~~[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the ~~quarterly period ended September 30, 2017~~Quarterly Period Ended: December 31, 2022

~~[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the transition period from ~~__________________~~______________ to ~~__________________~~ ______________

(Exact ~~Name~~name of ~~Registrant~~registrant as ~~Specified~~specified in ~~Its Charter)~~its charter)

~~Registrant’s Telephone Number, Including Area Code:~~~~(225) 227-2384~~Securities registered pursuant to Section 12(b) of the Act: None

~~(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)~~

Indicate by check mark whether the ~~registrant:~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~[X]~~ ☒ No ~~[ ]~~☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ~~[X]~~ ☒ No ~~[ ]~~☐

Indicate by check mark whether the ~~Registrant~~registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting ~~company or an emerging growth~~ company. See ~~the definitions~~definition of “accelerated filer”, “large accelerated ~~filer,” “accelerated filer,”~~filer” and “smaller reporting company” ~~and “emerging growth company”~~ in Rule ~~12b-2~~12B-2 of the Exchange Act. ~~(Check one):~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ~~[ ]~~☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ~~[ ]~~ ☐ No ~~[X]~~ ☒

~~Indicate the number~~The registrant had 6,151,499,919 shares of ~~shares outstanding of each of the issuer’s classes of~~its common stock, $0.0001 par value per share, outstanding as of ~~the latest practicable date: 152,669,639 shares as of November 20, 2017.~~February 21, 2023.

This Quarterly Report on Form 10-Q contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this report, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements appear in a number of places, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements represent our reasonable judgment about the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “should,” “plan,” “potential,” “project,” “will,” “would” and other words of similar meaning, or the negatives of such terms or other variations. These include, but are not limited to, statements relating to the following:

Any or all of our forward-looking statements may turn out to be wrong. They may be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors including, among others:

In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements, some of which are included elsewhere in this report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed on December 29, 2022 with the Securities and Exchange Commission (“SEC”), particularly in the ‘Risk Factors” section of such reports, that could cause results or events to differ materially from the forward-looking statements that we make herein. Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement should be relied upon. Our actual future results may vary materially from those expressed or implied in any forward-looking statements. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement. Forward-looking statements apply only as of the date they are made, and we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report, except as otherwise required by applicable law.

This Quarterly Report on Form 10-Q includes trademarks for Theralink, which are protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ^® or ^TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names.

~~ONCBIOMUNE PHARMACEUTICALS,~~THERALINK TECHNOLOGIES, INC. ~~AND SUBSIDIARIES~~

							December 31,			September 30,
	September 30, 2017			December 31, 2016			2022			2022
	(Unaudited)						(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	83,563		$	-		$	1,130,902		$	393,460
Accounts receivable		93,356			-
Inventories		106,249			-
Subscription receivable		-			11,190
Accounts receivable, net								48,295			32,125
Prepaid expenses and other current assets		99,589			30,119			197,723			217,699
Marketable securities								1,700			3,700

Total Current Assets		382,757			41,309			1,378,620			646,984

OTHER ASSETS:
Property and equipment, net		8,503			9,604			655,220			686,127
Security deposit		6,400			6,400
Finance right-of-use assets, net								53,362			64,954
Operating right-of-use asset, net								1,142,419			1,154,861
Deferred offering costs								-			27,270
Security deposits								18,715			18,715

Total Assets	$	397,660		$	57,313		$	3,248,336		$	2,598,911

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES:
Convertible debt, net	$	289,089		$	54,688
Line of credit		99,208			99,741
Notes payable		538,875			-
Bank overdraft		-			812
Accounts payable		757,804			213,616		$	675,358		$	730,923
Accounts payable - related parties								6,000			16,223
Accrued liabilities		256,537			108,034			156,925			268,021
Accrued liabilities - related parties								82,043			76,927
Accrued compensation								561,472			383,295
Accrued director compensation								207,500			192,500
Contract liabilities								177,050			156,550
Convertible notes, net of discount								676,584			-
Convertible notes - related parties, net of discount								771,444			1,000,000
Notes payable - related party								350,000			350,000
Notes payable - current								1,000			1,000
Financing lease liability - current								52,037			53,995
Operating lease liability - current								26,960			25,551
Insurance payable								86,497			122,295
Derivative liabilities		2,122,848			402,055			42,466,252			-
Due to related parties		48,469			5,000
Contingent liabilities								80,240			78,440

Total Current Liabilities		4,112,830			883,946			46,377,362			3,455,720

Commitments and contingencies (Note 8)
LONG-TERM LIABILITIES:
Financing lease liability								23,469			34,390
Operating lease liability								1,150,424			1,157,761
Convertible notes - related parties net of discount, net of current portion								-			1,305,814
Convertible notes, net of discount								-			446,281

Total Liabilities								47,551,255			6,399,966

Commitments and Contingencies (Note 10)								-			-

Series E preferred stock; $0.0001 par value; 2,000 shares designated; nil and 1,000 issued and outstanding at December 31, 2022 and September 30, 2022, respectively; liquidation value of $0 and $2,040,329 at December 31, 2022 and September 30, 2022, respectively								-			2,000,000

Series F preferred stock; $0.0001 par value; 2,000 shares designated; nil and 500 issued and outstanding at December 31, 2022 and September 30, 2022; liquidation value of $0 and $1,020,164 at December 31, 2022 and September 30, 2022, respectively								-			1,000,000
Temporary equity value								-			-

STOCKHOLDERS’ DEFICIT:
Preferred stock, $0.0001 par value; 20,000,000 authorized;
Series A Preferred stock ($0.0001 par value; 1,000,000 shares authorized; 1,000,000 issued and outstanding at September 30, 2017 and December 31, 2016)		100			100
Series B Preferred stock ($0.0001 par value; 7,892,000 shares authorized; 7,892,000 and none issued and outstanding at September 30, 2017 and December 31, 2016, respectively)		789			-
Common stock: $.0001 par value, 500,000,000 shares authorized; 152,669,639 and 60,807,846 issued and outstanding at September 30, 2017 and December 31, 2016, respectively		15,267			6,081
Preferred stock: $0.0001 par value; 26,667 authorized;
Series A Preferred stock: $0.0001 par value; 1,333 shares designated; 667 issued and outstanding at December 31, 2022 and September 30, 2022								-			-
Series C-1 Preferred stock: $0.0001 par value; 3,000 shares designated; 141 and 1,043 issued and outstanding at December 31, 2022 and September 30, 2022, respectively								-			-
Series C-2 Preferred stock: $0.0001 par value; 6,000 shares designated; nil and 3,037 issued and outstanding at December 31, 2022 and September 30, 2022, respectively								-			-
Series D-1 Preferred stock: $0.0001 par value; 1,000 shares designated; nil issued and outstanding at December 31, 2022 and September 30, 2022								-			-
Series D-2 Preferred stock: $0.0001 par value; 4,360 shares designated; nil issued and outstanding at December 31, 2022 and September 30, 2022								-			-
Preferred stock value								-			-
Common stock: $0.0001 par value, 100,000,000,000 shares authorized; 6,151,499,919 and 6,151,499,919 issued and outstanding at December 31, 2022 and September 30, 2022, respectively								615,150			615,150
Additional paid-in capital		8,568,798			2,310,037			54,385,547			55,391,612
Accumulated deficit		(12,271,297	)		(3,142,851	)		(99,303,616	)		(62,807,817	)
Accumulatedother comprehensive loss		(28,827	)		-

Total Stockholders’ Deficit		(3,715,170	)		(826,633	)		(44,302,919	)		(6,801,055	)

Total Liabilities and Stockholders’ Deficit	$	397,660		$	57,313		$	3,248,336		$	2,598,911

See accompanying condensed notes to unaudited ~~condensed consolidated~~ financial statements.

~~ONCBIOMUNE PHARMACEUTICALS,~~THERALINK TECHNOLOGIES, INC. ~~AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED~~ STATEMENTS OF OPERATIONS ~~AND COMPREHENSIVE LOSS~~

See accompanying condensed notes to unaudited ~~condensed consolidated~~ financial statements.

~~ONCBIOMUNE PHARMACEUTICALS,~~THERALINK TECHNOLOGIES, INC. ~~AND SUBSIDIARIES~~

Theralink Technologies, Inc., formerly OncBioMune Pharmaceuticals, Inc. (the ~~“Company,” “we,” “us” or “our”~~“Company”) is, was a ~~biotechnology~~clinical-stage biopharmaceutical company ~~specializing~~engaged in ~~innovative~~the development of novel cancer ~~treatment therapies. The Company has~~immunotherapy products, with a proprietary ~~rights to a breast and prostate patent~~ vaccine as well as a process for the growth of cancer tumors. The Company’s mission is to improve the overall patient condition through innovative bio immunotherapy with proven treatment protocols, to lower deaths associated with cancer and reduce the cost of cancer treatment. The Company’s technology is safe, and utilizes clinically proven research methods of treatment to provide optimal success of patient recovery. We are also developing and commercializing specialty drugs in Mexico and other Latin American countries following our March 10, 2017 acquisition of Vitel Laboratorios, S.A. de C.V.

technology. On ~~March 10, 2017 (the “Closing Date”),~~June 5, 2020, the Company ~~completed~~acquired the ~~acquisition~~assets (the “Asset Sale Transaction”) of ~~100% of the issued and outstanding capital stock of Vitel Laboratorios, S.A. de C.V.~~Avant Diagnostics, Inc., a ~~Mexican variable stock~~Nevada corporation established in 2009 (“~~Vitel”) from its shareholders Manuel Cosme Odabachian and Carlos Fernando Alaman Volnie (collectively, the “Vitel Stockholders”~~Avant”) pursuant to the ~~terms and conditions of a Contribution~~Asset Purchase Agreement ~~to the Property of Trust F/2868 entered into among~~dated May 12, 2020, between the Company and ~~the Vitel Stockholders~~Avant (the “Asset Purchase Agreement”). Avant is a commercial-stage precision medicine and molecular data-generating company that focuses on the ~~Closing Date (the “Contribution Agreement”). Vitel is~~development and commercialization of a ~~revenue-stage Mexico-based pharmaceutical company~~series of patented, proprietary data-generating assays that ~~develops~~may provide important actionable information for physicians and ~~commercializes specialty drugs~~patients, as well as biopharmaceutical companies, in ~~MALA.~~the area of oncology.

Pursuant to the Asset Purchase Agreement, the Company acquired substantially all of the assets of Avant and assumed certain of its liabilities. Upon the terms and subject to the conditions of the Asset Purchase Agreement, Avant sold to the Company, all of Avant’s title and interest in all the assets, properties and rights of every kind and nature, whether real, personal or mixed, tangible or intangible (including goodwill), wherever located and whether existing or hereafter acquired, except for the specific excluded assets, which relate to, or are used or held for use in connection with, Avant’s business. The Company ~~acquired Vitel~~also hired Avant’s employees upon consummation of the Asset Sale Transaction. As consideration for the ~~purpose~~Asset Sale Transaction, the Company issued to Avant 1,000 shares of ~~commercializing~~a newly created Series D-1 Preferred Stock which held 54.55% of all voting rights on an as-converted basis with the common stock. Upon the effectiveness of an increase of the Company’s ~~PROSCAVAX vaccine technology~~authorized shares of common stock from 6,666,667 shares to 12,000,000,000 shares, all such shares of Series D-1 Preferred Stock issued to Avant automatically converted into 5,081,549,184 shares of the Company’s common stock. Avant possessed majority voting control of the Company immediately following the Asset Sale Transaction and ~~cancer technologies~~controlled the Company’s Board of Directors after the termination of the ten-day waiting period required by Rule 14f-1 under the Exchange Act. Accordingly, the Asset Sale Transaction was accounted for, in ~~MALA~~substance, as an asset acquisition of the Company’s net asset by Avant and a recapitalization of Avant. Avant is considered the historical registrant and the historical operations presented are those of Avant since Avant obtained 54.55% majority voting control of the Company. All share and per share data in the accompanying financial statements and footnotes has been retrospectively adjusted for the recapitalization.

On July 11, 2021, the Company’s wholly-owned subsidiary, OncBioMune, LLC, was administratively dissolved by the Louisiana Secretary of State for failing to ~~utilize Vitel’s distribution network~~meet its filing requirements and ~~customer~~pay the associated fees.

In connection with the Asset Sale Transaction, the Company entered into an Exchange Agreement, effective June 5, 2020, by and ~~industry relationships. (See~~among OncBioMune Pharmaceuticals, Inc. and the investors named therein, whereby the Company agreed to exchange certain convertible promissory notes and warrants outstanding for shares of Series C-1 Convertible Preferred Stock of the Company and options to purchase shares of the Company’s wholly-owned subsidiary, OncBioMune Sub Inc. OncBioMune Sub Inc. holds the patents used in the prior business of OncBioMune Pharmaceuticals, Inc. In July 2021, certain of those investors exercised their options to purchase the shares of OncBioMune Sub Inc. On July 26, 2021, the Company transferred all 10,000 shares of OncBioMune Sub Inc. held by the Company to the various investors for gross proceeds of $1,000 (see Note 3).

On February 25, 2022, FINRA recognized the Company’s name change to Theralink Technologies, Inc. and the related ticker symbol change from “OBMP” to “THER” went into effect.

The ~~Company’s consolidated~~accompanying interim unaudited financial statements include the financial statements of OncBioMune Pharmaceuticals, Inc. and its wholly-owned subsidiaries, OncBioMune, Inc., Vitel and Oncbiomune México, S.A. De C.V.. All significant intercompany accounts and transactions have been eliminated in consolidation.

Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ~~(the “U.S. GAAP”~~and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information, ~~and with~~which present the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included inunaudited financial statements ~~prepared in accordance with U.S. GAAP has been condensed or omitted from these~~of the Company as of December 31, 2022. The interim unaudited financial statements ~~pursuant to such accounting principles and, accordingly, they~~ do not include all the information and notes necessary for a comprehensive presentation of financial ~~statements These unaudited condensed consolidated financial statements~~position and results of operations and should be read in conjunction with the ~~summary of significant accounting policies and notes to the consolidated~~September 30, 2022 audited financial statements ~~for the years ended December 31, 2016 and 2015 of the Company which were included in the Company’s annual report~~ on Form 10-K as filed ~~with~~on December 29, 2022. It is management’s opinion that all material adjustments (consisting of normal recurring adjustments and non-recurring adjustments) have been made for the ~~Securities and Exchange Commission on April 17, 2017.~~fair presentation of the unaudited financial statements. The results for the interim period are not necessarily indicative of the results to be expected for the year ending September 30, 2023.

These ~~consolidated~~unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in ~~our~~the accompanying unaudited ~~condensed consolidated~~ financial statements, the Company had a net loss ~~of $9,128,446~~ and ~~$1,388,859 for the nine months ended September 30, 2017 and 2016, respectively. The~~ net cash used in operations ~~were $2,034,462~~of $36,456,347 and ~~$1,155,203~~$1,776,349, respectively, for the ~~nine~~three months ended ~~September 30, 2017 and 2016, respectively.~~December 31, 2022. Additionally, the Company had an accumulated deficit, ~~of $12,271,297~~stockholders’ deficit and ~~$3,142,851 at September 30, 2017 and December 31, 2016, respectively, had a~~ working capital deficit of ~~$3,730,073 at September 30, 2017, had minimal revenues since inception,~~$99,303,616, $44,302,919 and ~~is currently in default~~$44,998,742 on ~~certain convertible debt instruments, loans, and a bank line of credit.~~December 31, 2022. Management believes that these matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance date of this report. ~~On March 10, 2017, the~~

The Company ~~completed the acquisition of 100% of the issued and outstanding capital stock of Vitel. Management~~ cannot provide assurance that weit will ultimately achieve profitable operations or become cash flow positive or raise additional debt ~~and/~~or equity capital. ~~Management believes that our~~Additionally, the current capital resources are not ~~currently~~ adequate to continue operating and maintaining ~~its~~the business strategy for a period of twelve months from the ~~fiscal year ending December 31, 2017.~~issuance date of this report. The Company will seek to raise capital through additional debt ~~and/or~~and equity financings to fund ~~our~~its operations in the future.

Although the Company has historically raised capital from sales of equity and ~~from~~ the issuance of promissory notes, convertible notes and convertible debentures, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These ~~consolidated~~ financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The preparation of ~~the consolidated~~ financial statements in conformity with U.S. GAAP requires management to make ~~estimates~~judgments, assumptions, and ~~assumptions~~estimates that affect the ~~reported~~ amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the ~~consolidated~~ financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Management bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates during the ~~three~~periods ended December 31, 2022 and ~~nine months ended September 30, 2017 and 2016~~2021 include, ~~the~~but are not necessarily limited to, estimates of contingent liabilities, valuation of ~~accounts receivable, valuation of inventories,~~marketable securities, useful life of property and equipment, valuation of right-of-use ROU assets and lease liabilities, assumptions used in assessing impairment of ~~long-term~~long-lived assets, allowances for accounts receivable, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of ~~non-cash equity transactions, the valuation of~~ derivative liabilities, and the fair value of ~~assets acquired~~non-cash equity transactions.

Fair Value of Financial Instruments and ~~liabilities assumed in the business acquisition.~~Fair Value Measurements

FASB ASC 820 —- Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on December 31, ~~2016.~~2022. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on the disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

~~Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.~~

Level 2- Inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3- Inputs are unobservable inputs that reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the ~~consolidated~~ balance sheets for cash, ~~due from and to related parties,~~accounts receivable, prepaid expenses ~~line of credit payable,~~and other current assets, accounts payable, accrued liabilities, contract liabilities, and accrued ~~liabilities,~~compensation approximate their fair market value based on the short-term maturity of these instruments.

Assets or liabilities measured at fair value or a recurring basis included embedded conversion options in convertible debt (see Note 6) and were as follows on December 31, 2022 and September 30, ~~2017~~2022:

ASC 825-10 “~~Financial Instruments~~”,“Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding equity instruments.

~~For purposes of the consolidated statements of cash flows, the~~The Company considers all highly liquid instruments purchased with aan original maturity of three months or less ~~at the purchase date and money market accounts~~ to be cash equivalents. AtThe Company’s investment policy is to preserve principal and maintain liquidity. The Company periodically monitors its positions with, and the credit quality of, the financial institutions with which it invests.

Prepaid assets are carried at amortized cost. Significant prepaid assets as of December 31, 2022 and September 30, ~~2017~~2022 include, but are not necessarily limited to, prepaid insurance, prepaid consulting fees, prepaid equipment maintenance fees and ~~December 31, 2016,~~retainers for professional services.

Laboratory supplies are normally consumed within a year from purchase and any unused laboratory supplies are classified as current assets and reflected in the ~~Company did not have any cash equivalents.~~accompanying balance sheets as laboratory supplies.

The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. There were no balances in excess of FDIC insured levels as of September 30, 2017 and December 31, 2016. The Company has not experienced any losses in such accounts through September 30, 2017. Additionally, the Company maintains cash at financial institutions in Mexico. At September 30, 2017 and December 31, 2016, cash balances held in Mexico banks of $62,673 and $0, respectively, are uninsured.

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection.

Inventories, consisting of finished goods related to the Company’s products are stated at the lower of cost and net realizable value utilizing the first-in first-out (FIFO) method. A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These reserves are recorded based on estimates.

~~Property~~Fixed assets are stated at cost and ~~are~~ depreciated using the straight-line method over their estimated useful lives, which range from three to five ~~years.~~years. Leasehold improvements are depreciated over the shorter of ~~the~~their useful life or the lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. ~~Based~~

Stock-based compensation is accounted for based on the ~~Company’s review~~requirements of ~~long-lived assets~~ASC 718 – “Compensation –Stock Compensation”, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for ~~impairment,~~an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award be based on ~~September 30, 2017,~~the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under the FASB’s Accounting Standards Update (“ASU”) 2016-09 Improvements to Employee Share-Based Payment.

In accordance with ASU Topic 606 - Revenue from Contracts with Customers, the Company recognizes revenue in accordance with that core principle by applying the following steps:

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

The Company provides research and development support to biopharmaceutical companies to assist their drug development programs. In January 2021, the Company began performing tumor profiling to support clinical patient therapeutic intervention. The services provided by the Company are performance obligations under services contracts. These contracts are completed over time and may lead to deferred revenue for services not completed at the end of a period which is reflected as contract liabilities on the accompanying balance sheet. The Company may include, in accounts receivable, amounts billed to customers in advance of services being initiated or completed. If the Company has a right to such consideration that is unconditional such as for contractually allowed billings under non-cancellable contracts, such amounts billed in advance would be offset by a contract liability. Management reviews the completion status of all jobs monthly to determine the appropriate amount of revenue to recognize. The Company offers these services to biopharmaceutical companies and to private individuals. The Company uses various output methods to recognize revenues. The revenue recognized from services provided to private individuals during the three months ended December 31, 2022 and 2021 were minimal and therefore were not disaggregated for disclosure purposes.

Contract liabilities are cash deposits received from customers and advance billing included in accounts receivable on uncompleted contracts for which revenues have not been recognized as of the balance sheet date.

For the three months ended December 31, 2022 and 2021, contract liabilities activity is as follows:

During the three months ended December 31, 2022, the Company recognized ~~an impairment loss of $4,736,692 since the sum of expected undiscounted future cash flows is less than the carrying amount~~$3,500 of the ~~asset.~~ contract liabilities into revenue, of which $3,500 was related to the uncompleted contracts from the prior period.

The ~~impairment loss~~cost of revenue consists of ~~an impairment~~the cost of ~~intangibles~~labor, supplies and materials.

Trade receivables are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis and does not bear interest. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition.

Any charges to the allowance for doubtful accounts on accounts receivable are charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of ~~$4,695,596 recorded in connection with~~ the ~~acquisition of Vitel (see Note 3)~~allowance based on historical write-off percentages and the ~~impairment~~current status of accounts receivable. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired.

In fiscal 2022, the Company joined and made an ~~acquired drug formula~~investment in an investigator-initiated study. As part of ~~$41,096.~~that investment, the Company obtained rights/access to various retrospective biobank clinical samples for research and product development purposes. In addition, the Company received active patient clinical samples for the following disease sites: ovarian, endometrial, and head & neck cancers. These samples were tested to provide RUO (Research Use Only) results reports for research and product validation efforts. The transaction term is for 5-years, starting in September 2021. During the three months ended December 31, 2022 and 2021, the Company had spent $50,000 and $25,000 on this research and development project, which is included in general and administrative expenses on the accompanying unaudited statements of operations.

The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC ~~810-10-05-4~~815-10 - Derivative and ~~815-40.~~Hedging - Contract in Entity’s Own Equity. This accounting treatment requires that the carrying amount of any ~~embedded~~ derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment, or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.

The Company ~~recognizes revenue when persuasive evidence~~maintains its cash in banks and financial institutions that at times may exceed the federally insured limit of ~~an arrangement exists, delivery has occurred or services have been rendered,~~$250,000. As of December 31, 2022 and September 30, 2022, the ~~purchase price is fixed or determinable~~cash balances were in excess of the FDIC insured limit by $898,012 and ~~collectability is reasonably assured.~~$186,466, respectively. The Company ~~records~~has not experienced any losses in such accounts through December 31, 2022.

For the three months ended December 31, 2022, the Company generated total revenue ~~when~~of $55,295 of which 72% was from one of the ~~products have been shipped to~~Company’s customers. During the ~~customer. The~~three months ended December 31, 2021, the Company ~~reports its sales~~generated total revenue of $78,975 of which 56% and 35% were from two of the Company’s customers.

As of December 31, 2022, the Company had net of actual sales returns and the amount of reserves established for anticipated sales returns based on historical rates. The Company estimates and records a liability for potential returns and records this as a reduction of revenue in the same period the related revenue is recognized. The Company also offers cash discounts to certain customers as an incentive for prompt payment. The Company accounts for cash discounts by reducing accounts receivable ~~by the prompt pay discount amount and recognizes the discount as a reduction~~ of ~~revenue in the same period the related revenue is recognized.~~

~~Certain sales to distributors or retailers are made on a consignment basis. Revenue for consignment sales are not recognized until sell through to the final customer is established~~$48,295 of which ~~may be upon receipt~~82% was from one of ~~payment from~~ the Company’s ~~customer.~~

~~Stock-based compensation is accounted for based on~~customers. As of September 30, 2022, the ~~requirements~~Company had net accounts receivable of $32,125 of which 59% and 41% were from two of the ~~Share-Based Payment Topic~~Company’s customers, respectively.

As of December 31, 2022, the Company had deferred revenue reflected as contract liabilities of $177,050 of which ~~requires recognition in the financial statements~~73% and 21% were from two of the ~~cost~~Company’s customers. As of ~~employee~~September 30, 2022, the Company had deferred revenue reflected as contract liabilities of $156,550 of which 65% and ~~director services received in exchange for an award~~24% were from two of ~~equity instruments over~~ the ~~period~~Company’s customers.

Historically, the ~~employee or director is required~~Company relied on one vendor to perform the ~~services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement~~Company’s patient reporting and contract research (formerly called sample analysis) which is an integral part of the ~~cost of employee~~Company’s operation and ~~director services received~~revenue stream. Any disruption in ~~exchange for an award based~~this service could have a material adverse effect on the ~~grant-date fair value~~Company’s business, financial condition and results of operations. The Company discontinued using this vendor in June 2022 as the ~~award.~~patient reporting function has been moved in-house.

~~Pursuant to ASC 505-50 –~~~~“Equity-Based Payments to Non-Employees”~~~~, all share-based payments to non-employees, including grants of stock options, are recognized in~~During the consolidated financial statements as compensation expense over the service period of the consulting arrangement or until performance conditions are expected to be met. Using a Black-Scholes valuation model,three months ended December 31, 2022 and 2021, the Company ~~periodically reassessed the fair value~~incurred $0 and $113,295, respectively, or 100%, of ~~non-employee options until service conditions are met, which generally aligns with the vesting period of the options,~~its patient reporting and ~~the Company adjusts the~~contract research (formerly called sample analysis) expense ~~recognized in the consolidated financial statements accordingly.~~from one vendor.

Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing the net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock options and warrants (using the treasury stock method)., convertible notes, conversion of preferred stock, and common stock issuable. These common stock equivalents may be dilutive in the future.

~~All~~ The following potentially dilutive ~~common shares~~equity securities outstanding as of December 31, 2022 and 2021 were ~~excluded from~~not included in the computation of ~~diluted shares outstanding as they~~dilutive loss per common share because the effect would have ~~an anti-dilutive impact on the Company’s net losses and consisted of the following:~~been anti-dilutive:


					December 31,
	September 30, 2017		September 30, 2016		2022		2021
Stock warrants		23,479,438		867,870		6,862,673,594		1,075,563,017
Convertible debt		19,068,568		547,345
Stock options		4,000,000		-		1,901,410,519		-
Series C-1 preferred stock						212,431		445,301,289
Series C-2 preferred stock						-		733,542,619
Series E preferred stock						-		638,977,636
Series F preferred stock						-		319,488,818
Convertible notes						8,765,180,181		780,807,641
Total antidilutive securities excluded from computation of earnings						17,529,476,725		3,993,681,020

The Company accounts for income tax using the liability method prescribed by ASC 740 ~~“Income Taxes”.~~- Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740“Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of ~~September 30, 2017 and~~ December 31, ~~2016,~~2022 and 2021, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. ~~Tax years that remain subject to examination are the years ending on and after December 31, 2011.~~ The Company recognizes interest and penalties related to uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of ~~September 30, 2017.~~December 31, 2022 and 2021.

~~Research and development costs incurred in the development of the Company’s products are expensed as incurred.~~

The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company and its U.S. subsidiary is the U.S. dollar and the functional currency of the Company’s subsidiaries located in Mexico is the Mexican Peso (“Peso”). For the subsidiaries whose functional currencies are the Peso, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the spot exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. Additionally, transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates.

All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company did not enter into any material transactions in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

Asset and liability accounts at September 30, 2017 were translated at 18.12765 Pesos to $1.00, which was the exchange rates on the balance sheet date. Equity accounts were translated at their historical rate. The average translation rates applied to the statements of operations for the nine months ended September 30, 2017 was 18.87931 Pesos to $1.00. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate.

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

The Company accounts for its leases using the method prescribed by ASC 842 – ~~Deferral~~Lease Accounting. The Company assess whether a contract is, or contains, a lease at the inception of the ~~Effective Date~~,contract which ~~amends ASC Topic 606,~~~~Revenue~~is based on (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtains the right to substantially all the economic benefit from ~~Contracts with Customers.ASC Topic 606 was established by previously-issued ASU 2014-09, discussed below. For public business entities,~~ the ~~amendments~~use of the asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset. The Company allocates the consideration in ~~ASU 2015-14 defer~~ the ~~effective date of ASU 2014-09~~contract to ~~annual reporting periods beginning after December 15, 2017. Early adoption of ASU 2014-09 is permitted. In May 2014, FASB issued ASU 2014-09,~~~~Revenue from Contracts with Customers~~~~, which established ASC Topic 606. The new revenue recognition standard eliminates all industry-specific guidance and provides a five-step analysis of transactions~~each lease component based on its relative stand-alone price to determine ~~when and how revenue is recognized.~~the lease payments. The premise of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The amendments in this ASU may be applied retrospectively to each period presented, or as a cumulative effect adjustment as of the date of adoption. Management is currently evaluating the accounting, transition and disclosure requirements of the standard and expects to know the financial statement impact upon adoption in 2018.

On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) to amend the accounting guidance for leases. The accounting applied by a lessor is largely unchanged under ASU 2016-02. However, the standard requires lesseesCompany has elected not to recognize ~~lease~~ROU assets and lease liabilities for short-term leases classified as operating leases on the balance sheet. Lessees will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases withthat have a term of 12 months or ~~less, a lessee is permitted~~less.

Operating and financing lease ROU assets represent the right to ~~make~~use the leased asset for the lease term. Operating and financing lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most leases do not provide an ~~accounting policy election by class~~implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of ~~underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it will recognize lease~~future payments. Lease expense for ~~such leases generally~~minimum lease payments is amortized on a straight-line basis over the lease ~~term. ASU 2016-02~~term and is ~~effective for fiscal years beginning after December 15, 2018~~included in general and ~~early adoption is permitted. The Company is currently assessing~~administrative expenses in the ~~impact~~unaudited statements of ~~the guidance on its consolidated financial statements and notes to its consolidated financial statements.~~operations.

~~In July 2017, the FASB issued ASU 2017-11,~~~~Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I)~~Recent Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception.The ASU allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted classified as liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, such as warrants, an entity will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. The guidance in ASU 2017-11is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company is evaluating the impact of the revised guidance and believes that this will have a significant impact on its consolidated financial statements.Pronouncements

Management does not believe that any ~~other~~ recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the ~~accompanying consolidated~~Company’s financial statements.

NOTE 3 –~~ACQUISITION OF VITEL LABORATORIOS, S.A. de C.V.~~MARKETABLE SECURITIES

~~On March 10,~~During the fiscal year ended 2017, ~~(the “Closing Date”),~~ the Company ~~completed the acquisition~~acquired 1,000,000 shares of ~~100% of the issued and outstanding capital~~common stock of ~~Vitel Laboratorios, S.A. de C.V., a Mexican variable stock corporation~~Amarantus BioScience Holdings, Inc. (“~~Vitel”~~AMBS”) from its shareholders Manuel Cosme Odabachian and Carlos Fernando Alaman Volnie (collectively, the “Vitel Stockholders”) pursuant to the terms and conditions of a Contribution Agreement to the Property of Trust F/2868 entered into among the Company and the Vitel Stockholders on the Closing Date (the “Contribution Agreement”). Vitel is a revenue-stage Mexico-based pharmaceutical company that develops and commercializes specialty drugs in MALA. The Company acquired Vitel for the purpose of commercializing the Company’s PROSCAVAX vaccine technology and cancer technologies in MALA and to utilize Vitel’s distribution network and customer and industry relationships.

Pursuant to the terms of the Contribution Agreement, the Company issued 61,158,013 shares of its common stock and 5,000,000 shares of Series B preferred stock to Banco Actinver, S.A., in its capacity as Trustee (“Banco Actinver”) of the Irrevocable Management Trust Agreement Trust No. 2868 (the “Trust Agreement”) for the benefit of the Vitel Stockholders in exchange for 100% of the issued and outstanding capital stock of Vitel (the “Vitel Shares”). The Common Stock and Series B Preferred will be held by Trustee for the benefit of the Vitel Stockholders as provided for in the Trust Agreement and 98% of the Vitel Shares are held by Banco Actinver for the benefit of the Company as provided for in the Trust Agreement and 2% of the Vitel Shares were transferred to the Company. Vitel became a wholly owned subsidiary of the Company as of the Closing Date as the Company has full control of the Vitel Shares through the Trust.

In addition, the Company issued 2,892,000 shares of Series B Preferred to Jonathan F. Head, Ph. D, the Company’s Chief Executive Officer and a member of the Board of Directors of the Company (the “Board of Directors”) as provided for in the Contribution Agreement. The Series B preferred stock issued to Dr. Head and were determined to have nominal value of $289 or $.0001 per shares and was recorded as compensation expense.

To induce the Vitel Stockholders to enter into the Contribution Agreement and as a condition to close the transactions set forth in that agreement, the Company, the Vitel Stockholders, Dr. Head and Andrew A. Kucharchuk, the Company’s President, Chief Financial Officer and a Director also entered into the following agreements as of the Closing Date or perform the following actions (i) a Stockholder’s Agreement among the Company, Dr. Head, Mr. Kucharchuk, Mr. Cosme and Mr. Alaman dated as of the Closing Date (the “Stockholders’ Agreement”); (ii) the Trust Agreement; (iii) the Company, Vitel and the Vitel Stockholders entered into employment agreements with Messrs. Cosme and Alaman; (iv) the Company and Dr. Head and Mr. Kucharchuk entered into amendments to the employment agreements with, and stock option awards to, Dr. Head and Mr. Kucharchuk; (v) the Company, Dr. Head, Mr. Kucharchuk and the Vitel Stockholders agreed to consent to an amendment to the Company’s Articles of Incorporation and bylaws; (vi) and to elect Mr. Cosme, Mr. Alaman, Dr. Head and Mr. Kucharchuk as directors of Vitel and such directors to elect Mr. Cosme, Mr. Alaman, Dr. Head and Mr. Kucharchuk as officers of Vitel.

The Vitel Stockholders and the Company established a trust pursuant to the Trust Agreement described below. Mr. Cosme and Mr. Alaman each contributed, assigned and transferred to the Company ownership of, and title over, one share of the capital stock of Vitel (the “Vitel Shares”) and Mr. Cosme and Mr. Alaman contributed, assigned and transferred to Banco Actinver (as defined in the Trust Agreement”) ownership of, and title over, the remaining 98 Vitel Shares for the benefit of the Company pursuant to the terms and conditions of the Trust Agreement. The Company contributed, assigned and transferred to Banco Actinver ownership of, and title over, 61,158,013 newly-issued shares of Common Stock and 5,000,000 newly-issued shares of Series B Preferred Stock with 100 votes per share (collectively, the “OBM Shares”), for the benefit of Mr. Cosme and Mr. Alaman pursuant to the terms and conditions of the Trust Agreement. The OBM Shares held by the Trust have not been and will not be registered under the Securities Act of 1933, as amended, (“Securities Act”) and are restricted securities under the Securities Act and the rules and regulations promulgated thereunder and are subject to the restrictions on transfer contained in Article 4 of the Shareholders’ Agreement.

Corporate Rights. The corporate rights resulting from the Vitel Shares contributed to the Trust will be exercised by Banco Actinver pursuant to the written instructions it receives from the Company. For such purposes, and pursuant to the bylaws of Vitel, the Company shall have the authority to instruct Banco Actinver regarding exercising any corporate rights it may be entitled to in its capacity as the majority Vitel shareholder.

~~Composition of the Board of Directors.~~ The Stockholders’ Agreement permits the Vitel Stockholders to appoint one member to the Board of Directors, one designated by Dr. Head and Mr. Kucharchuk (the “Management Designee”), and two independent directors shall be designated jointly by Dr. Head and Mr. Kucharchuk (the “Management Stockholders”) on the one hand, and the Vitel Stockholders, on the other, and the Management Stockholders or the Management Designee and the Vitel Stockholders or the Vitel Designee shall jointly appoint, as soon as practicable, an independent fifth member of the Board of Directors.

~~Board of Directors Resolutions.~~ ~~The Stockholders’ Agreement requires the Board of Directors to adopt any and all resolutions~~ with a vote from a majority of its members, provided that for any “Major Decision” as defined in the Stockholders’ Agreement, either the Vitel Designee or the Management Designee shall vote in favor of adopting the corresponding resolution. In the event of a deadlock amongst the members of the Vitel Board of Directors, the Board of Directors shall cast the deciding vote to resolve the deadlock amongst the board members of Vitel with a vote from a majority of its members.

~~Restrictions on Transfer.~~Generally, the Stockholders may not at any time, except as discussed below, transfer their respective Company Securities (x) to any of their Affiliates, their spouse, children, grandchildren, parents, sisters, brothers, nieces, nephews or any other relative within the second degree of kindred or a trust or other entity under a Stockholder’s control (the “~~Permitted Transferees“), or (y) with the prior consent of the other Stockholders which are also a party hereto, or (z) as otherwise permitted under the Stockholders’ Agreement (each, a “Permitted Transfer~~ “), in the understanding that (1) each Management Stockholder will be considered a Permitted Transferee with respect to each other and each Vitel Stockholder will be considered a Permitted Transferee with respect to each other, (2) transfers by the Stockholders that are a party hereto resulting from their death shall be considered a Permitted Transfer, and (3) any Stockholder that is a party hereto may act individually in regards to the rights provided for in the Stockholders’ Agreement.

~~Right of First Refusal~~. In the event a Stockholder that is a party to the Stockholders’ Agreement wishes to transfer its Company Securities (other than a transfer which is part of an acquisition or strategic transaction approved by the directors of the Company as a Major Decision), the other non-transferring Stockholders that are also a party to the Stockholders’ Agreement shall have the irrevocable right of first refusal to purchase that shares of the selling shareholder.

~~Right of Co-Sale (Tag Along)~~. In the event that any stockholder who is a party to the Stockholders’ Agreement or group of such stockholders intends to accept an offer (either solicited or unsolicited) from any third party to acquire or otherwise transfer Company Securities (as defined in the Stockholders’ Agreement), representing at least 20% of the outstanding Company Securities, on a fully diluted basis, the selling stockholder shall give an offer notice in writing to the other stockholders of the Company who are a party to the Stockholders’ Agreement, with a copy to the Company, containing the terms and conditions of such offer received from the interested third party. Each such stockholder shall have the right to participate in such offer by selling the pro rata proportion of its Company Securities pursuant to such offer to acquire or otherwise Transfer Company Securities (as defined in the Stockholders’ Agreement).

~~Drag Along~~. In the event a stockholder who is a party to the Stockholders’ Agreement or group of such stockholders representing at least 32% (thirty two per cent) of the outstanding Company Securities, on a fully diluted basis, intends to accept an offer from any third party to acquire or otherwise Transfer Company Securities, representing at least 50% of the outstanding Company Securities, on a fully diluted basis, and the transaction is approved by the Board of Directors as a Major Decision, then each such stockholder shall be obligated to sell its Company Securities pursuant to the offer to purchase. In case the drag along provision included herein is enforced, all the stockholders participating in such sale shall receive the same terms and conditions of sale based on their respective holdings of Company Securities and shall otherwise be treated equally based on such ownership interest.

~~Termination~~. The Stockholders’ Agreement terminates upon the earlier of the following: (i) three years as of the Closing Date; (ii) in connection with any Shareholder, whenever such Shareholder directly or indirectly owns less than 5% of the fully diluted shares of the Company; or (iii) upon the consummation of a Liquidation Event (as defined in the Stockholders’ Agreement).

Effective as of March 10, 2017, Mr. Cosme, Mr. Alaman and the Company entered into the Irrevocable Management Trust Agreement Number F/2868 between Mr. Cosme, Mr. Alaman, the Company and Banco Actinver (the “Trust Agreement”) for the purpose of establishing a trust to hold the OBM Shares and 98 shares of Vitel’s capital stock which were transferred to Trustee pursuant to the Trust Agreement, in addition to other property the beneficiaries may elect to contribute to the trust. The trust structure of this acquisition transaction was established in order to provide certain income tax benefits to the seller pursuant to Mexican tax law.

~~In connection with the acquisition, the Company issued 61,158,013 unregistered shares of its common stock valued at $4,586,851, based on the acquisition-date~~ fair value of ~~our~~$40,980. The AMBS common stock is recorded as marketable securities in the accompanying balance sheets. Its fair value is adjusted every reporting period and the change in fair value is recorded in the statements of ~~$.075 per share based~~operations as unrealized gain or (loss) on ~~recent sales~~marketable securities. During the three months ended December 31, 2022 and 2021, the Company recorded $(2,000) and $5,400 of ~~the Company’s common stock pursuant to unit subscription agreements~~unrealized (loss) gain on marketable securities, respectively. As of December 31, 2022 and ~~5,000,000 shares of Series B preferred stock which primarily gives the holder voting rights and were determined to have nominal value of $500.~~

The fair value of the assets acquired and liabilities assumed were based on management estimates of the fair values on March 10, 2017. Based upon the purchase price allocation, the following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:

The assets acquired and liabilities assumed are recorded at their estimated fair value on the acquisition date with subsequent changes recognized in earnings or loss. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the business combination date. As a result, during the purchase price measurement period, which may be up to one year from the business acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. After the purchase price measurement period, the Company will record adjustments to assets acquired or liabilities assumed in operating expenses in the period in which the adjustments were determined.

~~The purchase price exceeded~~2022, the fair value of ~~the net assets acquired by approximately $4,695,596, which~~these shares was recorded as goodwill or other intangible assets pending the Company analysis of the fair values. The fair value of intangible assets may be based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired$1,700 and liabilities assumed. Any goodwill recorded is not expected to be deductible for U.S. income tax purposes. Based on the Company’s review of long-lived assets for impairment, the Company recognized an impairment loss of $4,695,596 since the sum of expected undiscounted future cash flows is less than the carrying amount of the goodwill.$3,700, respectively.

The Company shall record acquisition and transaction related expenses in the period in which they are incurred. During the nine months ended September 30, 2017, acquisition and transaction related expenses primarily consisted of legal fees of approximately $104,000.

On December 31, 2022 and September 30, 2022, accounts receivable consisted of the following:

For the three months ended December 31, 2022 and 2021, bad debt expense amounted to $0.

Property and equipment are recorded at cost. Once placed in service, they are depreciated on the straight-line method over their estimated useful lives. Leasehold improvements are accreted over the shorter of the estimated economic life or related lease terms. Property and equipment consist of the following:

For the three months ended December 31, 2022 and 2021, depreciation expense related to property and equipment amounted to $38,887 and $35,965, respectively.

Leased equipment was not included in the table above as it was accounted for in accordance with ASU 842 – Leases. These leases are discussed in Note 7 under financing lease right-of-use (“ROU”) assets and financing lease liabilities.

On December 31, 2022 and September 30, 2022, convertible notes payable (third parties and related parties) consisted of the following:

On May 12, 2021, the Company entered into a ~~$100,000 revolving promissory note (the “Revolving Note”~~Securities Purchase Agreement (“May 2021 SPA”) with ~~Regions Bank (the “Lender”~~a related party, who is an affiliate stockholder (“May 2021 Investor”) to purchase a convertible note (“May 2021 Note”) and accompanying 63,897,764 warrants (“May 2021 Warrants”) for an aggregate investment amount of $1,000,000 (see Note 8). The ~~unpaid~~May 2021 Note had a principal ~~balance~~value of ~~the Revolving Note is payable on demand~~$1,000,000 and ~~any unpaid principal and~~bore an interest ~~is payable due not later than October 27, 2017, is secured by deposits located at the Lender, and bears interest computed at a variable~~ rate of ~~interest which is equal~~8% per annum and was to ~~the Lender’s prime rate plus 1.7% (5.95% and 5.45% at September 30, 2017 and December 31, 2016, respectively)~~mature on May 12, 2026. The Company ~~will pay to Lender a late charge~~received the proceeds in three tranches with the first tranche of ~~5.0%~~$333,334 received in May 2021, the second tranche of ~~any monthly payment not~~$333,333 received ~~by Lender within 10 calendar days after its due date.~~in June 2021 and the third tranche of $333,333 received in July 2021. The ~~Company may,~~May 2021 Note was convertible at any time or from time to time, prepay the Revolving Note in whole or in part without penalty. As of the date of this report, the Lender has not renewed the Revolving Note and the Company is currently in default. Upon default, the interest increased by 2.0%.

At September 30, 2017 and December 31, 2016, the Company had $99,208 and $99,741, respectively, in borrowings outstanding under the Revolving Note. The weighted average interest rate during the nine months ended September 30, 2017 was approximately 5.76%.

~~On November 23, 2016, the Company entered~~ into and closed on the transaction set forth in an Amended and Restated Securities Purchase Agreements (the “Securities Purchase Agreements”) it entered into with three institutional investors (the “Purchasers”) for the sale of the Company’s convertible notes and warrants. Pursuant to the terms provided for in the Securities Purchase Agreement, the Company issued upon closing to the Purchasers for an aggregate subscription amount of $350,000: (i) 14.29% Original Issue Discount 10% Senior Secured Convertible Notes (the “November 2016 Notes”); and (ii) warrants (the “Warrants”) to purchase 2,333,334 shares of the Company’s common stock at ~~an initial~~a conversion price equal to $0.00313 per share for any amount of principal and accrued interest remaining outstanding (subject to adjustment). The May 2021 Note and May 2021 Warrants included a down-round provision under which the conversion price and exercise price ~~of $0.175 (subject to adjustments under certain conditions as defined in the Warrants) (see below for reduction of warrant exercise price) which~~ are ~~exercisable for a period of five years from November 23,2016. The aggregate principal amount of the November 2016 Notes was $350,000 and~~reduced if the Company ~~received $300,000 after giving effect to~~sells or issues any securities including options, convertible securities, with the ~~original issue discount~~exception of ~~$50,000. The November 2016 Notes bear interest at a rate equal to 10% per annum (which interest rate increased to 24% per annum upon the occurrence of an Event of Default~~exempt issuance (as defined in the ~~November 2016 Notes))~~agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the May 2021 Note and May 2021 Warrants. As of September 30, 2022, the May 2021 Note had an outstanding principal balance of $1,000,000 and accrued interest of $20,164 and is included in the accompanying balance sheet at $267,521 as a long-term convertible note payable – related party, net of discount in the amount of $732,479 (see Note 8). The May 2021 Warrants had an exercise price of $0.00313 per share (subject to adjustment) until May 12, 2026 and was exercisable for cash at any time. The May 2021 Warrants were valued at $984,200 using the relative fair value method which was recorded as a debt discount which was being amortized over the life of the May 2021 Note. In addition, the May 2021 Note had a ~~maturity date~~beneficial conversion feature (“BCF”) in the amount of ~~July 23, 2017~~$15,800 which was recorded as a debt discount which was being amortized over the life of the May 2021 Note. The debt discount totaled $1,000,000 which was being amortized over the life of the May 2021 Notes. On November 29, 2022, the May 2021 Note was exchanged for a new convertible debenture (see below).

On November 1, 2021, the Company entered into a Securities Purchase Agreement (“First November 2021 SPA”) with a related party, who is an affiliate stockholder (“First November 2021 Investor”), to purchase three convertible notes (collectively as “First November 2021 Notes”) and ~~were convertible (principal,~~three accompanying warrants (collectively as “First November 2021 Warrants”), for an aggregate investment amount of $1,000,000. The first note issued on November 1, 2021, had a principal balance of $334,000 and ~~interest)~~accompanying warrants to purchase up to 18,251,367 shares of common stock. The second note issued on December 1, 2021, had a principal balance of $333,000 and accompanying warrants to purchase up to 18,196,722 shares of common stock. The third note issued on January 1, 2022, had a principal balance of $333,000 and accompanying warrants to purchase up to 18,196,722 shares of common stock. The Company received $1,000,000 in aggregate proceeds from the First November 2021 Notes. The First November 2021 Notes bore interest rate of 8% per annum and was to mature on November 1, 2026. The First November 2021 Warrants are exercisable at any time ~~after~~and expire on November 1, 2026. The First November 2021 Warrants were initially valued at $990,048 using the ~~issuance date~~relative fair value method and were recorded as debt discount which is being amortized over the life of the First November ~~2016~~2021 Notes. The First November 2021 Notes and First November 2021 Warrants are convertible and exercisable, respectively, into shares of the Company’s ~~Common Stock~~common stock at ~~an initial conversion~~a price equal to ~~$0.15~~$0.00366 per share (subject to ~~adjustment as provided~~adjustment). The First November 2021 Notes and First November 2021 Warrants included a down-round provision under which the conversion price and exercise price were reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the ~~Note)~~agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the First November 2021 Notes and First November 2021 Warrants. On January 26, 2022, a notice and request for consent regarding a change in offering terms was sent by the Company to the First November 2021 Investor. Upon the approval of the First November 2021 Investor, the Company modified the terms of the First November 2021 SPA which increased the warrants issuable from 20% to 100% of the common stock issuable upon conversion of the notes purchased. As a result, the First November 2021 Investor received additional cashless-exercisable warrants equal to 80% of the common stock issuable upon conversion of the First November 2021 Notes. The Company issued additional warrants to purchase up to 218,579,234 shares of common stock to the First November 2021 Investor which increased the total relative fair value of all warrants in total by $34,620 recorded as debt discount which is being amortized over the life of the First November 2021 Notes (see ~~below~~Note 8 and 9). The modification of the First November 2021 SPA did not meet the requirements of a debt extinguishment under ASC 470-50 - Debt Modifications and Exchanges; however it represented a substantial modification whereby the First November 2021 Investor received a substantial amount of additional warrants for ~~reduction~~the same principal amount of investment hence it was accounted for, ~~reduction~~in substance, as a debt modification ASC 470-50 and no gain or losses was recognized. As of ~~conversion price)~~September 30, 2022, the First November 2021 Notes had an outstanding principal of $1,000,000 and accrued interest of $20,164 and are included in the accompanying balance sheet at $140,093 as a long-term convertible note payable – related party, net of discount in the amount of $859,907 (see Note 8) as of September 30, 2022. On November 29, 2022, the First November 2021 Notes were exchanged for a new convertible debenture (see below).

On April 5, 2022, the Company entered into a Securities Purchase Agreement (“First April 2022 SPA”) with a related party, Matthew Schwartz, who is a member of the board of directors (“Investor”), ~~provided, however, that if an event~~to purchase a convertible note with a principal balance of ~~default has occurred, regardless~~$100,000 (“First April 2022 Note”) with accompanying warrants to purchase 4,201,681 shares of ~~whether such Event~~common stock (“First April 2022 Warrants”). The Company received net proceeds of ~~Default has been cured or remains ongoing,~~$100,000 on March 24, 2022. The First April 2022 Warrants were valued at $89,815 using the ~~November 2016 Notes shall be~~relative fair value method and were recorded as debt discount which is being amortized over the life of the First April 2022 Note. The First April 2022 Warrants are exercisable at any time and expire on April 1, 2027. The First April 2022 Note bore interest rate of 8% per annum and was to mature on April 1, 2027. The First April 2022 Note and First April 2022 Warrants were convertible and exercisable, respectively, into shares of the Company’s common stock at a price equal to $0.00476 per share (subject to adjustment). The First April 2022 Note and First April 2022 Warrants included a down-round provision under which the conversion price and exercise price are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the First April 2022 Note and First April 2022 Warrants. For so long as the First April 2022 Warrants remains outstanding and until the listing by the Company or the trading of the common stock on a Qualified National Exchange (as defined in the agreement); (i) if the Company issues warrants to investors in an offering of common stock or of any equity linked security (each a “Subsequent Offering”), and such warrants equal more than 20% warrant coverage, then a number of additional shares will be added to the First April 2022 Warrants such that the First April 2022 Warrants shall equal the same percentage of the warrant coverage offered to the investors in the Subsequent Offering and; (ii) if the Company issues warrants in a Subsequent Offering which may be exercised by means of a cashless exercises, then the First April 2022 Warrants shall be exercisable ~~at 60%~~by the same cashless exercise feature of the ~~lowest closing price during~~warrants issued in the ~~prior twenty trading days~~Subsequent Offering. As of September 30, 2022, the ~~Common Stock~~First April 2022 Note had an outstanding principal balance of $100,000 and accrued interest of $3,901 and is reflected in the accompanying balance sheet at $18,959 as ~~reported on~~a long-term convertible note payable – related party, net of discount in the ~~OTCQB or other principal trading market (the “Default Conversion Price”). Due to non-payment~~amount of $81,041 (see Note 8) as of September 30, 2022. On November 29, 2022, the ~~November 2016 Notes, an event of default occurred and accordingly, the November 2016 Notes and Warrants are~~First April 2022 Note was exchanged for a new convertible ~~and exercisable based on the default terms.~~debenture (see below).

On May ~~23, 2017, in connection with the November 2016 Notes,~~9, 2022, the Company entered into ~~forbearance agreements (the “Forbearance Agreements”~~a Securities Purchase Agreement (“May 2022 SPA”) with a related party, who is an affiliate stockholder (“May 2022 Investor”), to purchase four convertible notes for an aggregate investment amount of $1,000,000 (collectively as “May 2022 Notes”) and accompanying warrants to purchase shares of common stock equal to 20% of the ~~Purchases whereby~~number of the ~~Purchasers waived~~total shares of common stock issuable upon the conversion of the May 2022 Notes (collectively as “May 2022 Warrants”). The first note issued on May 9, 2022, had a principal balance of $250,000 and accompanying warrants to purchase up to 10,504,202 shares of common stock. The second note issued on May 24, 2022, had a principal balance of $250,000 and accompanying warrants to purchase up to 10,504,202 shares of common stock. The third note issued on June 10, 2022, had a principal balance of $250,000 and accompanying warrants to purchase up to 10,504,202 shares of common stock. The fourth note issued on July 1, 2022, had a principal balance of $250,000 and accompanying warrants to purchase up to 10,504,202 shares of common stock. The Company received $1,000,000 in aggregate proceeds from the May 2022 Notes. The May 2022 Notes bore an interest rate of 8% per annum and were to mature on April 1, 2027. The May 2022 Warrants are exercisable at any ~~event~~time and expire on April 1, 2027. The May 2022 Warrants were valued at $178,449 using the relative fair value method and were recorded as debt discount which is being amortized over the life of ~~default, as~~the May 2022 Notes. The May 2022 Notes and May 2022 Warrants were convertible and exercisable, respectively, into shares of the Company’s common stock at a price equal to $0.00476 per share (subject to adjustment). The May 2022 Notes and May 2022 Warrants included a down-round provision under which the conversion price and exercise price are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the ~~November 2016 Notes. The Company failed to make~~agreements), or amended outstanding securities, at a ~~payment on May 23, 2017 to each~~lower conversion or exercise price than that of the ~~Holders~~May 2022 Notes and May 2022 Warrants. For so long as ~~required pursuant~~the May 2022 Warrants remains outstanding and until the listing by the Company or the trading of the common stock on a Qualified National Exchange (as defined in the agreement); (i) if the Company issues warrants to investors in a Subsequent Offering, and such warrants equal more than 20% warrant coverage, then a number of additional shares will be added to the ~~November 2016 Notes~~May 2022 Warrants such that the May 2022 Warrants shall equal the same percentage of the warrant coverage offered to the investors in the Subsequent Offering and; (ii) if the Company issues warrants in a Subsequent Offering which ~~resulted~~may be exercised by means of a cashless exercises, then the May 2022 Warrants shall be exercisable by the same cashless exercise feature of the warrants issued in ~~an event of default under such Notes.~~the Subsequent Offering. As of ~~result~~September 30, 2022, the May 2022 Notes had an aggregate outstanding principal balance of ~~the event of default, the aggregate amount owing under the November 2016 Notes as of May 23, 2017 was increased to $509,135 with such amount including a mandatory default amount of $141,299~~$1,000,000 and accrued interest of ~~$17,836 resulting~~$20,110 and are included in ~~debt settlement expense~~the accompanying balance sheet at $834,803 as a long-term convertible note payable – related party, net of ~~$141,299. The Forbearance~~discount in the amount of $165,197 (see Note 8) as of September 30, 2022. On November 29, 2022, the May 2022 Note was exchanged for a new convertible debenture (see below).

On June 15, 2022, the Company entered into a Securities Purchase Agreement ~~also provides for the Holders to forbear their right to demand an immediate cash payment~~(“June 2022 SPA”) with a related party, Danica Holley, who is a member of the board of directors (“Investor”), to purchase a convertible note with principal ~~amount due plus accrued~~of $50,000 (“June 2022 Note”) with accompanying warrants to purchase 2,100,840 shares of common stock (“June 2022 Warrants”). The Company received net proceeds of $50,000 on June 15, 2022. The June 2022 Warrants were valued at $5,924 using the relative fair value method and were recorded as debt discount which is being amortized over the life of the June 2022 Note. The June 2022 Warrants are exercisable at any time and expire on April 1, 2027. The June 2022 Note bore interest ~~as a result~~rate of 8% per annum and was to mature on April 1, 2027. The June 2022 Note and June 2022 Warrants were convertible and exercisable, respectively, into shares of the Company’s ~~failure~~common stock at a price equal to ~~satisfy its payment obligations~~$0.00476 per share (subject to ~~the Holder on May 23, 2017 so long as the Company complies with its other obligations under the November 2016 Notes~~adjustment). The June 2022 Note and the other transaction documents. The Forbearance Agreements did not waive the default interest rate of 24%. In consideration therefore, and as currently set forth in the November 2016 Notes, the Holders shall be entitled to convert such notes from time to time at their discretion in accordance with the terms of the November 2016 Notes and the November 2016 Notes shall not be subject to repayment unless agreed to by the Holder of such Note. In connection with the Forbearance Agreement, the Company increased the principal balance of the November 2016 Notes by $159,135, reduced accrued interest payable by $17,836, and recorded debt settlement expense of $141,299.

~~The November 2016 Notes and related~~June 2022 Warrants include a down-round provision under which the conversion price and exercise price ~~could be affected by future equity offerings undertaken~~are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the June 2022 Note and June 2022 Warrants. For so long as the June 2022 Warrants remains outstanding and until the listing by the Company or ~~contain terms that are not fixed monetary amounts at inception.~~the trading of the common stock on a Qualified National Exchange (as defined in the agreement); (i) if the Company issues warrants to investors in a Subsequent Offering, and such warrants equal more than 20% warrant coverage, then a number of additional shares will be added to the ~~date~~June 2022 Warrants such that the June 2022 Warrants shall equal the same percentage of ~~these November 2016 Notes,~~the warrant coverage offered to the investors in the Subsequent Offering and; (ii) if the Company ~~sold stock at~~issues warrants in a ~~share price~~Subsequent Offering which may be exercised by means of ~~$0.075 per share and $0.05 per share. Accordingly, pursuant to these ratchet provisions,~~a cashless exercises, then the ~~conversion price on~~June 2022 Warrants shall be exercisable by the ~~November 2016 Notes were lowered to $0.075 per share and then to $0.05 per share and the~~same cashless exercise ~~price~~feature of the ~~November 2016 Warrants was lowered to $0.03. Additionally,~~warrants issued in the ~~total number~~Subsequent Offering. As of ~~November 2016 Warrants were increased on~~September 30, 2022, the June 2022 Note had an outstanding principal balance of $50,000 and accrued interest of $1,173. The June 2022 Note are included in the accompanying balance sheet at $44,438 as a ~~full ratchet basis by an aggregate~~long-term convertible note payable – related party, net of discount in the amount of ~~11,277,780~~$5,562 (see Note 8)~~. In~~ as of September ~~2017,~~30, 2022. On November 29, 2022, the ~~Company issued 9,547,087 shares of its common stock upon the cashless exercise of 9,074,076 warrants~~June 2022 Note was exchanged for a new convertible debenture (see ~~Note 8)~~below).

On ~~June 2, 2017,~~July 29, 2022, the Company entered into a Demand Promissory Note Agreement with Jeffrey Busch who serves as a member of the Board of Directors and a related party, for a principal balance of $125,000, and on September 2,^nd 2022, the Company entered into a second Demand Promissory Note Agreement with Jeffrey Busch for a principal balance of $150,000 (collectively referred to as the “Busch Notes”). The Busch Notes bore an annual interest rate of 8% and were payable on demand. The outstanding principal and accrued interest on the Busch Notes were contingently convertible, in full, at the option of the lender, into the same security issued by the Company in its next private placement of equity or equity backed securities at any time after the inception date. As of September 30, 2022, the Busch Notes had an outstanding principal balance of $275,000 and accrued interest of $2,683 and are included in the accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, the Busch Notes were exchanged for a new convertible debenture (see below).

On August 11, 2022, the Company entered into a Demand Promissory Note Agreement with a related party, who is an affiliate stockholder, for a principal balance of $375,000. The note bore annual interest rate of 8% and was payable on demand. The outstanding principal and accrued interest of the note was contingently convertible, in full, at the option of the lender, into the same security issued by the Company in its next private placement of equity or equity backed securities at any time after the inception date. As of September 30, 2022, this note had an outstanding principal balance of $375,000 and accrued interest of $4,110 and is included in the accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, this note was exchanged for a new convertible debenture (see below).

On September 2, 2022, the Company entered into a Demand Promissory Note Agreement with a related party, who is an affiliate stockholder, for a principal balance of $350,000. The note bore an annual interest rate of 8% and was payable on demand. The outstanding principal and accrued interest of the note was contingently convertible, in full, at the option of the lender, into the same security issued by the Company in its next private placement of equity or equity backed securities at any time after the inception date. As of September 30, 2022, this note had an outstanding principal balance of $350,000 and accrued interest of $2,148 and is included in the accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, this note was exchanged for a new convertible debenture (see below).

On November 1, 2022, the Company entered into a Demand Promissory Note Agreements with two related parties, who are affiliate stockholders, for a principal balance of $120,000. The notes bore an annual interest rate of 8% and were payable on demand. The outstanding principal and accrued interest of the notes was contingently convertible, in full, at the option of the lender, into the same security issued by the Company in its next private placement of equity or equity backed securities at any time after the inception date. In December 2022, these short-term loans were repaid.

On November 29, 2022, in connection with the Share Exchange Agreements and New Convertible Debt discussed below, the May 2021 Warrants, First November 2021 Warrants, First April 2022 Warrants, May 2022 Warrants, and June 2022 Warrants, aggregating 385,441,138 warrants, were amended to reduce the exercise price to $0.003 per share. Additionally, 63,897,764 warrants issued in connection with Series F preferred stock were amended to reduce the exercise price to $0.003 per share. In conjunction with the price reduction, the price protection feature for all these warrants was eliminated. All other terms of the warrants remained the same. As a result of the November 29, 2022 amendment to the exercise price, the Company calculated the difference between the warrants fair values on November 29, 2022, the date of the amendment, using the then current exercise price ranging from $0.00366 to $0.00476 and the new exercise price of $0.003 and determined that the difference was insignificant.

Share Exchange Agreements and New Related Party Convertible Debentures and Warrants dated November 29, 2022

On November 29, 2022, the Company consummated the initial closing (the “Initial Closing”) of a private placement offering (the “Offering”) pursuant to the terms and conditions of that certain Securities Purchase Agreement, dated as of November 29, 2022 (the “2^nd ~~Securities Purchase~~“Purchase Agreement”) ~~with the Purchasers for the sale of the Company’s convertible notes~~, by and ~~warrants. Pursuant to the terms provided for in the 2~~^nd ~~Securities Purchase Agreement,~~among the Company, ~~issued upon closing to~~certain related party accredited investors (the “Related Party Purchasers”) and Cavalry Fund I Management LLC, a Delaware limited liability company, in its capacity as collateral agent (the “Collateral Agent”). At the Initial Closing, the Company sold the related party Purchasers ~~for an aggregate subscription amount of $233,345:~~ (i) ~~14.29%~~10% Original Issue Discount ~~10%~~ Senior Secured Convertible ~~Notes~~Debentures (the ~~“June 2017 Notes”~~“New Related Party Debentures”); in an aggregate principal amount of $550,000 and (ii) warrants (the ~~“June 2017~~“New Related Party Warrants”) to purchase ~~1,555,633~~up to 157,142,857 shares of ~~the Company’s~~ common stock ~~par value $0.001 per share at an initial exercise price~~ of ~~$0.175 (subject~~the Company (the “Common Stock”), subject to adjustments ~~under certain conditions as defined~~provided by the Warrants, which represents 100% warrant coverage. The Company received a total of $412,092 in net proceeds at the Initial Offering from the Related Party Purchasers, net of the Original Issue Discount of $50,000, commissions of $58,200 and other offering costs of $29,708.

On November 29, 2022, the Company entered into Securities Exchange Agreements with the above related party investors, whereby the May 2021 Note, the First November 2021 Notes, the First April 2022 Note, the May 2022 Notes, the June ~~2017 Warrants)~~2022 Note, the Busch Notes, the August 11, 2022 Demand Promissory Note, and ~~exercisable~~the September 2, 2022 Demand Promissory Note with an aggregate principal amount of $4,150,000 (the “Exchanged Related Party Notes”) and accrued interest payable of $120,750 were exchanged for ~~five years after~~New Related Party Debentures. Additionally, on November 29, 2022, in order to induce the ~~issuance date.~~

~~The~~related party investors to exchange the respective convertible notes into the Related Party Debentures, the aggregate principal amount of the ~~June 2017~~Exchanged Related Party Notes ~~is $233,345~~ and accrued interest payable was increased by 15% (and the August 11, 2022 and September 2, 2022 Demand Promissory Notes were issued with 10% OID), or $589,505, for new Related Party Debentures with an aggregate principal amount of $4,860,255.

On November 29, 2022, the Company ~~received $200,000 after giving effect~~entered into Securities Exchange Agreements with related party preferred stockholders, whereby related party holders of 1,000 shares of Series E preferred stock with a stated value of $2,000,000 and accrued dividends payable of $66,630, and related party holders of 500 shares of Series F preferred stock with a stated value of $1,000,000 and accrued dividends payable of $33,315 were exchanged for the New Related Party Debentures. Additionally, on November 29, 2022, in order to induce the ~~original issue discount~~related party preferred stockholders to exchange their respective preferred shares into the New Related Party Debentures, the aggregate stated value and accrued dividends payable were increased by 15%, or $464,992, for new Related Party Debentures with an aggregate principal amount of ~~$33,345.~~ $3,564,937.

The ~~June 2017 Notes~~November 29, 2022 New Related Party Debentures mature on November 29, 2023, subject to a three-month extension at the sole discretion of the Company. The New Related Party Debentures bear interest at ~~a rate equal to~~ 10% per annum ~~(which interest rate is increased to 24% per annum~~payable upon ~~the occurrence of an Event of Default (as defined in the June 2017 Notes)), have a maturity date of February 2, 2018 and~~conversion or maturity. The New Related Party Debentures are convertible ~~(principal, and interest) at any time after the issuance date of issuance~~ into shares of the Company’s common stock at ~~an initial~~any time after the maturity date and prior to Mandatory Conversion (as defined below) at the conversion price equal to ~~$0.15~~the lesser of: (i) $0.003 per share ~~(subject to adjustment as provided~~and (ii) 70% of the average of the VWAP (as defined in the ~~June 2017 Notes), provided, however, that~~Debentures) (or 50% of the average of such VWAP if an event of default has occurred ~~regardless~~and has not been cured) of the Common Stock during the ten Trading Day (as defined in the Debentures) period immediately prior to the applicable conversion date. The New Related Party Debentures are subject to mandatory conversion (“Mandatory Conversion”) in the event the Company closes a registered public offering of its Common Stock and receives gross proceeds of not less than $5,000,000, with such offering resulting in the listing for trading of the Common Stock on a national exchange (“Qualified Offering”). The conversion price per share of Common Stock in the case of a Mandatory Conversion shall be the lesser of (i) $0.003 per share and (ii) 70% of the offering price per share in the Qualified Offering (the “Qualified Offering Price”). Alternatively, upon a Mandatory Conversion, the holders of the Debentures may elect to exchange their Debentures for newly issued convertible preferred securities at a price per share equal to the Qualified Offering Price or the five-day VWAP of the Common Stock prior to the date that is 181 days after the closing of the Qualified Offering.

Notwithstanding the preceding, holders of New Related Party Debentures shall have the right to require satisfaction of up to 40% of all amounts outstanding under the Debentures, in cash, at the time of a Qualified Financing. Investors that are exchanging securityholders shall have the right to require satisfaction of up to 10% of all amounts outstanding under the Debentures, in cash, at the time of a Qualified Financing. The New Related Party Debentures also contain certain price protection provisions providing for adjustment of the number of shares of Common Stock issuable upon conversion of the Debentures in case of certain future dilutive events or stock-splits and dividends.

The Company’s obligations under the New Related Party Debentures are secured by a first priority lien on all of the assets of the Company pursuant to that certain Security Agreement, dated November 29, 2022 (the “Security Agreement”) by and among the Company, the Debenture holders and the Collateral Agent.

The Purchase Agreement contains customary representations, warranties, and covenants of the Company, including, among other things and subject to certain exceptions, covenants that restrict the ability of the Company without the prior written consent of the Debenture holders, to incur additional indebtedness, and repay outstanding indebtedness, create or permit liens on assets, redeem its Common Stock, settle outstanding litigation, or enter into transactions with affiliates.

If the Company or any Subsidiary shall default on any of its obligations under any mortgage credit agreement or other facility indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $250,000, whether such ~~Event~~indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, the New Related Party Debenture shall be deemed in default and the default provisions shall apply.

In connection with the Securities Exchange Agreements with related parties for the exchange of ~~Default~~the convertible notes and preferred shares for the New Related Party Debentures discussed above, the Company issued an aggregate of 2,564,340,702 warrants. The New Related Party Warrants are exercisable for five years and six months from the earlier of the maturity date of the New Related Party Debentures and the closing of the Qualified Financing, at an exercise price equal to (i) in the event that a Qualified Offering is consummated prior to the exercise of the New Related Party Warrant, the price per share at which the Qualified Offering is made (“Qualified Offering Price”), or (ii) in the event that no Qualified Offering has been ~~cured or remains ongoing,~~consummated, the June 2017 Note shall be convertible at 60% of the lowest closing price during the prior twenty trading days of the common stock as reported on the OTCQB or other principal trading market (the “Default Conversion Price”). The June 2017 Notes provide for two amortization payments on the six-month, seven-monthlower of: (A) $0.003 per share and eight-month anniversary of the issue date with each amortization payment being one third of the total outstanding principal and interest. If the six-month amortization payment is made in cash then the payment is(B) an amount equal to ~~120%~~70% of the average of the VWAP (or 50% of the average of the VWAP if an event of default has occurred and has not been cured) for the Common Stock over the ten Trading Days preceding the date of the delivery of the applicable ~~amortization payment and if~~exercise notice. If there is no effective registration statement covering the ~~seven-month or the eight-month amortization payments are made in cash then the payment is an amount equal to 125%~~resale of the ~~applicable amortization payment.~~

~~The June 2017 Notes~~shares underlying the New Related Party Warrants within 180 days following the closing of the Qualified Offering: (i) exercise may be ~~prepaid at~~via cashless exercise, and (ii) 5% additional Warrants will be issued by the Company to the holders for any ~~time until the 180th day following the Original Issue Date at an amount equal~~portion of each month without such effective registration statement, up to ~~(i) 115%~~a maximum of ~~outstanding principal balance~~25%. The New Related Party Warrants contain certain price protection provisions providing for adjustment of the ~~Note~~amount of securities issuable upon exercise of the New Related Party Warrants in case of certain future dilutive events or stock-splits and dividends.

As discussed above, on November 29, 2022, in order to induce the related party investors to exchange their respective convertible notes and preferred stock into the New Related Party Debentures, the aggregate principal amount and accrued interest payable of the exchanged convertible notes, and ~~unpaid interest~~the stated value and accrued dividends of exchanged preferred stock was increased by 15% (the August 11, 2022 and September 2, 2022 Demand Promissory Notes were issued with 10% OID), or an aggregate amount of $1,046,167. This inducement fee was included in loss from debt extinguishment on the accompanying unaudited statement of operations during ~~the period from the Original Issue Date through~~ the three months ~~following~~ended December 31, 2022. Additionally, the ~~Original Issue Date,~~remaining debt discount on exchanged related party notes of $1,768,379 was written off and ~~(ii) 120%~~included in loss from debt extinguishment on the accompanying unaudited statement of ~~outstanding principal balance of~~operations during the ~~June 2017 Notes and accrued and unpaid interest during~~three months four through six following the Original Issue Date. In order to prepay the June 2017 Notes, the Company shall provide 20 Trading Days prior written notice to the Holder, during which time the Holder may convert the June 2017 Notes in whole or in part at the Conversion Price.ended December 31, 2022.

The June 2017 Notes and related Warrants include a down-round provision under which the conversion price and exercise price could be affected by future equity offerings undertaken by the Company or contain terms that are not fixed monetary amounts at inception. Subsequent to the date of these June 2017 Notes, the Company sold stock at a share price of $0.05 per share. Accordingly, pursuant to these ratchet provisions, the exercise price of the June 2017 Warrants were lowered to $0.03 per share and the total number of June 2017 Warrants were increased on a full ratchet basis from 1,555,632 warrants to 9,074,520 warrants, an increase of 7,518,888 warrants (see Note 8).

On ~~July 26, 2017,~~November 1, 2021, the Company entered into ~~and closed on~~ a 3^rd Securities Purchase Agreement ~~(the “3~~^rd ~~Securities Purchase Agreement”~~(“Second November 2021 SPA”) with ~~three institutional investors (the “Purchasers”~~an investor (“Second November 2021 Investor”) ~~for the sale of the Company’s~~to purchase two convertible notes (collectively as “Second November 2021 Notes”) and ~~warrants. Pursuant to the terms provided for in the 3~~^rd ~~Securities Purchase Agreement, the Company issued upon closing to the Purchasers~~two accompanying warrants (collectively as “Second November 2021 Warrants”), for an aggregate ~~subscription~~investment amount of ~~$300,000: (i) 10% Original Issue Discount 5% Senior Secured Convertible Notes in the aggregate~~$500,000. The first note, issued on November 1, 2021, had a principal ~~amount~~balance of ~~$333,883 (the “July 2017 Notes”);~~$250,000 and ~~(ii)~~accompanying warrants ~~(the “July 2017 Warrants”)~~ to purchase ~~4,769,763~~up to 13,661,203 shares of common stock. The second note issued on December 1, 2021, had a principal balance of $250,000 and accompanying warrants to purchase up to 13,661,203 shares of common stock. The Company received $500,000 in aggregate proceeds from the Second November 2021 Notes. The Second November 2021 Notes bore an interest rate of 8% per annum and was to mature on November 1, 2026. The Second November 2021 Warrants are exercisable at any time and expire on November 1, 2026. The Second November 2021 Warrants to purchase up to 27,322,406 shares of common stock were valued at $495,560 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the Second November 2021 Notes. The Second November 2021 Notes and Second November 2021 Warrants are convertible and exercisable, respectively, into shares of the Company’s common stock at ~~an exercise~~a price ~~of $0.10~~equal to $0.00366 per share (subject to ~~adjustments under certain conditions as defined in the Warrants)~~adjustment). The ~~closing under the 3~~^rdSecurities Purchase Agreement occurred on July 26, 2017. These Notes bear interest at a rate equal to 5% per annum (which interest rate is increased to 24% per annum upon the occurrence of an Event of Default (as defined in the Notes)), have a maturity date of March 25, 2018 and are convertible (principal, and interest) at any time after the issuance date of these Notes into shares of the Company’s Common Stock at a conversion price equal to $0.07 per share (subject to adjustment as provided in the Note), provided, however, that if an event of default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the July 2017 Notes shall be convertible at 60% of the lowest closing price during the prior twenty trading days of the Common Stock as reported on the OTCQB or other principal trading market (the “Default Conversion Price”) and the exercise price of the July 2017 Warrants shall be 60% of the Default Conversion Price. These Notes provide for three amortization payments on the six-month, seven-month and eight-month anniversary of the issue date with each amortization payment being one third of the total outstanding principal and interest. If the six-month amortization payment is made in cash then the payment is an amount equal to 110% of the applicable amortization payment and if the seven-month or the eight-month amortization payments are made in cash then the payment is an amount equal to 115% of the applicable amortization payment. These Notes may be prepaid at any time until the 210th day following the Original Issue Date at an amount equal to (i) 115% of outstanding principal balance of the Note and accrued and unpaid interest during the period from the Original Issue Date through the three months following the Original Issue Date, and (ii) 120% of outstanding principal balance of theSecond November 2021 Notes and accrued and unpaid interest during months four through seven following the Original Issue Date. In order to prepay these Notes, the Company shall provide 20 Trading Days prior written notice to the Purchaser, during which time the Purchaser may convert the Notes in whole or in part at the Conversion Price.

~~The~~Second November 2016 Notes, June 2017 Notes and July 2017 Notes contain certain covenants, such as restrictions on the incurrence of indebtedness, creation of liens, payment of restricted payments, redemptions, payment of cash dividends and the transfer of assets. These Notes also contains certain adjustment provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions. The conversion price is also subject to adjustment if the Company issues or sells shares of its common stock for a consideration per share less than the conversion price then in effect, or issue options, warrants or other securities convertible or exchange for shares of its common stock at a conversion or exercise price less than the conversion price of these Notes then in effect. If either of these events should occur, the conversion price is reduced to the lowest price at which these securities were issued or are exercisable. The Company granted the Purchasers certain rights of first refusal on future offerings by the Company for as long as the Purchasers hold these Notes. In addition, subject to limited exceptions, the Purchasers will not have the right to convert any portion of these Note if the Purchaser, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s Common Stock outstanding immediately after giving effect to its conversion. The Purchaser may increase or decrease this ownership limitation to any percentage not exceeding 9.99% upon 61 days prior written notice to the Company.

~~The November 2016, June 2017 and July 2017~~2021 Warrants are exercisable for shares of the Company’s common stock upon the payment in cash of the exercise price and they are also exercisable on a cashless basis at any time there is no effective registration statement registering the shares of common stock underlying the Warrants. The exercise price of these Warrants are subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock and also upon any distributions of assets, including cash, stock or other property to the Company’s stockholders. The exercise price of these Warrants are also subject to full ratchet price adjustment if the Company sells or grants any option to purchase, sells or re-prices any common stock or common stock equivalents, as defined, at an exercise price lower than the then-current exercise price of these Warrants with the exception for certain exempted issuances and subject to certain limitations on the reduction of the exercise price as provided in the Warrants. In the event of a fundamental transaction, as described in these Warrants and generally including any reorganization, recapitalization or reclassification of the Common Stock, the sale, transfer or other disposition of all or substantially all of the Company’s properties or assets, the Company’s consolidation or merger with or into another person, the acquisition of more than 50% of the outstanding Common Stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by the outstanding Common Stock, the holders of these Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised these Warrants immediately prior to such fundamental transaction; provided that upon the occurrence of certain fundamental transactions, the holder can require the Company to purchase these Warrants for cash at a price equal to the higher of the Black Scholes Value of the unexercised portion of these Warrants or difference between the cash per share paid in the fundamental transaction and the exercise price per share. The holders of these Warrants will not have the right to exercise any portion of these Warrants if the holder (together with its affiliates) would beneficially own in excess of 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of these Warrants.

In connection with the Company’s obligations under the November 2016, June 2017 and July 2017 Notes, the Company entered into a Security Agreement, Pledge Agreement and Subsidiary Guaranty with Calvary Fund I LP, as agent, pursuant to which the Company granted a lien on all assets of the Company (the “Collateral”) excluding permitted indebtedness which includes a first lien held by Regions Bank in connection with the $100,000 revolving promissory note entered into with Regions Bank in October 2014, for the benefit of the Purchasers, to secure the Company’s obligations under the Notes. Upon an Event of Default (as defined in the related Notes), the Purchasers may, among other things, collect or take possession of the Collateral, proceed with the foreclosure of the security interest in the Collateral or sell, lease or dispose of the Collateral.

~~From May 2017 to September 2017, the Company issued 9,433,557 shares of its common stock upon the conversion of principal note balances of $378,453 and interest of $12,158 (see Note 8).~~

~~In connection with the issuance of the November 2016, June 2017 and July 2017 Notes and Warrants, the Company determined that the terms of these Note and Warrants contain terms that~~ included a down-round provision under which the conversion price and exercise price ~~could be affected~~are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the Second November 2021 Notes and Second November 2021 Warrants. The conversion and exercise price of the Second November 2021 Notes and Second November 2021 Warrants are reduced equal to the lower conversion and exercise price of the new issuance or amended securities. At the election of the Second November 2021 Investor, the Second November 2021 Notes was convertible in whole or in part at any time and from time to time. On January 26, 2022, a notice and request for consent regarding a change in offering terms was sent by ~~future equity offerings undertaken~~the Company to the Second November 2021 Investor. Upon the approval of the Second November 2021 Investor, the Company modified the terms of the Second November 2021 SPA which increased the warrants issuable from 20% to 100% of the common stock issuable upon conversion of the notes purchased. As a result, the Second November 2021 Investor received additional cashless-exercisable warrants equal to 80% of the common stock issuable upon conversion of the Second November 2021 Notes. The Company issued additional warrants to purchase up to 109,289,616 shares of common stock to the Second November 2021 Investor which increased the total relative fair value of all warrants in total by $22,429. This was recorded as debt discount which is being amortized over the life of the Second November 2021 Notes (see Note 9). The modification of the Second November 2021 SPA did not meet the requirements of a debt extinguishment under ASC 470-50 - Debt Modifications and Exchanges; however it represented a substantial modification whereby the Second November 2021 Investor received a substantial amount of additional warrants for the same principal amount of investment hence it was accounted for, in substance, as a debt modification ASC 470-50 and no gain or losses was recognized. As of September 30, 2022, the Second November 2021 Notes had an outstanding principal balance of $500,000 and accrued interest of $34,520. The Second November 2021 Notes are included in the accompanying balance sheet at $69,417 as a long-term convertible note payable, net of discount in the amount of $430,583 as of September 30, 2022. On November 29, 2022, the Second November 2021 Notes were exchanged for a new convertible debenture (see below).

On November 1, 2021, the Company entered into a Securities Purchase Agreement (“Third November 2021 SPA”) with an investor (“Third November 2021 Investor”) to purchase two convertible notes (collectively as “Third November 2021 Notes”) and two accompanying warrants (collectively as “Third November 2021 Warrants”), for an aggregate investment amount of $500,000. The first note issued on November 1, 2021, had a principal balance of $250,000 and accompanying warrants to purchase up to 13,661,203 shares of common stock. The second note issued on December 1, 2021, had a principal balance of $250,000 and accompanying warrants to purchase up to 13,661,203 shares of common stock. The Company received $500,000 in aggregate proceeds from the Third November 2021 Notes. The Third November 2021 Notes bore an interest rate of 8% per annum was to mature on November 1, 2026. The Third November 2021 Warrants are exercisable at any time and expire on November 1, 2026. The Third November 2021 Warrants to purchase up to 27,322,406 shares of common stock were valued at $495,560 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the Third November 2021 Notes. The Third November 2021 Notes and Third November 2021 Warrants were convertible and exercisable, respectively, into shares of the Company’s common stock at a price equal to $0.00366 per share (subject to adjustment). The Third November 2021 Notes and Third November 2021 Warrants included a down-round provision under which the conversion price and exercise price are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the Third November 2021 Notes and Third November 2021 Warrants. The conversion and exercise price of the Third November 2021 Notes and Third November 2021 Warrants are reduced equal to the lower conversion and exercise price of the new issuance or amended securities. At the election of the Third November 2021 Investor, the Third November 2021 Notes were convertible in whole or in part at any time and from time to time. On January 26, 2022, a notice and request for consent regarding a change in offering terms was sent by the Company to the Third November 2021 Investor. Upon the approval of the Third November 2021 Investor, the Company modified the terms of the Third November 2021 SPA which increased the warrants issuable from 20% to 100% of the common stock issuable upon conversion of the notes purchased. As a result, the Third November 2021 Investor received additional cashless-exercisable warrants equal to 80% of the common stock issuable upon conversion of the Third November 2021 Notes. The Company issued additional warrants to purchase up to 109,289,616 shares of common stock to the Third November 2021 Investor which increased the total relative fair value of all warrants in total by $22,429. This was recorded as debt discount which is being amortized over the life of the Third November 2021 Notes (see Note 9). The modification of the Third November 2021 SPA did not meet the requirements of a debt extinguishment under ASC 470-50 - Debt Modifications and Exchanges; however it represented a substantial modification whereby the Third November 2021 Investor received a substantial amount of additional warrants for the same principal amount of investment, hence it was accounted for, in substance, as a debt modification ASC 470-50 and no gain or losses was recognized. As of September 30, 2022, the Third November 2021 Notes had an outstanding principal balance of $500,000 and accrued interest of $34,411 and are included in the accompanying balance sheet at $69,417 as a long-term convertible note payable, net of discount in the amount of $430,583 as of September 30, 2022. On November 29, 2022, the Third November 2021 Notes were exchanged for a new convertible debenture (see below).

On January 27, 2022, the Company entered into a Securities Purchase Agreement (“First January 2022 SPA”) with an investor (“First January 2022 Investor”) to purchase a convertible note with a principal balance of $500,000 (“First January 2022 Note”) with the Company receiving $500,000 in proceeds and accompanying warrants to purchase up to 136,612,022 shares of common stock (“First January 2022 Warrants”). The First January 2022 Note bore an interest rate of 8% per annum and was to mature on November 1, 2026. The First January 2022 Warrants are exercisable at any time and expire on November 1, 2026. The First January 2022 Warrants to purchase up to 136,612,022 shares of common stock were valued at $498,428 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the First January 2022 Note. The First January 2022 Note and First January 2022 Warrants were convertible and exercisable, respectively, into shares of the Company’s common stock at a price equal to $0.00366 per share (subject to adjustment). The First January 2022 Note and First January 2022 Warrants included a down-round provision under which the conversion price and exercise price are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the First January 2022 Note and First January 2022 Warrants include. The conversion and exercise price of the First January 2022 Note and First January 2022 Warrants are reduced equal to the lower conversion and exercise price of the new issuance or amended securities. At the election of the First January 2022 Investor, the First January 2022 Note was convertible in whole or in part at any time and from time to time. As of September 30, 2022, the First January 2022 Note had an outstanding principal balance of $500,000 and accrued interest of $26,959 and is included in the accompanying balance sheet at $72,081 as a long-term convertible note payable, net of discount in the amount of $427,919 as of September 30, 2022. On November 29, 2022, the First January 2022 Note was exchanged for a new convertible debenture (see below).

On January 31, 2022, the Company entered into a Securities Purchase Agreement (“Second January 2022 SPA”) with an investor (“Second January 2022 Investor”) to purchase a convertible note with principal balance of $500,000 (“Second January 2022 Note”) with the Company receiving $500,000 in proceeds and accompanying warrants to purchase up to 136,612,022 shares of common stock (“Second January 2022 Warrants”). The Second January 2022 Note bore an interest rate of 8% per annum and was to mature on November 1, 2026. The Second January 2022 Warrants are exercisable at any time and expire on November 1, 2026. The Second January 2022 Warrants to purchase up to 136,612,022 shares of common stock were valued at $498,428 using the relative fair value method and recorded as a debt discount which was being amortized over the life of the Second January 2022 Note. The Second January 2022 Note and Second January 2022 Warrants were convertible and exercisable, respectively, into shares of the Company’s common stock at a price equal to $0.00366 per share (subject to adjustment). The Second January 2022 Note and Second January 2022 Warrants included a down-round provision under which the conversion price and exercise price are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the Second January 2022 Note and Second January 2022 Warrants. The conversion and exercise price of the Second January 2022 Note and Second January 2022 Warrants are reduced equal to the lower conversion and exercise price of the new issuance or amended securities. At the election of the Second January 2022 Investor, the Second January 2022 Note was convertible in whole or in part at any time and from time to time. As of September 30, 2022, the Second January 2022 Note had an outstanding principal balance of $500,000 and accrued interest of $26,520 and is included in the accompanying balance sheet at $71,221 as a long-term convertible note payable, net of discount in the amount of $428,779. On November 29, 2022, the Second January 2022 Note was exchanged for a new convertible debenture (see below).

During April 2022, the Company entered into a Securities Purchase Agreement (“Second April 2022 SPA”) with various investors (“Investors”), to purchase convertible notes for an aggregate investment amount of $425,000 (collectively as “Second April 2022 Notes”) with the Company receiving $425,000 of proceeds and accompanying warrants to purchase up to an aggregate of 17,857,144 shares of common stock (collectively as “Second April 2022 Warrants”). The Second April 2022 Warrants were valued at $335,593 using the relative fair value method and were recorded as debt discount which was being amortized over the life of the Second April 2022 Notes. The Second April 2022 Notes bore an interest rate of 8% per annum and was to matures on April 1, 2027. The Second April 2022 Warrants are exercisable at any time and expire on April 1, 2027. The Second April 2022 Notes and Second April 2022 Warrants were convertible and exercisable, respectively, into shares of the Company’s common stock at a price equal to $0.00476 per share (subject to adjustment). The Second April 2022 Notes and Second April 2022 Warrants included a down-round provision under which the conversion price and exercise price are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the Second April 2022 Notes and Second April 2022 Warrants. The conversion and exercise price of the Second April 2022 Notes and Second April 2022 Warrants are reduced equal to the lower conversion and exercise price of the new issuance or amended securities. For so long as the Second April 2022 Warrants remains outstanding and until the listing by the Company or ~~contain~~the trading of the common stock on a Qualified National Exchange (as defined in the agreement); (i) if the Company issues warrants to investors in a Subsequent Offering, and such warrants equal more than 20% warrant coverage, then a number of additional shares will be added to the Second April 2022 Warrants such that the Second April 2022 Warrants shall equal the same percentage of the warrant coverage offered to the investors in the Subsequent Offering and; (ii) if the Company issues warrants in a Subsequent Offering which may be exercised by means of a cashless exercises, then the Second April 2022 Warrants shall be exercisable by the same cashless exercise feature of the warrants issued in the Subsequent Offering. At the election of the Investors, the Second April 2022 Notes was convertible in whole or in part at any time and from time to time. As of September 30, 2022, the Second April 2022 Notes had an aggregate outstanding principal balance of $425,000 and accrued interest of $15,710 and are included in the accompanying balance sheet at $120,808 as a long-term convertible note payable, net of discount in the amount of $304,192 as of September 30, 2022. On November 29, 2022, the Second April 2022 Notes were exchanged for a new convertible debenture (see below).

On July 1, 2022, the Company entered into a Securities Purchase Agreement with an investor (“July 2022 Investor”), to purchase a convertible note for a principal amount of $50,000 (“July 2022 Note”) with the Company receiving $50,000 of proceeds and accompanying warrants to purchase 2,100,840 shares of common stock (“July 2022 Warrants”). The July 2022 Note bore an interest rate of 8% per annum and was to mature on April 1, 2027. The July 2022 Warrants are exercisable at any time and expire on April 1, 2027. The July 2022 Warrants were valued at $7,037 using the relative fair value method and was recorded as debt discount to be amortized over the life of the July 2022 Note. The July 2022 Note and July 2022 Warrants were convertible and exercisable, respectively, into shares of the Company’s common stock at a price equal to $0.00476 per share (subject to adjustment). The July 2022 Note and July 2022 Warrants included a down-round provision under which the conversion price and exercise price are reduced if the Company sells or issues any securities including options, convertible securities, with the exception of exempt issuance (as defined in the agreements), or amended outstanding securities, at a lower conversion or exercise price than that of the July 2022 Note and July 2022 Warrants. The conversion and exercise price of the July 2022 Note and July 2022 Warrants are reduced equal to the lower conversion and exercise price of the new issuance or amended securities. For so long as the July 2022 Warrants remains outstanding and until the listing by the Company or the trading of the common stock on a Qualified National Exchange (as defined in the agreement); (i) if the Company issues warrants to investors in a Subsequent Offering, and such warrants equal more than 20% warrant coverage, then a number of additional shares will be added to the July 2022 Warrants such that the July 2022 Warrants shall equal the same percentage of the warrant coverage offered to the investors in the Subsequent Offering and; (ii) if the Company issues warrants in a Subsequent Offering which may be exercised by means of a cashless exercises, then the July 2022 Warrants shall be exercisable by the same cashless exercise feature of the warrants issued in the Subsequent Offering. As of September 30, 2022, the July 2022 Note had an outstanding principal balance of $50,000 and accrued interest of $953 and is included in the accompanying balance sheet at $43,337 as a long-term convertible note payable, net of discount in the amount of $6,663. On November 29, 2022, the July 2022 Note was exchanged for a new convertible debenture (see below).

On October 22, 2022, the Company issued a new convertible note for $200,000 to an existing investor for the settlement of claims (the “Settlement Note”). In connection with issuance of the Settlement Note, the Company recorded settlement expense of $200,000. On November 29, 2022, the Settlement Note was exchanged for a new convertible debenture (see below).

On November 29, 2022, in connection with the Share Exchange Agreements and New Convertible Debentures discussed below, the Second November 2021 Warrants, Third November 2021 Warrants, January 2022 Warrants, Second January 2022 Warrants, Second April 2022 Warrants, and the July 2022 Warrants, aggregating 566,406,072 warrants, were amended to reduce the exercise price to $0.003 per share. Additionally, 16,393,443 warrants issued to a placement agent in January 2022 were amended to reduce the exercise price to $0.003 per share. In conjunction with the price reduction, the price protection feature for all these warrants was eliminated. All other terms of the warrants remained the same. As a result of the November 29, 2022 amendment to the exercise price, the Company calculated the difference between the warrants fair values on November 29, 2022, the date of the amendment, using the then current exercise price ranging from $0.00366 to $0.00476 and the new exercise price of $0.003 and determined that the difference was insignificant.

Share Exchange Agreements and New Convertible Debentures and Warrants dated November 29, 2022

On November 29, 2022, the Company consummated the Initial Closing of the Offering pursuant to the terms and conditions of the Purchase Agreement, by and among the Company, certain accredited investors (the “Purchasers”) and Cavalry Fund I Management LLC, a Delaware limited liability company, in its capacity as collateral agent (the “Collateral Agent”). At the Initial Closing, the Company sold the Purchasers (i) 10% Original Issue Discount Senior Secured Convertible Debentures (the “New Debentures”) in an aggregate principal amount of $2,805,000 and (ii) warrants (the “Warrants” and together with the New Debentures, the “Underlying Securities”) to purchase up to 801,428,569 shares of common stock of the Company (the “Common Stock”), subject to adjustments provided by the Warrants, which represents 100% warrant coverage. The Company received a total of $2,095,288 in net proceeds at the Initial Offering, net of the Original Issue Discount of $255,000, commissions of $296,800 and other offering costs of $157,912.

On November 29, 2022, the Company entered into Securities Exchange Agreements with the above investors, whereby the Second November 2021 Notes, the Third November 2021 Notes, the First January 2022 Note, the Second January 2022 Note, the Second April 2022 Notes, the July 2022 Note, and the Settlement Note, with an aggregate principal amount of $2,675,000 (the “Exchanged Convertible Notes”) and accrued interest payable of $173,375 were exchanged for New Debentures. Additionally, on November 29, 2022, in order to induce the investors to exchange their respective convertible notes into the New Debentures, the aggregate principal amount and accrued interest payable was increased by 15%, or $427,256, for the New Debentures with an aggregate principal amount of $3,275,631.

On November 29, 2022, the Company entered into Securities Exchange Agreements with preferred stockholders, whereby holders of 902 shares of Series C-1 preferred stock with a stated value of $372,303, and holders of 3,037 shares of Series C-2 preferred stock with a stated value of $1,245,935 were exchanged for the New Debentures. Additionally, on November 29, 2022, in order to induce the preferred stockholders to exchange their respective preferred shares into the New Debentures, the aggregate stated value of the preferred shares was increased by 15%, or $242,736, for New Debentures with an aggregate principal amount of $1,860,974.

The New Debentures mature on November 29, 2023, subject to a three-month extension at the sole discretion of the Company. The New Debentures bear interest at 10% per annum payable upon conversion or maturity. The New Debentures are convertible into shares of Common Stock at any time after the maturity date and prior to Mandatory Conversion at the conversion price equal to the lesser of: (i) $0.003 per share and (ii) 70% of the average of the VWAP (as defined in the Debentures) (or 50% of the average of such VWAP if an event of default has occurred and has not been cured) of the Common Stock during the ten Trading Day (as defined in the Debentures) period immediately prior to the applicable conversion date. The New Debentures are subject to Mandatory Conversion in the event the Company closes a Qualified Offering. The conversion price per share of Common Stock in the case of a Mandatory Conversion shall be the Qualified Offering Price. Alternatively, upon a Mandatory Conversion, the holders of the New Debentures may elect to exchange their Debentures for newly issued convertible preferred securities at a price per share equal to the Qualified Offering Price or the five-day VWAP of the Common Stock prior to the date that is 181 days after the closing of the Qualified Offering.

Notwithstanding the preceding, holders of New Debentures shall have the right to require satisfaction of up to 40% of all amounts outstanding under the Debentures, in cash, at the time of a Qualified Financing. Investors that are exchanging securityholders shall have the right to require satisfaction of up to 10% of all amounts outstanding under the Debentures, in cash, at the time of a Qualified Financing. The New Debentures also contain certain price protection provisions providing for adjustment of the number of shares of Common Stock issuable upon conversion of the New Debentures in case of certain future dilutive events or stock-splits and dividends.

The Company’s obligations under the New Debentures are secured by a first priority lien on all of the assets of the Company pursuant to that certain Security Agreement, dated November 29, 2022 (the “Security Agreement”) by and among the Company, the Purchasers and the Collateral Agent.

The Company had the right to hold one or more subsequent closings at any time prior to December 31, 2022, unless otherwise extended, to sell additional Underlying Securities in an aggregate principal amount up to $6,600,000, which was subject to adjustment. The subsequent closing deadline was extended, and a subsequent raise was consummated on January 27, 2023 (See Note 11).

If the Company or any Subsidiary shall default on any of its obligations under any mortgage credit agreement or other facility indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $250,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, the New Debenture shall be deemed in default and the default provisions shall apply.

In connection with the Securities Exchange Agreements with investors for the exchange of the convertible notes and preferred shares for the New Debentures discussed above, the Company issued an aggregate of 2,269,030,092 warrants to investors. The Warrants are exercisable for five years and six months from the earlier of the maturity date of the New Debentures and the closing of the Qualified Financing, at an exercise price equal to (i) in the event that a Qualified Offering is consummated prior to the exercise of the Warrant, the Qualified Offering Price, or (ii) in the event that no Qualified Offering has been consummated, the lower of: (A) $0.003 per share and (B) an amount equal to 70% of the average of the VWAP (or 50% of the average of the VWAP if an event of default has occurred and has not ~~fixed monetary amounts at inception. Accordingly, under~~been cured) for the Common Stock over the ten Trading Days preceding the date of the delivery of the applicable exercise notice. If there is no effective registration statement covering the resale of the shares underlying the Warrants within 180 days following the closing of the Qualified Offering: (i) exercise may be via cashless exercise, and (ii) 5% additional Warrants will be issued by the Company to the holders for any portion of each month without such effective registration statement, up to a maximum of 25%. The Warrants contain certain price protection provisions providing for adjustment of the amount of securities issuable upon exercise of the Warrants in case of certain future dilutive events or stock-splits and dividends.

As discussed above, on November 29, 2022, in order to induce the investors to exchange their respective convertible notes and preferred stock into the New Debentures, the aggregate principal amount and accrued interest payable of the exchanged convertible notes, and the stated value of exchanged preferred stock was increased by 15%, or an aggregate amount of $669,992. This inducement fee was included in loss from debt extinguishment on the accompanying unaudited statement of operations during the three months ended December 31, 2022. Additionally, the remaining debt discount on Exchanged Convertible Notes of $1,949,909 was written off and included in loss from debt extinguishment on the accompanying unaudited statement of operations during the three months ended December 31, 2022.

In connection with the Initial Closing of the private placement, the Company and Joseph Gunnar & Co. LLC, a U.S. registered broker-dealer (“Gunnar”), entered into a placement agency agreement (the “Placement Agency Agreement”), pursuant to which Gunnar agreed to act as the placement agent for the Offering (the “Placement Agent”). Pursuant to the terms of the Placement Agency Agreement, the Company agreed to (i) pay Gunnar a cash placement fee of 10% of the gross cash proceeds raised in the Offering, and (ii) issue to Gunnar warrants (the “PA Warrants”) on the terms identical to the Warrants sold in the Offering in an amount equal to 10% of the Underlying Securities sold to investors. As a result of the foregoing, the Company paid Gunnar an aggregate commission of $305,000 in connection with the Initial Closing. The Company also paid $50,000 in fees to Gunnar’s legal counsel and paid Gunnar a financial advisory fee of $50,000. In addition, Gunner received 124,489,795 warrants. Additionally, the Company issued 16,000,000 warrants to a consultant in connection with the private placement offering.

Analysis of Exchange Agreements, Related Party Debenture and New Debentures, and Related Warrants

In accordance with ASC 470-50, Debt Modifications and Extinguishments, the Company performed an assessment of whether the Exchange Agreement transactions with related parties and investors was deemed to be new debt, a modification of existing debt, or an extinguishment of existing debt. The Company evaluated the November 29, 2022 Exchange Agreements for debt modification and concluded that the debt exchanges qualified for debt extinguishment. The Company determined the transactions were considered a debt extinguishment because the change in debt, the inducement premiums (related parties and third parties) discussed previously totaling $1,724,489, and the issuance of new warrants was substantial. Upon extinguishment, the Company had an aggregate of $3,718,288 of unamortized initial debt discount recorded which was written off and included in loss on debt extinguishment on the accompanying unaudited statement of operations during the three months ended December 31, 2022.

Derivative Liabilities Pursuant to Related Party Debentures and New Debentures and Related Warrants

Pursuant to the provisions of ~~FASB~~ ASC ~~Topic No.~~ 815-40 ~~“Derivatives~~– Derivatives and Hedging – Contracts in an Entity’s Own ~~Stock”~~Stock, the New Related Party Debentures, the New Debenture, and the New warrants issued in connection with the Exchange Agreements were analyzed and it was determined that the terms of the New Related Party Debentures, New Debentures and the related warrants contained terms that were considered derivatives due to the variable conversion of the Debentures and exercise price of the warrants, and other provisions which includes events not within the control of the Company. In accordance with ASC 815-40, the embedded conversion option contained in the ~~convertible instruments~~Notes and the Warrants were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date. The fair value of the embedded conversion ~~option derivatives~~options and ~~Warrants were~~warrants was determined using the Binomial Lattice valuation model. At the end of each period ~~on the date that debt was converted into common shares,~~ and on the date ~~of a cashless exercise of warrants,~~notes convert or are repaid, the Company ~~revalued~~revalues the derivative liabilities resulting from the embedded ~~conversion option~~options and ~~warrants derivative liabilities.~~warrants.

In connection with the issuance of ~~June 2017~~the New Related Party Debentures and ~~July 2017 Notes~~the New Debentures and ~~Warrants in June 2017,~~related warrants, on November 29, 2022, the initial measurement date, of the ~~June 2017 and July 2017 Notes and Warrants, the~~aggregate fair values of the embedded conversion option derivatives and warrant derivatives of ~~$1,203,940~~$41,961,095 was recorded as derivative liabilities ~~$730,700~~and was attributable to the following: 1) $21,986,653 of derivative liabilities was attributable to the New Related Party Debentures and related warrants which was allocated to debt discount up to the net principal amount of the New Related Party Debentures of $8,837,284, with the remainder of $13,149,369 charged to current period operations as initial derivative expense, and ~~$473,240~~2) $19,974,442 of derivative liabilities was ~~recorded as a~~attributable to the New Debentures and related warrants which was allocated to debt discount ~~and will be amortized into interest expense over~~up to the ~~term~~net principal amount of the ~~respective Note.~~

New Debentures of $7,231,894, with the remainder of $12,742,548 charged to current period operations as initial derivative expense. At the end of the period, the Company revalued the embedded conversion option derivative liabilities and warrant derivative ~~liabilities.~~liabilities and recorded a derivative expense of $505,158. In connection with ~~these revaluations,~~the revaluation and the initial derivative expense, the Company recorded an aggregate derivative expense of ~~$1,596,622 and $34,648 for~~$26,397,075 during the ~~nine~~three months ended ~~September 30, 2017~~December 31, 2022.

The Company uses the Binomial Valuation Model to determine the fair value of its conversion options and ~~2016, respectively.~~new stock warrants which requires the Company to make several key judgments including:

On November 29, 2022 (the Exchange Agreement date) and December 31, 2022, the fair value of the ~~derivative liabilities was~~embedded options and stock warrants were estimated at issuance using the Binomial ~~valuation model~~Valuation Model with the following assumptions:

~~At September 30, 2017 and~~The Company’s computation of the expected life of issued stock warrants was based on the simplified method as the Company does not have adequate exercise experience to determine the expected term. The interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. The computation of volatility was based on the historical volatility of the Company’s common stock.

During the three months ended December 31, ~~2016,~~2022 and 2021, amortization of debt discounts related to the convertible ~~debt consisted~~notes payable and Debentures amounted to $1,602,646 and $92,019, respectively, which has been included in interest expense on the accompanying unaudited statements of operations.

On October 21, 2021, the Company entered into a Promissory Note Agreement with Jeffrey Busch who serves as a member of the ~~following:~~

~~At September 30, 2017~~Board of Directors and a related party, for a principal amount of $150,000. The Company received proceeds of $150,000. The note bore an annual interest rate of 1%, matured on December ~~31, 2016,~~1, 2021 and could have been prepaid in whole or in part without penalty. Pursuant to the note, the Company ~~had $697,910~~has a 90-day grace period following the maturity date after which the lender was permitted to charge a late payment fee equal to 1% of the outstanding principal balance and ~~$350,000, respectively, in borrowings outstanding under~~cost of collection, including legal fees. During the ~~Notes. The weighted average interest rate during the period~~year ended September 30, ~~2017~~2022, the Company fully paid the outstanding balance on the note. As of September 30, 2022, the note had no outstanding balance (see Note 8).

On April 26, 2021, the Company entered into a Promissory Note Agreement with Jeffrey Busch who serves as a member of the Board of Directors and a related party, for a principal amount of $100,000. The Company received proceeds of $100,000. The note bears an annual interest rate of 1%, matures on April 1, 2022 and can be prepaid in whole or in part without penalty. Pursuant to the note, the Company has a 90-day grace period following the maturity date after which the lender was ~~approximately 11.2%~~permitted charge a late payment fee equal to 1% of the outstanding principal balance and cost of collection, including legal fees. On May 5, 2022, the Company and Jeffrey Busch (collectively as “Parties”) amended the April 26, 2021 note with principal amount of $100,000 (“Original Note”) pursuant to which the Parties increased the principal amount to $350,000 (“New Note”) with the Company receiving an additional $250,000 of proceeds and added a contingent conversion feature. The New Note bears an annual interest rate of 1% (which shall increase to 2% in an event of a default) and matures on May 5, 2024. The New Note may not be prepaid and is only convertible upon an occurrence of a public offering. The outstanding principal plus any unpaid accrued interest (“Conversion Amount”) of the New Note is convertible into shares of common stock at the price for which the common stock was sold in the public offering. Pursuant to ASC 470-50 - Debt Modifications and Exchanges, the amendment was accounted for as a debt extinguishment because the contingent conversion feature added to the New Note resulted in a substantial modification of the Original Note. No gain or loss was recognized in connection with the debt extinguishment. As of December 31, 2022, the New Note had an outstanding principal balance of $350,000, reflected as notes payable – related party in the accompanying unaudited balance sheet since the conditions for its contingent conversion has not yet been met, and accrued interest of $3,356 (see Note 8). As of September 30, 2022, the New Note had an outstanding principal balance of $350,000, reflected as notes payable – related party in the accompanying balance sheet since the conditions for its contingent conversion has not yet been met, and accrued interest of $2,474 (see Note 8).

~~From June 2017 to~~In September 2017, the Company entered into ~~loan~~a note agreement with a third-party investor. Pursuant to the note, the Company borrowed a principal amount of $1,000. The note bears an annual interest rate of 33.3%, is unsecured and in default due to non-payment of the balance pursuant to the repayment terms. As of December 31, 2022, the note had principal and accrued interest balances of $1,000 and $1,772, respectively. As of September 30, 2022, the note had principal and accrued interest balances of $1,000 and $1,689, respectively.

Financing Lease Right-of-Use (“ROU”) Assets and Financing Lease Liabilities

Effective November 2018, the Company entered into a financing agreement with the first lessor to finance the purchase of equipment. Pursuant to the financing agreement, the Company shall make a monthly payment of $379 for a period of 60 months commencing in November 2018 through October 2023. At the effective date of the financing agreement, the Company recorded a financing lease payable of $16,065.

Effective November 2018, the Company entered into a financing agreement with a second lessor to finance the purchase of equipment. Pursuant to the financing agreement, the Company shall make a monthly payment of $1,439 for a period of 60 months commencing in November 2018 through October 2023. At the effective date of the financing agreement, the Company recorded a financing lease payable of $62,394.

Effective March 2019, the Company entered into a financing agreement with a third lessor to finance the purchase of equipment. Pursuant to the financing agreement, the Company shall make a monthly payment of $1,496 for a period of 60 months commencing in March 2019 through February 2024. At the effective date of the financing agreement, the Company recorded a financing lease payable of $64,940.

Effective August 2019, the Company entered into a financing agreement with a fourth lessor to finance the purchase of equipment. Pursuant to the financing agreement, the Company shall make a monthly payment of $397 for a period of 60 months commencing in August 2019 through July 2024. At the effective date of the financing agreement, the Company recorded a financing lease payable of $19,622.

Effective January 2020, the Company entered into a financing agreement with a fifth lessor to finance the purchase of equipment. Pursuant to the financing agreement, the Company shall make a monthly payment of $1,395 for a period of 60 months commencing in January 2020 through December 2025. At the effective date of the financing agreement, the Company recorded a financing lease payable of $68,821.

The significant assumption used to determine the present value of the financing lease payables was the discount rate which ranged from 8% and 15% based on the Company’s estimated effective rate pursuant to the financing agreements.

Financing lease right-of-use assets (“Financing ROU”) is summarized below:

For the three months ended December 31, 2022 and 2021, depreciation expense related to Financing ROU assets amounted to $11,592 and $11,592, respectively.

Financing lease liability related to the Financing ROU assets is summarized below:

Future minimum lease payments under the financing lease agreements on December 31, 2022 are as follows:

Operating Lease Right-of-Use (“ROU”) Asset and Operating Lease Liabilities

In December 2019, the Company entered into a lease agreement for its corporate and laboratory facility in Golden, Colorado. The lease is for a period of 61 months, with ~~several third parties (the “Loans”)~~an option to extend, commencing in February 2020 and expiring in February 2025. Pursuant to the ~~loan agreements,~~lease agreement, the lease requires the Company ~~borrowed~~to pay a monthly base rent of; (i) $4,878 in the first year; (ii) $5,026 in the second year; (iii) $5,179 in the third year; (iv) $5,335 in the fourth year and; (v) $5,495 in the fifth year, plus a pro rata share of operating expenses beginning February 2020.

In February 2020, pursuant to ASC 842 – Leases, the Company calculated the present value of the total lease payments using a discount rate of 12% which was based on the Company’s estimated incremental borrowing rate. The Company recorded an ~~aggregate~~operating right-of-use asset and lease liability of ~~$538,875.~~$231,337 in connection with the lease.

On June 10, 2021, the Company entered into an amendment to its existing Warehouse Lease (the “Lease Amendment”), effective October 3, 2021, for its laboratory facility in Golden, CO (see Note 10). The ~~Loans bear interest~~Lease Amendment provided for: (i) an extension to the term of the original lease to five years following the completion of the Company’s improvements to the Expansion Premises (defined below); (ii) an expansion of the premises to include the premises located at Unit 404, Building F, 15000 West 6th Avenue, Golden, Colorado 80401, consisting of approximately 4,734 rentable square feet (the “Expansion Premises”); (iii) an annual base rent modification; (iv) an increase to the security deposit; (v) tenant improvement allowance; (vi) additional parking and; (vii) two renewal options, each for five year terms, for a total of ten years.

Pursuant to the Lease Amendment, the Company must pay a total annual base rent of; (1) $115,823 for year one; (2) $119,310 for year two; (3) $122,893 for year three; (4) $126,580 for year four; (5) $130,377 for year five; (6) $135,163 for year six; (7) $139,218 for year seven; (8) $143,394 for year eight; (9) $147,696 for year nine; (10) $152,127 for year ten; (11) $156,331 for year eleven; (12) $161,391 for year twelve; (13) $166,233 for year thirteen; (14) $171,220 for year fourteen and; (15) $176,357 for year fifteen.

In October 2021, pursuant to ASC 842 – Leases, the Company wrote off the balances of the operating asset of $168,664 and operating liability of $176,893 related to the original lease and recognized a gain on lease modification in the amount of $8,229, which was included in general and administrative expense in the accompanying statement of operation. The Company calculated the present value of the total lease payments in the Lease Amendment using a discount rate of ~~33.3%~~8% which was based on the Company’s incremental borrowing rate at the effective date and recorded an operating right-of-use asset and an operating lease liability of $1,212,708.

For the three months ended December 31, 2022, lease costs related to operating lease ROU asset and operating lease liabilities amounted to $50,311 which included base lease costs of $29,554 and other expenses such as common area maintenance and taxes of $20,757, all of which were expensed during the period and included in general and administrative expenses on the accompanying statements of operations. For the three months ended December 31, 2021, lease costs amounted to $56,867, which included base lease costs of $28,690 and other expenses of $28,177, all of which were expensed during the period and included in general and administrative expenses on the accompanying statements of operations.

Future base lease payments under the non-cancellable operating lease on December 31, 2022 are ~~unsecured. Loans aggregating $139,125 were due on or before October 1, 2017 and are currently in default, and loans aggregating $399,750 are due on or before January 1, 2018.~~as follows:

~~From time to time,~~Effective January 1, 2021, the Company ~~receives advances from~~entered into a consulting agreement with Mr. Kucharchuk, a member of the Board of Directors, to serve as a strategic advisor. The agreement was effective for a period of twelve months, commencing on January 1, 2021 and ~~repays such advances~~shall renew on a month-to month basis, subject to the Company’s chief executive officer and chief financial officer for working capital purposes. Additionally, from time to time, Vitel’s General Manager of Global Operations and Vitel’s Chief Operations Officer, both of who are beneficial shareholders of the Company (together referred to as the Vitel Officers), paid expenses on behalfright of the Company and Mr. Kucharchuk to terminate the agreement in accordance with the agreement. Pursuant to the agreement, Mr. Kucharchuk shall be paid $2,000 per month. As of December 31, 2022 and September 30, 2022, the Company ~~reimburses~~had an accounts payable – related party balance of $6,000 and $12,000 related to this consulting agreement, respectively.

On April 26, 2021, the ~~Vitel Officers or these expenses.~~Company entered into a Promissory Note Agreement with Jeffrey Busch who serves as a member of the Board of Directors, for a principal amount of $100,000 (see Note 6). On May 5, 2022, the parties amended the April 26, 2021 note into the New Note with the Company receiving an additional $250,000 of proceeds and added a conversion feature. The ~~advances are non-interest bearing~~New Note bears an annual interest rate of 1% (which shall increase to 2% in an event of a default) and matures on May 5, 2024. As of December 31, 2022, the New Note had an outstanding principal balance of $350,000, reflected as notes payable – related party in the accompanying unaudited balance sheet since the conditions for its contingent conversion has not yet been met, and accrued interest of $3,356 (see Note 6). As of September 30, 2022, the New Note had an outstanding principal balance of $350,000, reflected as notes payable – related party in the accompanying balance sheet since the conditions for its contingent conversion has not yet been met, and accrued interest of $2,474(see Note 6).

On May 12, 2021, the Company and the May 2021 Investor entered into a May 2021 SPA to purchase a convertible May 2021 Note and with principal value of $1,000,000 and accompanying May 2021 Warrants (see Note 6). In connection with the Company’s obligations under the May 2021 Note, the Company entered into a security agreement with the May 2021 Investor as agent, pursuant to which the Company granted a lien on the laboratory equipment of the Company, for the benefit of the related party. As of September 30, 2022, the May 2021 Note had an outstanding principal balance of $1,000,000 and accrued interest of $20,164. On November 29, 2022, the May 2021 Note was exchanged for a new convertible debenture (see Note 6).

On October 21, 2021, the Company entered into a Promissory Note Agreement with Jeffrey Busch who serves as a member of the Board of Directors and a related party, for a principal balance of $150,000. During the year ended September 30, 2022, the Company fully paid the outstanding balance on the note. As of September 30, 2022, the note had no outstanding balance (see Note 6).

On November 1, 2021, pursuant to the First November 2021 SPA the First November 2021 Investor purchased three notes with aggregate principal of $1,000,000 with accompanying First November 2021 Warrants to purchase up to an aggregate of 54,644,811 shares of common stock. As of September 30, 2022, the First November 2021 Notes had an outstanding principal balance of $1,000,000 and accrued interest of $20,164. On November 29, 2022, the First November 2021 Notes were exchanged for a new convertible debenture (see Note 6).

On January 26, 2022, a notice and request for consent regarding a change in offering terms was sent by the Company to the First November 2021 Investor. Upon the approval of the First November 2021 Investor, the Company modified the terms of the First November 2021 SPA which increased the warrants issuable from 20% to 100% of the common stock issuable upon conversion of the notes purchased. As a result, the First November 2021 Investor received additional cashless-exercisable warrants equal to 80% of the common stock issuable upon conversion of the First November 2021 Notes. The Company issued additional warrants to purchase up to 218,579,234 shares of common stock to the First November 2021 Investor which increased the total relative fair value of all warrants in total by $34,630 recorded as debt discount which is being amortized over the life of the First November 2021 Notes (see Note 6 and 9).

On April 5, 2022, pursuant to the First April 2022 SPA, Matthew Schwartz, a member of the Board of Directors and a related party, purchased a convertible note with principal amount of $100,000 with accompanying First April 2022 Warrants to purchase 4,201,681 shares of common stock. The Company received net proceeds of $100,000 on March 24, 2022. As of September 30, 2022, the First April 2022 Note had an outstanding principal balance of $100,000 and accrued interest of $3,901. On November 29, 2022, the First April 2022 Note was exchanged for a new convertible debenture (see Note 6).

On May 9, 2022, pursuant to the May 2022 SPA the May 2022 Investor purchased four convertible notes for an aggregate investment amount of $1,000,000 with accompanying May 2022 Warrants to purchase shares of common stock equal to 20% of the number of the total shares of common stock issuable upon the conversion of the May 2022 Notes. During the year ended September 30, 2022, the Company received an aggregate of $1,000,000 of proceeds and issued an aggregate of 42,016,808 of the May 2022 Warrants. As of September 30, 2022, the May 2022 Notes had an aggregate outstanding principal balance of $1,000,000 and accrued interest of $20,110. On November 29, 2022, the May 2022 Note was exchanged for a new convertible debenture (see Note 6).

On June 15, 2022, pursuant to the June 2022 SPA, Danica Holley, a member of the Board of Directors and a related party, purchased a convertible note with principal of $50,000 with accompanying June 2022 Warrants to purchase 2,100,840 shares of common stock. As of September 30, 2022, the June 2022 Note had an outstanding principal balance of $50,000 and accrued interest of $1,173. On November 29, 2022, the June 2022 Note was exchanged for a new convertible debenture (see Note 6).

On July 29, 2022, the Company entered into a Demand Promissory Note Agreement with Jeffrey Busch who serves as a member of the Board of Directors and a related party, for a principal balance of $125,000, and on September 2, 2022, the Company entered into a second Demand Promissory Note Agreement with Jeffrey Busch for a principal balance of $150,000 (collectively referred to as called the “Busch Notes”). The Busch Notes bear an annual interest rate of 8% and are payable on demand. The outstanding principal and accrued interest on the Busch Note is contingently convertible, in full, at the option of the lender, into the same security which is being issued by the Company in its next private placement of equity or equity backed securities at any time after the inception date. As of September 30, 2022, the Busch Notes had an outstanding principal balance of $275,000 and accrued interest of $2,683 and are reflected in the accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, the Busch Notes were exchanged for a new convertible debenture (see Note 6).

~~For~~On August 11, 2022, the ~~nine months~~Company entered into a Demand Promissory Note Agreement with a related party, who is an affiliate stockholder, for a principal balance of $375,000. The note bears an annual interest rate of 8% and is payable on demand. The outstanding principal and accrued interest of the note is contingently convertible, in full, at the option of the lender, into the same security which is being issued by the Company in its next private placement of equity or equity backed securities at any time after the inception date. As of September 30, 2022, this note had an outstanding principal balance of $375,000 and accrued interest of $4,110 and is reflected in the accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, this note was exchanged for a new convertible debenture (see Note 6).

On September 2, 2022, the Company entered into a Demand Promissory Note Agreement with a related party, who is an affiliate stockholder, for a principal balance of $350,000. The note bears an annual interest rate of 8% and is payable on demand. The outstanding principal and accrued interest of the note is contingently convertible, in full, at the option of the lender, into the same security which is being issued by the Company in its next private placement of equity or equity backed securities at any time after the inception date. As of September 30, 2022, this note had an outstanding principal balance of $350,000 and accrued interest of $2,148 and is reflected in the accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, this note was exchanged for a new convertible debenture (see Note 6).

During the year ended September 30, ~~2017,~~2022, the Company advanced a total of $13,883 to a related party, which is an affiliate entity and a majority shareholder of the Company. During the year ended September 30, 2022, the Company recorded bad debt expense of $35,594 related to the write off of related party advances. As of December 31, 2022 and September 30, 2022, the Company had related party receivable balances of $0.

On November 29, 2022, in connection with the Share Exchange Agreements and New Related Party Convertible Debentures discussed in Note 6, the May 2021 Warrants, First November 2021 Warrants, First April 2022 Warrants, May 2022 Warrants, and June 2022 Warrants, aggregating 385,441,138 warrants, were amended to reduce the exercise price to $0.003 per share. Additionally, 63,897,764 warrants issued in connection with Series F preferred stock were amended to reduce the exercise price to $0.003 per share. In conjunction with the price reduction, the price protection feature for all these warrants was eliminated. All other terms of the warrants remained the same. (See Note 6).

On November 29, 2022, the Company consummated the Initial Closing of the Offering pursuant to the terms and conditions of the Purchase Agreement, by and among the Company the Related Party Purchasers and the Collateral Agent. At the Initial Closing, the Company sold the related party Purchasers (i) the New Related Party Debentures in an aggregate principal amount of $550,000 and (ii) the New Related Party Warrants to purchase up to 157,142,857 shares of Common Stock, subject to adjustments provided by the Warrants, which represents 100% warrant coverage. The Company received a total of $412,092 in net proceeds at the Initial Offering from the Related Party Purchasers, net of the Original Issue Discount of $50,000, commissions of $58,200 and other offering costs of $29,708. (See Note 6).

On November 29, 2022, the Company entered into Securities Exchange Agreements with the Exchanged Related Party Notes and accrued interest payable of $120,750 were exchanged for New Related Party Debentures. Additionally, on November 29, 2022, in order to induce the related party investors to exchange the respective convertible notes into the Related Party Debentures, the aggregate principal amount of the Exchanged Related Party Notes and accrued interest payable was increased by 15% (those issued for the August 11, 2022 and September 2, 2022 Demand Promissory Notes were issued with 10% OID), or $589,505, for new Related Party Debentures with an aggregate principal amount of $4,860,255. (See Note 6).

On November 29, 2022, the Company entered into Securities Exchange Agreements with related party preferred stock holders, whereby related party holders of 1,000 shares of Series E preferred stock with a stated value of $2,000,000 and accrued dividends payable of $66,630, and related party holders of 500 shares of Series F preferred stock with a stated value of $1,000,000 and accrued dividends payable of $33,315 were exchanged for the New Related Party Debentures. Additionally, on November 29, 2022, in order to induce the related party preferred stockholders to exchange their respective preferred shares into the New Related Party Debentures, the aggregate stated value and accrued dividends payable were increased by 15%, or $464,992, for new Related Party Debentures with an aggregate principal amount of $3,564,937. (See Note 6).

As of December 31, 2022 and September 30, 2022, the Company owed several executives and directors for expense reimbursements and consulting fees in the aggregate amount of $6,000 and $16,223, respectively, which is reflected on the accompanying balance sheet as accounts payable – related parties.

On December 31, 2022 and September 30, 2022, net amount due to related ~~party activity~~parties consisted of the following:

~~ONCBIOMUNE PHARMACEUTICALS, INC. AND SUBSIDIARIES~~NOTE 9 – STOCKHOLDERS’ DEFICIT

~~During the nine months ended September 30, 2017,~~22, 2020, the Company owed amounts to a company owned by the Vitel Officers for consulting services performed prior to March 10, 2017, the acquisition date of Vitel. In connection with the balances owed, during the period from March 10, 2017 (the acquisition date) to September 30, 2017, the Company paid interest expense of $6,078 to this company which was reflected as interest expense - related party on the accompanying unaudited condensed consolidated statements of operations and repaid all amounts due of $10,563. At September 30, 2017, the Company did not owe any balances to this company. Additionally, during the nine months ended September 30, 2017, the Company paid $22,597 and $8,449 to this company owned by the Vitel Officers for consulting fees and for administrative fees, respectively.

~~On August 12, 2015, the Company~~ filed ~~amended and restated Articles of Incorporation~~ with the Nevada Secretary of State, an amendment to ~~authorize 520,000,000~~its Articles of Incorporation to change its name from “OncBioMune Pharmaceutical, Inc.” to “Theralink Technologies, Inc.” and increase its authorized shares of ~~capital stock, of which 500,000,000 shares are~~ common stock ~~with a~~from 6,666,667 shares of common stock at $0.0001 per share par value to 12,000,000,000 shares of ~~$0.0001~~common stock at $0.0001 per share ~~(“Common Stock”), and 20,000,000 shares are preferred stock, with a~~ par value, effective September 24, 2020.

On July 1, 2022, the Company filed with the Nevada Secretary of ~~$0.0001~~State, an amendment to its Articles of Incorporation to increase its authorized shares of common stock from 12,000,000,000 shares to 100,000,000,000 shares of common stock at $0.0001 per share ~~(“Preferred Stock”).~~par value.

On August 20, 2015, the Company filed the Certificate of Designation with the Nevada Secretary of State, designating ~~1,000,000~~1,333 shares of the authorized ~~20,000,000~~26,667 Preferred Stock as Series A Preferred Stock. Each holder of Series A Preferred Stock is entitled to 500 votes for each share of Series A Preferred Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Company.

The holders of Series A Preferred Stock shall have no special voting rights and their consent is not required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for the taking of any corporate action. On

As of December 31, 2022 and September ~~2, 2015, in connection with the Exchange, the Company issued 1,000,000~~30, 2022, there were 667 shares of the Company’s Series A Preferred Stock ~~representing 100% of the~~issued and outstanding ~~Series A Preferred. Of these shares, 500,000 were issued to our Chief Executive Officer and 500,000 shares were issued to~~held by a former member of ~~our~~the Board of Directors. ~~As of September 30, 2017, there are 1,000,000 shares of~~

On ~~March 7, 2017,~~May 18, 2020, the Company filed a certificate of designation, preferences and rights of Series ~~B preferred stock~~C-1 Preferred Stock (the ~~“Certificate~~“Series C-1 Certificate of Designation”), as amended on June 9, 2021, with the Nevada Secretary of State ~~of the State of Nevada~~ to designate ~~7,892,000~~3,000 shares of its previously authorized preferred stock as Series ~~B preferred stock,~~C-1 Preferred Stock, par value ~~$0.0001~~$0.0001 per share and a stated value of ~~$0.0001~~$4,128.42 per share. The Series C-1 Certificate of Designation and its filing was approved by the Company’s ~~board~~Board of ~~directors~~Directors without shareholder approval as provided for in the Company’s articles of incorporation and under Nevada law. The holders of shares of Series ~~B preferred stock are entitled~~C-1 Preferred Stock have the following preferences and rights:

On June 9, 2021, the Company filed an Amendment (the “CoD Amendment”) to ~~dividends or distributions share for share~~the Series C-1 Certificate of Designation with the Nevada Secretary of State. The filing of the CoD Amendment was approved by the Board on June 8, 2021, and by the holders of the ~~Common~~majority of the outstanding shares of Series C-1 Preferred Stock on June 8, 2021.

The CoD Amendment sets the triggering price for the anti-dilution price protection at $0.00275 per share, the same price as the Series C-2 Certificate of Designation. All other terms of the Series C-1 Certificate of Designation remain unchanged and in full force and effect.

During the year ended September 30, 2022, various holders of the Series C-1 Preferred Stock converted an aggregate of 1,923 shares of Series C-1 Preferred Stock into 288,637,529 shares of the Company’s common stock (see below – Common Stock Issued Upon Conversion of Series C-1 Preferred Stock).

As of December 31, 2022 and September 30, 2022, the Company had 141 and 1,043 shares of Series C-1 Preferred Stock issued and outstanding, respectively.

On May 18, 2020, the Company filed a certificate of designation, preferences and rights of Series C-2 Preferred Stock (the “Series C-2 Certificate of Designation”) with the Nevada Secretary of State to designate 6,000 shares of its previously authorized preferred stock as Series C-2 Preferred Stock, par value $0.0001 per share and a stated value of $410.27 per share. The Series C-2 Certificate of Designation and its filing was approved by the Company’s Board of Directors without shareholder approval as provided for in the Company’s articles of incorporation and under Nevada law. The holders of shares of Series ~~B preferred stock~~C-2 Preferred Stock have the following ~~voting~~preferences and rights:

During the year ended September 30, 2022, a holder of the Series C-2 Preferred Stock converted 1,880 shares of Series C-1 Preferred Stock into 280,475,491 shares of the Company’s common stock (see below – Common Stock Issued Upon Conversion of Series C-2 Preferred Stock).

On November 29, 2022, the Company entered into Securities Exchange Agreements with preferred stockholders, whereby holders of 3,037 shares of Series C-2 preferred stock with a stated value of $1,245,935 were exchanged for the New Debentures (See Note 6).

As of December 31, 2022 and September 30, 2022, the Company had 0 and 3,037 shares of Series C-2 Preferred Stock, respectively, issued and outstanding.

On September 15, 2020, the Company filed a Certificate of Designation, Preferences and Rights of Series E Preferred Stock (the “Series E Certificate of Designation”) with the Nevada Secretary of the State to designate 2,000 shares of its previously authorized preferred stock as Series E Preferred Stock, par value $0.0001 per share and a stated value of $2,000 per share. The Series E Certificate of Designation and its filing were approved by the Company’s Board of Directors without stockholder approval as provided for in the Company’s Articles of Incorporation and under Nevada law. The holders of shares of Series E Preferred Stock have the following preferences and rights:

On September 16, 2020, the Company entered into a Securities Purchase Agreement (the “SPA”) with an affiliated investor, who is a beneficial shareholder, to purchase an aggregate amount of 1,000 shares of the newly created Series E Convertible Preferred Stock of the Company (the “Series E Preferred”) for an aggregate investment amount of $2,000,000.

Pursuant to the Series E Certificate of Designation, Series E Preferred Stock is redeemable at the option of the holder in the event that the Company is prohibited from issuing shares of common stock to a holder upon any conversion due to insufficient shares of common stock available (“Authorized Failure Shares”) and therefore meets the criteria of a contingently redeemable instrument in accordance with ASC 480-10-25-7 – Distinguishing Liabilities from Equity. The Series E Preferred Stock is contingently redeemable upon the occurrence of an event that is outside of the issuer’s control and is classified as temporary equity pursuant to ASC 480-10-S99.

Further the Series E Preferred Stock is an equity host instrument since it has more features that align with an equity instrument than a debt instrument pursuant to ASC 815-15-25-17A – Derivatives and Hedging, which states in part that “the nature of the host contract depends on the economic characteristics and risks of the entire hybrid financial instrument.” All of the contractual and implied terms of the preferred share, such as the existence of a redemption feature or conversion option, should be considered when determining the nature of the host instrument as debt or equity. The Series E Preferred Stock embedded conversion feature (call option) is considered clearly and closely related to the equity host. Accordingly, further analysis under ASC 815-40-15 is not necessary and the embedded conversion feature should not be bifurcated from the host instrument. The Series E Preferred Stock redemption feature (put option) does not meet all the criteria under ASC 815-10-15-83, therefore it does not qualify as a derivative.

To determine whether the Series E Preferred Stock contains a BCF, we compared the effective conversion price and the Company’s stock price on the commitment date. The effective conversion price was calculated by dividing the proceeds from Series E Preferred Stock by the number of common shares issuable upon conversion of the Series E Preferred Stock. The BCF is measured as the difference between the commitment date stock price and the effective conversion price multiplied by the number of common stock issuable upon conversion of Series E. The BCF is limited to the total cash proceeds received if the amount of the BCF exceeds the cash proceeds received. In connection with the issuance of Series E Preferred Stock, during the year ended September 30, 2020, the Company recognized a beneficial conversion feature in the amount of $2,000,000 which was accounted for as a deemed dividend.

During the year ended September 30, 2021, the issuance of Series F Preferred Stock triggered the price protection clause in the Series E Preferred Stock. Thus, the conversion price of the Series E Preferred Stock was reduced from $0.00375 to $0.00313 on that date.

During the three months ended December 31, 2022 and 2021, the Company incurred $26,301 and $40,329 of Series E dividends. As of December 31, 2022 and September 30, 2022, dividend payable balances were $0 and $40,329, respectively, reflected in the accompanying unaudited balance sheets as accrued liabilities instead of temporary equity.

As of December 31, 2022 and September 30, 2022, the Company had 0 and 1,000 shares of Series E Preferred Stock issued and outstanding classified as temporary equity in the accompanying unaudited balance sheets, respectively.

On July 30, 2021, the Company filed a Certificate of Designation, Preferences and Rights of Series F Preferred Stock (the “Series F Certificate of Designation”), with the Nevada Secretary of State to designate 1,000 shares of its previously authorized preferred stock as Series F Preferred Stock, par value $0.0001 per share and a stated value of $2,000 per share. The Series F Certificate of Designation and its filing were approved by the Company’s Board of Directors without stockholder approval as provided for in the Company’s Articles of Incorporation and under Nevada law. The holders of shares of Series F Preferred Stock have the following preferences and rights:

In2021, the ~~event~~Company entered into a Securities Purchase Agreement (the “SPA”) with an affiliated investor, who is a beneficial shareholder, to purchase an aggregate amount of 500 shares of Series F Convertible Preferred Stock (the “Series F Preferred”) with accompanying warrant for 63,897,764 of common stock (the “Warrant”), for total proceeds of $1,000,000 (see Note 9). The Series F Preferred Stock has a stated value of $2,000 per share and shall accrue monthly in arrears, dividends at the rate of 8% per annum on the stated value. The dividends shall be paid monthly at the option of the ~~voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up of the Corporation, the holders~~holder of the Series BF Preferred Stock shall be entitled to receive, share for share with the holders of shares of Common Stock and Series A Preferred Stock, all the assets of the Corporation of whatever kind available for distribution to stockholders, after the rights of the holders of the Series A Preferred Stock have been satisfied.

In March 2017, the Company issued 2,892,000 shares of Series B Preferred to Jonathan F. Head, Ph. D, the Company’s Chief Executive Officer and a member of the Board of Directors of the Company as provided for in ~~the Contribution Agreement. The Series B preferred stock issued to Dr. Head and were determined to have nominal value of $289,~~either cash or $.0001 per shares, and was recorded as compensation expense. In addition, in March 2017 the Company issued 5,000,000 shares of Series B Preferred to Banco Actinver for the benefit of the Vitel Stockholders as partial consideration in the exchange for 100% of the issued and outstanding capital stock of Vitel. (See Note 3). The 5,000,000 shares of Series B preferred stock which primarily gives the holder voting rights and were determined to have nominal value of $500, or $.0001 per shares. As of September 30, 2017, there are 7,892,000 shares of Series B Preferred issued and outstanding.

On February 27, 2017, the Company issued 150,000 shares of its unregistered common stock to an employee as a bonus for services to the Company. The shares were valued at the most recent cash price paid of $0.075 per share. In connection with these shares, the Company recorded stock-based compensation of $11,250.

On April 13, 2017, the Company issued 20,000 shares of its unregistered common stock to a consultant for business development services performed. The shares were valued at the most recent cash price paid of $0.075 per share. In connection with these shares, the Company recorded stock-based compensation of $1,500.

On July 5, 2017, the Company issued 300,000 shares of its unregistered common stock to a consultant for business development services performed. The shares were valued at the quoted trading price on the date of grant of $0.077 per share. In connection with these shares, the Company recorded stock-based consulting fees of $23,100.

On March 10, 2017, pursuant to the terms of the Contribution Agreement, the Company issued 61,158,013 shares of its unregistered common stock to Banco Actinver, S.A., in its capacity as Trustee (the “Trustee”) of the Irrevocable Management Trust Agreement Trust No. 2868 (the “Trust Agreement”) for the benefit of the Vitel Stockholders in exchange for 100% of the issued and outstanding capital stock of Vitel (See Note 3). The 61,158,013 shares of common stock ~~were valued at $4,586,851, based on~~of the ~~acquisition-date fair~~Company. The number of shares of common stock issuable upon conversion of the Series F Preferred is determined by dividing the stated value of ~~our common stock~~the number of ~~$0.075 per share based on recent sales~~shares being converted, plus any accrued and unpaid dividends, by the lesser of: (i) $0.00313 and (ii) 75% of the average closing price of the Company’s common stock ~~pursuant to unit subscription agreements.~~

~~On October 20, 2015,~~during the Company entered into a common stock purchase agreement (the “Purchase Agreement”), together with a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Under the terms and subject to the conditions of the Purchase Agreement, the Company has the right to sell to, and Lincoln Park is obligated to purchase, up to $10.1 million in amounts of shares, as described below, of the Company’s common stock, subject to certain limitations, from time to time, over the 36-month period commencing on the date that a registration statement, which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC and a final prospectus in connection therewith is filed which occurred on December 15, 2015. The Company may direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 100,000 shares of Common Stock on any business day (such purchases, “Regular Purchases”), provided that at least one business day has passed since the most recent purchase, andprior five trading days; provided, however, ~~that Lincoln Park’s committed obligation under any single Regular Purchase~~the conversion price shall not exceed $50,000, provided that the amount the Company may sell to Lincoln Park under a single Regular Purchase may increase under certain circumstances as described in the Purchase Agreement but in no event will the amount of a single Regular Purchase exceed $500,000. The purchase price of shares of Common Stock related to the future funding willnever be ~~based on a formula tied to the prevailing market prices of such shares at the time of sales.~~less than $0.0016. In addition, the ~~Company may direct Lincoln Park~~investor was issued a Warrant to purchase ~~additional amounts as accelerated purchases if on the date~~an amount of ~~a Regular Purchase the closing sale price~~common stock equal to 20% of the ~~Common Stock is not below the threshold price as set forth in the Purchase Agreement. The Company’s sales of~~ shares of Common Stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 4.99%common stock issuable upon conversion of the ~~then outstanding shares of the Common Stock.~~

In connection with the Purchase Agreement, the Company issued as a commitment fee to Lincoln Park 1,000,000 shares of Common Stock. Lincoln Park represented to the Company, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)), and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a) (2) under the Securities Act. The securities sold may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the Purchase AgreementSeries F Preferred at any time, at no cost or penalty. Actual sales of shares of Common Stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. Lincoln Park has no right to require any sales by the Company, but is obligated to make purchases from the Company as it directs in accordance with the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our shares.

The net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its stock to Lincoln Park. The Company expects that any proceeds received by the Company from such sales to Lincoln Park under the Purchase Agreement will be used for general corporate purposes and working capital requirements.

~~During the nine months ended September 30, 2017, pursuant to the Purchase Agreement, the Company issued 2,000,000 shares of its common stock to Lincoln Park for net cash proceeds of $407,787.~~

~~From May 2017 to September 2017, the Company issued 9,433,557 shares of its common stock upon the conversion of principal note balances of $378,453 and interest of $12,158 (see Note 5).~~

During the six months ended June 30, 2017, pursuant to unit subscription agreements, the Company issued 8,253,136 shares of its unregistered common stock and 4,126,579 five-year warrants to purchase common shares for an exercise price of ~~$0.30~~$0.00313 per ~~common~~ share (subject to ~~investors~~adjustment as provided therein) until July 30, 2026. The Warrants are exercisable for cash ~~proceeds of $618,983 or $0.075 per share.~~

~~In July 2017, pursuant to a unit subscription agreement,~~at any time. The 63,897,764 Warrant was valued using the Company issued 1,000,000 shares of its unregistered common stock and 500,000 five-year warrants to purchase common shares for an exercise price of $0.30 per common share to investors for cash proceeds of $50,000 or $0.05 per share.

The November 2016 Warrants include a down-round provision under which the exercise price could be affected by future equity offerings undertaken by the Company or contain terms that are not fixed monetary amountsrelative fair value method at inception. Subsequent to the date of these November 2016 Warrants, the Company sold stock at a share price of $0.075 per share and $0.05 per share. Accordingly, pursuant to these ratchet provisions, the exercise price of the November 2016 Warrants were lowered to $0.03 per share$957,192 and the ~~total number of November 2016 Warrants were increased on~~Series F Preferred stock had a full ratchet basis from 2,333,334 warrants to 13,611,114 warrants, an increase of 11,277,780 warrants (see Note 5). In September 2017, the Company issued 9,547,087 shares of its common stock upon the cashless exercise of 9,074,076 of these warrants (see Note 5). Upon the cashless exercise of these warrants, the Company valued such warrants using the Binomial valuation model and calculated agrant date fair value ~~of $667,926~~$42,808 which was recorded as a ~~reduction~~BCF.

In accordance with ASC 470 – Debt, the proceeds of ~~derivative liabilities~~$1,000,000 was allocated based on the relative fair values of the Series F preferred stock and the Warrant of $42,808 and $957,192, respectively. Although ASC 470 is for debt instruments issued with warrants, preferred shares issued with warrants should be accounted for in a similar manner.

Pursuant to the Series F Certificate of Designation, Series F Preferred Stock is redeemable at the option of the holder in the event that the Company is prohibited from issuing shares of common stock to a holder upon any conversion due to insufficient shares of common stock available (“Authorized Failure Shares”) and therefore meets the criteria of a contingently redeemable instrument in accordance with ASC 480-10-25-7 – Distinguishing Liabilities from Equity. The Series F Preferred Stock is contingently redeemable upon the occurrence of an event that is outside of the issuer’s control and should be classified as temporary equity pursuant to ASC 480-10-S99. Further the Series F Preferred Stock is an equity host instrument since it has more features that align with an equity instrument than a debt instrument pursuant to ASC 815-15-25-17A – Derivatives and Hedging, which states in part that “the nature of the host contract depends on the economic characteristics and risks of the entire hybrid financial instrument.” All of the contractual and implied terms of the preferred share, such as the existence of a redemption feature or conversion option, should be considered when determining the nature of the host instrument as debt ~~settlement income.~~or equity. The Series F Preferred Stock embedded conversion feature (call option) is considered clearly and closely related to the equity host. Accordingly, further analysis under ASC 815-40-15 is not necessary and the embedded conversion feature should not be bifurcated from the host instrument. The Series F Preferred Stock redemption feature (put option) does not meet all the criteria under ASC 815-10-15-83, therefore it does not qualify as a derivative.

~~On June 2, 2017, in~~To determine whether the Series F Preferred Stock contains a BCF, we compared the effective conversion price and the Company’s stock price on the commitment date. The effective conversion price was calculated by dividing the proceeds from Series F Preferred Stock by the number of common shares issuable upon conversion of the Series F Preferred Stock. The BCF is measured as the difference between the commitment date stock price and the effective conversion price multiplied by the number of common stock issuable upon conversion of Series F. The BCF is limited to the total cash proceeds received if the amount of the BCF exceeds the cash proceeds received. In connection with the 2^nd ~~Securities Purchase Agreement (see Note 5),~~issuance of Series F Preferred Stock, during the year ended September 30, 2021, the Company recognized a BCF in the amount of $42,808 which was accounted for as a deemed dividend.

The relative fair value of the warrant of $957,192 was recorded as a discount associated with the Series F preferred stock and was fully amortized immediately because the Series F preferred stock was convertible on the date of issuance. The Company recorded the $957,192 as deemed dividend.

On November 29, 2022, the Company entered into Securities Exchange Agreements with related party preferred stockholders, whereby related party holders of 500 shares of Series F preferred stock with a stated value of $1,000,000 and accrued dividends payable of $33,315 were exchanged for the New Related Party Debentures (See Note 6).

During the three months ended December 31, 2022 and September 30, 2022, the Company also recorded dividends related to the Series F Preferred Stock in the amount of $13,151 and $20,164. As of December 31, 2022 and September 30, 2022, dividend payable balances were $0 and $20,164, respectively, reflected in the accompanying unaudited balance sheets as accrued liabilities instead of temporary equity.

As of December 31, 2022 and September 30, 2022, the Company had 0 and 500 shares of Series F Preferred Stock issued and outstanding classified as temporary equity in the ~~June 2017 Warrants~~accompanying unaudited balance sheets, respectively.

On April 28, 2020, the Board approved the 2020 Equity Incentive Plan (“2020 Plan”), as amended on May 29, 2020. On April 18, 2022, the Board terminated the 2020 Plan and any shares reserved thereunder are no longer subject to ~~purchase 1,555,633~~reservation and the Company had no options issued and outstanding under the 2020 Plan.

On April 18, 2022, the Company’s Board and the shareholders approved the 2022 Equity Incentive Plan (“2022 Plan”) at which time the plan became effective. Upon the effective date of the 2022 Plan, 1,915,000,000 shares of the Company’s common stock were reserved for issuance under the 2022 Plan (“Reserved Share Amount”), subject to the adjustments described in the 2022 Plan, and such Reserved Share Amount, when issued in accordance with the 2022 Plan, shall be validly issued, fully paid, and non-assessable. Pursuant to the 2022 Plan, the option price of each incentive stock option (except those that constitute substitute awards) shall be at least the fair market value of a share on the grant date; provided, however, that in the event that a grantee is a ten percent stockholder as of the grant date, the option price of an incentive stock option shall be not less than 110% of the fair market value of a share on the grant date, in no case shall the option price of any option be less than the par value ~~$0.001 per share at~~of a share.

On May 26, 2022, the Company’s Board of Directors (“Board”) approved the future granting of stock options under the 2022 Equity Incentive Plan, to various employees and consultants. On August 16, 2022, the Company granted stock options to purchase 1,901,410,519 common shares of the Company to various employees and consultants with an exercise price of $0.175 (subject to adjustments under certain conditions as defined in the June 2017 Warrants). The June 2017 Warrants include a down-round provision under which the conversion price and exercise price could be affected by future equity offerings undertaken by the Company or contain terms that are not fixed monetary amounts at inception. Subsequent to the date of these June 2017 Notes, the Company sold stock at a share price of $0.05$0.0036 per share. ~~Accordingly, pursuant to these ratchet provisions, the exercise price of the June 2017 Warrants were lowered to $0.03 per share~~The options expire on August 15, 2032 and ~~the total number of June 2017 Warrants were increased on a full ratchet basis from 1,555,632 warrants to 9,074,520 warrants, an increase of 7,518,888 warrants (see Note 5).~~

On July 26, 2017, in connection with the 3rd Securities Purchase Agreement (see Note 5), the Company issued the July 2017 Warrants to purchase 4,769,763 shares of the Company’s common stock, par value $0.001 per share at an exercise price of $0.10 (subject to adjustments under certain conditions as defined in the July 2017 Warrants).

~~Warrant activities for the nine months ended September 30, 2017 are summarized as follows:~~

On March 10, 2017, the non-management members of the Board of Directors determined that it was in the best interests of the Company to reward the Company’s chief executive officer and chief financial officer of the Company by amending their employment agreements and awarding them stock options in order to provide incentives to retain and motivate them in their roles with the Company. The stock option award included options for each of them to purchase 2,000,000 shares (the “Stock Options”) of Common Stock at an exercise price of $0.25 per share. One-third of the Stock Options vest ~~on March 10, 2017, March 10, 2018, and March 10, 2019, respectively, and are exercisable at any time after~~over varying vesting until 10 years after the grant date. The Stock Options vest so long as the optionee remains an employee of the Company or a subsidiary of the Company on the vesting dates (except as otherwise provided for in the employment agreement between the Company and the optionee).

terms through August 2026. The fair value of ~~this~~these option ~~grant~~grants was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%0%; expected volatility of ~~203.4%~~365.1%; risk-free interest rate of ~~1.93%~~2.82%; and an estimated holding period of 610 years. ~~In connection with these options, the~~The Company valued these ~~options~~stock option at a fair value of ~~$293,598~~$7,985,924 and will record stock-based compensation expense over the vesting ~~period.~~ periods.

During the ~~nine~~three months ended ~~September 30, 2017,~~December 31, 2022, in connection with the accretion of stock-based option expense over the vesting period, the Company recorded ~~stock-based compensation~~stock option expense of ~~$177,382 related to these options.~~

~~At September 30, 2017,~~$612,173. As of December 31, 2022, there were ~~4,000,000~~1,901,410,519 options outstanding and ~~1,333,334~~1,380,407,725 options vested, ~~and exercisable.~~subject to the filing of a registration on Form S-8 for the registration of the shares underlying such options. As of ~~September 30, 2017,~~December 31, 2022, there was ~~$116,216~~$1,358,129 of unvested stock-based compensation expense to be recognized through ~~December~~August 2026. The aggregate intrinsic value ~~at September 30, 2017~~on December 31, 2022 was ~~approximately $0~~$0 and was calculated based on the difference between the quoted share price on ~~September 30, 2017~~December 31, 2022 of $0.0034 and the exercise price of the underlying options.

Stock option activities for the ~~nine~~three months ended ~~September 30, 2017~~December 31, 2022 are summarized as follows:

On May 12, 2021, in connection with the issuance of a convertible note, the Company issued a Warrant to purchase up to 63,897,764 shares of common stock at an exercise price of $0.00313 per share (subject to adjustment as provided therein) until May 12, 2026 (see Note 6). The Warrants are exercisable for cash at any time. The Warrant was valued at $984,200 using the relative fair value method was recorded as debt discount which was being amortized over the life of the convertible note.

On July 30, ~~2017~~2021, the Company, in connection with the issuance of 500 shares of Series F preferred stock, issued a Warrant to purchase up to 63,897,764 shares of common stock at an exercise price of $0.00313 per share (subject to adjustment as provided therein) until July 30, 2026. The Warrants are exercisable for cash at any time. The Warrant was valued at $957,192 using the relative fair value method and was recorded as deemed dividend.

On November 1, 2021, the Company issued the First November 2021 Warrants to purchase an aggregate of 54,644,811 shares of common stock. The First November 2021 Warrants are exercisable at any time at a price equal to $0.00366 per share (subject to adjustment) until November 1, 2026. The First November 2021 Warrants were valued at $990,048 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the First November 2021 Notes (see Note 6 and Note 8).

On November 1, 2021, the Company issued the Second November 2021 Warrants to purchase an aggregate of 27,322,406 shares of common stock. The Second November 2021 Warrants are exercisable at any time at a price equal to $0.00366 per share (subject to adjustment) until November 1, 2026. The Second November 2021 Warrants were valued at $495,560 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the Second November 2021 Notes (see Note 6).

On November 1, 2021, the Company issued the Third November 2021 Warrants to purchase an aggregate of 27,322,406 shares of common stock. The Third November 2021 Warrants are exercisable at any time at a price equal to $0.00366 per share (subject to adjustment) until November 1, 2026. The Third November 2021 Warrants were valued at $495,560 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the Third November 2021 Notes (see Note 6).

On January 26, 2022, the Company, upon the approval of the First November 2021 Investor, amended the First November 2021 SPA whereby the Company issued additional cashless-exercisable warrants to purchase 218,579,234 shares of common stock. As a result, the total relative fair value of all warrants in total increased by $34,630, recorded as debt discount, which was being amortized over the life of the First November 2021 Notes (see Note 6). These warrants were exercisable at a price equal to $0.00366 per share (subject to adjustment) until November 1, 2026.

On January 26, 2022, the Company, upon the approval of the Second November 2021 Investor, amended the Second November 2021 SPA whereby the Company issued additional cashless-exercisable warrants to purchase 109,289,616 shares of common stock. As a result, the total relative fair value of all warrants in total increased by $22,429, recorded as debt discount, which was being amortized over the life of the Second November 2021 Notes (see Note 6). These warrants were exercisable at a price equal to $0.00366 per share (subject to adjustment) until November 1, 2026.

On January 26, 2022, the Company, upon the approval of the Third November 2021 Investor, amended the Third November 2021 SPA whereby the Company issued additional cashless-exercisable warrants to purchase 109,289,616 shares of common stock. As a result, the total relative fair value of all warrants in total increased by $22,429, recorded as debt discount, which was being amortized over the life of the Third November 2021 Notes (see Note 6). These warrants were exercisable at a price equal to $0.00366 per share (subject to adjustment) until November 1, 2026.

On January 27, 2022, the Company issued the First January 2022 Warrants to purchase an aggregate of 136,612,022 shares of common stock. The First January 2022 Warrants are exercisable at any time at a price equal to $0.00366 per share (subject to adjustment) until November 1, 2026. The First January 2022 Warrants were valued at $472,403 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the First January 2022 Note (see Note 6).

On January 31, 2022, the Company issued the Second January 2022 Warrants to purchase an aggregate of 136,612,022 shares of common stock. The Second January 2022 Warrants are exercisable at any time at a price equal to $0.00366 per share (subject to adjustment) until November 1, 2026. The Second January 2022 Warrants were valued at $469,810 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the Second January 2022 Note (see Note 6).

On January 31, 2022, the Company issued to two consultants an aggregate of 16,393,443 warrants as a placement fee in connection with the First January 2022 Note and Second January 2022 Note (collectively as “January 2022 Notes”) (see Note 6). These warrants are exercisable at a price equal to $0.00366 per share until November 1, 2024. These warrants were valued at $54,595 using the relative fair value method and were recorded as a debt discount which was being amortized over the life of the January 2022 Note.

On April 5, 2022, the Company issued the First April 2022 Warrants to purchase 4,201,681 shares of common stock. The First April 2022 Warrants are exercisable at any time at a price equal to $0.00476 per share (subject to adjustment) until April 1, 2027. The First April 2022 Warrants were valued at $89,815 using the relative fair value method and was recorded as debt discount which was being amortized over the life of the First April 2022 Note (see Note 6 and Note 8).

During April 2022, the Company issued the Second April 2022 Warrants to purchase an aggregate of 17,857,144 shares of common stock. The Second April 2022 Warrants are exercisable at any time at price equal to $0.00476 per share (subject to adjustment) until April 1, 2027. The Second April 2022 Warrants were valued at $335,593 using the relative fair value method and were recorded as debt discount which was being amortized over the life of the Second April 2022 Notes (see Note 6).

On May 9, 2022, the Company issued the May 2022 Warrants to purchase an aggregate of 42,016,808 shares of common stock. The May 2022 Warrants are exercisable at any time at a price equal to $0.00476 per share (subject to adjustment) until April 1, 2027. The May 2022 Warrants were valued at $178,449 using the relative fair value method and were recorded as debt discount which was being amortized over the life of the May 2022 Notes (see Note 6 and Note 8).

On June 15, 2022, the Company issued the June 2022 Warrants to purchase 2,100,840 shares of common stock. The June 2022 Warrants are exercisable at any time at a price equal to $0.00476 per share (subject to adjustment) until April 1, 2027. The June 2022 Warrants were valued at $5,924 using the relative fair value method and were recorded as debt discount which is being amortized over the life of the June 2022 Note (see Note 6 and Note 8).

On July 1, 2022, the Company issued the July 2022 Warrants to purchase an aggregate of 2,100,840 shares of common stock. The July 2022 Warrants are exercisable at any time at a price equal to $0.00476 per share (subject to adjustment) until April 1, 2027. The July 2022 Warrants were valued at $8,190 using the relative fair value method and were recorded as debt discount which was being amortized over the life of the July 2022 Notes (see Note 6).

On November 29, 2022, in connection with the Share Exchange Agreements and New Convertible Debt discussed below, the May 2021 Warrants, First November 2021 Warrants, First April 2022 Warrants, May 2022 Warrants, and June 2022 Warrants, aggregating 385,441,138 warrants, were amended to reduce the exercise price to $0.003 per share. Additionally, 63,897,764 warrants issued in connection with Series F preferred stock were amended to reduce the exercise price to $0.003 per share. All other terms of the warrants remained the same. As a result of the November 29, 2022 amendment to the exercise price, the Company calculated the difference between the warrants fair values on November 29, 2022, the date of the amendment, using the then current exercise price ranging from $0.00366 to $0.00476 and the new exercise price of $0.003 and determined that the difference was insignificant. (See Note 6).

On November 29, 2022, in connection with the Share Exchange Agreements and New Convertible Debentures discussed in Note 6, the Second November 2021 Warrants, Third November 2021 Warrants, January 2022 Warrants, Second January 2022 Warrants, Second April 2022 Warrants, and the July 2022 Warrants, aggregating 566,406,072 warrants, were amended to reduce the exercise price to $0.003 per share. Additionally, 16,393,443 warrants issued to a placement agent in January 2022 were amended to reduce the exercise price to $0.003 per share. In conjunction with the price reduction, the price protection feature for all these warrants was eliminated. All other terms of the warrants remained the same. As a result of the November 29, 2022 amendment to the exercise price, the Company calculated the difference between the warrants fair values on November 29, 2022, the date of the amendment, using the then current exercise price ranging from $0.00366 to $0.00476 and the new exercise price of $0.003 and determined that the difference was insignificant. (See Note 6).

In connection with the Securities Exchange Agreements with related parties for the exchange of the convertible notes and preferred shares for the New Related Party Debentures, as discussed in Note 6, the Company issued an aggregate of 2,564,340,702 warrants. The Warrants are exercisable for five years and six months from the earlier of the maturity date of the New Related Party Debentures and the closing of the Qualified Financing, at an exercise price equal to (i) in the event that a Qualified Offering is consummated prior to the exercise of the Warrant, the Qualified Offering Price, or (ii) in the event that no Qualified Offering has been consummated, the lower of: (A) $0.003 per share and (B) an amount equal to 70% of the average of the VWAP (or 50% of the average of the VWAP if an event of default has occurred and has not been cured) for the Common Stock over the ten Trading Days preceding the date of the delivery of the applicable exercise notice. If there is no effective registration statement covering the resale of the shares underlying the Warrants within 180 days following the closing of the Qualified Offering: (i) exercise may be via cashless exercise, and (ii) 5% additional Warrants will be issued by the Company to the holders for any portion of each month without such effective registration statement, up to a maximum of 25%. The Warrants contain certain price protection provisions providing for adjustment of the amount of securities issuable upon exercise of the Warrants in case of certain future dilutive events or stock-splits and dividends.

In connection with the Securities Exchange Agreements with investors for the exchange of the convertible notes and preferred shares for the New Debentures, as discussed in Note 6, the Company issued an aggregate of 2,269,030,092 warrants to investors. The Warrants are exercisable for five years and six months from the earlier of the maturity date of the New Debentures and the closing of the Qualified Financing, at an exercise price equal to (i) in the event that a Qualified Offering is consummated prior to the exercise of the Warrant, the Qualified Offering Price, or (ii) in the event that no Qualified Offering has been consummated, the lower of: (A) $0.003 per share and (B) an amount equal to 70% of the average of the VWAP (or 50% of the average of the VWAP if an event of default has occurred and has not been cured) for the Common Stock over the ten Trading Days preceding the date of the delivery of the applicable exercise notice. If there is no effective registration statement covering the resale of the shares underlying the Warrants within 180 days following the closing of the Qualified Offering: (i) exercise may be via cashless exercise, and (ii) 5% additional Warrants will be issued by the Company to the holders for any portion of each month without such effective registration statement, up to a maximum of 25%. The Warrants contain certain price protection provisions providing for adjustment of the amount of securities issuable upon exercise of the Warrants in case of certain future dilutive events or stock-splits and dividends.

In connection with the Initial Closing of the private placement, the Company and Gunnar, entered into the Placement Agency Agreement, pursuant to which Gunnar agreed to act as the Placement Agent. Pursuant to the terms of the Placement Agency Agreement, Gunner received 124,489,795 warrants. Additionally, the Company issued 16,000,000 warrants to a consultant in connection with the private placement offering.

Warrants activities for the three months ended December 31, 2022 is summarized as follows:

On ~~February 2, 2016,~~June 5, 2020, the Company and Dr. Michael Ruxin entered into an employment agreement ~~with Jonathan F. Head, Ph.D. (“~~(the “Ruxin Employment Agreement”) for Dr. ~~Head”)~~Ruxin to serve as the Company’s Chief Executive Officer, President and a director.

The Ruxin Employment Agreement provides that Dr. Ruxin will be employed for a five-year term commencing on June 5, 2020. The term will be automatically extended for one additional year upon the fifth anniversary of the effective date without any affirmative action, unless either party to the agreement provides at least sixty (60) days’ advance written notice to the other party that the employment period will not be extended. Dr. Ruxin will be entitled to receive an annual base salary of $300,000 and will be eligible for an annual discretionary bonus of 150% of such base salary. In the Ruxin Employment Agreement, Dr. Ruxin is entitled to, subject to the approval of the Board or a committee thereof, and under the 2022 Plan (i) a one-time grant of 49,047,059 Restricted Stock Units (“RSUs”) and (ii) a one-time grant of options to purchase 420,691,653 shares of common stock, In lieu of 49,047,059 RSU’s, on August 16, 2022, the Company granted 49,047,059 stock option plus the one-time grant of 420,691,653 stock options for an aggregate amount of 469,738,712 stock options with an exercise price of $0.0036 and an expiration date of August 15, 2032 and subject to vesting terms. Ruxin is entitled to participate in any and all benefit plans, from time to time, in effect for senior management, along with vacation, sick and holiday pay in accordance with the Company’s policies established and in effect from time to time. For the period of May 2021 through November 2021 and from August 15, 2022 to September 30, 2022, Dr. Ruxin deferred 50% of his salary. As of December 31, 2022 and September 30, 2022, the Company had accrued payroll related to Dr. Ruxin’s salary deferment of $125,000 and $112,500, respectively.

Dr. Ruxin is an “at-will” employee and his employment may be terminated by the Company at any time, with or without cause. In the event Dr. Ruxin’s employment is terminated by the Company without Cause (as defined in the Ruxin Employment Agreement), with Good Reason (as defined in the Ruxin Employment Agreement) or as a result of a non-renewal of the term of employment under the Ruxin Employment Agreement, Dr. Ruxin shall be entitled to receive the sum of (I) the Severance Multiple (as defined below), multiplied by his base salary immediately prior to such termination and (II) a pro-rata portion of his bonus for the year in which ~~runs~~such termination occurs equal to (a) his bonus for ~~three years (from February 2, 2016~~the most recently completed calendar year (if any), multiplied by (b) a fraction, the numerator of which is the number of days that have elapsed from the beginning of such calendar year through ~~February 1, 2019) and renews automatically for one year periods unless a written notice~~the date of termination and the denominator of which is the total number of days in such calendar year. “Severance Multiple” shall mean 3.0; provided, ~~not less than 120 days~~however, that if the date of termination occurs on or at any time during the twelve (12)-month period following a Change in Control, the Severance Multiple shall mean 4.0. In addition, the Company shall accelerate the vesting of any outstanding, unvested equity awards granted to Dr. Ruxin prior to the ~~automatic renewal date. The employment agreement with~~date of termination. Dr. ~~Head provides that Dr. Head’s salary for calendar year 2016~~Ruxin shall be ~~$275,000 and for calendar year 2017 and for each calendar year thereafter~~entitled to reimbursement of any COBRA payment made during the 18-month period following the date of termination.

The Ruxin Employment Agreement also contains covenants (a) restricting the executive from engaging in any activity competitive with our business during the term of the employment agreement ~~with Dr. Head shall be an amount determined by~~and in the ~~Board~~event of ~~Directors, which in no event shall be less than~~termination, for a period of one year thereafter, (b) prohibiting the ~~annual salary that was payable by~~executive from disclosing confidential information regarding the Company, ~~to Dr. Head for the immediately preceding calendar year.~~

~~On February 2, 2016, the Company entered into an employment agreement with Andrew Kucharchuk (“Mr. Kucharchuk) to serve as the Company’s President~~ and ~~Chief Financial Officer, the term of which runs for three years (from February 2, 2016 through February 1, 2019)~~(c) soliciting employees, customers and renews automatically for one year periods unless a written notice of termination is provided not less than 120 days prior to the automatic renewal date. The employment agreement with Mr. Kucharchuk provides that Mr. Kucharchuk’s salary for calendar year 2016 shall be $200,000 and for calendar year 2017 and for each calendar year thereafterprospective customers during the term of the employment agreement ~~with~~and for a period of one year thereafter.

On June 5, 2020, the Company and Jeffrey Busch entered into an employment agreement (the “Busch Employment Agreement”) for Mr. ~~Kucharchuk shall~~Busch to serve as the Company’s Chairman of the Company and in such other positions as may be ~~an amount determined~~assigned from time to time by the ~~Board~~board of ~~Directors, which in no event shall~~directors.

The Busch Employment Agreement provides that Mr. Busch will be ~~less than~~employed for a five-year term commencing on June 5, 2020. The term will be automatically extended for one additional year upon the fifth anniversary of the effective date without any affirmative action, unless either party to the agreement provides at least sixty (60) days’ advance written notice to the other party that the employment period will not be extended. Mr. Busch will be entitled to receive an annual base salary ~~that was payable by the Company to Mr. Kucharchuk for the immediately preceding calendar year.~~

~~The above executives shall~~of $60,000 and will be eligible for an annual ~~target bonus payment in an amount equal~~discretionary bonus. In the Busch Employment Agreement, Mr. Busch is entitled to, ~~ten percent of his base salary (“Bonus”). The Bonus is determined based on~~subject to the achievement of certain performance objectives of the Company as established by the Board of Directors. The Bonus may be greater or less than the target Bonus, based on the level of achievement of the applicable performance objectives.

~~On March 10, 2017, the non-management members~~approval of the Board or committee thereof, and under the 2020 Plan (i) a one-time grant of ~~Directors determined that it was in the best interests~~49,047,059 Restricted Stock (“RSUs”) and (ii) a one-time grant of options to purchase 420,691,653 shares of common stock. In lieu of 49,047,059 RSU’s, on August 16, 2022, the Company ~~to reward~~granted 49,047,059 stock option plus the ~~Company’s chief executive officer and chief financial officer~~one-time grant of ~~the Company by amending their employment agreements and awarding them~~420,691,653 stock options ~~in order to provide incentives to retain and motivate them in their roles~~for an aggregate amount of 469,738,712 stock options with the Company. The Company amended each of the February 2, 2016 employment agreements of the Company’s chief executive officer and chief financial officer to extend the term to March 9, 2020 and to provide for 100% vesting of any unvested portion of any outstanding equity, or equity-based award granted to them by the Company upon termination of their respective employment agreements without cause, as a result of a breach of the agreement by the Company or upon their respective death or disability.

~~The stock option award included options for each of them to purchase 2,000,000 shares (the “Stock Options”) of Common Stock at~~ an exercise price of ~~$0.25 per share. One-third~~$0.0036 and an expiration date of August 15, 2032 and subject to vesting terms. Mr. Busch is entitled to participate in any and all benefit plans, from time to time, in effect for senior management, along with vacation, sick and holiday pay in accordance with the ~~Stock Options vest on March 10, 2017, March 10, 2018,~~Company’s policies established and ~~March 10, 2019, respectively,~~in effect from time to time. As of December 31, 2022 and ~~are exercisable~~September 30, 2022, the Company had accrued director compensation of $207,500 and $192,500, respectively.

Mr. Busch is an “at-will” employee and his employment may be terminated by the Company at any time, after vesting until 10 years after the grant date. The Stock Options vest so long as the optionee remains an employee of the Company or a subsidiary of the Company on the vesting dates (except as otherwise provided for in the employment agreement between the Company and the optionee).

On March 10, 2017, Vitel entered into employment agreements with each of Messrs. Cosme and Alaman who were the sellers of Vitel (the “Vitel Employment Agreements”). Mr. Cosme was appointed as Vitel’s General Manager of Global Operations and Mr. Alaman was appointed as its Chief Operations Officer. Both of Messrs. Cosme and Alaman will be responsible for, supervising, managing, planning, directing and organizing the activities of the Vitel and will be its two most senior executive officers reporting to Vitel’s Board of Directors with all other employees of Vitel reporting directly or indirectly to them.

Each of the Vitel Employment Agreements provides for a base salary of $187,500, annual bonuses and other compensation as required under Mexican Federal Labor Law and an annual bonus target of 50% of salary based on performance objectives to be established by the Company’s Board of Directors annually. In addition, Messrs. Cosme and Alaman are entitled to a $500 monthly car allowance, health insurance reimbursement of up to $5,000 per year and other benefits required under Mexican law. The Vitel Employment Agreements also contains a non-compete provision prohibiting them from engaging in business activities that compete with Vitel’s current business and allows them to continue to operate their ongoing pharmaceuticals business so long as such business does not interfere with their duties to Vitel under their respective employment agreements. In addition, if Messrs. Cosme and Alaman seek to pursue any future business opportunities that do not interfere with their obligations to Vitel, they are required to notify the Company and provide it with a notice and an opportunity to participate in such opportunity.

~~The Vitel Employment Agreements may be terminated upon the employee’s death or disability, and~~ with or without cause. In the event ~~Vitel terminates either of Messrs. Cosme and Alaman’s~~Mr. Busch’s employment ~~upon their death or disability, for cause~~is terminated by the Company without Cause (as defined in the Busch Employment Agreement), with Good Reason (as defined in the Busch Employment Agreement) or as a result of a non-renewal of the term of employment ~~agreement) or if either of them should resign without cause,~~under the ~~person resigning is~~Busch Employment Agreement, Mr. Busch shall be entitled to ~~payment~~receive the sum of ~~their~~(I) the Severance Multiple (as defined below), multiplied by his base salary immediately prior to such termination and (II) a pro-rata portion of his bonus for the year in which such termination occurs equal to (a) his bonus for the most recently completed calendar year (if any), multiplied by (b) a fraction, the numerator of which is the number of days that have elapsed from the beginning of such calendar year through the date of termination and ~~certain severance payments they are legally~~the denominator of which is the total number of days in such calendar year. “Severance Multiple” shall mean 3.0; provided, however, that if the date of termination occurs on or at any time during the twelve (12)-month period following a Change in Control, the Severance Multiple shall mean 4.0. In addition, the Company shall accelerate the vesting of any outstanding, unvested equity awards granted to Mr. Busch prior to the date of termination.

The Busch Employment Agreement also contains covenants (a) restricting the executive from engaging in any activity competitive with our business during the term of the employment agreement and in the event of termination, for a period of one year thereafter, (b) prohibiting the executive from disclosing confidential information regarding the Company, and (c) soliciting employees, customers and prospective customers during the term of the employment agreement and for a period of one year thereafter.

On September 24, 2020, the Company appointed Thomas E. Chilcott, III, to serve as the Chief Financial Officer. The Company entered into an offer letter with Mr. Chilcott which provides that his base salary will be $225,000 per year. Mr. Chilcott is entitled to participate in all medical and other benefits that the Company has established for its employees. The offer letter also provides that Mr. Chilcott will be granted an option to purchase up to 94,545,096 shares of the Company’s common stock which were granted on August 16, 2022 with an exercise price of $0.0036 and an expiration date of August 15, 2032 and subject to vesting terms.

On December 31, 2021, the Company’s Board approved an increase in the base salary of Thomas E. Chilcott, III, the Company’s Chief Financial Officer, from $225,000 to $300,000 per year. The increase was effective January 1, 2022. The Board also approved two new bonuses for which Mr. Chilcott was eligible: (i) a $37,500 bonus payable upon the Company’s completion of a capital raise of at least $1,000,000; and (ii) a $37,500 bonus payable upon the Company’s completion of a capital raise of at least $2,000,000 in the aggregate. On December 6, 2022, the Board approved a bonus compensation plan pursuant to which Thomas E. Chilcott, III, the Company’s Chief Financial Officer, was eligible for: (i) a $150,000 bonus payable upon the successful filing of the Company’s report on Form 10-K for the annual period ended September 30, 2022 (the “ Annual Report ”) on or before December 29, 2022; or (ii) a $100,000 bonus payable upon the successful filing of the Company’s Annual Report on or before January 13, 2023 (collectively, the “Bonus”). During the three months ended December 31, 2022, an aggregate bonus of $150,000 was paid to Mr. Chilcott.

On December 5, 2022, the Company appointed Faith Zaslavsky, age 48, as President and Chief Operating Officer of the Company, effective December 5, 2022 (the “Effective Date”). In connection with her appointment, on December 5, 2022, the Company and Ms. Zaslavsky entered into an offer letter (the “Offer Letter”) which provides that Ms. Zaslavsky’s base salary will be $400,000 per year, and that beginning in calendar year 2023 she will be eligible to receive an annual incentive cash bonus of up to 35% of base salary at the discretion of the Board for the achievement of certain milestones to be agreed upon by Ms. Zaslavsky and the Company within 90 days of the Effective Date. Upon the Company’s creation of a new equity incentive plan or an increase in the number of shares available under ~~Mexican Federal Labor Law. At Vitel’s~~the Company’s existing equity incentive plan, Ms. Zaslavsky will be granted 150,000,000 employee stock options vesting at 20% annually, beginning on the Effective Date. The employee stock options will have a strike price equal to the closing price of the Company’s common stock on the day that the Board approves Ms. Zaslavsky’s stock option itpackage. Ms. Zaslavsky is eligible to participate in the benefit plans and programs generally available to the Company’s employees. Ms. Zaslavsky will also be entitled to reimbursement of reasonable business expenses incurred or paid by her in the performance of her duties and responsibilities for the Company, subject to any restrictions set by the Company from time to time and to such reasonable substantiation and documentation as may be specified by the Company from time to time. Ms. Zaslavsky’s employment with the Company is “at-will”, and either party can terminate ~~their~~the employment relationship at any time, for or without cause, with or without notice. The Offer Letter also contains standard restrictive covenants prohibiting Ms. Zaslavsky from engaging in competition with the ~~employee~~Company within the United States during her employment and for a period of 24 months following the termination of her employment with the Company.

On July 5, 2020, the Company and a consultant entered into a Scientific Advisory Board Service Agreement (“Scientific Advisory Agreement”) which provides for; (i) $2,000 monthly compensation; (ii) 88,786,943 stock options under the 2022 Plan, which were granted on August 16, 2022 with an exercise price of $0.0036 and an expiration date of August 15, 2032 and subject to vesting terms and; (iii) $1,500 per day for any special project requiring more than six hours of advisory service in a single day performed upon a written request from the Company. Either party may terminate the Scientific Advisory Agreement at any time upon ten days’ written notice to the other party unless either party neglects or fails to perform its obligations under the Scientific Advisory Agreement; then the termination notice shall be effective upon receipt of the same.

On July 5, 2020, the Company and a consultant entered into a Pathology Advisory Board Service Agreement (the “Pathology Advisory Agreement”) which provides for; (i) $272 monthly compensation; (ii) 77,972,192 stock options under the 2022 Plan, which were granted on August 16, 2022 with an exercise price of $0.0036 and an expiration date of August 15, 2032 and subject to vesting terms and; (iii) $1,500 per day for any special project requiring more than six hours of advisory service in a single day performed upon a written request from the Company. Either party may terminate the Pathology Advisory Agreement at any time upon ten days’ written notice to the other party unless either party neglects or fails to perform its obligations under the Pathology Advisory Agreement; then the termination notice shall be effective upon receipt of the same.

Effective January 1, 2021, the Company entered into a consulting agreement with Mr. Kucharchuk, a member of the Board of Directors, to serve as a strategic advisor. The agreement was effective for a period of twelve months, commencing on January 1, 2021 and shall renew on a month-to month basis, subject to the right of the Company and Mr. Kucharchuk to terminate the agreement pursuant to the agreement. Pursuant to the agreement, Mr. Kucharchuk shall be paid $2,000 per month. As of December 31, 2022 and September 30, 2022, the Company had an accounts payable – related payable balance of $6,000 and $12,000 related to this consulting agreement, respectively (See Note 8).

In September 2006, the Company entered into an exclusive license agreement with George Mason Intellectual Properties (“GMU License Agreement”), a non-profit corporation formed for the benefit of George Mason University (“GMU”) which: (1) grants an exclusive worldwide license, with the right to grant sublicenses, under the licensed inventions to make, have made, import, use, market, offer for sale and sell products designed, manufactured, used and/or marketed for all fields and for all uses, subject to the exclusions as defined in the GMU License Agreement; (2) grants an exclusive option to license past, existing, or future inventions in the Company’s field, from inventors that are obligated to assign to GMU and who have signed a memorandum of understanding acknowledging that developed intellectual property will be offered, subject to the exclusions as defined in the GMU License Agreement; (3) the license and option granted specifically excludes biomarkers for lung, ovarian, and breast cancers in a diagnostic field of use and GMU inventions developed using materials obtained from third parties under agreements granting rights to inventions made using said materials and; (4) grants right to assign or otherwise transfer the license so long as such assignment or transfer is accompanied by a change of control transaction and GMU is given 14 days’ prior notice. In addition, the Company is required to make an annual payment of $50,000 to GMU as well as pay GMU a quarterly royalty equal to the net revenue multiplied by one and one-half percent (1.5%), due on a quarterly basis or a quarterly sublicense royalty equal to the net revenue multiplied by fifteen percent (15%). Further, the Company has the right of first refusal for all technology associated with RPPA technology from GMU. As of December 31, 2022 and September 30, 2022, the Company has accrued royalty fees of $2,526 and $2,443, respectively, reflected in the accompanying unaudited balance sheet in accrued liabilities.

In March 2018, the Company entered into two license agreements (“NIH License Agreements”) with the National Institutes of Health (“NIH”) which grants the Company an exclusive and a nonexclusive United States license for certain patents. Pursuant to the NIH License Agreements, the Company is required to make an annual payment of $1,000 to the NIH as well as pay the NIH a royalty equal to the net sales multiplied by three percent (3.0%) every June 30^th and December 31^st. Commencing on January 1^stof the year following the year of the first commercial sale, the Company is subject to a non-refundable minimum annual royalty of $5,000. In addition, a sublicense royalty equal to the net revenue multiplied by ten percent (10%) will be payable upon sublicensing. As of December 31, 2022 and September 30, 2022, the Company has accrued royalty fees of $0.

In December 2019, the Company entered into a lease agreement for ~~good cause~~its corporate and laboratory facility in Golden, Colorado. The lease is for a period of 61 months, with an option to extend, commencing in February 2020 and expiring in February 2025 (see Note 7).

On June 10, 2021, the Company entered into an amendment to its existing Warehouse Lease (“Lease Amendment”), effective October 3, 2021, for its laboratory facility in Golden, CO (see Note 7). The Lease Amendment provided for: (i) an extension to the term of the original lease to five years following the completion of the Company’s improvements to the Expansion Premises (defined below); (ii) an expansion of the premises to include the premises located at Unit 404, Building F, 15000 West 6^th Avenue, Golden, Colorado 80401, consisting of approximately 4,734 rentable square feet (the “Expansion Premises”); (iii) an annual base rent modification; (iv) an increase to the security deposit; (v) tenant improvement allowance; (vi) additional parking and; (vii) two renewal options, each for five year terms, for a total of ten years.

Pursuant to ASC 450-20 – Loss Contingencies, liabilities for contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. As of December 31, 2022 and September 30, 2022, the Company has recorded a contingent liability of $80,240 and $78,440, respectively, resulting from certain liabilities of Avant prior to the asset sale and recapitalization transaction (see Note 1). The contingent liabilities consisted of two notes payables with a total outstanding principal balance of $40,000 as of December 31, 2022 and September 30, 2022 and accrued interest payable of $40,240 and $38,440 as of December 31, 2022 and September 30, 2022, respectively.

On December 10, 2021, YPH LLC filed a complaint against the Company in the District Court for the Southern District of New York alleging that Theralink breached its Certificate of Designation for Series C-1 Convertible Preferred Stock by failing to honor a conversion notice submitted to it by YPH. Based on these and other allegations, Plaintiff asserted a breach of contract claim claiming that it has damages in excess of $100 million. The case continues to be in the pleadings stage with Theralink filing its last response on March 30, 2022. The Company believes these claims are without merit and intends to defend plaintiffs’ lawsuits vigorously. The Company currently believes the likelihood of a loss contingency related to these matters is remote and, therefore, no provision for a loss contingency is required.

On August 16, 2022, Erika Singleton filed a complaint against the Company in the Eighth Judicial District Court, Clark County, Nevada, Case No. A-22-857038-C. Plaintiff alleges that the Company did not provide her with physical stock certificates for 200,000 shares of common stock Plaintiff purchased for $2,000 in 2017. Based on these and other allegations, Plaintiff asserts claims against the Company for breach of contract, violation of Florida securities law, fraud, and unjust enrichment. The court has set the hearing on our motion to dismiss for March 23, 2022. The Plaintiff has until March 2, 2023 to file her opposition to our motion to dismiss and we will then have until March 16, 2023 to file our reply.

On January 27, 2023, the Company consummated the second closing (the “Second Closing”) of the Offering pursuant to the terms and conditions of that certain Purchase Agreement, dated as of November 29, 2022, by and among the Company, certain accredited investors (the “Second Closing Purchasers”) and Cavalry Fund I Management LLC, a Delaware limited liability company, in its capacity as Collateral Agent. At the Second Closing, the Company sold the Purchasers (i) New Debentures in an aggregate principal amount of $1,045,000 and (ii) Warrants to purchase up to 298,571,429 shares of Common Stock, subject to adjustments provided by the Warrants, which represents 100% warrant coverage. The Company received a total of $950,000 in gross proceeds at the Second Offering, taking into account the 10% original issue discount, before deducting offering expenses and commissions.

Pursuant to the terms of the Placement Agency Agreement, the Company agreed to (i) pay Gunnar a cash placement fee of 10% of the gross cash proceeds raised in the Second Offering, and (ii) issue to Gunnar additional PA Warrants on the terms identical to the Warrants sold in the Second Offering in an amount equal to 10% of the New Debentures sold to Second Closing Purchasers. As a result of the foregoing, the Company paid Gunnar an aggregate commission of $95,000 in connection with the Second Closing. The Company also paid $7,500 in fees to Gunnar’s legal counsel.

The New Debentures mature on November 29, 2023, subject to a three-month extension at the sole discretion of the Company. The New Debentures bear interest at 10% per annum payable upon conversion or maturity. The Debentures are convertible into shares of Common Stock at any time after the maturity date and prior to Mandatory Conversion (as defined below) at the conversion price equal to the lesser of: (i) $0.003 per share and (ii) 70% of the average of the VWAP (as defined in the ~~agreement)~~Debentures) (or 50% of the average of such VWAP if an event of default has occurred and has not been cured) of the Common Stock during the ten Trading Day (as defined in ~~which~~the New Debentures) period immediately prior to the applicable conversion date. The New Debentures are subject to Mandatory Conversion in the event the ~~person terminated is entitled to (i)~~Company closes a Qualified Offering. The conversion price per share of Common Stock in the ~~equivalent amount~~case of a Mandatory Conversion shall be the Qualified Offering Price. Alternatively, upon a Mandatory Conversion, the holders of the ~~corresponding severance payment set forth in~~New Debentures may elect to exchange their Debentures for newly issued convertible preferred securities at a price per share equal to the ~~Mexican Federal Labor Law for an unjustified dismissal,~~Qualified Offering Price or ~~if greater (ii)~~ the ~~equivalent amount~~five-day VWAP of the Common Stock prior to the date that is 181 days after the closing of the Qualified Offering.

Notwithstanding the preceding, holders of New Debentures shall have the right to require satisfaction of up to ~~three years’ gross salary~~40% of all amounts outstanding under the New Debentures, in cash, at the time of a Qualified Financing. Investors that are exchanging shareholders shall have the right to require satisfaction of up to 10% of all amounts outstanding under the Debentures, in cash, at the time of a Qualified Financing. The New Debentures also contain certain price protection provisions providing for adjustment of the number of shares of Common Stock issuable upon conversion of the Debentures in case of certain future dilutive events or stock-splits and dividends.

The Company’s obligations under the Purchase Agreement and the New Debentures are secured by a first priority lien on all of the assets of the Company pursuant to that certain ~~amounts mandated under Mexican labor laws, depending on~~Security Agreement, dated November 29, 2022 (the “Security Agreement”) by and among the Company, the Purchasers and the Collateral Agent.

In connection with the issuance of the Underlying Securities discussed above, the Company determined that the terms of the Debentures and Warrants contain an embedded conversion option to be accounted for as derivative liabilities due to the holder having the potential to gain value upon conversion and provisions which includes events not within the control of the Company. In accordance with ASC 815-40 -Derivatives and Hedging - Contracts in an Entity’s Own Stock, the embedded conversion option contained in the Debentures and the Warrants shall be accounted for as derivative liabilities at the date of ~~termination less the number of months elapsed after March 10, 2017. The severance payment~~issuance and shall be ~~paid in equal monthly installments over the remaining term so long as the employee is in compliance with the non-compete provisions provided for in the employment agreement.~~

adjusted to fair value through earnings at each reporting date. The ~~Company is a guarantor of Vitel’s obligations under the Vitel Employment Agreements. The Vitel Employment Agreements do not represent additional purchase consideration.~~

~~For the nine months ended September 30, 2017, total sales to customers located in Mexico represent 100% total revenues.~~

For the nine months ended September 30, 2017, four customers accounted for approximately 87.3% of total sales (43.2%, 20.6%, 12.6% and 10.9%, respectively). The Company did not have customers during the 2016 periods. A reduction in sales from or loss of such customers would have a material adverse effect on the Company’s consolidated results of operations and financial condition. At September 30, 2017, five customers accounted for 97.2%fair value of the ~~accounts receivable balance (30.5%, 19.0%, 21.0%, 13.8%,~~embedded conversion options will be determined using the Binomial Lattice valuation model. At the end of each period and ~~12.9%, respectively).~~

~~Generally, the Company’s subsidiary, Onc BioMune, Inc., relies~~ on ~~one vendor as a single source of raw materials to produce certain components of its cancer treatment products. The Company believe that other vendors are available to supply these materials if~~Debenture conversion date or repayment, the Company ~~cannot obtain these materials~~revalues the derivative liabilities resulting from ~~its single source vendor.~~the embedded option.

For the nine months ended September 30, 2017, the Company’s subsidiary, Vitel, purchased all of its product from one supplier located in Mexico. This supplier obtains its products from one suppler located in Germany. The loss of this supplier may have a material adverse effect on the Company’s consolidated results of operations and financial condition.

~~During the nine months ended September 30, 2017, the Company’s subsidiary, Vitel, purchased and sold four products.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Cautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results~~

This quarterly report on Form 10-Q contains forward-looking statements regarding our business, financial condition, results of operations and prospects. The Securities and Exchange Commission (the “SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This quarterly report on Form 10-Q and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results. Factors that could cause our actual results of operations and financial condition to differ materially are set forth in the “Risk Factors” section of our annual report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on April 17, 2017.

We caution that these factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

~~The following~~ discussion should be read in conjunction with our ~~condensed consolidated~~historical financial statements. The following discussion and analysis contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. For additional information regarding these risks and uncertainties, please see Part II, Item 1A of this Quarterly Report on Form 10-Q, “Risk Factors,” and the ~~related notes that appear elsewhere~~risk factors included in ~~this quarterly report~~our September 30, 2022, Annual Report on Form ~~10-Q.~~10-K.

The Company is a ~~clinical-stage biopharmaceutical~~commercial-stage, precision medicine, molecular data-generating company ~~engaged in~~that focuses on the development of novel cancer immunotherapy products, with a proprietary vaccine technology that is designed to stimulate the immune system to attack its own cancer while not hurting the patient. We are also commercializing specialty drugs in Mexico and other Latin American countries following our March 10, 2017 acquisition of Vitel Laboratorios discussed below.

We seek to create a portfolio of product candidates that may be developed as therapeutics for our own proprietary programs or for development by potential collaborative partners. We recognize that the product development process is subject to both high costs and a high risk of failure. We believe that identifying a variety of product candidates and working in conjunction with other pharmaceutical partners may minimize the risk of failure, fill the product pipeline gap at major pharmaceutical companies, and ultimately increase the likelihood of advancing clinical development and potential commercialization of the product candidates.

~~Our lead product, ProscaVax™ is scheduled to commence a Phase 2 clinical study later in 2017 following our Phase 1 clinical trials in 2016 and into 2017.~~

On March 10, 2017, we completed the acquisition of Vitel Laboratorios (the “Vitel Acquisition”). The Vitel Acquisition is expected to transform OncBioMune into a revenue-generating international pharmaceutical company with a more diverse product line with a particularly deep reach throughout Mexico, Central and Latin America, and relationships across Europe and Asia. The Vitel Acquisition includes the acquisition of two drugs it licenses and sells in Mexico, Bekunis® for constipation and Cirkused® for stress. Approved for sale in the fourth quarter of 2016, the two over-the-counter products have generated significant sales that have exceeded Vitel’s early projections. Vitel has a total of seven other products that are either already in the registration stage or planned for launch later in 2017.

By acquiring Vitel, we indirectly acquired Vitel’s 50% ownership interest in Oncbiomune México, an entity in which we acquired a 50% interest when we jointly launched this company. Oncbiomune Mexico was launched for the purposes of developing and commercializing our PROSCAVAX vaccine technology and cancer technologies in México, Central and Latin America (“MALA”) for the treatment of prostate, ovarian and various other types of cancer and includes a portfolio of owned products and licenses with OncBioMune.

Vitel has license agreements covering the Mexican market with Roha Arnzemittel, GmbH (“Roha”) for Bekunis® (for constipation) and Cirkused® (for stress), as well as licensing rights to the remainder of Roha’s pipeline at Vitel’s discretion.

Vitel also has Mexican territorial rights through licensing agreements with; Kamada for KamRab® (for rabies), KamRho® (an Rh immunization) and Glassia® (for Anti-D deficiency); Aqvida for Imatinib (for cancer), and other oncology products; QPharma for Androferti (a male fertility drug) and is currently developing two innovative orphan drugs through their own research and development.

~~For Mexico, Central and Latin America, Vitel has relationships that are expected to forge~~ development and commercialization of ~~several products, including, Gem Pharmaceuticals~~a series of proprietary data-generating assays that may provide important actionable information for ~~GPX-150 (for sarcoma); EOC Pharma~~physicians, patients and biopharmaceutical companies, in the area of oncology. The Company’s objective is to commercialize the technology originally developed by Theranostics Health, Inc. This technology is differentiated due to:

Theralink is advancing proprietary technology in the field of phosphoproteomic research, a sector which has emerged as one of the most exciting new components in the high-growth field of precision molecular diagnostics. This technology is intended to make it possible to generate an accurate and comprehensive portrait of protein pathway activation in diseased cells from each patient, which may enable providers to identify and match individuals with optimal targeted molecular therapies. This technology enables the quantitative measurement of the active protein(s) in cancer cells and their level of activation. We believe the technology’s measurement sensitivity is many times greater than conventional mass spectrometry and other protein immunoassays. Initially spun-out from GMU in 2006, and subsequently elevated to the federal government’s Center for ~~Telatinib (for first line oral gastric cancer treatment);~~Medicare & Medicaid Services’ (“CMS”) and ~~Rational Vaccines~~Clinical Laboratory Improvement Amendments (“CLIA”) standards, Theralink’s assay may prove highly useful for oncology patient management by improving (i) chemotherapy drug selection; (ii) immunotherapy drug selection; and (iii) optimizing combination therapy selection.

The biomarker and data-generating tests provide biopharmaceutical companies, clinical scientists and physicians with molecular-based guidance as to which patients may benefit from new molecular targeted therapeutics being developed for use in treating various life-threatening oncology diseases. These tests may also provide guidance to physicians on existing treatment standards that are recognized as the standard of care in the oncology treatment community. This addresses the core aspect of precision oncology treatment by identifying which individuals are more likely to respond to specific targeted molecular therapies, thus forming the basis for personalized medicine.

The technology is based upon the pioneering work of three noted scientists, Drs. Lance Liotta, Emanuel Petricoin and Virginia Espina, in proteomic-based precision medicine. Theralink benefits from a portfolio of intellectual property derived from licensing agreements with:

Theralink is committed to advancing the technology from GMU and the NIH as a platform for the ~~first~~development of new clinical biomarkers. These biomarkers and ~~only herpes Vaccine~~monitoring products may have the ability to provide biopharmaceutical companies and doctors with critical molecular-based knowledge to potentially make the best therapeutic decisions based on a patient’s unique, individual medical needs.

On April 1, 2022, the Board of Directors (“Board”) of the Company, voted to appoint Danica Holley and Matthew M. Schwartz, M.D. to serve as members of the Board, effective April 4, 2022. Ms. Holley and Dr. Schwartz will serve as members of the Board until the next annual meeting of shareholders of the Company or until his or her resignation or removal and otherwise until his or her successor is elected. The Board determined that Ms. Holley and Dr. Schwartz each meet the independence standards of the NASDAQ Stock Market Rules and the applicable rules of the SEC.

On December 5, 2022, we appointed Faith Zaslavsky as President and Chief Operating Officer of the Company. Prior to joining the Company, Ms. Zaslavsky served as the President of Oncology of Myriad Genetics, Inc. Ms. Zaslavsky served Myriad in several roles for the ~~treatment~~past 22 years, and prior to serving as Myriad’s President of ~~HSV-2~~Oncology, Ms. Zaslavsky served as Myriad’s National Sales Director of Oncology from 2017 to 2019 and ~~HSV-1.~~a Regional Sales Director of Women’s Health from 2015 to 2017.

~~In addition to its product pipeline and relationships, Vitel’s network channel partners cover a wide range~~Results of drug development and marketing. A sampling of relationships includes, CID Information Systems (marketing intelligence), Grupo Nichos (pharmaceutical salesforce, demand generation), CeroGrados (pharmaceutical warehousing, and old chain), CRO’s authorized by the Federal CommissionOperations

Comparison for the ~~Protection from Sanitary Risks (“COFEPRIS”) in Mexico and Regulatory Affairs parties that are authorized by the COFEPRIS for dossier build up and pre-inspection.~~

In addition to the assets we acquired through the Vitel Acquisition, our current product portfolio consists of three target therapies and a vaccine platform that allows us to create a therapeutic vaccine for any solid tumor cancer. The vaccine platform has treated over 300 patients. We are in the planning stage of a Phase 2 clinical trial of our lead product, ProscaVax®. The trial will be under the direction of Glenn Bubley, MD and the lead site will be Harvard’s Beth Israel Deaconess Medical Center, with additional other hospitals in the Harvard Health System. We anticipate that the trial will expand the results that we found in our Phase 1 clinical trial in a different patient population. We also hope to develop our other proprietary technologies, such as the paclitaxel-albumin conjugate with regard to which we plan to file an orphan drug indication within the next two years.

Three ~~and Nine~~ Months Ended ~~September 30, 2017 Compared to Three~~December 31, 2022 and ~~Nine Months Ended September 30, 2016~~2021

During the three and nine months ended September 30, 2017, we generated revenue of $118,572 and $278,686, respectively, which related to product sales in Mexico during the period from the date of the Vitel acquisition (March 10, 2017) to September 30, 2017. We did not generate any revenues for the three and nine months ended September 30, 2016. We expect to generate future revenues from product sales in Mexico as discussed above in the Overview section.

During the three and nine months ended September 30, 2017, we recorded costs of sales of $53,168 and $156,084 and gross margin of $65,404 and $122,602, respectively, which related to product sales in Mexico during the period from the date of the Vitel acquisition (March 10, 2017) to September 30, 2017. We did not generate any cost of revenues or gross profit during the three and nine months ended September 30, 2016.

For the three months ended September 30, 2017, operating expenses amounted to $5,528,363 as compared to $461,696 for the three months ended September 30, 2016, an increase of $5,066,667, or 1,097.4%. For the nine months ended September 30, 2017, operating expenses amounted to $7,329,790 as compared to $1,334,321 for the nine months ended September 30, 2016, an increase of $5,995,469, or 449.3%. For the threeDecember 31, 2022 and ~~nine months ended September 30, 2017 and 2016,~~2021, operating expenses consisted of the following:

For the three months ended ~~September 30, 2017,~~December 31, 2022, loss from operations amounted to ~~$5,462,959~~$2,575,790 as compared to ~~$461,696~~$1,382,016 for the three months ended ~~September 30, 2016,~~December 31, 2021, an increase of ~~$5,066,667,~~$1,193,774, or ~~1,083.2%~~86%. ~~For the nine months ended September 30, 2017, loss from operations amounted to $7,207,188 as compared to $1,334,321 for the nine months ended September 30, 2016, an~~The increase ~~of $5,872,867, or 440.1%. These increases are~~was primarily a result of the ~~increases~~increase in operating expenses ~~partially offset by gross profit~~ discussed above.

For the three months ended ~~September 30, 2017, we had~~December 31, 2022 and 2021, total other ~~expense~~expenses, net amounted to $33,880,557 and $130,251, respectively, an increase of ~~$636,998 as compared to total other income of $97,245 for the three months ended September 30, 2016, a change of $734,243, or 755.0%. This~~$33,750,306. The change was primarily due to the recording of a loss from the fair value of derivative liabilities of $1,363,793 in the 2017 period as compared to income from the fair value of derivative liabilities of $109,858 in the 2016 period, an increase in interest expense of ~~approximately $197,000 due to~~$1,713,534 resulting from additional debt incurred in 2023 and an increase in ~~interest-bearing debt and~~ amortization of debt discount, ~~which has been included~~an increase in ~~interest~~unrealized loss on market securities of $7,400, an increase in loss on debt extinguishment of $5,434,447 resulting from the exchange of convertible notes and preferred stock to new debentures on November 29, 2022, an increase in settlement expense of $200,000, and an increase in ~~an increase in debt settlement income of $929,409.~~

~~For the nine months ended September 30, 2017, we had total other~~derivative expense of $1,921,258 as compared to total other expense of $54,538 for the nine months ended September 30, 2016, an increase of $1,866,720, or 3,422.8%. This increase was primarily due to the recording of expense$26,397,075 resulting from the ~~change in fair value~~treatment of the new debentures and warrants as derivative ~~liabilities of $2,292,674~~liabilities.

Preferred Stock Dividend and an increase in interest expense of $512,896 due to an increase in interest-bearing debt and amortization of debt discount which has been included in interest expense, offset by the recording of debt settlement income of $938,469 related to conversion of debt and exercise of warrants on a cashless basis.Deemed Dividend

For the three months ended ~~September 30, 2017,~~December 31, 2022, we ~~had~~recorded dividends for the Series E Preferred stock and Series F Preferred stock in the amount of $26,301 and $13,151, respectively, for a total of $39,452 of preferred stock dividends.

For the three months ended December 31, 2021, we recorded dividends for the Series E Preferred stock and Series F Preferred stock in the amount of $40,329 and $20,164, respectively, for a total of $60,493 of preferred stock dividends.

For the three months ended December 31, 2022, net loss ~~of $6,099,957,~~attributed to common stockholders amounted to $36,495,799, or ~~$(0.04)~~$(0.01) per ~~common~~ share (basic and diluted) as compared to a net loss attributed to common stockholders of ~~$364,451,~~to $1,572,760, or ~~$(0.01)~~$(0.00) per ~~common~~ share (basic and diluted), for the three months ended ~~September 30, 2016,~~December 31, 2021, an increase of ~~$5,735,506, or 1,573.7%.~~

For the nine months ended September 30, 2017, we had a net loss of $9,128,446, or $(0.08) per common share (basic and diluted) as compared to a net loss of $1,388,859, or $(0.02) per common share (basic and diluted) for the nine months ended September 30, 2016, an$34,923,039. The increase ~~of $7,739,587, or 557.3%.~~

The functional currency of our subsidiaries operating in Mexico is the Mexican Peso (“Peso”). The financial statements of our subsidiaries are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for the period) for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations. Aswas a result of ~~foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation loss of $10,711~~the changes in operating expenses and $28,827 for the three and nine months ended September 30, 2017, respectively. During the nine months ended September 30, 2016, we did not have any foreign subsidiaries. This non-cash loss had the effect of increasing our reported comprehensive loss.other expenses, net discussed above.

As a result of our foreign currency translation loss, we had comprehensive loss for the nine months ended September 30, 2017 of $9,157,273, compared to comprehensive loss of $1,388,859 for the nine months ended September 30, 2016. Additionally, we had comprehensive loss for the three months ended September 30, 2017 of $6,110,668, compared to comprehensive loss of $364,451 for the three months ended September 30, 2016.

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had a working capital deficit of ~~$3,730,073~~$44,998,742 and $1,130,902 in cash ~~of $83,563~~ as of ~~September 30, 2017~~December 31, 2022 and a working capital deficit of ~~$842,637~~$2,808,736 and no$393,460 in cash as of ~~December 31, 2016.~~

The decrease in working capital deficit ~~increased by $2,887,436 and~~ was primarily ~~due~~attributable to the increase in current liabilities of $42,921,642 primarily related to an increase in derivative liabilities ~~of $1,720,793, an increase in convertible debt, net of $234,901, an increase in notes payable of $538,875, and an increase in accounts payable and accrued expenses of $692,691~~(non-cash) offset by an increase in ~~cash~~current assets of ~~$83,563, an increase in accounts receivable of $93,356, and an increase in inventories of $106,249.~~$731,636.

~~Changes~~The following table sets forth a summary of changes in ~~our~~ cash ~~balance are summarized as follows:~~flows for the three months ended December 31 2022 and 2021:

~~Our~~Net cash used in operating activities was $1,776,349 for the ~~nine month~~three months ended ~~September 30, 2017~~December 31, 2022 as compared to ~~our cash used in operating activities~~$1,494,792 for the ~~nine~~three months ended ~~September 30, 2016 increased by $879,259. The~~December 31, 2021, an increase ~~is attributable to the increase use~~ of ~~cash for investor relations services, other professional fees, and compensation.~~$281,557, or 19%.

~~Cash flows~~Net cash used in investing activities was $7,980 for the ~~nine~~three months ended ~~September 30, 2017 was $11,571~~December 31, 2022 as compared to net cash used in investing activities of $0 for the ~~nine~~three months ended ~~September 30, 2016,~~December 31, 2021, an increase of $11,571. During the nine months ended September 30, 2017, we received cash from acquisition of Vitel of $39,144 offset by the $715 cost of property and equipment we acquired and the acquisition of a drug for $50,000.$7,980, or 100%.

~~Cash flows~~Net cash provided by financing activities was $2,521,771 for the ~~nine~~three months ended ~~September 30, 2017 was $2,142,664~~December 31, 2022 as compared to ~~$493,021~~$1,595,623 for the ~~nine~~three months ended ~~September 30, 2016,~~December 31, 2021, an increase of $1,649,643. During the nine months ended September 30, 2017, we received net proceeds from the sale of common stock of $1,087,960 as compared to $387,988 for the nine months ended September 30, 2016, proceeds of $43,452 from related party advances, net proceeds from convertible debt of $473,240, and proceeds from notes payable of $538,875, partially offset by a decrease in a bank overdraft and payments to our line of credit. During the nine months ended September 30, 2016, we received net proceeds from our bank line of credit of $49,033, net proceeds from convertible debt of $36,000, proceeds of $20,000 from related party advances, and proceeds from the sale of common stock of $387,988.$926,148, or 58%.

Our management does not believe that our current capital resources will be adequate to continue operating our ~~company~~Company and maintaining our business strategy for more than 12 months from the date of this report. Accordingly, we will have to raise additional capital in the near future to meet our working capital requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

~~Our unaudited condensed consolidated~~These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in ~~our~~the accompanying unaudited ~~condensed consolidated~~ financial statements, wethe Company had a net loss ~~of $9,128,446~~ and ~~$1,388,859 for the nine months ended September 30, 2017 and 2016, respectively. The~~ net cash used in operations ~~were $2,034,462~~of $36,456,347 and ~~$1,155,203~~$1,776,349, respectively, for the ~~nine~~three months ended ~~September 30, 2017 and 2016, respectively.~~December 31, 2022. Additionally, wethe Company had an accumulated deficit, ~~of $12,271,297~~stockholders’ deficit and ~~$3,142,851 at September 30, 2017 and at December 31, 2016, respectively, had a~~ working capital deficit of ~~$3,730,073 at September 30, 2017, had minimal revenues since inception,~~$99,303,616, $44,302,919 and ~~we are in default~~$44,998,742 on ~~certain convertible debt instruments, loans and a bank line of credit.~~December 31, 2022. Management believes that these matters raise substantial doubt about ~~our~~the Company’s ability to continue as a going concern for twelve months from the issuance date of this report. ~~On March 10, 2017, we completed the acquisition of 100% of the issued and outstanding capital stock of Vitel. Management~~

The Company cannot provide assurance that weit will ultimately achieve profitable operations or become cash flow positive or raise additional debt ~~and/~~or equity capital. ~~Management believes that our~~Additionally, the current capital resources are not ~~currently~~ adequate to continue operating and maintaining ~~its~~the business strategy for a period of twelve months from the ~~fiscal year ending December 31, 2017. We~~issuance date of this report. The Company will seek to raise capital through additional debt ~~and/or~~and equity financings to fund ~~our~~its operations in the future.

Although ~~we have~~the Company has historically raised capital from sales of equity and from the issuance of promissory notes, convertible notes and convertible debentures, there is no assurance that it will be able to continue to do so. If ~~we are~~the Company is unable to raise additional capital or secure additional lending in the near future, management expects that wethe Company will need to curtail or cease operations. These ~~consolidated~~ financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should wethe Company be unable to continue as a going concern.

On November 1, 2021, the Company entered into the First November 2021 SPA with the First November 2021 Investor, an affiliate stockholder, to purchase the First November 2021 Notes and the First November 2021 Warrants, for an aggregate investment amount of $1,000,000. The Company received $1,000,000 in aggregate proceeds from the First November 2021 Notes. As of September 30, 2022, the First November 2021 Notes had an outstanding principal of $1,000,000 and accrued interest of $20,164. On November 29, 2022, the First November 2021 Notes were exchanged for a new convertible debenture (see below).

On April 5, 2022, pursuant to the First April 2022 SPA, Matthew Schwartz, a member of the Board of Directors and a related party, purchased a convertible note with principal of $100,000 with accompanying First April 2022 Warrants to purchase 4,201,681 shares of common stock. The Company received net proceeds of $100,000 on March 24, 2022. As of September 30, 2022, the First April 2022 Note had an outstanding principal balance of $100,000 and accrued interest of $3,901. On November 29, 2022, the First April 2022 Note was exchanged for a new convertible debenture (see below).

On May 9, 2022, the Company entered into the May 2022 SPA with the May 2022 Investor, an affiliate stockholder, to purchase the May 2022 Notes and ~~Future Financings~~the May 2022 Warrants. The Company received $1,000,000 in aggregate proceeds from the May 2022 Notes. As of September 30, 2022, the May 2022 Notes had an aggregate outstanding principal balance of $1,000,000 and accrued interest of $20,110. On November 29, 2022, the May 2022 Note was exchanged for a new convertible debenture (see below).

~~Line~~On June 15, 2022, pursuant to the June 2022 SPA, Danica Holley, a member of ~~Credit~~the Board of Directors and a related party, purchased the June 2022 Note with a principal balance of $50,000 and accompanying June 2022 Warrants to purchase 2,100,840 shares of common stock. The Company received net proceeds of $50,000 on June 15, 2022. As of September 30, 2022, the June 2022 Note had an outstanding principal balance of $50,000 and accrued interest of $1,173. On November 29, 2022, the June 2022 Note was exchanged for a new convertible debenture (see below).

~~In October 2014, we~~On July 29, 2022, the Company entered into a ~~$100,000 revolving promissory note (the “Revolving Note”)~~Demand Promissory Note Agreement with ~~Regions Bank (the “Lender”). The unpaid~~Jeffrey Busch who serves as a member of the Board of Directors and a related party, for a principal balance of $125,000, and on September 2, 2022, the ~~Revolving~~Company entered into a second Demand Promissory Note ~~is payable on demand and any unpaid~~Agreement with Jeffrey Busch for a principal ~~and interest is payable due not later than October 27, 2017, is secured by deposits located at~~balance of $150,000 (collectively referred to as called the Lender, and bears interest computed at a variable rate of interest which is equal to the Lender’s prime rate plus 1.7% (5.95% and 5.45% at September 30, 2017 and December 31, 2016, respectively). We will pay to Lender a late charge of 5.0% of any monthly payment not received by Lender within 10 calendar days after its due date. We may, at any time or from time to time, prepay the Revolving Note in whole or in part without penalty. At September 30, 2017 and December 31, 2016, we had $99,208 and $99,741, respectively, in borrowings outstanding under the Revolving Note with $792 and $259, respectively, available for borrowing under such note. The weighted average interest rate during the nine months ended September 30, 2017 was approximately 5.76%“Busch Notes”). As of September 30, 2022, the ~~date~~Busch Notes had an outstanding principal balance of $275,000 and accrued interest of $2,683 and are included in the accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, the Busch Notes were exchanged for a new convertible debenture (see below).

On August 11, 2022, the Company entered into a Demand Promissory Note Agreement with a related party, who is an affiliate stockholder, for a principal balance of $375,000. As of September 30, 2022, this ~~report,~~note had an outstanding principal balance of $375,000 and accrued interest of $4,110 and is included in the ~~Lender has not renewed~~accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, this note was exchanged for a new convertible debenture (see below).

On September 2, 2022, the ~~Revolving~~Company entered into a Demand Promissory Note Agreement with a related party, who is an affiliate stockholder, for a principal balance of $350,000. As of September 30, 2022, this note had an outstanding principal balance of $350,000 and ~~we are currently~~accrued interest of $2,148 and is included in ~~default. Upon default,~~ the accompanying balance sheet as a short-term convertible note payable – related party. On November 29, 2022, this note was exchanged for a new convertible debenture (see below).

On November 29, 2022, the Company consummated the Initial Closing of the Offering pursuant to the terms and conditions of the Purchase Agreement, by and among, the Company, the , by and among the Company, the Related Party Purchasers and the Collateral Agent. At the Initial Closing, the Company sold the related party Purchasers (i) the New Related Party Debentures and (ii) the New Related Party Warrants to purchase up to 157,142,857 shares of Common Stock, subject to adjustments provided by the Warrants, which represents 100% warrant coverage. The Company received a total of $412,092 in net proceeds at the Initial Offering from the Related Party Purchasers, net of the Original Issue Discount of $50,000, commissions of $58,200 and other offering costs of $29,708.

On November 29, 2022, the Company entered into Securities Exchange Agreements, with the above related party investors, whereby the Exchanged Related Party Notes and accrued interest payable of $120,750 were exchanged for New Related Party Debentures. Additionally, on November 29, 2022, in order to induce the related party investors to exchange the respective convertible notes into the Related Party Debentures, the aggregate principal amount of the Exchanged Related Party Notes and accrued interest payable was increased by ~~2.0%.~~15% (10% for the August 11, 2022 and September 2, 2022 Demand Promissory Notes), or $589,505, for new Related Party Debentures with an aggregate principal amount of $4,860,255.

~~From June 2017 to September 2017, we~~On November 29, 2022, the Company entered into ~~loan agreement~~Securities Exchange Agreements, with ~~several third parties (the “Loans”). Pursuant~~related party preferred stockholders, whereby related party holders of 1,000 shares of Series E preferred stock with a stated value of $2,000,000 and accrued dividends payable of $66,630, and related party holders of 500 shares of Series F preferred stock with a stated value of $1,000,000 and accrued dividends payable of $33,315 were exchanged for the New Related Party Debentures. Additionally, on November 29, 2022, in order to induce the ~~loan agreements, we borrowed~~related party preferred stockholders to exchange their respective preferred shares into the New Related Party Debentures, the aggregate stated value and accrued dividends payable were increased by 15%, or $464,992, for new Related Party Debentures with an aggregate principal amount of ~~$538,875.~~ $3,564,937.

The ~~Loans~~November 29, 2022 New Related Party Debentures mature on November 29, 2023, subject to a three-month extension at the sole discretion of the Company. The Related Party Debentures bear interest at ~~an annual rate of 33.3% and~~10% per annum payable upon conversion or maturity. The New Related Party Debentures are ~~unsecured. Loans aggregating $139,125 were due on or before October 1, 2017 and are currently in default, and loans aggregating $399,750 are due on or before January 1, 2018.~~

~~On October 20, 2015, we entered~~convertible into a purchase agreement (the “Purchase Agreement”), together with a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Upon signing the Purchase Agreement, Lincoln Park agreed to purchase 333,334 shares of the Company’s common stock at any time after the maturity date and prior to Mandatory Conversion (as defined below) at the conversion price equal to the lesser of: (i) $0.003 per share and (ii) 70% of the average of the VWAP (as defined in the Debentures) (or 50% of the average of such VWAP if an event of default has occurred and has not been cured) of the Common Stock during the ten Trading Day (as defined in the Debentures) period immediately prior to the applicable conversion date. The New Related Party Debentures are subject to Mandatory Conversion in the event the Company closes a Qualified Offering. The conversion price per share of Common Stock in the case of a Mandatory Conversion shall be the Qualified Offering Price. Alternatively, upon a Mandatory Conversion, the holders of the Debentures may elect to exchange their Debentures for ~~$100,000 as an initial purchase~~newly issued convertible preferred securities at a price per share equal to the Qualified Offering Price or the five-day VWAP of the Common Stock prior to the date that is 181 days after the closing of the Qualified Offering.

Notwithstanding the preceding, holders of New Related Party Debentures shall have the right to require satisfaction of up to 40% of all amounts outstanding under the Debentures, in cash, at the time of a Qualified Financing. The New Related Party Debentures also contain certain price protection provisions providing for adjustment of the number of shares of Common Stock issuable upon conversion of the Debentures in case of certain future dilutive events or stock-splits and dividends.

The Company’s obligations under the New Related Party Debentures are secured by a first priority lien on all of the assets of the Company pursuant to the Security Agreement.

The Purchase ~~Agreement. Under~~Agreement contains customary representations, warranties, and covenants of the ~~terms~~Company, including, among other things and subject to certain exceptions, covenants that restrict the ability of the Company without the prior written consent of the Debenture holders, to incur additional indebtedness, and repay outstanding indebtedness, create or permit liens on assets, redeem its Common Stock, settle outstanding litigation, or enter into transactions with affiliates.

If the Company or any Subsidiary shall default on any of its obligations under any mortgage credit agreement or other facility indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $250,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, the New Related Party Debenture shall be deemed in default and the default provisions shall apply.

On January 27, 2022, the Company entered into the First January 2022 SPA with the First January 2022 Investor to purchase the First January 2022 Note in the principal amount of $500,000 with the Company receiving $500,000 in proceeds and First January 2022 Warrants to purchase up to 136,612,022 shares of common stock. As of September 30, 2022, the First January 2022 Note had an outstanding principal balance of $500,000 and accrued interest of $26,959. On November 29, 2022, the First January 2022 Note was exchanged for a new convertible debenture (see below).

On January 31, 2022, the Company entered into the Second January 2022 SPA with the Second January 2022 Investor to purchase the Second January 2022 Note with principal balance of $500,000 with the Company receiving $500,000 in proceeds and the Second January 2022 Warrants to purchase up to 136,612,022 shares of common stock. As of September 30, 2022, the Second January 2022 Note had an outstanding principal balance of $500,000 and accrued interest of $26,520. On November 29, 2022, the Second January 2022 Note was exchanged for a new convertible debenture (see below).

During April 2022, pursuant to the Second April 2022 SPA various investors purchased convertible notes for an aggregate investment amount of $425,000 with the Company receiving $425,000 of proceeds with accompanying Second April 2022 Warrants to purchase up to an aggregate of 17,857,144 shares of common stock. As of September 30, 2022, the Second April 2022 Notes had an aggregate outstanding principal balance of $425,000 and accrued interest of $15,710. On November 29, 2022, the Second April 2022 Notes were exchanged for a new convertible debenture (see below).

On July 1, 2022, the Company entered into a Securities Purchase Agreement with the July 2022 Investor, to purchase the July 2022 Note for a principal amount of $50,000 with the Company receiving $50,000 of proceeds and the July 2022 Warrants to purchase 2,100,840 shares of common stock. As of September 30, 2022, the July 2022 Note had an outstanding principal balance of $50,000 and accrued interest of $953. On November 29, 2022, the July 2022 Note was exchanged for a new convertible debenture (see below).

On October 22, 2022, the Company issued the “Settlement Note. In connection with issuance of the Settlement Note, the Company recorded settlement expense of $200,000. On November 29, 2022, the Settlement Note was exchanged for a new convertible debenture (see below).

On November 29, 2022, the Company consummated the Initial Closing of the Offering pursuant to the terms and conditions of the Purchase Agreement, weby and among the Company, the Purchasers and the Collateral Agent. At the Initial Closing, the Company sold the Purchasers the Underlying Securities. The Company received a total of $2,095,288 in net proceeds at the Initial Offering, net of the Original Issue Discount of $255,000, commissions of $296,800 and other offering costs of $157,912.

On November 29, 2022, the Company entered into Securities Exchange Agreements with the above investors, whereby the Exchanged Convertible Notes with an aggregate principal amount of $2,675,000 and accrued interest payable of $173,375 were exchanged for New Debentures. Additionally, on November 29, 2022, in order to induce the investors to exchange their respective convertible notes into the New Debentures, the aggregate principal amount and accrued interest payable was increased by 15%, or $427,256, for the New Debentures with an aggregate principal amount of $3,275,631.

The New Debentures mature on November 29, 2023, subject to a three-month extension at the sole discretion of the Company. The New Debentures bear interest at 10% per annum payable upon conversion or maturity. The New Debentures are convertible into shares of Common Stock at any time after the maturity date and prior to Mandatory Conversion (as defined below) at the conversion price equal to the lesser of: (i) $0.003 per share and (ii) 70% of the average of the VWAP (as defined in the Debentures) (or 50% of the average of such VWAP if an event of default has occurred and has not been cured) of the Common Stock during the ten Trading Day (as defined in the Debentures) period immediately prior to the applicable conversion date. The New Debentures are subject to Mandatory Conversion in the event the Company closes a Qualified Offering. The conversion price per share of Common Stock in the case of a Mandatory Conversion shall be the Qualified Offering Price. Alternatively, upon a Mandatory Conversion, the holders of the New Debentures may elect to exchange their Debentures for newly issued convertible preferred securities at a price per share equal to the Qualified Offering Price or the five-day VWAP of the Common Stock prior to the date that is 181 days after the closing of the Qualified Offering.

Notwithstanding the preceding, holders of New Debentures shall have the right to ~~sell to, and Lincoln Park is obligated to purchase,~~require satisfaction of up to ~~an additional $10,100,000~~40% of all amounts outstanding under the Debentures, in ~~amounts of shares, as described below, of our common stock, subject to certain limitations, from~~cash, at the time to time, over the 36-month period commencing on the date that a registration statement, which we agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC and a final prospectus in connection therewith is filed. We may direct Lincoln Park, at our sole discretion and subject to certain conditions, to purchase up to 100,000 shares of Common Stock on any business day (such purchases, “Regular Purchases”), provided that at least one business day has passed since the most recent purchase, and provided, however that Lincoln Park’s committed obligation under any single Regular Purchase shall not exceed $50,000, provided that the amount the Company may sell to Lincoln Park under a single Regular Purchase may increase under certain circumstances as described in the Purchase Agreement but in no event will the amount of a ~~single Regular Purchase exceed $500,000.~~Qualified Financing. The ~~purchase~~New Debentures also contain certain price protection provisions providing for adjustment of the number of shares of Common Stock ~~related~~issuable upon conversion of the New Debentures in case of certain future dilutive events or stock-splits and dividends.

The Company’s obligations under the New Debentures are secured by a first priority lien on all of the assets of the Company pursuant to the ~~future funding will~~Security Agreement.

If the Company or any Subsidiary shall default on any of its obligations under any mortgage credit agreement or other facility indenture agreement, factoring agreement or other instrument under which there may be ~~based~~issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $250,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, the ~~prevailing market prices~~New Debenture shall be deemed in default and the default provisions shall apply.

The Company may hold one or more subsequent closings at any time prior to December 31, 2022, unless otherwise extended, to sell additional Underlying Securities in an aggregate principal amount up to $6,600,000, which may be adjusted upward to mean an aggregate principal amount of ~~such~~$8,000,000 upon written consent of the Company and the Placement Agent. The subsequent closing deadline was extended, and a subsequent raise was consummated on January 27, 2023 (See Note 11 in unaudited notes to financial statements).

On May 5, 2022, the Company and Jeffrey Busch amended the Original Note pursuant to which the principal amount was increased to $350,000 (“New Note”) with the Company receiving additional $250,000 of proceeds and added a conversion feature. The New Note bears an annual interest rate of 1% (which shall increase to 2% in an event of a default) and matures on May 5, 2024. The New Note may not be prepaid and is only convertible upon an occurrence of a public offering. The Conversion Amount of the New Note is convertible into shares of common stock at the ~~time of sales. In addition, we may direct Lincoln Park~~price for which the common stock was sold in the public offering. Pursuant to ~~purchase additional amounts~~ASC 470-50 - Debt Modifications and Exchanges; the amendment was accounted for as ~~accelerated purchases if on~~a debt extinguishment because the ~~date of~~contingent conversion feature added to the New Note resulted in a ~~Regular Purchase the closing sale price~~substantial modification of the ~~Common Stock is not below the threshold price as set forth~~Original Note. No gain or loss was recognized in the Purchase Agreement. Our sales of shares of Common Stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 4.99% of the then outstanding shares of the Common Stock.

In connection with the ~~Purchase Agreement, we issued~~debt extinguishment. As of December 31, 2022, the New Note had an outstanding principal balance of $350,000, reflected as ~~a commitment fee~~notes payable – related party in the accompanying unaudited balance sheet since the conditions for its contingent conversion has not yet been met, and accrued interest of $3,356.

We will require additional financing to ~~Lincoln Park 1,000,000 shares~~fund our planned operations. We currently do not have committed sources of Common Stock. Lincoln Park represented to us, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)),additional financing and ~~the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) under the Securities Act. The securities sold~~ may not be ~~offered or sold in~~able to obtain additional financing particularly, if the ~~United States absent registration or an applicable exemption from registration requirements.~~volatile conditions of the stock and financial markets, and more particularly the market for early development stage company stocks persist.

The net proceeds under the Purchase Agreement to us will depend on the frequency and prices at which the Company sells shares of its stock to Lincoln Park. We expect that any proceeds received by us from such sales to Lincoln Park under the Purchase Agreement will be used for general corporate purposes and working capital requirements. During 2016, we received net proceeds of $191,850 and a subscription receivable of $11,190 which was collected in January 2017 under the Purchase Agreement. During the nine months ended September 30, 2017, pursuant to the Purchase Agreement, we issued 2,000,000 shares of our common stock to Lincoln Park for net cash proceeds of $407,787.

There can be no assurance that ~~funding will be available under the Purchase Agreement or if~~ additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to further delay or further scale down some or all of our activities or perhaps even cease the ~~operation of our business.~~

On November 23, 2016, we entered into and closed on the transaction set forth in an Amended and Restated Securities Purchase Agreements (the “Securities Purchase Agreements”) it entered into with three institutional investors (the “Purchasers”) for the saleoperations of the ~~Company’s convertible notes~~business.

Since inception we have funded our operations primarily through equity and warrants. Pursuant to the terms provided for in the Securities Purchase Agreement, we issued upon closing to the Purchasers for an aggregate subscription amount of $350,000: (i) 14.29% Original Issue Discount 10% Senior Secured Convertible Notes (the “November 2016 Notes”); and (ii) warrants (the “Warrants”) to purchase 2,333,334 shares of the Company’s common stock at an initial exercise price of $0.175 (subject to adjustments under certain conditions as defined in the Warrants) (see below for reduction of warrant exercise price) which are exercisable for a period of five years from November 23,2016. The aggregate principal amount of the November 2016 Notes was $350,000debt financings and we ~~received $300,000 after giving effect~~expect that we will continue to ~~the original issue discount of $50,000. The November 2016 Notes bear interest at a rate equal~~fund our operations through equity and debt financing, either alone or through strategic alliances. If we are able to 10% per annum (which interest rate increased to 24% per annum upon the occurrence of an Event of Default (as defined in the November 2016 Notes)), had a maturity date of July 23, 2017 and were convertible (principal, and interest) at any time after the issuance date of the November 2016 Notes into shares of the Company’s Common Stock at an initial conversion price equal to $0.15 per share (subject to adjustment as provided in the Note) (see below for reduction for reduction of conversion price), provided, however, that if an event of default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the November 2016 Notes shallraise additional financing by issuing equity securities, our existing stockholders’ ownership will be ~~convertible and the Warrants shall be exercisable at 60% of the lowest closing price during the prior twenty trading days of the Common Stock as reported on the OTCQB~~diluted. Obtaining commercial or other ~~principal trading market (the “Default Conversion Price”). Due to non-payment of the November 2016 Notes, an event of default occurred~~loans, assuming those loans would be available, will increase our liabilities and ~~accordingly, the November 2016 Notes and Warrants are convertible and exercisable based on the default terms.~~future cash commitments.

On May 23, 2017, in connection with the November 2016 Notes, we entered into forbearance agreements (the “Forbearance Agreements”) with the Purchases whereby the Purchasers waived any event of default, as defined in the November 2016 Notes. We failed to make a payment on May 23, 2017 to each of the Holders as required pursuant to the November 2016 Notes which resulted in an event of default under such Notes. As of result of the event of default, the aggregate amount owing under the November 2016 Notes as of May 23, 2017 was increased to $509,135 with such amount including a mandatory default amount of $141,299 and accrued interest of $17,836 resulting in debt settlement expense of $141,299. The Forbearance Agreement also provides for the Holders to forbear their right to demand an immediate cash payment of the principal amount due plus accrued interest as a result of the Company’s failure to satisfy its payment obligations to the Holder on May 23, 2017 so long as we comply with our other obligations under the November 2016 Notes and the other transaction documents. The Forbearance Agreements did not waive the default interest rate of 24%. In consideration therefore, and as currently set forth in the November 2016 Notes, the Holders shall be entitled to convert such notes from time to time at their discretion in accordance with the terms of the November 2016 Notes and the November 2016 Notes shall not be subject to repayment unless agreed to by the Holder of such Note. In connection with the Forbearance Agreement, we increased the principal balance of the November 2016 Notes by $159,135, reduced accrued interest payable by $17,836, and recorded debt settlement expense of $141,299.

The November 2016 Notes and related Warrants include a down-round provision under which the conversion price and exercise price could be affected by future equity offerings undertaken by the Company or contain terms that are not fixed monetary amounts at inception. Subsequent to the date of these November 2016 Notes, we sold stock at a share price of $0.075 per share and $0.05 per share. Accordingly, pursuant to these ratchet provisions, the conversion price on the November 2016 Notes were lowered to $0.075 per share and then to $0.05 per share and the exercise price of the November 2016 Warrants was lowered to $0.03. Additionally, the total number of November 2016 Warrants were increased on a full ratchet basis by an aggregate amount of 11,277,780. In September 2017, we issued 9,547,087 shares of our common stock upon the cashless exercise of 9,074,076 warrants.

~~On June 2, 2017, we entered into a 2~~^nd ~~Securities Purchase Agreement (the “2~~^nd ~~Securities Purchase Agreement”) with the Purchasers for the sale of the Company’s convertible notes and warrants. Pursuant to the terms provided for in the 2~~^nd Securities Purchase Agreement, we issued upon closing to the Purchasers for an aggregate subscription amount of $233,345: (i) 14.29% Original Issue Discount 10% Senior Secured Convertible Notes (the “June 2017 Notes”); and (ii) warrants (the “June 2017 Warrants”) to purchase 1,555,633 shares of the Company’s common stock, par value $0.001 per share at an initial exercise price of $0.175 (subject to adjustments under certain conditions as defined in the June 2017 Warrants) and exercisable for five years after the issuance date.

The aggregate principal amount of the June 2017 Notes is $233,345 and we received $200,000 after giving effect to the original issue discount of $33,345. The June 2017 Notes bear interest at a rate equal to 10% per annum (which interest rate is increased to 24% per annum upon the occurrence of an Event of Default (as defined in the June 2017 Notes)), have a maturity date of February 2, 2018 and are convertible (principal, and interest) at any time after the issuance date of issuance into shares of the Company’s common stock at an initial conversion price equal to $0.15 per share (subject to adjustment as provided in the June 2017 Notes), provided, however, that if an event of default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the June 2017 Note shall be convertible at 60% of the lowest closing price during the prior twenty trading days of the common stock as reported on the OTCQB or other principal trading market (the “Default Conversion Price”). The June 2017 Notes provide for two amortization payments on the six-month, seven-month and eight-month anniversary of the issue date with each amortization payment being one third of the total outstanding principal and interest. If the six-month amortization payment is made in cash then the payment is an amount equal to 120% of the applicable amortization payment and if the seven-month or the eight-month amortization payments are made in cash then the payment is an amount equal to 125% of the applicable amortization payment.

The June 2017 Notes may be prepaid at any time until the 180th day following the Original Issue Date at an amount equal to (i) 115% of outstanding principal balance of the Note and accrued and unpaid interest during the period from the Original Issue Date through the three months following the Original Issue Date, and (ii) 120% of outstanding principal balance of the June 2017 Notes and accrued and unpaid interest during months four through six following the Original Issue Date. In order to prepay the June 2017 Notes, we shall provide 20 Trading Days prior written notice to the Holder, during which time the Holder may convert the June 2017 Notes in whole or in part at the Conversion Price.

~~On July 26, 2017, we entered into and closed on a 3~~^rd ~~Securities Purchase Agreement (the “3~~^rd ~~Securities Purchase Agreement”) with three institutional investors (the “Purchasers”) for the sale of the Company’s convertible notes and warrants. Pursuant to the terms provided for in the 3~~^rd Securities Purchase Agreement, we issued upon closing to the Purchasers for an aggregate subscription amount of $300,000: (i) 10% Original Issue Discount 5% Senior Secured Convertible Notes in the aggregate principal amount of $333,883 (the “July 2017 Notes”); and (ii) warrants (the “July 2017 Warrants”) to purchase 4,769,763 shares of the Company’s common stock at an exercise price of $0.10 per share (subject to adjustments under certain conditions as defined in the Warrants). The closing under the 3^rdSecurities Purchase Agreement occurred on July 26, 2017. These Notes bear interest at a rate equal to 5% per annum (which interest rate is increased to 24% per annum upon the occurrence of an Event of Default (as defined in the Notes)), have a maturity date of March 25, 2018 and are convertible (principal, and interest) at any time after the issuance date of these Notes into shares of the Company’s Common Stock at a conversion price equal to $0.07 per share (subject to adjustment as provided in the Note), provided, however, that if an event of default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the July 2017 Notes shall be convertible at 60% of the lowest closing price during the prior twenty trading days of the Common Stock as reported on the OTCQB or other principal trading market (the “Default Conversion Price”) and the exercise price of the July 2017 Warrants shall be 60% of the Default Conversion Price. These Notes provide for three amortization payments on the six-month, seven-month and eight-month anniversary of the issue date with each amortization payment being one third of the total outstanding principal and interest. If the six-month amortization payment is made in cash then the payment is an amount equal to 110% of the applicable amortization payment and if the seven-month or the eight-month amortization payments are made in cash then the payment is an amount equal to 115% of the applicable amortization payment. These Notes may be prepaid at any time until the 210th day following the Original Issue Date at an amount equal to (i) 115% of outstanding principal balance of the Note and accrued and unpaid interest during the period from the Original Issue Date through the three months following the Original Issue Date, and (ii) 120% of outstanding principal balance of the Notes and accrued and unpaid interest during months four through seven following the Original Issue Date. In order to prepay these Notes, the Company shall provide 20 Trading Days prior written notice to the Purchaser, during which time the Purchaser may convert the Notes in whole or in part at the Conversion Price.

The November 2016 Notes, June 2017 Notes and July 2017 Notes contain certain covenants, such as restrictions on the incurrence of indebtedness, creation of liens, payment of restricted payments, redemptions, payment of cash dividends and the transfer of assets. These Notes also contains certain adjustment provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions. The conversion price is also subject to adjustment if we issue or sell shares of our common stock for a consideration per share less than the conversion price then in effect, or issue options, warrants or other securities convertible or exchange for shares of its common stock at a conversion or exercise price less than the conversion price of these Notes then in effect. If either of these events should occur, the conversion price is reduced to the lowest price at which these securities were issued or are exercisable. The Company granted the Purchasers certain rights of first refusal on future offerings by the Company for as long as the Purchasers hold these Notes. In addition, subject to limited exceptions, the Purchasers will not have the right to convert any portion of these Note if the Purchaser, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s Common Stock outstanding immediately after giving effect to its conversion. The Purchaser may increase or decrease this ownership limitation to any percentage not exceeding 9.99% upon 61 days prior written notice to the Company.

The November 2016, June 2017 and July 2017 Warrants are exercisable for shares of the Company’s common stock upon the payment in cash of the exercise price and they are also exercisable on a cashless basis at any time there is no effective registration statement registering the shares of common stock underlying the Warrants. The exercise price of these Warrants are subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock and also upon any distributions of assets, including cash, stock or other property to the Company’s stockholders. The exercise price of these Warrants are also subject to full ratchet price adjustment if the Company sells or grants any option to purchase, sells or re-prices any common stock or common stock equivalents, as defined, at an exercise price lower than the then-current exercise price of these Warrants with the exception for certain exempted issuances and subject to certain limitations on the reduction of the exercise price as provided in the Warrants. In the event of a fundamental transaction, as described in these Warrants and generally including any reorganization, recapitalization or reclassification of the Common Stock, the sale, transfer or other disposition of all or substantially all of the Company’s properties or assets, the Company’s consolidation or merger with or into another person, the acquisition of more than 50% of the outstanding Common Stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by the outstanding Common Stock, the holders of these Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised these Warrants immediately prior to such fundamental transaction; provided that upon the occurrence of certain fundamental transactions, the holder can require the Company to purchase these Warrants for cash at a price equal to the higher of the Black Scholes Value of the unexercised portion of these Warrants or difference between the cash per share paid in the fundamental transaction and the exercise price per share. The holders of these Warrants will not have the right to exercise any portion of these Warrants if the holder (together with its affiliates) would beneficially own in excess of 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of these Warrants.

In connection with our obligation under the November 2016, June 2017 and July 2017 Notes, we entered into a Security Agreement, Pledge Agreement and Subsidiary Guaranty with Calvary Fund I LP, as agent, pursuant to which the Company granted a lien on all assets of the Company (the “Collateral”) excluding permitted indebtedness which includes a first lien held by Regions Bank in connection with the $100,000 revolving promissory note entered into with Regions Bank in October 2014, for the benefit of the Purchasers, to secure the Company’s obligations under the Notes. Upon an Event of Default (as defined in the related Notes), the Purchasers may, among other things, collect or take possession of the Collateral, proceed with the foreclosure of the security interest in the Collateral or sell, lease or dispose of the Collateral.

~~From May 2017 to September 2017, we issued 9,433,557 shares of our common stock upon the conversion of principal note balances of $378,453 and interest of $12,158.~~

During the six months ended June 30, 2017, pursuant to unit subscription agreements, we issued 8,253,136 shares of our unregistered common stock and 4,126,579 five-year warrants to purchase common shares for an exercise price of $0.30 per common share to investors for cash proceeds of $618,983 or $0.075 per share.

In July 2017, pursuant to a unit subscription agreement, we issued 1,000,000 shares of our unregistered common stock and 500,000 five-year warrants to purchase common shares for an exercise price of $0.30 per common share to investors for cash proceeds of $50,000 or $0.05 per share.

We have identified the following policies as critical to ~~its~~our business and results of operations. Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, assumptions, and estimates that affect the 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 reporting period. Actual results could differ from these estimates. Management bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates during the periods ended December 31, 2022 and 2021 include, but are not necessarily limited to, estimates of contingent liabilities, valuation of marketable securities, useful life of property and equipment, valuation of ROU assets and lease liabilities, assumptions used in assessing impairment of long-lived assets, allowances for accounts receivable, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of derivatives and the fair value of non-cash equity transactions.

Additionally, the full impact of COVID-19 is unknown and cannot be reasonably estimated. However, the Company has made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are material differences between the Company’s estimates and the actual results, the Company’s future results of operation will be affected.

FASB ASC 820 - Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on December 31, 2022. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation”, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under the FASB’s Accounting Standards Update (“ASU”) 2016-09 Improvements to Employee Share-Based Payment.

In accordance with ASU Topic 606 - Revenue from Contracts with Customers, the Company recognizes revenue in accordance with that core principle by applying the following steps:

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

Contract liabilities are cash deposits received from customers and ~~development costs incurred~~advance billing included in accounts receivable on uncompleted contracts for which revenues have not been recognized as of the balance sheet date.

The Company accounts for its leases using the method prescribed by ASC 842 – Lease Accounting. The Company assess whether the contract is, or contains, a lease at the inception of a contract which is based on (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset. The Company allocates the consideration in the ~~development~~contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less.

Operating and financing lease ROU assets represents the right to use the leased asset for the lease term. Operating and financing lease liabilities are recognized based on the present value of the ~~Company’s products are expensed as incurred.~~future minimum lease payments over the lease term at the commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the statements of operations.

~~We have~~The Company has certain financial instruments that are embedded derivatives associated with capital raises. WeThe Company evaluates all ~~of our~~its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC ~~810-10-05-4~~815-10 - Derivative and ~~815-40.~~Hedging - Contract in Entity’s Own Equity. This accounting treatment requires that the carrying amount of any ~~embedded~~ derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment, or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.

~~We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services~~Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. We record revenue when the products have been shipped to the customer. We report our sales net of actual sales returns and the amount of reserves established for anticipated sales returns based on historical rates. We estimate and record a liability for potential returns and record this as a reduction of revenue in the same period the related revenue is recognized. We also offers cash discounts to certain customers as an incentive for prompt payment. We account for cash discounts by reducing accounts receivable by the prompt pay discount amount and recognizes the discount as a reduction of revenue in the same period the related revenue is recognized.

Certain sales to distributors or retailers are made on a consignment basis. Revenue for consignment sales are not recognized until sell through to the final customer is established which maybe upon receipt of payment by our customer.

~~Stock-based compensation is accounted for based~~material effect on the ~~requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the~~Company’s financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is recognized over the service period of the award.statements.

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.

We maintain “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act isare recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including ~~the~~our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure. Our management, with the participation of ~~the~~our principal executive officer and principal financial officer, evaluated our disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of ~~September 30, 2017,~~December 31, 2022, our disclosure controls and procedures were not ~~effective.~~effective due to our material weaknesses in internal control over financial reporting discussed below.

Our management, including our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022. Our management’s evaluation of our internal control over financial reporting was based on the Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that as of December 31, 2022, our internal control over financial reporting was not effective.

The ineffectiveness of our ~~disclosure controls and procedures~~internal control over financial reporting was due to the following material weaknesses which we identified in our internal ~~control~~controls over financial reporting: (1) the lack of multiples levels of management review on complex accounting and financial reporting issues, (2) a lack of adequate segregation of duties and necessary corporate accounting resources in our financial reporting process and accounting function as a result of our limited financial resources to support hiring of personnel and implementation of accounting systems and (3) lack of experienced accounting staff at our newly acquired subsidiaries located in Mexico. It is likely that we will continue to report material weaknesses in our internal control over financial reporting.

A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

~~Changes in internal control over financial reporting~~Management’s Remediation Plan

~~There were no changes in~~We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes in the future:

The remediation efforts set out in (i) are largely dependent upon our company securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes.

Management believes that despite our material weaknesses set forth above, our unaudited financial statements for the quarter ended December 31, 2022 are fairly stated, in all material respects, in accordance with US GAAP.

There was no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) during the quarter ended ~~September 30, 2017~~December 31, 2022 that ~~have~~has materially affected, or ~~are~~is reasonably likely to materially affect, ~~our~~the Company’s internal control over financial reporting.

On August 16, 2022, Erika Singleton filed a complaint against the Company in the Eighth Judicial District Court, Clark County, Nevada, Case No. A-22-857038-C. Plaintiff alleges that the Company did not provide her with physical stock certificates for 200,000 shares of common stock Plaintiff purchased for $2,000 in 2017. Based on these and other allegations, Plaintiff asserts claims against the Company for breach of contract, violation of Florida securities law, fraud, and unjust enrichment. The court has set the hearing on our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party ormotion to dismiss for March 23, 2022. The Plaintiff has ~~a material interest adverse~~until March 2, 2023 to file her opposition to our ~~interest.~~motion to dismiss and we will then have until March 16, 2023 to file our reply.

~~Not applicable~~Risk factors that may affect our business and financial results are discussed in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2022. There have been no material changes to ~~smaller reporting companies.~~the disclosures relating to this item from those set forth in our 2022 Form 10-K.

On July 5, 2017, we issued 300,000 shares of our unregistered common stock to a consultant for business development services performed. The shares were valued at the quoted trading price on the date of grant of $0.077 per share.None.

~~During the quarterly period ended September 2017, we issued 5,537,800 shares of our common stock upon the conversion of principal note balances of $188,217 and interest of $10,098.~~

~~In September 2017, we issued 9,547,087 shares of our common stock upon the cashless exercise of 9,074,076 warrants.~~

~~The above securities were issued in reliance upon the exemptions provided by Section 4(a) (2) under the Securities Act of 1933, as amended.~~

~~As of September 30, 2017, we were in default on certain of our convertible debt instruments and loans caused by the non-payment of balance due pursuant to the repayment terms.~~None.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Page
	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	~~Condensed Consolidated~~ Balance Sheets - As of December 31, 2022 (unaudited) and September 30, ~~2017 (unaudited) and December 31, 2016~~2022	34
	~~Condensed Consolidated~~ Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~December 31, 2022 and ~~2016~~2021 (unaudited)	45
	~~Condensed Consolidated~~ Statements of Changes in Stockholder’s Deficit for the Three Months Ended December 31, 2022 and 2021 (unaudited)	6
	Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~December 31, 2022 and ~~2016~~2021 (unaudited)	57
	Condensed Notes to Unaudited ~~Consolidated~~ Financial Statements	68
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2546
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3456
Item 4.	Controls and Procedures	3556

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	3557
Item 1A.	Risk Factors	3557
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3557
Item 3.	Defaults Upon Senior Securities	3557
Item 4.	Mine Safety Disclosures	3658
Item 5.	Other Information	3658
Item 6.	Exhibits	3658

Signatures		3759

●	projected operating or financial results, including anticipated cash flows used in operations;
●	expectations regarding capital expenditures, research and development expenses and other payments;
●	our beliefs and assumptions relating to our liquidity position, including our ability to obtain additional financing; and
●	our beliefs, assumptions and expectations about the regulatory approval for our technology including, but not limited to our ability to obtain regulatory approval in a timely manner or at all.

●	our ability to continue as a going concern;
●	our ability to remain current in filing all reports required to be filed by us under Section 13 or 15(d) of the Securities Exchange Act of 1934;
●	our ability to maintain pricing;
●	our ability to employ skilled and qualified workers;
●	the fact that we have incurred significant losses since inception, expect to incur net losses for at least the next several years and may never achieve or sustain profitability;
●	the loss of key management personnel upon whom we depend;
●	our ability to fund our operations;
●	inadequate insurance coverage for certain losses or liabilities;
●	our ability to navigate the regulatory approval process in the U.S. and other countries, and our success in obtaining required regulatory approvals on a timely basis;
●	commercial development of technologies that compete with our technology;
●	the actual and perceived effectiveness of our technology, and how the technology compares to competitive technologies;
●	the rate and degree of market acceptance and clinical utility of our technology;
●	adverse effects of the recent and ongoing COVID-19 pandemic;
●	the strength of our intellectual property protection, and our success in avoiding infringement of the intellectual property rights of others;
●	regulations affecting the health care industry;
●	adverse developments in our research and development activities;
●	potential liability if our technology causes illness, injury or death, or adverse publicity from any such events;
●	our ability to operate our business efficiently, manage capital expenditures and costs (including general and administrative expenses) and obtain financing when required; and
●	our expectations with respect to future licensing, partnering or acquisition activity.

	For the Three Month Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

REVENUES	$	118,572		$	-		$	278,686		$	-

COST OF REVENUES		53,168			-			156,084			-

GROSS PROFIT		65,404			-			122,602			-

OPERATING EXPENSES:
Professional fees		373,379			238,085			1,323,230			549,184
Compensation expense		267,475			167,088			806,341			536,706
Consulting fees - related party		650			-			22,597			-
Research and development expense		5,488			5,201			73,720			85,736
Bad debt expense		1,251			-			43,497			-
General and administrative expenses - related party		243			-			8,449			-
General and administrative expenses		143,185			51,322			315,264			162,695
Impairment loss		4,736,692			-			4,736,692			-

Total Operating Expenses		5,528,363			461,696			7,329,790			1,334,321

LOSS FROM OPERATIONS		(5,462,959	)		(461,696	)		(7,207,188	)		(1,334,321	)

OTHER INCOME (EXPENSE):
Interest expense		(203,347	)		(12,613	)		(526,708	)		(19,890	)
Interest expense - related party		(6,078	)		-			(6,078	)		-
Derivative income (expense)		(1,363,793	)		109,858			(2,327,322	)		(34,648	)
Debt settlement income, net of settlement expense		929,409			-			938,469			-
Loss on foreign currency transactions		6,811			-			381			-

Total Other Income (Expense)		(636,998	)		97,245			(1,921,258	)		(54,538	)

NET LOSS	$	(6,099,957	)	$	(364,451	)	$	(9,128,446	)	$	(1,388,859	)

COMPREHENSIVE LOSS:
Net loss	$	(6,099,957	)	$	(364,451	)	$	(9,128,446	)	$	(1,388,859	)

Other comprehensive loss:
Unrealized foreign currency translation loss		(10,711	)		-			(28,827	)		-

Comprehensive loss	$	(6,110,668	)	$	(364,451	)	$	(9,157,273	)	$	(1,388,859	)

NET LOSS PER COMMON SHARE - Basic and Diluted:	$	(0.04	)	$	(0.01	)	$	(0.08	)	$	(0.02	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted		139,917,339			58,471,197			117,671,151			57,667,941

	2022			2021
	For the Three Months Ended
	December 31,
	2022			2021

REVENUES, NET	$	55,295		$	78,975

COST OF REVENUE		10,818			43,565

GROSS PROFIT		44,477			35,410

OPERATING EXPENSES:
Professional fees		387,438			217,823
Compensation expense		1,752,699			625,855
Licensing fees		31,637			36,092
General and administrative expenses		448,493			537,656

Total Operating Expenses		2,620,267			1,417,426

LOSS FROM OPERATIONS		(2,575,790	)		(1,382,016	)

OTHER (EXPENSES) INCOME:
Interest expense, net		(1,847,035	)		(135,651	)
Loss on debt extinguishment, net		(5,434,447	)		-
Unrealized (loss) gain on marketable securities		(2,000	)		5,400
Settlement expense		(200,000	)		-
Derivative expense		(26,397,075	)		-

Total Other Expenses, net		(33,880,557	)		(130,251	)

NET LOSS		(36,456,347	)		(1,512,267	)

Series E preferred stock dividend		(26,301	)		(40,329	)
Series F preferred stock dividend		(13,151	)		(20,164	)
Preferred stock dividend		(13,151	)		(20,164	)

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(36,495,799	)	$	(1,572,760	)

NET LOSS PER COMMON SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:
Basic and Diluted	$	(0.01	)	$	(0.00	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and Diluted		6,151,499,846			5,555,474,165

Large accelerated filer ~~[ ]~~	Accelerated filer ~~[ ]~~

Non-accelerated filer ~~[ ]~~	Smaller reporting company ~~[X]~~

Emerging growth company ~~[ ]~~
☐	☐	☒	☒	☐


	Preferred Stock										Common Stock
	Series A # of Shares		Series C-1 # of Shares			Series C-2 # of Shares			Amount		# of Shares		Amount		Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Deficit

Balance on September 30, 2022		667		1,043			3,037		$	-		6,151,499,919	$	615,150	$	55,391,612		$	(62,807,817	)	$	(6,801,055	)

Accretion of stock option expense		-		-			-			-		-		-		612,173			-			612,173

Exchange of preferred stock to convertible debt		-		(902	)		(3,037	)		-		-		-		(1,618,238	)		-			(1,618,238	)

Series E preferred stock dividend		-		-			-			-		-		-		-			(26,301	)		(26,301	)

Series F preferred stock dividend		-		-			-			-		-		-		-			(13,151	)		(13,151	)

Net loss		-		-			-			-		-		-		-			(36,456,347	)		(36,456,347	)

Balance on December 31, 2022		667		141			-		$	-		6,151,499,919	$	615,150	$	54,385,547		$	(99,303,616	)	$	(44,302,919	)

	Level 2—Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

	Level 3—Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

	At September 30, 2017						At December 31, 2016
Description	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative liabilities		—		—	$	2,122,848		—		—		402,055

	December 31, 2022						September 30, 2022
Description	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative liabilities	$	—	$	—	$	42,466,252	$	—	$	—	$	—

	Derivative Liabilities
Balance at December 31, 2016	$	402,055
Initial valuation of derivative liabilities included in debt discount		473,240
Initial valuation of derivative liabilities included in derivative expense		730,700
Reclassification of derivative liabilities to debt settlement income upon conversion		(411,842	)
Reclassification of derivative liabilities to debt settlement income upon cashless exercise of warrants		(667,927	)
Change in fair value included in derivative expense		1,596,622
Balance at September 30, 2017	$	2,122,848


	For the Three Months Ended December 31,
	2022		2021
Balance at beginning of period	$	-	$	-
Initial valuation of derivative liabilities included in debt discount		16,069,178		-
Initial valuation of derivative liabilities included in derivative expense		25,891,917		-
Change in fair value included in derivative expense		505,158		-
Balance at end of period	$	42,466,252	$	-

	December 31, 2022			December 31, 2021
Contract liabilities beginning balance	$	156,550		$	135,150
Billings and cash receipts on uncompleted contracts		24,000			43,000
Less: revenues recognized during the period		(3,500	)		(22,250	)
Total contract liabilities	$	177,050		$	155,900

Cash	$	39,144
Accounts receivable		178,835
Inventories		54,952
Recoverable taxes		50,792
Other current assets		1,499
Property and equipment		480
Goodwill and other intangible assets		4,695,596
Total assets acquired at fair value		5,021,298

Accounts payable and accrued expenses		427,723
Payroll taxes		6,224
Total liabilities assumed		433,947

Total purchase consideration	$	4,587,351


	December 31, 2022			September 30, 2022
Accounts receivable	$	52,127		$	35,957
Less: allowance for doubtful accounts		(3,832	)		(3,832	)
Accounts receivable, net	$	48,295		$	32,125


	Estimated Useful Life in Years		December 31, 2022			September 30, 2022
Laboratory equipment		5	$	597,059		$	597,059
Furniture		5		24,567			24,567
Leasehold improvements		5		353,826			353,826
Computer equipment		3		76,470			68,490
Property and equipment gross				1,051,922			1,043,942
Less accumulated depreciation				(396,702	)		(357,815	)
Property and equipment, net			$	655,220		$	686,127

		1			2
	December 31, 2022			September 30, 2022
Principal amount	$	7,941,605		$	2,475,000
Less: debt discount		(7,265,021	)		(2,028,719	)
Convertible notes payable, net		676,584			446,281
Less: current portion of convertible notes payable - related parties		(676,584	)		-
Convertible notes payable, net – long-term	$	-		$	446,281

Principal amount – related parties	$	8,975,192		$	4,150,000
Less: debt discount – related parties		(8,203,748	)		(1,844,186	)
Convertible notes payable - related parties, net		771,444			2,305,814
Less: current portion of convertible notes payable - related parties		(771,444	)		(1,000,000	)
Convertible notes payable - related parties, net – long-term	$	-		$	1,305,814

Total convertible notes payable, net	$	1,448,028		$	2,752,095

	●	the value of the Company’s common stock;
	●	the expected life of issued stock warrants;
	●	the expected volatility of the Company’s stock price;
	●	the expected dividend yield to be realized over the life of the stock warrants; and
	●	the risk-free interest rate over the expected life of the stock warrants.

~~Dividend rate~~	02023
Dividend rate	—	%
Term (in years)	~~0.01~~1 to ~~5.00~~6.5 years
Volatility	~~168.4%~~270.0% to ~~199.6~~364.2	%
~~Risk-free~~Risk—free interest rate	~~1.03%~~3.92% to ~~1.89~~4.78	%

	December 31, 2022			September 30, 2022

Financing ROU assets	$	231,841		$	231,841
Less accumulated depreciation		(178,479	)		(166,887	)
Balance of Financing ROU assets	$	53,362		$	64,954

	December 31, 2022			September 30, 2022

Financing lease payables for equipment	$	231,841		$	231,841
Total financing lease payables		231,841			231,841
Payments of financing lease liabilities		(156,335	)		(143,456	)
Total		75,506			88,385
Less: short term portion		(52,037	)		(53,995	)
Long term portion	$	23,469		$	34,390

Years ending December 31,	Amount

2023	$	57,631
2024		24,403
Total minimum financing lease payments		82,034
Less: discount to fair value		(6,528	)
Total financing lease payable on December 31, 2022	$	75,506

	December 31, 2022			September 30, 2022

Operating office lease	$	1,212,708		$	1,212,708
Less accumulated reduction		(70,289	)		(57,847	)
Balance of Operating ROU asset	$	1,142,419		$	1,154,861

	CEO			CFO		Vitel Officers			Total
Balance due to related parties at December 31, 2016	$	5,000		$	-	$	-		$	5,000
Working capital advances received		50,000			-		6,444			56,444
Repayments made		(7,000	)		-		(5,975	)		(12,975	)
Balance due to related parties at September 30, 2017	$	48,000		$	-	$	469		$	48,469

	December 31, 2022			September 30, 2022

Convertible notes principal – related parties	$	8,975,192		$	4,150,000
Discount on convertible notes - related parties		(8,203,748	)		(1,844,186	)
Note payable principal – related parties		350,000			350,000
Accrued liabilities - related parties		82,043			76,927
Accounts payable – related parties		6,000			16,223
Total	$	1,209,487		$	2,748,964

	●	Each share of Series C-1 Preferred Stock is convertible into shares of common stock any time after the Initial Issuance Date at a conversion price of $0.0275 per share. The number of shares of common stock issuable upon conversion shall be determined by dividing (x) the conversion amount (determined by the sum of the stated value thereof plus any additional amount thereon which consist of all dividends, whether declared or not) of such share of Series C-1 by (y) the conversion price of $0.0275 per share (subject to temporary adjustment upon a triggering event as defined by the Series C-1 Certificate of Designation, to 80% of the conversion price). The adjusted conversion price is only in effect until the triggering event is cured. The convertibility of shares of Series C-1 Preferred Stock is limited such that a holder of Series C-1 Preferred Stock may not convert Series C-1 Preferred Stock to common stock to the extent that the number of shares of common stock to be issued pursuant to such conversion, when aggregated with all other shares of common stock owned by the holder at such time, would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) more than 4.99% of all of the Company’s common stock outstanding.

	●	In the event the Company issues or sells any securities including options or convertible securities, except for any Exempt Issuance (as defined in the Series C-1 Certificate of Designation), at a price of or with an exercise price or conversion price of less than $0.0275 per share (see amendment discussed above), then upon such issuance or sale, the Series C-1 Preferred Stock conversion price shall be reduced to the sale price, the exercise price or conversion price of the securities sold. In addition, these preferred shareholders have the right to participate in future equity offerings from the company for twenty-four months from the effective date.

	●	In the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up of the Company, the holders of the Series C-1 Preferred Stock shall be entitled to receive, in cash out of the assets of the Company, whether from capital or from earnings available for distribution to its stockholders (“Liquidation Funds”) before any amount shall be paid to the holders of any shares of Junior Stock, but pari passu with any Parity Stock (as defined in the Series C-1 Certificate of Designation) then outstanding, an amount per shares of the Series C-1 Preferred Stock equal to the greater of (A) the conversion amount thereof on the date of such payment or (B) the amount per share such holder of Series C-1 Preferred Stock would receive if such holder converted such Series C-1 into common stock immediately prior to the date of the payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the holders of Series C-1 Preferred Stock and holders of the shares of Parity Stock, then each holder of Series C-1 Preferred Stock and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of the Liquidation Funds payable to such holder of Series C-1 Preferred Stock and such holder of the Parity Stock as a liquidation preference, in accordance with their respective certificate of designation (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Series C-1 Preferred Stock and all holders of Parity Stock.

●	●	Each share of Series ~~B preferred~~C-2 Preferred Stock is convertible into shares of common stock ~~entitles~~any time after the initial issuance date at a conversion price of $0.00275 per share. The number of shares of common stock issuable upon conversion shall be determined by dividing (x) the conversion amount (determined by the sum of the stated value thereof plus any additional amount thereon) of such share of Series C-2 by (y) the conversion price of $0.00275 per share (subject to temporary adjustment upon a triggering event as defined by the Series C-2 Certificate of Designation to 80% of the conversion price). The adjusted conversion price is only in effect until the triggering event is cured. The convertibility of shares of Series C-2 Preferred Stock is limited such that a holder of Series C-2 Preferred Stock may not convert Series C-2 Preferred Stock to common stock to the extent that the number of shares of common stock to be issued pursuant to such conversion, when aggregated with all other shares of common stock owned by the holder ~~to 100 votes on~~at such time, would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) more than 4.99% of all ~~matters submitted to a vote~~ of the Company’s ~~stockholders.~~common stock outstanding.
	●	~~Except as otherwise provided~~
	●	In the event the Company issues or sells any securities including options or convertible securities, except for any Exempt Issuance (as defined in the Series C-2 Certificate of ~~Designation,~~Designation), at a price of or with an exercise price or conversion price of less than the conversion price, then upon such issuance or sale, the Series C-2 Preferred Stock conversion price shall be reduced to the sale price, the exercise price or conversion price of the securities sold. In addition, these preferred shareholders have the right to participate in future equity offerings from the company for twenty-four months from the effective date.

	●	In the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up of the Company, the holders of the Series C-2 Preferred Stock shall be entitled to receive, in cash out of the Liquidation Funds before any amount shall be paid to the holders of any shares of Junior Stock, but pari passu with any Parity Stock (as defined in the Series C-2 Certificate of Designation) then outstanding, an amount per shares of the Series C-2 Preferred Stock equal to the greater of (A) the conversion amount thereof on the date of such payment or (B) the amount per share such holder would receive if such holder converted such Series C-2 into common stock immediately prior to the date of the payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the holders of Series ~~B preferred stock, the~~C-2 Preferred Stock and holders of ~~Company common stock~~the shares of Parity Stock, then each holder of Series C-2 Preferred Stock and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of the Liquidation Funds payable to such holder of Series C-2 Preferred Stock and such holder of the Parity Stock as a liquidation preference, in accordance with their respective certificate of designation (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Series C-2 Preferred Stock and all holders of Parity Stock.

	●	From the initial issuance date, cumulative dividends on each share of Series E shall accrue, on a quarterly basis in arrears (with any partial quarter calculated on a pro-rata basis), at the rate of 8% per annum on the stated value, plus any additional amount thereon. Dividends shall be paid within 15 days after the end of each fiscal quarter (“Dividend Payment Date”), at the option of the Holder in cash or through the issuance of shares of ~~any other Company capital~~common stock. In the event that the Holder elects to receive its dividends in shares of common stock ~~having general voting rights and~~the number of shares of common stock to be issued to each applicable Holder shall ~~vote together as one class on all matters submitted~~be determined by dividing the total dividend outstanding to ~~a vote~~such Holder by the average closing price of the ~~Company’s stockholders; and~~common stock during the five trading days on the principal market prior to the dividend payment date.
	●	~~Commencing at~~
	●	Holders of shares of Series E Preferred Stock are entitled to dividends or distributions on each share on an “as converted” into common stock basis, if, as and when declared from time to time by the Board of Directors.

	●	In connection with, (i) a Change of Control of the Company or (ii) on the closing of, a Qualified Public Offering by the Company, all of the outstanding shares of Series E (including any fraction of a share) shall automatically convert into an aggregate number of shares of common stock (including any fraction of a share) by multiplying the number of outstanding shares by the stated value per share of $2,000 plus accrued dividends and dividing that number (including any fraction of a share) by the lesser of: (i) $0.00375 or (ii) 75% of the average closing price of the common stock during the prior five trading days on the principal market, subject to adjustment as provided in the Series ~~B Preferred Stock (the “Issuance Date”) and upon~~E Certificate of Designation including a price protection provision for offerings below the ~~earliest~~conversion price. However, the conversion price shall never be less than $0.0021. If a closing of a Change of Control transaction or a Qualified Public Offering occurs, such automatic conversion of all of the ~~occurrence~~outstanding shares of ~~(i) a holder of the~~ Series ~~B Preferred Stock owning, directly or indirectly as a beneficiary or otherwise,~~E shall be deemed to have been converted into shares of Common Stock ~~which are~~immediately prior to the closing of such transaction or Qualified Public Offering.

	●	In the event the Company issues or sells any securities including options or convertible securities, except for any Exempt Issuance (as defined in the Series E Certificate of Designation), at a price, an exercise price or conversion price of less than ~~5.0%~~the conversion price, then upon such issuance or sale, the Series E Preferred Stock conversion price shall be reduced to the sale price or the exercise price or conversion price of the securities sold.

	●	Holders of Series E Preferred Stock have no voting rights.

	●	From the Initial Issuance Date, cumulative dividends on each share of Series F shall accrue, on a monthly basis in arrears (with any partial month being made on a pro-rata basis), at the rate of 8% per annum on the stated value, plus any additional amount thereon. Dividends shall be paid within 15 days after the end of each month (“Dividend Payment Date”), at the option of the Holder in cash or through the issuance of shares of ~~Common Stock, (ii)~~common stock. In the ~~date a holder~~event that the Holder elects to receive its dividends in shares of common stock the number of shares of common stock to be issued to each applicable Holder shall be determined by dividing the total dividend payable to such Holder by the average closing price of the common stock during the five trading days on the principal market prior to the dividend payment date.

	●	Holders of shares of Series BF Preferred Stock are entitled to dividends or distributions on each share on an “as converted” into common stock basis, if, as and when declared from time to time by the Board of Directors.

	●	Each share of Series F Preferred Stock is ~~no longer an employee~~convertible into shares of common stock any time after the initial issuance date at the conversion price which is the lesser of: (i) $0.00313 or (ii) 75% of the average closing price of the common stock during the prior five trading days on the principal market, subject to adjustment as provided in the Series F Certificate of Designation including a price protection provision for offerings below the conversion price, provided, however, the conversion price shall never be less than $0.0016. The number of shares of common stock issuable upon conversion shall be determined by multiplying the number of outstanding shares by the stated value per share of $2,000 plus additional amount by the conversion price.

	●	In connection with, (i) a Change of Control of the Company or (ii) on the closing of, a Qualified Public Offering by the Company, all of the outstanding shares of Series F Preferred Stock (including any fraction of ~~its subsidiaries~~a share) shall automatically convert along with the additional amount into an aggregate number of shares of common stock (including any fraction of a share) as is determined by dividing the number of shares of Series F Preferred Stock (including any fraction of a share) by the automatic conversion price then in effect. If a closing of a Change of Control transaction or ~~(iii) five years after~~a Qualified Public Offering occurs, such automatic conversion of all of the outstanding shares of Series F Preferred Stock shall be deemed to have been converted into shares of common stock immediately prior to the closing of such transaction or Qualified Public Offering.

	●	In the event the Company issues or sells any securities including options or convertible securities, except for any Exempt Issuance ~~Date,~~(as defined in the Series F Certificate of Designation), at a price, an exercise price or conversion price of less than the conversion price, then upon such issuance or sale, the Series F Preferred Stock conversion price shall be reduced to the sale price, or the exercise price or conversion price of the securities sold.

	●	Series F Preferred Stock shall rank pari passu with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company with the Series C-1 Preferred Stock of the Company, the Series C-2 Preferred Stock of the Company, and the Series E Preferred Stock of the Corporation (the “Parity Stock”), and all other shares of capital stock of the Company shall ~~have~~be junior in rank to all Series F shares with respect to the ~~right~~preferences as to ~~redeem all~~dividends (except for the common stock, which shall be pari passu as provided in the Series F Certificate of Designation), distributions and payments upon the liquidation, dissolution and winding up of the ~~then outstanding~~Company (such junior stock is referred to herein collectively as “Junior Stock”). The rights of all such Junior Stock shall be subject to the rights, powers, preferences and privileges of the Series BF Preferred Stock. Without limiting any other provision of the Series F Certificate of Designation, without the prior express consent of the Required Holder, the Company shall not hereafter authorize or issue any additional or other shares of capital stock that is (i) of senior rank to the Series F Preferred Stock ~~held by such holder at a price equal~~in respect of the preferences as to dividends, distributions and payments upon the ~~Stated Value (the “Redemption Price”). The Series B~~liquidation, dissolution and winding up of the Company (collectively, the “Senior Preferred ~~Stock which is redeemed~~Stock”), or (ii) Parity Stock. Except as provided for in the Certificate of ~~Designations shall be returned to~~Designation, in the event of the merger or consolidation of the Company ~~(and, if not so returned, shall automatically be deemed canceled). The Redemption Price shall be mailed to such holder at the holder’s address of record, and~~into another corporation, the Series BF Preferred Stock ~~owned by~~shall maintain their relative rights, powers, designations, privileges and preferences provided for in the Certificate of Designation for a period of at least two years following such ~~holder~~merger or consolidation and no such merger or consolidation shall ~~be canceled.~~cause result inconsistent therewith.

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance Outstanding December 31, 2016		3,304,872		$	0.27
Issued on a full ratcheted basis		18,796,668			0.03
Issued in connection with financings		10,951,974			0.17
Exercised		(9,074,076	)		0.03
Balance Outstanding September 30, 2017		23,979,438		$	0.11		4.66	$	590,354
Exercisable, September 30, 2017		23,979,438		$	0.11		4.66	$	590,354

	Number of Option		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance Outstanding December 31, 2016		-	$	-
Granted		4,000,000		0.25
Balance Outstanding September 30, 2017		4,000,000	$	0.25		9.44	$	0
Exercisable, September 30, 2017		1,333,334	$	0.25		9.44	$	0

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance Outstanding September 30, 2022		1,901,410,519		$	0.0036		9.88	$	-
Granted		-			-				-
Balance Outstanding December 31, 2022		1,901,410,519		$	0.0036		9.63	$	0
Exercisable, December 31, 2022		1,380,407,725	(a)	$	0.0036		9.63	$	0

Balance Non-vested on September 30, 2022		547,666,344		$	0.0036		9.88	$	-
Granted		-			-		-		-
Vested during the period		(26,663,550	)		0.0036		-		-
Balance Non-vested on December 31, 2022		521,002,794		$	0.0036		9.63	$	0

			Weighted		Weighted Average Remaining
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Warrants		Price		(Years)		Value
Balance Outstanding on September 30, 2022		1,888,813,005	$	0.003		3.26	$	1,140,362

Issued in connection with a New Related Party Debentures (see Note 6)		2,564,340,702		0.003

Issued in connection with a New Debentures (see Note 6)		2,269,030,092		0.003

Issued to placement agent and consultant in connection with New Related Party and New Debentures (see Note 6)		140,489,795		0.003
Balance Outstanding on December 31, 2022		6,862,673,594	$	0.0025		5.48	$	8,731,840
Exercisable on December 31, 2022		6,662,673,594	$	0.0025		5.56	$	8,551,840