Zeo ScientifiX, Inc. 10-Q

Item 1. Financial Statements Organicell Regenerative Medicine, Inc. CONSOLIDATED BALANCE SHEETS (Unaudited) April 30, October 31, 2022 2021 ASSETS Current Assets Cash $ 66,002 $ 108,570 Accounts receivable, net of allowance for bad debts 48,181 104,150 Prepaid expenses 77,713 69,647 Inventories 163,459 234,827 Total Current Assets 355,355 517,194 Property and equipment, net 1,611,677 1,113,416 Other assets – right of use 197,658 254,665 Security deposits 50,282 47,682 TOTAL ASSETS $ 2,214,972 $ 1,932,957 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable and accrued expenses $ 2,661,239 $ 1,873,022 Accrued liabilities to management 1,959,671 1,542,130 Notes payable 67,500 4,392 Advances payable 220,897 220,897 Finance lease obligations 108,005 92,270 Operating lease obligations 120,021 114,231 Deferred revenue - 9,575 Debentures payable 133,305 144,000 Promissory Note, net of debt discount 501,778 - Commitment Fee Shortfall Obligation 137,539 - Liabilities attributable to discontinued operations 125,851 125,851 Total Current Liabilities 6,035,806 4,126,368 Long term finance lease obligations 291,619 331,748 Long term operating lease obligations 77,637 140,434 Total Liabilities 6,405,062 4,598,550 Commitments and contingencies Stockholders’ Deficit Common stock, $ 0.001 par value, 2,500,000,000 shares authorized; 1,166,887,928 and 1,132,361,005 shares issued and outstanding, respectively 1,166,888 1,132,361 Additional paid-in capital 39,417,550 37,826,795 Accumulated deficit ( 44,774,528 ) ( 41,624,749 ) Total Stockholders’ Deficit ( 4,190,090 ) ( 2,665,593 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 2,214,972 $ 1,932,957 The accompanying notes are an integral part of these consolidated financial statements. 1 Organicell Regenerative Medicine, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended April 30, Six Months Ended April 30, 2022 2021 2022 2021 Revenues $ 1,735,173 $ 1,195,076 $ 3,334,321 $ 2,563,516 Cost of revenues 126,418 136,321 275,539 304,492 Gross profit 1,608,755 1,058,755 3,058,782 2,259,024 General and administrative expenses 2,867,017 3,292,158 5,958,477 12,657,788 Loss from operations ( 1,258,262 ) ( 2,233,403 ) ( 2,899,695 ) ( 10,398,764 ) Other income (expense) Interest expense ( 149,242 ) ( 6,092 ) ( 189,545 ) ( 12,311 ) Change in Commitment Fee Shortfall Obligation ( 48,539 ) - ( 60,539 ) - Other - - - 21,575 Loss before taxes ( 1,456,043 ) ( 2,239,495 ) ( 3,149,779 ) ( 10,389,500 ) Provision for income taxes - - - - Net loss $ ( 1,456,043 ) $ ( 2,239,495 ) $ ( 3,149,779 ) $ ( 10,389,500 ) Net loss per common share - basic and diluted $ ( 0.00 ) $ ( 0.00 ) $ ( 0.00 ) $ ( 0.01 ) Weighted average number of common shares outstanding - basic and diluted 1,077,966,032 1,053,064,834 1,068,441,162 1,009,097,162 The accompanying notes are an integral part of these consolidated financial statements. 2 Organicell Regenerative Medicine, Inc. CONSOLIDATED CHANGES TO STOCKHOLDERS’ DEFICIT For the Three Months And Six Months Ended April 30, 2022 and 2021 (Unaudited) Three Months Ended April 30, Additional Total Common Stock Paid-In Accumulated Stockholders’ Shares Par Value Capital Deficit Deficit Balance February 1, 2022 1,149,204,595 $ 1,149,205 $ 38,881,841 $ ( 43,318,485 ) $ ( 3,287,439 ) Sale of common stock 8,333,333 8,333 241,667 - 250,000 Stock-based compensation 7,350,000 7,350 252,242 - 259,592 Stock issued in settlement of litigation 2,000,000 2,000 41,800 - 43,800 Net loss - - - ( 1,456,043 ) ( 1,456,043 ) Balance April 30, 2022 1,166,887,928 $ 1,166,888 $ 39,417,550 $ ( 44,774,528 ) $ ( 4,190,090 ) Balance February 1, 2021 1,010,132,783 $ 1,010,133 $ 33,129,945 $ ( 37,018,194 ) $ ( 2,878,116 ) Sale of common stock 27,796,912 27,797 1,262,203 - 1,290,000 Exchange of accounts payable for stock 500,000 500 81,750 - 82,250 Stock-based compensation 57,040,000 57,040 1,169,868 - 1,226,908 Net loss - - - ( 2,239,495 ) ( 2,239,495 ) Balance April 30, 2021 1,095,469,695 $ 1,095,470 $ 35,643,766 $ ( 39,257,689 ) $ ( 2,518,453 ) 3 Six Months Ended April 30, Additional Total Common Stock Paid-In Accumulated Stockholders’ Shares Par Value Capital Deficit Deficit Balance October 31, 2021 1,132,361,005 $ 1,132,361 $ 37,826,795 $ ( 41,624,749 ) $ ( 2,665,593 ) Sale of common stock 17,000,000 17,000 653,000 - 670,000 Stock-based compensation 12,450,000 12,450 776,032 - 788,482 Common stock issued as commitment fee for Promissory Note 3,076,923 3,077 119,923 - 123,000 Stock issued in settlement of litigation 2,000,000 2,000 41,800 - 43,800 Net loss - - - ( 3,149,779 ) ( 3,149,779 ) Balance April 30, 2022 1,166,887,928 $ 1,166,888 $ 39,417,550 $ ( 44,774,528 ) $ ( 4,190,090 ) Balance October 31, 2020 939,942,783 $ 939,943 $ 26,536,430 $ ( 28,868,189 ) $ ( 1,391,816 ) Sale of common stock 28,596,912 28,597 1,301,403 - 1,330,000 Exchange of accounts payable for stock 500,000 500 81,750 - 82,250 Stock-based compensation 126,430,000 126,430 7,724,183 - 7,850,613 Net loss - - - ( 10,389,500 ) ( 10,389,500 ) Balance April 30, 2021 1,095,469,695 $ 1,095,470 $ 35,643,766 $ ( 39,257,689 ) $ ( 2,518,453 ) The accompanying notes are an integral part of these consolidated financial statements. 4 Organicell Regenerative Medicine, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended April 30, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 3,149,779 ) $ ( 10,389,500 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 32,775 24,856 Amortization of OID and commitment fee discount – Promissory Note 161,778 - Change in Commitment Fee Shortfall Obligation 60,539 - Stock-based compensation 788,482 7,850,613 Stock issued in settlement of litigation 43,800 - Changes in operating assets and liabilities: Accounts receivable 51,578 ( 48,791 ) Prepaid expenses ( 8,066 ) ( 47,541 ) Inventories 71,368 ( 7,150 ) Accounts payable and accrued expenses 918,215 914,628 Accrued liabilities to management 417,542 114,747 Security deposits ( 2,600 ) ( 29,882 )) Deferred revenue ( 9,575 ) - Net cash used in operating activities ( 623,943 ) ( 1,618,020 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets ( 385,036 ) ( 46,264 ) Net cash used in investing activities ( 385,036 ) ( 46,264 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of Promissory Note 540,000 - Payments on finance lease ( 24,394 ) ( 27,041 ) Repayments of notes payable ( 199,195 ) ( 33,557 ) Proceeds from sale of common stock 650,000 1,330,000 Net cash provided by financing activities 966,411 1,269,402 (Decrease) in cash ( 42,568 ) ( 394,882 ) Cash at beginning of period 108,570 590,797 Cash at end of period $ 66,002 $ 195,915 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for taxes $ - $ - Cash paid for interest $ 29,911 $ 15,614 NON-CASH INVESTING AND FINANCING TRANSACTIONS: OID discount on proceeds received from Promissory Note $ 60,000 $ - Stock purchased from payments due on accounts payable $ 20,000 $ - Common stock issued as commitment fee for Promissory Note $ 123,000 $ - Commitment Fee Shortfall Obligation $ 77,000 $ - Promissory note issued for past due Professional Fees $ 256,000 $ - Purchase of fixed assets $ 146,000 $ - Exchange of accounts payable interest into common stock $ - $ 82,250 Operating lease – right of use assets $ - $ 235,313 The accompanying notes are an integral part of these consolidated financial statements. 5 NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Organicell Regenerative Medicine, Inc. f/k/a Biotech Products Services and Research, Inc. (“Organicell” or the “Company”) was incorporated on August 9, 2011 in the State of Nevada. The Company is a clinical-stage biopharmaceutical company principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and to provide other related services. Our proprietary products are derived from perinatal sources and are principally used in the health care industry administered through doctors and clinics (collectively, “Providers”). On May 21, 2018, the Company filed a Certificate of Amendment with the Secretary of State of Nevada to change the Company’s name from Biotech Products Services and Research, Inc. to Organicell Regenerative Medicine, Inc., effective June 20, 2018 (the “Name Change”) and during November 2021 the Name Change was effectuated in the marketplace by the Financial Industry Regulatory Agency. For the six months ended April 30, 2022, the Company principally operated through General Surgical of Florida, Inc., a Florida corporation and wholly owned subsidiary, which was formed to sell the Company’s therapeutic products to Providers. The Company’s leading product, Zofin™ (also known as Organicell TM Flow), is an acellular, biologic therapeutic derived from perinatal sources and is manufactured to retain naturally occurring microRNAs, without the addition or combination of any other substance or diluent. In June 2021, the Company announced that it was launching a service platform for its first autologous product called Patient Pure X TM (PPX TM ). PPX TM is a non-manipulated biologic containing the nanoparticle fraction from a patient’s own peripheral blood. The Company began to accept minimal orders for this service since October 2021. In November 2020, the Company formed Livin’ Again Inc., a wholly owned subsidiary, for the purpose of among other things, providing independent education, advertising and marketing services, to Providers that provide medical and other healthcare, anti-aging and regenerative services. including FDA-approved IV vitamin and mineral liquid infusions (“IV Drip Therapies”). To date, there has been no significant activity and the Company has no timetable, if any, as to when IV Drip Therapies revenues will commence. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the rules and regulations of the Securities Exchange Commission, although we believe that the disclosures made are adequate to make the information not misleading. These unaudited consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended October 31, 2021 filed with the Securities and Exchange Commission. Concentrations of Credit Risk The balance sheet items that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents. Balances in accounts are insured up to Federal Deposit Insurance Corporation (“FDIC”) limits of $ 250,000 per institution. At April 30, 2022, the Company did not hold cash balances in any financial institution in excess of FDIC insurance coverage limits. 6 Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles of the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates. Cash Equivalent s The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Accounts Receivable Accounts receivable are recorded at net realizable value on the date revenue is recognized. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to pay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. For the three months and six months ended April 30, 2022 and 2021, the Company did no t record any bad debt expense. Stock Subscriptions Receivable Stock subscriptions receivable for equity investments in the Company are classified as current assets once a fully executed stock subscription agreement is received and provided that the receivable is collected prior to the issuance of the financial statements. In the event that the Company receives a fully executed stock subscription agreement but the receivable is not collected prior to the issuance of the financial statements, the receivable is classified as a direct reduction to stockholders’ equity. At April 30, 2022 and October 31, 2021, there were no stock subscriptions receivable outstanding. Inventory Inventory is stated at the lower of cost or net realizable value using the average cost method. The Company provides reserves for potential excess, dated or obsolete inventories based on an analysis of forecasted demand compared to quantities on hand and any firm purchase orders, as well as product shelf life. At April 30, 2022 and October 31, 2021, the Company determined that there were no t any reserves required in connection with our inventory. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives of property and equipment range from 3 to 15 years. Upon sale or retirement, the cost and related accumulated depreciation and amortization are eliminated from their respective accounts, and the resulting gain or loss is included in results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. Construction in Progress The cost of all projects under construction for new laboratory facilities and other improvements that are in progress (under way) at a particular point in time and have not yet been placed into service are reported as construction in progress until such time as the project is complete. 7 Revenue Recognition The Company follows the guidance of FASB Accounting Standards Update (“ASU”) Topic 606 “Revenue from Contracts with Customers” which requires the Company to recognize revenue in amounts that reflect the prorata completion of the performance obligations of the Company required under the contracts. The Company recognizes revenue only when it transfers control of a promised good or service to a customer in an amount that reflects the consideration it expects to receive in exchange for the good or service. Our performance obligations are satisfied and control is transferred at a point-in-time, which is typically when the transfer and title to the product sold has taken place and there is evidence of our customer’s satisfactory acceptance of the product shipment or delivery except in those instances when the customer has made prior arrangements with the Company to store the product purchased by the customer at the Company’s facilities that is to be delivered at a later date to be designated by the customer. Net Income (Loss) Per Common Share Basic income (loss) per common share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity instruments. At April 30, 2022, the Company had 9,500,000 common shares issuable upon the exercise of warrants and unpaid Original Base Salary and Incremental Salary that could be convertible into approximately 49,960,000 common shares that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the three months and six months ended April 30, 2022. At April 30, 2021, the Company had 9,500,000 common shares issuable upon the exercise of warrants and unpaid Original Base Salary and Incremental Salary that could be convertible into approximately 33,404,000 common shares that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the three months and six months ended April 30, 2021. Stock-Based Compensation All stock-based payments are recognized in the financial statements based on their fair values. Research and Development Costs Research and development costs consist of direct and indirect costs associated with the development of the Company’s technologies. These costs are expensed as incurred. Our research and development expenses were approximately $ 276,600 and $ 234,300 for the three months ended April 30, 2022 and 2021, respectively. Our research and development expenses were approximately $ 553,000 and $ 896,000 for the six months ended April 30, 2022 and 2021, respectively. The research and development costs primarily relate to the filing and approval of IND applications and the performance of clinical trials. Income Taxes The Company is required to file a consolidated tax return that includes all of its subsidiaries. Provisions for income taxes are based on taxes payable or refundable for the current year taxable income for federal and state income tax reporting purposes and deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss carryforwards. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of the operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred tax assets will not be realized. 8 The Company accounts for uncertain tax positions in accordance with FASB Topic 740 – Income Taxes. This pronouncement prescribes a recognition threshold and measurement process for financial statement recognition of uncertain tax positions taken or expected to be taken in a tax return. The interpretation also provides guidance on recognition, derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. For the three months and six months ended April 30, 2022 and 2021 the Company incurred operating losses, and therefore, there was not any income tax expense amount recorded during those periods. There is a full valuation allowance established for the tax benefit associated with the net losses for the three months and six months ended April 30, 2022 and 2021. Valuation of Derivatives The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. Sequencing The Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. The Company currently has 2,500,000,000 authorized shares of common stock of which 1,168,587,928 shares are issued and outstanding as of June 14, 2022. The Company expects that it will continue to issue common stock in the future in connection with debt and/or equity financings, transactions with third parties, performance incentives and as compensation to its employees. Currently the amount of authorized shares is sufficient to provide for the additional shares that the Company may be contingently obligated to issue under existing arrangements. Fair Value of Financial Instruments The Company includes fair value information in the notes to financial statements when the fair value of its financial instruments is different from the book value. When the book value approximates fair value, no additional disclosure is made. The Company follows FASB ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities and convertible debt. The estimated fair value of cash, accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments. The Company follows the provisions of ASC 820 with respect to its financial instruments. As required by ASC 820, assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Level one — Quoted market prices in active markets for identical assets or liabilities; 9 Level two — Inputs other than level one inputs that are either directly or indirectly observable such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level three — Unobservable inputs that are supported by little or no market activity and developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company did no t have any convertible instruments outstanding at April 30, 2022 and October 31, 2021 that qualify as derivatives. Operating Lease Obligations Under the provisions of Accounting Standards Update (ASU) No. 2016-02 (Topic 842) (“ASC 842”), the Company recognizes a right of use (“ROU”) asset and corresponding lease liability for all operating leases upon commencement of the lease. The Company applies the modified retrospective approach which includes a number of optional practical expedients on leases that commenced before the effective date of ASC 842, including continuing to account for leases that commenced before the effective date in accordance with previous guidance, unless the lease is modified and the inclusion of amounts pertaining to the maintenance portion of the leased assets. The Company’s policy is to treat operating leases that have a term of one year or less at lease commencement date and do not include a purchase option that is reasonably certain of exercise, consistent with the lease recognition approach as previously outlined under ASC 840. In addition, month to month leases which do not involve additional financial commitments on the part of the Company are also treated consistent with the lease recognition approach as previously outlined under ASC 840. The Company has established a capitalization threshold of $ 15,000 in determining whether any future operating leases will be capitalized. Subsequent Events The Company has evaluated subsequent events that occurred after April 30, 2022 through the financial statement issuance date for subsequent event disclosure consideration. NOTE 3 – GOING CONCERN The unaudited accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since its inception. The Company incurred net losses of $ 3,149,779 for the six months ended April 30, 2022. In addition, the Company had an accumulated deficit of $ 44,774,528 at April 30, 2022. The Company had a negative working capital position of $ 5,680,451 at April 30, 2022. New United States Food and Drug Administration (“FDA”) regulations which were announced in November 2017 and which became effective beginning in May 2021 (postponed from November 2020 due to the COVID-19 pandemic) require that the sale of products that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”). The Company has not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products it currently produces would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. 10 In addition to the above, the adverse public health developments and economic effects of the ongoing COVID-19 pandemic in the United States have adversely affected the demand for our products and services by our customers and from patients of our customers as a result of quarantines, facility closures and social distancing measures put into effect in connection with the COVID-19 outbreak and which currently still continue to have a negative impact to our business and the economy. As a result of the above, the Company’s efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be achieved and ultimately may prove to be unsuccessful unless (a) the Company’s ability to process, sell and distribute the products currently being produced or developed in the future are not restricted; (b) the United States economy returns to pre-COVID-19 conditions; and/or (c) additional sources of working capital through operations or debt and/or equity financings are realized. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses and research and development costs related to development of new products and to perform required clinical studies in connection with the sale of its products. The Company does not have any assets to pledge for the purpose of borrowing additional capital. In addition, the Company relies on its ability to produce and sell products it manufactures that are subject to changing technology and regulations that it currently sells and distributes to its customers. The Company’s current market capitalization, common stock liquidity and available authorized shares may hinder its ability to raise equity proceeds. The Company anticipates that future sources of funding, if any, will therefore be costly and dilutive, if available at all. In view of the matters described in the preceding paragraphs, recoverability of the recorded asset amounts shown in the accompanying consolidated balance sheet assumes that (a) the Company is able to continue to produce products or obtain products under supply arrangements which are in compliance with current and future regulatory guidelines; (b) the United States economy returns to pre-COVID-19 market conditions; (c) the Company will be able to establish a stabilized source of revenues, including efforts to expand sales internationally and the development of new product offerings and/or designations of products; (d) obligations to the Company’s creditors are not accelerated; (e) the Company’s operating expenses remain at current levels and/or the Company is successful in restructuring and/or deferring ongoing obligations; (f) the Company is able to continue its research and development activities, particularly in regards to remaining compliant with the FDA and ongoing safety and efficacy of its products; and/or (g) the Company obtains additional working capital to meet its contractual commitments and maintain the current level of Company operations through debt or equity sources. There is no assurance that the products we currently produce will not be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s and/or the Company will be able to complete its revenue growth strategy. There is no assurance that the Company’s research and development activities will be successful or that the Company will be able to timely fund the required costs of those activities. Without sufficient cash reserves, the Company’s ability to pursue growth objectives will be adversely impacted. Furthermore, despite significant effort since July 2015, the Company has thus far been unsuccessful in achieving a stabilized source of revenues. If revenues do not increase and stabilize, if the COVID-19 crisis is not satisfactorily managed and/or resolved, if the Company’s ability to process, sell and/or distribute the products currently being produced or developed in the future are restricted, and/or if additional funds cannot otherwise be raised, the Company might be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws. As of April 30, 2022, based on the factors described above, the Company concluded that there was substantial doubt about its ability to continue to operate as a going concern for the 12 months following the issuance of these financial statements. 11 NOTE 4 – INVENTORIES Schedule of Inventories April 30, 2022 October 31, 2021 Raw materials and supplies $ 37,873 $ 92,601 Finished goods 125,586 142,226 Total inventories $ 163,459 $ 234,827 NOTE 5 – PROPERTY AND EQUIPMENT Schedule of Property and Equipment April 30, 2022 October 31, 2021 Computer equipment $ 13,541 $ 10,684 Finance lease equipment 544,378 544,378 Manufacturing equipment 332,732 258,791 Property and equipment, gross 890,651 813,853 Less: accumulated depreciation ( 139,921 ) ( 107,146 ) Total property and equipment, net before leasehold improvements 750,730 706,707 Construction in progress: Leasehold improvements 860,947 406,709 Total property and equipment, net $ 1,611,677 $ 1,113,416 Depreciation expense totaled $ 18,605 and $ 12,665 for the three months ended April 30, 2022 and 2021, respectively. Depreciation expense totaled $ 32,775 and $ 24,856 for the six months ended April 30, 2022 and 2021, respectively. As described in Note 6, during the year ended October 31, 2021, the Company began the build-out of additional laboratory processing, product distribution and administrative office capacity at its Basalt Lab Lease location. The total costs incurred as of April 30, 2022 were $ 860,947 and are reflected as construction in progress. The Basalt Lab Lease location became operational during May 2022. Amortization of these costs began during May 2022 once the facility became operational and will be amortized over the expected term of the Basalt Lab Lease. NOTE 6 – LEASE OBLIGATIONS Finance Lease Obligations: During March 2019, the Company entered into a lease agreement for certain lab equipment in the amount of $ 239,595 . Under the terms of the lease agreement, the Company is required to make 60 equal monthly payments of $ 4,513 plus applicable sales taxes. Under the Lease Agreement, the Company has the right to acquire all of the leased equipment for $ 1.00 . As a result, the lease agreement is being accounted for as a finance lease obligation. The annual interest rate charged in connection with the lease is 4.5 %. The leased equipment are being depreciated over their estimated useful lives of 15 years. During October 2021, the Company entered into a second lease agreement in the amount of $ 304,873 for certain lab equipment that is being installed at the Basalt lab location. Under the terms of the lease agreement, the Company is required to make 60 equal monthly payments of $ 5,478 plus applicable sales taxes. Under the Lease Agreement, the Company has the right to acquire all of the leased equipment for $ 1.00 . As a result, the lease agreement is being accounted for as a finance lease obligation. The annual interest rate charged in connection with the lease is 3.0 %. Lease payments and depreciation of the leased equipment has not commenced pending completion of the Basalt lab buildout (see below) and the facility becomes operational. The leased equipment will be depreciated over their estimated useful lives of 15 years. 12 Operating Lease Obligations: Administrative Office The Company’s corporate administrative offices are leased from MariLuna, LLC, a Florida limited liability company which is owned by Dr. Mitrani. During July 2020, the Company entered into an extension of the operating lease agreement. The lease term is for an additional 36 months beginning July 1, 2020 and expiring June 30, 2023, with a monthly rental rate of $ 3,500 . On July 1, 2020, in connection with the adoption of ASC 842, the Company recorded a ROU asset and corresponding operating lease obligation of $ 117,659 (present value of the associated leased payments based on an assumed borrowing rate of 4.5 %). Lease amortization expense for the three months ended April 30, 2022 and 2021 was $ 9,890 and $ 9,350 , respectively. Lease amortization expense for the six months ended April 30, 2022 and 2021 was $ 19,669 and $ 18,700 , respectively. Beginning October 1, 2020, the Company entered into a second lease agreement with Mariluna LLC for office space located in Aspen, CO. The initial term of the lease was for one year, expiring on September 30, 2021 and the lease has been subsequently extended on a month to month basis. Under the terms of the lease, the Company is required to make monthly rental payments of $ 6,500 and was required to provide a security deposit of $ 11,000 upon execution of the lease agreement. Laboratory Facilities: In connection with the Company’s decision to again operate a placental tissue bank processing laboratory in Miami, Florida, during February 2019, the Company entered into a renewable month to month lease agreement (“Miami Lab Lease”) for an approximately 450 square foot laboratory and a 100 square foot administrative office space. In connection with the Miami Lab Lease, the Company was required to post a security deposit of $ 6,332 . From November 2020 through May 31, 2021, the Company entered into an additional month to month lease agreement in the same facility as the Miami Lab Lease for an additional 390 square foot laboratory. The Company also has entered into additional month to month lease agreements in the same facility as the Miami Lab Lease for additional administrative office space. Monthly lease payments are approximately $ 8,000 plus administrative fees and taxes. During June 2022, the Company entered into a six-month lease agreement with the new owners of the Miami Lab Lease facilities effective July 1, 2022 (“New Miami Lab Lease”). The New Miami Lab Lease may be renewed on a month-to-month basis upon expiration of the initial term. Monthly lease payments are approximately $ 9,500 per month plus administrative fees and taxes. During March 2021, the Company entered into a lease agreement for an approximately 2,452 square foot commercial space located in Basalt, Colorado (the “Basalt Lab Lease”). The Company intends to build additional laboratory processing, product distribution and administrative office capacity from this location. The term of the Basalt Lab Lease is for three years and may be renewed for an additional (3) three-year term provided the Company is not in default (“First Renewal Option”). Rental expense is $ 6,800 per month and provides for annual increases of 3% or the Denver Aurora Metropolitan CPI index, whichever is greater. In connection with the Basalt Lab Lease, the Company was required to post a security deposit of $ 13,600 . The Company is currently constructing the initial laboratory and office build-out at an estimated cost of $ 900,000 . The Basalt Lab Lease location became operational during May 2022. In connection with the execution of the Basalt Lab Lease, the Company recorded a ROU asset and corresponding operating lease obligation of $ 235,313 (present value of the associated leased payments based on an assumed borrowing rate of 4.5 %). Lease amortization expense for the three months and six months ended April 30, 2022 was $ 18,977 and $ 37,338 , respectively. 13 NOTE 7 – RELATED PARTY TRANSACTIONS The Company’s corporate administrative offices are leased from MariLuna, LLC, a Florida limited liability company which is owned by Dr. Mitrani. The term of the lease expires in June 2023. Monthly rent is $ 3,500 . The Company paid a security deposit of $ 5,000 . Total rent expense for the three months ended April 30, 2022 and 2021 was $ 10,500 . Total rent expense for the six months ended April 30, 2022 and 2021 was $ 21,000 . Beginning October 1, 2020, the Company entered into a second lease agreement with Mariluna LLC for office space located in Aspen, CO. The initial term of the lease was for one year, expiring on September 30, 2021 and the lease has been subsequently extended on a month to month basis. Under the terms of the lease, the Company is required to make monthly rental payments of $ 6,500 and was required to provide a security deposit of $ 11,000 upon execution of the lease agreement. Total rent expense for the three months ended April 30, 2022 and 2021 was $ 19,500 . Total rent expense for the six months ended April 30, 2022 and 2021 was $ 39,000 . In connection with Mr. Bothwell’s executive employment agreements, the Company agreed to reimburse Rover Advanced Technologies, LLC, a company owned and controlled by Mr. Bothwell for office rent and other direct expenses (phone, internet, copier and direct administrative fees, etc.) totaling $ 7,247 and $ 7,454 for the three months ended April 30, 2022 and 2021, respectively, and $ 17,081 and $ 15,724 for the six months ended April 30, 2022 and 2021, respectively. For the three months and six months ended April 30, 2022, the Company sold a total of approximately $ 203,700 and $ 283,000 , respectively, of products to a management services organization (“MSO”) that provides administrative services and contracts for medical supplies for several medical practices, including approximately $ 53,000 and $ 76,000 of products purchased from the Company for the three months and six months ended April 30, 2022, respectively, that were attributable to the medical practice owned by Dr. George Shapiro. Dr. Shapiro also has an indirect economic interest in the parent company that owns the MSO. For the three months and six months ended April 30, 2022, the total amount of sales of products to customers related to Mr. Michael Carbonara totaled $ 2,160 and $ 10,320 , respectively. For the three months and six months ended April 30, 2022, the total amount of sales of products to customers related to Dr. Allen Meglin totaled $ 7,660 . At April 30, 2022, salary amounts owed to Albert Mitrani, Dr. Mari Mitrani and Ian Bothwell were $ 362,101 , 483,455 , and $ 1,006,095 , respectively and consulting fees owed to Dr. George Shapiro were $ 108,000 . During June 2022, Albert Mitrani made a capital contribution of $ 250,000 to the Company. The proceeds were used for working capital. NOTE 8 – NOTES PAYABLE Notes Payable Debentures On June 20, 2018, the Company issued a total of $ 150,000 of convertible 6 % debentures (“150,000 Debentures”) to an accredited investor. The principal amount of the $150,000 Debentures, plus accrued and unpaid interest through June 30, 2019 were payable on the 10 th business day subsequent to June 30, 2019, unless the payment of the $150,000 Debentures were prepaid at the sole option of the Company, were converted as provided for under the terms of the $150,000 Debentures, and/or accelerated due to an event of default in accordance with the terms of the $150,000 Debentures. Interest on the $150,000 Debentures for each calendar quarter ended beginning with the quarter ended June 30, 2018 is payable on the 10 th business day following the immediately prior calendar quarter. The $150,000 Debentures were not repaid as required. At April 30, 2022, the principal balance of the $150,000 Debentures outstanding was $ 133,305 and accrued and unpaid interest was $ 1,333 . 14 Unsecured Promissory Note For Professional Fees Owed On January 24, 2022, the Company reached an agreement with a professional firm in connection with unpaid legal services owing as of December 31, 2021 in the amount of $ 278,340 (“Unpaid Professional Fees”). In connection with the agreement, the Company issued the professional firm a promissory note in the amount of $ 256,000 of which the Company was required to make a cash payment of $ 166,000 by January 25, 2022 and twelve monthly payments of $ 7,500 beginning February 28, 2022. If the Company makes all payments as required under the promissory note, then the Company will receive a discount of $ 22,340 , representing the remaining balance of the Professional Fees outstanding from the December 31, 2021 balances after all payments of the promissory note are applied. As of June 17, 2022, the Company has made all required payments due in connection with the promissory note. The balance outstanding at April 30, 2022 is $ 67,500 . Unsecured Promissory Note On February 5, 2019, the Company entered into an unsecured loan agreement with a third party with a principal balance of $ 25,000 . The outstanding principal was due March 8, 2019 . The loan was not repaid on the maturity date as required. The third party subsequently agreed to apply amounts due for invoices due from third party for future purchases of the Company products to the extent of the outstanding balances owed by the Company in connection with the loan (interest and principal). As of April 30, 2022 and October 31, 2021, the remaining amount due under this arrangement was $ 0 and $ 4,392 , respectively. Promissory Note - SPA On January 11, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with AJB Capital Investments, LLC (“Purchaser”) pursuant to which we sold a promissory note in the principal amount of $ 600,000 (“Promissory Note”) to the Purchaser in a private transaction for a purchase price of $540,000 (giving effect to original issue discount of $ 60,000 ). In connection with the sale of the Promissory Note, the Company also paid the Purchaser’s legal fees and due diligence costs of $ 12,500 and brokerage fees of $ 9,000 to J.H. Darbie & Co., a registered broker-dealer which were expensed during the six months ended April 30, 2022. After payment of the legal fees and brokerage fees, the net proceeds to the Company were $ 518,500 , which will be used for working capital and other general corporate purposes. The Promissory Note matures on July 11, 2022, subject to extension at the option of the Company for up to an additional six month period, bears interest at the a rate of 10 % per annum for the first six months, payable monthly, and 12% per annum thereafter, payable monthly, if extended, and only following an event of default (as defined in the Note), is convertible into shares of the Company’s common stock at a conversion price equal to the lower of the “VWAP” (as hereinafter defined) of the common stock during (i) the twenty (20) trading day period preceding the issuance date of the Note; or (ii) the twenty (20) trading day period preceding the date of conversion of the Promissory Note. As used in the Promissory Note, “VWAP” means, for any date, the price of our common stock as determined by the first of the following clauses that applies: (i) if the common stock is then listed or quoted on one or more established stock exchanges or national market systems, the daily volume weighted average price of the common stock for such date on the trading market on which the common stock is then listed or quoted as reported by Bloomberg L.P.; or (ii) if the common stock is regularly quoted on an automated quotation system (including applicable tiers of the over-the-counter market maintained by OTC Market Group, Inc.) or by a recognized securities dealer, the volume weighted average price of the common stock for such date on the applicable OTC Markets Group, Inc. tier or as quoted by such securities dealer. In accordance with the terms of the SPA, as of January 11, 2022, the Company has reserved 36,923,080 shares of its authorized but unissued common stock for issuance in the event the Purchaser exercises its right to convert the Promissory Note following an event of default. The Promissory Note may be prepaid by the Company at any time without penalty. The Promissory Note also contains covenants, events of defaults, penalties, default interest and other terms and conditions customary in transactions of this nature. 15 Pursuant to the terms of the SPA, the Company paid a commitment fee to the Purchaser in the amount of $ 123,000 (“Initial Commitment Fee”) in the form of 3,076,921 shares of the Company’s common stock (the “Initial Commitment Fee Shares”) valued at $ 0.04 the closing price of the common stock of the Company on the closing date. In addition, if the Company exercises the option to extend the maturity date of the Promissory Note, the Company will pay an additional commitment fee to the Purchaser in the amount of $ 61,546 in the form of an additional 1,538,462 shares of its common stock (“Additional Commitment Fee Shares,” and together with the Initial Commitment Fee Shares, collectively, “Commitment Fee Shares”) valued at $ 0.04 the closing price of the common stock of the Company on the closing date. In the event that by the first anniversary of repayment of the Promissory Note by the Company, the Purchaser has not generated the amount of $ 200,000 from public sales of the Commitment Fee Shares, and $100,000 from public sales of the Additional Commitment Fee Shares, if applicable, the Company shall either pay the amount of any such shortfall either (i) by issuing additional shares of our common stock at a price equal to the VWAP for the common stock during the five (5) trading day period prior to such anniversary date; or (ii) in cash, in which case, the Company shall repurchase any unsold Commitment Fee Shares then held by the Purchaser for such shortfall amount (“Commitment Fee Shortfall Obligation”). The offer and sale of the Promissory Note to the Purchaser was made in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (“Securities Act”), in reliance on exemptions afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. Upon the closing, the Company recorded a discount of the Promissory Note in the amount of $ 260,000 , consisting of the original issue discount of $ 60,000 , the fair value of the Initial Commitment Fee Shares of $ 123,000 and the Commitment Fee Shortfall Obligation of $ 77,000 . These costs will be amortized over the initial term of the Promissory Note. For the three months and six months ended April 30, 2022, $ 130,000 and $ 161,778 , respectively, of the total discounts recorded in connection with the issuance of the Promissory Note have been amortized. At April 30, 2022, the fair value of the Commitment Fee Shares was approximately $ 62,462 (valued at $0.0203 the closing price of the common stock of the Company on April 29, 2022). As a result, the Company has recorded an additional Commitment Fee Shortfall Obligation in the amount of $ 48,539 and $ 60,539 for the three months and six months ended April 30, 2022, respectively. The total Commitment Fee Shortfall Obligation at April 30, 2022 was $ 137,539 . NOTE 9 – IRS PENALTIES The Company’s income tax returns for the periods since inception through the tax year ended October 31, 2015 were not filed with the Internal Revenue Service (“IRS”) until August 2017 (“Delinquent Filed Returns”). The Company’s income tax returns for the tax year ended October 31, 2016 were filed with the IRS during December 2017. In connection with the Delinquent Filed Returns, during the period September 2017 through October 2017, the Company received notices that it was being assessed approximately $ 90,000 of penalties, plus interest (“IRS Penalties”), in connection with the late filing of certain information returns that were included as part of the Delinquent Filed Returns. In connection with the notices, the IRS indicated its intent to levy property of the Company if the IRS penalties were not paid as required. During January 2018, the Company requested from the IRS an abatement of the IRS penalties based on reasonable cause. During April 2018, the IRS notified the Company that the IRS penalties for the tax year ended 2011 of $ 20,000 , plus interest, were abated and the request for abatement for the IRS penalties for the tax years ended 2012 – 2015 were denied. The Company is currently appealing the initial determination by the IRS to exclude the IRS penalties for the tax years 2012-2015 in its consideration of abatement and filed a “Request for Collection Due Process Equivalent Hearing” (“Request”) in September 2021. A hearing date has been set for June 28, 2022. During the period that the Request is being reviewed and processed by the IRS, the IRS has agreed to put a hold on taking any levy action against the Company for the remaining amounts of the IRS Penalties that are still outstanding. In connection with the notices, the Company has accrued $ 83,684 and $ 83,684 of accrued tax penalties and interest on the balance sheet as of April 30, 2022 and October 31, 2021, respectively. 16 NOTE 10 – CAPITAL STOCK Preferred Stock The Company is authorized to issue 10,000,000 shares of $ 0.001 par value preferred stock in one or more designated series, each of which shall be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. The Company’s board of directors is authorized, without stockholders’ approval, within any limitations prescribed by law and the Company’s Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock. Issued Shares As of April 30, 2022, there were no designations of Preferred Stock authorized or outstanding. Common Stock Issuances of Common Stock - Sales: In November 2021, the Company sold an aggregate of 8,000,000 shares of common stock to one “accredited investor” at $ 0.05 per share for an aggregate purchase price of $ 400,000 . The proceeds were used for working capital. In January 2022, the Company sold an aggregate of 666,667 shares of common stock to one “accredited investor” at $ 0.03 per share for an aggregate purchase price of $ 20,000 . The purchase price was paid through an offset of an outstanding balance owed by the Company to the investor at the time of the sale of $20,000. In February 2022, the Company sold an aggregate of 8,333,333 shares of common stock to one “accredited investor” at $ 0.03 per share for an aggregate purchase price of $ 250,000 . The proceeds were used for working capital. Issuances of Common Stock – Stock-Based Compensation: On December 27, 2021, the Company and an employee agreed to an amendment of the employee’s employment agreement. Under the terms of the amendment, the employee agreed to extend the term of the agreement through December 31, 2024 and the Company agreed to increase the employee’s annual salary from $ 180,000 per year to $ 210,000 per year effective January 1, 2022. In connection with the amendment, the Company agreed to grant the employee 1,000,000 shares of common stock of the Company to vest quarterly over the remaining term of the agreement (valued at $ .029 per share, the closing price of the common stock of the Company on the grant date). The total value of the stock granted in connection with the amendment was $ 29,000 which will be amortized over the remaining term of the agreement. The Company recorded $ 7,250 and $ 8,458 of stock-based compensation during the three and six months ended April 30, 2022, respectively, in connection with these shares. In connection with the VP Agreements, during the six months ended April 30, 2022, the Company issued each of the Sales Executive an additional 450,000 Performance Shares (total 900,000 shares) valued at $ 0.035 per share, the closing price of the common stock of the Company on the grant date. The Company will amortize the value of the stock-based compensation of $ 31,500 over the remaining term of the VP Agreements. The Company has recorded a total of $ 7,875 and $ 10,500 of stock-based compensation expense during the three and six months ended April 30, 2022, respectively, in connection with these shares. 17 On March 17, 2022, the Company entered into a consulting agreement with a third party to assist the Company with certain services associated with the implementation of the PPX TM service platform as well as other customary day to day activities as reasonably requested. The term of the agreement expires on September 30, 2022 (“Initial Term”) and may be renewed for four additional six-month terms upon mutual agreement. As consideration for agreeing to provide consulting services to the Company during the Initial Term, the Company agreed to issue the consultant 7,000,000 shares of unregistered common stock. The Company also agreed to provide the consultant 5,000,000 shares of unregistered common stock for each renewal period, if any. The shares issued were valued at $ 0.018 per share, the closing price of the common stock of the Company on the effective date of the agreement, totaling $ 126,000 . The Company will amortize the costs associated with the issuance over the Initial Term of the agreement. The Company amortized $ 29,077 of stock-based compensation expense during the three and six months ended April 30, 2022. During June 2020, the Company entered into a consulting agreement with a third party in connection with past and future consulting and advisory services to be provided to the Company. The consulting agreement expires on June 30, 2022 and may be extended for additional monthly periods provided each party agrees in writing at least 5 days prior to expiration of the term. In connection with the consulting agreement, the Company issued the consultant 1,700,000 shares of unregistered common stock valued at $ 0.019 per share, the closing price of the common stock of the Company on the date of the agreement. For each monthly renewal thereafter, if any, the Company agreed to issue the consultant an additional 1,700,000 shares of unregistered common stock. All of the shares granted thus far vested immediately on the date of grant. The Company will record $ 32,300 of stock-based compensation expense based on the grant date fair value of these shares during the quarter ended July 31, 2022. Equity Line of Credit Commitment: During November 2021, the Company entered into an agreement with an investor whereby the investor has agreed to provide the Company with a $ 10,000,000 equity line of credit facility (“ELOC”), subject to many conditions including the Company determining to proceed with the ELOC, approval and execution of definitive agreements for the ELOC and the Company subsequently filing a registration statement covering the underlying shares to be sold under the ELOC. The Company is not obligated to proceed with the ELOC or file a registration statement for the ELOC. In connection with the above, the investor agreed to purchase 7,000,000 restricted common shares of the Company priced at $ 0.05 per share ($350,000) upon such time that the Company initially files the registration statement for the ELOC. In connection with the above, the Company agreed to pay a commitment fee to the investor in the amount of 3,000,000 shares of common stock of the Company fully vested (valued at $ 0.067 per share, the closing price of the common stock of the Company on the date of the agreement). The Company recorded $ 201,000 of stock-based compensation expense based on the grant date fair value of these shares during the six months ended April 30, 2022. Shares Issued – Promissory Note: As described in Note 8, in connection with the issuance of the Promissory Note on January 11, 2022, the Company issued the Purchaser’s 3,076,923 commitment shares valued at $ 123,000 . Shares Issued – Settlement of Litigation: As described in Note 12, during April 2022 the Company settled a lawsuit whereby the Company paid LAE $ 45,000 in cash and 2,000,000 shares of restricted common stock of the Company. The shares issued were valued at $0.0219 per share, the closing price of the common stock of the Company on the effective date of the settlement, totaling $ 43,800 . Management and Consultants Performance Stock Plan On April 25, 2020, the Company approved the adoption of the Management and Consultants Performance Stock Plan (“MCPP”) providing for the grant to current senior executive members of management and third-party consultants shares of common stock of the Company (“Shares”) based on the achievement of certain defined operational performance milestones (“Milestones”). 18 On June 29, 2020, the Board amended the MCPP, providing for the additional grant of common stock of the Company to the current senior executive members of management and the current non-executive members of the Board based on the Company completing any transaction occurring while employed and/or serving as a member of the Board, respectively, that results in a change in control of the Company or any sale of substantially all the assets of the Company (“Transaction”) which upon after giving effect to such issuance of shares below, corresponds to a minimum pre-Transaction fully diluted price per share of the Company’s common stock in the amounts indicated below. Schedule of minimum pre-transaction price per share Pre-Transaction Price Per Share Valuation (a) Executive Bonus Shares Issued (b) Non-executive Board Bonus Shares Issued (c) $ 0.22 40,000,000 2,000,000 $ 0.34 60,000,000 3,000,000 $ 0.45 80,000,000 4,000,000 $ 0.54 100,000,000 5,000,000 (a) proforma for issuance of all shares to be issued pursuant to the MCPP and other in the money contingent share issuances (b) per each executive consisting of Albert Mitrani, Dr. Mari Mitrani, Ian Bothwell, and Dr. George Shapiro (c) per each non-executive Board member consisting of Dr. Allen Meglin and Michael Carbonara On August 14, 2020, the Board amended the MCPP, providing for the additional grant of common stock of the Company to each Dr. Maria I. Mitrani and Ian Bothwell based on the Company obtaining aggregate gross fundings (grants for research and development and clinical trials, purchase contracts for Company products, debt and/or equity financings) or other financial awards during the term of employment with the Company based on the amounts indicated below: Schedule of debt and/or equity financings Aggregate Funding Amount Shares From To $ 2,500,000 $ 5,000,000 5,000,000 $ 5,000,001 $ 10,000,000 10,000,000 $ 10,000,001 $ 30,000,000 30,000,000 On September 23, 2020, the Board amended the MCPP, providing for the grant of common stock of the Company of 15.0 million, 7.5 million and 15.0 million shares of common stock of the Company, respectively, to each Albert Mitrani, Dr. Maria I. Mitrani and Ian Bothwell upon such time that the Company’s common stock trades above $0.25 per share, $0.50 per share and $0.75 per share, respectively, for 30 consecutive trading days subsequent to March 31, 2021 and provided such milestone occurs during the term of employment with the Company. In addition, each of the current executives were entitled to receive an additional 7 million shares, which when combined with all previous IND and/or eIND’s Milestones previously issued under the MCPP of 43 million shares, represents the total of all incentive shares to be issued to each executive in connection with the combined thirteen IND’s and/or eIND’s Milestones achieved through September 23, 2020. In the future, each of the current executives shall be entitled to receive 5 million shares as a performance incentive for each IND and/or “Expanded Access” approval (and excluding all eIND’s) received by the Company that involve more than 15 patients and provided such milestone occurs during the term of employment with the Company. On February 10, 2021, the Board amended the MCPP, providing for the grant of common stock of the Company of 5 million shares for each Phase II clinical trial completed, 5 million shares for each Phase III clinical trial approved and initiated (deemed to be upon the time the first patient is enrolled) and 10.0 million shares for each Phase III clinical trial fully enrolled. In addition, the CMO’s portion of a designated grant for an achievement of any applicable Milestone subsequent to September 23, 2020 was reduced to 30% until the time that the CMO becomes a full-time employee of the Company. 19 Pursuant to the MCPP, a total of 342,500,000 shares have been issued and as described above, additional shares are authorized to be issued under the MCPP subject to the achievement of the defined contingent performance based milestones described above and provided the milestones are achieved while the individual is employed and/or serving as a member of the Board: Schedule of management and consultants performance stock plan Name MCPP SharesIssued MCPP Remaining Shares Authorized Albert Mitrani 80,000,000 137,500,000 Ian Bothwell 80,000,000 167,500,000 Dr. Maria Mitrani 80,000,000 167,500,000 Dr. George Shapiro 69,500,000 100,000,000 Dr. Allen Meglin - 5,000,000 Michael Carbonara - 5,000,000 Consultants 33,000,000 - Total 342,500,000 582,500,000 The Company will record stock-based compensation expense in connection with any MCPP Shares that are actually awarded based on the fair value as of the initial grant date that the respective milestone for the MCPP Shares were approved. In connection with the MCPP Shares that have been awarded to date, all such shares were issued in connection with the MCPP Shares approved on April 25, 2020 and accordingly were valued $0.027 per share, the closing price of the common stock of the Company on the date that those respective MCPP Shares were approved. Upon completion of the Share Exchange on October 29, 2021, the MCPP (but not Awards of unexchanged shares of our common stock) was terminated. Unvested Equity Instruments : A summary of unvested equity instruments outstanding for the six months ended April 30, 2022 and 2021 are presented below: Schedule of Nonvested Share Activity Number of Nonvested Shares Weighted- Average Grant Date Fair Value Outstanding at October 31, 2021 83,844,445 $ 0.062 Non-Vested Shares Granted 1,900,000 $ 0.034 Vested ( 2,583,333 ) $ 0.055 Expired/Forfeited - $ - Outstanding at April 30, 2022 83,161,111 $ 0.061 Number of Nonvested Shares Weighted- Average Grant Date Fair Value Outstanding at October 31, 2020 1,111,111 $ 0.029 Non-Vested Shares Granted - $ - Vested ( 333,332 ) $ 0.029 Expired/Forfeited - $ - Outstanding at April 30, 2021 777,779 $ 0.029 20 NOTE 11 – WARRANTS A summary of warrant activity for the six months ended April 30, 2022 and 2021 are presented below: Schedule of Summary of Warrant Activity Number of Shares Weighted- average Exercise Price Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at October 31, 2021 9,500,000 $ 0.03 6.90 $ 289,500 Granted - $ - - $ - Exercised - $ - - $ - Expired/Forfeited - $ - - $ - Outstanding and exercisable at April 30, 2022 9,500,000 $ 0.03 6.40 $ - Number of Shares Weighted- average Exercise Price Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at October 31, 2020 9,500,000 $ 0.03 7.90 $ 1,268,000 Granted - $ - - $ - Exercised - $ - - $ - Expired/Forfeited - $ - - $ - Outstanding and exercisable at April 30, 2021 9,500,000 $ 0.03 7.40 $ 3,479,600 NOTE 12 – COMMITMENTS AND CONTINGENCIES Preparation of IRB, Pre-IND, IND Protocols for Clinical Applications and Clinical Trial Initiation and Monitoring : In connection with the Company’s ongoing research and development efforts and the Company’s efforts to meet compliance with current and anticipated United States Food and Drug Administration (“FDA”) regulations expected to be enforced beginning in May 2021 pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue based products that fall under Section 351 of the Public Health Services Act (“HCT/Ps”), the Company has applied for and received Investigation New Drug (“IND”) approval from the FDA to commence clinical trials in connection with the use of the Company’s products and related treatment protocols for specific indications. The ability to successfully complete the above efforts will be dependent on the actual outcomes in connection with the use of the Company’s products and related treatment protocols for each clinical trial, the Company’s ability to timely enroll patients and fund the required payments and complete the applicable clinical trials, which is subject to available working capital generated from operations, financing arrangements with the third-party vendors involved in the studies and/or from additional debt and/or equity financings as well as the ultimate approval from the FDA. New CRO Agreements During August 2021, October 2021, and December 2021, the Company entered into agreements with a new CRO to provide ongoing clinical research and related services in connection with three of the Company’s approved clinical research trials (“New CRO Agreements”). In connection with the New CRO Agreements, the Company is obligated to make aggregate payments to the CRO of approximately $1,700,000 plus estimated aggregate pass-through costs and other third-party direct costs of approximately $565,000 as well as site and patient related costs. The Company is obligated to make the CRO payments in equal monthly installments over the term of the clinical trial beginning on the commencement of the work by the CRO in connection with the applicable clinical trial and the payments for the pass-through costs and other third-party direct costs as well as site and patient related costs are paid in accordance with completion of agreed upon milestones. As of April 30, 2022, the Company has been billed a total of approximately $477,000 in connection with the New CRO Agreements of which approximately $ 401,000 is outstanding as of April 30, 2022. 21 Contingent Convertible Obligations Into Equity Securities Obligations Due Under Executive Employment Agreements Beginning July 1, 2020, at the sole option of the Executive, any portion of unpaid Original Base Salary for periods after January 1, 2020, including unpaid bonus salary, may be converted by Executive into common stock at a conversion rate equal to the average trading price during the month in which the accrued salary pertains. For any unpaid Original Base Salary that existed prior to January 1, 2020, including unpaid bonus salary, the amounts may be converted at a conversion price using the closing trading price of the stock on the last trading day in December 2019. Beginning December 1, 2020, at the sole option of the Executive, all unpaid Incremental Salary for periods after January 1, 2020 may be converted by the Executive into common stock at a conversion rate equal to the average trading price during the month in which the accrued salary pertains. For any unpaid Incremental Salary that existed prior to January 1, 2020, the amounts may be converted at a conversion price using the closing trading price of the stock on the last trading day in December 2019. None of the Executives have yet to elect to convert any portion of their unpaid Original Base Salary. As of April 30, 2022, there was approximately $721,000 of unpaid Original Base Salary and Incremental Salary related to the period prior to December 31, 2019 and approximately $1,168,000 of unpaid Original Base Salary and Incremental Salary related to the period January 1, 2020 through April 30, 2022, that could be converted in the future into approximately 49,960,000 shares of common stock (weighted average conversion price of $0.038 per share) . Legal Matters On June 17, 2021, Organicell received a subpoena dated June 14, 2021, from the Atlanta Regional Office of the SEC requiring the production of certain documents and communications in connection with the treatment and results of various COVID-19 patients, as discussed in the Company’s Current Reports on Form 8-K filed with the SEC during the period from May 27, 2020 through May 11, 2021. The Company is fully cooperating with the SEC’s investigation and believes that it will be able to provide all of the information requested by the SEC. The Company can make no assurances as to the time or resources that will need to be devoted to this investigation or its final outcome, or the impact, if any, of this investigation or any proceedings on the Company’s current business, financial condition, results of operations, cash flows, or the Company’s future operations. On August 17, 2021, the Company was served with a summons and complaint by LAE International Consulting, LLC (“LAE”), in the case styled LAE International Consulting, LLC v. Organicell Regenerative Medicine, Inc. et al., Case No. 2021-018461-CA-01 (In the Circuit Court of the 11th Judicial Circuit in and for Miami Dade County, Florida) (the “Lawsuit”). Albert Mitrani, Mari Mitrani and Ian Bothwell (the “Individual Defendants”) were also named as defendants in the Lawsuit. In the Lawsuit, LAE alleges breach of contract, unjust enrichment, violation of Florida’s Unfair and Deceptive Trade Practices Act, breach of obligation of good faith and fair dealing, negligent misrepresentation and fraudulent misrepresentation in connection with a prior consulting agreement entered into between the Company and LAE. During April 2022 the Lawsuit was settled whereby the Company agreed to pay LAE $ 45,000 in cash and 2,000,000 shares of restricted common stock of the Company. In addition to the foregoing, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm our business. NOTE 13 – SEGMENT INFORMATION The Company has only one operating segment. 22