Zeo ScientifiX, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PAGE NO. Organicell Regenerative Medicine, Inc. Reports of Independent Registered Public Accounting Firms F-2 Consolidated Balance Sheets as of October 31, 2023 and 2022 F-5 Consolidated Statements of Operations for the Years Ended October 31, 2023 and 2022 F-6 Consolidated Statement of Changes In Stockholders’ Equity (Deficit) for the Years Ended October 31, 2023 and 2022 F-7 Consolidated Statements of Cash flows for the Years Ended October 31, 2023 and 2022 F-8 Notes to Consolidated Financial Statements F-9 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Organicell Regenerative Medicine, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Organicell Regenerative Medicine, Inc. (the “Company”) as of October 31, 2023, the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the year ended October 31, 2023, and the related notes ( collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2023, and the results of its operations and its cash flows for the year ended October 31, 2023, 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 more fully described in Note 3, the Company has a stockholders’ deficit and has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matter The 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 especially challenging, subjective, or complex judgments. The 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 audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. F- 2 Convertible note transactions As described in Note 11 to the consolidated financial statements , the Company issued investment units consisting of secured promissory notes which are convertible into shares of the Company’s common stock and warrants to acquire shares of the Company’s common stock. The Company allocated the proceeds received from the sale of the investment units to the convertible notes and warrants based upon their relative fair value. The Company used a Black Scholes Option Pricing Model, which uses certain assumptions related to expected life of the warrants, expected volatility, risk-free interest rates, and future dividends, to determine the fair value of the warrants. We identified the accounting for the issuance of the convertible notes and warrants as a critical audit matter because of the significance of the account balances, and due to the complexity involved in assessing the classification and presentation of the convertible notes and warrants. The auditing for these transactions required a high degree of audit judgement including evaluating the reasonableness of the significant judgements made by management in determining the appropriate accounting. The primary audit procedures we performed to address this critical audit matter included the following, among others: ● We read the convertible note and warrant agreements, and relevant documentation. ● We obtained the Company’s analysis of the accounting of the convertible note and warrants issued in accordance with relevant accounting standards. ● We evaluated the reasonableness of the Company’s methodology for allocation of proceeds including the Company’s consideration of relevant accounting standards. ● We developed independent estimates for the fair value of the warrants issued based on the assumptions and data used by management. /s/ Weinberg & Company P.A. Weinberg & Company P.A. 572 We have served as the Company’s auditor since 2023. Los Angeles, CA January 29, 2024 F- 3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Organicell Regenerative Medicine, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Organicell Regenerative Medicine, Inc. (the “Company”) as of October 31, 2022, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended October 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2022, and the results of its operations and its cash flows for the year ended October 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 3, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Marcum llp Marcum llp ( PCAOB ID No. 688) We have served as the Company’s auditor from 2015 through April 2023. Fort Lauderdale, FL February 14, 2023 F- 4 Organicell Regenerative Medicine, Inc. CONSOLIDATED BALANCE SHEETS As of October 31, 2023 and 2022 October 31, 2023 October 31, 2022 ASSETS Current Assets Cash $ 1,756,202 $ 3,753,097 Accounts receivable, net of allowance for bad debts 18,212 55,110 Receivables from related parties - 128,939 Other receivables 11,378 7,433 Prepaid expenses 106,184 173,152 Inventories 310,183 248,510 Total Current Assets 2,202,159 4,366,241 Property and equipment, net 572,726 1,683,516 Other assets – right of use - 110,995 Security deposits 7,315 39,936 TOTAL ASSETS $ 2,782,200 $ 6,200,688 LIABILITIES, SHARES SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ (DEFICIT) EQUITY Current Liabilities Accounts payable and accrued expenses $ 2,611,969 $ 2,378,531 Advances payable to former officer 220,897 220,897 Finance lease obligations 23,107 143,748 Operating lease obligations - 82,407 Promissory note, net of debt discount - 563,111 Convertible promissory note, net of debt discount 656,853 - Commitment Fee Shortfall Obligation - 174,462 Commitment to repurchase shares in connection with settlement of litigation - 500,000 Deferred revenue 497,259 - Total Current Liabilities 4,010,085 4,063,156 Long term finance lease obligations 13,134 220,340 Long term operating lease obligations - 28,588 Total Liabilities 4,023,219 4,312,084 Commitments and contingencies Shares Subject To Possible Redemption Series C Preferred Stock, $ 0.001 par value, 100 shares authorized; 100 and 100 shares issued and outstanding, respectively - - Stockholders’ (Deficit) Equity Common stock, $ 0.001 par value, 2,500,000,000 shares authorized; 7,283,483 and 7,395,632 shares issued and outstanding, respectively 7,284 7,396 Additional paid-in capital 56,259,711 52,402,514 Accumulated deficit ( 57,508,014 ) ( 50,521,306 ) Total Stockholders’ (Deficit) Equity ( 1,241,019 ) 1,888,604 TOTAL LIABILITIES, SHARES SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ (DEFICIT) EQUITY $ 2,782,200 $ 6,200,688 The accompanying notes are an integral part of these consolidated financial statements. F- 5 Organicell Regenerative Medicine, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended October 31, 2023 and 2022 Year Ended October 31, 2023 2022 Revenues (includes sales to related parties of approximately $ 115,440 and $ 329,600 , respectively) $ 4,558,278 $ 6,491,008 Cost of revenues 507,629 753,534 Gross profit 4,050,649 5,737,474 General and administrative expenses (including write-off of $142,405 of officers advances in 2023) 10,817,627 14,580,434 Loss from operations ( 6,766,978 ) ( 8,842,960 ) Other income (expense) Interest expense ( 431,424 ) ( 398,260 ) Change in Commitment Fee Shortfall Obligation ( 18,917 ) ( 30,692 ) Impairment of non-marketable securities in a related entity ( 100,000 ) - Gain on sale of assets 340,611 - Gain from write-off of liabilities attributable to discontinued operations - 125,851 Other ( 10,000 ) 249,504 Net loss $ ( 6,986,708 ) $ ( 8,896,557 ) Net loss per common share - basic and diluted $ ( 0.99 ) $ ( 1.56 ) Weighted average number of common shares outstanding - basic and diluted 7,028,638 5,688,230 The accompanying notes are an integral part of these consolidated financial statements. F- 6 Organicell Regenerative Medicine, Inc. CONSOLIDATED CHANGES TO STOCKHOLDERS’ EQUITY (DEFICIT) For the Years Ended October 31, 2022 and 2023 Additional Total Stockholders’ Common Stock Paid In Accumulated Equity Shares Par Value Capital Deficit (Deficit) Balance October 31, 2021 5,661,805 $ 5,662 $ 38,953,494 $ ( 41,624,749 ) $ ( 2,665,593 ) Sale of common stock 1,412,500 1,413 7,288,587 - 7,290,000 Stock-based compensation 263,250 263 3,916,327 - 3,916,590 Shares issued in Restructuring - - - - - Capital contributed by Executive - - 250,000 - 250,000 Warrants issued to executives as payment for outstanding compensation - - 649,740 - 649,740 Executive forgiveness of employment obligations in connection with Restructuring - - 1,526,893 - 1,526,893 Commitment to repurchase shares in connection with settlement of litigation - - ( 500,000 ) ( 500,000 ) Common stock issued as commitment fee for Promissory Note 23,077 23 156,208 - 156,231 Exchange of accounts payable for stock 25,000 25 117,475 - 117,500 Stock issued in settlement of litigation 10,000 10 43,790 - 43,800 Net loss - - - ( 8,896,557 ) ( 8,896,557 ) Balance October 31, 2022 7,395,632 7,396 52,402,514 ( 50,521,306 ) 1,888,604 Sale of common stock 22,282 22 99,978 - 100,000 Stock-based compensation 25,969 26 3,208,750 - 3,208,776 Issuance of Common stock and Warrants as commitment fee for SPA 23 Note 75,000 75 282,425 - 282,500 Discount on warrants issued with convertible debt - - 72,430 - 72,430 Stock issued in satisfaction of Commitment Fee Shortfall Obligation 58,600 59 193,320 - 193,379 Cancellation of shares repurchased in connection with litigation ( 124,000 ) ( 124 ) 124 - - Return of former executive’s shares and warrants ( 170,000 ) ( 170 ) 170 - - Net loss - - - ( 6,986,708 ) ( 6,986,708 ) Balance October 31, 2023 7,283,483 $ 7,284 $ 56,259,711 $ ( 57,508,014 ) $ ( 1,241,019 ) The accompanying notes are an integral part of these consolidated financial statements. F- 7 Organicell Regenerative Medicine, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended October 31, 2023 and 2022 Year Ended October 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 6,986,708 ) $ ( 8,896,557 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 486,354 332,508 Amortization of OID and commitment fee discount – Promissory Note 349,272 323,111 Change in Commitment Fee Shortfall Obligation 18,917 30,692 Gain from sale of assets ( 340,611 ) - Gain from write-off of liabilities attributable to discontinued operations - ( 125,851 ) Gain from write-offs and settlements of accounts payable and notes payable - ( 249,504 ) Write-off of non-marketable securities 100,000 - Write-off of receivables from officers and other receivable 142,405 - Write-off of fixed assets 36,219 - Reserve for bad debt - 27,500 Write-off of inventory - 37,455 Stock issued in settlement of litigation - 43,800 Stock-based compensation 3,208,776 3,916,590 Changes in operating assets and liabilities: Accounts receivable, net of allowance for bad debts 36,898 17,148 Receivables from related party - ( 128,939 ) Other receivable ( 17,411 ) ( 7,433 ) Prepaid expenses 66,968 ( 103,505 ) Inventories ( 61,673 ) ( 51,138 ) Accounts payable and accrued expenses 233,439 1,035,609 Accrued liabilities to management - 657,003 Security deposits 32,621 ( 14,754 ) Deferred revenue 497,259 ( 9,575 ) Net cash used in operating activities ( 2,197,275 ) ( 3,165,840 ) CASH FLOWS FROM INVESTING Purchase of fixed assets ( 25,391 ) ( 824,743 ) Proceeds from sale of assets 740,957 - Investment in non-marketable equity securities ( 100,000 ) - Net cash provided by (used in) investing activities 615,566 ( 824,743 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of notes payable 1,229,400 540,000 Shares repurchased in connection with litigation ( 500,000 ) - Capital contributed by former executive - 250,000 Payments on finance leases ( 114,586 ) ( 59,930 ) Repayments of notes payable ( 1,130,000 ) ( 364,960 ) Proceeds from sale of common stock 100,000 7,270,000 Net cash (used in) provided by financing activities ( 415,186 ) 7,635,110 Increase (decrease) in cash ( 1,996,895 ) 3,644,527 Cash at beginning of period 3,753,097 108,570 Cash at end of period $ 1,756,202 $ 3,753,097 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for taxes $ - $ - Cash paid for interest $ 67,145 $ 78,625 NON-CASH INVESTING AND FINANCING TRANSACTIONS: Executive forgiveness of employment obligations in connection with Restructuring $ - $ 1,526,893 Warrants issued to executives as payment for outstanding compensation $ - $ 649,740 Warrants issued in connection with convertible notes $ 72,430 $ - Finance lease assigned to buyer in connection with asset sale $ 213,261 $ - Stock issued in exchange for accounts payable $ - $ 117,500 OID discount on proceeds received from Promissory Note $ 10,600 $ 60,000 Stock purchased from payments due on accounts payable $ - $ 20,000 Common stock issued as commitment fee for Promissory Note $ 282,500 $ 156,231 Commitment Fee Shortfall Obligation $ - $ 143,769 Commitment to repurchase shares in connection with settlement of litigation $ - $ 500,000 Promissory note issued for past due Professional Fees $ - $ 256,000 Purchase of fixed assets included in accounts payable $ - $ 77,865 Common stock issued in satisfaction of Commitment Fee Shortfall Obligation $ 193,379 $ - The accompanying notes are an integral part of these consolidated financial statements. F- 8 ORGANICELL REGENERATIVE MEDICINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Organicell Regenerative Medicine, Inc. (“Organicell” or the “Company”) was incorporated on August 9, 2011 in the State of Nevada under the name Bespoke Tricycles Inc. (changed to Biotech Products Services and Research, Inc. during September 2015 and to Organicell Regenerative Medicine, Inc., effective June 20, 2018). The Company is a clinical-stage biopharmaceutical company principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and regenerative medicine. The Company’s proprietary products are derived from perinatal sources and manufactured to retain the naturally occurring extracellular vesicles, hyaluronic acid, and proteins without the addition or combination of any other substance or diluent (“RAAM Products”). Our RAAM Products and related services are principally used in the health care industry administered through doctors and clinics (“Providers”). On December 8, 2023, our board of directors and our stockholders holding a majority of the Company’s voting power, approved resolutions authorizing the Company to amend its Articles of Incorporation to change the name (“Name Change”) of the Company from Organicell Regenerative Medicine, Inc. to “Zeo ScientifiX, Inc.” Implementation and effectiveness of the Name Change will be subject to Organicell’s compliance with applicable regulatory requirements of the Securities and Exchange Commission and FINRA. For the years ended October 31, 2023 and 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™ 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. The Company recently launched a service platform for its first autologous product called Patient Pure X™ (PPX™). PPX™ is a non-manipulated biologic containing the nanoparticle fraction from a patient’s own peripheral blood. To date, revenues from PPX™ continue to be minimal. During the year ended October 31, 2023, the Company began to expand the use of its proprietary products in future formulations for a variety of topical use applications in the skin-care industry. On November 7, 2023, the Company filed a certificate of amendment to its Articles of Incorporation to affect a reverse split of our issued and outstanding common stock on a one-for-two-hundred basis. The reverse stock split was effective with FINRA on November 28, 2023 (the “Reverse Split”). The par value of the Company’s common stock was unchanged at $0.001 per share after the Reverse Split. As a result, on the effective date of the Reverse Split, the stated capital on the Company’s balance sheet attributable to the Company’s common stock was reduced proportionately based on the reverse stock split ratio of one-for-two hundred and the additional paid-in capital account was credited with the amount by which the stated capital was reduced. All per share amounts referenced herein are reflective of the Reverse Split. F- 9 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Concentrations of Risk Credit Risk The balance sheet items that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents and accounts receivable. Balances in accounts are insured up to Federal Deposit Insurance Corporation (“FDIC”) limits of $ 250,000 per institution. At October 31, 2023, the Company held in two financial institutions a total of $ 915,497 of cash balances in excess of FDIC insurance coverage limits. Major Customer During the year ended October 31, 2023, the Company sold products and services totaling approximately $ 1,301,000 ( 28.5 % ) to a large distributor and the distributor’s customers, approximately $ 459,000 ( 10.1 % ) to a large distributor and the distributor’s customers and approximately $ 460,000 ( 10.1 % ) to an individual medical practice. During the fiscal year ended October 31, 2022, the Company sold a total of approximately $ 2,124,000 ( 32.7 % ) to a large distributor and the distributors customers, approximately $ 1,413,700 ( 21.8 % ) to customers of another distributor and $ 702,100 ( 10.8 % ) of product to a management services organization (MSO) that provides administrative services and contracts for medical supplies for several medical practices. The Company’s sales agreements are non-exclusive and the Company does not believe it has any exposure based on the customers of its products. Major Supplier During the fiscal year ended October 31, 2023, the Company purchased the tissue raw material used in manufacturing of its products from two suppliers, of which each accounted for approximately $ 113,100 and $ 86,900 or 57.0 % and 43.0 % , respectively, of the total amount of tissue raw material purchased during that period. During the fiscal year ended October 31, 2022, the Company purchased the tissue raw material used in manufacturing of its products from two suppliers, of which each accounted for approximately $ 145,000 and $ 130,000 or 53.0 % and 47.0 % , respectively, of the total amount of tissue raw material purchased during that period. The Company’s supply agreements are non-exclusive and the Company does not believe it has any exposure based on the availability of raw materials and/or products from other suppliers. F- 10 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. Those estimates and assumptions include estimates for credit loss reserves for accounts receivable, assumptions used in valuing inventories at net realizable value, impairment testing of recorded long-term tangible and intangible assets, the valuation allowance for deferred tax assets, accruals for potential liabilities, assumptions made in valuing equity instruments issued for services, and assumptions used in the determination of the Company’s liquidity. Cash Equivalents 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. Management determined that no allowance for bad debts was necessary at October 31, 2023 and 2022. For the year ended October 31, 2023 and 2022, the Company recorded bad debt expense of $ 0 and $ 27,500 , respectively. Inventory Inventory is stated at the lower of cost or net realizable value using the average cost method. The Company provides a reserve 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 October 31, 2023 and 2022, the Company determined that no reserves were required in connection with our inventory. At October 31, 2022, the Company wrote off $ 37,455 in connection with inventory that the Company determined was no longer saleable due to its expired shelf life. 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. F- 11 Non-marketable Securities Non-marketable securities consist of equity investments in privately held companies, which are classified as other assets on the consolidated balance sheets. These non-marketable equity securities do not have readily determinable fair values. Under the measurement alternative election, the Company accounts for these non-marketable securities at cost and adjusted for observable price changes in orderly transactions for the identical or similar investments of the same issuer or upon impairment and are not eligible for the net-asset-value practical expedient from fair value measurement. The measurement alternative election is reassessed each reporting period to determine whether the non-marketable securities continue to be eligible for this election. The Company periodically evaluates its non-marketable securities for impairment when events and circumstances indicate that the carrying amount of the investment may not be recovered. Impairment indicators may include, but are not limited to, a significant deterioration in earnings performance, credit rating, asset quality or business outlook or a significant adverse change in the regulatory, economic, or technological environment. Under current U.S. GAAP, equity investments without readily determinable fair values are reported at cost minus impairment. However, impairment losses are recognized only if they are considered other-than- temporary. The Company evaluated its investment in non-marketable securities at October 31, 2023, and determined such investment was impaired. Leasehold Improvements Leasehold improvements in excess of $1,000 that are made in connection with leases having a term of more than 12 months are capitalized by the Company and amortized over the shorter of the useful life of the asset or the remaining lease periods and renewals that are deemed to be reasonably certain at the date the leasehold improvements are purchased. Costs associated with leasehold improvements that do not exceed $1,000 are expensed as incurred. 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. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue on the Company’s consolidated balance sheet. 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 fully vested 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 fully vested shares outstanding during the year. 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 October 31, 2023, the Company had 2,571,656 common shares issuable upon the exercise of warrants and 100,000 unvested restricted stock that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the year ended October 31, 2023. At October 31, 2022, the Company had 2,149,000 common shares issuable upon the exercise of warrants and 499,216 unvested restricted stock that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the year ended October 31, 2022. F- 12 Stock-Based Compensation All stock-based payments are recognized in the financial statements based on their fair values. The Company periodically issues stock options and stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. 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 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. 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 $ 922,700 and $ 791,300 for the years ended October 31, 2023 and 2022, 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 files 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. 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 years ended October 31, 2023 and 2022 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 years ended October 31, 2023 and 2022. F- 13 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 7,283,483 shares are issued and outstanding as of October 31, 2023. 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; 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. F- 14 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. 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’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 October 31, 2023 through the financial statement issuance date for subsequent event disclosure or recording. NOTE 3 – GOING CONCERN The 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 $ 6,986,708 for the year ended October 31, 2023 and used $ 2,197,275 of cash from operating activities during that period. In addition, the Company had an accumulated deficit and a stockholders’ deficit of $ 57,508,014 and $ 1,241,019 , respectively, at October 31, 2023. The Company had a working capital deficit of $ 1,807,926 at October 31, 2023. United States Food and Drug Administration (“FDA”) regulations which were announced in November 2017 and which became effective in May 2021 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. 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; and/or (b) 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. F- 15 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 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; (c) obligations to the Company’s creditors are not accelerated; (d) the Company’s operating expenses remain at current levels and/or the Company is successful in restructuring and/or deferring ongoing obligations; (e) 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 (f) 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 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 October 31, 2023, 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. NOTE 4 – RESTRUCTURING Effective July 13, 2022, the Company entered into (a) a binding letter of intent with Skycrest Holdings, LLC (“Skycrest”) and Greyt Ventures LLC (“Greyt,” and together with Skycrest, the “Skycrest/Greyt Group”) to invest $ 2,000,000 in the Company through the purchase of 500,000 shares of the Company’s common stock (“Shares”) at a price of $ 4.00 per Share; and (b) effective July 16, 2022, a second binding letter of intent with Beyond 100 FZE, a Dubai company (“Beyond 100,” and together with the Skycrest/Greyt Group, the “Investors”) to invest $ 2,000,000 in the Company through the purchase of 500,000 shares at a price of $ 4.00 per Share. Pursuant to the binding letters of intent (the “LOIs”), the Company agreed to (a) make certain corporate governance changes as more fully described therein, including allowing the Investors to appoint new independent directors who will comprise a majority of the members of the Board; (b) enter into 36-month consulting agreements with each of Skycrest and Greyt (each, a “Consulting Agreement,” and collectively, the “Consulting Agreements”), pursuant to which (i) Skycrest and Greyt will provide certain advisory services to the Company as more fully set forth in the LOIs; and (ii) Skycrest and Greyt shall each be compensated for their services by the Company issuing to each of them ten year-warrants to purchase 750,000 Shares at an exercise price of $ 4.00 per Share (the “Warrants”), which Warrants will be exercisable on a “cashless” basis; (c) implement certain changes in management, including Albert Mitrani stepping down as Chief Executive Officer; and (d) make modifications to management compensation, all as more fully set forth in the LOIs. F- 16 Contemporaneously with entering into the respective LOIs, the Skycrest/Greyt Group and Beyond 100 each advanced Organicell $400,000 and $300,000, respectively (a total of $700,000) as good faith deposits against the $2,000,000 (a total of $4,000,000) purchase price for the Shares. On August 19, 2022 (“Closing”), the Company entered into stock purchase agreements (each, an “SPA” and collectively, the “SPAs”) with Skycrest Holdings, LLC (“Skycrest”), Greyt Ventures LLC (“Greyt”), Beyond 100 FZE (“Beyond 100”) and Smart Co. Holding Pte. Ltd. (“Smart Co,” and together with Skycrest, Greyt and Beyond 100, individually, an “Investor” and collectively, the “Investors”). Pursuant to the SPAs, the Company issued each Investor 250,000 shares of the Company’s common stock (“Shares”) at a price of $4.00 per Share ($1,000,000). In addition, under the SPAs with Skycrest and Greyt, the Company issued each of them 50 shares of newly designated Series C Non-Convertible Preferred Stock (the “Series C Preferred Shares”). The Series C Preferred Shares vote together with Shares of our common stock as a single class on all matters presented to a vote of stockholders, except as required by law and entitle Skycrest and Greyt to each exercise 25.5% of the total voting power of the Company. The SPAs with Skycrest and Greyt, also grant them the right, acting jointly, to designate a majority of the nominees to be elected to the Company’s board of directors at each annual meeting of the Company’s stockholders (the “Designation Right”). The Designation Right expires at such time as the Series C Preferred Shares are no longer outstanding. As a result of the issuance to Skycrest and Grey of the Series C Preferred Stock and the granting to them of the Designation Right, a “Change in Control” of the Company is deemed to have occurred. The SPA with Beyond 100 grants that Investor a right of first refusal for a period of 18 months from Closing with respect to any bona fide offer, or proposal received by the Company from or agreement in principal reached by the Company with a third party to enter into an exclusive arrangement providing for manufacturing, distributing, licensing, and commercializing any of its existing and/or future products and services to be manufactured, licensed and/or distributed by the Company or any of its subsidiaries in India. The SPAs also accord the Investors registration rights under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to which the Company has agreed to file a registration statement under the Securities Act with the Securities and Exchange Commission (the “SEC”) within 180 days of Closing and use its commercially reasonable efforts to cause such registration statement to be declared effective by the SEC within 60 days thereafter. The registration statement will cover the resale of the Shares pursuant to the SPAs, and in the case of Skycrest and Greyt, the Shares issued or issuable upon exercise of the Consulting Warrants. The SPAs also provide the Investors “piggy-back” registration rights with respect to their respective Shares. To date, the Investors have deferred any of the Company’s registration obligations pursuant to the SPA. Consulting Agreements At Closing, the Company also entered into 36-month consulting agreements with each of Skycrest and Greyt (each, a “Consulting Agreement,” and collectively, the “Consulting Agreements”), pursuant to which (a) Skycrest and Greyt will provide certain advisory services to the Company as more fully set forth therein; and (b) Skycrest and Greyt are being compensated for their services by the Company issuing to each of them at closing ten (10) year-warrants to purchase 750,000 Shares at an exercise price of $4.00 per Share (the “Consulting Agreement Warrants”), which Warrants are exercisable on a “cashless” basis (see Note 14). F- 17 NOTE 5 – INVENTORIES Schedule of inventories October 31, 2023 October 31, 2022 Raw materials and supplies $ 153,868 $ 85,096 Finished goods 156,315 163,414 Total inventories $ 310,183 $ 248,510 NOTE 6 – PROPERTY AND EQUIPMENT Schedule of property and equipment October 31, 2023 October 31, 2022 Computer equipment $ - $ 26,881 Finance lease equipment 260,356 544,378 Manufacturing equipment 534,531 625,979 Leasehold improvements - 925,932 794,887 2,123,170 Less: accumulated depreciation and amortization ( 222,161 ) ( 439,654 ) Total property and equipment, net $ 572,726 $ 1,683,516 As described in Note 8, 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 (as defined in Note 8). The Basalt Lab Lease location became operational during May 2022 and the depreciation of equipment and the amortization of the leasehold improvement costs at the Basalt Lab began during May 2022. Sale Of Basalt Lab Assets Effective, August 7, 2023, the Company sold the Basalt Lab (“Sale”) to a non-affiliated third-party purchaser (“Purchaser”). The transaction included the assignment of the Basalt Lab Lease and the lease for certain laboratory equipment and the sale of all leasehold improvements associated with the Basalt Lab and inventory. The purchase price paid by Purchaser was $ 1,252,000 of which $ 752,000 was allocated to the sale of equipment and leaseholds, and $ 500,000 was allocated to future purchases of inventory, plus the assumption by Purchaser of all remaining financial and other obligations under the leases for the Basalt Lab premises and certain laboratory equipment. In addition, Organicell and Purchaser entered into a distribution agreement, pursuant to which Purchaser became a non-exclusive distributor of Organicell’s products and a commission agreement, pursuant to which Organicell may become entitled to certain payments from Purchaser in connection with transactions by it with specified third parties. As of the date of the Sale, the net book value of the equipment sold and leasehold improvements assigned to the Purchaser was $318,068 and $295,489, respectively, and finance lease obligations assumed by the Purchaser were $ 213,261 . In connection with the Sale, the Company recorded a gain of $ 340,611 , net of transaction fees of approximately $ 11,100 . Depreciation expense totaled $ 106,384 and $ 82,036 for the years ended October 31, 2023 and 2022, respectively. Amortization expense totaled $ 379,970 and 250,472 for the years ended October 31, 2023 and 2022, respectively. F- 18 NOTE 7 – EQUITY IN NON-MARKETABLE SECURITIES OF AFFILIATED ENTITY Schedule of equity in non marketable securities affiliated entity October 31, 2023 October 31, 2022 Equity in non-marketable securities $ 100,000 - Reserve on carrying value of investment in non-marketable securities $ ( 100,000 ) - Equity in non-marketable securities $ - - During the year ended October 31, 2023, the Company invested $100,000 in cash (representing a 10% equity interest at the time of the investment) in the non-marketable equity securities of one privately held skin-care formulator (“Formulator”) in an effort to accelerate the Company’s development of expertise with respect to the skincare industry and the potential supply of the Company’s products in future topical formulations. The Company evaluated its ownership, contractual and other interests in this entity and determined the Company does not have a variable interest in this entity and therefore it is not required to be consolidated in the Company’s consolidated financial statements, as the Company is not the primary beneficiary and does not have the power to direct activities that most significantly impact the entities’ economic performance. The Company’s maximum loss exposure is limited to the carrying value of this investment. At the time of the investment, both Greyt Ventures, LLC and Skycrest Holdings, LLC, principal shareholders of the Company, each owned a 20% interest in the Formulator. In addition, Mr. Robert Smoley, a consultant and advisor to the Company is also the Chief Operating Officer of the Formulator. The Company’s, Greyt Ventures, LLC’s and Skycrest Holdings, LLC’s equity interests in the Formulator have since been reduced to 8.96%, 17.93% and 17.93%, respectively, as a result of additional sales of equity interests in the Formulator to outside parties. In addition, the Company’s CMO was granted an option to acquire up to 200,000 membership interests in the Formulator, of which 100,000 vested immediately and the remaining $100,000 will vest based on future sales of the Formulator attributed to the CMO. The option price is $20,000 for the 200,000 membership interests. As of October 31, 2023, the Company recorded a reserve against the carrying value of its investment of the Formulator of $100,000, based on the limited financial history of the Formulator to date to ascertain the fair value of the Formulator and the Company’s limited rights to control future dilution to the Company’s interests and the timing of available distributions, if any, of the Formulator. As such, at October 31, 2023, the carrying value of the Company’s investments in equity securities without readily determinable fair values totaled $0. Sales Representative Agreement During November 2023, the Company and the Formulator entered into a Sales Representative Agreement (“Sales Agreement”) in connection with the Company’s efforts to expand the use of its proprietary products for a variety of topical use applications. In connection with the Sales Agreement, the Company will receive commissions on the net sales value of Formulator products that are sold to pre-approved retailors, wholesale distributors, private label customers and direct to consumer customers which were introduced to the Formulator by the Company of 10%, 5%, 10% and 15%, respectively. Joint Supply Agreement The Company and the Formulator entered into an agreement whereby the Formulator has agreed to supply the Moisturizer that the Company is obligated to supply under the Amended Skincare Agreement (see Note 15). F- 19 NOTE 8 – 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 upon termination of the lease. 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 upon termination of the lease. 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 began during May 2022, the date that the Basalt lab buildout was completed (see below) and the facility became operational. The leased equipment are being depreciated over their estimated useful lives of 15 years. As described in Note 6, on August 7, 2023, certain equipment under the second lease agreement were assigned to the Purchaser resulting in the reduction of the Company’s remaining aggregate lease obligations by $ 213,261 , and reducing payments under the second lease agreement from $5,478 per month to $461 per month. As of October 31, 2023, finance lease obligations were $ 36,241 , of which $ 23,107 were current. The weighted average remaining term of the Company’s Finance Leases as of October 31, 2023 was 7.4 months. The minimum lease payments pursuant to the Finance Leases are as follows: Schedule of minimum lease payment to finance lease Year Ended October 31, Minimum Rent 2024 $ 23,588 2025 5,536 2026 5,536 2027 2,768 2028 - Thereafter - Total undiscounted finance lease payments 37,428 Less: imputed interest ( 1,187 ) Present value of finance lease liabilities $ 36,241 Operating Lease: The Company’s previously leased corporate administrative offices from MariLuna, LLC. The lease term began July 1, 2020 and expired in July 2022 in connection with the Closing. The monthly rental rate of the lease was $ 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 % ). In connection with the Closing, the remaining ROU asset and security deposit were written off (see Note 4). Lease amortization expense for the year ended October 31, 2022 was $ 29,670 . F- 20 During March 2021, the Company entered into a lease agreement (“Basalt Lab Lease”) for an approximately 2,452 square foot commercial space located in Basalt, Colorado (the “Basalt Lab”). 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 $ 20,400 . The Company completed the construction of the initial laboratory and office build-out at a cost of $925,932, which was included as leasehold improvements in the accompanying balance sheet. The Basalt Lab became operational during May 2022. The Company used the Basalt Lab for additional processing, product distribution and administrative office capacity. 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 % ). The right of use asset was $ 110,955 at October 31, 2022. As described in Note 6, on August 7, 2023, the Basalt Lab was sold and the Basalt Lab Lease was assigned to Purchaser and the remaining balance of the ROU asset and corresponding liability of $ 49,750 was written off. In September 2023, in connection with the sale, the Company’s security deposit of $ 20,400 was returned to the Company. Lease amortization expense for the years ended October 31, 2023 and 2022 was $ 61,246 and $ 76,351 , respectively. As of October 31, 2023, the operating lease obligation in connection with the Basalt Lab Lease was $ 0 . NOTE 9 – RELATED PARTY TRANSACTIONS The Company’s corporate administrative offices were previously leased from MariLuna, LLC, a Florida limited liability company which is owned by a former executive under a lease agreement that expired June 30, 2023. The Company paid a security deposit of $ 5,000 . Monthly rent was $ 3,500 . In connection with the Closing, the lease agreement was terminated effective July 31, 2022 and the deposit was forfeited by the Company (see Note 15). Total rent expense for the year ended October 31, 2023 and 2022 was $ 0 and $ 31,500 , 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 was subsequently extended on a month to month basis. Under the terms of the lease, the Company was 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 years ended October 31, 2023 and 2022 was $ 0 and $ 58,500 , respectively. In connection with the Closing, the lease agreement was terminated effective July 31, 2012 and the deposits were forfeited by the Company (see Note 15). In connection with Mr. Bothwell’s executive employment agreements, the Company agreed to reimburse Rover Advanced Technologies, LLC (“Rover”), a company owned and controlled by Mr. Bothwell for office rent and other direct expenses (phone, internet, copier and direct administrative fees, etc.) totaling $ 0 and $ 36,352 for the years ended October 31, 2023 and 2022, respectively. In connection with the Closing, beginning November 2022, the Company no longer reimbursed for office expenses and other direct expenses of Rover (see Note 15). For the year ended October 31, 2023, the Company sold a total of approximately $ 180,900 of product to a management services organization (“MSO”) that provides administrative services and contracts for medical supplies for several medical practices, including approximately $115,440 of products purchased from the Company that were attributable to the medical practice owned by Dr. George Shapiro the Company’s Chief Medical Officer and a member of the board of directors. Dr. Shapiro also has an indirect economic interest in the parent company that owns the MSO. F- 21 For the year ended October 31, 2022, the Company sold a total of approximately $ 702,100 of product to a management services organization (“MSO”) that provides administrative services and contracts for medical supplies for several medical practices, including $207,072 of products purchased from the Company that were attributable to the medical practice owned by Dr. George Shapiro the Company’s Chief Medical Officer and a member of the board of directors. Dr. Shapiro also has an indirect economic interest in the parent company that owns the MSO. For the year ended October 31, 2022, the total amount of sales of products to the medical practice owned by Dr. Allen Meglin, a member of the board of directors until August 2022 and to customers related to Mr. Michael Carbonara, a member of the board of directors until August 2022 totaled $20,820 and $ 101,715 , respectively. At Closing, the Company and each of Albert Mitrani (a former executive of the Company) and Dr. Mari Mitrani (a former executive of the Company) agreed to forego unpaid salary amounts as of the date of the Closing in the amount of $ 430,200 and $ 563,455 (reduced for $22,500 of security deposits that were retained by Mariluna LLC upon termination of leases), respectively. At Closing, Ian Bothwell waived all unpaid and accrued compensation in the amount of $1,043,478, in exchange for ten-year warrants to purchase 150,000 Shares at an exercise price of $4.00 per share, exercisable on a “cashless basis” and a cash payment of $50,000 at Closing. At Closing, Dr. George Shapiro terminated his consulting arrangement with the Company and waived all unpaid consulting fee obligations in the amount of $139,500 in exchange for ten-year warrants to purchase 15,750 Shares at an exercise price of $4.00 per share, exercisable on a “cashless basis.” During June 2022, Albert Mitrani, a former executive of the Company, made a capital contribution of $ 250,000 to the Company. The proceeds were used for working capital. During the year ended October 31, 2023, the Company invested $ 100,000 in cash (representing a 10% equity interest at the time of the investment) in the non-marketable equity securities of a privately held skin-care formulator (“Formulator”). At the time of the investment, both Greyt Ventures, LLC and Skycrest Holdings, LLC, principal shareholders in the Company, each owned a 20% interest in the Formulator. In addition, Mr. Robert Smoley, a consultant and advisor to the Company is also the Chief Operating Officer of the Formulator. In addition, the Company’s CMO was granted an option to acquire up to 200,000 membership interests in the Formulator, of which 100,000 vested immediately and the remaining $100,000 will vest based on future sales of the Formulator attributed to the CMO. The option price is $20,000 for the 200,000 membership interests (see Note 7). At October 31, 2023 and October 31, 2022, advances payable to an affiliate of a former executive were $ 220,897 . The advances are non-interest bearing and there are no formal arrangements regarding the repayment of the advances. F- 22 NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Schedule of account payable and accrued expenses October 31, 2023 October 31, 2022 Accrued payroll related liabilities $ 666,924 $ 666,780 Lab equipment and supplies payables 407,183 477,255 Clinical trial and research payables 675,284 312,711 Legal fees payables 478,810 328,121 Other professional fees payables 81,135 90,993 Accrued IRS penalty (Note 12) 86,319 83,684 Accrued commissions payable 101,627 39,675 Construction payables 9,317 5,474 Other payables and accrued expenses 105,370 373,838 Total Accounts Payable and Accrued Expenses $ 2,611,969 $ 2,378,531 NOTE 11 – NOTES PAYABLE Schedule of notes payable October 31, 2023 October 31, 2022 SPA 22 $ - $ 600,000 SPA 23 - - Convertible Promissory Notes 725,000 - Unamortized discount ( 68,147 ) ( 36,889 ) Total Notes Payable $ 656,853 $ 563,111 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. On August 25, 2022, the Company had paid off the entire remaining amount due under the promissory note. In accordance with the terms of the promissory note, the Company received a discount of $ 22,340 from the original balance of the Unpaid Professional Fees. Promissory Note – SPA 22 On January 11, 2022, the Company entered into a Securities Purchase Agreement (“SPA 22”) 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 ). The Promissory Note was initially due on July 11, 2022, and was extended by the Company for an additional six-month period (“Extension”). The Promissory Note bears interest at a rate of 10 % per annum for the first six months, payable monthly, and 12% per annum thereafter, payable monthly. The Promissory Note matured on January 11, 2023 and the Promissory Note was paid in full. F- 23 Pursuant to the terms of the SPA 22, the Company paid a commitment fee to the Purchaser in the amount of $ 123,000 (“Initial Commitment Fee”) in the form of 15,385 shares of the Company’s common stock (“Initial Commitment Fee Shares”) valued at $ 8.00 , the closing price of the common stock of the Company on the closing date. In addition, in connection with the Extension, the Company paid an additional commitment fee to the Purchaser in the amount of $ 33,231 in the form of an additional 7,692 shares of its common stock (“Additional Commitment Fee Shares,” and together with the Initial Commitment Fee Shares, collectively, “Commitment Fee Shares”) valued at $ 4.32 , the closing price of the common stock of the Company on the Extension date. Pursuant to the terms of the SPA 22, in the event that by the earlier of the first anniversary of repayment of the Promissory Note by the Company or the date that the Purchaser has sold all of the Commitment Fee Shares (“True-Up Date”), the Purchaser has not generated the amount of $ 300,000 from public sales of the Commitment Fee Shares, 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 the True-up Date (“Conversion Price”); 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”). 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 were fully amortized over the initial term of the Promissory Note from January 11, 2022 to July 11, 2022. In connection with the extension of the Promissory Note from July 12, 2022 to January 11, 2023, the Company recorded a discount of the Promissory Note in the amount of $ 100,000 , consisting of the fair value of the Additional Commitment Fee Shares of $ 33,231 and the Additional Commitment Fee Shortfall Obligation of $ 66,769 . These costs were amortized over the term of the Extension. For the year ended October 31, 2023 and 2022, $ 36,889 and $ 323,111 , respectively, of the total discounts recorded in connection with the issuance of the Promissory Note have been amortized. At February 10, 2023, the date that the Company received notice to repay the Commitment Fee Shortfall Obligation (see below) and October 31, 2022, the fair value of the Commitment Fee Shares was approximately $ 76,200 (valued at $3.30 the closing price of the common stock of the Company on February 10, 2023) and approximately $ 125,500 (valued at $5.44 the closing price of the common stock of the Company on October 31, 2022), respectively. The Company recorded an increase in the Commitment Fee Shortfall Obligation in the amount of $ 49,384 for the year ended October 31, 2023. The Company recorded an increase in the Commitment Fee Shortfall Obligation in the amount of $ 30,692 for the year ended October 31, 2022. On February 10, 2023, the Company received a notice from the Purchaser that it had sold all of the Commitment Fee Shares and that the Commitment Fee Shortfall Obligation of $ 187,519 was due. The Company elected to satisfy the obligation through the issuance of 58,600 shares of common stock based on a Conversion Price as defined in the SPA 22 of $ 3.20 per share, which resulted in a reduction of $ 30,468 from the Commitment Fee Shortfall Obligation recorded as of February 10, 2023. The total Commitment Fee Shortfall Obligation at October 31, 2023 and October 31, 2022 was $ 0 and $ 174,462 , respectively. Promissory Note – SPA 23 On March 6, 2023, the Company entered into another Securities Purchase Agreement (“SPA 23”) with the Purchaser, pursuant to which we sold a promissory note in the principal amount of $ 530,000 (“Note”) to the Purchaser in a private transaction for a purchase price of $519,400 (giving effect to original issue discount of $10,600). In connection with the sale of the Note, the Company also paid the Purchaser’s legal fees and due diligence costs of $ 15,000 , resulting in net proceeds to the Company of $ 504,400 , which will be used for working capital and other general corporate purposes. The Note bears interest at the rate of 12 % per annum. The Note matured on September 6, 2023 and was paid in full. F- 24 Pursuant to the terms of the SPA 23, the Company paid a commitment fee to the Purchaser (“Commitment Fee”) in the form of 75,000 shares of the Company’s common stock (“Commitment Fee Shares”) and issued the Purchaser a Warrant exercisable for a five-year period to purchase up to 50,000 shares of our common stock at a price of $ 12.00 per share (“Warrant Shares”). Upon the closing, the Company recorded a discount of the Promissory Note in the amount of $ 308,000 , consisting of the original issue discount of $ 10,600 , transaction fees of $ 15,000 , the fair value of the Commitment Fee Shares of $ 169,500 and the fair value of the Warrant Shares of $ 113,000 . The discount is being amortized over the term of Note. For the year ended October 31, 2023, $ 308,000 of the total discounts recorded in connection with the issuance of the Note have been amortized. Pursuant to the terms of the SPA 23, the Company granted certain piggyback registration rights under the Securities Act of 1933, as amended with respect to the Conversion Shares, the Warrant Shares and the Commitment Fee Shares. Convertible Promissory Notes During the period August 2023 through September 2023, the Company sold 2.9 Units (“Units”) to 4 investors in a private offering at a purchase price of $ 250,000 per Unit for an aggregate purchase price of $ 725,000 . Each Unit consists of (a) a $ 250,000 in principal amount 8 % Convertible Promissory Note due September 30, 2026 (“Convertible Promissory Note ” ); and (b) 7,813 common stock purchase warrants (the “Warrants”), each entitling the holder to purchase one share of common stock, $ 0.001 par value (“Shares”) at an exercise price of $ 20.00 for a period of five years from the date of issuance. Interest on the Convertible Promissory Notes are payable annually and together with the principal amount on the Maturity Date. The Convertible Promissory Notes may be prepaid by the Company, in whole, but not in part, at any time prior to the Maturity Date, subject to payment of a premium of 10%, provided that the Company gives the holders fifteen (15) business notice prior to prepayment, during which period, Investors may elect to convert the Notes and accrued but unpaid interest thereon into Shares at a conversion price equal to 80% of the average of the daily VWAP of the Shares (as defined in the Note) for twenty consecutive (20) trading days ending on the date the Company gives the holders of the Convertible Promissory Notes notice of prepayment. Holders of the Convertible Promissory Notes will have the right, at any time during the period commencing on April 1, 2024 and ending on the earliest to occur of the Maturity Date, the date of a Prepayment or the date of an automatic conversion, to convert the Convertible Promissory Note in whole, but not in part, and accrued interest thereon into Shares at a conversion price equal to 80% of the average of the daily VWAP of the Shares (as defined in the Convertible Promissory Note) for twenty consecutive ( 20 ) trading days ending on the date the investor gives the Company a notice of conversion, subject to a minimum conversion price of $ 6.00 per Share. In addition, the Convertible Promissory Notes and accrued but unpaid interest thereon will automatically convert into Shares in the event that prior to the Maturity Date, the Company consummates a “Qualified Financing” or a “Qualified Sale” (as defined in the Convertible Promissory Note) at a conversion price equal to 80% of the offering price of Shares sold in the Qualified Financing or 80% of the purchase price per Share to be received by stockholders following consummation of a Qualified Sale. The fair value of the Warrants issued was $ 80,469 . The Company has recorded a discount of the Promissory Note in the amount of $72,430, representing the allocable fair market value of the Note and the warrants. The discount is being amortized over the term of Note. For the year ended October 31, 2023, $4,284 of the discounts recorded in connection with the issuance of the Note have been amortized, resulting to unamortized debt discount of $68,146 as of October 31, 2023. The securities were offered and sold in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemptions from registration afforded by Rule 506(b) of Regulation D under the Securities Act. F- 25 NOTE 12 – INCOME TAXES The Company files a consolidated federal income tax return that includes all of its subsidiaries. For the years ended October 31, 2023 and 2022, the Company incurred operating losses, and therefore, there was not any current income tax expense amount recorded during those periods. The consolidated provision for income taxes for October 31, 2023 and 2022 consists of the following: Schedule of provision for income tax Year Ended October 31, 2023 Year Ended October 31, 2022 Current: Federal $ - $ - State - - Current Income Tax Expense (Benefit) $ - $ - Deferred: Federal $ ( 385,315 ) $ 4,405,121 State ( 349,335 ) 1,079,723 Deferred Income Tax Expense (Benefit) ( 734,650 ) 5,484,844 Change in Valuation Allowance 734,650 ( 5,484,844 ) Income tax provision $ - $ - Effective tax rates differ from the federal statutory rate of 21 % for 2023 and 2022 applied to income before income taxes. A reconciliation of the U.S. federal statutory tax amount to the Company’s effective tax amount is as follows: Schedule of effective income tax rate October 31, 2023 October 31, 2022 Tax at federal statutory rate $ ( 1,467,209 ) $ ( 1,868,277 ) State taxes, net of federal benefit ( 349,335 ) ( 386,555 ) Permanent differences - 400,100 Stock-based compensation 834,282 6,609,802 Executive Forgiveness of employment obligations In connection with Restructuring - 480,109 Other 247,612 249,665 Total income tax expense (benefit) ( 734,650 ) 5,484,844 Change in valuation allowance 734,650 ( 5,484,844 ) Income tax provision $ - $ - The Company had a federal net operating loss carryover of $ 17,196,794 as of October 31, 2023, of which 80% is available to offset future taxable income indefinitely. The Company had state net operating loss carryovers of $ 12,025,813 of which $ 6,554,845 , carryover indefinitely and the balance expires in varying amounts through 2042. F- 26 The tax effects of temporary differences and carry-forwards that give rise to deferred tax assets and liabilities for the Company were as follows: Schedule of deferred tax assets and liabilities October 31, 2023 October 31, 2022 Deferred Tax Assets: Stock based compensation $ 1,636,853 $ 798,239 Net operating loss carryforward-Federal 3,611,327 3,002,402 Net operating loss carryforward-State 617,525 396,530 Other - 1,477 Total deferred tax assets: 5,865,705 4,198,648 Deferred Tax Liabilities: Property and equipment 309,260 302,447 Total deferred tax liabilities: 309,260 302,447 Valuation Allowance ( 5,556,445 ) ( 3,896,201 ) Net deferred tax assets $ - $ - FASB ASC 740 requires a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. At October 31, 2023 and October 31, 2022, the net deferred tax asset was offset by a full valuation allowance. Pursuant to Code Sec. 382 of the Internal Revenue Code (“the Code”), the utilization of net operating loss carryforwards may be limited as a result of a cumulative change in stock ownership of more than 50% over a three-year period. The Company may be subject to such limitation. 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 was held on June 28, 2022 and the Company is awaiting the IRS’ determination. 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 $ 86,319 and $ 83,684 of accrued tax penalties and interest on the balance sheet as of October 31, 2023 and October 31, 2022, respectively. F- 27 NOTE 13 – 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. On August 17, 2022, the Company filed a Certificate of Designation for a newly created Series C Non-Convertible Preferred Stock consisting of 100 shares, $ 0.001 par value of authorized but unissued preferred stock of the Company (“Series C Preferred Shares”). The Series C Preferred Shares vote together with shares of our common stock as a single class on all matters presented to a vote of stockholders, except as required by law. The Series C Preferred Shares are not convertible into common stock, do not have any dividend rights and do have a nominal liquidation preference. The Series C Preferred Shares also have certain protective provisions, such as requiring the vote of a majority of Series C Preferred Shares to change or amend their rights, powers, privileges, limitations and restrictions. Issued Shares In connection with the Closing (see Note 4), on August 19, 2022, the Company issued each of Skycrest and Greyt, 50 shares of the Series C Preferred Shares. The Series C Preferred Shares are automatically redeemed by the Company for nominal consideration at such time as the holder owns less than 50% of the Shares purchased pursuant to its SPA and Shares issued or issuable upon exercise of the Consulting Warrants or in the event the holder transfers or seeks to transfer the Series C Preferred Shares, other than by the laws of descent and distribution. Common Stock On November 7, 2023, the Company filed a certificate of amendment to its Articles of Incorporation to affect a reverse split of our issued and outstanding common stock on a one-for-two-hundred basis. The reverse stock split was effective with FINRA on November 28, 2023 (the “Reverse Split”). The par value of the Company’s common stock was unchanged at $0.001 per share after the Reverse Split. Issuances of Common Stock - Sales: In November 2021, the Company sold an aggregate of 40,000 shares of common stock to one “accredited investor” at $ 10.00 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 3,333 shares of common stock to one “accredited investor” at $ 6.00 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 41,667 shares of common stock to one “accredited investor” at $ 6.00 per share for an aggregate purchase price of $ 250,000 . The proceeds were used for working capital. F- 28 During August 2022, in connection with the Closing, the Company sold an aggregate of 1,000,000 shares of common stock to several “accredited investors” at $ 4.00 per share for an aggregate purchase price of $ 4,000,000 . The proceeds are being used for working capital. During August 2022 and September 2022, the Company sold an aggregate of 327,500 shares of common stock to four “accredited investors” at $ 8.00 per share for an aggregate purchase price of $ 2,620,000 . The proceeds are being used for working capital. Issuances of Common Stock – Stock Based Compensation: In connection with agreements entered into with two former sales executives (“Sales Executives”), the Sales Executives were each granted 5,000 shares of unregistered common stock of the Company (“Execution Shares”) valued at $ 7.00 per share, the closing price of the common stock of the Company on the grant date. The Company recorded $ 35,000 of stock-based compensation expense on the grant date for each issuance. In addition, each of the Sales Executives received 45,000 of unregistered common stock of the Company (“Performance Shares”) (cumulative aggregate total 90,000 Performance Shares issued). On June 30, 2022, the Sales Executives agreements were terminated (see Note 15). The Company recorded stock-based compensation expense for the year ended October 31, 2022 of $ 149,100 . Effective March 29, 2021, the Company and Assure Immune L.L.C (“Consultant”) executed an amendment of the Consultant’s Agreement, whereby the Company issued to the Consultants 100,000 shares of unregistered common stock (“Shares”) valued at $ 12.28 per share, the closing price of the common stock of the Company on the grant date. The Company amortized the costs associated with this issuance of $ 1,228,000 over the remaining term of the Consultant’s Agreement expiring March 30, 2023. The shares issued vested 50% as of the date of the Amendment and the remaining 50% vested on December 31, 2021. The Company recorded a total of $ 614,000 of stock-based compensation expense during the year ended October 31, 2022, respectively (see Note 15). On August 9, 2021, the Company entered into an additional consulting agreement with a third party to provide consulting services in connection with the development of international research and development, sales and distribution and financing opportunities for a period of six months. The 10,000 shares of fully vested unregistered common stock issued to the consultant under the new agreement were valued at $ 185,400 (valued at $ 18.60 per share, the closing price of the common stock of the Company on the effective date of the agreement). The Company recorded $ 92,700 of stock-based compensation expense during the year ended October 31, 2022, based on the grant date fair value of these shares amortized over the term of the agreement. During February 2021, the Company entered into a consulting agreement with a third party to provide consulting services for a one-year period. As consideration for agreeing to provide consulting services to the Company, the Company agreed to issue the consultant 2,500 shares of unregistered common stock upon completion of the three-month anniversary of the agreement. The shares issued were valued at $ 19.00 per share, the closing price of the common stock of the Company on the effective date of the agreement, totaling $ 47,500 . The Company amortized the costs associated with the issuance over the term of the agreement. The Company amortized $ 11,875 of stock-based compensation expense during the year ended October 31, 2022. On June 4, 2021, the Company and a former employee agreed to 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, 2022 and the Company agreed to grant the employee 5,000 shares of common stock of the Company to vest upon execution of the amendment (valued at $ 27.20 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 of $ 136,000 will be amortized beginning June 4, 2021 over the remaining term of the agreement. On October 31, 2022, the parties mutually agreed to terminate the employee’s employment agreement. The Company recorded $ 100,211 of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2022. F- 29 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 5,000 shares of common stock of the Company to vest quarterly over the remaining term of the agreement (valued at $ 5.80 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 $ 22,958 of stock-based compensation during the year ended October 31, 2022 in connection with these shares. 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™ service platform as well as other customary day to day activities as reasonably requested. The term of the agreement expired on September 30, 2022 (“Initial Term”). As consideration for agreeing to provide consulting services to the Company during the Initial Term, the Company agreed to issue the consultant 35,000 shares of unregistered common stock. The shares issued were valued at $ 3.60 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 $ 126,000 of stock-based compensation expense during the year ended October 31, 2022. On June 9, 2022, the Company entered into a consulting agreement with a company affiliated with Mr. Sinnreich in connection with past and future consulting and advisory services to be provided to the Company. In connection with the consulting agreement, for the months of June 2022 and July 2022, the Company issued the consultant 8,500 shares and 10,000 shares of unregistered common stock valued at $ 3.80 per share and $ 2.70 per share, the closing price of the common stock of the Company on June 9, 2022 and July 1, 2022, respectively. All of the shares granted vested immediately on the date of grant. The Company recorded $ 59,300 of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2022. On July 21, 2022, in connection with the Term Sheet, Mr. Sinnreich was issued 50,000 shares of restricted common stock that vested immediately upon issuance. The shares issued were valued at $ 6.80 per share, the closing price of the common stock of the Company on the effective date of the Term Sheet, totaling $343,000. The Company recorded $ 343,000 of stock-based compensation expense during year ended October 31, 2022. On July 21, 2022, in connection with the Term Sheet, during the first year of the Initial Term, Mr. Sinnreich was to be compensated by the issuance of 120,000 shares of Organicell’s common stock upon execution of the Term Sheet, which shall vest pro-rata in equal monthly installments of 10,000 shares each. The shares issued were valued at $6.80 per share, the closing price of the common stock of the Company on the effective date of the Term Sheet, totaling $823,200. On November 22, 2022, Mr. Sinnreich resigned from the Company. The Company amortized the costs associated with the issuance through the date of Mr. Sinnreich’s termination. For the year ended October 31, 2023 and 2022, a total of 7,233 and 33,534 shares, respectively, had vested and the Company recorded $ 49,618 and $ 228,353 of stock-based compensation expense during the years ended October 31, 2023 and 2022, respectively. On August 18, 2022, the Company entered into a consulting agreement with a third party to provide strategic marketing and digital marketing services for a minimum period of six months. As consideration for agreeing to provide consulting services to the Company, the Company will pay the consultant $15,000 per month and issued the consultant 12,500 shares of unregistered common stock valued at $4.82 per share, the closing price of the common stock of the Company on the effective date of the agreement. All of the shares granted vested immediately on the date of issuance. The Company will record $60,250 of stock-based compensation expense based on the grant date fair value of these shares during the term of the consulting agreement. The Company recorded $ 35,146 and $ 25,104 of stock-based compensation expense during the years ended October 31, 2023 and 2022, respectively. F- 30 On December 1, 2022, the Company granted 750 shares of common stock to an employee as provided for in the employment agreement valued at $ 6.00 per share, the closing price of the common stock of the Company on the grant date. The Company recorded $ 4,500 of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2023. On December 29, 2022, the Company agreed to issue 25,000 shares of common stock to a service provider in exchange for the provider providing discounts of 10% on all services provided retroactive to August 2022. The common stock granted was valued at $ 100,000 based on the closing price of the common stock of the Company on the date of the agreement of $ 4.00 per share. The Company recorded $100,000 of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2023. Equity Line Of Credit Commitment: During November 2021, the Company entered into an term sheet agreement with Tysadco Partners LLC, a Delaware limited company (“Tysadco”) whereby Tysadco agreed to provide the Company with a $1 0,000,000 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 was not obligated to proceed with the ELOC or file a registration statement for the ELOC. In connection with the above, Tysadco agreed to purchase 35,000 restricted common shares of the Company priced at $ 10.00 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 15,000 shares of common stock of the Company fully vested (valued at $13.40 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 year ended October 31, 2022. On September 1, 2022, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Tysadco and a Registration Rights Agreement (the “Registration Rights Agreement”) with Tysadco. Pursuant to the Purchase Agreement, Tysadco committed to purchase, subject to certain restrictions and conditions, up to $10,000,000 worth of the Company’s common stock (the “Commitment”), over a period of 24 months from the effectiveness of the registration statement registering the resale of shares purchased by Tysadco pursuant to the Purchase Agreement (the “Registration Statement”). Pursuant to the terms of the Registration Rights Agreement, the Company was obligated to use its commercially reasonable efforts to file a registration statement with the Securities and Exchange Commission within thirty (30) days after the date of such agreement, to register the resale by Tysadco of the shares of common stock issuable under the Purchase Agreement. On September 2, 2022, the Company filed the required registration statement and on October 24, 2022, the Registration Statement was declared effective (“Registration”). The Purchase Agreement provides that at any time after the effective date of the Registration Statement, from time to time on any business day selected by the Company (the “Purchase Date”), the Company shall have the right, but not the obligation, to direct Tysadco to buy the lesser of $1,000,000 in common stock per sale or 500% of the daily average share value traded for the 10 days prior to the closing request date, at a purchase price of 80% of the of the two lowest individual daily VWAPs during the ten (10) trading days preceding the draw down or put notice (“Valuation Period”), with a minimum request of $25,000 (“Request”). The payment for the shares covered by each request notice will occur on the business day immediately following the Valuation Period. F- 31 Pursuant to the Purchase Agreement, on December 2, 2022, the Company submitted a put request to Tysadco to purchase 22,282 registered shares at a purchase price of $4.49, for a total of $100,000 (“Put Request”). On December 5, 2022, Tysadco funded the Put Request and the Company issued 22,282 shares to Tysadco. The proceeds from the share sale were used for working capital and general corporate purposes. Due to overall market conditions, the Company determined that it would not seek to obtain additional financing through the ELOC Purchase Agreement and the ELOC Registration lapsed and is no longer effective and the Company can no longer receive additional fundings pursuant to the ELOC. Shares Issued - Promissory Note – SPA 22: As described in Note 11, in connection with the issuance of the Promissory Note on January 11, 2022, the Company issued the Purchaser’s 15,385 commitment shares valued at $ 123,000 . In addition, in connection with the Extension on July 11, 2022, the Company issued the Purchaser an additional 7,692 commitment shares valued at $33,231. Shares Issued – SPA 23: As described in Note 11, in connection with the issuance of the Note on March 6, 2023, the Company issued the Purchaser’s 75,000 commitment shares of the Company’s common stock valued at $ 169,500 based on the closing price of the common stock of the Company on the date of the agreement of $2.26 per share. Shares Issued – Amendment of consulting agreement: On August 19, 2022 the Company and a consultant (“Consultant”) agreed to an amendment to the consulting agreement whereby the Consultant was issued 25,000 shares of common stock of the Company and received a $ 20,000 cash payment in exchange for satisfaction of approximately $210,000 in outstanding consulting fees due to the Consultant up through August 31, 2022. The parties also agreed to the reduction of future fees payable to the Consultant from $40,000 per month to $15,000 per month for the period September 2022 through March 2023. The shares issued were valued at $4.70 per share, the closing price of the common stock of the Company on the effective date of the settlement, totaling $117,500. The Company recorded a gain of $72,500 for the year ended October 31, 2022 in connection with the settlement, representing the difference in the fair value of the shares issued and the amount of obligations settled. Shares Issued – Settlement of Litigation: As described in Note 15, during April 2022 the Company settled a lawsuit whereby the Company paid LAE $ 45,000 in cash and 10,000 shares of restricted common stock of the Company. The shares issued were valued at $4.38 per share, the closing price of the common stock of the Company on the effective date of the settlement, totaling $ 43,800 . Shares Repurchased – Settlement of Litigation: As described in Note 15, effective October 13, 2022, the Company settled a lawsuit by agreeing to repurchase 124,000 shares of common stock for $ 500,000 which was recorded as a liability at October 31, 2022. The shares repurchased were transferred to the Company on February 2. 2023 and redeposited back into the Company’s treasury of authorized and unissued shares on February 3, 2023. F- 32 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”). Pursuant to the MCPP, a total of 1,712,500 shares have been issued. On October 29, 2021, the MCPP (but not Awards of unexchanged shares of our common stock) was terminated. In connection with the Closing, the Company and each of the grantees of awards authorized but not yet issued under the MCPP (“Awards”) agreed to waive and terminate their respective Awards. 2021 Plan and Share Exchange Agreement In September 2021, the Company adopted the 2021 Equity Incentive Plan (“2021 Plan”). The 2021 Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares (an “Award”) to any person who is an employee or director of, or consultant to the Company. The maximum aggregate number of shares that may be issued pursuant to all Awards was 1,250,000 shares. On June 6, 2023, the Company’s approved an increase in the number of shares of the Company’s common stock reserved for issuance under the Company’s 2021 Plan from 1,250,000 shares to 2,500,000 shares. The 2021 Plan is administered by (a) the board of the directors of the Company; or (b) a committee designated by the board, which Committee shall be constituted in such a manner as to satisfy the applicable laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such committee shall continue to serve in its designated capacity until otherwise directed by the board. The board of directors may at any time amend, suspend, or terminate the Plan; provided, however, that no such amendment shall be made without the approval of the Company’s shareholders to the extent such approval is required by applicable laws. As of October 31, 2023, a total of 900,500 shares of our common stock (net of 181,500 shares of our common stock redeposited for future issuance) that have been awarded under the 2021 Plan remain issued and outstanding. As of October 31, 2022, a total of 417,000 shares of our common stock were awarded and remained issued and outstanding under the 2021 Plan. Unvested Equity Instruments : A summary of unvested equity instruments outstanding for the years ended October 31, 2023 and 2022 are presented below: Schedule of non vested share activity Number of Nonvested Shares Weighted- Average Grant Date Value Outstanding at October 31, 2022 499,216 $ 11.35 Non-Vested Shares Granted - $ - Vested 169,983 $ 12.19 Expired/Forfeited 229,233 $ 10.35 Outstanding at October 31, 2023 100,000 $ 12.20 F- 33 Number of Nonvested Shares Weighted- Average Grant Date Value Outstanding at October 31, 2021 419,222 $ 12.34 Non-Vested Shares Granted 129,500 $ 6.86 Vested 49,506 $ 7.98 Expired/Forfeited - $ - Outstanding at October 31, 2022 499,216 $ 11.35 As of October 31, 2023, there was no unamortized compensation cost related to nonvested awards. As of October 31, 2022, the total compensation cost related to nonvested awards not yet recognized and the weighted-average period over which such costs are expected to be recognized was $855,030 and 7.0 months, respectively. NOTE 14 – WARRANTS A summary of warrant activity for the years ended October 31, 2023 and 2022 are presented below: Schedule of warrant activity Number of Shares Weighted- average Exercise Price Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at October 31, 2022 2,149,000 $ 4.52 9.63 $ 2,440,110 Granted 737,656 $ 3.57 5.00 $ - Exercised - $ - - $ - Expired/Forfeited ( 315,000 ) $ 6.62 8.46 $ - Outstanding at October 31, 2023 2,571,656 $ 3.99 7.50 $ - Exercisable at October 31, 2023 1,959,365 $ 4.45 8.33 $ - Number of Shares Weighted- average Exercise Price Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at October 31, 2021 47,500 $ 6.11 6.90 $ 289,500 Granted 2,101,500 $ 4.48 10.0 $ - Exercised - $ - - $ - Expired/Forfeited - $ - - $ - Outstanding at October 31, 2022 2,149,000 $ 4.52 9.63 $ 2,440,110 Exercisable at October 31, 2022 1,940,242 $ 4.37 9.62 $ 2,403,058 F- 34 On July 21, 2022, the Company issued Mr. Sinnreich (a former executive) a cashless warrant to purchase an aggregate of 200,000 shares of common stock in connection with Mr. Sinnreich’s employment agreement. The warrant is exercisable for $ 6.80 per share (the closing price of the Company’s common stock on the date of grant), until the tenth anniversary date of the date of issuance. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 2.91 % , (2) term of 10 years, (3) expected stock volatility of 144 % , and (4) expected dividend rate of 0 % . All of the warrants vested immediately. The grant date fair value of the warrants issued was $ 1,332,000 . The Company recorded $ 1,332,000 of stock-based compensation expense for the year ended October 31, 2022 based on the fair value of these warrants on the grant date. At Closing, the Company also entered into 36-month consulting agreements with each of Skycrest and Greyt (each, a “Consulting Agreement,” and collectively, the “Consulting Agreements”), pursuant to which (a) Skycrest and Greyt will provide certain advisory services to the Company as more fully set forth therein; and (b) Skycrest and Greyt are being compensated for their services by the Company issuing to each of them at closing ten (10) year-warrants to purchase 750,000 Shares at an exercise price of $ 4.00 per Share (the “Consulting Agreement Warrants”), which Warrants are exercisable on a “cashless” basis. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 2.91 % , (2) term of 10 years, (3) expected stock volatility of 144 % , and (4) expected dividend rate of 0 % . All of the warrants vested immediately. The grant date fair value of the warrants issued to Skycrest and Greyt was $ 2,940,000 and $ 2,940,000 , respectively. The Company will amortize the costs associated with warrants issued over the term of the Consulting Agreement. The Company recorded $ 1,960,000 and $ 408,333 of stock-based compensation expense for the year ended October 31, 2023 and 2022, respectively, based on the fair value of these warrants on the grant date. At Closing, Ian Bothwell waived all unpaid and accrued compensation except for four unpaid base salary payments outstanding as of July 31, 2022, in exchange for ten-year warrants to purchase 150,000 Shares at an exercise price of $ 4.00 per Share, exercisable on a “cashless basis” and a cash payment of $50,000 at Closing. All of the warrants vested immediately. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 2.91 % , (2) term of 10 years, (3) expected stock volatility of 144 % , and (4) expected dividend rate of 0 % . The grant date fair value of the warrants issued to Mr. Bothwell was $ 588,000 which amount was applied towards the amount of unpaid and accrued compensation. The remaining balance of unpaid and accrued compensation that was forgiven by Mr. Bothwell totaling $ 455,478 was recorded as additional paid in capital as of October 31, 2022 (see Note 15). At Closing, Dr. George Shapiro terminated his consulting arrangement with the Company and waived all unpaid consulting fee obligations in exchange for ten-year warrants to purchase 15,750 Shares at an exercise price of $ 4.00 per Share, exercisable on a “cashless basis.” All of the warrants vested immediately. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 2.91 % , (2) term of 10 years, (3) expected stock volatility of 144 % , and (4) expected dividend rate of 0 % . The grant date fair value of the warrants issued to Dr. Shapiro was $ 61,740 which amount was applied towards the amount of unpaid and accrued compensation, The remaining balance of unpaid and accrued compensation that was forgiven by Dr. Shapiro totaling $ 77,760 was recorded as additional paid in capital as of October 31, 2022 (see Note 15). During August 2022, the Company entered into five separate consulting and employment agreements providing for the issuance of ten-year warrants to purchase an aggregate of 205,750 Shares at exercise prices ranging from $ 4.80 to $ 6.00 per Share, exercisable on a “cashless basis”. The warrants vest over the term of the agreements that range for 6 months to 2 years. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rates between 2.60 % - 3.05 % , (2) term of 10 years, (3) expected stock volatility of 143 % , and (4) expected dividend rate of 0 % . The grant date aggregate fair value of all the warrants issued was $ 1,122,075 . The Company recorded an aggregate of $ 237,638 and $ 133,363 of stock-based compensation expense for the years ended October 31, 2023 and 2022, respectively, based on the fair value of these warrants on the grant date. F- 35 During September 2022, each of the five non-executive directors (other than the Chairman) were granted the right to be party to a Director’s Service Agreement. Pursuant to that agreement, non-employee directors will be compensated for their services by the annual issuance of warrants to acquire up to 5,000 shares of the Company’s common stock at an exercise price of $ 8.80 (the fair market value of the common stock as of the date of grant, exercisable for a period of ten (10) years from the date of grant (“Director Warrants”). The Director Warrants shall be and shall vest in equal monthly installments of 416.67 shares, subject to continued service by the director as a member of the board of directors. The agreement will also provide for indemnification of directors to the fullest extent permitted by Nevada law. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 3.69 % , (2) term of 10 years, (3) expected stock volatility of 143 % , and (4) expected dividend rate of 0 % . The grant date fair value of each warrant issued was $ 43,200 (aggregate total of $216,000). The Company recorded an aggregate of $ 160,373 and $ 23,079 of stock-based compensation expense for the years ended October 31, 2023 and 2022, respectively, based on the fair value of these warrants on the grant date. Effective August 1, 2022, the Company entered into a one-year consulting agreement with a third party to provide strategic advice, assistance with implementation of new business strategies and overall advice concerning the Company’s business goals and objectives. The consultant received compensation in the form of a warrant to acquire up to 5,000 shares of the Company’s common stock at an exercise price of $ 6.60 (the fair market value of the common stock as of the date of grant, exercisable for a period of ten (10) years from the date of grant and exercisable on a “cashless basis.” The warrant shall vest in equal monthly installments. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 2.60 % , (2) term of 10 years, (3) expected stock volatility of 143 % , and (4) expected dividend rate of 0 % . The grant date fair value of the warrant issued was $ 32,700 . The Company will record stock-based compensation expense during the term of the agreement based on the fair value of these warrants on the grant date. The Company recorded $ 24,525 and $ 8,175 of stock-based compensation expense for the years ended October 31, 2023 and 2022, respectively. As described in Note 11, in connection with the issuance of the Note on March 6, 2023, the Company issued the Purchaser’s 50,000 commitment Warrant Shares exercisable for a five-year period at a price of $ 12.00 per share. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 3.98 % , (2) term of 5 years, (3) expected stock volatility of 169 % , and (4) expected dividend rate of 0 % . All of the warrants vested immediately. The grant date fair value of the warrants issued was $ 113,000 . The Company recorded $ 113,000 as a loan discount which was amortized over the term of the Note. As described in Note 15, effective June 1, 2023, the Company issued Dr. Leider a warrant to purchase an aggregate of 285,000 shares of common stock in connection with Dr. Leider’s employment agreement. The warrant is exercisable for $ 2.40 per share (the closing price of the Company’s common stock on the date of grant), until the fifth anniversary date of the date of issuance. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 3.7 % , (2) term of 5 years, (3) expected stock volatility of 168 % , and (4) expected dividend rate of 0 % . The warrant vests in equal quarterly installments over a three-year period. The grant date fair value of the warrants issued was $ 684,000 . The Company recorded $ 95,000 of stock-based compensation expense for the year ended October 31, 2023 based on the fair value of these warrants on the grant date. As described in Note 15, effective June 1, 2023, the Company issued Dr. Golub a warrant to purchase an aggregate of 250,000 shares of common stock in connection with Dr. Golub’s employment agreement. The warrant is exercisable for $ 2.40 per share (the closing price of the Company’s common stock on the date of grant), until the fifth anniversary date of the date of issuance. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 3.7 % , (2) term of 5 years, (3) expected stock volatility of 168 % , and (4) expected dividend rate of 0 % . The warrant vests in equal quarterly installments over a one-year period. The grant date fair value of the warrants issued was $ 600,000 . The Company recorded $ 250,000 of stock-based compensation expense for the year ended October 31, 2023 based on the fair value of these warrants on the grant date. F- 36 As described in Note 15, effective July 12, 2023, the Company issued Ms. Swartz a warrant to purchase an aggregate of 130,000 shares of common stock in connection with Ms. Swartz’s employment agreement. The warrant is exercisable for $ 2.28 per share (the closing price of the Company’s common stock on the date of grant), until the fifth anniversary date of the date of issuance. The Company valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 4.1 % , (2) term of 5 years, (3) expected stock volatility of 167 % , and (4) expected dividend rate of 0 % . The warrant vests over a three-year period. The grant date fair value of the warrants issued was $ 296,400 . The Company recorded $ 28,817 of stock-based compensation expense for the year ended October 31, 2023 based on the fair value of these warrants on the grant date. As described in Note 11, during the period August 2023 through September 2023, the Company sold 2.9 Units (“Units”) to 4 investors in a private offering at a purchase price of $ 250,000 per Unit for an aggregate purchase price of $ 725,000 . Each Unit consists of (a) a $ 250,000 in principal amount 8 % Convertible Promissory Note due September 30, 2026 (the “Note”); and (b) 7,813 common stock purchase warrants (the “Warrants”), each entitling the holder to purchase one share of common stock, $ 0.001 par value (“Shares”) at an exercise price of $ 20.00 for a period of five years from the date of issuance. As of October 31, 2023, there was approximately $ 4,881,000 of unamortized compensation associated with warrants outstanding as of October 31, 2023 that will be amortized over their respective remaining service periods. All stock compensation expense is classified under general and administrative expenses in the consolidated statements of operations. NOTE 15 – COMMITMENTS AND CONTINGENCIES Skincare Agreement In September 2022, the Company entered into a joint development agreement and supply agreement with a third-party supplier (“Supplier”) that develops and manufactures various devices and related equipment and consumables used in the skincare industry (“Skincare Agreement”) that are marketed and sold directly and/or through its affiliates or third parties, in the United States of America and in most major international markets. Under the terms of the Skincare Agreement, the Company was obligated to provide and the Third Party was obligated to purchase a minimum volume of raw material ingredient (“Ingredient”) from the Company to be used as part of formulations in exclusive biologic topical products (“Products”) to be marketed and sold by Supplier during the first year of the Agreement in the amount of $ 167,000 (“Minimum Purchase”) and mutually agreed upon minimal annual amounts thereafter. In June 2023, the Supplier informed the Company that there were delays in the Supplier’s development of the Products, including the timing of providing a purchase order for the Minimum Purchase of the Company’s Ingredient. During September 2023, the Company and the Supplier agreed to enter into an Amendment and Restatement of the Skincare Agreement (“Amended Skincare Agreement”). Under the terms of the Amended Skincare Agreement, the products to be provided by the Company was modified to include both the Ingredient and a topical moisturizer (“Moisturizer”) supplied by the Formulator (see Note 7). The Ingredient and the Moisturizer are hereinafter referred to as the “Combined Product”. The Supplier was obligated to deliver a purchase order for a minimum of $ 403,200 of the Combined Product by September 30, 2023 (“Initial Purchase Order”) and a total of $ 648,000 of the Combined Product during the first year of the Amended Skincare Agreement. During November 2023, the Supplier paid the Company $ 403,200 in connection with the Initial Purchase Order. Pursuant to Sales Agreement with the Formulator, the Company paid the Formulator $ 235,200 representing the amount of Initial Purchase Order associated with the Company’s arrangement with the Formulator to supply he Moisturizer. Both the Company and the Formulator have yet to deliver the Ingredient or the Moisturizer to the Supplier. F- 37 Executive Employment Agreements The Company is party to executive employment agreements with each of Ian T. Bothwell (our Chief Financial Officer), Dr. Maria Ines Mitrani (our former Chief Science Officer) (see below) and Albert Mitrani, our former Executive Vice President of Sales) (see below), originally executed in April 2018 and subsequently amended (the “ Executive Employment Agreements ”). As amended, the Executive Employment Agreements provided for a term expiring on December 31, 2025 and a base annual salary of $ 300,000 and specified expense reimbursement allowances. They also contained customary confidentiality and non-competition provisions. Pursuant to the terms of the SPA, the Executive Employment Agreements were further amended on August 19, 2022 and February 9, 2023 as follows: 1. Each of Albert Mitrani, Dr. Maria Ines Mitrani and Ian Bothwell amended their respective employment agreements providing for (a) setting their respective base salaries at $ 300,000 per annum; (b) limits on cell phone, automobile and other monthly allowances; (b) elimination of any compensation associated with commissions, fixed bonus, increases to base salary (based on revenue milestones), and/or tax make-whole provisions associated with equity grants; and (c) deletion of change in control provisions. In the February 9, 2023 amendment, each of Albert Mitrani, Dr. Maria Ines Mitrani and Ian Bothwell agreed to a reduction in each executive’s annual salary to $ 150,000 per year effective December 15, 2022 in the case of Dr. Mari Mitrani and Albert Mitrani and November 30, 2022 in the case of Mr. Bothwell. The reduction will remain in effect through such time that net revenues from operations are breakeven when calculating the salaries of all three executives without the agreed upon reductions (“Salary Reduction Period”). There is no obligation of the Company to repay that portion of Base Salary that has been reduced during the Salary Reduction Period. Beginning August 16, 2023, Mr. Bothwell’s annual salary was increased to $ 200,000 per year. 2. Albert Mitrani and Dr. Maria Ines Mitrani each waived all accrued but unpaid compensation outstanding as of July 31, 2022. The Company, Albert Mitrani and Dr. Maria Ines Mitrani also agreed to terminate the leases with Mariluna LLC for use of Albert Mitrani’s and Mari Mitrani’s Miami, FL and Aspen, Colorado homes, retroactive to July 13, 2022. The Company wrote off the related ROU asset and lease liability as of the Closing Date. The balance of unpaid and accrued compensation that was forgiven by Albert Mitrani and Dr. Maria Ines Mitrani totaling $ 430,200 and $ 563,455 (reduced for $22,500 of security deposits that were retained by Mariluna LLC upon termination of leases), respectively, was recorded as additional paid in capital as of October 31, 2022. 3. Ian Bothwell waived all unpaid and accrued compensation outstanding as of July 31, 2022, in exchange for ten-year warrants to purchase 150,000 Shares at an exercise price of $ 4.00 per Share, exercisable on a “cashless basis” and a cash payment of $50,000 at Closing. The Company and Mr. Bothwell also agreed that rental and other office costs associated with the California office currently used by him will not be reimbursed after October 31, 2022. The balance of unpaid and accrued compensation that was forgiven by Mr. Bothwell totaling $ 455,478 , was recorded as additional paid in capital as of October 31, 2022. 4. Each of Albert Mitrani, Dr. Maria Ines Mitrani, Ian Bothwell and all other recipients agreed to terminate all awards granted but not yet issued under the Company’s Management and Consultant Performance Plan. 5. Each of Albert Mitrani, Dr. Maria Ines Mitrani and Ian Bothwell agreed to modify severance compensation provisions to be paid upon termination to only occur upon a termination without cause in an amount equal to one month’s base salary for each year of service. F- 38 In connection with the February 9, 2023 amendment to the Executive Employment Agreements, Mr. Bothwell and Mr. Mitrani also agreed to repay approximately $ 44,600 and $ 84,300 , respectively, of previously reimbursed expenses to the Company and the Company and the executives exchanged mutual releases. During August 2023, the Company agreed to extinguish Mr. Bothwell’s obligation to repay the previously reimbursed expenses of approximately $44,600. In connection with the settlement agreement with Albert Mitrani and Dr. Maria Ines Mitrani effective November 13, 2023 (see Legal Matters below), the Company agreed to extinguish Mr. Mitrani’s obligation to repay the previously reimbursed expenses outstanding at the time of the settlement of approximately $75,900. On April 28, 2023, the Company terminated Dr. Maria Ines Mitrani as its Chief Scientific Officer and contemporaneously terminated her employment agreement with the Company. On May 12, 2023, the Company terminated Albert Mitrani as its Executive Vice President of Sales and contemporaneously terminated his employment agreement with the Company. As of October 31, 2023, the Company reserved the remaining amounts due of $ 0 and $ 75,900 against the amounts due from Mr. Bothwell and Mr. Mitrani, respectively. As of October 31, 2023 and October 31, 2022, the total amounts due from related parties were $ 0 and $ 128,939 , respectively, and is included in receivables from related party in the accompanying consolidated balance sheets. Resignation Of Matthew Sinnreich On July 21, 2022 (“Effective Date”), Matthew Sinnreich was appointed by the Board of Directors to the position of Chief Operating Officer and Acting Chief Executive Officer. On the Effective Date, Organicell and Mr. Sinnreich entered into a term sheet (the “Term Sheet”) setting forth in principle the terms of Mr. Sinnreich’s employment agreement with and compensation by the Company. The Term Sheet was subject to the negotiation and execution of a definitive employment agreement embodying the provisions of the Term Sheet, as well as customary terms and conditions for an executive employment agreement (the “Employment Agreement”). The parties agreed to use their respective commercial best efforts to negotiate and execute the Employment Agreement. In connection with the Term Sheet, as an inducement for Mr. Sinnreich to join the Company, Mr. Sinnreich was issued 50,000 shares of restricted common stock (“Inducement Shares”) and ten-year warrants to purchase 200,000 shares at a price of $ 6.80 per share, exercisable on a “cashless” basis (“Inducement Warrants”. The foregoing Inducement Shares and Inducement Warrants vested immediately upon issuance. During the first year of the Initial Term, Mr. Sinnreich was to be compensated by the issuance of 120,000 shares of Organicell’s common stock, which were to vest in equal monthly installments of 10,000 shares each (“Salary Shares”). During the second year of the Initial Term, Mr. Sinnreich was to be entitled to receive a base salary of $ 25,000 per month, payable in cash or shares of Organicell’s common stock, at his election. On September 13, 2022, Mr. Sinnreich assumed the position of President and Acting Chief Executive Officer. He subsequently resigned from the Company on November 22, 2022. During the period November 1, 2022 through November 22, 2022 and as of November 22, 2022, a total of 7,233 and 40,767 of the Salary Shares were vested, respectively. In July 2023, Mr. Sinnreich paid the Company $ 50,000 and returned to the Company 170,000 shares and warrants to purchase 200,000 shares. The total amount of shares returned to the Company of 170,000 were redeposited back into the Company’s treasury of authorized and unissued shares on July 19, 2023. F- 39 Chief Executive Officer, Chief Science Officer and Chief Products Officer On June 6, 2023, our board of directors appointed Harry Leider, M.D., M.B.A., as Chief Executive Officer and a member of the board of directors and Howard J. Golub, M.D., as Executive Vice President and Chief Science Officer. Ian T. Bothwell, who has served as Interim Chief Executive Officer since November 2022, in addition to his position as Chief Financial Officer will continue in his Chief Financial Officer role. On July 12, 2023, our board of directors appointed Jill Swartz, as Chief Products Officer. Dr. Leider’s employment agreement provides for a base salary of $ 325,000 per year and the grant of an option under Organicell’s Equity Incentive Plan (“Incentive Plan”) to purchase 285,000 shares of our common stock at a price of $ 2.40 per share (fair market value on the date of grant) (“Leider Option”). The Leider Option vests in equal quarterly installments over a three-year period, contingent upon Dr. Leider’s continued employment with the Company and expires five years from the date of grant. The vesting of the Leider Option is accelerated in the event of a change in control of the Company (as described in the employment agreement) or if the Company achieves certain market cap valuations. Dr. Leider shall also be entitled to earn a commission of ten percent (10%) of the net profit (sales less cost of goods sold) generated by the sale of any of the Company’s biologic products sold directly by him solely from sources generated by him alone. Dr. Leider’s employment with the Company is “At Will” meaning that his employment with the Company and his employment agreement may be terminated by the Company at any time, for any reason or for no reason at all and with or without “Cause” (as defined in the Agreement). Notwithstanding the foregoing, in the event the Company terminates Dr. Leider’s employment without Cause or Dr. Leider terminates his employment with the Company for “Good Reason” (as defined in the Agreement), Dr. Leider will be entitled to receive an amount equal to one year’s salary as severance, less the value of the Leider Option as vested on the date of termination, as calculated by subtracting the market price for the shares underlying the option as of the date of termination, less the exercise price for such shares, provided further, that the combined amount of the severance payment and market value of the Leider Option shall not be less than $200,000. In such circumstance he will also be entitled to receive a pro-rated share of any bonus earned for the year in which the termination takes place. Dr. Golub’s employment agreement provides for a base salary of $ 150,000 per year. Dr. Golub will not be a full-time employee, but rather will devote such amount of his working time as the Company deems reasonably necessary to fulfill his duties thereunder (estimated to be approximately ½ his working time). Dr. Golub will perform his duties remotely from his residence, with travel, as required by his position. He will be permitted to continue serving as a Principal of Care-Safe, LLC. Dr. Golub is also granted an option under the Incentive Plan to purchase 250,000 shares of our common stock at a price of $ 2.40 per share (fair market value on the date of grant) (“Golub Option”). The Golub Option vests in equal quarterly installments over a one-year period, contingent upon Dr. Golub’s continued employment with the Company and expires five (5) years from the date of grant. Dr. Golub’s employment with the Company is “At Will” meaning that his employment with the Company and his employment agreement may be terminated by the Company at any time, for any reason or for no reason at all and with or without “Cause” (as defined in the Agreement). Notwithstanding the foregoing, in the event the Company terminates Dr. Golub’s employment without Cause or Dr. Golub terminates his employment with the Company for “Good Reason” (as defined in the Agreement), Dr. Golub will be entitled to receive an amount equal to one year’s base salary as severance. He will also be entitled to receive a pro-rated share of any bonus earned for the year in which the termination takes place. F- 40 Ms. Swartz’s employment agreement provides for a base salary of $ 215,000 per year and the grant of an option under Organicell’s Equity Incentive Plan (“Incentive Plan”) to purchase 130,000 shares of our common stock at a price of $ 2.40 per share (fair market value on the date of grant) (“Swartz Option”). The Swartz Option vests one-third (1/3) on the first anniversary of the employment agreement. The remaining portion will vest in equal quarterly installments during the second and third year of the employment agreement, contingent upon Ms. Swartz’s continued employment with the Company and expires five years from the date of grant. Ms. Swartz’s employment with the Company is “At Will” meaning that her employment with the Company and her employment agreement may be terminated by the Company at any time, for any reason or for no reason at all and with or without “Cause” (as defined in the Agreement). Notwithstanding the foregoing, in the event the Company terminates Ms. Swartz’s employment without Cause or Ms. Swartz terminates her employment with the Company for “Good Reason” (as defined in the Agreement), Ms. Swartz will be entitled to receive an amount equal to one year’s base salary as severance. All the above employment agreements contain customary confidentiality, non-competition and non-solicitation covenants. Consultant Agreements Assure Immune LLC Effective March 29, 2021, the Company and Assure Immune L.L.C (“Consultant”) entered into an amendment (“Amendment”) to the consulting agreement between the parties dated March 30, 2020 (“Agreement”). Under the terms of the Amendment, the initial term of the Agreement was extended for an additional 2 years (until March 30, 2023) and the terms for eligibility of the Consultants to receive future grants of stock above those stock issuances granted as of the date of the Amendment based on achievement of certain future milestones previously provided for in the Agreement were eliminated. In addition, the Amendment provided additional terms in connection with termination of the Agreement. Under the terms of the Amendment, the Consultant received an additional 100,000 shares of common stock that vested 50% upon execution of the Amendment and the remaining 50% on December 31, 2021. On August 19, 2022 the Company and Consultant agreed to an amendment to the consulting agreement whereby the Consultant was issued 25,000 shares of common stock of the Company and received a $20,000 cash payment in exchange for satisfaction of approximately $200,000 in outstanding consulting fees due to the Consultant up through August 31, 2022. The parties also agreed to the reduction of future fees payable to the Consultant from $40,000 per month to $15,000 per month for the period September 2022 through March 2023. The Agreement was not renewed upon its expiration. F- 41 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 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. 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 two of the Company’s approved clinical research trials (“New CRO Agreements”). On August 23, 2022 the New CRO Agreements were amended. In connection with the New CRO Agreements, the Company is obligated to make aggregate payments to the CRO of approximately $1,443,000 plus estimated aggregate pass-through costs and other third-party direct costs of approximately $495,000 (“Pass-Through Costs”) as well as site and patient related costs. The Company is obligated to make the CRO payments based on the actual costs incurred 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. In connection with the two aforementioned studies, the Company determined in one of the studies that it acquired sufficient safety data with less than the originally planned patient enrollment and the study has been closed. In the other study, the Company is reviewing the benefit from continued efforts to commence the study and/or whether the existing approved IND should be modified, terminated and/or replaced. As of October 31, 2023, the Company has been billed a total of approximately $1,431,300 in connection with the New CRO Agreements, Pass-Through Costs and Site related costs, respectively, of which approximately $ 587,800 was outstanding as of October 31, 2023. As of October 31, 2022, the Company has been billed a total of approximately $680,000 in connection with the New CRO Agreements, including $18,400 of escrow related payments, of which approximately $ 244,900 was outstanding as of October 31, 2022. Contingent Convertible Obligations Into Equity Securities Obligations Due Under Executive Employment Agreements In connection with the Closing, the Company and each of the Executives agreed to forego their unpaid Original Base Salary and Incremental Salary (see “Changes in Management Compensation” above). F- 42 Legal Matters SEC Matter 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 fully cooperated with the SEC’s investigation and believes that it has provided 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 in the future 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. LAE International Consulting 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. Daniel Pepock and Tracy Yourke The Company terminated the employment agreements with the former Sales Executives Daniel Pepock (“Pepock”) and Tracy Yourke (“Yourke”) effective June 30, 2022. On August 22, 2022, Mr. Pepock, Ms. Yourke and Organicell agreed to a material settlement term sheet (“Settlement”) which provided for the resolution and full settlement and release of all claims among the parties and for the Company to buy back all of the shares of common stock of the Company issued to and owned by Mr. Pepock and Ms. Yourke at the time of the Settlement (represented by Mr. Pepock and Ms. Yourke to be in excess of 124,000 shares) in exchange for a payment by the Company of $500,000 (“Purchase Price”). In addition, the Company agreed to release Mr. Pepock and Ms. Yourke from their non-compete restrictions upon transfer of the shares to the Company. Effective October 13, 2022, the parties executed a Confidential Settlement Agreement and Mutual General Release memorializing the terms of the Settlement. Under the terms of the Settlement, the Company agreed to repurchase 124,000 shares of common stock for $500,000. On January 31, 2023, 124,000 shares were transferred to the Company and the Company paid the Purchase Price. The shares received by the Company were immediately cancelled and returned to the Company’s treasury of authorized and unissued shares on February 3, 2023. At October 31, 2022, the Company has recorded the obligation to repurchase the shares in connection with settlement of the litigation in the amount of $500,000 in the consolidated balance sheet. F- 43 Albert Mitrani and Dr. Maria Ines Mitrani On June 7, 2023, Organicell filed a four-count complaint with the Seventeenth Judicial Circuit in and for Broward County, Florida against Albert Mitrani and Dr. Maria Ines Mitrani, co-founders of the Company. Albert Mitrani was a former director and executive officer of the Company (most recently serving as Chief Executive Officer from September 2019 to July 2022 and as Executive Vice President of Sales from July 2022 until his termination in May 2023) and Dr. Mitrani is a former director and former executive officer of the Company (serving as Chief Science Officer from November 2016 until her termination in April 2023). The complaint alleges (i) breach of contract; (ii) breach of fiduciary duty; and (iii) tortious interference with business relationships; and seeks injunctive relief, in connection with, inter alia , non-solicitation and non-competition violations, misappropriation of Organicell materials and proprietary information resulting in unjust enrichment, causing detriment to business relationships and goodwill towards customers and physicians, self-dealing and misconduct afoul to Organicell’s business interests as members of Organicell’s board of directors, executive officers and minority equity interest holders—all causing irreparable harm to Organicell. The complaint seeks injunctive relief, in addition to both compensatory and punitive damages. Effective November 13, 2023, the Company entered into a settlement agreement with Albert Mitrani and Dr. Maria Ines Mitrani, pursuant to which it resolved various claims against the Mitranis, including those set forth in the previously reported Florida state action the Company had filed against the Mitranis. As part of the settlement, Albert Mitrani and Dr. Maria Ines Mitrani returned to the Company 682,161 and 481,831 shares of Organicell common stock held by them respectively and the parties exchanged mutual releases. Other 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 16 – SEGMENT INFORMATION For the years ended October 31, 2023 and 2022, the Company operated only one 1 operating segment. F- 44 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.