, without limitation:

Feighan and Celeste meet the definition of a “non-employee director” under Rule 16b-3

under the Securities Exchange Act of 1934, as amended, the requirements of Section 162(m) of the Internal Revenue Code for “outside

directors.” The duties of our Compensation Committee include, without limitation:

reviewing, approving and administering our compensation

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review and recommend for approval by the Board the frequency with which the Company should submit to the

stockholders an advisory vote on the compensation of the Company’s named executive officers, taking into account any prior stockholder

advisory vote on the frequency with which the Company shall hold a stockholder advisory vote on compensation of the Company’s named

stockholders an advisory vote on the compensation of the Company’s named executive officers, taking into account any prior stockholder

advisory vote on the frequency with which the Company shall hold a stockholder advisory vote on compensation of the Company’s named

executive officers;

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Other than giving his recommendation, our Chief Executive Officer does not

participate in the Compensation Committee’s decisions regarding his own compensation.

and Corporate Governance Committee .

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in business, finance or administration;

familiarity with the Company’s industry;

and prominence and reputation.

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The Chairman serves in a presiding capacity at Board meetings and has such other duties as are determined by the Board from time to time.

Board’s Role in Risk Oversight

Board oversees the Company’s risk management efforts by reviewing information provided by management in order to oversee risk identification,

Board’s Role in Risk Oversight

Board oversees the Company’s risk management efforts by reviewing information provided by management in order to oversee risk identification,

risk management, and risk mitigation strategies.

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can be confidential or anonymous, if so designated, and may be submitted in writing to the following address:

Biopharma, Inc.

Innovations, Inc.

Richard McKilligan, Corporate Secretary

Avenue of the Stars, 2 nd Floor

Angeles, CA 90067

Park Avenue, Suite 400

communications received as described above will be opened by our Secretary for the sole purpose of determining whether the contents constitute

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Committee Interlocks and Insider Participation

fiscal 2021, none of our executive officers or directors was a member of the board of directors of any other company where the

relationship would be construed to constitute an interlocking relationship (as described in Item 407(e)(iii) of SEC Regulation S-K).

the year ended December 31, 2022, none of our executive officers or directors was a member of the board of directors of any other

company where the relationship would be construed to constitute an interlocking relationship (as described in Item 407(e)(iii) of

SEC Regulation S-K).

of Business Conduct and Ethics

Company’s Code of Business Conduct and Ethics applies to all of its employees, including its Chief Executive Officer and its Chief

Financial Officer.

The Code of Business Conduct and Ethics and all Committee charters are posted on the Company’s website at https://vitality.bio/investors/profile-copy/.

The Code of Business Conduct and Ethics and all Committee charters are posted on the Company’s website at https://malachiteinnovations.com/wp-content/uploads/2021/10/Malachite-Innovations-Code-of-Business-Conduct.pdf

16(a) Beneficial Ownership Reporting Compliance

16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of a registered

class of our equity securities (the “Reporting Persons”) to file with the SEC reports on Forms 3, 4 and 5 concerning

their ownership of and transactions in our common stock and other equity securities.

16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of a registered class of our

equity securities (the “Reporting Persons”) to file with the SEC reports on Forms 3, 4 and 5 concerning their ownership of

and transactions in our common stock and other equity securities.

solely on a review of SEC filings and other procedures performed as deemed necessary, we believe that all Reporting Persons complied

with these requirements during our fiscal year 2021.

with these requirements during the year ended December 31, 2022, except that each of our reporting officers and directors failed to file a timely Form 4 reporting their receipt

of options to purchase the Company’s common stock under the under the Malachite Innovations, Inc.

2021 Stock Incentive Plan on November

30, 2022 as reported in a Form 5 filed by each such reporting officer and director on March 31, 2023.

Executive Compensation

following table summarizes all compensation recorded by us in each of the fiscal years ended March 31, 2021 and March 31, 2020 for (i)

our current principal executive officer and principal financial officer, and (ii) our next most highly compensated executive officer

other than our principal executive officer and principal financial officer serving as an executive officer at the end of our 2021 fiscal

year and whose total compensation exceeded $100,000 in our 2021 fiscal year.

following table summarizes all compensation recorded by us during the year ended December 31, 2022, the nine months ended December 31,

2021 and the year ended March 31, 2021 for (i) our current principal executive officer and principal financial officer, and (ii) our

next most highly compensated executive officer other than our principal executive officer and principal financial officer serving as

an executive officer at the end of our 2022 fiscal year and whose total compensation exceeded $100,000 during the year ended December

Compensation Table

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Cavanaugh, Chief Executive Officer (2) (principal executive officer)

Ended 12/31/22

Period Ended 12/31/21

Ended 3/31/21

McKilligan, Chief Financial Officer (3) (principal financial officer)

Ended 12/31/22

Period Ended 12/31/21

Ended 3/31/21

Brandon Zipp, Chief Science Officer (4)

(1) The method used and the assumptions made to calculate the amortization

included in this table are described in Footnote 5 of the financial statements and the accompanying notes for the years ended March 31,

2021 and 2020 appearing elsewhere in this Annual Report.

amortization of an option to purchase 500,000 shares of common stock with an exercise price of $0.35 per share, granted in May 2019 and

an option to purchase 250,000 shares of common stock with an exercise price of $0.30 per share, granted in June 2019.

Cavanaugh was

appointed Chief Executive Officer in May 2019.

Includes amortization of an option to purchase 370,234 shares of common

stock with an exercise price of $0.50 per share, granted in July 2016, an option to purchase 75,000 shares of common stock with an exercise

price of $1.81 per share, granted in December 2017, and an option to purchase 250,000 shares of common stock with an exercise price of

$0.30 per share, granted in June 2019.

Zipp first became an executive officer in the fiscal year ended March 31, 2021.

amortization of an option to purchase 370,234 shares of common stock with an exercise price of $0.50 per share, granted in July

2016, an option to purchase 75,000 shares of common stock with an exercise price of $1.81 per share, granted in December 2017, and

an option to purchase 500,000 shares of common stock with an exercise price of $0.35 per share, granted in May 2019.

McKilligan entered into employment agreements with the Company, each dated September 24, 2020 (the “Zipp Employment

Agreement”

and the “McKilligan Employment Agreement”, respectively, and together, the “Employment Agreements”).

The Employment Agreements have initial terms ending September 24, 2021.

the Zipp Employment Agreement, Dr.

Zipp will receive an annualized base salary of $180,000 and in the event of a change of control, which

includes a sale of a majority of the equity of the Company or a sale of a majority of the Company’s assets (a “Change of

Control”), the Company shall pay to Dr.

Zipp a bonus equal to 2.5% of the net proceeds of such Change of Control on the

ending date of the first payroll period following the Change of Control.

Zipp is also entitled to severance payments equal to one

year’s of his then-current base salary in the event of termination by the Company without cause or for good reason after

a Change of Control.

Such severance benefits will be reduced by any renumeration received by Dr.

Zipp for other employment and payment

is subject to the receipt of a release of claims in favor of the Company and its affiliates from Dr.

the McKilligan Employment Agreement, Mr.

McKilligan will receive an annualized base salary of $180,000 and in the event of a Change of

Control, the Company shall pay to Mr.

McKilligan a bonus equal to 0.5% of the net proceeds of such Change of Control on the ending date

of the first payroll period following the Change of Control.

McKilligan is also entitled to severance payments equal to six months’

of his then-current salary in the event of termination by the Company without cause or for good reason after a Change of Control.

Such severance benefits will be reduced by any renumeration received by Mr.

McKilligan for other employment and payment is subject

to the receipt of a release of claims in favor of the Company and its affiliates from Mr.

Equity Awards at Fiscal Year-End

Option Awards

Number of securities underlying unexercised option

Ended 12/31/22

Period Ended 12/31/21

The method used and the assumptions made to calculate the fair value of option awards included in this table are described in Footnote

5 of the financial statements and the accompanying notes for the year ended December 31, 2022 and the nine months ended December 31,

2021 appearing elsewhere in this Annual Report.

Based on the fair value of (i) an option to purchase 500,000 shares of common stock with an exercise price of $0.35 per share, granted

in May 2019, (ii) an option to purchase 250,000 shares of common stock with an exercise price of $0.30 per share, granted in June 2019,

(iii) an option to purchase 350,000 shares of common stock with an exercise price of $0.277 per share, granted in December 2021, and

(iv) an option to purchase 750,000 shares of common stock with an exercise price of $0.18 per share, granted in November 2022.

Based on the fair value of (i) an option to purchase 75,000 shares of common stock with an exercise price of $1.81 per share, granted

in December 2017, (ii) an option to purchase 250,000 shares of common stock with an exercise price of $0.30 per share, granted in June

2019, (iii) an option to purchase 150,000 shares of common stock with an exercise price of $0.277 per share, granted in December 2021,

and (iv) an option to purchase 250,000 shares of common stock with an exercise price of $0.18 per share, granted in November 2022.

Based on the fair value of (i) an option to purchase 500,000 shares of common stock with an exercise price of $0.35 per share, granted

in May 2019, and (ii) an option to purchase 150,000 shares of common stock with an exercise price of $0.277 per share, granted in December

2021, and (iv) an option to purchase 250,000 shares of common stock with an exercise price of $0.18 per share, granted in November 2022.

Equity Awards at December 31, 2022

of securities underlying unexercised option

Unexercisable

Option Exercise Price ($)

Option Expiration Date

Michael Cavanaugh (1)

Richard McKilligan (2)

Brandon Zipp (3)

under the Company’s Equity Incentive Plan, the awards include an option to purchase 500,000 shares of common stock,

250,000 of which vested in May 2020 and 250,000 of which became fully exercisable on May 8, 2021, and an option to purchase 250,000

shares of common stock, 125,000 of which vested in June 2020 and 125,000 of which become fully exercisable on June 27, 2021.

under the Company’s Equity Incentive Plan, the awards include an option to purchase 10,000 shares of common stock, all

of which were vested and fully exercisable as of January 1, 2015, an option to purchase 20,000 shares of common stock, all of which

were vested and fully exercisable as of January 1, 2017, an option to purchase 20,000 shares of common stock, all of which were

vested and fully exercisable as of May 21, 2017, an option to purchase 370,234 shares of common stock, all of which were vested and

fully exercisable as of July 1, 2018, an option to purchase 75,000 shares of common stock, all of which were vested and fully

exercisable as of December 27, 2019, and an option to purchase 250,000 shares of common stock, 125,000 of which vested in June 2020

and 125,000 of which become fully exercisable on June 27, 2021.

under the Company’s Equity Incentive Plan, the awards include an option to purchase 2,500 shares of common stock, all

of which were vested and fully exercisable as of March 11, 2016, an option to purchase 7,500 shares of common stock, all of which

were vested and fully exercisable as of March 21, 2016, an option to purchase 15,000 shares of common stock, all of which were vested

and fully exercisable as of April 3, 2016, an option to purchase 20,000 shares of common stock, all of which were vested and fully

exercisable as of January 1, 2017, an option to purchase 20,000 shares of common stock, all of which were vested and fully exercisable

as of May 21, 2017, an option to purchase 370,234 shares of common stock, all of which were vested and fully exercisable as of July

1, 2018, an option to purchase 75,000 shares of common stock, all of which were vested and fully exercisable as of December 27, 2019,

and an option to purchase 500,000 shares of common stock, 250,000 of which vested in May 2020, and 250,000 of which became fully

exercisable on May 8, 2021.

Cavanaugh (1)

McKilligan (2)

under the Company’s Equity Incentive Plan, the awards consist of (i) an option to purchase 500,000 shares of common stock,

250,000 of which became fully exercisable in May 2020 and 250,000 of which became fully exercisable in May 2021, (ii) an option to

purchase 250,000 shares of common stock, 125,000 of which became fully exercisable in June 2020 and 125,000 of which became fully

exercisable in June 2021, (iii) an option to purchase 350,000 shares of common stock, all of which became fully exercisable in December

2021, and (iv) an option to purchase 750,000 shares of common stock all of which became fully exercisable in November 2022.

under the Company’s Equity Incentive Plan, the awards consist of (i) an option to purchase 370,234 shares of common stock,

all of which became fully exercisable in July 2018, (ii) an option to purchase 250,000 shares of common stock, 125,000 of which became

fully exercisable in June 2020 and 125,000 of which became fully exercisable in June 2021, and (iii) an option to purchase 150,000

shares of common stock, all of which became fully exercisable in December 2021, and (iv) an option to purchase 250,000 shares of

common stock all of which became fully exercisable in November 2022.

under the Company’s Equity Incentive Plan, the awards consist of (i) an option to purchase 370,234 shares of common stock,

all of which were became fully exercisable in July 2018, (ii) an option to purchase 500,000 shares of common stock, 250,000 of which

became fully exercisable in May 2020, and 250,000 of which became fully exercisable in May 2021, and (iii) an option to purchase

150,000 shares of common stock, all of which became fully exercisable in December 2021, and (iv) an option to purchase 250,000 shares

of common stock all of which became fully exercisable in November 2022.

receive a combination of cash and equity awards as compensation for their service.

There are no additional fees paid for meetings attended

although our directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection

with attendance at meetings of our Board of Directors and committees.

although our directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with

attendance at meetings of our Board of Directors and committees.

Compensation Table

following table shows compensation paid to our non-employee directors during the fiscal year ended March 31, 2021:

following table shows compensation paid to our non-employee directors during the year ended December 31, 2022:

(non-cash) (1)

All other compensation

Richard Celeste (1)

Edward Feighan (1)

of March 31, 2021, the aggregate number of stock and option awards held by each of our non-employee directors was as follows:

Celeste held an option award to purchase 500,000 shares of our common stock with an exercise price of $0.35 per share, all of

which are fully vested, and (ii) Mr.

Feighan held an option award to purchase 500,000 shares of our common stock with an exercise

price of $0.35 per share, all of which are fully vested, and an option to purchase 250,000 shares of our common stock with an exercise

price of $0.30 per share, 125,000 of which vested in June 2020 and 125,000 of which become fully exercisable on June 27, 2021.

method used and the assumptions made to calculate the amortization are described in Footnote 5 of the financial statements and the accompanying notes for the years ended March 31, 2021

and 2020 appearing elsewhere in this Annual Report.

of December 31, 2022, the aggregate number of stock and option awards held by each of our non-employee directors was as follows:

Celeste held an option award to purchase 500,000 shares of our common stock with an exercise price of $0.35 per share, an

option to purchase 250,000 shares of our common stock with an exercise price of $0.277 per share, and an option to purchase 250,000

shares of our common stock with an exercise price of $0.18 per share, all of which are fully vested, and (ii) Mr.

Feighan held an

option award to purchase 500,000 shares of our common stock with an exercise price of $0.35 per share, an option to purchase 250,000

shares of our common stock with an exercise price of $0.30 per share, and an option to purchase 250,000 shares of our common stock

with an exercise price of $0.277 per share, and an option to purchase 250,000 shares of our common stock with an exercise price of

$0.18 per share, all of which are fully vested.

The method used and the assumptions made to calculate the fair value of the options

are described in Footnote 5 of the financial statements and the accompanying notes for the year ended December 31, 2022 and the nine

months ended December 31, 2021 appearing elsewhere in this Annual Report.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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of each person named in the table is:

c/o Vitality Biopharma, Inc., 1907 Avenue of the Stars, 2 nd Floor, Los Angeles, California

Shares of our common stock subject to options, warrants or other rights currently exercisable or exercisable within 60 days after

May 18, 2021, are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the person

holding such options, warrants, convertible notes or other rights, but are not deemed outstanding for computing the beneficial ownership

percentage of any other person.

Name of Beneficial Owner

Beneficially Owned

Percentage Beneficially

Directors and Named Executive Officers:

Edward Feighan (2)

Richard Celeste (3)

Michael Cavanaugh (4)

Richard McKilligan (5)

c/o Malachite Innovations, Inc., 200 Park Avenue, Suite 400, Cleveland, Ohio 44122.

Shares of our

common stock subject to options, warrants or other rights currently exercisable or exercisable within 60 days after December 31, 2022, are

deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the person holding such options,

warrants, convertible notes or other rights, but are not deemed outstanding for computing the beneficial ownership percentage of any

other person.

of Beneficial Owner

and Named Executive Officers:

Cavanaugh (4)

McKilligan (5)

Brandon Zipp (6)

Current Directors and Executive Officers as a Group (5 persons)

Joseph LoConti (7)

on 50,840,147 shares of our common stock issued and outstanding as of May 18, 2021.

Directors and Executive Officers as a Group (5 persons)

National Insurance Company (8)

on 78,116,814 shares of our common stock issued and outstanding as of March 30, 2023.

Except as otherwise indicated, we believe

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in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

(i) 502,500 shares of the Company’s common stock acquired in connection with a Securities Purchase Agreement dated October

19, 2018, (ii) 100,376 shares of the Company’s common stock acquired in connection with a Share Exchange Agreement dated

October 19, 2018, (iii) 1,402,813 shares of the Company’s common stock acquired in connection with an a mendment

(i) 502,500 shares of the Company’s common stock acquired in connection with a Securities Purchase Agreement dated October

19, 2018, (ii) 100,376 shares of the Company’s common stock acquired in connection with a Share Exchange Agreement dated October

19, 2018, (iii) 1,402,813 shares of the Company’s common stock acquired in connection with an a mendment

dated January 18, 2019 to the Securities Purchase Agreement dated October 19, 2018 , and (iv) options to purchase 1,250,000

shares of common stock, 375,000 of which vested in May and June 2020, 250,000 of which vested on May 8, 2021, and 125,000 of which

shall vest on June 27, 2021.

Also includes (x) 167,500 shares of the Company’s common stock acquired by The Feighan

Family Fund, LLC (the “Feighan Fund”), an entity beneficially owned by Mr.

Feighan in connection with a Securities Purchase

Agreement dated October 19, 2018, (y) 50,124 shares of the Company’s common stock acquired by the Feighan Fund in connection

with a Share Exchange Agreement dated October 19, 2018, and (z) 467,604 shares of the Company’s common stock acquired

by the Feighan Fund in connection with an a mendment dated January 18, 2019 to the Securities

Purchase Agreement dated October 19, 2018.

an option to purchase 500,000 shares of common stock, 250,000 of which vested in May 2020 and 250,000 of which vested on May 8, 2021.

(i) 50,000 shares of the Company’s common stock acquired in connection with a Securities Purchase Agreement dated October 19,

2018, (ii) 257,500 shares of the Company’s common stock acquired in connection with a Share Exchange Agreement dated October

19, 2018, (iii) 572,291 shares of the Company’s common stock acquired in connection with an a mendment

dated January 18, 2019 to the Securities Purchase Agreement dated October 19, 2018 , and (iv) options to purchase 750,000 shares

of common stock, 375,000 of which vested in May and June 2020, 250,000 of which vested on May 8, 2021, and 125,000 of which shall

vest on June 27, 2021.

(i) a grant of 10,000 shares of restricted common stock, which vested as of January 1, 2015, (ii) an option to purchase

20,000 shares of common stock, all of which were vested and fully exercisable as of January 1, 2017, (iii) an option to purchase

20,000 shares of common stock, all of which were vested and fully exercisable as of May 21, 2017, (iv) an option to purchase

370,234 shares of common stock, all of which were vested and fully exercisable as of July 1, 2018, (v) an option to purchase

75,000 shares of common stock, all of which were vested and fully exercisable as of December 27, 2019, and (vi) an option

to purchase 250,000 shares of common stock, 125,000 of which vested in June 2020, and 125,000 of which shall vest on June 27, 2021.

(i) 64,000 shares of common stock, of which 50,000 shares were purchased on the open market and 14,000 of which represent

restricted stock awards and were vested and fully exercisable as of January 1, 2016, (ii) an option to purchase 2,500 shares

of common stock, all of which were vested and fully exercisable as of March 11, 2016, (iii) an option to purchase 7,500 shares

of common stock, all of which were vested and fully exercisable as of March 21, 2016, (iv) an option to purchase 15,000 shares

of common stock, all of which were vested and fully exercisable as of April 3, 2016, (v) an option to purchase 20,000 shares

of common stock, all of which were vested and fully exercisable as of January 1, 2017, (vi) an option to purchase 20,000 shares

of common stock, all of which were vested and fully exercisable as of May 21, 2017, (vii) an option to purchase 370,234 shares

of common stock, all of which were vested and fully exercisable as of July 1, 2018, (viii) an option to purchase 75,000 shares

of common stock, all of which were vested and fully exercisable as of December 27, 2019, and (xi) an option to purchase 500,000

shares of common stock, 250,000 of which vested in May 2020, and 250,000 of which vested on May 8, 2021.

information is based solely on Amendment No.

2 to Schedule 13D filed on April 2, 2019.

Joseph LoConti has reported the sole power

to vote and dispose of 7,022,584 shares of the Company’s common stock and the shared power to vote and dispose of 6,130,479

shares of the Company’s common stock.

LoConti’s address is 200 Park Avenue, Suite 400, Orange Village, Ohio 44122.

shares of common stock, all of which are fully vested.

Also includes (x) 167,500 shares of the Company’s common stock acquired

by The Feighan Family Fund, LLC (the “Feighan Fund”), an entity beneficially owned by Mr.

Feighan in connection with

a Securities Purchase Agreement dated October 19, 2018, (y) 50,124 shares of the Company’s common stock acquired by the Feighan

Fund in connection with a Share Exchange Agreement dated October 19, 2018, and (z) 467,604 shares of the Company’s common stock

acquired by the Feighan Fund in connection with an a mendment dated January 18, 2019 to the

Securities Purchase Agreement dated October 19, 2018.

options to purchase 1,000,000 shares of common stock, all of which are fully vested.

(i) 50,000 shares of the Company’s common stock acquired in connection with a Securities Purchase Agreement dated October 19,

2018, (ii) 257,500 shares of the Company’s common stock acquired in connection with a Share Exchange Agreement dated October

19, 2018, (iii) 572,291 shares of the Company’s common stock acquired in connection with an a mendment

dated January 18, 2019 to the Securities Purchase Agreement dated October 19, 2018 , and (iv) options to purchase 1,850,000

shares of common stock, all of which are fully vested.

(i) a grant of 10,000 shares of restricted common stock, which is fully vested, and (ii) options to purchase 1,020,234 shares of

common stock, all of which are fully vested.

(i) 64,000 shares of common stock, 14,000 of which represent a grant of restricted common stock, which is fully vested, and (ii)

options to purchase 1,270,234 shares of common stock, all of which are fully vested.

information is based solely on the Form 4 filed on August 26, 2021, and Amendment No.

3 to Schedule 13D filed on May 27, 2022.

LoConti has reported the sole power to vote and dispose of 7,256,584 shares of the Company’s common stock and the shared power

to vote and dispose of 19,463,813 shares of the Company’s common stock, 6,666,667 of which are warrant shares.

address is 200 Park Avenue, Suite 400, Orange Village, Ohio 44122.

information is based solely on the Form 13G filed on June 1, 2022.

Indemnity National Insurance Company has reported the sole power

to vote and dispose of 26,666,666 shares of the Company’s common stock, 13,333,333 of which are warrant shares.

Indemnity National

Insurance Company’s address is 238 Bedford Way, Franklin, Tennessee 37064.

Certain Relationships and Related Transactions, and Director Independence

with Related Persons

April 23, 2012, we entered into a lease agreement with One World Ranches LLC pursuant to which we leased from One World Ranches LLC,

an entity jointly owned by Dr.

Avtar Dhillon, the former Chairman of our Board of Directors and his wife, Diljit Banins, certain office

and laboratory space located in Yuba City, California.

Our rent payments thereunder were $2,300 per month until May 1, 2017 and increased

to $2,600 per month on May 1, 2017.

That lease agreement terminated on May 1, 2020.

May 8, 2019, the Company and Mr.

Robert Brooke, the former Chief Executive Officer of the Company, entered into a separation agreement

and release on May 8, 2019 (the “Separation Agreement”).

Pursuant to the Separation Agreement, Mr.

Brooke received a severance

payment equal to six-months’

salary, payable in six equal monthly installments of $18,750, reimbursement of COBRA payments for

up to 12 months, and agreed to release any and all claims against the Company and its affiliates.

as described above, during the fiscal years ended March 31, 2021 and 2020, and through the filing of this Annual Report,

there have been no transactions, and there are no currently proposed transactions, in which we were or are to be a participant and

the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed

fiscal years and in which any related person had or will have a direct or indirect material interest.

the year ended December 31, 2022 and the nine months ended December 31, 2021, and through the filing of this Annual Report, there have

been no transactions, and there are no currently proposed transactions, in which we were or are to be a participant and the amount involved

exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years

and in which any related person had or will have a direct or indirect material interest.

Board of Directors has determined that Messrs.

Feighan and Celeste would qualify as “independent”

as that term is defined

Feighan and Celeste would qualify as “independent” as that term is defined

by Nasdaq Listing Rule 5605(a)(2).

Cavanaugh would not qualify as “independent”

because he currently serves as our Chief

Cavanaugh would not qualify as “independent” because he currently serves as our Chief

Executive Officer.

Principal Accounting Fees and Services

Registered Public Accounting Firm’s Fee Summary

following table provides information regarding the fees billed to us by Weinberg & Company, P.A., our independent registered public

accounting firm, for services rendered in the fiscal years ended March 31, 2021 and 2020.

All fees described below were approved by our

Board of Directors:

For the years ended March 31,

Audit-Related Fees

All Other Fees

The fees identified under this caption were for professional services rendered by Weinberg & Company, P.A.

for the audit

of our annual financial statements.

The fees identified under this caption also include fees for professional services rendered by Weinberg

& Company, P.A.

Registered Public Accounting Firm’s Fee Summary

following table provides information regarding the fees billed to us by Meaden & Moore, Ltd., our independent registered public accounting

firms, for services rendered in the year ended December 31, 2022 and the nine months ended December 31, 2021.

All fees described below

were approved by our Board of Directors:

the year ended

December 31, 2022

December 31, 2021

The fees identified under this caption were for professional services rendered by Meaden & Moore, Ltd.

for the audit of

our annual financial statements.

The fees identified under this caption also include fees for professional services rendered by Meaden

& Moore, Ltd.

for the review of the financial statements included in our quarterly reports on Forms 10-Q.

3 unchanged sentences

The fees identified under this caption consist of assurance and related services reasonably related to the performance of the

audit or review of financial statements and not reported under the caption “

Audit Fees ”.

audit or review of financial statements and not reported under the caption “ Audit Fees ”.

We incurred no such fees

during the year ended December 31, 2022 and the nine months ended December 31, 2021.

Tax fees consist principally of assistance related to tax compliance and reporting.

These fees consist primarily of accounting consultation fees related to potential collaborative agreements.

no such fees in during the fiscal years ended March 31, 2021 or 2020.

no such fees during the nine months ended December 31, 2021.

Policies and Procedures

Audit Committee’s charter requires our Audit Committee to pre-approve all audit and permissible non-audit services to be performed

for the Company by our independent registered public accounting firm, giving effect to the “de minimis”

exception for ratification

Audit Committee’s charter requires our Audit Committee to pre-approve all audit and permissible non-audit services to be performed

for the Company by our independent registered public accounting firm, giving effect to the “de minimis” exception for ratification

of certain non-audit services allowed by the applicable rules of the SEC, in order to assure that the provision of such services does

not impair the auditor’s independence.

Since the establishment of our Audit Committee on August 24, 2012, the Audit Committee approved

4 unchanged sentences

financial statements filed as a part of this Annual Report are as follows:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of March 31, 2021 and 2020

Consolidated Statements of Operations for the years ended March 31, 2021 and 2020

Consolidated Statements of Stockholders’

Equity for the years ended March 31, 2021 and 2020

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

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm (PCAOB ID 314)

Balance Sheets as of December 31, 2022 and December 31, 2021

Statements of Operations for the year ended December 31, 2022 and the nine months ended December 31, 2021

Statements of Stockholders’ Equity for the year ended December 31, 2022 and the nine months ended December 31, 2021

Statements of Cash Flows for the year ended December 31, 2022 and the nine months ended December 31, 2021

to Consolidated Financial Statements

are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

exhibits filed with this Annual Report are set forth in the Exhibit Index included at the end of this Annual Report,

which is incorporated herein by reference.

exhibits filed with this Annual Report are set forth in the Exhibit Index included at the end of this Annual Report, which is incorporated

herein by reference.

Form 10-K Summary

1 unchanged sentence

on its behalf by the undersigned, thereunto duly authorized.

BIOPHARMA, INC.

INNOVATIONS, INC.

March 31, 2023

Michael Cavanaugh

12 unchanged sentences

Executive Officer and Director

March 31, 2023

Executive Officer)

Edward Feighan

March 31, 2023

Richard Celeste

Agreement and Plan of Merger, dated September 14, 2011, by and between Stevia First Corp.

March 31, 2023

and Plan of Merger, dated September 14, 2011, by and between Stevia First Corp.

and Legend Mining Inc.

(Incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on October 14, 2011.)

Articles of Incorporation of Stevia First Corp.

(Incorporated by reference to Exhibit 3.1 to the registrant’s Registration Statement on Form S-1 filed with the SEC on August 6, 2008 (File No.

(Incorporated by reference

to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on October 14, 2011.)

of Incorporation of Stevia First Corp.

(Incorporated by reference to Exhibit 3.1 to the registrant’s Registration Statement

on Form S-1 filed with the SEC on August 6, 2008 (File No.

333-152830).)

Certificate of Amendment of Articles of Incorporation of Vitality Biopharma, Inc.

(Incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on July 19, 2016.)

Bylaws of Stevia First Corp.

(Incorporated by reference to Exhibit 3.2 to the registrant’s Registration Statement on Form S-1 filed with the SEC on August 6, 2008 (File No.

of Amendment of Articles of Incorporation of Vitality Biopharma, Inc.

(Incorporated by reference to Exhibit 3.1 to the registrant’s

Current Report on Form 8-K filed with the SEC on July 19, 2016.)

of Merger, effective October 10, 2011 (Incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form

8-K filed with the SEC on October 14, 2011.)

of Change, effective October 10, 2011 (Incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form

8-K filed with the SEC on October 14, 2011.)

of Merger, dated as of September 30, 2021, (Incorporated by reference to Exhibit 2.1.1 to the registrant’s Current Report on

Form 8-K filed with the SEC on October 12, 2021.)

of Stevia First Corp.

(Incorporated by reference to Exhibit 3.2 to the registrant’s Registration Statement on Form S-1 filed

with the SEC on August 6, 2008 (File No.

333-152830).)

Certificate of Amendment of Bylaws of Stevia First Corp.

(Incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 7, 2012.)

Stevia First Corp.

2012 Stock Incentive Plan (Incorporated by reference to Annex A of to the registrant’s Proxy Statement on Schedule 14A filed with the SEC on June 24, 2016.)

Securities Purchase Agreement, dated October 19, 2018 by and among Vitality Biopharma, Inc., and the Purchasers listed on the signature pages thereto (Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on October 23, 2018.)

Securities Exchange Agreement, dated October 19, 2018 by and among Vitality Biopharma, Inc., and the Shareholders listed on the signature pages thereto (Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on October 23, 2018.)

Amendment to Securities Purchase Agreement, dated as of January 18, 2019 by and among Vitality Biopharma, Inc.

and the Investors listed on the signature pages thereto (Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on January 22, 2019.)

Separation Agreement and Release, dated May 8, 2019, by and between the registrant and Robert Brooke.

(Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on May 14, 2019.)

Third Amendment to Vitality Biopharma, Inc.

2012 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on May 14, 2019.)

of Amendment of Bylaws of Stevia First Corp.

(Incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on

Form 8-K filed with the SEC on February 7, 2012.)

of Malachite Innovations, Inc., effective as of November 10, 2021 (Incorporated by reference to Exhibit 3.2.3 to the registrant’s

Quarterly Report on Form 10-Q filed with the SEC on November 15, 2021.)

Purchase Agreement, dated October 19, 2018 by and among Vitality Biopharma, Inc., and the Purchasers listed on the signature pages

thereto (Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on October

Exchange Agreement, dated October 19, 2018 by and among Vitality Biopharma, Inc., and the Shareholders listed on the signature pages

thereto (Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on October

to Securities Purchase Agreement, dated as of January 18, 2019 by and among Vitality Biopharma, Inc.

and the Investors listed on

the signature pages thereto (Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed

with the SEC on January 22, 2019.)

Agreement and Release, dated May 8, 2019, by and between the registrant and Robert Brooke.

(Incorporated by reference to Exhibit

10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on May 14, 2019.)

Amendment to Vitality Biopharma, Inc.

2012 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 to the registrant’s

Current Report on Form 8-K filed with the SEC on May 14, 2019.)

Agreement between the Company and Dr.

Brandon Zipp, dated September 24, 2020 (Incorporated by reference to Exhibit 10.1 to

the registrant’s Current Report on Form 8-K filed with the SEC on September 25, 2020.)

Agreement between the Company and Richard McKilligan, dated September 24, 2020 (Incorporated by reference to Exhibit 10.2

to the registrant’s Current Report on Form 8-K filed with the SEC on September 25, 2020.)

Consent of Weinberg & Company, P.A.

Power of Attorney (included on the signature page to this Annual Report.)

Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities and Exchange Act of 1934

Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities and Exchange Act of 1934

Certification of Principal Executive Officer pursuant to 18 U.S.C.

Brandon Zipp, dated September 24, 2020 (Incorporated by reference to Exhibit 10.1 to the registrant’s

Current Report on Form 8-K filed with the SEC on September 25, 2020.)

Agreement between the Company and Richard McKilligan, dated September 24, 2020 (Incorporated by reference to Exhibit 10.2 to the

registrant’s Current Report on Form 8-K filed with the SEC on September 25, 2020.)

Purchase Agreement, dated as of August 19, 2021, by and between the registrant, Triton Funds, LP and Triton Funds, LLC (Incorporated

by reference to Exhibit 10.9 to the registrant’s Registration Statement on Form S-1 filed with the SEC on August 31, 2021 (File

of Common Stock Purchase Warrant (Incorporated by reference to Exhibit 10.10 to the registrant’s Registration Statement on

Form S-1 filed with the SEC on August 31, 2021 (File No.

Biopharma, Inc.

2021 Stock Incentive Plan (Incorporated by reference to Exhibit 99.1 to the registrant’s Registration Statement

on Form S-8 filed with the SEC on September 3, 2021.)

of Meaden & Moore, Ltd.

of Attorney (included on the signature page to this Annual Report.)

Certification

of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities and Exchange Act of 1934

Certification

of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities and Exchange Act of 1934

Certification

of Principal Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of

Certification of Principal Financial Officer pursuant to 18 U.S.C.

Certification

of Principal Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of

Instance Document

Taxonomy Extension Schema Document

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Taxonomy Extension Presentation Linkbase Document

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

contract or compensatory plan or arrangement.

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of March 31, 2021 and 2020

Consolidated Statements of Operations for the years ended March 31, 2021 and 2020

Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2021 and 2020

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

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm (PCAOB ID 314 )

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the year ended December 31, 2022 and the nine months ended December 31, 2021

Statements of Stockholders’ Equity for the year ended December 31, 2022 and nine months ended December 31, 2021

Statements of Cash Flows for the year ended December 31, 2022 and the nine months ended December 31, 2021

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Stockholders and Board of Directors of Vitality Biopharma, Inc.

the Stockholders and Board of Directors of

Innovations, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Vitality Biopharma, Inc.

(the “Company”) as of March

31, 2021 and 2020, the related consolidated statements of operations, stockholders’ equity, and cash flows for the years

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

In our opinion,

the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March

31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting

principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial

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

As discussed in Note 1 to the consolidated

financial statements, the Company has suffered recurring losses from operations and negative cash flows from operations that raise

substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also

described in Note 1.

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

have audited the accompanying consolidated balance sheets of Malachite Innovations, Inc.

(the “Company”) as of December 31,

2022 and 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December

31, 2022 and the nine months ended December 31, 2021, and the related notes and schedules (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December

31, 2022 and the nine months ended December 31, 2021, in conformity with accounting principles generally accepted in the United States

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

Our responsibility is to express an

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

We are a public accounting firm registered

with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with

respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

Our responsibility is to express an opinion

on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting

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

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

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

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether

due to error or fraud.

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

financial reporting.

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.

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

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

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

of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the entity’s internal control over financial reporting.

Accordingly, we express no such opinion.

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

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis,

evidence regarding the amounts and disclosures in the 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

audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due

to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles

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

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

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was

communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are

material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication

of the critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

on extinguishment of liabilities

As described in Note 2 to the consolidated

financial statements, the Company recorded a gain on the extinguishment of liabilities of $1,456,574 during the year ended March 31,

2021, including a gain on settlement with a vendor of $1,062,405, and a gain on extinguishment of an advance of $296,653 that was

time barred by the statute of limitations.

We identified management’s evaluation of

the Company’s settlement with vendor and extinguishment of the advance as a critical audit matter as these were unusual and significant

transactions that required a high degree of auditor judgement and audit effort.

The primary procedures we performed to address this critical audit

matter included:

We read the terms of the settlement agreement.

We evaluated the reasonableness of management’s assessment

that the outstanding advance was time barred by the statute of limitations.

We evaluated the Company’s accounting analysis in determining

applicable accounting treatment.

We performed inquiries of management and of outside legal counsel.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements

that were communicated or required to be communicated to the audit committee and that:

(1) related to accounts or disclosures that are

material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgements.

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,

and we are not, by communicating the critical matters below, providing separate opinions on the critical audit matters or on the accounts

or disclosures to which they relate.

Company has experienced recurring losses from operations and negative cash flows from operations which raise substantial doubt about

its ability to continue as a going concern.

However, management believes the substantial doubt is alleviated, based on the acquisition

of a revenue-generating subsidiary and additional debt financing via a revolving credit facility, that provides the Company with enough

funds to ensure continuing operations as a stand-alone entity for a period of at least one year from the issuance of these consolidated

financial statements.

determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty

regarding the Company’s future cash flows and the risk of bias in management’s judgments and assumptions in their determination.

The evaluation of certain assumptions used in the Company’s estimate of its cash inflows and outflows used in its forecasted model

of liquidity for at least 12 months beyond the date of the issuance of the consolidated financial statements involved a high degree of

subjective auditor judgment.

Our audit procedures related to the Company’s assertion on its ability to continue as a going concern

included the following, among others:

We gained an understanding of the internal controls over the Company’s going concern evaluation, including the inputs and assumptions

used in forecasted results.

We assessed whether the Company’s determination that there is no substantial doubt about the entity’s ability to continue

as a going concern was adequately disclosed, including adequate disclosure of detail related to management’s plan.

We tested the reasonableness of the forecasted operating expenses, including uses and sources of cash used in management’s assessment

of whether the Company has sufficient liquidity to fund operations for at least one year from the consolidated financial statement issuance

This testing included inquiries with management, testing of revenue transactions, comparison of prior period forecasts to actual

results, consideration of positive and negative evidence impacting management’s forecasts, the Company’s financing arrangements

in place as of the report date, market and industry factors, and consideration of the Company’s relationships with its financing

Meaden & Moore, Ltd

& MOORE, LTD.

have served as the Company’s auditor since 2021.

Weinberg & Company, P.A.

Angeles, California

BIOPHARMA, INC.

INNOVATIONS, INC.

BALANCE SHEETS

March 31, 2021

March 31, 2020

and cash equivalents

current assets

Cash and cash equivalents

Prepaid expenses

Total current assets

Operating lease right-of-use asset

Liabilities and Stockholders’

net of accumulated depreciation

long-term assets

and Stockholders’ Equity

portion of long-term debt

current liabilities

Accounts payable and accrued liabilities

Operating lease liability, short-term

Total liabilities

Commitments and contingencies

Stockholders’

Common stock, par value $0.001 per share;

debt, net of current portion

long-term debt

Stockholders’

stock, par value $ 0.001 per share;

1,000,000,000 shares authorized;

50,840,147 shares issued and outstanding, respectively

Additional paid-in-capital

Accumulated deficit

78,116,814 and 51,450,147 shares issued and outstanding, respectively

paid-in-capital

( 50,212,854 )

( 49,140,678 )

Total stockholders’

Total Liabilities and Stockholders’

stockholders’ equity (deficit)

Liabilities and Stockholders’ Equity

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

BIOPHARMA, INC.

INNOVATIONS, INC.

STATEMENTS OF OPERATIONS

Years Ended March 31,

Months Ended December 31, 2021

and administrative

and development

operating expenses

General and administrative

Research and development

Rent - related party

Total operating expenses

Loss from operations

Gain on extinguishment of liabilities

Change in fair value of derivative liability

Total other income

Loss from continuing operations

Loss from discontinued operations

from operations

( 1,100,433 )

Net loss per share from continuing operations - basic and diluted

Net loss per share from discontinued operations - basic and diluted

Net loss per share - basic and diluted

Weighted average number of common shares outstanding - basic and diluted

( 1,712,699 )

income (expense):

on loan forgiveness

income (expense)

other income (expense)

$ ( 1,072,176 )

$ ( 1,712,969 )

loss per share – basic and diluted

average number of common shares outstanding – basic and diluted

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

BIOPHARMA, INC.

INNOVATIONS, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

ENDED MARCH 31, 2021 and 2020

Balance, March 31, 2019

ENDED DECEMBER 31, 2022 AND THE NINE MONTHS ENDED DECEMBER 31, 2021

March 31, 2021

$ ( 47,427,709 )

Cancellation of shares

Fair value of vested stock options

Balance, March 31, 2020

and warrants issued for cash

value of vested stock options

( 1,712,969 )

Fair value of vested stock options

Balance, March 31, 2021

( 1,712,969 )

December 31, 2021

$ ( 49,140,678 )

$ ( 381,641 )

and warrants issued for cash

issued in exchange for Range

value of vested stock options

( 1,072,176 )

December 31, 2022

$ ( 50,212,854 )

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

BIOPHARMA, INC.

INNOVATIONS, INC.

STATEMENTS OF CASH FLOWS

Years Ended March 31,

Cash flows from operating activities:

December 31, 2022

December 31, 2021

flows from operating activities:

$ ( 1,072,176 )

Loss from discontinued operations

Loss from continuing operations

Adjustments to reconcile loss from continuing operations to net cash used in operating activities:

Fair value of vested stock options

Operating lease expense

Change in fair value of derivative liability

Gain on extinguishment of liabilities, net of cash received of $450,000

Accrual of interest added to note payable

Changes in operating assets and liabilities:

Prepaid expense and other current assets

Accounts payable and accrued liabilities

Accounts payable –

related party

Operating lease liability

Net cash used in operating activities –

continuing operations

Net cash used in operating activities –

discontinued operations

Net cash used in operating activities

$ ( 1,712,969 )

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

value of vested stock options

in operating assets and liabilities:

expense and other current assets

payable and accrued liabilities

cash used in operating activities

( 1,365,744 )

flows from investing activities:

acquired in acquisition of Range Environmental Resources

( 5,813,057 )

paid for acquisition of Range Environmental Resources

cash used in investing activities

( 6,547,230 )

provided by financing activities:

from issuance of common shares and warrants

from long-term debt

of long-term debt

of SBA disaster loan

of line of credit

cash provided by financing activities

Proceeds from PPP loan

Net cash provided by financing activities –

continuing operations

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents - beginning of period

Cash and cash equivalents - end of period

Supplemental disclosure of cash flow information:

Cash paid during the period for:

Supplemental non-cash investing and financing activities:

Initial recognition of operating lease right-of-use assets and operating lease obligations upon adoption of new lease accounting standard

Cancellation of shares

increase (decrease) in cash and cash equivalents

and cash equivalents - beginning of period

and cash equivalents - end of period

disclosure of cash flow information:

paid during the period for:

non-cash investing and financing activities:

issued for acquisition

debt from Range Reclamation Entities acquisition

Forgiveness of PPP loan

$ ( 109,435 )

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

BIOPHARMA, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

YEARS ENDED MARCH 31, 2021 AND 2020

INNOVATIONS, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022 AND THE NINE MONTHS ENDED DECEMBER 31, 2021

BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Biopharma, Inc.

(the “Company”, “we”, “us” or “our”), was incorporated in the

State of Nevada on June 29, 2007.

2015, the Company developed a new class of cannabinoids known as cannabosides, which were discovered through application of the

Company’s proprietary enzymatic bioprocessing technologies.

In 2016, the Company received approvals from the U.S.

Drug Enforcement

Administration (the “DEA”) and the State of California to initiate studies and manufacturing scale-up at its research

and development facilities in order to develop cannabosides.

Currently, we do not have any commercial products and have not yet

generated any revenues from our cannabinoid prodrug pharmaceuticals.

Going Concern

The accompanying financial

statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities

and commitments in the normal course of business.

As reflected in the accompanying financial statements, during the year ended March

31, 2021, the Company incurred a net loss of $880,851 and used $1,605,076 of cash in our operating activities.

These factors raise substantial

doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are

The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a

going concern.

The ability to continue as

a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or raising additional capital

to meet its obligations and repay its liabilities arising from normal business operations when they come due.

We estimate as of March

31, 2021, we will have sufficient funds to operate the business for the next eight months.

Since our existing cash balances are estimated

to be insufficient to fund our currently planned level of operations, we likely will need additional financing or other sources of capital

to fund our planned future operations.

Further, these estimates could differ if we encounter unanticipated difficulties, or if our estimates

of the amount of cash necessary to operate our business prove to be wrong, and we use our available financial resources faster than we

currently expect.

No assurance can be given that any future financing or capital, if needed, will be available or, if available, that

it will be on terms that are satisfactory to the Company.

We do not presently have,

nor do we expect in the near future to have, significant revenue to fund our business from our operations, and will need to obtain most

of our necessary funding from external sources in the near term.

Since inception, the Company has experienced recurring operating losses

and negative operating cash flows, and we have funded our operations primarily through equity and debt financings, and we expect to continue

to rely on these sources of capital in the future.

However, if we raise additional funds by issuing equity or convertible debt securities,

our existing stockholders’

ownership will be diluted, and obtaining commercial loans would increase our liabilities and future

cash commitments.

If we cannot raise the money that we need in order to continue to develop our business, we will be forced to delay,

scale back or eliminate some or all of our proposed operations.

Company is subject to risks and uncertainties of the COVID-19 pandemic that could adversely impact our business, our liquidity

and access to capital markets and our business development activities.

The Company has implemented additional health and safety

precautions and protocols in response to the pandemic and government guidelines.

extent of the impact of the COVID-19 pandemic has had and will continue to have on the Company is highly uncertain and difficult

to predict and quantify.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s

business, results of operations and financial condition will depend on future developments that are highly uncertain, including

as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, including vaccination

efforts, as well as the economic impact on local, regional, national and international markets.

Innovations, Inc.

(the “Company”, “we”, “us” or “our”), was incorporated in the State

of Nevada on June 29, 2007.

founded in 2007 as Legend Mining Inc., the Company began operations as a mineral extraction exploration business.

In 2011, the Company

changed its name to Stevia First Corp and pursued a new strategy focused on developing stevia-based additives for the food and beverage

In 2015, the Company changed its name to Vitality Biopharma, Inc.

and pursued a new strategy focused on developing cannabinoid-based

prodrugs anticipated to treat inflammatory conditions of the gastrointestinal tract by unlocking the therapeutic properties of cannabinoids

but without their unwanted psychoactive side effects.

October 2021, the Company changed its name to Malachite Innovations, Inc.

and reorganized its corporate structure and created the

following two wholly-owned operating subsidiaries:

(i) Graphium Biosciences, Inc., a Nevada corporation (“Graphium”),

into which the Company contributed all of its drug development assets;

and (ii) Daedalus Ecosciences, Inc., a Nevada corporation

(“Daedalus”) which was formed to serve as a holding company for the Company’s future ESG operating

In May 2022, Daedalus acquired Range

Environmental Resources, Inc., a West Virginia corporation (“Range Environmental”) and Range Natural Resources, Inc., a West

Virginia corporation (“Range Natural” and together with Range Environmental, the “Range Reclamation Entities”).

The Range Reclamation Entities provide land reclamation, water restoration and environmental consulting services to mining and non-mining

customers throughout the Appalachian region with the goal of returning land to pre-mining conditions or repurposing the land for natural,

commercial, agricultural or recreational use.

The Range Reclamation Entities’ water restoration services seek to improve rivers,

streams and discharges through novel and innovative treatment applications to help customers meet their various regulatory standards and

requirements.

The Range Reclamation Entities also provide environmental consulting services to customers typically in connection with

land reclamation and water restoration projects and as an additional value-add service, sells water treatment chemicals manufactured by

third parties to their customers.

Range Natural also provides resource mining services for customers incidental to the reclamation and

repurposing of mine sites.

December 31, 2022, Daedalus was merged into Malachite Innovations, Inc., leaving Malachite Innovations, Inc., as the parent company with

full ownership of all of its wholly-owned operating subsidiaries, including the Range Reclamation Entities, Terra Preta, Pristine Stream,

Range Security and Graphium.

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

of liabilities and commitments in the normal course of business.

As reflected in the accompanying financial statements, during the year

ended December 31, 2022, the Company incurred a net loss of $ 1,072,176 and used $ 603,778 of cash in the Company’s operating activities.

These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that

the financial statements are issued.

The financial statements do not include any adjustments that might be necessary should the Company

be unable to continue as a going concern.

ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or

raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due.

The Company estimates, as of December 31, 2022, that it has sufficient funds to operate the business for 12 months given its cash balance

of $ 442,369 , line of credit availability of $ 1,000,000 , and revenues being generated by the Range Reclamation Entities.

Although the Company’s

existing cash balances are estimated to be sufficient to fund its currently planned level of operations, the Company is actively seeking

additional financing and other sources of capital to accelerate the funding and execution of its growth strategy and value creation plan.

However, these estimates could differ if the Company encounters unanticipated difficulties, or if its estimates of the amount of cash

necessary to operate its business prove to be wrong, and the Company uses its available financial resources faster than it currently

No assurance can be given that any future financing or capital, if needed, will be available or, if available, that it will

be on terms that are satisfactory to the Company.

of Presentation

consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Vitality Healthtech, Inc.,

and have been prepared in accordance with accounting principles generally accepted in the United States of America.

balances and transactions have been eliminated in consolidation.

The Company’s fiscal year end is March 31.

consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Graphium Biosciences, Inc.,

Range Environmental Resources, Inc., Range Natural Resources, Inc., Terra Preta, Inc., Pristine Stream Ventures, Inc., Range

Security Resources, Inc., Daedalus Ecosciences, Inc.

(merged into Malachite Innovations, Inc.

on December 31, 2022), and Vitality

Healthtech, Inc.

(dissolved in May 2021), and have been prepared in accordance with accounting principles generally accepted in the

United States of America.

Intercompany balances and transactions have been eliminated in consolidation.

The Company’s fiscal

year end is December 31.

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

2 unchanged sentences

results could differ from those estimates.

The more significant estimates and assumptions by management include, among others, assumptions

used in valuing assets acquired in business acquisitions, reserves for accounts receivable, assumptions used in valuing equity instruments

issued for services, the valuation allowance for deferred tax assets, and accruals for potential liabilities.

Actual results could differ from those estimates.

Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers”.

The core principle of the revenue standard

is that a company should recognize revenue by analyzing the following five steps;

(1) identify the contract with the customer;

the performance obligations in the contract;

3) determine the transaction price;

4) allocate the transaction price to the performance

and 5) recognize revenue when (or as) each performance obligation is satisfied.

The Company primarily invoices customers

and recognizes revenue on a periodic basis for equipment and labor hours provided to a customer on a particular job based on an agreed-upon

hourly rate sheet or a fixed amount for a project.

The Company also invoices customers and recognizes revenue for equipment mobilization

fees and materials and supplies required to complete a project.

The Company invoices for the sales of chemicals and recognizes revenue

when the products are delivered to the customer’s designated site.

Costs for equipment, labor and chemicals are generally expensed

as incurred since the projects are generally short-term and not subject to a contract.

All revenue is recognized at a point in time.

and Cash Equivalents

Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to

be cash equivalents.

From time to time, the Company’s cash account balances exceed the balances covered by the Federal Deposit

Insurance System.

Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash

From time to time, the Company’s cash account balances exceed the balances covered by the Federal Deposit Insurance

The Company has never suffered a loss due to such excess balances.

Assets and Liabilities Measured at Fair Value

The Company follows the authoritative

guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value measurements.

Fair value is defined as

the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the

asset or liability in an orderly transaction between market participants at the measurement date.

A fair value hierarchy was established,

which prioritizes the inputs used in measuring fair value into three broad levels as follows:

prices in active markets for identical assets or liabilities.

other than the quoted prices in active markets, that are observable either directly or indirectly.

inputs based on the Company’s assumptions.

The Company is required to use observable market

data if such data is available without undue cost and effort.

The Company believes that because of their short

maturity, the carrying amounts of cash, accounts payable and accrued liabilities approximate fair value.

of March 31, 2021 and March 31, 2020, the Company’s balance sheet includes no Level 2 liabilities.

The following

table sets forth a summary of the changes in the estimated fair value of our embedded derivative liabilities during the years

ended March 31, 2021 and 2020:

March 31, 2021

March 31, 2020

Fair value at beginning of period

Net change in the fair value of derivative liabilities

Fair value at end of period

Financial Instruments

Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify

as embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument

is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported

in the statements of operations.

For stock-based derivative financial instruments, the Company uses a probability weighted average

Black-Scholes-Merton Option Pricing model to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity,

is evaluated at the end of each reporting period.

accounts receivable are stated at the amount management expects to collect from the balances outstanding at the end of each fiscal period

reflected in the consolidated balance sheets.

Based on management’s assessment, it has concluded that losses on balances outstanding

as of those dates will be immaterial and, therefore, no allowances were recorded for the year ended December 31, 2022 or the nine months

ended December 31, 2021.

Accounts receivable were $ 981,385 at December 31, 2022.

There were no accounts receivable balances at December

31, 2021 or March 31, 2021.

No bad debt expense was accrued in either the year ended December 31, 2022 or the nine months ended December

31, 2021 and there is no allowance for doubtful accounts as of December 31, 2022 or December 31, 2021.

is carried at cost.

Expenditures for maintenance and repairs are charged to cost of services.

Additions and betterments are capitalized.

The cost and related accumulated depreciation of equipment sold or otherwise disposed of are removed from the accounts and any gain or

loss is reflected in the current year’s earnings.

Company provides for depreciation of equipment using the straight-line method for both financial reporting and federal income tax purposes

over the estimated six-year useful lives of the equipment.

Company assesses the recoverability of its equipment by determining whether the depreciation of the assets over their remaining lives

can be recovered through projected future cash flows generated by the assets.

There were no assets identified for impairment.

costs are classified as cost of sales.

is tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not

(i.e., a likelihood greater than 50%) that the intangible asset is impaired.

Company follows the asset and liability method of accounting for income taxes.

Under this method, deferred income tax assets and

liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying

values and their respective income tax basis (temporary differences).

The effect on deferred income tax assets and liabilities

of a change in tax rates is recognized as income (loss) in the period that includes the enactment date.

Under this method, deferred income tax assets and liabilities

are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their

respective income tax basis (temporary differences).

The effect on deferred income tax assets and liabilities of a change in tax rates

is recognized as income (loss) in the period that includes the enactment date.

Company determines whether a contract is, or contains, a lease at inception.

Right-of-use assets represent the Company’s

right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make

lease payments arising from the lease.

Right-of-use assets and lease liabilities are recognized at lease commencement based upon

the estimated present value of unpaid lease payments over the lease term.

The Company uses its incremental borrowing rate based

on the information available at lease commencement in determining the present value of unpaid lease payments.

Right-of-use assets represent the Company’s right

to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments

arising from the lease.

Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present

value of unpaid lease payments over the lease term.

The Company uses its incremental borrowing rate based on the information available

at lease commencement in determining the present value of unpaid lease payments.

The Company had no lease commitments for longer than

one year as of December 31, 2022.

The laboratory space lease in Rocklin, California was renewed in March 2022 and ends on March 31, 2023.

Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions

for services.

The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock

Compensation whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense

on the straight-line basis over the vesting period.

Recognition of compensation expense for non-employees is in the same period

and manner as if the Company had paid cash for the services.

The Company recognizes the fair value of stock-based compensation

within its Statements of Operations with classification depending on the nature of the services rendered.

The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation whereby the value

of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the

vesting period.

Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash

for the services.

The Company recognizes the fair value of stock-based compensation within its Consolidated Statements of Operations

with classification depending on the nature of the services rendered.

fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain

assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock,

and future dividends.

Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing

model and based on actual experience.

The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect

compensation expense recorded in future periods.

assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future

Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based

on actual experience.

The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense

recorded in future periods.

and Diluted Loss Per Share

loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of

outstanding common shares during the period.

Shares of restricted stock are included in the basic weighted average number of

common shares outstanding from the time they vest.

Diluted loss per share is computed by dividing net loss applicable to

common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares

that would have been outstanding if all dilutive potential common shares had been issued.

Shares of restricted stock are

included in the diluted weighted average number of common shares outstanding from the date they are granted unless they are

antidilutive.

Diluted loss per share excludes all potential common shares if their effect is anti-dilutive.

The following

potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion

would be anti-dilutive:

loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of outstanding common

shares during the period.

Shares of restricted stock are included in the basic weighted average number of common shares outstanding from

the time they vest.

Diluted loss per share is computed by dividing net loss applicable to common stockholders by the weighted average

number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential

common shares had been issued.

Shares of restricted stock are included in the diluted weighted average number of common shares outstanding

from the date they are granted unless they are antidilutive.

Diluted loss per share excludes all potential common shares if their effect

is anti-dilutive.

The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share

as their inclusion would be anti-dilutive:

SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

and Patent Application Costs

the Company believes that its patents and underlying technology have continuing value, the amount of future benefits to be derived

from the patents is uncertain.

the Company believes that its patents and underlying technology have continuing value, the amount of future benefits to be derived from

the patents is uncertain.

Accordingly, patent costs are expensed as incurred.

and Development

and development costs consist primarily of fees paid to consultants and outside service providers, patent fees and costs, and

other expenses relating to the acquisition, design, development and testing of the Company’s treatments and product candidates.

Research and development costs are expensed as incurred.

Company operates in one segment for the development of pharmaceuticals products.

In accordance with the “Segment Reporting”

Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews

operating results to make decisions about allocating resources and assessing performance for the entire Company.

Existing guidance,

which is based on a management approach to segment reporting, establishes requirements to report selected segment information

quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which

the entity holds material assets and reports revenue.

All material operating units qualify for aggregation under “Segment

Reporting” due to their similar customer base and similarities in:

and development costs consist primarily of fees paid to consultants and outside service providers, patent fees and costs, and other expenses

relating to the acquisition, design, development and testing of the Company’s treatments and product candidates.

Research and development

costs are expensed as incurred.

Value of Financial Instruments

ASC 825, “Financial Instruments” requires that the Company disclose estimated fair values of financial instruments.

instruments held by the Company include, among others, accounts receivable, accounts payable and long-term debt.

The carrying amounts

reported in the balance sheets for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value.

of October 1, 2021, we began operating under two segments:

(i) Graphium Biosciences, Inc., a wholly-owned subsidiary of the Company,

reports the operating results of our cannabinoid drug development segment, which is advancing a broad portfolio of glycosylated cannabinoid

prodrugs that have been developed to unlock the rebalancing effects of the endocannabinoid system to address numerous chronic conditions,

and (ii) the Range Reclamation Entities, which are wholly-owned subsidiaries of the Company, report the operating results of the Environmental

Services segment, which provides land reclamation, water restoration and environmental consulting services to mining and non-mining customers .

Three other operating business segments (i) Biochar Products and Solutions, (ii) Stream Mitigation Banking, and (iii) Environmental Security

Services, began operations in the first quarter of 2023.

accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified

as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance

for the entire Company.

Existing guidance, which is based on a management approach to segment reporting, establishes requirements to

report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers,

and the countries in which the entity holds material assets and reports revenue.

All material operating units qualify for aggregation

under “Segment Reporting” due to their similar customer base and similarities in:

economic characteristics;

nature of products and services;

nature of products

and services;

and procurement, manufacturing, and distribution processes.

Since the Company operates in one segment, all financial information

required by “Segment Reporting” can be found in the accompanying financial statements.

Accounting Pronouncements

June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments .

ASU 2016-13 requires entities

to use a forward-looking approach based on current expected credit losses to estimate credit losses on certain types of financial

instruments, including trade receivables.

ASU 2016-13 requires entities to

use a forward-looking approach based on current expected credit losses to estimate credit losses on certain types of financial instruments,

including trade receivables.

This may result in the earlier recognition of allowances for losses.

ASU 2016-13 is

effective for the Company beginning April 1, 2023, and early adoption is permitted.

The Company does not believe the potential

impact of the new guidance and related codification improvements will be material to its financial position, results of operations

and cash flows.

recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified

Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact

on the Company’s present or future financial statements.

GAIN ON EXTINGUISHMENT OF LIABILITIES

Years Ended March 31,

Gain on settlement with vendor (a)

Gain on extinguishment of advance (b)

Gain on forgiveness of PPP Loan (c)

Gain on extinguishment of debt

Gain on settlement with vendor

2016 to 2019, the Company recorded approximately $1.1 million due to a vendor for services, of which $612,405 had not been paid

and was included in accounts payable at March 31, 2020 and through November 30, 2020.

In December 2020, the Company reached

a settlement with the vendor to forgive the $612,405 of outstanding invoices, and in addition, the Company received a payment

from the vendor of $450,000.

This resulted in a gain on settlement of $1,062,405 during the year ended March 31, 2021.

Gain on extinguishment of advance

July 2018, the Company received a payment from a third party in the amount of $296,653.

Since the Company has not been able to

confirm the nature of this payment, it had previously recorded this payment as an advance that was included in current liabilities.

At March 31, 2021, the Company, after consultation with outside legal counsel, determined that any claim to recover that advance

was time barred by the statute of limitations and the Company recorded relief of this liability and a gain from debt extinguishment

of $296,653 during the year ended March 31, 2021.

Gain on forgiveness of PPP Loan

May 6, 2020, the Company was granted a loan (the “PPP loan”) from U.S.

Bank for $96,988 pursuant to the Paycheck Protection

Program under the CARES Act.

The PPP loan bore interest at 1% per annum with the first six months of interest deferred, and was unsecured

and guaranteed by the Small Business Administration (the “SBA”).

The Company used the entire PPP loan amount for qualifying

expenses as described in the CARES Act, including qualifying payroll costs, qualifying group health care benefits, qualifying rent, and

qualifying utilities.

On November 21, 2020, we received notice that the SBA had reviewed the forgiveness application of our PPP loan

and provided forgiveness of the entire principal of our PPP loan plus accrued interest of $528, and we recognized a gain on extinguishment

of the PPP loan of $97,516 during the year ended March 31, 2021.

DISCONTINUED OPERATIONS

October 2018, the Company acquired Summit Healthtech, Inc., now known as Vitality Healthtech, Inc.

and its subsidiary The Control

(collectively, “Summit Healthtech”).

In May 2019, the Company decided to close Summit Healthtech due

to poor financial and operating performance.

Summit Healthtech ceased all operations and closed on June 14, 2019.

to the clinical operations of Summit Healthtech, the Company was engaged in the business of selling research diagnostic testing

kits (collectively referred to as the “Company’s clinical and test kit operations”).

May 2019, the Company decided to close the Company’s clinical and test kit operations.

The Company’s clinical and

test kit operations meet the discontinued operations criteria and are reported as such in all periods presented on the accompanying

consolidated financial statements.

During the year ended March 31, 2020, costs to close the Company’s clinical and test

kit operations, primarily made up of severance and related benefits, totaled approximately $165,000, and are included in loss

from discontinued operations.

part of the acquisition of Summit Healthtech, the Company issued 1,450,000 shares of common stock to Dr.

Arif Karim, the

former owner of The Control Center, Inc.

Karim had entered into an employment agreement with Summit Healthtech, Inc.

prior to the acquisition by the Company.

On October 30, 2019, the Company reached a settlement with Dr.

Karim, whereby the

Company and Dr.

Karim released all claims against each other, including any claims under the Executive Employment Agreement

between Vitality Healthtech, Inc.

Karim dated October 12, 2018, and the Share Purchase Agreement by and among The

Control Center, Inc., Dr.

Karim and Vitality Healthtech, Inc.

also dated October 12, 2018.

In exchange for the releases, the

Company paid Dr.

Karim $120,000, which is included in the costs to close the Company’s clinical and test kit

operations, and the 1,450,000 shares of the Company’s common stock issued to Dr.

Karim were cancelled with no

adjustment to the purchase price recorded.

following table presents the summarized components of loss from discontinued operations for the Company’s clinical and test

kit operations:

Years Ended March 31,

Cost of sales

Research and development

General and administrative

Impairment of goodwill and intangible assets

Loss from discontinued operations

OPERATING LEASE

March 31, 2020, the Company’s wholly-owned subsidiary, The Control Center, Inc.

(“TCC”) had an operating lease

agreement for its office space.

The lease expired on February 28, 2021.

Lease expense for the lease was recognized on a straight-line

basis over the lease term.

The lease did not contain any residual value guarantees or material restrictive covenants.

commenced in 2016 and upon the adoption of ASC 842 on April 1, 2019, an operating lease right-of-use asset and operating lease

liability were recognized based on the present value of remaining lease payments over the remaining lease term.

In addition, at

March 31, 2020, TCC had a sublease agreement in place for the office space that also expired February 28, 2021.

Sublease income

was not significant during the years ended March 31, 2021 and 2020.

components of lease expense and supplemental cash flow information related to leases for the period are as follows:

March 31, 2021

March 31, 2020

Operating lease cost (included in general and administrative expenses in the accompanying statement of operations)

Other Information

Cash paid for amounts included in the measurement of lease liabilities for the years ended March 31, 2021 and 2020

Weighted average remaining lease term –

operating leases (in years)

Average discount rate –

operating leases

supplemental balance sheet information related to leases for the period is as follows:

Operating Leases

Long-term right-of-use asset

Short-term operating lease liability

Long-term operating lease liability

Total operating lease liabilities

expenses were $123,606 and $153,999 during the years ended March 31, 2021 and March 31, 2020, respectively.

of March 31, 2021, TCC owed unpaid lease payments under the lease totaling $33,440, which are included in accounts payable and accrued

liabilities on the accompanying consolidated balance sheet.

TCC has had no assets, employees or operations since its closure

The Company is a party to a guaranty that specifies that the Company has no further liability under the lease as of

March 31, 2021, and therefore the Company does not intend to make these payments.

STOCK BASED COMPENSATION

Stock options issued during fiscal 2021

The Company granted no option

awards during the year ended March 31, 2021.

options issued during fiscal 2020

the year ended March 31, 2020, the Company granted to directors and employees options to purchase an aggregate of 3,250,000 shares of

the Company’s common stock with exercise prices of between $0.30 to $0.35 per share, that expire ten years from the date of grant,

and all have vesting periods of up to 24 months.

The fair value of each option award was estimated on the date of grant using

the Black-Scholes-Merton Option Pricing model based on the following assumptions:

(i) volatility rate of 176.50%, (ii) discount rate

of 1.73%, (iii) zero expected dividend yield, and (iv) expected life of 6 years, which is the average of the term of the options and

their vesting periods.

The total fair value of the option grants to employees at their grant dates was approximately $1,026,000.

the years ended March 31, 2021 and 2020, total stock-based compensation expense related to vested stock options was $461,856 and

$626,668, respectively.

At March 31, 2021, the remaining unamortized cost of the outstanding stock-based awards was approximately

$74,000 and will be amortized on a straight-line basis over a weighted average remaining vesting period of 2 years.

summary of the Company’s stock option activity during the fiscal years ended March 31, 2020 and 2021 is as follows:

Exercise Price

Balance outstanding at March 31, 2019

Balance outstanding at March 31, 2020

Balance outstanding at March 31, 2021

Balance exercisable at March 31, 2021

March 31, 2021, the 5,997,544 outstanding stock options had no intrinsic value.

summary of the Company’s stock options outstanding and exercisable as of March 31, 2021 is as follows:

Number of Options

Weighted Average Exercise Price

Weighted Average Grant- date Stock Price

Options Outstanding, March 31, 2021

Options Exercisable, March 31, 2021

$ 1.50 - 1.95

summary of warrants to purchase common stock issued during the fiscal years ended March 31, 2020 and 2021 is as follows:

Exercise Price

Balance outstanding at March 31, 2019

Balance outstanding at March 31, 2020

Balance outstanding and exercisable at March 31, 2021

March 31, 2021, the 146,668 outstanding stock warrants had no intrinsic value.

Company had no income tax expense for the years ended March 31, 2021 or 2020 due to its history of operating losses.

The following

is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate:

Years Ended March 31,

Federal statutory tax rate

State tax rate, net of federal benefit

Total federal and state tax rate

Valuation allowance

ASU 2016-13 is effective for the Company

beginning January 1, 2023, and early adoption is permitted.

The Company does not believe the potential impact of the new guidance and

related codification improvements will be material to its financial position, results of operations and cash flows.

recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public

Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s

present or future financial statements.

ACQUISITION OF RANGE ENVIRONMENTAL RESOURCES AND RANGE NATURAL RESOURCES

May 2022, the Company and its wholly-owned subsidiary, Daedalus Ecosciences, Inc., entered into a share purchase agreement with Range

Environmental Resources, Inc.

(“Range Environmental”), and Range Natural Resources, Inc.

(“Range Natural”, and

collectively with Range Environmental, the “Range Reclamation Entities”), and the two (2) shareholders of the Range Reclamation Entities (the “Range

Shareholders”) (the “Share Purchase Agreement”), under which the Company issued a total of 10,000,000 shares of the

Company’s common stock to the Range Shareholders and Daedalus Ecosciences paid cash consideration of $ 1,000,000 to the Range Shareholders

for 80 % of the outstanding common stock of each of the Range Reclamation Entities.

to entering into the Share Purchase Agreement, the Company discovered that Joshua Justice, one of the Range Shareholders (“Justice”),

made certain misrepresentations in the Share Purchase Agreement.

On July 12, 2022, the Company entered into a Separation Agreement, by

and among the Company, Daedalus Ecosciences, the Range Reclamation Entities, and Justice and his spouse (the “Separation Agreement”)

pursuant to which Justice:

a) acknowledged that his employment with the Range Reclamation Entities was terminated for cause effective June 30, 2022;

b) returned the 5,000,000 shares of the Company’s common stock that had been issued to him under the terms of the Share Purchase

c) transferred his 10% interest in each of the Range Reclamation Entities to Daedalus Ecosciences;

and d) paid Daedalus Ecosciences cash

in an amount of $250,000.

As a result, only 5,000,000 of the Company’s common stock issued to the Range Shareholders is considered

to have been issued in exchange for 90% of the outstanding common stock of each of the Range Reclamation Entities .

Subsequently,

on October 11, 2022, Daedalus Ecosciences and Jeremy Starks, the remaining Range Shareholder (“Starks”), entered into a share

purchase agreement, effective as of May 11, 2022 (the “Starks Agreement”), pursuant to which Starks exchanged his 10 % common

stock ownership of the Range Reclamation Entities for 10 % of the Cash Dividends and Sale Proceeds (as both terms are defined in the Starks Agreement)

of the Range Reclamation Entities, as a result of which, the Range Reclamation Entities are now wholly-owned subsidiaries of Daedalus Ecosciences and the Range Reclamation Entities are reported as wholly-owned indirect subsidiaries of the Company in the financial statements made part of this Form 10-Q.

other changes were made to the consideration received by Starks as part of the Share Purchase Agreement and he remains as President of

each of the Range Reclamation Entities.

Company accounted for the transaction as a business combination in accordance ASC 805 “Business Combinations”.

has performed an allocation of the purchase price paid for the assets acquired and the liabilities assumed.

The fair values of the assets

acquired are set forth below.

The allocation of the purchase price is based on management’s estimates.

OF BUSINESS ACQUISITION ALLOCATION OF PURCHASE PRICE

value of assets acquired:

and equipment

assets acquired

value of liabilities assumed

consideration

stock consideration

purchase price

transaction costs incurred

has an assigned value of $ 751,421 and represents the value of the Range Reclamation Entities’ brand reputation,

customer base and employee relations.

increased to $ 751,421 at December 31, 2022.

There had been no goodwill at December 31, 2021.

The increase in goodwill was driven by the

addition of the Range Reclamation Entities in the period and represents the value of the Range Reclamation Entities’ employee relations .

Goodwill by reportable segment is as follows:

December 31, 2022

Range Reclamation Entities:

of Common Stock and Warrants

May 2022, the Company entered into two securities purchase agreements providing for the issuance and sale by the Company of (i) 20,000,000

shares of the Company’s common stock (the “May Shares”) at a price of $ 0.15 per share and (ii) warrants to purchase

up to an additional 20,000,000 shares of the Company’s common stock (the “May Warrants”, and the shares issuable upon

exercise of the Warrants, the “May Warrant Shares”) at a price of $ 0.60 per share.

The May Warrants expire on May 10, 2027.

The aggregate proceeds to the Company from the sale of the May Shares and May Warrants was $ 3,000,000 .

May 2022, the Company purchased 90% of the outstanding common stock of each of the Range Reclamation Entities for a combination of Company

shares and cash, as described in Note 2.

Only 5,000,000 of the Company’s common stock issued to the Range Shareholders is considered

outstanding as of December 31, 2022, in order to reflect the effects of the Separation Agreement.

August 2022, the Company entered into a securities purchase agreement providing for the issuance and sale by the Company of (i) 1,666,667

shares of the Company’s common stock (the “August Shares”) at a price of $ 0.15 per share and (ii) warrants to purchase

up to an additional 1,666,667 shares of the Company’s common stock (the “August Warrants”, and the shares issuable

upon exercise of the Warrants, the “August Warrant Shares”) at a price of $ 0.60 per share.

The August Warrants expire on

August 26, 2027.

The aggregate proceeds to the Company from the sale of the August Shares and August Warrants was $ 250,000 .

STOCK OPTIONS

options issued during the year ended December 31, 2022

the year ended December 31, 2022, the Company granted to directors, advisors, and employees options to purchase an aggregate of 2,650,000

shares of the Company’s common stock with exercise prices of $ 0.18 per share that expire ten years from the date of grant, and

vested upon grant.

The fair value of each option award was estimated on the date of grant using the Black-Scholes-Merton Option Pricing

model based on the following assumptions:

(i) volatility rate of 277.5 %, (ii) discount rate of 3.82 %, (iii) zero expected dividend yield,

and (iv) expected life of 5 years, which is the average of the term of the options and their vesting periods.

The total fair value of

the option grants to employees at their grant dates was approximately $ 393,260 , all of which was allocated to general and administrative

expenses during the year ended December 31, 2022.

options issued during the nine months ended December 31, 2021

the nine months ended December 31, 2021, the Company granted to directors and employees options to purchase an aggregate of 1,150,000

shares of the Company’s common stock with exercise prices of $ 0.277 per share that expire ten years from the date of grant, and

vested upon grant.

The fair value of each option award was estimated on the date of grant using the Black-Scholes-Merton Option Pricing

model based on the following assumptions:

(i) volatility rate of 385.62 %, (ii) discount rate of 1.25 %, (iii) zero expected dividend yield,

and (iv) expected life of 5 years, which is the average of the term of the options and their vesting periods.

The total fair value of

the option grants to employees at their grant dates was approximately $ 251,455 , all of which was allocated to general and administrative

expenses during the nine months ended December 31, 2021.

During the nine months ended December 31, 2021, we cancelled options to purchase

265,000 shares of common stock that had been issued to two employees under the prior stock incentive plan.

These options were exchanged

for options to purchase 242,256 shares of common stock and the new options are included in the options to purchase 1,150,000 shares of

common stock described above.

the year ended December 31, 2022 and the nine months ended December 31, 2021, total stock-based compensation expense related to vested

stock options was $ 393,260 and $ 297,984 , respectively.

At December 31, 2022, there was no remaining unamortized cost of the outstanding

stock-based awards.

summary of the Company’s stock option activity during the year ended December 31, 2022 and the nine months ended December 31, 2021

is as follows:

SUMMARY OF STOCK OPTION ACTIVITY

outstanding at March 31, 2021

Balance outstanding

at December 31, 2021

outstanding at December 31, 2022

exercisable at December 31, 2022

December 31, 2022, the 9,392,544 outstanding stock options had no intrinsic value.

summary of the Company’s stock options outstanding and exercisable as of December 31, 2022 is as follows:

SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE

Average Exercise Price

Average Grant- date Stock Price

Outstanding and exercisable, December 31, 2022

summary of warrants to purchase common stock issued during the year ended December 31, 2022 and the nine months ended December 31, 2021

is as follows:

SCHEDULE OF WARRANTS ACTIVITY

outstanding at March 31, 2021

Balance outstanding

at December 31, 2021

outstanding and exercisable at December 31, 2022

December 31, 2022, the 22,313,335 outstanding stock warrants had no intrinsic value and at December 31, 2021, the 646,668 outstanding

stock warrants had no intrinsic value.

NOTES PAYABLE

Environmental was granted a loan (the “PPP loan”) from United Bank for $ 109,435 on March 9, 2021, pursuant to the Paycheck

Protection Program (the “PPP”) under the CARES Act.

The PPP loan had a maturity date of March 9, 2023 and bore interest at

a rate of 1 % per annum, with the first six months of interest deferred.

On August 19, 2022, Range

Environmental received notice that the U.S.

Small Business Administration (“SBA”) had reviewed the forgiveness application

of Range Environmental’s PPP loan and provided forgiveness of the entire principal of the PPP loan plus accrued interest.

The Company recognized a gain on forgiveness of the PPP loan of $ 109,435 during the year ended December 31, 2022.

June 17, 2020, Range Environmental was granted an SBA Disaster Loan in the amount of $ 150,000 with an interest rate of 3.75 % per annum.

On September 14, 2022, the Company paid the entire balance

due on this loan of $ 162,575 , including $ 12,575 in accrued interest.

Company had no notes payable outstanding as of December 31, 2022.

LINE OF CREDIT

November 2022, the Company secured a line of credit with a bank with a limit of $ 1,000,000 .

The line of credit has a maturity date of

November 30, 2023 , and bears interest at one percent ( 1 %) above the prime rate.

As of December 31, 2022, the balance due under the line

of credit was $ 0 .

August 2021, the Company entered into a $ 5,000,000 equity line transaction with Triton Funds, LP (“Triton”) providing for

the issuance and sale by the Company to Triton of a number of shares of the Company’s common stock having an aggregate value of

up to $ 5,000,000 and warrants to purchase up to an equal number of shares of the Company’s common stock.

In its sole discretion

and subject to certain agreed upon funding conditions, the Company may submit, from time to time, notices obligating Triton to purchase

shares with a value of up to $250,000 until the financing arrangement expires on December 31, 2022 or Triton has purchased the $5,000,000

of shares pursuant to the equity line transaction.

On December 31, 2022, this equity line expired with $169,950 of the $5,000,000 available financing used.

The Company had no income tax expense for the year ended December 31, 2022 and the nine months ended December 31,

2021 due to its history of operating losses.

The following is a reconciliation of the statutory federal income tax rate to the Company’s

effective tax rate:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

statutory tax rate

tax rate, net of federal benefit

federal and state tax rate

tax assets and liabilities consist of the following:

Net deferred tax assets:

Net operating loss carryforwards

Stock-based compensation

Research credits

Operating lease liability

Gross deferred tax assets

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

deferred tax assets:

operating loss carryforwards

lease liability

deferred tax assets

valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Derivative income

Operating lease right-of-use asset

Total deferred tax liabilities

Net deferred income tax assets (liabilities)

provisions of ASC Topic 740, Accounting for Income Taxes , require an assessment of both positive and negative evidence when determining

whether it is more likely than not that deferred tax assets are recoverable.

For the years ended March 31, 2021 and 2020, based on all

available objective evidence, including the existence of cumulative losses, the Company determined that it was more likely than not that

the net deferred tax assets were not fully realizable.

Accordingly, the Company established a full valuation allowance against its net

( 9,174,000 )

( 8,178,000 )

deferred tax assets

The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive

evidence exists to support reversal of the valuation allowance.

During the years ended March 31, 2021 and 2020, the valuation allowance

increased by $29,000 and $1.0 million, respectively.

March 31, 2021 and 2020, the Company had available Federal and state net operating loss carryforwards (“NOLs”) to

reduce future taxable income.

For Federal purposes, the amounts available were approximately $20.8 million and $19.7 million,

respectively.

For state purposes, approximately $16.8 million and $16.7 million was available at March 31, 2021 and 2020, respectively.

tax liabilities:

lease right-of-use asset

deferred tax liabilities

deferred income tax assets (liabilities)

The provisions of ASC Topic 740, Accounting for Income Taxes, require an assessment of both positive and negative

evidence when determining whether it is more likely than not that deferred tax assets are recoverable.

For the year ended December 31,

2022 and the nine months ended December 31, 2021, based on all available objective evidence, including the existence of cumulative losses,

the Company determined that it was more likely than not that the net deferred tax assets were not fully realizable.

Accordingly, the Company

established a full valuation allowance against its net deferred tax assets.

The Company intends to maintain a full valuation allowance

on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance.

During the year ended

December 31, 2022 and the nine months ended December 31, 2021, the valuation allowance increased by $ 996,000 and $ 491,000 , respectively.

At December 31, 2022 and December 31, 2021, the Company had available Federal and state net operating loss carryforwards

(“NOLs”) to reduce future taxable income.

For Federal purposes, the amounts available were approximately $ 24.0 million and

$ 22.8 million, respectively.

For state purposes, approximately $ 23.4 million and $ 22.9 million was available at December 31, 2022 and

December 31, 2021, respectively.

The Federal carryforwards expire on various dates through 2042 and the state carryforwards expire through

Due to restrictions

imposed by Internal Revenue Code Section 382 regarding substantial changes in ownership of companies with loss carryforwards,

the utilization of the Company’s NOLs may be limited as a result of changes in stock ownership.

Due to restrictions imposed by Internal Revenue Code Section 382 regarding substantial changes in ownership of companies with loss

carryforwards, the utilization of the Company’s NOLs may be limited as a result of changes in stock ownership.

NOLs incurred subsequent

to the latest change in control are not subject to the limitation.

Company’s operations are based in California and it is subject to Federal and California state income tax.

Tax years after

2016 are open to examination by United States and state tax authorities.

Company’s operations are based in California and Ohio and it is subject to Federal, California and Ohio state income tax.

after 2016 are open to examination by United States and state tax authorities.

Company adopted the provisions of ASC 740, which requires companies to determine whether it is “more likely than not”

1 unchanged sentence

in the financial statements.

ASC 740 also provides guidance on the recognition, measurement, classification and interest and penalties

related to uncertain tax positions.

As of March 31, 2021 and 2020, no liability for unrecognized tax benefits was required to

be recorded or disclosed.

RELATED PARTY TRANSACTIONS

the year ended March 31, 2020, the Company paid rent of $2,600 to One World Ranches LLC, which is jointly-owned by Dr.

Avtar Dhillon,

the former Chairman of the Board of Directors of the Company, and his wife.

ASC 740 also provides guidance on the recognition, measurement, classification and interest and

penalties related to uncertain tax positions.

As of December 31, 2022 and December 31, 2021, no

liability for unrecognized tax benefits was required to be recorded or disclosed.

LONG-TERM DEBT OBLIGATIONS

debt consists of debt on vehicles and equipment, which serves as the collateral.

Interest rates range from 3.69 % to 9.95 % for 2022.

debt matures from 2023 through 2028.

summary of payments due under the long-term debt by year is as follows:

OF MATURITIES OF LONG TERM DEBT

long-term debt

MAJOR CUSTOMER AND CONCENTRATION OF CREDIT RISK

to the Company’s largest customer were 72 % of total sales for the year ended December 31, 2022, respectively.

receivable from the same customer were 62 % of total accounts receivable and unbilled receivables as of December 31, 2022.

COMMITMENTS AND CONTINGENCIES

The Company received a letter

in February 2021 from counsel for the Company’s previous director’s and officer’s insurance carrier (the “insurer”)

demanding that the Company reimburse the insurer for sums advanced by the insurer to a former director of the Company as defense costs

in connection with a claim purportedly arising under a previous directors and officers insurance policy.

The Company believes it has

no liability for this claim on the basis of, among other things, Nevada law, the Company’s governing documents and the language

of the policy.

Accordingly, as of March 31, 2021, no contingent liability has been recorded in the Company’s consolidated statements

of financial condition for this matter.

Company received a letter in February 2021 from counsel for the Company’s director’s and officer’s insurance carrier

(the “insurer”) demanding that the Company reimburse the insurer for sums advanced by the insurer to a former director of

the Company as defense costs in connection with a claim purportedly arising under a previous directors and officers insurance policy.

The Company believes it has no liability for this claim on the basis of, among other things, Nevada law, the Company’s governing

documents and the language of the policy.

Accordingly, as of December 31, 2022, no contingent liability has been recorded in the Company’s

consolidated statements of financial condition for this matter.

SEGMENT INFORMATION

280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent

with the Company’s internal organization structure as well as information about services, categories, business segments and

major customers in financial statements.

The Company has five

reportable segments that are based on the following business units:

(i) Environmental Services, (ii) Biochar Products and

Services, (iii) Stream Mitigation Banking, (iv) Environmental Security Services, and (v) Cannabinoid Drug

In accordance with the “Segment Reporting” Topic of the ASC,

the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results

to make decisions about allocating resources and assessing performance for the entire Company.

Existing guidance, which is based on

a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report

annually entity-wide disclosures about products and services, major customers and the countries in which the entity holds material

assets and reports revenue.

All material operating units qualify for aggregation under “Segment Reporting” due to their

similar customer base and similarities in:

economic characteristics;

nature of products and services;

and procurement, manufacturing

and distribution processes.

The Company operated two reportable business segments during the year ended December 31, 2022, the

Cannabinoid Drug Development and Environmental Services segments.

The other business segments began operating in 2023.

Drug Development – glycosylated cannabinoid drug development program

Environmental

Services – land reclamation, water restoration and environmental consulting services

Products and Solutions - biochar product development and environmental solutions business

Mitigation Banking – mitigation banks to restore waterways

and support economic development

Environmental

Security Services – security services on mines transitioning to next generation industries

Company had no inter-segment sales for the periods presented.

financial information concerning the Company’s reportable segments is shown as below:

OF FINANCIAL INFORMATION OF REPORTABLE SEGMENT

Environmental

the year ended December 31, 2022

Environmental

income (loss)

( 1,417,842 )

( 1,072,176 )

expenditures for long-lived assets

Environmental

the nine months ended December 31, 2021

Environmental

$ ( 298,925 )

$ ( 1,396,560 )

$ ( 1,712,969 )

income (loss)

$ ( 298,925 )

$ ( 1,396,560 )

$ ( 1,712,969 )

expenditures for long-lived assets

QUARTERLY DATA (UNAUDITED)

financial information for each quarter during the year ended December 31, 2022 and the nine months ended December 31, 2021 is below:

SUMMARY OF FINANCIAL INFORMATION QUARTERLY DATA

ended March 31, 2022

ended June 30, 2022

ended September 30, 2022

ended December 31, 2022

from operations

loss per share – basic and diluted

ended June 30, 2021

ended September 30, 2021

ended December 31, 2021

(loss) from operations

income (loss)

income (loss) per share – basic and diluted

PRO FORMA DATA (UNAUDITED)

May 2022, the Company acquired the “Range Reclamation Entities, which primarily

focus on the reclamation of former coal mines, and the remediation of non-compliant streams and waterways .

The acquired business contributed revenue of $ 4,832,278 and net income of $ 816,469 for the period from May 12, 2022 to December

The following unaudited pro forma summary presents the consolidated information of the Company as if the acquisition had occurred

on January 1, 2022:

OF PRO FORMA DATA INFORMATION

forma year ended December 31, 2022

income (loss)

( 1,235,473 )

SUBSEQUENT EVENTS

March 2023, the Company entered into a lease of our office and laboratory space at 2224A Sierra Meadows Drive, Rocklin, California 95677,

which requires a lease payment of approximately $ 3,000 per month and expires on March 31, 2024 .

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

What changed 10-K

Item 9A. Controls and Procedures