UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K



(Mark
One)



☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the fiscal year ended: September 30, 2022



or



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



Commission
file number: 000-30233



Endexx
Corporation

(Exact
name of registrant as specified in its charter)



|Nevada                             |  | 30-0353162             
|---------------------------------- |  | -----------------------
|(State
    of jurisdiction of      |  | (I.R.S.
    Employer   
|Incorporation
    or organization) |  | Identification
    No.)



|38246
    North Hazelwood Circle, Cave Creek, AZ |  | 85331         
|------------------------------------------------ |  | --------------
|(Address
    of principal executive offices)     |  | (Zip
    Code)



Registrant’s
telephone number, including area code: (480) 595-6900



Securities
registered pursuant to Section 12(b) of the Act



|Title
    of Each Class |  | Trading
    Symbol(s) |  | Name
    of each Exchange on which registered
|----------------------- |  | --------------------- |  | ---------------------------------------------
|None                    |  | EDXC                  |  | None                                         



Securities
registered pursuant to Section 12(g) of the Act:



Common
stock with a par value of $0.0001 per share

(Title
of Class)



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒



Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒



Indicate by check mark whether the 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 ☒ No ☐



Indicate by check mark whether the registrant has submitted electronically 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 such files).

Yes ☒No ☐



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



|Large
    accelerated filer | ☐ | Accelerated
    filer         | ☐
|--------------------------- | - | ----------------------------- | -
|Non-accelerated
    filer   | ☒ | Smaller
    reporting company | ☒
|                            |   | Emerging
    Growth Company   | ☐



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.

Yes
☐ No ☐



Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes
☐ No ☒



The
aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates (based on the closing price
of the registrant’s common stock as quoted on the OTC Markets Group Inc.’s Pink® Open Market as of the last business
day of the registrant’s most recently completed second fiscal quarter was approximately $0.0399.



As
of January 9, 2023, there were 505,157,952 shares of common stock, $0.0001 par value per share, outstanding.


















TABLE
OF CONTENTS



|             |                                                                                                              | Page
|------------ | ------------------------------------------------------------------------------------------------------------ | ----
|PART I       |                                                                                                              |     
|ITEM
    1.  | BUSINESS                                                                                                     | 4   
|ITEM
    1A. | RISK FACTORS                                                                                                 | 11  
|ITEM
    1B. | UNRESOLVED STAFF COMMENTS                                                                                    | 22  
|ITEM
    2.  | PROPERTIES                                                                                                   | 22  
|ITEM
    3.  | LEGAL PROCEEDINGS                                                                                            | 22  
|ITEM
    4.  | MINE SAFETY DISCLOSURE                                                                                       | 22  
|PART II.     |                                                                                                              |     
|ITEM
    5.  | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 23  
|ITEM
    6.  | RESERVED                                                                                                     | 25  
|ITEM
    7.  | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        | 26  
|ITEM
    7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                   | 29  
|ITEM
    8.  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  | 29  
|ITEM
    9.  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         | 30  
|ITEM
    9A. | CONTROLS AND PROCEDURES                                                                                      | 30  
|ITEM
    9B. | OTHER INFORMATION                                                                                            | 31  
|ITEM
    9C. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS                                          | 36  
|PART III     |                                                                                                              |     
|ITEM
    10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                       | 37  
|ITEM
    11. | EXECUTIVE COMPENSATION                                                                                       | 39  
|ITEM
    12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS               | 42  
|ITEM
    13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                    | 44  
|ITEM
    14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                       | 46  
|PART IV      |                                                                                                              |     
|ITEM
    15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                   | 47  



2









SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS



This
Annual Report contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are not historical
facts but rather are plans and predictions based on current expectations, estimates, and projections about our industry, our beliefs,
and assumptions.



We
use words such as “may,” “will,” “could,” “should,” “anticipate,” “expect,”
“intend,” “project,” “plan,” “believe,” “seek,” “assume,” and
variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties, and other factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These
risks and uncertainties include those described in the section entitled “Risk Factors.” You should not place undue reliance
on these forward-looking statements because the matters they describe are subject to certain risks, uncertainties, and assumptions that
are difficult to predict. Our forward-looking statements are based on the information currently available to us and speak only as of
the date on which they were made. Over time, our actual results, performance, or achievements may differ from those expressed or implied
by our forward-looking statements, and such difference might be significant and materially adverse to our security holders. Except as
required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information,
future events, or otherwise. We have identified some of the important factors that could cause future events to differ from our current
expectations and they are described in this Annual Report on Form 10-K (“Annual Report”) under the captions “Risk Factors,”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in other documents
that we may file with the Securities and Exchange Commission (“SEC”), all of which you should review carefully. Please consider
our forward-looking statements in light of those risks as you read this Annual Report.



3







PART
I



Item
1. Business.



Overview



We
develop hemp-derived, cannabidiol-based products, each formulated to address key segments of the health and wellness market. Through
our subsidiaries and strategic partnerships, we sell high-end, full-spectrum oils, extracts, topicals, and pet products, all with the
shared purpose of supporting the potential of relief of pain and inflammation for humans and pets through our e-commerce site www.cbdunlimited.com,
as well as other online and in-store retailers. Our products are built upon three key fundamentals: targeted-delivery, controlled-dosing,
and dual-therapy applications. Our products have been formulated with input from nutrition experts, cosmetic specialists, and Doctors
of Podiatric Medicine; use American-sourced hemp-derived materials; and use the highest quality natural ingredients. Each product undergoes
rigorous quality control checks to ensure that the final product is of the highest possible quality and is tested and verified by independent
laboratories. (See, “Government Regulation.”) We continue to invest in research and development in order to develop
new products and delivery methods. We plan to scale our production to meet growing consumer demand by entering into new joint ventures
and securing commitments from large retailers with national presence.



In
addition to our consumer products, our Gorilla-Tek division offers a state-of-the art automated dispensing system providing a secure
method of distributing hemp-based products. The proprietary system enables retailers to increase sales channels without opening a physical
storefront location. Complementing our retail products and Gorilla-Tek divisions, we also own and operate a number of wholly-owned subsidiaries
that offer technology and consulting solutions to the hemp and hemp-derived product industry, including an easy to use “Seed-to-Shelf”
compliance and inventory tracking and process management system for regulated products in a front of counter pharmacy support platform.



We
are led by a management team and advisory group that has decades of experience in the pharmacy, medical, hemp-derived products, nutraceutical,
and health supplement industries. Our strategic partnerships include leading regulated hemp farms, manufacturers, marketers, and retailers
with national presence, all supporting the development and sale of our hemp-derived products. We are based in Cave Creek, Arizona.



Historical
Overview



The
Company was incorporated in the State of Nevada on September 5, 1997 as Micron Solutions, Inc. (“Micron Solutions”), in order
to complete a merger with Shillelagh Ventures Chartered, a Utah corporation (“Shillelagh”). In November 1997, Shillelagh
merged with and into Micron Solutions, with Micron Solutions as the surviving entity.



In
2002, Micron Solutions entered into an Exchange Agreement (the “Exchange Agreement”) with PanaMed, Inc., a California corporation,
formerly known as PanaMed Africa, Inc., and all of its shareholders, pursuant to which they transferred and assigned their common shares
to Micron Solutions in exchange for an equal number of shares of common stock of Micron Solutions, thereby causing PanaMed, Inc. to become
a wholly-owned subsidiary of Micron Solutions. In connection with the Exchange Agreement, Micron Solutions (i) changed its name to PanaMed
Corporation (“PanaMed Corporation”), (ii) effected a 1-for-10 reverse stock split, such that every ten shares of PanaMed
Corporation’s common stock became one share of its common stock, and (iii) amended its Articles of Incorporation similarly to decrease
the number of its authorized shares of capital stock by the same ratio as the reverse stock split ratio. From 2002 to 2005, PanaMed Corporation
operated as a biotech service and licensing company, investing capital into biotechnologies and conducting therapeutic treatment programs
in the Ivory Coast, Africa.



In
June 2005, we filed a Certificate of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to
change our name to Endexx Corporation. At that time, we adopted our current trading symbol, “EDXC.” In September 2005, we
acquired Visual Board Books, Inc. (“VBB”), a Software-as-a-Service (“SaaS”) developer, through a merger, whereby
VBB merged with and into us, and we were the surviving entity. Subsequently, we operated as a diversified technology and SaaS and compliance
and tracking systems company until we shifted our focus to the hemp-derived product industry in August 2014. In October 2018, we changed
our name to CBD Unlimited, Inc., and in May 2020, we changed our name back to Endexx Corporation, with CBD Unlimited, Inc., becoming
our wholly-owned subsidiary. On January 25, 2021, we filed our Amended and Restated Articles of Incorporation.



Operating
Subsidiaries



We
currently have two primary operating subsidiaries:



Go
Green Global Enterprises, Inc.



We
acquired Go Green Global Enterprises, Inc., a Nevada corporation (“Go Green Global”), pursuant to a Common Stock Share Exchange
Agreement (the “GG Share Exchange Agreement”), dated May 1, 2018, with Go Green Global, as subsequently amended by the First
Amended Common Stock Share Exchange Agreement, dated July 10, 2018 (the “Amendment”; and, together with the GG Share Exchange
Agreement, the “Amended Exchange Agreement”). Pursuant to the Amended Exchange Agreement, we issued 10,000,000 restricted
shares of our Common Stock to the two former equity owners of Go Green Global in exchange for 20,000,000 restricted shares of Go Green
Global’s common stock, which constituted all of its post-closing issued and outstanding shares of common stock, and resulted in
Go Green Global becoming our wholly-owned subsidiary. The GG Share Exchange Agreement was the first step in our proposed entry into the
Jamaican cannabis market.



In
June 2018, Go Green Global entered into an Agreement for the Assignment and Assumption of Contracts, Intellectual Property, Trade Secrets,
and Business Opportunities (the “Go Green Global and Jamaica Assignment”) with Go Green Global Enterprises Limited, a Jamaican
corporation (“Go Green Jamaica”), in furtherance of Go Green Global’s business strategy to commence operations in Jamaica.
As a result of the Go Green Global and Jamaica Assignment, Go Green Global now owns 49% of the ordinary shares of Go Green Jamaica. The
remaining 51% of the ordinary shares are held by Go Green Jamaica’s legacy equity owners (including one of its directors, Kent
Gammon), each of whom is otherwise unaffiliated with the Company. Our Chief Executive Officer, Todd Davis, serves as one of the three
directors of Go Green Jamaica and as its President.



4









Pursuant
to the Go Green Global and Jamaica Assignment, Go Green Jamaica assigned to Go Green Global certain assets, including (i) two consulting
agreements, (ii) a lease for approximately 1,200 square feet of retail space to be operated as a “retail herb house” to be
located in Ocho Rios, Jamaica, now that a “Retailer Licence” has been obtained from the Cannabis Licensing Authority of Jamaica
(the “Jamaica CLA”), (iii) a lease for approximately one acre to be used to grow cannabis once the relevant license for growing
operations has been obtained from the Jamaica CLA, and (iv) license applications to grow, cultivate, process, package, and sell medical
cannabis in Jamaica. As of June 17, 2021, Go Green Global has become licensed by the Jamaica CLA for retail sales and, prior to the date
of this Annual Report on Form 10-K, the Jamaica CLA granted a provisional license for cultivation. We expect to commence retail operations
on or about September 1, 2021. We expect that the cultivation license process will be completed in approximately six months, which will
allow Go Green Jamaica then to commence its cultivation operations in Jamaica.



Together
One Step Closer, LLC



We
acquired Together One Step Closer, LLC, an Arizona limited liability company, doing business as Holistic Earth Remedies (“Holistic
Earth Remedies”), pursuant to a Stock Purchase Agreement (the “Holistic SPA”), dated November 8, 2017, entered into
between Holistic Earth Remedies and us. Pursuant to the Holistic SPA, we acquired all of the issued and outstanding equity interests
in Holistic Earth Remedies and, in consideration thereof, we issued 1,000,000 restricted shares of our Common Stock to its then-sole
member, who was otherwise unaffiliated with us. Holistic Earth Remedies specializes in the formulation, production, and sales of a full
line of topical lotions, gels, salves, balms, and spray applications for the potential natural relief of pain, inflammation, stress,
and mild skin irritation. Holistic Earth Remedies currently has limited operations. It distributes third-party manufactured hemp-derived
products that are sold at select health spas, fitness centers and alternative medicine outlets.



Additionally,
we recently completed three acquisitions in connection with our business plan:



Kush
Inc.



On
February 1, 2020, we entered into a Stock Purchase Agreement with Kush Inc. (aka Kushwear; “Kush”), pursuant to which agreement
we acquired all of the issued and outstanding shares of capital stock of Kush. In consideration thereof, at the closing of the transaction,
we issued 500,000 restricted shares of our Common Stock to Charles Mohr, the sole shareholder of Kush, and are obligated to issue up
to an additional 500,000 restricted shares of our Common Stock upon meeting certain milestones. One hundred twenty-five thousand of such
additional restricted shares of our Common Stock will be issued upon the occurrence of each of the following events: (i) Kush clients
generating $150,000 in gross sales revenue, (ii) 3,000 points of distribution being established, (iii) a positive return on investment
being established in the first year of the agreement (which event did not occur), and (iv) the achievement of 200,000 “likes or
engagements” (in any combination) in social media. We purchased Kushwear for rebranding purposes to reach a younger demographic
with our clothing line and hemp-derived products. As of the date of this Amended Registration Statement, the website has been completed,
but we have not launched our sales activities.



CBD
Life Brands, Inc.



On
March 1, 2020, we entered into a term sheet with CBD Life Brands, Inc. (“CBDLB”), for the purchase of all of CBDLB’s
digital and social assets, intellectual property, and formulas/recipes for its cannabidiol (“CBD”)-infused beverages for
which we paid $100,000. In connection with this transaction, the key employees of CBDLB agreed to enter into standard three-year non-competition
agreements for our benefit. We are still in the process of developing CBD-infused beverage formulations, and expect to launch new products
in late-2023.



Khode,
LLC



On
October 1, 2020, we entered into an LLC Operating Agreement of Khode, LLC (“Khode”) and, in May of 2021, we entered into
a Membership Interest Purchase Agreement that resulted in a minor adjustment to the holdings of the parties thereto. By virtue of that
agreement, we now own 70.01% of the membership interests of Khode and, pursuant to the provisions of the Khode Operating Agreement, are
required to make a capital contribution of $3,500,000. As of the date of this Annual Report on Form 10-K, we have made a partial capital
contribution in the amount of approximately $1,500,000 and expect to raise the balance through limited, private sales of our debt and
equity securities. We cannot provide any assurance that such financing will be available on terms acceptable to us, at times required
by us, if at all. If we fail to make the entire capital contribution, we will be in breach of our obligations under the Khode Operating
Agreement. In the event of such a breach, the 24.99% interest holder in Khode, a Florida corporation known as Serious Promotions, Inc.,
will have the right, exercisable by written notice given at any time on or before the date which is twenty Business Days following the
occurrence of such event of default, to terminate the Endorsement Agreement (as described in the second paragraph, below), with Khode
having a ten-month sell-off period with respect to all Branded Products (as defined in the Khode Operating Agreement) then manufactured
but not yet sold.



Effective
January 22, 2021, we entered into a Percentage Payment Agreement with a third party that is not otherwise affiliated with Khode, pursuant
to which we are obligated to pay to that third party an amount equivalent to 2.1% of all cash received by Khode from its net sales of
certain products during the term of that Percentage Payment Agreement, which will terminate when Khode has been dissolved. As of the
date of this Amended Registration Statement, Khode has not generated any revenues and we cannot provide any assurance that it will generate
any revenues.



During
October 2020, Khode entered into a five-year Endorsement and License Agreement with Serious Promotions, Inc., a Florida corporation,
f/s/o Khaled, professionally known as DJ Khaled, who is an American artist, record executive and producer, and media personality. Pursuant
to that agreement, Khode is to create a custom line of hemp-derived-infused oils, creams, and other beauty products under DJ Khode’s
brand and he is to promote the products through personal appearances, the use of social media platforms, participation in presentation
videos, video, and audio “drops,” and media quotes. In connection with DJ Khaled’s services, Khode is obligated to
make quarterly payments totaling an aggregate of $5,000,000 by July 1, 2025, of which aggregate amount, as of the date of this Annual
Report on Form 10-K, Khode has tendered $750,000 and expects to finance the balance of the quarterly payments through cash flow from
operations of Khode. As of the date of this Annual Report on Form 10-K, Khode has not generated any positive cash flow from operations
and we cannot provide any assurance that it will generate any cash flow from operations in the future in an amount sufficient to, among
other things, make such quarterly payments.



Effective
August 31, 2022, we closed a transaction contemplated by an Agreement (the “Hyla August Agreement”) with HYLA UK Holdco Limited,
a United Kingdom limited company (“Hyla UK”). Pursuant to the terms thereof, we, through our specially formed transaction
subsidiary, purchased (the “Hyla Transaction”) 51% of the issued and outstanding capital stock of Hyla US Holdco Limited,
a Delaware corporation (“Hyla”), a wholly-owned operating subsidiary of Hyla UK. We are holding that 51% as an investment.
(See Item 9b.)



5







Present
and Future State of Operations



Among
our subsidiaries, acquisitions, and partnerships, CBD Unlimited, Inc., Phytobites Inc., Holistic Earth Remedies, Go Green Global Enterprises,
and our operating agreement with Khode, LLC are operational and in full effect. Over the coming months and years, we intend to: (i) launch
Go Green Global’s retail operation in Jamaica; (ii) re-brand Kushwear’s line-up of sustainable clothing and hemp-derived
products; and (iii) develop CBDLB’s formula of hemp-derived and infused beverages, and integrate them into our product offering.



Overview
of the Hemp-Derived Product Industry



The
Difference Between Hemp and Marijuana



Both
marijuana and hemp come from the same species of plant called “Cannabis.” Hemp is a unique strain or species known as “Cannabis
Sativa L,” which, by dry weight, contains less than 0.3% THC concentration. Cannabis Sativa L plants contain unique compounds called
cannabinoids and terpenoids. CBD is one of approximately 66 cannabinoids found in the Cannabis Sativa L plant and shares many properties
with cannabis (i.e., marijuana). Unlike CBD derived from marijuana, CBD derived from the aerial parts of the hemp plant contains
less than three-tenths of one percent (0.3%) of THC, the component that causes the psychoactive side-effects commonly associated with
marijuana. In general, hemp CBD-based products that have a THC concentration of less than 0.3% is generally considered “legal”
in the United States, and yields a product that some consumers believe contains the observed medicinal benefits of traditional cannabis,
without inducing its “high” in consumers. Notwithstanding the beliefs of many consumers, the FDA has not recognized any medical
benefits derived from CBD. CBD is available in several forms, such as isolates, distillates, and oil extracts, including (i) hemp seed
oil, which has no CBD, (ii) full-spectrum CBD, which contains phyto-cannabinoids, such as THC, CBN, THCA, CBC, and CBG in variable concentrations,
and is considered the most natural form of CBD, and (iii) broad-spectrum CBD, which contains less-to-non-detectable THC than full-spectrum
CBD.



Market
Opportunity



We
believe that, with recent regulatory changes, the hemp-derived product industry is poised for growth. Recent projections from BDS Analytics
Inc. and Arcview Market Research project that the collective market for hemp-derived product sales is poised to exceed $20 billion in
the United States by 2024. This forecast takes into account products sold through licensed dispensaries, pharmaceuticals, and in the
general retail market.



Many
believe this current and prospective growth is driven by education and shifting attitudes towards hemp-derived Products. According to
a January 2019 Consumer Reports survey, an estimated 64 million Americans have tried CBD in the preceding 24 months. A June 2019 Harris
Poll reported that 86% of the survey takers had some awareness of CBD and 56% of the survey takers indicated that they support using
CBD as a potential replacement for traditional pain killers. The June 2019 Harris Poll also indicated that CBD users tend to be younger,
with over 10% of Americans between the ages of 18 and 44 years old using CBD regularly. Overall, males are more likely to have tried
CBD and are more likely to use it regularly: 10% of males responded that they used CBD on a regular basis, as compared to just 4% of
female respondents.



Our
Products



The
hemp-derived product industry is still largely underserved against the demand for natural and nutritional supplements and topicals. With
the industry poised for growth in the coming years, our established portfolio of products and industry solutions can serve multiple market
segments. Our current products and service offerings consist of two groups: (i) consumer products and (ii) technology solutions.



Our
Current Consumer Products



Our
focus is on the development, manufacture, and distribution of nutritional supplements and delivery systems for healthy living for the
nutraceutical consumer market in the form of hemp-based, non-psychoactive cannabinoids and terpenoid extracts that are infused into products.
Our current products encompass hemp-derived oils, topicals, extracts, drinks, premium chocolates, and a newly launched premium blue line
of hemp-derived health and beauty care products. Our Phyto-bites are hemp-derived soft chews for animal use that are formulated to promote
health and potentially support an improved quality of life.



According
to the National Institutes of Health, a “dietary supplement” is a product that is intended to supplement the diet. A dietary
supplement contains one or more dietary ingredients (including vitamins, minerals, herbs or other botanicals, amino acids, and other
substances) or their components; is intended to be taken by mouth as a pill, capsule, tablet, or liquid; and is identified on the front
label of the product as being a dietary supplement. None of our products is a dietary supplement.



We
have built a network of reliable suppliers of high-quality, hemp-derived products and provide pharmacy-grade delivery systems with consistent
and precise dosages. The derived and finished products are tested at the point of origin and retested in the certified labs for contaminants,
trace elements, potency, and purity. All products are developed and produced in ISO 9000 and GMP and OTC-certified facilities in collaboration
with our distribution partners throughout the United States and established licensed medical hemp manufacturing and processing facilities.



We
believe that our product line is establishing a new standard in quality, transparency, consistency, and accuracy. Using current extraction
technologies and sustainable cultivation practices, our ultimate goal is to improve the safety, quality, and bioavailability of hemp-derived
products to our customers. All of our products are sold on our e-commerce site, www.cbdunlimited.com, which seamlessly brings
together our products, marketing content, and education into a single platform. The Premium Blue Line is marketed to the mass pharmacy,
mass retail, and mass food markets.



Our
existing consumer products include energy drinks, water products, tea bags, and K-Cup Pods and hemp-derived creams and mists.



6







Products
Under Development and Implementation



Gorilla-Tek



We
have developed and, subject to manufacturing, are implementing “Gorilla-Tek,” a secure automated inventory control and dispensing
system developed for managing high value items. The technology has been re-engineered for the hemp-derived product and pharmacy industries
and offers retailers a new venue for selling hemp-derived products in a safe and secure manner. The dispensing system is a kiosk that
comes in multiple forms and is no larger than traditional vending machines. We also recently launched a propriety application as an “end
cap” machine designed to service, educate, and advertise hemp-derived products as a self-contained full-service store within in
a store.







Gorilla-Tek
was acquired in connection with our acquisition of Dispense Labs LLC in 2013 and uses proprietary software that is specifically designed
to secure and control compliant transactions and manage inventory. We believe this will significantly improve profitability, accountability,
security, and customer satisfaction. Gorilla-Tek is specifically designed and configured to dispense hemp-derived products, regulated
products, and prescription refills, while also managing the supply chain, providing up-to-the-minute accounting details, and protecting
the security of the product, as well as the consumer and/or patient accessing the system. Gorilla-Tek has been tested in high-risk one
in each of three geographically dispersed locations: Santa Ana, California; Denver, Colorado; and Kingston, Jamaica in licensed dispensaries.
Originally known as “Autospense,” Gorilla-Tek was rebranded to reflect automated retail and remote retail applications better,
where additional security, age compliance, and tracking are required. The Gorilla-Tek machines were strategically positioned at high-traffic
areas in order to promote easy access and significant use. Initial results were promising, as retailers saw increased sales, reduced
theft of products, and stronger inventory control. Subsequent to completion of testing, one of the machines is currently located at the
manufacturing facility in California, the second is located at a retail establishment in Kingston, Jamaica, and the third is located
at the retail facility in Kingston, Jamaica that we will operate now that we have received our license for retail sales from the Jamaica
CLA. We expect to release Gorilla-Tek to the broader market in late-2022 and 2023, where we intend to partner with national retailers
interested in selling hemp-derived products.



Dudad



“Dudad”
is an Acoustic Fingerprint Audio Ad Capture and advertising application platform. Development of the base operating system has been finalized.
Additional investments will be required to commercialize the technology, and there can be no assurance that we will expend the resources
necessary for commercialization, that we will have available resources, or that the technology can even be commercialized successfully.
In order to commercialize Dudad, we will need to update the software app to current Python integration capabilities and then we will
need to market it to the advertising industry. Python is an open-source programming language managed by the Python Software Foundation.
WE believe that third-party programmers will be able to update the software for an expenditure of not more than $100,000. We do not currently
know the economic extent of the marketing required for Dudad. When ready, as to which there can be no assurance, we expect to promote
Dudad through advertisements in Advertising Age and other industry outlets.



Distribution
Methods



All
of our products are currently sold online through our e-commerce platform www.cbdunlimited.com, select distributors, specialty
sales groups, and brick-and-mortar retailers.



7







We
distribute our products throughout the United States, and now that the Cannabis Licensing Authority of Jamaica has granted Go Green Jamaica
a “Retailer Licence,” we expect to commence the distribution of our products on a limited basis in Jamaica through Go Green
Global and Go Green Jamaica commencing on or about September 1, 2021. Our product offerings to be sold in Jamaica through Go Green Global
are expected to include medical cannabis products regulated by the Jamaica CLA, hemp-derived products, clothing, and other shop-related
products. A portion of our sales comes through our e-commerce platform, and orders are fulfilled at our fulfillment center, which is
located at our headquarters in Cave Creek, Arizona. Demand for our products is generally increasing and we are contemplating a transition
of our distribution to a third-party fulfillment center.



In
addition to our e-commerce website, several distributors carry our products and sell them into mass pharmacy, retail stores, food chains,
convenience stores, gas station stores, and specialty shops. Our current retail strategy entails targeting accounts and regions throughout
the United States where we believe our products, including our hemp-derived creams and mists, are most likely to succeed with retail
shoppers. Our distribution and retail strategy aims to increase our brand exposure and drive follow-on purchases at retail locations
that carry our products and through our e-commerce platform. We intend to utilize social media, print, radio, and digital marketing,
as well as broad distribution agreements. We currently have distribution agreements with:



| | ● | Southern
    Glazer’s Wine and Spirits, LLC: we entered into a 10-year (subject to successive automatic five-year renewals) Master Distribution
    Agreement, dated March 27, 2020, pursuant to which we appointed SGWS as our sole and exclusive distributor of certain of our products
    (as defined in the Agreement) to retail accounts that are licensed to sell alcoholic beverages in the territory (as defined in the
    Agreement), subject our rights to sell our products to end-users in the territory through electronic commerce.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ● | Impulse
    Health LLC: we entered into a two-year (subject to successive automatic two-year renewals) Sales Representative Agreement, dated
    April 1, 2020, pursuant to which pursuant to which we appointed Impulse Health as our exclusive sales representative of certain of
    our products (as defined in the Agreement) to certain accounts (as defined in the Agreement).                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ● | Beauty
    Strategy Group, LLC: we entered into a 12-month (subject to extension mutually agreeable to the parties) Brand Consulting Agreement,
    dated April 21, pursuant to which we granted Beauty Strategy the right to act as our consultant and the authorization to solicit
    orders from Ulta and Sephora in accordance with our regular terms of sale and prices then in effect.                                                                                                                                                      



Effective
on October 9, 2020, Khode entered into a Master Service Agreement with Impact Brokers, LLC, for a term that continues for the duration
of the transactions contemplated by the Khode Operating Agreement. During the term of that agreement, Impact Brokers will provide to
Khode strategic, creative, and operational support for those transactions.



The
above summary description of each of the four agreements is not intended to be comprehensive. For a more complete understanding of each
of the agreements, please see Exhibits 10.27, 10.28, 10.29, and 10.30 to this Annual Report on Form 10-K.



During
 our 2022 fiscal year, we did not have any significant customer concentrations.



Marketing



The
key goal of our sales and marketing campaign is to provide broad exposure of our products and their demonstrated potential effectiveness
to our target markets. We have adopted a multi-pronged approach to market our products and build brand awareness, encompassing digital,
social, educational, and affiliate marketing:



| | ● | Social
    Media Marketing: We are capitalizing on the reach of social media platforms, including Facebook, Instagram, and Twitter, to work
    with social media influencers to increase our brand awareness.                                                                                                                                                                                                                                   
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | Digital
    Ads and Search Engine Optimization: We are developing personalized digital advertisements to target different consumer segments
    and explain the potential benefits of our products. Additionally, we intend to work with our partners and public relations team to
    optimize search engine results for our brand in the hemp-derived product category.
    
    We
    expect that our future marketing campaign will include:
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | Affiliate
    Marketing: We are in the process of adopting an affiliate marketing campaign, where our sales teams and social media influencers
    will market and sell our products through their network of contacts and followers. We expect that our affiliate marketing campaign
    will offer commissions on sales and referrals that should enable the growth of our sales and brand awareness.                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | Television
    and Radio Content: We intend to make regular appearances on radio stations and news segments to discuss our Company and its brands,
    and the hemp-derived product industry as a whole.                                                                                                                                                                                                                                         



Competition



The
hemp-derived product industry is subject to significant competition and is comprised of thousands of businesses, ranging from growers,
extractors, and manufacturers to distributors and retailers, and this number is expected to grow substantially in the coming years. We
directly compete with small-to-mid-sized manufacturers with annual revenues between $2 million and $20 million. However, if we are successful
in achieving our future growth targets, of which there can be no assurance, we would compete with much larger companies that generate
annual revenues in excess of $50 million. Some of our key competitors include Alternate Health Corp., Charlotte’s Web Holdings,
Inc., Cresco Labs, Inc., Curaleaf Holdings Inc., CV Sciences, Inc., Elixinol Global Ltd., Eviana Health Corp., KannaLife, Inc., Ovation
Science Inc., and Zynerba Pharmaceuticals, Inc.



Competition
against these brands is fierce, with each manufacturer offering a host of hemp-derived products directly competing with us. This can
over-populate the market with indistinguishable products and brands, forcing customers to buy products with little information. With
so many brands in the market, having a competitive differentiator is essential to attract customers. We believe our products are superior
to those of many of our competitors because we have established formulations with controlled dosing and delivery systems, and have tested
this platform within the healthcare industry with physicians, pharmacists, healthcare service providers, and veterinarians through clinical
trials or other pharmacy collaborations. Additionally, we believe that providing good customer service to our customers, through transparency
and education, will set us apart from our competitors. However, it is possible that one or more of our competitors could develop significant
research or marketing advantages over us that allows them to provide superior products or pricing, respectively, which could put us at
a competitive disadvantage.



8







Suppliers



We
have a network of suppliers and third-party service providers, including state-certified hemp suppliers, manufacturers, and distributors.
We source all of our hemp from certified American growers, and manufacture all of our products in CGMP, OTC, Cosmetic, and ISO-certified
facilities. Additionally, all of our ingredients and finished goods are tested for purity and quality by ISO-certified third-party laboratories:
Delta Verde Laboratories, DB Labs, LLC, and a division of Eurofins Scientific SE. We make available to our customers copies of the laboratories’
certificates of analysis, which disclose THC concentration, presence of metals, pesticides, or any other harmful contaminants. We continuously
manage the risks associated with third-party suppliers and service providers by continuously evaluating our supply chain for any quality
or manufacturing problems, and are continually identifying alternative solutions to any potential issues.



Our
Customers



We
are not dependent on any single customer for a significant portion of our sales. However, we have customers who purchase our products
on a regular basis. We believe this loyalty is an essential factor that will help differentiate our brand and products from our competition.
Our goal is to continue to build this loyalty from our customers by offering the highest quality products and best customer service in
the hemp-derived product industry.



In
addition to the customers who visit our e-commerce platform, we have strong relationships with wholesalers, distributors, and retailers.
Our products are now in approximately 6,400 retail locations .



Government
Regulation



In
2014, Congress enacted Section 7606 of the Agriculture Act of 2014 (the “2014 Farm Bill”), which provides for the domestic
cultivation of industrial hemp as part of agricultural pilot programs adopted by individual states for the purposes of research by state
departments of agriculture and institutions of higher education. The 2014 Farm Bill provides for the domestic cultivation of industrial
hemp in these pilot programs, notwithstanding other federal laws, such as the Controlled Substances Act (the “CSA”). The
2014 Farm Bill governed any current domestic production of industrial hemp.



The
2014 Farm Bill’s provisions require states that choose to adopt agricultural pilot programs to study the growth, cultivation, or
marketing of industrial hemp to do so in a manner that (i) ensures that only institutions of higher education and state agriculture departments
are used to grow or cultivate industrial hemp; (ii) requires that sites used for growing or cultivating industrial hemp be certified
with, and registered by, the states; and (iii) authorizes state agriculture departments to regulate the pilot programs. Within those
parameters, the 2014 Farm Bill gives significant discretion to states to determine whether to adopt an industrial hemp pilot program,
and to adopt regulations governing industrial hemp (including marketing research involving products derived from industrial hemp) under
those pilot programs. Many of the states that have adopted pilot programs have registered private companies to participate in the pilot
program. We worked with farms and extraction facilities that were registered under Arizona’s agricultural pilot program.



Under
the 2014 Farm Bill, any cannabis plant, plant part, or plant product that contains a higher concentration of THC than permitted in industrial
hemp is considered a Schedule I substance under the CSA and is not protected by the 2014 Farm Bill. In addition, any industrial hemp
plant, plant part, or plant product that is produced outside of a state agricultural pilot program may be considered unlawful but not
a controlled substance.



In
December 2018, the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”) was signed into law. Prior to its passage,
hemp, a member of the cannabis family, and hemp-derived products were classified as Schedule I controlled substances, and so were considered
illegal under the CSA. With the passage of the 2018 Farm Bill, hemp cultivation is broadly permitted outside of the state agricultural
pilot programs. The 2018 Farm Bill explicitly allows the transfer of hemp-derived products across state lines for commercial or other
purposes. It also puts no restrictions on the sale, transport, or possession of hemp-derived products, so long as those items are produced
in a manner consistent with the law.



Additionally,
there will be significant, shared state-federal regulatory power over hemp cultivation and production. Pursuant to the 2018 Farm Bill,
state agriculture departments must consult with the state’s governor and chief law enforcement officer to devise a plan that must
be submitted to the Secretary of the United States Department of Agriculture (the “USDA”). A state’s plan to license
and regulate hemp can only commence once the Secretary of the USDA approves the state’s plan. In states opting not to devise a
hemp regulatory program, the USDA will construct a regulatory program under which hemp cultivators in those states must apply for licenses
and comply with a federally-run program. This system of shared regulatory programming is similar to options states had in other policy
areas, such as health insurance marketplaces under the Affordable Care Act, or workplace safety plans under the Occupational Health and
Safety Act – both of which had federally-run systems for states opting not to set up their own systems. The USDA has deferred review
and approval of state plans, establishing its umbrella plan for hemp production in states without approved plans, and issuing federal
licenses to producers in such states until the agency promulgates final implementing regulations. Until such time as the USDA issues
such final regulations, commercial hemp production under the 2018 Farm Bill cannot legally begin. However, research-related activities
involving industrial hemp under the more-restrictive 2014 Farm Bill may continue. The USDA has expressed an intention to issue such final
regulations in time for producers to cultivate hemp for commercial purposes during the 2020 growing season; however, the timing and content
of the USDA’s final implementing regulations cannot be assured. Moreover, the 2018 Farm Bill permits states to establish additional
restrictions on hemp production and hemp products than required under federal law, although states may not interfere with the interstate
transportation of hemp or hemp products produced in compliance with the 2018 Farm Bill.



Even
though the 2018 Farm Bill removed industrial hemp from the Schedule I list, the 2018 Farm Bill preserved the regulatory authority of
the Food and Drug Administration (the “FDA”) over cannabis and cannabis-derived compounds used in food and pharmaceutical
products pursuant to the Federal Food, Drug, and Cosmetic Act (the “FD&C Act”) and Section 351 of the Public Health Service
Act. The FDA has stated that it intends to treat products containing cannabis or cannabis-derived compounds as it treats any other FDA-regulated
products. The FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with
any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce.



9







The
FDA has also stated that it is unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce,
or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived. Even though products
containing cannabis and cannabis-derived compounds remain subject to the FDA’s regulatory authority, there are methods available
for those companies who seek to lawfully introduce these products into interstate commerce. For example, a company can seek approval
from the FDA to market a human or animal drug that is derived from cannabis with therapeutic claims. In June 2018, the FDA approved Epidiolex,
which is a CBD-derived drug approved to treat epilepsy. The approval was based on adequate and well-controlled clinical studies, which
gives prescribers confidence in the drug’s uniform strength and consistent delivery that support appropriate dosing needed for
treating patients with epilepsy. The FDA’s position leaves a great deal of uncertainty in interpreting the legal standing of CBD
– the 2018 Farm Bill legalizes the interstate commerce of hemp, but the FDA has made statements indicating its desire to regulate
CBD products, which could significantly limit interstate commerce of CBD products.



Additionally,
the Federal Trade Commission (“FTC”) regulates advertising of all products, including for FDA-regulated articles made from
hemp and CBD derived from hemp.



Accumulated
Deficit



We
have incurred operating losses since inception and have negative cash flow from operations. As of September 30, 2022, we had an accumulated
deficit of $43,642,790 and incurred a net loss of $4,128,946 for the year then ended. Additionally, as of September 30, 2021 we had an accumulated
deficit of $39,513,844 and incurred a net loss of $6,808,154 for our 2021 fiscal year.



Our continuation as a going
concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flow from operations to meet
our obligations. We intend to continue to seek additional debt or equity financing to continue our operations, but there can be no assurance
that such financing will be available on terms acceptable to us, if at all.



Intellectual
Property



We
do not hold, nor have we applied for, any patents. As of the date of this Annual Report on Form 10-K, we have one service mark for “Endexx.”
Additionally, we have applied for several trademarks of our products’ names and logos, including “CBD Unlimited,” “Khode,”
and “Phyto-Bites.” As of the date of this Annual Report on Form 10-K, the US Patent and Trademark Office (USPTO) has not
approved any CBD-related trademarks, and, accordingly, our applications are still pending.



Research
and Development



Our
research and development expenses for the years ended September 30, 2022 and 2021 totaled $27,067 and $10,145, respectively, and relate
to the development of our products. None of these costs was borne directly by our customers.



Employees



As
of January 12, 2023, we have approximately ten full-time employees. None of our employees is covered by any collective bargaining
agreements and we have never experienced a major work stoppage, strike, or dispute. We consider our relationship with our employees to
be outstanding.



Reports
to Security Holders



We
are not currently required to file periodic reports with the Commission, nor are we required to deliver an annual report to our stockholders.
However, in compliance with OTC Markets Group Inc. (the “OTCM”) Alternative Reporting Standards, we file alternate annual
and interim reports, all of which can be found on the disclosure tab of our company profile on the OTCM’s website at https://www.otcmarkets.com/stock/EDXC/disclosure.



Because
our class of Common Stock is now registered pursuant to Section 12(g) of the Exchange Act, we are subject to the requirements of Section
13(a) thereunder, which will require us to file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form
8-K, and are required to comply with all other obligations of the Exchange Act applicable to issuers pursuant to Section 12(g). Further,
our directors and named executive officers and beneficial owners of five percent (5%) or more of our Common Stock will be subject to
certain disclosure obligations under the Exchange Act.



You
may read and copy this Annual Report on Form 10-K and any future reports we file with the Commission free of charge through the Commission’s
website at www.sec.gov. You may obtain further information about us on our websites at https://endexx.com/ and www.cbdunlimited.com.
We caution the reader that none of the information contained on such websites is incorporated into this Annual Report on Form 10-K.



10







Item
1A. Risk Factors.



Investing
in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together
with all of the other information contained in this Annual Report on Form 10-K or in any other documents incorporated by reference into
this Annual Report on Form 10-K, in light of your particular investment objectives and financial circumstances. Moreover, the risks so
described are not the only risks we face. Additional risks not presently known to us or that we currently perceive as immaterial may
ultimately prove more significant than expected and impair our business operations. Any of these risks could adversely affect our business,
financial condition, results of operations, or prospects. The quoted price of the Common Stock could decline due to any of these risks
and you may lose all or part of your investment.



Risks
Related to Our Business



We
have a limited operating history on which to judge our new business prospects and management. We commenced operations in the
hemp-derived product industry in 2014 in the same year as the 2014 Farm Bill became law and four years prior to the passage of the 2018
Farm Bill. Accordingly, we have only a limited operating history upon which to have to base an evaluation of our business and prospects.
Operating results for future periods are subject to numerous uncertainties and we cannot assure you that we will achieve or sustain profitability.
Our prospects must be considered in light of the risks encountered by companies in the early stage of development, particularly companies
in new and rapid evolving markets. We cannot assure you that we will successfully address any of these risks.



We
have incurred significant net losses and cannot assure you that we will achieve or maintain profitable operations. Our net losses
were $9,163,000 for the year ended September 30, 2020 and $8,276,000 for the year ended September 30, 2019. As of September 30, 2020,
we had a stockholders’ deficit of $11,654,000. The increase in net losses was the result of the sum of certain positive results
in the 2020 fiscal year compared to the 2019 fiscal year (nominally increased revenues, enhanced by a $422,000 decrease in cost of revenues,
a $378,000 decrease in inventory impairment, a $342,000 decrease in professional fees-related party, a $1,480,000 decrease in combined
financing costs, interest expenses, and default penalties, and a $2,510,000 non-cash gain in fair value of derivative liability) offset
by certain negative results between the years (a $200,000 increase in advertising and promotion expenses, a $100,000 increase in payroll
expenses, a $70,000 increase in professional fees, a $255,000 increase in general and administrative expenses, and a net 428,000 loss
on acquisition and unrealized loss on investments). We may continue to incur significant losses in the future for a number of reasons,
including unforeseen expenses, difficulties, complications, and delays, and other unknown events.



Accordingly,
we cannot assure you that we will achieve sustainable operating profits as we continue to expand our product line and otherwise implement
our growth initiatives. Any failure to achieve and maintain profitability would have a materially adverse effect on our ability to implement
our business plan, our results and operations, and our financial condition, and could cause the value of our Common Stock to decline,
resulting in a significant or complete loss of your investment.



Our
independent registered public accounting firm’s reports for the fiscal years ended September 30, 2022 and 2021 have raised substantial
doubt as to our ability to continue as a “going concern.” Our independent registered public accounting firm indicated
in its reports on our audited consolidated financial statements as of and for the years ended September 30, 2022 and 2021 that there
is substantial doubt about our ability to continue as a going concern. A “going concern” opinion indicates that the financial
statements have been prepared assuming we will continue as a going concern and do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if
we do not continue as a going concern. Therefore, you should not rely on our consolidated balance sheet as an indication of the amount
of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to stockholders, in
the event of liquidation. The presence of the going concern note to our financial statements may have an adverse impact on the relationships
we are developing and plan to develop with third parties as we continue the commercialization of our products and could make it challenging
and difficult for us to raise additional financing, all of which could have a material adverse impact on our business and prospects and
result in a significant or complete loss of your investment.



Our
ability to grow and compete in the future will be adversely affected if adequate capital is not available to us or not available on terms
favorable to us. We have limited capital resources. To date, we have financed our operations through a mix of equity and debt
investments by investors, and we expect to continue to do so in the foreseeable future. Our ability to continue our normal and planned
operations, to grow our business, and to compete in our industry will depend on the availability of adequate capital.



We
cannot assure you that we will be able to obtain additional funding from those or other sources when or in the amounts needed, on acceptable
terms, or at all. If we raise capital through the sale of equity, or securities convertible into equity, it would result in dilution
to our then-existing stockholders, which could be significant depending on the price at which we may be able to sell our securities.
If we raise additional capital through the incurrence of additional indebtedness, we would likely become subject to further covenants
restricting our business activities, and holders of debt instruments may have rights and privileges senior to those of our then-existing
stockholders. In addition, servicing the interest and principal repayment obligations under debt facilities could divert funds that would
otherwise be available to support development of new programs and marketing to current and potential new clients. If we are unable to
raise capital when needed or on attractive terms, we could be forced to delay, reduce, or eliminate development of new products or future
marketing efforts, or reduce or discontinue our operations. Any of these events could significantly harm our business, financial condition,
and prospects.



The
COVID-19 pandemic could have a material adverse impact on our business, results of operations, and financial condition.In December
2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In January 2020, the WHO declared the COVID-19 outbreak
a “Public Health Emergency of International Concern.” This worldwide outbreak has resulted in the implementation of significant
governmental measures, including lockdowns, closures, quarantines, and travel bans intended to control the spread of the virus. Companies
are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions, and temporarily closing businesses
and facilities. These restrictions, and future prevention and mitigation measures, have had an adverse impact on global economic conditions
and have had an adverse impact on consumer confidence and spending on certain products and services, which could materially adversely
affect the supply of, as well as the demand for, our products. Uncertainties regarding the economic impact of COVID-19 are likely to
result in sustained market turmoil, which could also negatively impact our business, financial condition, and cash flow. As of the date
of this Annual Report on Form 10-K, many of the governmental restrictions are in the process of being lessened or lifted, which actions
we expect should have a positive impact on consumer confidence and spending and a related positive impact on our business and, thereafter,
our financial condition and cash flow.



11







Our
co-packers source raw materials used in our products from suppliers located in the United States. The impact of COVID-19 on these suppliers,
or any of our other suppliers, distributors, and resellers, or transportation or logistics providers, has negatively affected the price
(through increases) and the availability of our ingredients and/or packaging materials (through longer lead times) and has accordingly
negatively impacted our supply chain. As these disruptions caused by COVID-19 have continued for an extended period of time, our ability
to meet the demands of our consumers has been and may be further materially impacted. To date, we have not experienced any reduction
in the available supply of our products. Additionally, many of our employees, including members of our management team, have been working
remotely as a result of the closure of our offices and warehouses in compliance with local and state regulations in response to the COVID-19
pandemic. If our operations or productivity continue to be impacted by the COVID-19 outbreak and government-mandated closures, those
occurrences will continue to impact our business, financial condition, and cash flow, all in a negative manner. The extent to which the
COVID-19 pandemic will further impact our business will depend on future developments and, given the uncertainty around the extent and
timing of the potential future spread or mitigation and around the imposition or relaxation of protective measures, we cannot reasonably
estimate the impact to our business at this time. However, we expect that, during our current fiscal year, the adverse impact of COVID-19
on our business will slowly abate, as the positivity rate in tests for COVID-19 continues to decrease along with the new infection and
mortality rates and the number of people becoming vaccinated continues to increase.



Nevertheless,
the extent of the effect of COVID-19 on our operational and financial performance will continue to depend on future developments of the
outbreak, which remain uncertain and difficult to predict, considering the rapidly evolving landscape, including the spread of the new
Delta variant of COVID-19. As a result, it is not currently possible to ascertain the short- and medium-term impact of COVID-19 on our
business. However, as the pandemic has continued for a prolonged period, it has had a material adverse effect on our business, results
of operations, financial condition, and cash flow and may have contributed to the volatility in the quoted price of our Common Stock
on the OTCM.



The
2018 Farm Bill passed in December 2018, along with undeveloped shared state-federal regulations over hemp cultivation and production
that may impact our business. The 2018 Farm Bill was signed into law on December 20, 2018. Pursuant to the terms of the 2018
Farm Bill, state agriculture departments must consult with the state’s governor and chief law enforcement officer to devise a plan
that must be submitted to the Secretary of the USDA. A state’s plan to license and regulate hemp can only commence once the Secretary
of the USDA approves the state’s plan. In states opting not to devise a hemp regulatory program, the USDA will need to construct
a regulatory program under which hemp cultivators in those states must apply for licenses and comply with a federally-run program. The
details and scopes of each state’s plans are not known as of the date of this Registration Statement and may contain varying regulations
that may impact our business. Even if a state creates a plan in conjunction with its governor and chief law enforcement officer, the
Secretary of the USDA must approve it. There can be guarantee that any state plan will be approved. Review times may be extensive. There
may be amendments and the ultimate plans, if approved by states and the USDA, may materially limit our business depending upon the scope
of the regulations.



Laws
and regulations affecting our industry to be developed under the 2018 Farm Bill are in development. As a result of the 2018 Farm
Bill’s recent passage, there will be constant evolution of laws and regulations affecting the hemp industry could detrimentally
affect our operations. Local, state, and federal hemp laws and regulations may be broad in scope and subject to changing interpretations.
These changes may require us to incur substantial costs associated with legal and compliance fees and ultimately require us to alter
our business plan. Furthermore, violations of these laws, or alleged violations, could disrupt our business and result in a material
adverse effect on our operations. In addition, we cannot predict the nature of any future laws, regulations, interpretations, or applications,
and it is possible that regulations may be enacted in the future that will be directly applicable to our business.



The
possible FDA regulation of hemp and industrial hemp-derived products, and the possible registration of facilities where hemp is grown
and hemp-derived products are produced, if implemented, could negatively affect the cannabis industry generally, which could directly
affect our financial condition. The 2018 Farm Bill established that hemp containing less than 0.3% THC was no longer under the
CSA. Previously, the FDA had not approved cannabis, industrial hemp, or CBD derived from cannabis or industrial hemp as a safe and effective
drug for any indication. The FDA considered hemp and hemp-derived CBD as illegal Schedule I drugs. As of the date of this Annual Report
on Form 10-K, we have not, and do not intend to file an investigational new drug (“IND”) application with the FDA, concerning
any of our products that may contain cannabis, industrial hemp, or CBD derived from industrial hemp. Further, the FDA concluded that
products containing hemp or CBD derived from hemp are excluded from the dietary supplement definition of the FD&C Act. However, as
a result of the passage of the 2018 Farm Bill, at some indeterminate future time, the FDA may choose to change its position concerning
products containing hemp, or CBD derived from hemp, and may choose to enact regulations that are applicable to such products, including,
but not limited to, the growth, cultivation, harvesting, and processing of hemp; regulations covering the physical facilities where hemp
is grown; and possible testing to determine efficacy and safety of hemp-derived CBD. In such event, our products could be subject to
regulation. However, we do not know what impact would be on the hemp industry in general, and what costs, requirements, and possible
prohibitions may be enforced in the future. If we are unable to comply with the conditions and possible costs of such regulations and/or
registrations, we may be unable to continue to operate our business.



The
FDA limits companies’ ability to discuss the medical benefits of hemp-derived products. Under FDA rules, it is illegal
for companies to make “health claims” or any claim that a product has a specific medical benefit without first getting FDA
approval for such claim. The FDA has not recognized any medical benefits resulting from the consumption of hemp-derived products, which
means that no companies are legally permitted to advertise any health claims related to hemp-derived products. Because of the perception
among many consumers that hemp-derived CBD is a health/medicinal product, our inability to make health claims about the hemp-derived
materials in our products may limit our ability to market and sell the products to consumers, which would negatively impact our revenues
and profits.



12







The
FDA has recently called into question the legality of products containing hemp-derived ingredients sold as dietary supplements.In
November 2019, the FDA issued warning letters to 15 companies for selling products that contain CBD in ways that violate the FD&C
Act and stated therein that products containing CBD cannot be sold as dietary supplements. In a series of letters in 2016 and 2017, the
FDA stated that, “based on available evidence, FDA has concluded that cannabidiol products are excluded from the dietary supplement
definition (the “IND Preclusion”) under Section 201(ff)(3)(B)(ii) of the FD&C Act.” Under that provision, if a
substance (such as CBD) has been authorized for investigation as a new drug for which substantial clinical investigations have been instituted
and for which the existence of such investigations has been made public, the products containing that substance are excluded from the
Section 201(ff)(3)(B)(ii) definition of a dietary supplement. There is an exception to the IND Preclusion if the substance was “marketed
as” a dietary supplement or as a conventional food before substantial clinical investigations were instituted pursuant to an authorization
for investigation of a new drug and made public, as further discussed below; however, based on available evidence, the FDA concluded
that this is not the case for cannabidiol, as it has not concluded that CBD is generally recognized as safe (GRAS) among qualified experts
for its use in human or animal food. The FDA has not instituted any rulemaking procedures or provided an opportunity for public comment
in arriving at its conclusion regarding CBD in dietary supplements.



The
IND preclusion language from Section 201(ff) of the FD&C Act includes several requirements that must be met for a certain ingredient
to be precluded from the definition of a dietary supplement. First, the ingredient must have been authorized by FDA for investigation
as a new drug. Next, substantial clinical investigations must have been instituted. These substantial clinical investigations must also
be made public. Lastly, all of the above must have occurred prior to the marketing of the ingredient as a dietary supplement or food.
That is, all of these conditions must be met before the article can be precluded from the definition of a dietary supplement under Section
201(ff)(3)(B)(ii) of the FD&C Act.



According
to the National Institutes of Health, a “dietary supplement” is a product that is intended to supplement the diet. A dietary
supplement contains one or more dietary ingredients (including vitamins, minerals, herbs or other botanicals, amino acids, and other
substances) or their components; is intended to be taken by mouth as a pill, capsule, tablet, or liquid; and is identified on the front
label of the product as being a dietary supplement. None of our products is a dietary supplement.



We
believe that CBD has been marketed as a dietary supplement prior to commencement and public notice of any substantial clinical investigations
instituted on CBD, as the investigations that were publicized were not substantial and they were limited in number and preliminary in
nature, thereby rendering the IND Preclusion inapplicable.



U.S.
federal and foreign regulation and enforcement may adversely affect the implementation of cannabis laws and regulations and may negatively
impact our revenue, or we may be found to be violating the CSA or other federal, state, or foreign laws. Even though we do not
cultivate, process, market, or distribute cannabis or any products that contain cannabis, some of our customers do engage in such activities.
Cannabis, though not strictly defined in the 2018 Farm Bill, is a Schedule I controlled substance and is illegal under federal law. Even
in those states where the use of cannabis has been legalized, its use remains a violation of federal law. A Schedule I controlled substance
is defined as a substance that has no currently accepted medical use in the United Stated, a lack of safety for use under medical supervision
and a high potential for abuse. The Department of Justice defines Schedule I controlled substances as “the most dangerous drugs
of all the drug schedules with potentially severe psychological or physical dependence.”



At
present, numerous states and the District of Columbia allow their citizens to use medical cannabis. Additionally, many states have approved
legalization of cannabis for adult recreational use. The laws of these states relative to cannabis are in conflict with the CSA, which
makes cannabis use and possession illegal on a national level. If the federal government decides to enforce the CSA with respect to cannabis,
persons that are charged with distributing, possessing with intent to distribute, or growing cannabis could be subject to fines and imprisonment.
Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to us.



Cannabis
and cannabis products remain illegal under federal law. Cannabis and CBD containing in excess of 0.3% THC are Schedule I controlled
substances and are illegal under federal law, specifically the CSA. Even in those states in which the use of marijuana has been legalized,
its use remains a violation of federal law. CBD and cannabinoids derived from industrial hemp are not distinguishable. Although our hemp-derived
products contain less than 0.3% THC, if there were mistakes in processing or mislabeling and THC in excess of 0.3% were found in our
products, we could be subject to enforcement and prosecution, which would have a negative impact on our business and operation.



Variations
in state and local regulation, and enforcement in states that have legalized cannabis, may restrict cannabis-related activities, which
may negatively impact our revenues and prospective profits. Individual state laws do not always conform to the federal standard
or to other states’ laws. States that have decriminalized cannabis have created legal regimes, structures, and rules related to
the use, cultivation, manufacture, distribution, transportation, and sale of medical cannabis and related products. These legal regimes
often require companies to apply for and be awarded a license in order to operate a cannabis business operation. Although our products
contain less than 0.3% THC, if there were mistakes in processing or mislabeling and THC in excess of 0.3% was found in our products,
we could be found to be in violation of these states laws and regulations for not obtaining required licenses.



State
laws and regulations are also still in flux as states figure out how best to regulate new products. State laws may change in unexpected
ways that could result in our partners losing their licenses, being forced to change their products or services, or raise prices, all
of which could impact our revenues and prospective profits.



Laws
regarding the transportation of cannabis may change, which may negatively impact our business. Transportation of cannabis is
governed by both state and federal law. The interaction between these two legal regimes creates legal and practice difficulties in getting
products to market. Changes in state law related to the transportation of cannabis may significantly impact our ability to get products
to market or may raise the cost of doing so, which would impact our revenue and potential profits. Although federal law now allows the
transportation of products derived exclusively from industrial hemp, both state and federal law make it illegal to transport cannabis
products across state lines. Any accidental or intentional transportation of cannabis in our products across state lines could, therefore,
result in significant consequences including loss of a state issued license or permit, financial penalties, seizure of our products,
and prosecution for the illegal transportation of a Schedule I substance. These consequences may impact our revenues, potential profits,
or ability to continue operating in this line of business.



The
approach in the enforcement of cannabis laws may be subject to change, which creates uncertainty for our business. As a result
of the conflicting views between state legislatures and the federal government regarding cannabis, investments in, and the operations
of, cannabis businesses in the United States are subject to inconsistent laws and regulations. Laws and regulations affecting the cannabis
industry are constantly changing, which could detrimentally affect our operations. Local, state, and federal cannabis laws and regulations
are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance
or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and
result in material adverse effect on our operations. It is also possible that regulations may be enacted in the future that will be directly
applicable to our business. Since the passage of the 2018 Farm Bill, there has been little other legislation passed at the federal level
pertaining to the cultivation, transportation, and sale of CBD products. Conversely, numerous laws and guidance have passed on the state
and local levels, providing for non-standardized legal standing throughout the US. These ever-changing regulations could even affect
federal tax policies that may make it difficult to claim tax deductions on our returns. In light of these changes and to the best of
our knowledge, we are in compliance with all existing regulations.



We
cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional
governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.



13







Because
our business is dependent upon continued market acceptance by consumers, any negative trends will adversely affect our business operations.We are substantially dependent on continued market acceptance and proliferation of consumers of hemp and hemp-derived products.
We believe that, as hemp and hemp-derived products become more accepted as a result of the passage of the 2018 Farm Bill, the stigma
associated with hemp and hemp-derived products will diminish and, as a result, consumer demand will continue to grow. While we believe
that the market and opportunity in the hemp space continues to grow, we cannot predict the future growth rate and size of the market.
Any negative outlook on the hemp industry will adversely affect our business operations.



We
face intense competition and many of our competitors have greater resources that may enable them to compete more effectively.We
are involved in a highly competitive industry where we may compete with numerous other companies who offer alternative methods or approaches,
who may have far greater resources, more experience, and personnel perhaps more qualified than we. Our competitors may devote their resources
to developing and marketing products that will directly compete with our product lines. Due to this competition, there is no assurance
that we will not encounter difficulties in obtaining revenues and market share or in the positioning of our products and services. There
are no assurances that competition in our respective industries will not lead to reduced prices for our products. If we are unable to
successfully compete with existing companies and new entrants to the hemp market, this will have a negative impact on our business and
financial condition.



Our
products and services are new, and our industry is rapidly evolving. Due consideration must be given to our prospects in light
of the risks, uncertainties, and difficulties frequently encountered by companies in their early stage of development, particularly companies
in the rapidly evolving legal hemp industry. To be successful in this industry, we must, among other things:



| | ● | develop
    and introduce functional and attractive product and service offerings;                  
| | - | ----------------------------------------------------------------------------------------------------
| | ● | attract
    and maintain a large base of consumers;                                                 
| | ● | increase
    awareness of our brands and develop consumer loyalty;                                  
| | ● | establish
    and maintain strategic relationships with distribution partners and service providers;
| | ● | respond
    to competitive and technological developments; and                                      
| | ● | attract,
    retain, and motivate qualified personnel.                                              



We
cannot guarantee that we will succeed in achieving any or all of these goals, and our failure to do so would have a material adverse
effect on our business, prospects, financial condition, and operating results.



Some
of our products and services are new and are only in early stages of commercialization. We are not certain that these products and services
will function as anticipated or be desirable to its intended market. Also, some of our products may have limited functionalities, which
may limit their appeal to consumers and put us at a competitive disadvantage. If our current or future products and services fail to
function properly or if we do not achieve or sustain market acceptance, we could lose customers or could be subject to claims that could
have a material adverse effect on our business, financial condition, and operating results.



As
is typical in a new and rapidly evolving industry, demand, and market acceptance for recently introduced products and services are subject
to a high level of uncertainty and risk. Because our market is new and evolving, it is difficult to predict with any certainty the size
of this market and its growth rate, if any. We cannot guarantee that a market for our products and services will develop or that a demand
for our products and services will emerge or be sustainable. If the market fails to develop, develops more slowly than expected, or becomes
saturated with competitors, our business, financial condition, and operating results would be materially adversely affected.



Federal
intellectual property laws may limit our ability to protect our trademarks, names, logos, and other intellectual property. U.S.
trademark law makes it unlawful to trademark any product that cannot legally be sold across state lines. Because the sale and transportation
of cannabis and cannabis products is still prohibited under federal law, this may limit our ability to secure trademark protection for
our products. We applied for trademark protection with the understanding that our products are derived from industrial hemp and other
legal sources; however, because of the current state of cannabis law, the U.S. Patent and Trademark Office may reject our current or
future applications. This would negatively impact our ability to protect our intellectual property, which could negatively impact our
revenues and prospective profits.



If
we fail to protect our intellectual property, our business could be adversely affected. Our viability will depend, in part, on
our ability to develop and maintain the proprietary aspects of our intellectual property to distinguish our products from our competitors’
products. We rely on trade secrets and confidentiality provisions to establish and protect our intellectual property, including our proprietary
formulas and manufacturing techniques. We may not be able to enforce some of our intellectual property rights because cannabis is illegal
under federal law.



Any
infringement or misappropriation of our intellectual property or proprietary formulations could damage its value and limit our ability
to compete. We may have to engage in litigation to protect the rights to our intellectual property, which could result in significant
litigation costs and require a significant amount of our time. In addition, our ability to enforce and protect our intellectual property
rights may be limited in certain countries outside the United States, which could make it easier for competitors to capture market position
in such countries by utilizing technologies that are similar to those developed or licensed by us.



14







Competitors
may also harm our sales by designing products that mirror our products or processes without infringing on our intellectual property rights.
If we do not obtain sufficient protection for our intellectual property, or if we are unable to effectively enforce our intellectual
property rights, our competitiveness could be impaired, which would limit our growth and future revenue.



We
may also find it necessary to bring infringement or other actions against third parties to seek to protect our intellectual property
rights. Litigation of this nature, even if successful, is often expensive and time-consuming to prosecute and there can be no assurance
that we will have the financial or other resources to enforce our rights or be able to enforce our rights or prevent other parties from
developing similar products or processes or designing around our intellectual property.



Although
we believe that our products and processes do not and will not infringe upon the patents or violate the proprietary rights of others,
it is possible such infringement or violation has occurred or may occur, which could have a material adverse effect on our business.We are not aware of any infringement by us of any person’s or entity’s intellectual property rights. In the event
that products we sell or processes we employ are deemed to infringe upon the patents or proprietary rights of others, we could be required
to modify our products or processes or obtain a license for the manufacture and/or sale of such products or processes or cease selling
such products or employing such processes. In such event, there can be no assurance that we would be able to do so in a timely manner,
upon acceptable terms and conditions, or at all, and the failure to do any of the foregoing could have a material adverse effect upon
our business.



There
can be no assurance that we will have the financial or other resources necessary to enforce or defend a patent infringement or proprietary
rights violation action. If our products or processes are deemed to infringe or likely to infringe upon the patents or proprietary rights
of others, we could be subject to injunctive relief and, under certain circumstances, become liable for damages, which could also have
a material adverse effect on our business and our financial condition.



Tax
laws related to cannabis may impact our ability to generate revenue or potential profits. Section 280E of the Internal Revenue
Code prohibits cannabis businesses from deducting their ordinary and necessary business expenses, forcing us to pay higher effective
federal tax rates compared to similar companies in other industries. With the passage of the 2018 Farm Bill, we believe that Section
280E of the Internal Revenue Code will not apply to us. However, if we inadvertently produce or sell products that are considered cannabis,
or are deemed to engage in a cannabis business despite the passage of the 2018 Farm Bill, we may be subject to Section 280E of the Internal
Revenue Code, which would prohibit us from deducting our ordinary and necessary business expenses. In such instance, our business may
be less profitable than it could otherwise be.



State
tax laws are also changing. Even though state taxes are already high, many local jurisdictions are imposing heavy additional taxes either
as a disincentive for cannabis companies to operate there or in order to cash in on the growing number of cannabis companies paying taxes.
It is unknown how states will treat companies engaging in the hemp-derived product industry from a tax perspective. High taxes could
overwhelm our partner companies causing them to go out of business or raise prices for their services, which in turn may impact our revenues
and profits by forcing us to find different partners in more tax friendly areas or pay higher prices.



We
may not be able to obtain the necessary permits and authorizations to operate our business in the future. We may not be able
to obtain or maintain the necessary licenses, permits, authorizations, or accreditations for our business, or may only be able to do
so at great cost. In addition, we may not be able to comply fully with the wide variety of laws and regulations applicable to the cannabis
and hemp-derived product industries. Failure to comply with or to obtain the necessary licenses, permits, authorizations, or accreditations
could result in restrictions on our ability to operate, which could have a material adverse effect on our business.



Changes
in the regulations governing cannabis outside of the United States may adversely impact our prospects. Our growth strategy with
respect to international expansion of the new business lines continues to evolve as regulations governing the cannabis and hemp-derived
product industries in foreign jurisdictions become more fully developed. Interpretation of these laws, rules, and regulations and their
application is ongoing. Amendments to current laws, regulations, and guidelines, more stringent implementation, or enforcement thereof,
enactment of new laws, the adoption of new regulations, or other unanticipated events, including changes in political regimes and attitudes
toward cannabis and hemp-derived products are beyond our control and could material adverse effect on our international growth prospects.



We
cannot assure you that we will be able to expand our operations into legal jurisdictions outside of the United States, and any such expansion
will be subject to risks.There can be no assurance that any market for cannabis products to be offered by us will develop in
any jurisdiction outside of the United States. Laws, regulations, and perceptions pertaining to cannabis and hemp-derived products vary
widely internationally, and the scope or pace of legalization of cannabis and hemp-derived products cannot be predicted or assured. If
and when additional legal markets for cannabis and hemp-derived products develop, our pursuit of such markets may expose it to new or
unexpected risks or significantly increase its exposure to one or more existing risk factors, including economic instability, changes
in laws and regulations, and the effects of competition. These factors may limit our capability to successfully expand our operations
into such jurisdictions and may have a material adverse effect on our business, financial condition, and results of operations.



We
will become subject to further laws and regulations as we expand internationally. In addition to initiating business operations
in Jamaica, we plan on expanding our business internationally. If and as this international expansion occurs, we will become subject
to the laws and regulations of (as well as international treaties among) the foreign jurisdictions in which we operate or import or export
products or materials. In addition, we may avail ourselves of proposed legislative changes in certain jurisdictions to expand our product
portfolio, which expansion may include business and regulatory compliance risks as yet undetermined. Failure by us to comply with the
current or evolving regulatory framework in any jurisdiction could have a material adverse effect on our business, financial condition,
and results of operations. There is the possibility that any such international jurisdiction could determine that we were not or is not
compliant with applicable local regulations. If our historical or current sales or operations were found to be in violation of such international
regulations, we may be subject to enforcement actions in such jurisdictions including, but not limited to civil and criminal penalties,
damages, fines, the curtailment or restructuring of our operations or asset seizures and the denial of regulatory applications, each
of such circumstances could have a material adverse effect on our business, financial condition, and results of operations.



15







Reliance
on third-party suppliers, service providers, manufacturers, and distributors may result in disruption to our business lines’ supply
chains. Suppliers, service providers, and distributors of our products may elect, at any time, to breach or otherwise cease to
participate in supply, service, or distribution agreements, or other relationships, on which the operations of our business rely. The
loss of suppliers, service providers, manufacturers, or distributors would have a material adverse effect on the business and operational
results of our business.



Industrial
hemp is vulnerable to specific agricultural risks that could have a material adverse effect on the availability of hemp to be purchased
by us for use in our products. Our suppliers may grow their industrial hemp outdoors. As such, the risks inherent in engaging
in outdoor agricultural businesses apply. Agricultural production by its nature contains elements of risk and uncertainty that may adversely
affect our business and operations, including but not limited to the following: (i) any future climate change with a potential shift
in weather patterns leading to droughts and associated crop losses; (ii) potential insect, fungal, and weed infestations resulting
in crop failure and reduced yields; (iii) wild and domestic animals damaging the crops; and (iv) crop raiding, sabotage, or
vandalism, all of which could affect the availability of hemp that we can purchase for use in our products. If hemp is not readily available,
our business and financial condition would be materially adversely effected.



Loss
of key contracts with our suppliers, renegotiation of such agreements on less favorable terms or other actions these third parties may
take could harm our business. Most of our agreements with suppliers of our industrial hemp, including our key supplier contract,
may be subject to cancellation or non-renewal. The loss of these agreements, or the renegotiation of these agreements on less favorable
economic or other terms, could limit our ability to procure raw material to manufacture our products. This could negatively affect our
ability to meet consumer demand for our products. Upon expiration or termination of these agreements, our competitors may be able to
secure industrial hemp from our existing suppliers which will put us at a competitive disadvantage in the market.



We
have a limited number of supply sources and depend solely on United States-based suppliers, which may subject us to additional risks.We believe that our continued success will depend upon the availability of raw materials that permit us to meet labeling claims
and quality control standards. The supply of our industrial hemp is subject to the same risks normally associated with agricultural production,
such as climactic conditions, insect infestations, and availability of manual labor or equipment for harvesting. Any significant delay
in or disruption of the supply of raw materials could substantially increase the cost of such materials, could require product reformulations,
the qualification of new suppliers, and repackaging and could result in a substantial reduction or termination by us of our sales of
certain products, any of which could have a material adverse effect upon us. Accordingly, there can be no assurance that the disruption
of our supply sources will not have a material adverse effect on us.



We
also exclusively obtain our raw product from United States’ suppliers. Therefore, our business is subject to the risks generally
associated with a lack of geographic diversity in our suppliers poses, including the potential for enforcement activity, natural disasters
affecting key geographic locations where our ingredients are grown, and possible challenges with exporting our products abroad.



The
market for industrial hemp and hemp-derived products in the United States is relatively new and is subject to risks associated with an
emerging industry. This industry and market may not continue to exist or grow as anticipated or we may ultimately be unable to succeed
in this industry or market. The hemp and hemp-derived product industry in the United States is highly speculative and is a relatively
new industry that appears to be rapidly expanding but ultimately may not be successful. We face inherent challenges associated with being
in a new market, including establishing reliable agricultural supply chains and processing and manufacturing to compete with producers
in other countries where industrial hemp cultivation has already been established. Therefore, we are subject to all of the business risks
associated with a new business in a niche market, including risks of unforeseen capital requirements, failure of widespread market acceptance
of hemp products, failure to establish business relationships, and competitive disadvantages as against larger and more established competitors.



Laws
governing our access to banking services are uncertain and are in a state of flux. Since the commerce in cannabis is illegal
under federal law, most federally chartered banks will not accept funds for deposit from businesses involved with cannabis. Consequently,
businesses involved in the cannabis industry often have difficulty finding a bank willing to accept their business. With the passage
of the 2018 Farm Bill, we expect the banking industry will be more open to doing business with compliant hemp business. However, banks
may still refuse to open bank accounts, make loans, or initiate currency transactions with us. Additionally, major credit card processors
also may be hesitant to do business with us and, as a result, we may be forced to find less reputable credit card processing solutions
abroad, or pay higher transaction fees.



The
House of Representatives approved the Secure and Fair Enforcement Banking Act in September 2019 and its provisions were included in the
HEROES Act relief bill that it approved in May 2020. Those provisions are designed to protect banks that service the cannabis industry
from being penalized by federal regulators as well as to protect ancillary business that work with the cannabis industry from being charged
with money laundering and other financial crimes. However, whether the provisions of this bill will be introduced again and ultimately
passed is unknown and, even if it is passed, it may not result in a more open banking climate. Our inability to open and maintain bank
accounts would make it difficult for us to operate our business, increase our operating costs, and pose additional operational, logistical,
and security challenges and could result in our inability to implement our business plan. Similarly, many of our suppliers, partners,
and customers are involved in cannabis and/or hemp businesses and further restriction to their ability to access banking services may
make it difficult for them to purchase our products, which could have a material adverse effect on our business, financial condition,
and results of operations.



Banking
regulations in our business are costly and time consuming, which may negatively impact our business.In assessing the prospective
risk of providing services to hemp-related business, financial institutions may conduct customer due diligence that includes: (i) verifying
with the appropriate state authorities whether the business is duly licensed and registered; (ii) reviewing the license application (and
related documentation) submitted by the business for obtaining a state license to operate its cannabis-related or hemp-related businesses;
(iii) requesting from state licensing and enforcement authorities available information about the business and related parties; (iv)
developing an understanding of the normal and expected activity for the business, including the types of products to be sold; (v) ongoing
monitoring of publicly available sources for adverse information about the business and related parties; (vi) ongoing monitoring for
suspicious activity, including for any of the red flags described in this guidance; and (vii) refreshing information obtained as part
of customer due diligence on a periodic basis and commensurate with the risk. With respect to information regarding state licensure obtained
in connection with such customer due diligence, a financial institution may reasonably rely on the accuracy of information provided by
state licensing authorities, where states make such information available. These regulatory reviews may be time consuming and costly.



16







Due
to our involvement in the hemp industry, we may have a difficult time obtaining the various insurances that are desired to operate our
business, which may expose us to additional risk and financial liability. Insurance that is otherwise readily available, such
as general liability and product liability, may be more difficult for us to obtain and has been more expensive, because of our involvement
in the hemp industry. There are no guarantees that we will be able to find such insurance in the future, or that the cost will be affordable
to us. If we are forced to go without such insurance, it may prevent us from entering into certain business sectors, may inhibit our
growth, and may expose us to additional risk and financial liability.



We
are dependent on the popularity of consumer acceptance of our product lines and service offerings. Our ability to generate revenue
and be successful in the implementation of our business plan is dependent on consumer acceptance and demand of our product lines and
service offerings. Acceptance of our products and services will depend on several factors, including availability, cost, ease of use,
familiarity of use, convenience, effectiveness, safety, and reliability. If customers do not accept our products, or if we fail to meet
customers’ needs and expectations adequately, our ability to continue generating revenues could be reduced. Due to the changing
consumer preferences, it is also difficult to forecast demand for hemp-derived products. There is a high risk that hemp-derived products’
ultimate popularity will decline, leading to lower revenues.



A
drop in the retail price of hemp-derived products may negatively impact our business. The demand for our products depends in
part on the price of commercially grown hemp. Fluctuations in economic, market, and agricultural conditions that impact the prices of
commercially grown hemp, such as increases in the supply of such hemp and the decrease in the price of products using commercially grown
hemp, could cause the demand for hemp-derived products to decline, which would have a negative impact on our business.



We
could suffer reputational and financial damage in the event of injury from our products or product recalls. As a manufacturer
and distributor of products intended for human consumption or use, we are subject to product liability claims if the use of our products
by others is alleged to have resulted in harm or injury. Our products consist of hemp-derived oils, creams, lotions, extracts, and other
ingredients that are not subject to pre-market regulatory approval in the United States or internationally, as well as snacks and health,
but not dietary, supplements. Previously unknown adverse reactions resulting from human consumption or use of these ingredients could
occur, which would likely result in product liability claims against us, and which would increase our costs and adversely affect our
reputation and harm our business. We may be held liable if any illness or injury caused by any product we develop, manufacture, or distribute,
if any such product is found to be unsuitable for use. In addition to any reputational damage we would suffer, we cannot guarantee that
our product liability insurance or that of any of our suppliers would fully cover potential liabilities. In the event of litigation,
any adverse judgments against us would have a material adverse effect on our financial condition, including our cash balances, and results
of operations.



The
presence of THC in our hemp-derived products may cause adverse consequences to users of such products that will expose us to the risk
of liability and other consequences. Our products are made from industrial hemp, which contains THC, though typically at a low
level. As a result of the variability of agricultural products, certain of our products contain varying levels of THC. THC is an illegal
or controlled substance in many jurisdictions. Whether or not ingestion of THC (at low levels or otherwise) is permitted in a particular
jurisdiction, there may be adverse consequences to end users who test positive for THC attributed to use of our products through unintentional
presence in its products of THC, even if only in trace amounts. In addition, certain metabolic processes in the body may negatively affect
the results of drug tests. Positive tests may adversely affect the end user’s reputation, ability to obtain or retain employment,
and participation in certain athletic or other activities. A claim or regulatory action against us based on such positive test results
could materially adversely affect our reputation, potentially expose us to material liability, and potentially require us to recall our
products.



Our
future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel. Our
future success largely depends upon the continued services of our executive officers and management team. If one or more of our executive
officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Additionally,
we may incur additional expenses to recruit and retain new executive officers. If any of our executive officers joins a competitor or
forms a competing company, we may lose some or all of our customers. Finally, we do not maintain “key person” life insurance
on any of our executive officers. Because of these factors, the loss of the services of any of these key persons could adversely affect
our business, financial condition, and results of operations, and thereby an investment in our stock.



Our
continuing ability to attract and retain highly qualified personnel will also be critical to our success because we will need to hire
and retain additional personnel as our business grows. There can be no assurance that we will be able to attract or retain highly qualified
personnel. We face significant competition for skilled personnel in our industries. In particular, if the hemp industry continues to
grow, demand for personnel may become more competitive. This competition may make it more difficult and expensive to attract, hire, and
retain qualified managers and employees. Because of these factors, we may not be able to manage or grow our business effectively, which
could adversely affect our financial condition or business. As a result, the value of your investment could be significantly reduced
or completely lost.



We
may not be able to manage our growth or improve our operational, financial, and management information systems effectively, which would
impair our results of operations.In the near term, we intend to expand the scope of our operations activities significantly,
including the launch of our new brand Blesswell, in conjunction with the Khode LLC Joint Venture, expanding our existing sales and distribution
channels, along with the future launch of Go Green Global’s operations in Jamaica, re-branding of Kushwear’s product line-up,
and developing and launching CBDLB’s line-up of beverages. If we are successful in executing our business plan, we will experience
growth in our business that could place a significant strain on our business operations, finances, management, and other resources. The
factors that may place strain on our resources include, but are not limited to, the following:



| | ● | The
    need for continued development of our financial and information management systems;                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| | ● | The
    need to manage strategic relationships and agreements with manufacturers, customers, and partners; and                           
| | ● | Difficulties
    in hiring and retaining skilled management, technical, and other personnel necessary to support and manage our business.



17







Additionally,
our strategy envisions a period of rapid growth that may impose a significant burden on our administrative and operational resources.
Our ability to manage growth effectively will require us to substantially expand the capabilities of our administrative and operational
resources and to attract, train, manage, and retain qualified management and other personnel. There can be no assurance that we will
be successful in recruiting and retaining new employees or retaining existing employees.



We
cannot provide assurances that our management will be able to manage this growth effectively. Our failure to successfully manage growth
could result in our sales not increasing commensurately with capital investments or otherwise materially adversely affecting our business,
financial condition, or results of operations.



If
we are unable to continually innovate and increase efficiencies, our ability to attract new customers may be adversely affected.In
the area of innovation, we must be able to develop new technologies and products that appeal to our customers. This depends, in part,
on the technological and creative skills of our personnel and on our ability to protect our intellectual property rights. We may not
be successful in the development, introduction, marketing, and sourcing of new technologies or innovations, that satisfy customer needs,
achieve market acceptance, or generate satisfactory financial returns.



If
we incur substantial liability from litigation, complaints, or enforcement actions, our financial condition could suffer. Our
participation in the hemp-derived product industry may lead to litigation, formal or informal complaints, enforcement actions, and inquiries
by various federal, state, or local governmental authorities against us. Litigation, complaints, and enforcement actions could consume
considerable amounts of financial and other corporate resources, which could have a negative impact on our sales, revenue, profitability,
and growth prospects. We have not been, and are not currently, subject to any material litigation, complaint, or enforcement action regarding
cannabis or hemp (or otherwise) brought by any federal, state, or local governmental authority.



Risks
Relating to Our Common Stock



The
market price of our Common Stock may fluctuate significantly, which could negatively affect us and the holders of our Common Stock.The
trading price of our Common Stock may fluctuate significantly in response to a number of factors, many of which are beyond our control.
For instance, if our financial results are below the expectations of securities analysts and investors, the market price of our Common
Stock could decrease, perhaps significantly. Other factors that may affect the market price of our Common Stock include:



| | ● | volatility
    in the trading markets generally and in our particular market segment;                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                        
| | ● | limited
    trading of our Common Stock;                                                                                               
| |   |                                                                                                                                        
| | ● | actual
    or anticipated fluctuations in our results of operations;                                                                   
| |   |                                                                                                                                        
| | ● | the
    financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections;
| |   |                                                                                                                                        
| | ● | announcements
    regarding our business or the business of our customers or competitors;                                              
| |   |                                                                                                                                        
| | ● | changes
    in accounting standards, policies, guidelines, interpretations, or principles;                                             
| |   |                                                                                                                                        
| | ● | actual
    or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally;          
| |   |                                                                                                                                        
| | ● | developments
    or disputes concerning our intellectual property or our offerings, or third-party proprietary rights;                 
| |   |                                                                                                                                        
| | ● | announced
    or completed acquisitions of businesses or technologies by us or our competitors;                                        
| |   |                                                                                                                                        
| | ● | new
    laws or regulations or new interpretations of existing laws or regulations applicable to our business;                         
| |   |                                                                                                                                        
| | ● | any
    major change in our board of directors (our “Board”) or management;                                                            
| |   |                                                                                                                                        
| | ● | sales
    of shares of our Common Stock by us or by our stockholders;                                                                  
| |   |                                                                                                                                        
| | ● | lawsuits
    threatened or filed against us; and                                                                                       
| |   |                                                                                                                                        
| | ● | other
    events or factors, including those resulting from war, incidents of terrorism, or responses to these events.                 



Statements
of, or changes in, opinions, ratings, or earnings estimates made by brokerage firms or industry analysts relating to the markets in which
we operate or expect to operate could have an adverse effect on the market price of our Common Stock. In addition, the stock market as
a whole, as well as our particular market segment, has from time to time experienced extreme price and volume fluctuations, which may
affect the market price for the securities of many companies, and which often have appeared unrelated to the operating performance of
such companies. Any of these factors could negatively affect our stockholders’ ability to sell their shares of Common Stock at
the time and price they desire.



We
may issue additional shares of Common Stock or preferred stock in the future, which could cause significant dilution to all stockholders.We are authorized to issue up to 1,000,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.0001
per share, of which 505,157,952 shares of Common Stock and 4,878,048.8 shares of Series
H Convertible Preferred Stock (the “Series H Stock”) are currently issued and outstanding as of January 9, 2023. The number
of shares of Common Stock issued and outstanding excludes the shares of Common Stock underlying the shares of Series H Stock and shares
underlying common stock purchase warrants. We expect to seek additional financing in order to provide working capital to our business
or may issue additional shares of Common Stock as compensation. Our Board has the power to issue any or all of such authorized but unissued
shares of our Common Stock at any price and, in respect of the preferred stock, at any price and with any attributes, our Board considers
sufficient, without stockholder approval. The issuance of additional shares of Common Stock in the future will reduce the proportionate
ownership and voting power of current stockholders and may negatively impact the market price of our Common Stock.



18







We
may issue additional securities with rights superior to those of our Common Stock, which could materially limit the ownership rights
of our stockholders. We may offer additional debt or equity securities in private and/or public offerings in order to raise working
capital or to refinance our debt. Our Board has the right to determine the terms and rights of any debt securities and preferred stock
without obtaining the approval of our stockholders. It is possible that any debt securities or preferred stock that we sell would have
terms and rights superior to those of our Common Stock and may be convertible into shares of our Common Stock. Any sale of securities
could adversely affect the interests or voting rights of the holders of our Common Stock, result in substantial dilution to existing
stockholders, or adversely affect the market price of our Common Stock.



Quotation
on the OTCM’s Pink® Open Market may be volatile and sporadic. Currently, our Common Stock is quoted on the
OTCM’s Pink Open Market. Trading in stock quoted on over-the-counter markets is often thin and characterized by wide fluctuations
in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress
or inflate the market price of our Common Stock for reasons unrelated to operating performance. Moreover, the OTCM is not a stock exchange,
and trading of securities on this market is often more sporadic than the trading of securities listed on a national securities exchange,
i.e., the New York Stock Exchange, the NYSE American, or The Nasdaq Stock Market.



The
Holders of our Series H Stock control more than half of our voting securities; they can exert significant control over our business and
affairs and have actual or potential interests that may depart from those of investors. The holders of our Series H Preferred
Stock control in excess of 50% of our total voting power. As a result, they will have significant influence and control over all corporate
actions requiring stockholder approval, irrespective of how our other stockholders may vote, including the following actions:



| | ● | to
    elect or defeat the election of our directors;                                   
| | - | ----------------------------------------------------------------------------------------
| |   |                                                                                         
| | ● | to
    amend or prevent an amendment to our Articles of Incorporation or Bylaws;        
| |   |                                                                                         
| | ● | to
    effect or prevent a merger, sale of assets, or other corporate transaction; and  
| |   |                                                                                         
| | ● | to
    control the outcome of any other matter submitted to our stockholders for a vote.



This
concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover, or other business consolidation,
or discouraging a potential acquirer from making a tender offer for our Common Stock, which in turn could reduce our stock price or prevent
our stockholders from realizing a premium over our stock price.



We
will be a “controlled company” within the meaning of the Nasdaq rules and the NYSE rules and, as a result, will qualify for,
and will rely on, exemptions from certain corporate governance requirements that provide protection to the stockholders of companies
that are subject to such corporate governance requirements.Because the holders of our Series H Preferred Stock control in excess
of 50% of our total voting power, we will be a “controlled company” within the meaning of the corporate governance standards
of the Nasdaq rules and the NYSE rules. Under these rules, a listed company of which more than 50% of the voting power is held by an
individual, group, or another company is a “controlled company” and may elect not to comply with certain of the exchange’s
corporate governance requirements. As of the date of this Annual Report on Form 10-K, our Common Stock is not listed on the New York
Stock Exchange, the NYSE American, or the Nasdaq Stock Market and there cannot be any assurance that it ever will be listed on a national
securities exchange. If our Common Stock qualifies to be listed on a national securities exchange and if we choose to initiate the listing
process, we will then determine whether we characterize ourselves as a “controlled company” for corporate governance requirements.
As a company, whose Common Stock is currently quoted on the OTCM’s Pink Open Market, we are not required to abide by the corporate
governance rules of a national securities exchange and accordingly, do not have a fully independent series of board committees. Thus,
as a consequence of our reliance on certain exemptions from the Nasdaq standards provided to “controlled companies,” you
will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements
of a national securities exchange.



We
are not subject to the rules of a national securities exchange requiring the adoption of certain corporate governance measures and, as
a result, our stockholders do not have the same protections.Separately from the “controlled company” analysis of
the previous risk factor, we are not subject to the rules of a national securities exchange, such as the New York Stock Exchange, the
NYSE American, or The Nasdaq Stock Market. National securities exchanges generally require more rigorous measures relating to corporate
governance that are designed to enhance the integrity of corporate management. The requirements of the OTCM’s Pink®
Open Market afford our stockholders fewer corporate governance protections than those of a national securities exchange. Until we comply
with such greater corporate governance measures, even though such compliance is not required by the OTCM for quotations of shares of
our Common Stock on the OTCM’s Pink Open Market, our stockholders will have fewer protections, such as those related to director
independence, stockholder approval rights, and governance measures that are designed to provide oversight of a corporation’s management
by its board of directors.



A
decline in the price of our Common Stock could affect our ability to raise working capital, which could adversely impact our ability
to continue our operations. A prolonged decline in the price of our Common Stock could result in a reduction in the liquidity
of our Common Stock and a reduction in our ability to raise capital. We may attempt to acquire a significant portion of the funds we
need in order to conduct our planned operations through the sale of equity securities; thus, a decline in the price of our Common Stock
could be detrimental to our liquidity and our operations because the decline may adversely affect investors’ desire to invest in
our securities. If we are unable to raise the funds we require for all of our planned operations, we may be forced to reallocate funds
from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop
new products or services and continue our current operations. As a result, our business may suffer, and we may be forced to reduce or
discontinue operations. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale
of our Common Stock and we may be forced to reduce or discontinue operations.



19







Because
we do not intend to pay any cash dividends on our shares of Common Stock in the near future, our stockholders will not be able to receive
a return on their shares unless and until they sell them. We intend to retain any future earnings to finance the development
and expansion of our business. We do not anticipate paying any cash dividends on our Common Stock in the near future. The declaration,
payment, and amount of any future dividends will be made at the discretion of our Board, and will depend upon, among other things, the
results of operations, cash flow, and financial condition, operating and capital requirements, and other factors as our Board considers
relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to
the amount of any such dividend. Unless our Board determines to pay dividends, our stockholders will be required to look to appreciation
of our Common Stock to realize a gain on their investment. There can be no assurance that this appreciation will occur.



If
we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting
obligations, result in the restatement of our financial statements, harm our operating results, possibly subject us to regulatory scrutiny
and sanctions, cause investors to lose confidence in our reported financial information, and have a negative effect on the market price
for shares of our Common Stock. Effective internal controls are necessary for us to provide reliable financial reports and effectively
to prevent fraud. We maintain a system of internal controls over financial reporting, which is defined as a process designed by, or under
the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected
by our Board, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”).



Because
our class of Common Stock is now registered pursuant to Section 12(g) of the Exchange Act, we will have significant requirements for
enhanced financial reporting and internal controls. We are required to document and test our internal control procedures in order to
satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness
of our internal controls over financial reporting. The process of designing and implementing effective internal controls is a continuous
effort that requires us to anticipate and react to changes in our business and economic and regulatory environments, and to expend significant
resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.



We
cannot assure you that we will, in the future, identify areas requiring improvement in our internal control over financial reporting.
We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will
implement and maintain adequate controls over our financial processes and reporting in the future as we continue to grow. If we are unable
to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations,
result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause
investors to lose confidence in our reported financial information, and have a negative effect on the market price for shares of our
Common Stock.



We
lack sufficient internal controls over financial reporting and implementing acceptable internal controls will be difficult with a limited
number of management personnel, which will make it difficult to ensure that information required to be disclosed in our future reports
filed and submitted under the Exchange Act is recorded, processed, summarized, and reported as and when required.As of the date
of this Annual Report on Form 10-K, we currently lack certain internal controls over our financial reporting. We have a limited number
of management personnel, which may make it difficult to implement such controls at this time. The lack of such controls makes it difficult
to ensure that information required to be disclosed in our reports to be filed and submitted under the Exchange Act (now that our class
of Common Stock is registered pursuant to Section 12(g) thereof) will be recorded, processed, summarized, and reported, as and when required.



The
reasons we believe that our disclosure controls and procedures are not fully effective are because:



| | ● | there
    is a lack of segregation of duties necessary for a good system of internal control due to insufficient accounting staff due to our
    size;                                                                
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                       
| | ● | the
    staffing of our accounting department is weak due to the lack of qualifications and training, and the lack of formal review process;                                                                          
| |   |                                                                                                                                                                                                                       
| | ● | our
    control environment is weak due to the lack of an effective risk assessment process, the lack of internal audit function, and insufficient
    documentation and communication of the accounting policies; and
| |   |                                                                                                                                                                                                                       
| | ● | failure
    in the operating effectiveness over controls related to recording revenue.                                                                                                                                



We
cannot assure you that we will be able to develop and implement the necessary internal controls over financial reporting. The absence
of such internal controls may inhibit investors from purchasing our shares and may make it more difficult for us to raise debt or equity
financing.



20







Our
Common Stock is categorized as “penny stock,” which may make it more difficult for investors to sell their shares of Common
Stock due to suitability requirements. Our Common Stock is categorized as “penny stock.” The Commission adopted Rule
15g-9, which generally defines “penny stock” to be any equity security that has a market price (as defined) of less than
$5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The price of our Common Stock is significantly
less than $5.00 per share and we did not qualify for any of the other exceptions; therefore, our Common Stock is considered “penny
stock.” This designation imposes additional sales practice requirements on broker-dealers who sell to persons other than established
customers and “accredited investors.” The term “accredited investor” refers generally to institutions with assets
in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly
with his or her spouse. The penny stock rules require a broker-dealer buying our securities, prior to a transaction in a penny stock
not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Commission that provides
information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer
with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction
and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations,
and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting
the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny
stock rules require that, prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make
a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written
agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability and/or
willingness of broker-dealers to trade our securities, either directly or on behalf of their clients, may discourage potential investor’s
from purchasing our securities, or may adversely affect the ability of our stockholders to sell their shares.



The
Financial Industry Regulatory Authority, Inc. (“FINRA”) has adopted sales practice requirements that may limit a stockholder’s
ability to buy and sell our Common Stock, which could depress the price of our Common Stock. In addition to the “penny
stock” rules described above, FINRA has adopted rules that require that, in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced
securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s
financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that
there is a high probability that speculative low-priced securities will not be suitable for at least some customers. Thus, the FINRA
requirements may make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which could limit
your ability to buy and sell our Common Stock, have an adverse effect on the market for our shares, and thereby depress our price per
share of Common Stock.



The
elimination of monetary liability against our directors, officers, and employees under Nevada law and the existence of indemnification
rights for our obligations to our directors, officers, and employees may result in substantial expenditures by us and may discourage
lawsuits against our directors, officers, and employees. Our Articles of Incorporation contain a provision limiting the personal
liability of our directors and officers to our stockholders and to us for damages for the breach of a fiduciary duty as a director or
officer except with respect to (i) acts or omissions that involve intentional misconduct, fraud, or a knowing violation of the law or
(ii) the payment of dividends in violation of Nevada law. We also previously entered into employment agreements with each of our officers
pursuant to which we have contractual indemnification obligations. The foregoing indemnification obligations could result in us incurring
substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup.
These provisions and the resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches of
their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors and
officers even though such actions, if successful, might otherwise benefit our stockholders and us.



Anti-takeover
effects of certain provisions of Nevada state law hinder a potential takeover of us. Nevada has a business combination law that
prohibits certain business combinations between Nevada corporations and “interested stockholders” for three years after an
“interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors
approves the combination in advance. For purposes of Nevada law, an “interested stockholder” is any person who is (i) the
beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation
or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly
or indirectly, of ten percent or more of the voting power of the then-outstanding shares of the corporation. The definition of the term
“business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer
to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests
of the corporation and its other stockholders.



The
potential effect of Nevada’s business combination law is to discourage parties interested in taking control of us from doing so
if these parties cannot obtain the approval of our Board. Both of these provisions could limit the price investors would be willing to
pay in the future for shares of our Common Stock.



21







Item
1b. Unresolved Staff Comments.



None.



Item
2. Properties.



Our
principal executive offices are located at 38246 North Hazelwood Circle, Cave Creek Arizona 85331, and our telephone number is (480)
595-6900. We purchased this property for $420,000 on February 1, 2019. The property encompasses approximately 2,860 square feet. Approximately
1,907 square feet is designated as office space that serves as the principal place of business for our management team and support staff,
as well as our sales and customer service teams. The remaining 950 square feet is designated as our product development and test facility,
and our inventory storage and fulfillment center. We currently believe that our existing facility is suitable, but we may require additional
space to accommodate the growth that we are planning to occur. We believe that such space, if required, will be available to us on commercially
reasonable terms.



Item
3. Legal Proceedings.



From
time to time, we are involved in various legal actions arising in the normal course of business. We currently have no legal proceeding
to which we are a party to or to which our property is subject and, to the best of our knowledge, no adverse legal activity is anticipated
or threatened.



Item
4. Mine Safety Disclosures.



Not
applicable.



22







PART
II



Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities



Recent
Sales of Unregistered Securities:



We
issued the following shares of our Common Stock in Fiscal Year 2022:



On
October 22, 2021, the Company and a noteholder agreed to modify the terms of the May 2021 note payable agreement. The maturity of the
note was extended from November 2021 to April 2022. In return, the Company agreed to issue the noteholder (identified as Noteholder J
in the footnotes to our financial statements) a total of 2,562,500 shares of common stock as modification and commitment fees. We issued
the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of the
Company’s Common Stock were issued by the Company in a transaction not involving any public offering).



On
October 25, 2021, the Company issued 6,211,180 shares of common stock valued at $300,000 in connection with a services agreement. We
issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares
of the Company’s Common Stock were issued by the Company in a transaction not involving any public offering).



On
April 17, 2022, the Company issued 9,761,904 shares of common stock, valued at $548,738 as default penalty to a certain noteholder. We
issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares
of the Company’s Common Stock were issued by the Company in a transaction not involving any public offering).



On
April 20, 2022, the Company issued 4,111,111 shares of its common stock to a certain noteholder, for debt and interest conversions by
the noteholder. The shares were valued at $220,000. We issued the shares in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of the Company’s Common Stock were issued by the Company in a transaction not
involving any public offering).



On
May 19, 2022, the Company issued 8,928,571 shares of its common stock to Noteholder J, valued at $294,643 in connection with a financing
agreement. We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in
that the shares of the Company’s Common Stock were issued by the Company in a transaction not involving any public offering).



23







Market
Information



Our
Common Stock is quoted on the OTCM’s Pink® Open Market, under the symbol “EDXC.” The following table
shows the high and low closing bid prices of our Common Stock for periods indicated as reported by OTCM. The market quotations reflect
inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions.



|Quarter Ended                             |  | High Closing Bid Price Per Share |        |  | Low Closing Bid Price Per Share |  
|----------------------------------------- |  | -------------------------------- | ------ |  | ------------------------------- | -
|Fiscal Year 2023                          |  |                                  |        |  |                                 |  
|Second Quarter (through January 12, 2023) |  | $                                | 0.0897 |  |                                 | $
|First Quarter                             |  | $                                | 0.0897 |  |                                 | $
|                                          |  |                                  |        |  |                                 |  
|Fiscal Year 2022                          |  |                                  |        |  |                                 |  
|Fourth Quarter                            |  | $                                | 0.100  |  |                                 | $
|Third Quarter                             |  | $                                | 0.0713 |  |                                 | $
|Second Quarter                            |  | $                                | 0.049  |  |                                 | $
|First Quarter                             |  | $                                | 0.0579 |  |                                 | $
|                                          |  |                                  |        |  |                                 |  
|Fiscal Year 2021                          |  |                                  |        |  |                                 |  
|Fourth Quarter                            |  | $                                | 0.115  |  |                                 | $
|Third Quarter                             |  | $                                | 0.189  |  |                                 | $
|Second Quarter                            |  | $                                | 0.285  |  |                                 | $
|First Quarter                             |  | $                                | 0.145  |  |                                 | $
|                                          |  |                                  |        |  |                                 |  
|Fiscal Year 2020                          |  |                                  |        |  |                                 |  
|Fourth Quarter                            |  | $                                | 0.0829 |  |                                 | $
|Third Quarter                             |  | $                                | 0.10   |  |                                 | $
|Second Quarter                            |  | $                                | 0.117  |  |                                 | $
|First Quarter                             |  | $                                | 0.206  |  |                                 | $



On
January 12, 2023, the closing bid price of our Common Stock as reported by OTCM was $0.0448 per share.



Holders



As
of January 9, 2023, we had approximately 438 record holders of shares our Common Stock. As of January 9, 2023, we had 505,157,952
shares of our Common Stock issued and outstanding.



Securities
Authorized for Issuance under Equity Compensation Plans



We
do not have any equity compensation plans.



Dividends



We
currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development
of our business. We do not intend to pay cash dividends on our Common Stock for the foreseeable future. Any future determination related
to dividend policy will made at the discretion of our Board.



24







Securities
Not Registered under the Securities Act; Rule 144 Eligibility



None
of our shares of Common Stock and preferred stock has been registered under the Securities Act. Accordingly, the shares of Common Stock
and preferred stock issued and outstanding that are not in the public markets through an exemption from such registration may not be
resold absent registration under the Securities Act and applicable state securities laws or an available exemption thereunder.



Rule
144



Shares
of our Common Stock that are restricted securities may be eligible for resale in compliance with Rule 144 of the Securities Act, subject
to the requirements described below. “Restricted securities,” as defined under Rule 144, were issued and sold by us in reliance
on exemptions from the registration requirements of the Securities Act. These shares may be sold in the public market only if registered
or if they qualify for an exemption from registration, such as Rule 144. Below is a summary of the requirements for sales of our Common
Stock pursuant to Rule 144 commencing 90 days after our class of Common Stock became registered pursuant to Section 12(g) of the Exchange
Act on May 3, 2021.



For
a person who has not been deemed to have been one of our affiliates at any time during the 90 days preceding a sale, sales of our shares
of Common Stock held longer than six months, but less than one year, will be subject only to the current public information requirement.
A person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least one year, is entitled to sell his or her shares without complying with the manner of
sale, public information, volume limitation, or notice provisions of Rule 144.



A
person who is our affiliate or who was our affiliate at any time during the preceding three months and who has beneficially owned restricted
securities for at least six months, will generally be entitled to sell within any three-month period a number of shares that does not
exceed one percent of the number of shares of our Common Stock then outstanding. Sales under Rule 144 by our affiliates are also subject
to manner of sale provisions and notice requirements and to the availability of current public information about us. Persons who may
be deemed to be affiliates generally include individuals or entities that control, or are controlled by, or are under common control
with, us and may include our directors and officers, as well as our significant stockholders.



Item
6. Selected Financial Data



Not
applicable.



25







Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations



The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial
statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information,
the following discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties,
and assumptions, such as our plans, objectives, expectations, and intentions. Forward-looking statements are statements not based on
historical information and which relate to future operations, strategies, financial results, or other developments. Forward-looking statements
are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic, and competitive uncertainties,
and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to
change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those
expressed in any forward-looking statements made by us, or on our behalf. We disclose any obligation to update forward-looking statements.
Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result
of a number of factors, including those discussed under “Forward-Looking Statements,” “Item 1. Business,” and
“Item 1A. Risk Factors” sections in this Annual Report on Form 10-K. We use words such as “anticipate,” “estimate,”
“plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,”
“intend,” “may,” “will,” “should,” “could,” and similar expressions to identify
forward-looking statements.



Overview



We
develop hemp-derived, cannabidiol-based products, each formulated to address key segments of the health and wellness market. Through
our subsidiaries, we sell high-end, full-spectrum hemp-derived oils, extracts, topicals, and pet products, all with the shared purpose
of supporting the potential of relief of pain and inflammation for humans and pets, through our e-commerce site www.cbdunlimited.com,
as well as other online and in-store retailers. In addition to our consumer products, our Gorilla-Tek division offers a state-of the
art automated dispensing system providing a secure method of distributing hemp-based products. The proprietary system enables retailers
to increase sales channels without opening a physical storefront location. Complementing our retail products and Gorilla-Tek divisions,
we also own and operate a number of wholly-owned subsidiaries that offer technology and consulting solutions to the hemp and CBD industry,
including an easy to use “Seed-to-Shelf” compliance and inventory tracking and process management system for regulated products
in a front of counter pharmacy support platform.



The
Company was incorporated in the State of Nevada on September 5, 1997 as Micron Solutions in order to complete a merger with Shillelagh.
In November 1997, Shillelagh merged with and into Micron Solutions, with Micron Solutions as the surviving entity. In 2002, Micron Solutions
entered into the Exchange Agreement with PanaMed, Inc., and all of its shareholders, pursuant to which PanaMed, Inc. became the Company’s
wholly-owned subsidiary. In connection with the Exchange Agreement, Micron also changed its name to PanaMed Corporation.



In
June 2005, we filed a Certificate of Amendment to Articles of Incorporation with the Secretary of State of the State of Nevada to change
our name to Endexx Corporation. At that time, we adopted our current trading symbol, “EDXC.” In September 2005, PanaMed Corporation
acquired VBB, an SaaS provider, through a merger, whereby VBB merged with and into us, and we were the surviving entity. Subsequently,
we operated as a diversified technology and SaaS and compliance and tracking systems company, until we shifted our focus to the hemp-derived
product industry in August 2014. In October 2018, we changed our name to CBD Unlimited, Inc., and in May 2020, we changed our name back
to Endexx Corporation, with CBD Unlimited, Inc., becoming our wholly-owned subsidiary. On January 25, 2021, we filed our Amended and
Restated Articles of Incorporation.



Results
of Operations



Fiscal
Year Ended September 30, 2022 Compared to Fiscal Year Ended and September 30, 2021



Revenues



Revenues
for the fiscal year ended September 30, 2022 were $1,277,579, as compared to $650,515 for the fiscal year ended September 30, 2021,
a $627,064 (or 96.4%) increase in revenues. The improvement in revenue for fiscal 2022 is partly attributable to improved market conditions, new sales channels and improved marketing efforts in promoting the Company’s products.



We
expect an increase in commercial revenue over the next 12 months as our business model is implemented and expanded and our commercial
and retail accounts continue to grow and expand the products being sold in each of their retail locations. Additionally, we will continue
to focus on the development of both current and new products while continuing to commercialize existing products lines.



Gross
Profit (Loss)



Gross profit (loss) for the fiscal year ended September
30, 2022 was a profit of $503,009, as compared to a loss of $344,078 for the fiscal year ended September 30, 2021. The gross profit in
2022 was attributable to increased revenues and decreased inventory impairment.





Operating
Expenses



Operating
expenses for the fiscal year ended September 30, 2022, were $3,865,244, as compared to $5,027,251for the fiscal year ended September 30,
2021, a decrease of $1,162,007. The decrease in operating expenses over the prior period can be attributed to significant decreases in advertising expenses.



We
expect that operating expenses will continue to decrease over the next 12 months as our long-term growth strategy will require significant changes
in personnel and facilities, offset increased research and development expenses to ensure that products nearing commercialization
are brought to market as quickly and as effectively. We cannot provide any assurances that our strategy will be effective.



26







Other
Expense



Other
expense for the fiscal year ended September 30, 2022 was $766,711, as compared to other expense of $1,436,825 for the year ended September
30, 2020, a $670,114 year-over-year decrease. This is the result of significantly lower interest expenses. Derivative liabilities are associated with loans that are convertible and have variable pricing on the equivalent
shares of Common Stock. At the end of each period, these derivative liabilities are valued, and the net change is recorded as a gain
or loss in other expense and income.



Loss
from Operations and Total Net Loss



Loss
from operations for the fiscal year ended September 30, 2022 was $3,362,235, as compared to loss from operations of $5,371,329 for
the fiscal year ended September 30, 2021, an improvement in net loss from operations of $2,009,094. The decrease in loss from
operations for 2022 was the result of (i) a increase in gross revenues, (ii) a marginally lower increase in cost of revenues, and
(iii) a decrease in inventory impairment, and (iv) a decrease in total operating expenses. Total net loss for the fiscal year ended
September 30, 2022 was $4,128,946, as compared to a total net loss of $6,808,154 for the fiscal year ended September 30, 2021, a
decrease of $2,679,208 in total net loss. The decrease in total net loss for 2022 was as a result of decreased operating expenses,
lower interest expenses and gains in default penalties. Derivative liabilities are associated with loans that are convertible and
have variable pricing on the equivalent shares of Common Stock. At the end of each period, these derivative liabilities are valued,
and the net change is recorded as a gain or loss in other expense and income.



We
do not expect to realize net income in the near term as anticipated operational expenses are expected to increase as a result of increased
research and development expenses, consulting fees, payroll expenses, and administrative costs as staffing increases. Despite management’s
focus on ensuring operating efficiencies, we expect to continue to operate at a loss through fiscal 2023 only in part due to the COVID-19
pandemic. Nevertheless, we expect that, during our current fiscal year, the adverse impact of COVID-19 on our business will slowly abate,
as the positivity rate in tests for COVID-19 continues to decrease along with the new infection and mortality rates and the number of
people becoming vaccinated continues to increase.



Liquidity
and Capital Resources – Fiscal Year Ended September 30, 2022



Going
Concern



We
have incurred operating losses since inception and have negative cash flow from operations. As of September 30, 2022, we had a stockholders’
deficit of $8,154,808, a working capital deficit of $8,333,828, and we incurred an accumulated deficit of $43,642,790 and incurred a net
loss of $4,128,946 in fiscal year 2022. Additionally, we utilized $2,953,681 in cash during the fiscal year ended September 30, 2022, while
we received $3,297,976 in cash from financing activities. As a result, our continuation as a going concern is dependent on our ability
to obtain additional financing until we can generate sufficient cash flow from operations to meet our obligations. We intend to continue
to seek additional debt or equity financing to continue our operations, but there can be no assurance that such financing will be available
on terms acceptable to us, if at all.



Our
consolidated financial statements have been prepared on a going concern basis, which implies we may not continue to meet our obligations
and continue our operations for the next fiscal year. The continuation of our Company as a going concern is dependent upon our ability
to obtain necessary debt or equity financing to continue operations until we begin generating positive cash flow.



As
of September 30, 2022, we had a cash position of $365,162. We estimate our operating expenses for the near- and mid-term may continue
to exceed the revenues that we may generate, and we may need to raise capital through either debt or equity offerings to continue operations.
We are in the early stages of our business. We are required to fund growth from financing activities, and we intend to rely on a combination
of equity and debt financings. Due to market conditions and the early stage of our operations, there is considerable risk that we will
not be able to raise such financings at all, or on terms that are not overly dilutive to our existing stockholders. We can offer no assurance
that we will be able to raise such funds. If we are unable to raise the funds we require for all of our planned operations, we may be
forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations,
including our ability to develop new products and continue our current operations. As a result, our business may suffer, and we may be
forced to reduce or discontinue operations.



There
is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and
at times deemed acceptable to us, if at all. The issuance of additional equity securities by us would result in a significant dilution
in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase
our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us,
we may be unable to continue our business, as planned, and as a result may be required to scale back or cease operations for our business,
the result of which would be that our stockholders would lose some or all of their investment. The consolidated financial statements
do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts
and classifications of liabilities that may result should we be unable to continue as a going concern.



Cash
Flow – Operating Activities



For
the 12 months ended September 30, 2022, our cash used in operating activities amounted to an outflow of $1,463,181, compared to cash used
during the 12 months ended September 30, 2021 of $3,720,267.The decrease in cash used in our operating activities is due to changes in
our inventory value, prepaid expenses, accounts receivable, and accrued interest on notes payable.



Cash
Flow – Financing Activities



For
the 12 months ended September 30, 2022, our cash provided by financing activities amounted to $3,297,976, which includes $0 in
proceeds received from the issuances of our Common Stock and $2,064,123 in proceeds from the issuance of convertible notes, and $333,123
in proceeds from the issuance of notes payable.



27







For
the 12 months ended September 30, 2021, our cash provided by financing activities amounted to $3,736,484, which includes $328,000 in
proceeds received from the issuances of our Common Stock and $1,614,234 in proceeds from the issuance of convertible notes, and $1,815,000
in proceeds from the issuance of notes payable.



Cash
Flow – Investing Activities



Net
cash used in investing activities in the 12 months ended September 30, 2022 was $1,490,500, compared to net cash used in investing activities
in the 12 months ended September 30, 2021 of $0.



Accounts
Receivable and Allowance for Doubtful Account Receivable



Accounts
receivable are recorded at net realizable value. We determine provisions for uncollectible accounts, sales returns, and claims based
upon factors including the credit risk and activity of specific distributors and resellers, historical trends, and other information.
If we become aware of a specific distributor’s or reseller’s inability to meet its financial obligations, bad debt charges
are recorded based on an overall assessment of past due accounts receivable outstanding. In the opinion of management, a provision was
deemed necessary for uncollectible accounts.



Inventory



The cost of inventory using the standard cost method,
which approximates actual cost based on a first-in, first-out method. Our inventories are valued at the lower of cost or net realizable
value. Our inventory consists almost entirely of finished and unfinished goods, and freight, which include CBD creams, oils, capsules,
and sprays. We periodically evaluate and adjust inventories for obsolescence. In the opinion of management, no provision for obsolescence
is deemed necessary. The shelf life of all product inventory is two years, and as of September 30, 2022, we had approximately $777,911
of product in inventory, which was a decrease of approximately $142,901, compared to approximately $920,812 at September 30, 2021. We
expect the balance of inventory to increase in direct relation to the increase in sales that we expect.





Goodwill
and Intangible Assets



Goodwill
arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus
the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed
as of the acquisition date. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are
not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a
goodwill impairment test should be performed. We have selected December 31 as the date to perform the annual impairment test.



Intangible
assets represent both indefinite lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are
amortized, and are tested annually for impairment. Intangible assets are reported on the balance sheet at cost less accumulated amortization.
We have selected September 30 as the date to perform the annual impairment test.



Stock-Based
Compensation



FASB’s
ASC Topic 718, Stock Compensation (formerly, FASB Statement 123R), prescribes accounting and reporting standards for all stock-based
payment transactions in which employee and non-employee services are acquired. We measure the cost of employee and non-employee services
received in exchange for an award of equity instruments based on the grant-date fair value of the award. Fair value for restricted stock
awards is valued using the closing price of our Common Stock on the date of grant. For our 2022 and 2021 fiscal years, we recognized
stock-based compensation expense of approximately $455,800, and $721,021, respectively.



Off
Balance Sheet Arrangements



As
of September 30, 2022 and on September 30, 2021, we had 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 stockholders.



Critical
Accounting Policies



The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues
and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe
to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions.
We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate
estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and
assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.



28







Item
7a. Quantitative And Qualitative Disclosures About Market Risk.



Not
applicable.



Item
8. Financial Statements and Supplementary Data.



Table
of Contents



|                                                                                                 | Page
|------------------------------------------------------------------------------------------------ | ----
|                                                                                                 |     
|Consolidated Balance Sheets as of September 30, 2022 and 2021                                    | F-1 
|                                                                                                 |     
|Consolidated Statements of Operations for the years ended September 30, 2022 and 2021            | F-2 
|                                                                                                 |     
|Consolidated Statements of Stockholders’ Deficit for the years ended September 30, 2022 and 2021 | F-3 
|                                                                                                 |     
|Consolidated Statements of Cash Flows for the years ended September 30, 2022 and 2021            | F-4 
|                                                                                                 |     
|Notes to the Consolidated Financial Statements                                                   | F-5 



29









ENDEXX
CORPORATION AND SUBSIDIARIES

CONSOLIDATED
BALANCE SHEETS





|                                                                                                                                      |  |                   |             |   |                   |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                      |  | September
    30, |             |   | September
    30, |  
|                                                                                                                                      |  | 2022              |             |   | 2021              |  
|                                                                                                                                      |  |                   |             |   |                   |  
|Assets                                                                                                                                |  |                   |             |   |                   |   |             |  
|Current
    assets                                                                                                                    |  |                   |             |   |                   |   |             |  
|Cash                                                                                                                                  |  | $                 | 365,162     |   |                   | $ | 20,867      |  
|Accounts
    receivable, net of allowance of $58,257, respectively                                                                    |  |                   | 256,096     |   |                   |   | 50,755      |  
|Inventory,
    net of allowance of $1,071,469 and $1,001,542, respectively                                                            |  |                   | 777,911     |   |                   |   | 920,812     |  
|Prepaid
    expenses                                                                                                                  |  |                   | 279,560     |   |                   |   | 41,648      |  
|Total
    current assets                                                                                                              |  |                   | 1,678,729   |   |                   |   | 1,034,082   |  
|                                                                                                                                      |  |                   |             |   |                   |   |             |  
|Investment
    in marketable securities                                                                                               |  |                   | 420         |   |                   |   | 9,920       |  
|Equity
    method investment                                                                                                          |  |                   | 2,000,000   |   |                   |   | -           |  
|Note
    receivable                                                                                                                   |  |                   | 1,500,000   |   |                   |   | -           |  
|Property
    and equipment, net of accumulated depreciation of $77,044 and $75,388, respectively                                      |  |                   | 28,005      |   |                   |   | 449,661     |  
|Prepaid
    expenses                                                                                                                  |  |                   | -           |   |                   |   | 250,000     |  
|Intangible
    - website domains                                                                                                      |  |                   | 16,250      |   |                   |   | 16,250      |  
|Total
    assets                                                                                                                      |  | $                 | 5,223,404   |   |                   | $ | 1,759,913   |  
|                                                                                                                                      |  |                   |             |   |                   |   |             |  
|Liabilities
    and Stockholders’ Deficit                                                                                             |  |                   |             |   |                   |   |             |  
|Current
    liabilities                                                                                                               |  |                   |             |   |                   |   |             |  
|Accounts
    payable                                                                                                                  |  | $                 | 2,253,250   |   |                   | $ | 1,020,464   |  
|Customer
    deposit                                                                                                                  |  |                   | 15,182      |   |                   |   | 36,705      |  
|Accrued
    expenses                                                                                                                  |  |                   | 19,756      |   |                   |   | 43,469      |  
|Accrued
    interest                                                                                                                  |  |                   | 237,703     |   |                   |   | 1,095,248   |  
|Payroll
    and taxes payable, including related party                                                                                |  |                   | 915,230     |   |                   |   | 849,919     |  
|Notes
    payable, net of discount of $4,291 and $10,957, respectively                                                                |  |                   | 5,771,861   |   |                   |   | 1,201,584   |  
|Convertible
    notes payable, net of discount of $1,474,338 and $-0-, respectively                                                   |  |                   | 799,575     |   |                   |   | 5,452,111   |  
|Derivative
    liability                                                                                                              |  |                   | -           |   |                   |   | 1,799,354   |  
|Total
    current liabilities                                                                                                         |  |                   | 10,012,557  |   |                   |   | 11,498,854  |  
|                                                                                                                                      |  |                   |             |   |                   |   |             |  
|Notes
    payable, net of current portion                                                                                             |  |                   | 3,365,655   |   |                   |   | 248,200     |  
|                                                                                                                                      |  |                   |             |   |                   |   |             |  
|Total
    liabilities                                                                                                                 |  |                   | 13,378,212  |   |                   |   | 11,747,054  |  
|                                                                                                                                      |  |                   |             |   |                   |   |             |  
|Commitments
    and contingencies (Note 8)                                                                                            |  |                   | -           |   |                   |   |             |  
|                                                                                                                                      |  |                   |             |   |                   |   |             |  
|Stockholders’
    deficit                                                                                                             |  |                   |             |   |                   |   |             |  
|Preferred
    stock, $0.0001 Par Value, 10,000,000 share authorized                                                                   |  |                   |             |   |                   |   |             |  
|Series
    A preferred stock, 1,824,000 issued and outstanding, respectively                                                          |  |                   | 182         |   |                   |   | 182         |  
|Series
    H preferred stock, 4,878,049 and -0- issued and outstanding, respectively                                                  |  |                   | 488         |   |                   |   | -           |  
|Series
    Z preferred stock, -0- and 719,571 issued and outstanding, respectively                                                    |  |                   | -           |   |                   |   | 72          |  
|Preferred stock, value                                                                                                                |  |                   | -           |   |                   |   | 72          |  
|Common
    stock, $0.0001 Par Value, 1,000,000,000 share authorized, 501,376,264 and 486,313,058 issued and outstanding, respectively |  |                   | 50,138      |   |                   |   | 48,631      |  
|Additional
    paid-in capital                                                                                                        |  |                   | 35,437,174  |   |                   |   | 29,477,818  |  
|Accumulated
    deficit                                                                                                               |  |                   | (43,642,790 | ) |                   |   | (39,513,844 | )
|Total
    stockholders’ deficit                                                                                                       |  |                   | (8,154,808  | ) |                   |   | (9,987,141  | )
|Total
    liabilities and stockholders’ deficit                                                                                       |  | $                 | 5,223,404   |   |                   | $ | 1,759,913   |  



F-1













ENDEXX
CORPORATION AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF OPERATIONS





|                                                 |  |                         |             |   |      |   |             |  
|------------------------------------------------ |  | ----------------------- | ----------- | - | ---- | - | ----------- | -
|                                                 |  | For
    the years ended |            
|                                                 |  | September
    30,       |            
|                                                 |  | 2022                    |             |   | 2021 |  
|                                                 |  |                         |             |   |      |  
|Revenues                                         |  | $                       | 1,277,579   |   |      | $ | 650,515     |  
|Cost
    of revenues                             |  |                         | 596,228     |   |      |   | 589,056     |  
|Inventory
    impairment                         |  |                         | 178,342     |   |      |   | 405,537     |  
|Gross
    profit (loss)                          |  |                         | 503,009     |   |      |   | (344,078    | )
|                                                 |  |                         |             |   |      |   |             |  
|Operating
    expenses                           |  |                         |             |   |      |   |             |  
|Depreciation                                     |  |                         | 20,606      |   |      |   | 20,400      |  
|Advertising
    and promotion                    |  |                         | 564,075     |   |      |   | 1,778,073   |  
|Payroll
    expenses                             |  |                         | 609,288     |   |      |   | 637,493     |  
|Professional
    fees                            |  |                         | 1,773,680   |   |      |   | 1,721,236   |  
|Research
    and development                     |  |                         | 27,067      |   |      |   | 10,145      |  
|General
    and administrative expenses          |  |                         | 870,528     |   |      |   | 859,904     |  
|Total
    operating expenses                     |  |                         | 3,865,244   |   |      |   | 5,027,251   |  
|                                                 |  |                         |             |   |      |   |             |  
|Loss
    from operations                         |  |                         | (3,362,235  | ) |      |   | (5,371,329  | )
|                                                 |  |                         |             |   |      |   |             |  
|Other
    (income) and expense                   |  |                         |             |   |      |   |             |  
|Change
    in fair value of derivative liability |  |                         | 4,117,085   |   |      |   | (28,724     | )
|Financing
    costs and discount amortization    |  |                         | 1,452,884   |   |      |   | 1,288,527   |  
|Interest
    expenses                            |  |                         | 1,241,493   |   |      |   | 950,549     |  
|Default
    penalty                              |  |                         | 584,738     |   |      |   | 91,576      |  
|Gain
    from settlement of derivative liability |  |                         | (5,916,439  | ) |      |   | (865,103    | )
|Gain
    on settlement of liabilities            |  |                         | (289,100    | ) |      |   | -           |  
|Gain
    on disposition of assets                |  |                         | (423,950    | ) |      |   | -           |  
|Total
    other (income) expense                 |  |                         | 766,711     |   |      |   | 1,436,825   |  
|                                                 |  |                         |             |   |      |   |             |  
|Net
    loss                                     |  | $                       | (4,128,946  | ) |      | $ | (6,808,154  | )
|                                                 |  |                         |             |   |      |   |             |  
|Net
    loss per share - basic                   |  | $                       | (0.01       | ) |      | $ | (0.01       | )
|                                                 |  |                         |             |   |      |   |             |  
|Weighted
    average shares outstanding - basic  |  |                         | 503,983,723 |   |      |   | 455,049,510 |  





F-2









ENDEXX
CORPORATION AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ DEFICIT





|                                                                |  |                                |            |   |                                |   |      |                                |  |  |                  |  |  |                   |     |  |             |  |          |        |  |   |        |   |  |         |             |   |         |   |        |       |  |   |            |   |  |   |             |   |  |   |             |  
|--------------------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ---- | ------------------------------ |  |  | ---------------- |  |  | ----------------- | --- |  | ----------- |  | -------- | ------ |  | - | ------ | - |  | ------- | ----------- | - | ------- | - | ------ | ----- |  | - | ---------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                                                |  | Preferred
    Stock - Series A |            |   | Preferred
    Stock - Series H |   |      | Preferred
    Stock - Series Z |  |  | Common
    Stock |  |  | AdditionalPaid-in |     |  | Accumulated |  |          |        | 
|                                                                |  | Shares                         |            |   | Amount                         |   |      | Shares                         |  |  | Amount           |  |  | Shares            |     |  | Amount      |  |          | Shares |  |   | Amount |   |  | Capital |             |   | Deficit |   |        | Total | 
|                                                                |  |                                |            |   |                                |   |      |                                |  |  |                  |  |  |                   |     |  |             |  |          |        |  |   |        |   |  |         |             |   |         |   |        |       | 
|Balances
    at September 30, 2020                              |  |                                | 7,296,000  |   |                                | $ | 730  |                                |  |  | -                |  |  | $                 | -   |  |             |  | -        |        |  | $ | -      |   |  |         | 404,908,141 |   |         | $ | 40,491 |       |  | $ | 21,010,497 |   |  | $ | (32,705,690 | ) |  | $ | (11,653,972 | )
|Shares
    issued for private placements                        |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 7,031,111   |   |         |   | 703    |       |  |   | 327,297    |   |  |   | -           |   |  |   | 328,000     |  
|Shares
    issued for services                                  |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 7,332,496   |   |         |   | 733    |       |  |   | 720,288    |   |  |   | -           |   |  |   | 721,021     |  
|Shares
    issued for debt settlement                           |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 41,621,310  |   |         |   | 4,162  |       |  |   | 1,406,683  |   |  |   | -           |   |  |   | 1,410,845   |  
|Shares
    issued for conversion of related party liabilities   |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 54,658,192  |   |         |   | 5,466  |       |  |   | 1,415,647  |   |  |   | -           |   |  |   | 1,421,113   |  
|Shares
    issued for related party liability settlements       |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | 172,989  |        |  |   | 17     |   |  |         | -           |   |         |   | -      |       |  |   | 885,684    |   |  |   | -           |   |  |   | 885,701     |  
|Shares
    issued for financing                                 |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 16,420,000  |   |         |   | 1,642  |       |  |   | 1,834,318  |   |  |   | -           |   |  |   | 1,835,960   |  
|Shares
    issued for settlement of preferred stock             |  |                                | (5,472,000 | ) |                                |   | (548 | )                              |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 9,000,000   |   |         |   | 900    |       |  |   | (352       | ) |  |   | -           |   |  |   | -           |  
|Common
    shares exchanged for preferred stock                 |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | 546,582  |        |  |   | 55     |   |  |         | (54,658,192 | ) |         |   | (5,466 | )     |  |   | 5,411      |   |  |   | -           |   |  |   | -           |  
|Capital
    contribution from related party                     |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | -           |   |         |   | -      |       |  |   | 274,514    |   |  |   | -           |   |  |   | 274,514     |  
|Settlement
    of derivative liability                          |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | -           |   |         |   | -      |       |  |   | 1,597,831  |   |  |   | -           |   |  |   | 1,597,831   |  
|Net
    loss                                                    |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | -           |   |         |   | -      |       |  |   | -          |   |  |   | (6,808,154  | ) |  |   | (6,808,154  | )
|Balances
    at September 30, 2021                              |  |                                | 1,824,000  |   |                                | $ | 182  |                                |  |  | -                |  |  | $                 | -   |  |             |  | 719,571  |        |  | $ | 72     |   |  |         | 486,313,058 |   |         | $ | 48,631 |       |  | $ | 29,477,818 |   |  | $ | (39,513,844 | ) |  | $ | (9,987,141  | )
|Shares
    issued for services                                  |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 10,311,180  |   |         |   | 1,031  |       |  |   | 454,769    |   |  |   | -           |   |  |   | 455,800     |  
|Shares
    issued for financing                                 |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 11,491,071  |   |         |   | 1,150  |       |  |   | 429,306    |   |  |   | -           |   |  |   | 430,456     |  
|Warrants
    issued for financing                               |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | -           |   |         |   | -      |       |  |   | 523,238    |   |  |   | -           |   |  |   | 523,238     |  
|Shares
    issued for conversion of interest                    |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 4,111,111   |   |         |   | 411    |       |  |   | 221,589    |   |  |   | -           |   |  |   | 222,000     |  
|Sharess
    issued for default penalty                          |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | 9,761,904   |   |         |   | 976    |       |  |   | 583,762    |   |  |   | -           |   |  |   | 584,738     |  
|Shares
    and liabilities surrendered for equity in subsidiary |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | (719,571 | )      |  |   | (72    | ) |  |         | (20,612,060 | ) |         |   | (2,061 | )     |  |   | 236,133    |   |  |   | -           |   |  |   | 234,000     |  
|Shares
    issued for investment                                |  |                                | -          |   |                                |   | -    |                                |  |  | 4,878,049        |  |  |                   | 488 |  |             |  | -        |        |  |   | -      |   |  |         | -           |   |         |   | -      |       |  |   | 1,999,512  |   |  |   | -           |   |  |   | 2,000,000   |  
|Warrants
    and options issued in connection with debt         |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | -           |   |         |   | -      |       |  |   | 1,511,047  |   |  |   | -           |   |  |   | 1,511,047   |  
|Net
    loss                                                    |  |                                | -          |   |                                |   | -    |                                |  |  | -                |  |  |                   | -   |  |             |  | -        |        |  |   | -      |   |  |         | -           |   |         |   | -      |       |  |   | -          |   |  |   | (4,128,946  | ) |  |   | (4,128,946  | )
|Balances
    at September 30, 2022                              |  |                                | 1,824,000  |   |                                | $ | 182  |                                |  |  | 4,878,049        |  |  | $                 | 488 |  |             |  | -        |        |  | $ | -      |   |  |         | 501,376,264 |   |         | $ | 50,138 |       |  | $ | 35,437,174 |   |  | $ | (43,642,790 | ) |  | $ | (8,154,808  | )





F-3









ENDEXX
CORPORATION AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS





|                                                                                            |  |                         |            |   |      |   |            |  
|------------------------------------------------------------------------------------------- |  | ----------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                            |  | For
    the years ended |           
|                                                                                            |  | September
    30,       |           
|                                                                                            |  | 2022                    |            |   | 2021 |  
|Operating
    activities                                                                    |  |                         |            |   |      |   |            |  
|Net
    loss                                                                                |  | $                       | (4,128,946 | ) |      | $ | (6,808,154 | )
|Adjustments
    to reconcile net loss to net cash used in operating activities:             |  |                         |            |   |      |   |            |  
|Stock-based
    compensation                                                                |  |                         | 455,800    |   |      |   | 721,021    |  
|Shares
    issued for financing costs                                                       |  |                         | 430,456    |   |      |   | 477,560    |  
|Warrants
    issued for financing costs                                                     |  |                         | 523,238    |   |      |   | -          |  
|Depreciation
    and amortization                                                           |  |                         | 20,606     |   |      |   | 20,400     |  
|Amortization
    of debt discount                                                           |  |                         | 430,708    |   |      |   | 679,277    |  
|Change
    in fair value of derivative liability                                            |  |                         | 4,117,085  |   |      |   | (28,724    | )
|Gain
    from settlement of liabilities                                                     |  |                         | (289,100   | ) |      |   | -          |  
|Gain
    from settlement of derivative liabilities                                          |  |                         | (5,916,439 | ) |      |   | (865,103   | )
|Gain
    on disposition of assets                                                           |  |                         | (423,950   | ) |      |   | -          |  
|Impairment
    expense                                                                      |  |                         | 178,342    |   |      |   | 405,537    |  
|Financing
    costs                                                                         |  |                         | 69,682     |   |      |   | 131,690    |  
|Default
    penalty                                                                         |  |                         | 584,738    |   |      |   | 91,576     |  
|Changes
    in operating assets and liabilities:                                            |  |                         |            |   |      |   |            |  
|Accounts
    receivable                                                                     |  |                         | (205,341   | ) |      |   | (21,314    | )
|Inventory                                                                                   |  |                         | (35,441    | ) |      |   | (216,704   | )
|Prepaid
    expenses                                                                        |  |                         | 72,088     |   |      |   | (42,088    | )
|Accounts
    payable                                                                        |  |                         | 1,232,786  |   |      |   | 599,982    |  
|Customer
    deposit                                                                        |  |                         | (21,523    | ) |      |   | -          |  
|Accrued
    expenses                                                                        |  |                         | (23,713    | ) |      |   | (78,407    | )
|Accrued
    interest                                                                        |  |                         | 1,166,432  |   |      |   | 805,993    |  
|Accrued
    interest, related party                                                         |  |                         | -          |   |      |   | 85,776     |  
|Payroll
    and taxes payable, primarily related party                                      |  |                         | 299,311    |   |      |   | 321,415    |  
|Net
    cash used in operating activities                                                   |  |                         | (1,463,181 | ) |      |   | (3,720,267 | )
|                                                                                            |  |                         |            |   |      |   |            |  
|Investing
    activities:                                                                   |  |                         |            |   |      |   |            |  
|Proceeds
    from sale of investments in marketable securities                              |  |                         | 9,500      |   |      |   | -          |  
|Issuance
    of note receivable                                                             |  |                         | (1,500,000 | ) |      |   | -          |  
|Net
    cash used in investing activities                                                   |  |                         | (1,490,500 | ) |      |   | -          |  
|                                                                                            |  |                         |            |   |      |   |            |  
|Financing
    activities:                                                                   |  |                         |            |   |      |   |            |  
|Proceeds
    from sale of common stock                                                      |  |                         | -          |   |      |   | 328,000    |  
|Proceeds
    from convertible notes payable                                                 |  |                         | 2,964,853  |   |      |   | 1,614,234  |  
|Proceeds
    from notes payable                                                             |  |                         | 333,123    |   |      |   | 1,815,000  |  
|Repayment
    of note payable                                                               |  |                         | -          |   |      |   | (20,750    | )
|Net
    cash provided by financing activities                                               |  |                         | 3,297,976  |   |      |   | 3,736,484  |  
|                                                                                            |  |                         |            |   |      |   |            |  
|Net
    increase in cash                                                                    |  | $                       | 344,295    |   |      | $ | 16,217     |  
|Cash,
    beginning of period                                                               |  |                         | 20,867     |   |      |   | 4,650      |  
|Cash,
    end of period                                                                     |  | $                       | 365,162    |   |      | $ | 20,867     |  
|                                                                                            |  |                         |            |   |      |   |            |  
|Cash
    paid for income taxes                                                              |  | $                       | -          |   |      | $ | -          |  
|Cash
    paid for interest                                                                  |  | $                       | 75,061     |   |      | $ | 58,780     |  
|                                                                                            |  |                         |            |   |      |   |            |  
|Supplemental
    schedule of non-cash investing and financing activities:                   |  |                         |            |   |      |   |            |  
|Convertible
    notes and interest converted to common stock                                |  | $                       | 222,000    |   |      | $ | 1,410,845  |  
|Debt
    discount at origination                                                            |  | $                       | 387,333    |   |      | $ | 68,100     |  
|Prepaid
    expenses from note payable                                                      |  | $                       | 60,000     |   |      | $ | -          |  
|Convertible
    notes, notes payable and interest settled through issuance of notes payable |  | $                       | 7,371,487  |   |      | $ | -          |  
|Preferred
    stock issued for equity method investment                                     |  | $                       | 2,000,000  |   |      | $ | -          |  
|Preferred
    stock surrendered for equity in subsidiary                                    |  | $                       | 72         |   |      | $ | -          |  
|Common
    stock surrendered for equity in subsidiary                                       |  | $                       | 2,061      |   |      | $ | -          |  
|Related
    party liabilities surrendered for equity in subsidiary                          |  | $                       | 234,000    |   |      | $ | -          |  
|Discount
    on convertible notes from warrants and options                                 |  | $                       | 1,511,047  |   |      | $ | -          |  
|Related
    party note and interest converted to common stock                               |  | $                       | -          |   |      | $ | 1,421,113  |  
|Derivative
    liability settled through conversion of convertible notes                    |  | $                       | -          |   |      | $ | 1,597,831  |  
|Amortization
    of right-of-use asset and lease liability                                  |  | $                       | -          |   |      | $ | 39,000     |  
|Notes
    and interest payable settled through issuance of convertible notes                |  | $                       | -          |   |      | $ | 1,057,976  |  
|Preferred
    stock issued for related party liability settlements                          |  | $                       | -          |   |      | $ | 885,701    |  
|Contributions
    from related party through settlement of liabilities                      |  | $                       | -          |   |      | $ | 274,514    |  





F-4















ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



1.
Organization and Basis of Presentation



We
were incorporated under the laws of State of Nevada on September 5, 1997, as Micron Solutions. From 2002-2005, the Company operated as
Panamed Corporation, a biotech service and licensing company. Panamed Corporation merged with Visual Board Books Inc. (VBB) in February
2005 and changed the consolidated company name to Endexx Corporation (the Company).



Our
primary business is the manufacturing and sale of hemp products for personal use and pets. The Company has the following wholly owned
subsidiaries:



| | ● | Global
                                            Solaris Group, LLC        
| | - | -----------------------------------------------------------------------------
| | ● | Greenleaf
                                            Consulting LLC         
| | ● | Cann
                                            Can LLC                     
| | ● | Together
                                            One Step Closer, LLC    
| | ● | PhytoLabs
                                            LLC                    
| | ● | Go
                                            Green Global Enterprises, Inc.
| | ● | CBD
                                            Health Solutions             
| | ● | Kush,
                                            Inc.                       
| | ● | CBD
                                            Life Brands, Inc.            
| | ● | Retail
                                            Pro Associates            
| | ● | CBD
                                            Unlimited, Inc.              
| | ● | Dispense
                                            Labs LLC                
| | ● | Khode,
                                            LLC (70% owner)           



Basis
of Presentation and Going Concern



The
Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States
of America. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board
of Directors; however, actual results could differ from those estimates. The operating results of the above listed wholly owned subsidiaries
were consolidated with the consolidated financial statements of the Company. All significant intercompany accounts and transactions have
been eliminated in consolidation.



Our
consolidated financial statements have been presented on the basis that we are a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. We have sustained operating losses since inception, which
raises substantial doubt about the Company’s ability to continue as a going concern.



As
of September 30, 2022, we have a working capital deficit of $8,333,828, and an accumulated deficit of $43,642,790. During the year ended
September 30, 2022, we had a net loss of $4,128,946 and cash used in operating activities of $1,463,181. The Company’s ability
to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and
positive cash flows. Management’s plans with respect to operations include the sustained and aggressive marketing of hemp cannabidiol
products and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and
sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined with
additional financing as necessary will result in improved operations and cash flow in 2023 and beyond. However, there can be no assurance
that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying consolidated
financial statements do not include any adjustments that might result from the outcome of this uncertainty.



F-5











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



2.
Summary of Significant Accounting Policies



Use
of Estimates



The
Company’s financial statement preparation requires that management make estimates and assumptions which affect the reporting of
assets and liabilities and the related disclosure of contingent assets and liabilities in order to report these financial statements
in conformity with GAAP. Actual results could differ from those estimates.



Cash



Cash
includes all highly liquid investments that are readily convertible to known amounts of cash and have original maturities at the date
of purchase of three months or less. There were no cash equivalents as of September 30, 2022 and 2021.



Accounts
Receivable



Accounts
receivable consists of invoiced and unpaid product sales. The Company records an allowance for doubtful accounts to allow for any amounts
that may not be recoverable, which is based on an analysis of the Company’s prior collection experience, customer credit worthiness,
and current economic trends. Accounts are considered delinquent when payments have not been received within the agreed upon terms and
are written off when management determines that collection is not probable.



At
September 30, 2022 and September 30, 2021, we recorded $58,257, respectively, for an allowance for doubtful accounts based upon management’s
review of accounts receivable.



Inventory



Inventory
is composed of finished goods, in-process, and raw goods inventory, valued on a first in first out basis, and includes production cost,
product freight in, and packaging costs. Slow moving and obsolete inventories are written down based on a comparison of on-hand quantities
to historical and projected usages.



The
Company has authorized a consignment inventory arrangement with one of its mass retail customers. After consignment inventory has been
sold by this customer, the customer notifies the Company of the sale and the Company records revenue in that accounting period. The Company
authorizes the replenishment of consignment inventory based on orders placed by the customer. The Company is provided with weekly reports
of consignment sales activity and balances.



Prepaid
Expenses



The
Company considers all items incurred for future services to be prepaid expenses. As of September 30, 2022 and September 30, 2021, the
Company had $279,560 and $291,648, respectively, of future professional and advertising services to be received through the year ended
September 30, 2023.



During
March 2020, the Company entered into a barter agreement whereby it delivered $249,560 of its inventory in exchange for future advertising
credits. The credits, which expire in March 2023, are valued at the lower of the Company’s cost of market value of the inventory
transferred. Under the terms of the barter agreement, the Company is required to pay cash equal to a negotiated amount of the bartered
advertising and use the barter credits to pay the balance. These credits are charged to expense as they are used. As of September 30,
2022, none of the barter credits have been used and have been recorded as current assets on the accompanying financial statements.



The
Company assesses the recoverability of barter credits periodically. Factors considered in evaluating the recoverability include management’s
plans with respect to advertising for which barter credits can be used. Any impairment losses are charged to operations as they are determinable.
During the years ended September 30, 2022 and 2021, the Company recorded no impairment losses related to barter credits.



F-6











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Property
and Equipment



Property
and equipment are stated at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to operations as
incurred. Depreciation and amortization are based on the straight-line method over the estimated useful lives of the related assets.
When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts,
and any resulting gain or loss is reflected in operations in the period realized.



Depreciation
is computed on the straight-line method net of salvage value with useful lives as follows:



Schedule
of Property and Equipment Useful Lives

|Computer
    equipment and software |  | 5 years     
|----------------------------------- |  | ------------
|Business
    equipment and fixtures |  | 7 years     
|Property
    and buildings          |  | 39
    years



Recoverability
of Long-Lived Assets



The
Company reviews its long-lived assets on a periodic basis, whenever events and changes in circumstances have occurred which may indicate
a possible impairment. The assessment for potential impairment will be based primarily on the Company’s ability to recover the
carrying value of its long-lived assets from expected future cash flows from its operations on an undiscounted basis. If such assets
are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value
of the assets. Fixed assets to be disposed of by sale will be carried at the lower of the then current carrying value or fair value less
estimated costs to sell.



We
amortize the cost of other intangible assets over their estimated useful lives, which range up to ten years, unless such lives are deemed
indefinite. During the years ended September 30, 2022 and 2021, we recorded no impairment charges related to other intangible assets.



Customer
Deposits



From
time-to-time the Company receives payment from wholesale customers in advance of delivering products to the customer. All such deposits
are short term in nature as the Company delivers the product, unfulfilled portions, or engineering services to the customer before the
end of its next annual fiscal period. These deposits are credited to the customer against product deliveries or at the completion of
the customer’s order.



Revenue
Recognition



Revenue
is recognized from the sale of hemp products when our performance obligation is satisfied. Our primary performance obligation (the distribution
and sales of hemp products) is satisfied upon the shipment or delivery of products to our customers, which is also when control is transferred.
The transfer of control of products to our customers is typically based on written sales terms that do not allow for a right of return
after 30 days from the date of purchase. Revenue is recognized net of allowances for returns and any taxes collected from customers and
subsequently remitted to governmental authorities.



The
following table presents the Company’s revenues disaggregated by type:



Schedule
of Disaggregation of Revenue

|          |  | For
    the years ended |          
|--------- |  | ----------------------- | ---------
|          |  | September
    30,       |          
|          |  | 2022                    |          
|Wholesale |  | $                       | 1,085,024
|Retail    |  |                         | 146,620  
|Other     |  |                         | 45,935   
|Total     |  | $                       | 1,277,579



F-7











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Fair
Value of Financial Instruments



In
accordance with the reporting requirements of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 825, Financial Instruments, the Company calculates the fair value of its assets and liabilities which qualify
as financial instruments under this standard and includes this additional information in the notes to the financial statements when the
fair value is different than the carrying value of those financial instruments. The Company does not have assets or liabilities measured
at fair value on a recurring basis except its derivative liability.



Consequently,
the Company did not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor
gains or losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to
those assets and liabilities still held during the years ended September 30, 2022 and 2021, except as disclosed.



Fair
Value Measurement



ASC
Topic 820, Fair Value Measurements, provides a comprehensive framework for measuring fair value and expands disclosures which are required
about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the
inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and
the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:



Level
1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and
liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the
New York Stock Exchange.



Level
2 - Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported
date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced
with models using highly observable inputs.



Level
3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level
3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts
used to determine the fair value.



The
following tables present the Company’s assets and liabilities that were measured and recognized at fair value as of September 30,
2021:



Schedule
of Assets and Liabilities Fair Value Measured

|                          |  | Level
    1 |       |  | Level
    2 |   |   | Level
    3 |  |   | Total     | 
|------------------------- |  | ----------- | ----- |  | ----------- | - | - | ----------- |  | - | --------- | 
|September
    30, 2021   
|                          |  | Level
    1 |       |  | Level
    2 |   |   | Level
    3 |  |   | Total     | 
|Marketable
    securities |  | $           | 9,920 |  |             | $ | - |             |  | $ | -         | 
|Derivative
    liability  |  |             | -     |  |             |   | - |             |  |   | 1,799,354 | 
|Total                     |  | $           | 9,920 |  |             | $ | - |             |  | $ | 1,799,354 | 



A
reconciliation of the changes in the Company’s Level 3 derivative liability at fair value is as follows:



Schedule
of Reconciliation of Fair Value Derivative Liability

|Balance
    at September 30, 2020      |  | $ | 5,649,412  |  
|-------------------------------------- |  | - | ---------- | -
|Conversions
    of debt to equity      |  |   | (1,597,831 | )
|Settlement
    of derivative liability |  |   | (2,223,503 | )
|Change
    in fair value               |  |   | (28,724    | )
|Balance at September
    30, 2021      |  | $ | 1,799,354  |  
|Change
    in fair value               |  |   | 4,117,085  |  
|Settlement
    of derivative liability |  |   | (5,916,439 | )
|Balance
    at September 30, 2022      |  | $ | -          |  



F-8











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



From
time to time, the Company enters into convertible promissory note agreements (Note 5). These notes are convertible at a fraction of the
stock closing price near the conversion date. Additionally, the conversion price, as well as other terms including interest rates, adjust
if any future financings have more favorable terms. The conversion features of these notes meet the definition of a derivative which
therefore requires bifurcation and are accounted for as a derivative liability.



Beginning
on October 1, 2020, the Company began estimating the fair value of the conversion feature derivatives embedded in the convertible promissory
notes based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model. The change in method used to value the derivative
resulted in a trivial difference in valuation.



At
September 30, 2021, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible promissory
notes based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following weighted-average inputs: the price
of the Company’s common stock of $0.05164; a risk-free interest rate of 0.05%, and expected volatility of the Company’s common
stock of 95%, various estimated exercise prices, and terms under one year.



Convertible
Instruments



The
Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC Topic 815, Derivatives
and Hedging Activities.



Applicable
GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative
financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and
risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host
contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at
fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same
terms as the embedded derivative instrument would be considered a derivative instrument.



The
Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated
from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of
conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the
commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements
are amortized over the term of the related debt to their stated date of redemption.



Beneficial
Conversion Features



ASC
470-20 applies to convertible securities with beneficial conversion features that must be settled in stock and to those that give the
issuer a choice in settling the obligation in either stock or cash. ASC 470-20 requires that the beneficial conversion feature should
be valued at the commitment date as the difference between the conversion price and the fair market value of the common stock into which
the security is convertible, multiplied by the number of shares into which the security is convertible. This amount is recorded as a
debt discount and amortized over the life of the debt. ASC 470-20 further limits this amount to the proceeds allocated to the convertible
instrument.



Research
and development costs



Research
and development costs are charged to expense as incurred and are included in operating expenses. Total research and development costs
were $27,067 and $10,145 for the years ended September 30, 2022 and 2021, respectively.



Advertising
Costs



The
costs of advertising are expensed as incurred. Advertising expenses are included in the Company’s operating expenses. Advertising
expense were $564,075 and $1,778,073 for the years ended September 30, 2022 and 2021, respectively.



F-9











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Income
Taxes



The
Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined
based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which
differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that
are expected to be realized.



The
Company follows ASC 740-10, Accounting for Uncertainty in Income Taxes. This interpretation requires recognition and measurement of uncertain
income tax positions using a “more-likely-than-not” approach. The Company evaluates its tax positions on an annual basis,
and as of September 30, 2022, no additional accrual for income taxes is necessary. The Company’s policy is to recognize both interest
and penalties related to unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities,
while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest or penalties since
its inception. The Company is required to file income tax returns in the U.S. federal tax jurisdiction and in various state tax jurisdictions
and the prior three fiscal years remain open for examination by federal and/or state tax jurisdictions. The Company is currently not
under examination by any other tax jurisdictions for any tax year.



Share
Based Compensation



The
Company accounts for share-based compensation in accordance with the fair value recognition provisions of the FASB ASC No. 718 and No.
505. The Company issues restricted stock to employees for their services. Cost for these transactions are measured at the fair value
of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized
as expense in the period granted. The Company also issues restricted stock to consultants for various services. Costs for these transactions
are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably
measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment only if there is sufficient
disincentive to ensure performance or (ii) the date at which the counterparty’s performance is complete. The Company recognized
consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring
future services, the consulting expense is to be recognized ratably over the requisite service period.



(Loss)
Income Per Share of Common Stock



Basic
net loss/income per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share
(EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options, warrants
and convertible notes. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports
a loss because to do so would be anti-dilutive for periods presented.



The
Company had total potential additional dilutive securities outstanding at September 30, 2022 and 2021, as follows.



Schedule
of Potential Additional Dilutive Securities Outstanding

|                     |  | September
    30, |             |  | September
    30, | 
|-------------------- |  | ----------------- | ----------- |  | ----------------- | 
|                     |  | 2022              |             |  | 2021              | 
|Warrants             |  |                   | 88,918,645  |  |                   | 
|Options              |  |                   | 22,500,000  |  |                   | 
|Convertible
    debt |  |                   | 90,426,058  |  |                   | 
|Total                |  |                   | 201,844,703 |  |                   | 



All
convertible notes payable, by written agreement, provide for a beneficial ownership limitation cap of 4.99% shares of the total issued
and outstanding common stock of the Company, at any given time.



Recently
Issued Accounting Pronouncements



During
the years ended September 30, 2022 and 2021, there were several new accounting pronouncements issued by the FASB. Each of the other pronouncements,
as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements
has had or will have a material impact on the Company’s financial statements.



F-10











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Contingencies



Certain
conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only
be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent
liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are
pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the
perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected
to be sought.



If
the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be
estimated, then the estimated liability would be accrued in the Company’s financial statements.



If
the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot
be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and
material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve
guarantees, in which case the guarantee would be disclosed.



3.
Inventory



The
Company’s inventory consisted of the following at the respective balance sheet dates:



Schedule
of Inventory

|                                           |  | September
    30, |            |   | September
    30, |  
|------------------------------------------ |  | ----------------- | ---------- | - | ----------------- | -
|                                           |  | 2022              |            |   | 2021              |  
|Raw
    materials and packaging components |  | $                 | 249,042    |   |                   | $
|Finished
    goods                         |  |                   | 1,427,017  |   |                   |  
|Consigned
    goods                        |  |                   | 77,135     |   |                   |  
|Apparel                                    |  |                   | 96,186     |   |                   |  
|Less
    obsolescence allowance            |  |                   | (1,071,469 | ) |                   |  
|Inventory
    net                          |  | $                 | 777,911    |   |                   | $



4.
Property and Equipment



The
Company’s property and equipment consisted of the following at the respective balance sheet dates:





Summary
of Property, Plant, and Equipment

|                                  |  | September
    30, |         |   | September
    30, |  
|--------------------------------- |  | ----------------- | ------- | - | ----------------- | -
|                                  |  | 2022              |         |   | 2021              |  
|Land                              |  | $                 | -       |   |                   | $
|Building                          |  |                   | -       |   |                   |  
|Machinery
    and equipment       |  |                   | 66,264  |   |                   |  
|Computer/office
    equipment     |  |                   | 38,785  |   |                   |  
|Property
    and equipment, gross |  |                   | 105,049 |   |                   |  
|Less
    accumulated depreciation |  |                   | (77,044 | ) |                   |  
|Property
    and equipment, net   |  | $                 | 28,005  |   |                   | $



On
April 1, 2022, the Company sold its land and building the Noteholder C. The land and building were carried at cost of $420,000 and accumulated
depreciation of $18,950. The Company received consideration totaling $825,000 with $645,000 allocated to the October 2019 note payable
(Note 5) and $180,000 to related accrued interest. As a result of the sale, the Company recognized a $423,950 gain on disposition of
assets.



F-11











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



5.
Debt



Notes
payable



The
Company’s notes payable as of September 30, 2022, are summarized as follows:

Schedule of Notes Payable

|Noteholder        |  | Origination |           |  | Maturity |  |           | Interest |  |  | Principal                         |   |  | Discount |          
|----------------- |  | ----------- | --------- |  | -------- |  | --------- | -------- |  |  | --------------------------------- | - |  | -------- | ---------
|                  |  |             |           |  |          |  |           |          |  |  | Balances
    - September 30, 2022 |  
|Noteholder        |  | Origination |           |  | Maturity |  |           | Interest |  |  | Principal                         |   |  | Discount |          
|Noteholder
    A1 |  |             | 8/15/2022 |  |          |  | 2/15/2024 |          |  |  | 6.667                             | % |  | $        | 540,758  
|Noteholder
    A2 |  |             | 8/15/2022 |  |          |  | 2/15/2024 |          |  |  | 6.667                             | % |  |          | 1,498,450
|Noteholder
    A3 |  |             | 8/15/2022 |  |          |  | 2/15/2024 |          |  |  | 6.667                             | % |  |          | 2,336,858
|Noteholder
    B  |  |             | 9/2/2021  |  |          |  | 9/2/2022  |          |  |  | 12                                | % |  |          | 100,000  
|Noteholder
    B  |  |             | 10/7/2021 |  |          |  | 10/7/2022 |          |  |  | 15                                | % |  |          | 50,000   
|Noteholder
    C  |  |             | 4/1/2022  |  |          |  | 4/1/2023  |          |  |  | 10                                | % |  |          | 85,594   
|Noteholder
    C  |  |             | 8/15/2022 |  |          |  | 2/15/2024 |          |  |  | 6.667                             | % |  |          | 1,876,191
|Noteholder
    G  |  |             | 6/20/2017 |  |          |  | 8/5/2017  |          |  |  | 18                                | % |  |          | 55,353   
|Noteholder
    F  |  |             | 8/15/2022 |  |          |  | 2/15/2024 |          |  |  | 6.667                             | % |  |          | 288,720  
|Noteholder
    D  |  |             | 8/15/2022 |  |          |  | 2/15/2024 |          |  |  | 6.667                             | % |  |          | 1,263,164
|Noteholder
    I  |  |             | 6/17/2020 |  |          |  | 6/17/2050 |          |  |  | 4                                 | % |  |          | 160,000  
|Noteholder
    J  |  |             | 8/15/2022 |  |          |  | 2/15/2024 |          |  |  | 6.667                             | % |  |          | 640,239  
|Noteholder
    K  |  |             | 8/28/2021 |  |          |  | 9/1/2022  |          |  |  | 15                                | % |  |          | 50,000   
|Noteholder
    K  |  |             | 10/6/2021 |  |          |  | 10/6/2022 |          |  |  | 15                                | % |  |          | 66,980   
|Noteholder
    L  |  |             | 7/12/2022 |  |          |  | -         |          |  |  | 10                                | % |  |          | 24,500   
|Noteholder
    M  |  |             | 7/12/2022 |  |          |  | -         |          |  |  | 10                                | % |  |          | 25,000   
|Noteholder
    M  |  |             | 7/25/2022 |  |          |  | -         |          |  |  | 5                                 | % |  |          | 30,000   
|Noteholder
    N  |  |             | 7/28/2022 |  |          |  | -         |          |  |  | 10                                | % |  |          | 50,000   
|                  |  |             |           |  |          |  |           |          |  |  |                                   |   |  | $        | 9,141,807



The
Company’s notes payable as of September 30, 2021, are summarized as follows:



|Noteholder        |  | Origination |           |  | Maturity |  |            | Interest |  |  | Principal                         |   |  | Discount |          
|----------------- |  | ----------- | --------- |  | -------- |  | ---------- | -------- |  |  | --------------------------------- | - |  | -------- | ---------
|                  |  |             |           |  |          |  |            |          |  |  | Balances
    - September 30, 2021 |  
|Noteholder        |  | Origination |           |  | Maturity |  |            | Interest |  |  | Principal                         |   |  | Discount |          
|Noteholder
    A1 |  |             | 4/9/2020  |  |          |  | 8/5/2020   |          |  |  | 22                                | % |  | $        | 25,000   
|Noteholder
    A1 |  |             | 4/28/2020 |  |          |  | 8/5/2020   |          |  |  | 22                                | % |  |          | 105,000  
|Noteholder
    A1 |  |             | 7/9/2021  |  |          |  | 7/9/2022   |          |  |  | 12                                | % |  |          | 50,000   
|Noteholder
    A1 |  |             | 8/13/2021 |  |          |  | 8/13/2022  |          |  |  | 12                                | % |  |          | 100,000  
|Noteholder
    A1 |  |             | 9/3/2021  |  |          |  | 9/3/2022   |          |  |  | 12                                | % |  |          | 150,000  
|Noteholder
    A1 |  |             | 8/18/2021 |  |          |  | 8/18/2022  |          |  |  | 12                                | % |  |          | 25,000   
|Noteholder
    B  |  |             | 9/2/2021  |  |          |  | 9/2/2022   |          |  |  | 12                                | % |  |          | 100,000  
|Noteholder
    G  |  |             | 6/20/2017 |  |          |  | 8/5/2017   |          |  |  | 18                                | % |  |          | 55,353   
|Noteholder
    I  |  |             | 6/17/2020 |  |          |  | 6/17/2050  |          |  |  | 4                                 | % |  |          | 160,000  
|Noteholder
    I  |  |             | 4/27/2020 |  |          |  | 4/27/2022  |          |  |  | 1                                 | % |  |          | 112,888  
|Noteholder
    I  |  |             | 3/8/2021  |  |          |  | 3/8/2026   |          |  |  | 1                                 | % |  |          | 107,500  
|Noteholder
    J  |  |             | 5/29/2021 |  |          |  | 11/29/2021 |          |  |  | 10                                | % |  |          | 420,000  
|Noteholder
    K  |  |             | 8/28/2021 |  |          |  | 9/1/2022   |          |  |  | 15                                | % |  |          | 50,000   
|                  |  |             |           |  |          |  |            |          |  |  |                                   |   |  | $        | 1,460,741



At
September 30, 2022 and 2021, accrued interest related to notes payable totaled $191,437 and $105,403, respectively.



During
October 2021, the $112,888 note payable held by Noteholder I was forgiven by the Small Business Administration.



During
February 2022, the $107,500 note payable held by Noteholder I was forgiven by the Small Business Administration.



F-12











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Convertible
notes payable



The
Company’s convertible notes payable as of September 30, 2022, are summarized as follows:

Schedule of Convertible Notes Payable

|                 |  |             |           |  |          |  |           |          |  |  |            |   |  | Balances
    - September 30, 2022 |             
|---------------- |  | ----------- | --------- |  | -------- |  | --------- | -------- |  |  | ---------- | - |  | --------------------------------- | ------------
|Noteholder       |  | Origination |           |  | Maturity |  |           | Interest |  |  | Conversion |   |  | Principal                         |             
|Noteholder
    C |  |             | 8/23/2022 |  |          |  | 8/23/2023 |          |  |  | 12         | % |  | $                                 | 0.0245/share
|Noteholder
    D |  |             | 8/23/2022 |  |          |  | 8/23/2023 |          |  |  | 12         | % |  | $                                 | 0.0245/share
|Noteholder
    E |  |             | 11/4/2020 |  |          |  | 5/4/2021  |          |  |  | 15         | % |  | $                                 | 0.059/share 
|                 |  |             |           |  |          |  |           |          |  |  |            |   |  |                                   |             



The
Company’s convertible notes payable as of September 30, 2021, are summarized as follows:



|                  |  |             |            |  |          |  |           |          |  |  |            |   |  | Balances
    - September 30, 2021 |            
|----------------- |  | ----------- | ---------- |  | -------- |  | --------- | -------- |  |  | ---------- | - |  | --------------------------------- | -----------
|Noteholder        |  | Origination |            |  | Maturity |  |           | Interest |  |  | Conversion |   |  | Principal                         |            
|Noteholder
    A2 |  |             | 2/12/2019  |  |          |  | 2/11/2020 |          |  |  | 8          | % |  |                                   | Variable   
|Noteholder
    A2 |  |             | 3/15/2019  |  |          |  | 3/14/2020 |          |  |  | 8          | % |  |                                   | Variable   
|Noteholder
    A2 |  |             | 4/5/2019   |  |          |  | 4/4/2020  |          |  |  | 8          | % |  |                                   | Variable   
|Noteholder
    A2 |  |             | 8/5/2019   |  |          |  | 8/5/2020  |          |  |  | 12         | % |  |                                   | Variable   
|Noteholder
    A3 |  |             | 3/5/2021   |  |          |  | 3/4/2022  |          |  |  | 12         | % |  | $                                 | 0.054/share
|Noteholder
    A3 |  |             | 1/22/2021  |  |          |  | 1/21/2022 |          |  |  | 12         | % |  | $                                 | 0.054/share
|Noteholder
    A3 |  |             | 4/2/2021   |  |          |  | 4/1/2022  |          |  |  | 12         | % |  | $                                 | 0.054/share
|Noteholder
    C  |  |             | 10/11/2019 |  |          |  | 1/31/2022 |          |  |  | 12         | % |  | $                                 | 0.054/share
|Noteholder
    E  |  |             | 11/4/2020  |  |          |  | 5/4/2021  |          |  |  | 15         | % |  | $                                 | 0.059/share
|Noteholder
    F  |  |             | 5/10/2021  |  |          |  | 5/10/2022 |          |  |  | 12         | % |  | $                                 | 0.08/share 
|                  |  |             |            |  |          |  |           |          |  |  |            |   |  |                                   |            



At
September 30, 2022 and 2021, accrued interest related to convertible notes payable totaled $46,266 and $989,845, respectively, and the
derivative liability balances related to the accrued interest totaling $-0- and $357,154, respectively.



In
connection with the August 23, 2022 convertible note agreements with Noteholder C and Noteholder D, the Company issued a total of 22,500,000
options (Note 7) exercisable at $0.01 per share. The options were fully vested at issuance and expire on August 23, 2023. Additionally,
the Company issued a total of 88,731,145 warrants (Note 7) exercisable at $0.02695 per share. The warrants were fully vested at issuance
and expire on August 23, 2027. The options and warrants, valued at approximately $4,413,000, represented approximately 67% of the total
consideration received and resulted in an additional discount on the notes totaling $1,511,047 pursuant to FASB ASC 470-20-30, Debt.
The discount is being amortized over the life of the notes.



Convertible
notes payable – related party



During
2016, Todd Davis (Note 9) converted accrued salary and accrued payroll taxes for a total of into a long term note payable bearing an
interest rate of eight percent (8%) per annum, due on demand. The note was convertible into shares of our common stock at a rate of $0.026
per share. As of September 30, 2020, there was an outstanding principal balance of $1,072,185 and accrued interest of $327,484. On September
30, 2021, the principal and accrued interest were converted into common stock (Note 9).



F-13









ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



6.
Payroll and Payroll Taxes Payable



The
Company’s payroll and payroll taxes payable consisted of the following at the respective balance sheet dates:



Schedule of Payroll and Taxes Payable

|                               |  | September
    30, |         |  | September
    30, |  
|------------------------------ |  | ----------------- | ------- |  | ----------------- | -
|                               |  | 2022              |         |  | 2021              |  
|Accrued
    payroll - Officer  |  | $                 | -       |  |                   | $
|Accrued
    payroll - Employee |  |                   | 128,105 |  |                   |  
|Accrued
    payroll taxes      |  |                   | 787,125 |  |                   |  
|Total                          |  | $                 | 915,230 |  |                   | $



During
September 2021, $954,000 in accrued payroll – officer was settled through the issuance of Series Z Preferred Stock (Note 9).



During
August 2022, approximately $240,000 in accrued payroll – officer was settled through an exchange agreement (Note 9).



7.
Stockholders’ Deficit



On
January 25, 2021, the Company amended its articles of incorporation to increase its authorized shares to 1,000,000,000 shares and 10,000,000
shares of the Company’s common stock and preferred stock, respectively.



The
Company’s common stock shares have equal voting rights, are non-assessable and have one vote per share. As of September 30, 2022
and 2021, the Company’s issued and outstanding common stock totaled 501,376,264 and 486,313,058, respectively.



The
Company’s Series A Preferred Stock shares have voting rights in the ratio of 25 votes to 1 share held. During the year ended September
30, 2021, 5,472,000 shares of Series A Preferred Stock were exchanged for 9,000,000 shares of the Company’s common stock. As of
September 30, 2022 and 2021, the Company’s issued and outstanding Series A Preferred Stock totaled 1,824,000, respectively.



The
Company’s Series H Preferred Stock shares have voting rights equal to the aggregate of all other voting rights plus 1 and each
share is convertible into 10 shares of the Company’s common stock. As of September 30, 2022 and 2021, the Company’s issued
and outstanding Series H Preferred Stock totaled 4,878,049 and -0-, respectively,



The
Company’s Series Z Preferred Stock shares have voting rights equal to the aggregate of all other voting rights plus 1 and each
share is convertible into 100 shares of the Company’s common stock. Additionally, the Series Z Preferred Stock carries a cumulative
dividend at 4.56% of the stated value, is to be paid in kind with common stock, and is payable only at the time the shares are converted
to common stock. As of September 30, 2022 and 2021, the Company’s issued and outstanding Series Z Preferred Stock totaled -0-,
respectively, and the Series Z Preferred Stock was retired by the Company during August 2022.



F-14









ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Issuances
pursuant to private placements



During
the year ended September 30, 2021, we issued shares of our common stock under private placement agreements for proceeds received as follows:

Schedule
of Common Stock Issued

|Date       |  | Shares |           |  | Proceeds |  
|---------- |  | ------ | --------- |  | -------- | -
|10/19/2020 |  |        | 650,000   |  |          | $
|11/3/2020  |  |        | 228,572   |  |          |  
|11/13/2020 |  |        | 2,512,563 |  |          |  
|12/14/2020 |  |        | 232,560   |  |          |  
|12/31/2020 |  |        | 700,000   |  |          |  
|1/29/2021  |  |        | 700,000   |  |          |  
|2/26/2021  |  |        | 312,500   |  |          |  
|7/28/2021  |  |        | 1,694,916 |  |          |  
|           |  |        | 7,031,111 |  |          | $



Issuances
for services



During
the year ended September 30, 2022, we issued shares of our common stock for services as follows:  Date
    Shares
    Expense10/25/2021
    6,211,180
    $300,0005/9/2022
    3,500,000
    133,0005/9/2022
    600,000
    22,80010,311,180
    $455,800  During
the year ended September 30, 2021, we issued shares of our common stock for services as follows:  Date
    Shares
    Expense10/28/2020
    200,000
    $9,60010/31/2020
    300,000
    16,2602/3/2021
    977,778
    117,3334/23/2021
    1,000,000
    145,0007/1/2021
    1,900,000
    190,9507/1/2021
    54,506
    5,4787/1/2021
    250,000
    25,1257/21/2021
    1,875,000
    150,1888/9/2021
    775,212
    61,0877,332,496
    $721,021




F-15











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Issuances
for financing costs and default penalty



On
February 1, 2021, the Company issued 12,000,000 shares of common stock valued at $1,358,400 to Noteholder C to amend the conversion terms
of the October 11, 2019, convertible note payable (Note 5) from containing a variable conversion rate to a fixed conversion rate at $0.054
per share. The amendment resulted in a reduction of the derivative liability totaling $2,223,503.



On
May 10, 2021, the Company issued 420,000 shares of common stock valued at $57,960 to Noteholder F in connection with the May 10, 2021,
convertible note agreement (Note 5).



On
May 29, 2021, the Company issued 4,000,000 shares of common stock valued at $419,600 to Noteholder J in connection with the May 29, 2021,
note agreement (Note 5).



During
October 2021, the Company and Noteholder J agreed to modify the terms of the May 2021 note payable agreement. The maturity of the note
was extended from November 2021 to April 2022. In return, the Company agreed to issue Noteholder J a total of 2,562,500 shares of common
stock valued at $135,813.



During
May 2022, the Company and Noteholder J agreed to roll the May 2021 note agreement into a new note. In return, the Company agreed to issue
Noteholder J a total of 8,928,571 shares of common stock valued at $294,643.



During
April 2022, the Company’s common stock was no longer quoted on OTC, resulting in a default under the terms of the May 2021 note
agreement with Noteholder F (Note 5). To prevent Noteholder F from triggering default provisions, the Company and Noteholder F agreed
that the Company would issue 9,761,904 common shares valued at $584,738.



Issuances
for debt settlements



During
the year ended September 30, 2022, we issued shares of our common stock for the settlement of convertible debt and related interest as
follows:  Settlement
    of
    Settlement
    of
    Settlement
    ofDate
    Shares
    Principal
    Interest
    Derivative4/20/2022
    4,111,111
    $-
    $222,000
    $-  During
the year ended September 30, 2021, we issued shares of our common stock for the settlement of convertible debt and related interest as
follows:  Settlement
    of
    Settlement
    of
    Settlement
    ofDate
    Shares
    Principal
    Interest
    Derivative10/30/2020
    1,700,000
    $50,660
    $-
    $42,47211/5/2020
    6,961,000
    137,222
    20,445
    239,61511/30/2020
    13,885,210
    300,000
    14,500
    883,22912/2/2020
    2,000,000
    98,800
    -
    131,36012/16/2020
    1,825,000
    108,240
    28,818
    123,7681/12/2021
    1,500,000
    102,000
    -
    67,0772/8/2021
    1,383,000
    61,700
    35,110
    110,3108/6/2021
    1,000,000
    45,900
    -
    -8/24/2021
    6,857,100
    250,000
    15,370
    -8/31/2021
    2,000,000
    71,800
    -
    -9/21/2021
    2,510,000
    57,300
    12,980
    -41,621,310
    $1,283,622
    $127,223
    $1,597,831




F-16











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





Warrants
outstanding



During
October 2021, the Company issued warrants for the purchase of 187,500 shares of common stock with a total value of $7,587 as financing
costs. These warrants expire after five years and have an exercise price of $0.08.



During
December 2021, the Company issued warrants for the purchase of 10,288,066 shares of common stock with a total value of $353,319 as financing
costs. The warrants expire after five years and have an exercise price of $0.06.



During
May 2022, the Company issued warrants for the purchase of 5,000,000 shares of common stock with a total value of $162,332 as financing
costs. The warrants expire after five years and have an exercise price of $0.06.



During
August 2022, the Company issued warrants for the purchase of 88,731,145 shares of common stock in connection with a convertible note
payable (Note 5). The warrants expire after five years and have an exercise price of $0.02695.



A
summary of the status of the Company’s warrant grants as of September 30, 2022 and the changes during the two years then ended
is presented below:

Schedule of Warrants

|                                      |  |          |             |   |                    |   |      | Weighted-Average    
|------------------------------------- |  | -------- | ----------- | - | ------------------ | - | ---- | --------------------
|                                      |  |          |             |   | Weighted-Average   |   |      | Remaining           
|                                      |  | Warrants |             |   | Exercise
    Price |   |      | Contractual
    Life
|Outstanding
    at September 30, 2020 |  |          | 20,750,000  |   |                    | $ | 0.12 |                     
|Outstanding
    at September 30, 2021 |  |          | 20,750,000  |   |                    | $ | 0.12 |                     
|Granted                               |  |          | 104,206,711 |   |                    |   | 0.03 |                     
|Cancelled                             |  |          | (36,038,066 | ) |                    |   | 0.09 |                     
|Outstanding
    at September 30, 2022 |  |          | 88,918,645  |   |                    | $ | 0.03 |                     
|Exercisable
    at September 30, 2022 |  |          | 88,918,645  |   |                    | $ | 0.03 |                     



Options
outstanding



During
August 2022, the Company issued options for the purchase of 22,500,000 shares of common stock in connection with a convertible note payable
(Note 5). The options expire after one year and have an exercise price of $0.01.



A
summary of the status of the Company’s option grants as of September 30, 2022 and the changes during the year then ended is presented
below:

Summary
of Stock Option Grants

|                                      |  |         |            |  |                    |   |      | Weighted-Average    
|------------------------------------- |  | ------- | ---------- |  | ------------------ | - | ---- | --------------------
|                                      |  |         |            |  | Weighted-Average   |   |      | Remaining           
|                                      |  | Options |            |  | Exercise
    Price |   |      | Contractual
    Life
|Outstanding
    at September 30, 2021 |  | -       |            |  | $                  | - |      |                     
|Granted                               |  |         | 22,500,000 |  |                    |   | 0.01 |                     
|Outstanding
    at September 30, 2022 |  |         | 22,500,000 |  |                    | $ | 0.01 |                     
|Exercisable
    at September 30, 2022 |  |         | 22,500,000 |  |                    | $ | 0.01 |                     



F-17







ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



8.
Commitments and Contingencies



Serious
Promotions, Inc.



In
June 2022, Serious Promotions, Inc. filed a Petition before the American Arbitration Association seeking monetary damages against Khode,
LLC, a joint venture entered into by Serious Promotions and the Company. Serious Promotions alleges that Khode failed to make certain
payments of fees related to the Endorsement and License Agreement entered into by Serious Promotions and its president Khaled Mohamed
Khaled (p/k/a DJ Khaled). Serious Promotions seeks $6,250,000 in damages.



In
July 2022, Khode, joined as a party by the Company, filed counterclaims against Serious Promotions, Khaled and Impact Brokers for breach
of the Endorsement and License Agreement and related violations of legal duties, seeking damages in an amount no less than $100,000,000.



Although
this arbitration is in its early stages, the Company is confident in its position, will vigorously defend its position, and prosecute
its counterclaims, and ultimately expects rulings in its favor.



Contracts
and commitments



On
May 7, 2018, we assumed two consulting agreements for the two principals of Go Green Global Enterprises, a Nevada Corporation, when we
acquired them. The consultants provide general business services as needed by the Company, and the term of the contract is for one year
and automatically renews from year to year after that, compensation is set at a monthly fee of $5,000, and a 10% perpetual fee of 10%
of the gross revenues generated by the project currently under formation. The contract also has provisions for reimbursement of all expenses
incurred by them in conjunction of performing their duties.



On
January 11, 2019, we entered into a joint venture agreement with a biometric company (GFE), in conjunction with our Jamaica financial
interest, Go Green Global. GFE will contribute use of its software licenses, payment solutions software, and to assist with capital raises
and build all building required for redevelopment. We agreed to use of our M3Hub and Gorilla Tek Technologies globally and use of our
150 acre grow facility in Jamaica. GFE agreed to fund the purchase of the property and retrofitting of existing buildings and making
the operation fully functional.



On
January 28, 2019, we entered into an agreement with a third party to represent our products to customers, the term of the agreement is
for four (4) years from the date of the contract, January 28, 2023, and has automatic four-year renewal clauses. We agreed to pay a commission
of nineteen percent (19%), composed of ten percent (10%) for commission, two percent (2%) for override, and seven percent (7%) for expenses
of managing and advertising the account. Within thirty (30) days of the end of the calendar year, we agreed to pay the representative
a bonus for certain sales milestones if two percent (2%) of the net receipts, payable in shares of our restricted common stock.



From
time to time, we enter into consulting agreements for our products to be represented to certain customers or geographic areas. The terms
of these agreements range from one (1) to five (5) years, and some include automatic one-year renewal clauses. As part of the agreement,
commissions of ten percent (10%) are paid for sales with no distributor involved, and commissions of seven percent (7%) are paid for
sales with a distributor. Depending on the consultant’s performance and achievement of certain milestones, the Company also may
issue a stock bonus.



F-18











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



On
October 1, 2020, the Company entered into an LLC operating agreement for the formation of Khode, LLC. Pursuant to the operating agreement,
the Company owns 70% of Khode, LLC. To date, the operations in Khode have been nominal and no non-controlling interest has been allocated.



On
October 1, 2020, the Company entered into a one-year agreement for strategic, creative, and operational support for marketing. The agreement
expired on September 30, 2021.



During
October 2020, the Company entered into a five-year endorsement contract with an American DJ, record executive and producer, and media
personality. Pursuant to the endorsement contract, the Company is to make quarterly payments totaling $5,000,000 by July 1, 2025. During
the year ended September 30, 2021, the Company paid $1,000,000 under this contract. The agreement was terminated during the year ended
September 30, 2022.



One
of the Company’s subsidiaries entered into a lease agreement for retail space in Jamaica effective October 2018. The Company records
rent expense associated with this lease on the straight-line basis in conjunction with the terms of the underlying lease. The lease expired
after 36 months in October 2021 and required monthly lease payments of approximately $3,250.



9.
Related Party Transactions



Todd
Davis, CEO and CFO, employment agreement



During
April 2005, the Company entered into an employment agreement with Todd Davis providing for an annual salary of $156,000.



On
October 1, 2016, Todd Davis, President and Chief Executive Officer converted accrued salary and accrued payroll taxes for a total of
$1,157,500 into a long term note payable bearing an interest rate of eight percent (8%) per annum, due on demand (Note 5). The note was
convertible into shares of our common stock at a rate of $0.026 per share.



On
September 30, 2021, Mr. Davis converted the $1,072,185 in principal and $348,928 in related accrued interest related to the October 2016
convertible note payable (Note 5) into 54,658,192 shares of the Company’s common stock under the terms of the convertible note
agreement. The excess accrued interest totaling $64,332 was forgiven by Mr. Davis, resulting in a capital contribution to the Company
totaling $64,332. Concurrently, the Company and Mr. Davis entered into an exchange agreement whereby the Company issued Mr. Davis 691,859
shares of Series Z Preferred Stock as follows:





| | ● | 546,582
                                            shares of Series Z Preferred Stock exchanged for the 54,658,192 shares of common stock                                                                                                                                                                                                                                                           
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | 145,277
                                            shares of Series Z Preferred Stock issued to settle $954,000 in accrued officer compensation.
                                            The 145,277 shares of Series Z Preferred Stock were valued at $743,818, resulting in a capital
                                            contribution of $210,182 on the settlement of the liability.



The
Company’s accrued officer compensation (Note 6) as of September 30, 2021, substantially consists of amounts owed pursuant to the
employment agreement which weren’t converted into the 2016 note or settled in the 2021 settlement.



Effective
September 1, 2022, the Company and Mr. Davis entered into an employment agreement providing for a salary of $10,000 per month.



F-19











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Rayne
Forecast Inc. consulting agreement



Rayne
Forecast, Inc. (RFI), an entity owned by the CEO, is a party with the Company to a Consulting Agreement, pursuant to which the CEO, through
RFI, provides certain services to the Company in connection with his role as the Company’s CEO and is compensated, through RFI,
for certain services rendered to the Company. Pursuant to the terms of the Consulting Agreement, as amended, the Company shall pay to
the CEO a minimum fee of $50,000 up to a maximum fee of $500,000 for the CEO’s reasonable services in any merger or acquisition
involving the Company. The agreement provides that any such fees are not “finder’s fees” and are not to be calculated
on the basis of any percentage of the amount of any financing or the deemed monetary value of any merger or acquisition transaction.
The fees may be paid in Company stock or cash depending, among other items, on the cash availability of the Company. On September 30,
2021, the Company and RFI entered into an exchange agreement whereby the Company issued RFI 27,712 shares of Series Z Preferred Stock
in exchange for the settlement of $141,883 due to RFI under the Consulting Agreement.



Black
Mountain Botanical



During
the years ended September 30, 2022 and 2021, Black Mountain Botanical (BMB), an entity owned by the wife of Mr. Davis, received $172,115
and $97,181, respectively, for procurement, payment and pricing services.



Contribution
and Exchange Agreement



Effective
August 31, 2022, in connection with the Hyla Acquisition Agreement (Note 10), Mr. Davis, RFI, and the Company entered into a Contribution
and Exchange Agreement (the “Davis/Rayne Contribution Agreement”). Under the terms of the Davis/Rayne Contribution Agreement,
Mr. Davis and RFI surrendered 20,612,060 shares of common stock and 719,571 shares of Series Z Preferred Stock in exchange for 30% ownership
in CBD Unlimited, Inc.



10.
Equity Method Investment and Note Receivable



Hyla
US Holdco Limited



Effective
August 31, 2022, the Company closed the transactions (the “Hyla Transaction Closing Date”) contemplated by a Control Acquisition
Agreement (the “Hyla Acquisition Agreement”) with HYLA UK Holdco Limited, a United Kingdom limited company (the “Seller”).
Pursuant to the terms of the Hyla Acquisition Agreement, we purchased (the “Hyla Transaction”) 51% of the issued and outstanding
capital stock of Hyla US Holdco Limited, a Delaware corporation (“Hyla”), a wholly-owned operating subsidiary of the Seller.



We
issued to the Seller 4,878,049 shares of our newly constituted Series H Convertible Preferred Stock (the “Hyla Series H Preferred”).
We valued those shares at an aggregate of $2,000,000, which was based upon an as-converted-into-our Common Stock value of $0.041 per
share. The per-share price was the closing price of our Common Stock, par value $0.0001 per share (our “Common Stock”), as
reported by the OTC Markets Group Inc. (the “OTCM”), on August 19, 2022, the date on which certain of the initial set of
Hyla Transaction-related draft documents were circulated for signature.



As
of September 30, 2022, the Company did not control Hyla and recorded an equity method investment for $2,000,000 at September 30, 2022.



F-20











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Additionally,
as part of the Hyla Acquisition Agreement, the Company is obligated to pay to the Seller
a Self-financing Promissory Note (our “Self-financing Note”) with a term of up to nine years. The initial principal balance
of the Self-financing Note is $8,000,000 and it bears interest at an annual simple interest rate of 3.15%, which is the Internal Revenue
Service’s August 2022 Applicable Federal Rate for promissory notes with terms from three to nine years. Upon an Event of Default
(as such term is defined in the Self-financing Note), the interest rate will increase to 6.3% per annum until such Event of Default has
been cured or the debt has been paid in full. Under the Note, the Company will be obligated to make payments of principal and interest
on a quarterly basis, in arrears (each, a “Quarterly Payment”). The amount of principal and interest due to the Seller for
each of our Quarterly Payments is calculated pursuant to a formula set forth in the Self-financing Note, the components of which are
derived from a matrix that consists of Hyla’s quarterly gross sales revenues and its gross sales margin. Each Quarterly Payment
shall, at the option of the Seller, be paid either in cash or through the issuance of shares of our Common Stock. The pricing of those
shares will be determined by the volume weighted average price of our Common Stock as of the last business day of the relevant quarter.
The Self-financing Note is subject to an “ownership limitation” such that the Seller cannot request that it be issued shares
of our Common Stock as payment if such issuance would result in the Seller holding more than 4.99% of the then-issued and outstanding
shares of our Common Stock (a “Conversion or Exercise Blocker”). We may pre-pay our Self-financing Note in whole or in part
at any time without premium or penalty.



In
connection with the Hyla Transaction, Hyla and we entered into an Intercompany Services Agreement (the “Hyla ISA”), pursuant
to the provisions of which, we agreed to provide to Hyla certain human resources, marketing, information technology, and other administrative
services that are necessary to support its business. We will invoice Hyla on a monthly basis for our performance of the services thereunder,
and for which Hyla will pay us in accordance with the provisions of the HYLA ISA. The initial term of the Hyla ISA is nine years and
it is subject to renewal for successive 12-month periods.



In
connection with the Hyla ISA, Hyla issued to us its two-year Promissory Note in the principal amount of $1,500,000, which accrues interest
at the rate of 10% per annum (“Hyla’s ISA Note”). Principal and interest payments thereunder are due and payable monthly.
Upon an Event of Default (as such term is defined in Hyla’s ISA Note), the interest rate increases to 18% per annum until such
Event of Default has been cured or the debt has been paid in full. The principal amount is due and payable on or before August 31, 2024.



11.
Income Taxes



The
Company accounts for income taxes under ASC 740-10, which provides for an asset and liability approach of accounting for income taxes.
Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently
enacted tax laws, attributed to temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts calculated for income tax purposes.



The
components of income tax expense for the years ended September 30, 2022 and 2021 consist of the following:

Schedule of Components Income Tax Expense

|                                            |  | 2022 |     |   | 2021 | 
|------------------------------------------- |  | ---- | --- | - | ---- | 
|Federal
    and State tax at statutory rate |  |      | 26  | % |      | 
|Temporary
    differences                   |  |      | 3   | % |      | 
|Permanent
    differences                   |  |      | -2  | % |      | 
|Valuation
    allowance                     |  |      | -27 | % |      | 
|Effective
    rate                          |  |      | 0   | % |      | 



Significant
components of the Company’s deferred tax assets as of September 30, 2022 and 2021 are summarized below.

Schedule
of Deferred Tax Assets

|                                     |  | 2022 |            |   | 2021 |  
|------------------------------------ |  | ---- | ---------- | - | ---- | -
|Deferred
    tax assets:             |  |      |            |   |      |  
|Net
    operating loss carryforwards |  | $    | 4,838,000  |   |      | $
|Valuation
    allowance              |  |      | (4,838,000 | ) |      |  
|Deferred
    tax assets              |  | $    | -          |   |      | $



F-21











ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



As
of September 30, 2022 and 2021, the Company had approximately $18,608,000 and $14,347,000, respectively, of federal net operating loss
carry forwards. Future utilization of the net operating loss carry forwards is subject to certain limitations under Section 382 of the
Internal Revenue Code. The Company believes that there has not been any transaction to warrant any limitation of any previous operating
losses.



To
the extent that the tax deduction is included in a net operating loss carry forward and is in excess of amounts recognized for book purposes,
no benefit will be recognized until the loss carry forward is recognized. Upon utilization and realization of the carry forward, the
corresponding change in the deferred asset and valuation allowance will be recorded as additional paid-in capital.



The
Company provides for a valuation allowance when it is more likely than not that it will not realize a portion of the deferred tax assets.
The Company has established a valuation allowance against the net deferred tax asset due to the uncertainty that enough taxable income
will be generated in those taxing jurisdictions to utilize the assets. Therefore, we have not reflected any benefit of such deferred
tax assets in the accompanying financial statements. Our net deferred tax asset and valuation allowance increased by $1,109,000 and $1,908,000
during the years ended September 30, 2022 and 2021, respectively.



The
Company reviewed all income tax positions taken or that we expect to be taken for all open years and determined that our income tax positions
are appropriately stated and supported for all open years. The Company is subject to U.S. federal income tax examinations by tax authorities
for years after 2013 due to unexpired net operating loss carryforwards originating in and subsequent to that year. The Company may be
subject to income tax examinations for the various taxing authorities which vary by jurisdiction. The Company has not filed its tax returns
since 2013. The Company estimates that the amount of penalties, if any, will not have a material effect on the results of operations,
cash flows or financial position. No provisions have been made in the financial statements for such penalties, if any. The Company is
working with its accountants to prepare and file past due federal tax returns for 2013 through 2022, which are anticipated to be completed
and filed in 2023.



F-22











Item
9. Changes in and Disagreements with Accountants on Accounting And Financial Disclosure



None.



Item
9a. Controls and Procedures



Evaluation
of Disclosure Controls and Procedures



We
maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to
ensure that information required to be disclosed in our reports under the Exchange Act, is 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 our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions
regarding required disclosure.



We
carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer
and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) as of the year ended December 31, 2018. Based on this evaluation, our principal executive officer and principal
financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2018.



Management’s
Annual Report on Internal Control over Financial Reporting



Our
management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Rule
13a-15(f) under the Exchange Act). Internal control over financial reporting is a process, including policies and procedures, designed
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
reporting purposes in accordance with U.S. generally accepted accounting principles. Our management assessed our internal control over
financial reporting using the criteria in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”). Our system of internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements.



Based
on our evaluation under the framework in COSO, our management concluded that our internal controls over financial reporting were ineffective
as of December 31, 2018 based on such criteria. Deficiencies then existed in the design or operation of our internal controls over financial
reporting that adversely affected our internal controls and that may then have been considered to be material weaknesses. The matters
involving internal controls and procedures that our management then considered to have been material weaknesses were:



|(i)  | inadequate
    segregation of duties and effective risk assessment; and              
|---- | -------------------------------------------------------------------------------------
|     |                                                                                      
|(ii) | insufficient
    staffing resources resulting in financial statement closing process.



The
weaknesses and the related risks were not uncommon in a company of our size because of the limitations in the size and number of staff.
To address these material weaknesses, our Chief Financial Officer performed additional analyses and other procedures, including the retention
of qualified accounting professionals and the employment of a Controller in September 2018 to assist with the preparation of our financial
statements, to ensure that the financial statements included herein fairly present, in all material respects, our financial position,
results of operations, and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this
report fairly present, in all material respects, our financial condition, results of operations, and cash flows for the periods presented.
As of December 31, 2020, our management concluded that our internal controls over financial reporting, as of December 31, 2020, were
no longer ineffective based on the above-referenced criteria.





30









By
virtue of our receipt of additional financing during our 2020 fiscal year, we undertook remediation measures to address the above-described
two-year old material weaknesses described in this Annual Report. Such remediation activities included the following:



|(i)  | we
    updated the documentation of our internal control processes, including formal risk assessment of our financial reporting processes;
    and                    
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                       
|(ii) | we
    implemented procedures pursuant to which we can now ensure segregation of duties and hired additional resources to ensure appropriate
    review and oversight.



Notwithstanding
the changes to our system of internal controls during the preceding two fiscal years, as described herein, a control system, no matter
how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met
under all potential conditions, regardless of how remote, and may not prevent or detect all errors and all fraud. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within
the 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 a simple error or mistake. Our internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles.



Auditor’s
Report on Internal Control Over Financial Reporting



This
Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control
over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm
pursuant to the rules of the SEC that permit us to provide only management’s report in this Annual Report.



Changes
in Internal Control over Financial Reporting



There
were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.



Item
9b. Other Information



Hyla
Investment and Related Transactions



Effective
August 31, 2022, we closed a transaction contemplated by the Hyla August Agreement with HYLA UK. Pursuant to the terms thereof, we, through
our specially formed transaction subsidiary, purchased 51% of the issued and outstanding capital stock of Hyla US Holdco Limited, a wholly-owned
operating subsidiary of Hyla UK. We are holding that 51% as an investment.



Hyla
produces and sells organic, plant-based, all-natural, zero-nicotine vape products. Each Hyla device contains a natural guarana extract
that is blended with proprietary botanical formulas. Hyla launched its products in October 2021 and its initial inventory (140,000 devices)
was sold out the following month. Hyla’s products bear the Underwriters Laboratories global safety certification and are CE approved.



The
Hyla Transaction was paid through the issuance (i) of shares of our capital stock and (ii) our contingent promissory note. We issued
to Hyla UK approximately 4,878,049 shares of our newly constituted Series H Stock. We valued those shares at an aggregate of two million
dollars, which was based upon an as-converted-into-our Common Stock value of $0.041 per share. The per-share price was the closing price
of our Common Stock, par value $0.0001 per share, as reported by the OTCM on August 19, 2022, the date on which certain of the initial
set of Hyla Transaction-related draft documents were circulated for signature. We also issued to Hyla UK our Self-financing Promissory
Note (our “Self-financing Note”) with a term of up to nine years. The initial principal balance of our Self-financing Note
is $8 million and it bears interest at an annual simple interest rate of 3.15%, which is the Internal Revenue Service’s August
2022 Applicable Federal Rate for promissory notes with terms from three to nine years. We are obligated to make payments of principal
and interest on a quarterly basis, in arrears (each, a “Quarterly Payment”). The amount of each of our Quarterly Payments
is calculated pursuant to a formula set forth in the Self-financing Note, the components of which are derived from a matrix that consists
of Hyla’s quarterly gross sales revenues and its gross sales margin.





31







Certificate
of Designation of Rights, Privileges, Preferences, and Limitations of Series H Convertible Preferred Stock



To
establish our Series H Stock, we filed a Certificate of Designation of Rights, Privileges, Preferences, and Limitations of Series H Convertible
Preferred Stock with the Secretary of State of the State of Nevada on August 25, 2022 (the “Series H CoD”). The Series H
Stock has a par value of $0.0001 per share and a stated value of $0.41 per share. Each share of Series H Stock may be initially converted
into 10 shares of our Common Stock, subject to adjustment due to merger, consolidation, exchange of shares, recapitalization, reorganization,
or similar events, all as set forth in the Series H CoD. The holders of the Series H Stock are entitled to receive dividends in an aggregate
amount equal to the total amount of any dividends that we declare, pay, or set aside for the holders of shares of our Common Stock. The
holders of Series H Stock shall vote together as a single class, but otherwise have the same voting rights as the holders of shares of
our Common Stock except that the holders of the Series H Stock are entitled to an aggregate vote equivalent to one share in excess of
the maximum potential vote of the aggregate of the other classes or series of our then-issued and outstanding equity voting shares on
any occasion when the vote of the holders of our voting equity is held. Further, for so long as shares of Series H Stock are outstanding,
the holders of the majority of the Series H Stock shall have the right to appoint two of our directors, while the other three directors
will be appointed by the vote of a majority of our Common Stock and the Series H Stock, the holders thereof exercising their variable
basis voting rights. The Series H Stock has a liquidation preference to our Common Stock equal to $0.41 per share. As of the date of
this Annual Report on Form 10-K, none of the holders of the Series H Stock has exercised any board appointment rights.



Self-financing
Note



Pursuant
to the Hyla August Agreement, we issued to Hyla UK our Self-financing Note in the principal amount of $8 million, which accrues interest
at the rate of 3.15% per annum. Upon an Event of Default (as such term is defined in the Self-financing Note), the interest rate will
increase to 6.3% per annum until such Event of Default has been cured or the debt has been paid in full. The amount of principal and
interest due to Hyla UK for each of our Quarterly Payments is calculated pursuant to a formula set forth in the Self-financing Note,
the components of which are derived from a matrix that consists of Hyla’s quarterly gross sales revenues and its gross sales margin.
Each Quarterly Payment shall, at the option of Hyla UK, be paid either in cash or through the issuance of shares of our Common Stock.
The pricing of those shares will be determined by the volume weighted average price of our Common Stock as of the last business day of
the relevant quarter. The Self-financing Note is subject to an “ownership limitation” such that Hyla UK cannot request that
it be issued shares of our Common Stock as payment if such issuance would result in Hyla UK holding more than 4.99% of the then-issued
and outstanding shares of our Common Stock (a “Conversion or Exercise Blocker”). We may pre-pay our Self-financing Note in
whole or in part at any time without premium or penalty. As of the date of this Annual Report on Form 10-K, we have not made any of the
Quarterly Payments under the Self-financing Note but are not in default of our obligations thereunder as we have not received from Hyla
the information required to calculate the Quarterly Payments.



Intercompany
Services Agreement



In
connection with the Hyla Transaction, Hyla and we entered into an Intercompany Services Agreement (the “Hyla ISA”), pursuant
to the provisions of which, we agreed to provide to Hyla certain human resources, marketing, information technology, and other administrative
services that are necessary to support its business. We will invoice Hyla on a monthly basis for our performance of the services thereunder,
and for which Hyla will pay us in accordance with the provisions of the HYLA ISA. The initial term of the Hyla ISA is nine years and
it is subject to renewal for successive 12-month periods.





ISA-related
Promissory Note



In
connection with the Hyla ISA, Hyla issued to us its two-year Promissory Note in the principal amount of $1.5 million, which accrues interest
at the rate of 10% per annum (“Hyla’s ISA Note”). Principal and interest payments thereunder are due and payable on
a monthly basis. Upon an Event of Default (as such term is defined in Hyla’s ISA Note), the interest rate increases to 18% per
annum until such Event of Default has been cured or the debt has been paid in full. The principal amount is due and payable on or before
August 31, 2024. As of the date of this Annual report on Form 10-K, none of the monthly payments has been made.





32







Financing
Related to the Hyla Transaction and Endexx’s On-going Obligations



In
connection with the financing that we required to effectuate the Hyla Transaction and for certain of our on-going obligations, pursuant
to a Note Purchase Agreement (the “NPA”), we sold and issued two Convertible Promissory Notes (each, an “NPA Promissory
Note”) in an aggregate principal amount of approximately $2.174 million for an aggregate purchase price of $2.0 million ($1.335
million to one of the NPA Investors and $655 thousand to the other NPA Investor) and granted two five-year Common Stock Purchase Warrants
(each, an “NPA Warrant”) that are exercisable for the purchase of up to an aggregate of approximately 88.7 million shares
(approximately 59.2 million shares to one of the NPA Investors and approximately 29.5 million shares to the other NPA Investor) of our
Common Stock (collectively, the “NPA Warrant Stock”) to two of our Historic Investors (as such term is defined in “Reduction
of Historic Promissory Obligations; Cancellation of Historic Warrants”, below; each of such Historic Investors, an “NPA Investor”).
In addition, each NPA Investor and we also entered into a Registration Rights Agreement (the “NPA Registration Rights Agreement”),
pursuant to the provisions of which we are obligated to register for resale the shares of our Common Stock that underly our NPA Promissory
Notes and our NPA Warrants. To secure our obligations to each NPA Investor under our NPA Promissory Notes, we entered into a Security
Agreement (the “NPA Security Agreement”) and an IP Security Agreement (the “NPA IP Security Agreement”), each
in favor of each NPA Investor (collectively, the “NPA Security Agreements”).



The
sale and issuance of the NPA Promissory Notes, the grant of the NPA Warrants, and the other transactions contemplated by the NPA were
completely consummated on August 31, 2022 (the “NPA Closing Date”). The NPA also granted to each NPA Investor a one-year
option to purchase up to an aggregate of 22.5 million shares of our Common Stock (20 million shares for one NPA Investor and 2.25 million
shares for the other NPA Investor) at a per-share exercise price of $0.01 (collectively, the “NPA Options”). Exercise of
the NPA Options is subject to the Conversion or Exercise Blocker.



Each
NPA Promissory Note is due on the 12-month anniversary of the NPA Closing Date and is secured by all of our assets (including the equity
of each of our partially and wholly-owned subsidiaries) pursuant to the provisions of the NPA Security Agreements. Initially, the NPA
Promissory Notes are convertible into shares of our Common Stock (the “NPA Conversion Stock”) at an initial, fixed conversion
price of $0.0245 per share, subject to adjustment due to merger, consolidation, exchange of shares, recapitalization, reorganization,
or similar event as set forth in the NPA Promissory Notes (the “NPA Conversion Price”). The NPA Promissory Notes contain
an adjustment provision that, subject to certain exceptions, reduces the conversion price if we issue shares of our Common Stock or common
stock equivalents at a price lower than the then-current NPA Conversion Price for the NPA Promissory Notes. Upon the occurrence of any
fundamental transaction, distributions, stock dividends, or other similar event, each NPA Investor will be entitled to participate in
such an event on an “as-converted” basis, and the NPA Conversion Price will be ratably adjusted upon any stock split, stock
distribution, or other similar event. Each NPA Promissory Note is subject to the Conversion or Exercise Blocker, such that the applicable
NPA Investor cannot convert any portion of its NPA Promissory Note that would result in the NPA Investor and its affiliates exceeding
the limits of the Conversion or Exercise Blocker following such conversion (excluding, for purposes of such determination, shares of
our Common Stock that will be issuable upon conversion of that portion of the holder’s NPA Promissory Note or exercise of that
portion of the holder’s NPA Warrant that had not then been converted or exercised, respectively). An NPA Promissory Note may not
be converted until the six-month anniversary of the NPA Closing Date, except in the event of an uncured Event of Default (as such term
is defined in the NPA Promissory Note). Each NPA Promissory Note accrues interest at an annual rate equal to 12% (the first 12 months
of which constitute guaranteed interest) and is due and payable on its maturity date (or sooner if an NPA Investor converts an NPA Promissory
Note or otherwise accelerates the maturity date, as provided for therein). Interest is payable in cash on the maturity date or, in shares
of our Common Stock at the then-current NPA Conversion Price if the NPA Investor were to convert an NPA Promissory Note or otherwise
accelerates the maturity date, as provided for therein.





33







We
have the right, but not the obligation, to prepay, in full, but not in part, the outstanding principal and interest under each NPA Promissory
Note prior to its maturity date. Exercise of our prepayment option requires us to pay to the then-holder of the applicable NPA Promissory
Note an amount equal to the sum of (i) the then-outstanding principal amount plus (ii) the guaranteed interest and any other outstanding
and accrued interest thereon, multiplied by 125%. We must provide five calendar days’ prior written notice to the then-holder of
the applicable NPA Promissory Note of our intention to effectuate a prepayment.



We
also granted to each of the NPA Investors an NPA Warrant for the purchase of up to an aggregate of approximately 88.7 million shares
of NPA Warrant Stock. Each NPA Warrant has a five-year term, is immediately exercisable at an exercise price of $0.02695 per share (the
“NPA Warrant Exercise Price”), subject to adjustment, and is exercisable by the then-holder on a “cashless” basis.
Each NPA Warrant contains an adjustment provision that, subject to certain exceptions, reduces the NPA Warrant Exercise Price if we issue
shares of our Common Stock or common stock equivalents at a price lower than the then-current NPA Warrant Exercise Price. Any stock splits,
reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will result in an
equitable adjustment of the NPA Warrant Exercise Price and, in certain circumstances, the number of shares of NPA Warrant Stock. Each
NPA Warrant is subject to an “ownership limitation,” such that the applicable NPA Investor cannot exercise any portion of
an NPA Warrant that would result in that NPA Investor and its affiliates holding more than the limits of the Conversion or Exercise Blocker
upon such exercise (excluding, for purposes of such determination, shares of our Common Stock remaining issuable upon the exercise of
its NPA Warrant or the conversion of its NPA Promissory Note).



Pursuant
to the provisions of the NPA Registration Rights Agreement, we are obligated to file a Registration Statement with the SEC to register
for resale the shares of Conversion Stock and the shares of NPA Warrant Stock not later than the four-month anniversary of the NPA Closing
Date. Further, we agreed to use our best efforts to have the Registration Statement declared effective by the SEC within 90 days after
we have filed it, but in no event later than 90 days after such filing, or by the 5th trading day following the date on which we are
notified that the Registration Statement will not be reviewed by the SEC or is no longer subject to further review and comments. Pursuant
to the provisions of the NPA Registration Rights Agreement, we are subject to payment of partial liquidated damages in an amount equal
to 2.0% of the aggregate purchase price paid by the applicable NPA Investor pursuant to the NPA for the NPA Promissory Note and the NPA
Warrant if we fail (i) to meet various specified filing and effectiveness dates in accordance with the schedule set forth therein or
(ii) to keep the Registration Statement effective and usable by the NPA Investors in the manner set forth therein. The NPA Investors
and we also agreed, among other things, to indemnify each NPA Investor from certain liabilities and to pay all fees and expenses that
we may incur in connection with the registration of the shares of Conversion Stock and the shares of Warrant Stock held by each NPA Investor.





34







Reduction
of Historic Promissory Obligations; Cancellation of Historic Warrants



Between
February of 2019 and May of 2022, we borrowed approximately $6.7 million from seven different investors (collectively, the “Historic
Investors”) through the issuance of a series of our Convertible Promissory Notes (collectively, the “Historic Investors Pre-Hyla
Transaction Promissory Notes”) and, with accrued interest standard rate interest through August 31, 2022, we owed the Historic
Investors approximately $9.445 million. Each of the Historic Promissory Notes accrued interest at a specified rate that increased significantly
in the event that we defaulted in our obligations thereunder. As of August 31, 2022, we may have been in default under the provisions
of some or all of the Historic Investors Pre-Hyla Transaction Promissory Notes. In connection with our initial sale and issuance of each
Historic Investors Pre-Hyla Transaction Promissory Note, we also granted to each Historic Investor a Common Stock Purchase Warrant that
provided to each Historic Investor the right to purchase shares of our Common Stock (collectively, the “Historic Investors Warrants”).
The initial aggregate number of shares of our Common Stock underlying the Historic Investors Warrants was approximately 74 million.



In
connection with, and effective upon, August 31, 2022, each of the Historic Investors and we entered into Settlement, Lock-Up, and Leak-Out
Agreements (each, a “Historic Investors Settlement Agreement”). Pursuant to the provisions of each such Agreement, each Historic
Investor agreed to exchange its Historic Investors Pre-Hyla Transaction Promissory Note and its Historic Investors Warrant for a replacement,
simple Promissory Note (collectively, the “Historic Investors Replacement Notes”). The initial principal balance of each
Historic Investors Replacement Note was equal to the sum of (i) the principal amount owed to each Historic Investor under its Historic
Investors Pre-Hyla Transaction Promissory Note and (ii) the accrued and unpaid stated rate of interest thereunder.



The
term of each Historic Investors Replacement Note is 18 months. Payments of principal thereunder are to commence on the three-month anniversary
of the NPA Closing Date – an amount that escalates through and including the 17-month anniversary, with a balloon payment due the
following month. Interest accrues during the term of each Historic Investors Replacement Note at a rate of 6.667% per annum and is also
due with the balloon payment. We may prepay the Historic Investors Replacement Notes at any time without premium or penalty. Upon an
event of default thereunder, the interest rate on the then-unpaid principal increases to 18.0% per annum until that default has been
cured or the debt has been paid in full. Upon an event of default of a Historic Investors Replacement Note, the holder thereof has the
right to pursue payment of only those amounts that were then due and payable; however, the holder does not have any right to accelerate
any future amounts due thereunder. Further, in the event that a Historic Investor obtains a judgment against us resulting from a default
under a Historic Investors Replacement Note, the Historic Investor is precluded from attaching any of (i) the Series H Stock that we
acquired in the Hyla Transaction and (ii) Hyla’s assets.



Pursuant
to the provisions of the Settlement Agreements, each Historic Investor agreed to (i) waive any default or additional interest, fees,
and penalties that otherwise might have been due under its Historic Investors Pre-Hyla Transaction Promissory Note and (ii) waive any
Common Stock conversion rights under its Historic Investors Pre-Hyla Transaction Promissory Note. Two of the Historic Investors that
owned shares of our Common Stock agreed (i) that, for a period of 12 or 18 months, they would not sell any of those shares and (ii) for
the succeeding period of 12 months, they would limit their sales of those shares to a maximum of five percent of the daily trading volume
of our Common Stock, as reported by the OTCM. A third Historic Investor that, because it is also an NPA Investor, is not party to such
an agreement.



Todd
Davis Agreements



Effective
as of August 31, 2022, we entered into a series of agreements with our president, Todd Davis, as detailed below.



Contribution
and Exchange Agreement



Mr.
Davis, Rayne Forecast Inc., an Arizona corporation that is wholly owned by Mr. Davis (“Rayne”), CBD Unlimited, Inc., a Nevada
corporation that, until then was a wholly-owned subsidiary ours (“CBDU”), and we entered into a Contribution and Exchange
Agreement (the “Davis/Rayne Contribution Agreement”). Pursuant to its terms, (i) Rayne surrendered to us for cancellation
(y) certain shares of our Common Stock then owned of record and beneficially by Rayne and (z) Mr. Davis surrendered all of the then-issued
and outstanding shares of our Series Z Convertible Preferred Stock (“Series Z Preferred”), all of which stock was owned of
record and beneficially by Mr. Davis, such that upon such cancellations, Mr. Davis and Rayne collectively remained the record and beneficial
owners of 4.99% of the then-issued and outstanding shares of our Common Stock (separate from additional shares of our Common Stock thereafter
held in an escrow, which, if released, would increase such percentage to 8.62%, calculated as if that stock had been released to Rayne
on August 31, 2022, which potential post-release percentage is equivalent to the percentage of our capital stock owned of record and
beneficially by Hyla UK (assuming that, as of August 31, 2022, Hyla UK had converted all of the shares of Series H Stock) and (ii) Mr.
Davis and Rayne contributed to us certain unpaid compensation and related items in their favor. In exchange therefor, we transferred
to Mr. Davis/Rayne that number of shares of CBDU common stock equal to 30% of its then-issued and outstanding capital stock (the “Davis/Rayne
Exchange Transaction”). Pursuant to the provisions of the Davis/Rayne Contribution Agreement, we contributed all of our operating
assets, wherever situated, and all of our liabilities directly related thereto to CBDU. As a result of the provisions of the Davis/Rayne
Contribution Agreement, CBDU became a majority-owned subsidiary of ours that we will continue to consolidate for financial reporting
purposes. Subsequent to August 31, 2022, but in connection with the Davis/Rayne Contribution Agreement and the Davis/Rayne Exchange Transaction,
we filed our Certificate of Withdrawal of Certificate of Designation for our Series Z Preferred (the “Series Z Withdrawal”)
with the Secretary of State of the State of Nevada.





35







Escrow
Agreement



Effective
as of Hyla Transaction Closing Date and as required pursuant to the provisions of the Davis/Rayne Contribution Agreement, Mr. Davis,
Rayne, a third-party escrow agent, and we entered into an Escrow Agreement (the “Davis/Rayne Escrow Agreement”), pursuant
to which Rayne delivered a number of shares of our Common Stock (the “Davis/Rayne Escrowed Shares”) to the escrow agent to
be held in escrow. Under the terms of the Davis/Rayne Escrow Agreement, the Davis/Rayne Escrowed Shares will be released to Rayne (or
Mr. Davis) upon our payment in full of each of the Historic Investors Replacement Notes.





Executive
Agreement



Effective
as of Hyla Transaction Closing Date and in connection therewith and with the Davis /Rayne Contribution Agreement and the Davis/Rayne
Exchange Transaction, Mr. Davis and we entered into a one-year Executive Agreement (the “Davis Executive Agreement”). Pursuant
thereto, Mr. Davis will continue to serve as our President and will continue to provide such services as are customary of such officeholder
and will continue to oversee CBDU’s operations, as now consolidated into CBDU. We will provide base compensation to Mr. Davis at
a rate of $10,000 per month. He will also be eligible to participate in all other benefits that we offer to our executives, including,
but not limited to, health insurance for Mr. Davis and his family members. Either of us may terminate the Davis Executive Agreement upon
30 days’ written notice for any or no reason; provided, that we can terminate Mr. Davis immediately for Cause (as such term is
defined in the Davis Executive Agreement). If we terminate the Davis Executive Agreement other than for Cause or if Mr. Davis terminates
the Davis Executive Agreement for Good Reason (as such term is defined in the Davis Executive Agreement), then we will continue to pay
to Mr. Davis his base compensation for the succeeding six months. We do not have any obligations to Mr. Davis if we terminate the Davis
Executive Agreement for Cause or if Mr. Davis terminates the Davis Executive Agreement other than for Good Reason.



The
foregoing brief summary description of certain terms and provisions of each of the Series Z Withdrawal, the Series H CoD, the NPA Warrants,
the Hyla August Agreement, the Self-financing Note, the Hyla ISA, Hyla’s ISA Note, the NPA, the NPA Promissory Notes, the NPA Warrants,
the NPA Registration Rights Agreement, the NPA Security Agreement, the NPA IP Security Agreement, the Historic Investors Settlement Agreements,
the Historic Investors Replacement Notes, the Davis/Rayne Contribution Agreement, the Davis/Rayne Escrow Agreement, and the Davis Executive
Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of each of such certificates,
securities, and agreements, a copy of the form of each of which is attached to this Annual Report on Form 10-K, as Exhibits 3.3a, 3.4,
4.11, and 10.35 through 10.48, respectively. Readers are encouraged to read each Exhibit in full for a more comprehensive understanding
of the transaction described herein.



Item
9c. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.



Not
applicable.





36









PART
III



Item
10. Directors, Executive Officers and Corporate Governance.



Directors
and Executive Officers



Our
executive officers are appointed by, and serve at the pleasure of, our Board, holding office until their death, resignation, or removal
from office. Each of our directors serve a one-year term, with the current director serving until the next annual meeting of stockholders,
until his respective successor has been duly elected and qualified, or until his death, resignation, or removal.



The
following table sets forth information regarding our executive officers and directors:



|Name                |  | Age |  | Position                                                                                                                                                                                                      |  | Date
    First Elected or 
    Appointed
|------------------- |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------
|                    |  |     |  |                                                                                                                                                                                                               |  |                                         
|Todd
    Davis      |  | 56  |  | Chairman
    of the Board, Chief Executive Officer, President, Chief Financial Officer, and Treasurer, and Audit Committee Member, Compensation
    Committee Member, and Governance and Nominating Committee |  | January
    1, 2002                     
|Steven
    Plumb    |  | 63  |  | Chief Financial Officer                                                                                                                                                                                       |  | August
    31, 2022                     
|Nick
    Mehdi      |  | 49  |  | Independent
    Director, Audit Committee Member, Compensation Committee Member, and Governance and Nominating Committee Member                                                                               |  | August
    31, 2022                     
|Dustin
    Sullivan |  | 48  |  | Independent
    Director, Audit Committee Member, Compensation Committee Member, and Governance and Nominating Committee Member                                                                               |  | March
    20, 2020                      
|Irving
    Minnaker |  | 64  |  | Independent
    Director, Audit Committee Member, Compensation Committee Member, and Governance and Nominating Committee Member                                                                               |  | September
    15, 2021                  



Todd
Davis – Chairman of the Board, Chief Executive Officer, President, and Treasurer.Mr. Davis joined us in January 2002 as
a director, and has served as our Chief Executive Officer, President, Treasurer, and Chairman of the Board since June 2004. Mr. Davis
previously worked as an investment banker in Chicago, Illinois from October 1990 to December 2000 at Thomas James Associates, Inc., Baron
Chase Securities, Inc., Lexington Securities, Inc., and Access Financial Group, Inc., where he was engaged in over 100 initial public
offerings, follow-on offerings, and private placements. Following his tenure on Wall Street, Mr. Davis worked as an independent consultant,
an advisor in the biomedical and pharmaceutical industries beginning in March 2000 through April 2003. In January 2002, he was hired
as the Chief Financial Officer of PanaMed Corporation, and was later appointed Chief Executive Officer in June 2004. Mr. Davis holds
a Bachelor of Science degree in Administrative Communications from Northern Arizona University, and has partially completed a master’s
degree in International Finance from Arizona State University. Additionally, Mr. Davis previously held Series 7 and 63 licenses from
1990 to 2002. We believe that Mr. Davis is qualified to serve on our Board because of he has served in multiple C-level positions in
public companies and has the experience and knowledge necessary to lead us. We believe that Mr. Davis’ status as our long-time
Chairman of the Board and executive officer allows him to have a great understanding of what is required to advance our business, which
qualifies him to serve on our Board.



Steven
M Plumb – Chief Financial Officer. Mr. Plumb is a seasoned senior executive and financial manager, experienced in operations,
finance, and marketing. He is a former auditor with PriceWaterhouseCoopers and KPMG. He also has a background in IT, biotech, oil and
gas, real estate, medical, and utility companies. Since 2001, Mr. Plumb has served as the president of Clear Financial Solutions, Inc.,
a consulting firm that he founded, which provides interim CFO services to small public companies. Between December of 2018 and May of
2021, he served as the Chief Financial Officer of Artella Solutions, Inc., a private medical device company; from May of 2013 through
February of 2019, as the Chief Financial Officer of ProBility Media Corp. (PBYA.PK), a Pasadena, Texas-based online training school for
skilled trades, and commencing January of 2020, as the Chief Financial Officer of DirectView Holdings, Inc. (DIRV.PK), a Boca Raton,
Florida-based security monitoring company. In his career, he has prepared SEC filings, managed investor relations, conducted mergers
and acquisition activities, developed successful offering memoranda, registration statements, and investor presentations. Steve received
his Bachelor of Business Administration degree from the University of Texas at Austin, Austin, Texas. Based on his financial background
and his wide variety of experience, we believe that M. Plumb is well suited to act as our Secretary and Treasurer.









37







Nick
Mehdi – Director. Mr. Mehdi, 49, has served as Hyla’s CEO since inception in September of 2021. Prior to joining
Hyla and commencing in May of 2019, he was the Chief Executive Officer of ZT Wireless, LLC, and from October of 2018 to October of 2018,
he was the Vice President of Operations for Sun Com Mobile, LLC. Both companies are Sugarland, Texas-based wireless communications companies.
Nick received his bachelor’s degree from University of Houston in May 2001. Based on his experience with Hyla’s products
and his position as its CEO, we believe that Mr. Mehdi is well qualified to serve as one of our directors.



Dustin
Sullivan – Director. Mr. Sullivan joined our Board in March 2020, as Chief Operating Officer. Since his resignation as
our Chief Operating Officer, Mr. Sullivan serves as an independent director. Between September 2018 and March 2020, he also served as
our Chief Operating Officer. He previously worked at Walgreens Boots Alliance, Inc. (“Walgreens”) from August 2000 to December
2015 in various roles, completing his tenure there as a Divisional Merchandise Manager. In his time at Walgreens, he worked with large
healthcare consumer packaged goods companies to launch a variety of brands within the nonprescription and healthcare business. Additionally,
he served as Divisional Merchandise Manager, where he oversaw several large prescription drugs to nonprescription drugs conversions (e.g.,
Nasacort, Flonase, and Nexium). After leaving Walgreens in December 2015, Mr. Sullivan worked at Impulse Health, LLC, serving as Vice
President of their Health and Wellness consulting division. In this role, his team lead the sales, marketing, and financial planning
of several new brands, launching in markets ranging from specialty/niche distribution to thirty thousand plus grocery, drug, and mass
retail outlets. Mr. Sullivan holds a Bachelor of Arts degree in Secondary Education, History, and Economics, and was a teacher in Chicago,
Illinois from January 1997 to January 2000. In March 2020, Mr. Sullivan resigned as our Chief Operating Officer, but remained on our
Board as an independent director. We believe that Mr. Sullivan’s background and experience in retail business development allows
him to have a great understanding of what is required to bring new products to market, which qualifies him to serve on our Board.









Irving
Minnaker – Director. Mr. Minnaker joined our Board in September 2021, as an independent director. Prior to joining the
Company, Mr. Minnaker served as a Senior Vice President of Retail Sales and Trading at Lehman Brothers from January 1986 to December
1993. Additionally, he served as Senior Vice President of Retail Sales at Prudential Financial from January 1994 to December 1996, and
Head of International Sales for Eco Building Products, Inc. from October 2010 to November 2011. Since December 2014, he has served as
an Executive Vice President at Apollo Capital Group, Inc. Mr. Minnaker is also an independent director of Chemical Technologies Holding
Corporation and Comprehensive Business Developers Inc. Mr. Minnaker holds a Bachelor of Arts in Finance from the University of Miami.



Family
Relationships



There
are no family relationships among any of our executive officers or directors.



Involvement
in Certain Legal Proceedings



In
June 2022, Serious Promotions, Inc. filed a Petition before the American Arbitration Association seeking monetary damages against Khode,
LLC, a joint venture entered into by Serious Promotions and us. Serious Promotions alleges that Khode failed to make certain payments
of fees related to the Endorsement and License Agreement entered into by Serious Promotions and its president Khaled Mohamed Khaled (p/k/a
DJ Khaled). Serious Promotions seeks $6,250,000 in damages.





38







In
July 2022, Khode, joined as a party by us, filed counterclaims against Serious Promotions, Khaled and Impact Brokers for breach of the
Endorsement and License Agreement and related violations of legal duties, seeking damages in an amount no less than $100,000,000.



Although
this arbitration is in its early stages, we are confident in our position, will vigorously defend our position, and prosecute our counterclaims,
and ultimately expect a ruling in our favor.



We
know of no other material proceedings in which any of our directors, officers, or affiliates, or any registered or beneficial stockholder
is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries, including, but
not limited to:



| | (a) | any
    petition under the federal bankruptcy laws or any state insolvency laws filed by or against, or an appointment of a receiver, fiscal
    agent, or similar officer by a court for the business or property of such person, or any partnership in which such person was a general
    partner at or within two years before the time of such filing, or any corporation or business association of which such person was
    an executive officer at or within two years before the time of such filing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | any
    conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor
    offenses);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | being
    subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction,
    permanently or temporarily enjoining such person from, or otherwise limiting, the following activities: (i) acting as a futures commission
    merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any
    other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment
    adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company,
    bank, savings and loan association, or insurance company, or engaging in or continuing any conduct or practice in connection with
    such activity; engaging in any type of business practice; or (ii) engaging in any activity in connection with the purchase or sale
    of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (d) | being
    the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority
    barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described in
    paragraph (c)(i) above, or to be associated with persons engaged in any such activity;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (e) | being
    found by a court of competent jurisdiction (in a civil action), the Commission to have violated a federal or state securities or
    commodities law, and the judgment in such civil action or finding by the Commission has not been reversed, suspended, or vacated;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (f) | being
    found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any
    federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been
    subsequently reversed, suspended, or vacated;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (g) | being
    the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently
    reversed, suspended, or vacated, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation;
    or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary
    or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order,
    or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business
    entity; or                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (h) | being
    the subject of, or a party to, any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization
    (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange
    Act), or any equivalent exchange, association, entity, or organization that has disciplinary authority over its members or persons
    associated with a member.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



Item
11. Executive Compensation.



The
following table sets forth certain compensation awarded to, earned by, or paid to the following “named executive officers,”
which term is defined as follows:



| | (a) | all individuals serving as our principal executive officer and principal
financial officer during the years ended September 30, 2022 and 2021; and                  
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                     
| | (b) | each of our three other most highly compensated executive officers who
were serving as executive officers at the end of the years ended September 30, 2022 and 2021.





39









Except
as set forth in the following table, we did not have any individuals for whom disclosure would have been required but for the fact that
the individual was not serving as an executive officer as of the end of fiscal 2022. n



|Name and Position                   |  | Fiscal  Year |      |  | Salary  ($) |   |         | Stock Awards ($) (1) |  |   | Total ($) | 
|----------------------------------- |  | ------------ | ---- |  | ----------- | - | ------- | -------------------- |  | - | --------- | 
|                                    |  |              |      |  |             |   |         |                      |  |   |           | 
|Todd Davis (2)                      |  |              |      |  |             |   |         |                      |  |   |           | 
|Chief Executive Officer, President, |  |              | 2022 |  |             | $ | 153,000 |                      |  | $ | -         | 
|and Chairman of the Board           |  |              | 2021 |  |             | $ | 156,000 |                      |  | $ | -         | 
|                                    |  |              |      |  |             |   |         |                      |  |   |           | 
|Steven M Plumb (3)                  |  |              |      |  |             |   |         |                      |  |   |           | 
|Chief Financial Officer             |  |              | 2022 |  |             | $ | 5,000   |                      |  | $ | -         | 
|                                    |  |              |      |  |             |   |         |                      |  |   |           | 
|Ronald Cotting (4)                  |  |              |      |  |             |   |         |                      |  |   |           | 
|Director of Operations              |  |              | 2022 |  |             | $ | 125,000 |                      |  | $ | -         | 
|                                    |  |              | 2021 |  |             | $ | 125,000 |                      |  | $ | -         | 
|                                    |  |              |      |  |             |   |         |                      |  |   |           | 
|Stephen A. Herron, Sr. (5)          |  |              |      |  |             |   |         |                      |  |   |           | 
|Director of Sales                   |  |              | 2022 |  |             | $ | 125,000 |                      |  | $ | -         | 
|                                    |  |              | 2021 |  |             | $ | 125,000 |                      |  | $ | -         | 



| | (1) | For
    valuation purposes, the dollar amount shown is calculated based on the market price of our Common Stock on the grant dates. The number
    of shares granted, the grant date, and the market price of such shares for each named executive officer is set forth below.                                                                    
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Mr.
    Davis was appointed as our Chief Financial Officer on January 1, 2002 and as our Chief Executive Officer, President, Treasurer, and
    Chairman of the Board on June 4, 2004, and served as our Chief Financial Officer and Treasurer until August 31, 2022. Effective September 1, 2022, Mr. Davis’ annual compensation became $120,000.
| | (3) | Mr. Plumb joined the Company as our Chief Financial Officer and Secretary
on August 29, 2022.                                                                                                                                                                                                                                                     
| | (4) | Mr.
    Cotting joined the Company as our Director of Operations (a non-executive officer level position) on April 1, 2020.                                                                                                                                                                                                                       
| | (5) | Mr.
    Herron joined the Company as our Director of Sales (a non-executive officer level position) on April 1, 2020.                                                                                                                                                                                                                             



Narrative
Disclosure to Summary Compensation Table



The
following is a discussion of the material information that we believe is necessary to understand the information disclosed in the foregoing
Summary Compensation Table.





40







Todd
Davis



On
April 4, 2005, we entered into an employment agreement with Mr. Davis. Pursuant to the employment agreement, Mr. Davis is entitled to
a base salary of $156,000 per year. Mr. Davis is also eligible to receive an annual bonus as provided for under an annual incentive plan
sponsored and maintained by us and/or as the Board determines in its discretion, as well as options to purchase shares of Common Stock
as the Board determines in its discretion. In addition to certain payments due to Mr. Davis upon termination of employment, the employment
agreement contains customary non-competition, non-solicitation, and confidentiality provisions. Finally, Mr. Davis is eligible for certain
other welfare, pension, and incentive benefits available to all of our senior executives. This agreement was superseded in connection
with the Hyla Transaction. Please see Item 9b for an update.



Mr. Davis earned total cash compensation for his services
to us in the amount of $153,000 for fiscal 2022 and $156,000 for fiscal 2021.





Outstanding
Equity Awards at Fiscal Year-End



We
did not have any option awards or unvested stock awards outstanding as of September 30, 2022.



Retirement
or Similar Benefit Plans



There
are no arrangements or plans in which we provide retirement or similar benefits for our director or executive officers.



Resignation,
Retirement, Other Termination, or Change in Control Arrangements



Other
than as disclosed below, we have no contract, agreement, plan, or arrangement, whether written or unwritten, that provides for payments
to our director or executive officers at, following, or in connection with the resignation, retirement, or other termination of our director
or executive officers, or a change in control of our Company or a change in our director’s or executive officers’ responsibilities
following a change in control.



Mr.
Davis and our other senior executives are entitled to payments upon termination pursuant to the terms of their respective employment
agreements. If the officer’s employment is terminated by us “without cause” or by the officer for “good reason”
(each term as defined in the employment agreement), we are obligated to pay to the officer (i) his base salary and any bonus earned and/or
accrued, but unpaid through the date of termination, (ii) a pro rata portion of the officer’s annual bonus for the fiscal year
in which the officer’s termination occurs in an amount at least equal to (1) the officer’s target bonus amount, multiplied
by (2) a fraction, the number of which is the number of days in the fiscal year in which the termination occurs through the date of termination
and the denominator of which is 365 (the “Pro-Rated Bonus”), (iii) any accrued vacation pay, and (iv) a lump-sum cash payment
equal to 50% of the officer’s then-current base salary. We are also obligated to continue for a period of six months following
the termination, medical, hospitalization, dental, and life insurance programs the officer and his dependents were participating immediately
prior to the date of termination (the “Continued Benefits”).





41









If
the officer’s employment is terminated by us for “cause” or by the officer “without good cause” (each term
as defined in the employment agreement), we are obligated to pay the officer his base salary and accrued vacation pay through the date
of termination. If the officer’s employment is terminated for “disability” (as that term is defined in the employment
agreement), we are obligated to pay the officer his base salary, bonus, and accrued vacation pay through the date of termination as soon
as practicable following the date of termination, the Pro-Rated Bonus, and the Continued Benefits for a period of one year.



If
the officer’s employment is terminated by reason of death, we are obligated to pay to his beneficiaries, legal representatives,
or estate, as the case may be, the officer’s base salary and accrued vacation pay through the date of termination, his Pro-Rated
Bonus, and the Continued Benefits, for the benefit of the officer’s spouse and dependence, for a period of two years.



Director
Summary Compensation Table



As
of the end of our 2022 fiscal year, we had three non-employee directors. We did not compensate them for their service as directors during
any of the years in which they served.



Risk
Assessment in Compensation Programs



During our 2022 and 2021 fiscal years, we paid compensation
to our employees, including executive and non-executive officers. Due to the size and scope of our business, and the amount of compensation,
we did not have any employee compensation policies and programs to determine whether our policies and programs create risks that are reasonably
likely to have a material adverse effect on us.





Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.



Security
Ownership of Certain Beneficial Owners, Management and Directors



To
our knowledge, based on information furnished to us, each person named in the tables below has sole voting and investment power with
respect to such shares, shown as beneficially owned by such person, except as otherwise indicated. The number of securities shown represents
the number of securities the person “beneficially owns,” as determined by the rules of the Commission. The Commission has
defined “beneficial” ownership of a security to mean the possession, directly or indirectly, of voting power and/or investment
power. A security holder is also deemed to be, as of any date, the beneficial owner of all securities that such security holder has the
right to acquire within 60 days after that date through (i) the exercise of any option, warrant, or right, (ii) the conversion of a security,
(iii) the power to revoke a trust, discretionary account, or similar arrangement, or (iv) the automatic termination of a trust, discretionary
account, or similar arrangement.



The
following table sets forth, as of January 9, 2023, certain information with respect to the beneficial ownership of our Common Stock by
(i) each stockholder, or group of affiliated stockholders, known by us to be the beneficial owner of 5% or more of our outstanding Common
Stock, (ii) our directors, (iii) each of our named executive officers, and (iv) all of our directors and executive officers as a group.



|Name and Address                                                                    |  | Title of Class |  | Amount
                                                                                 and Nature of Beneficial Ownership |            |  | Percent Owned
                                                                                                                                                                                                                                                                                    (%) (1) | 
|----------------------------------------------------------------------------------- |  | -------------- |  | -------------------------------------------------------------------------------------------------------------------------- | ---------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Todd Davis, CEO, Director (2) c/o 38246 N. Hazelwood Circle Cave Creek, AZ 85331    |  | Common Stock   |  |                                                                                                                            | 28,254,345 |  |                                                                                                                                                                                                                                                                                                           | 
|Steven M Plumb, CFO 9130 Cliffwood DriveHouston, TX 77096                           |  | Common Stock   |  |                                                                                                                            | -          |  |                                                                                                                                                                                                                                                                                                           | 
|Nick Mehdi, Director4719 Chenybriar Ave. Sugar Land, TX 77479                       |  | Common Stock   |  |                                                                                                                            | -          |  |                                                                                                                                                                                                                                                                                                           | 
|Irving Minnaker, Director 550 South Ocean Blvd, Apt. 1201 
Boca Raton Florida 33432 |  | Common Stock   |  |                                                                                                                            | -          |  |                                                                                                                                                                                                                                                                                                           | 
|Dustin Sullivan, Director 212 Island Drive Island Lake, IL
    60042                |  | Common Stock   |  |                                                                                                                            | 3,825,654  |  |                                                                                                                                                                                                                                                                                                           | 
|Directors and Executive Officers as a Group (5 persons)                             |  | Common Stock   |  |                                                                                                                            | 32,079,999 |  |                                                                                                                                                                                                                                                                                                           | 



*
Less than 1%



|(1) | Applicable
    percentage of ownership is based on 505,157,952 shares of our Common Stock outstanding as of January 9, 2023, plus, for each stockholder,
    all shares that such stockholder could be issued within 60 days upon the conversion or exercise of any convertible or exercisable
    securities.                                                                                                                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(2) | Includes
    3,044,175 shares of our Common Stock owned of record and beneficially by Mr. Davis and 25,210,170 shares of our Common Stock owned
    of record by Rayne Forecast Inc. (“Rayne”), an entity over which Mr. Davis has dispositive and voting authority.  Does
    not include 20,526,143 shares of our Common Stock held in an escrow account with the Company’s counsel for the benefit of Rayne,
    subject to release upon our payment of our obligations under our promissory note to Hyla UK Limited.





42









The
following table sets forth, as of January 9, 2023, certain information with respect to the beneficial ownership of our Series H Stock
by (i) each stockholder, or group of affiliated stockholders, known by us to be the beneficial owner of 5% or more of our outstanding
Common Stock, (ii) our directors, (iii) each of our named executive officers, and (iv) all of our directors and executive officers as
a group.



|Name and Address                                                                     |  | Title of Class                       |  | Amount and Nature of Beneficial Ownership |              |  | Percent Owned
                                                                                                                                                                                                                                                                                    (%) (1) | 
|------------------------------------------------------------------------------------ |  | ------------------------------------ |  | ----------------------------------------- | ------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Todd Davis, CEO  c/o 38246 N. Hazelwood Circle  Cave Creek, AZ 85331                 |  | Series H Convertible Preferred Stock |  |                                           | -            |  |                                                                                                                                                                                                                                                                                                           | 
|Steven M Plumb, CFO 9130 Cliffwood Drive Houston, TX 77096                           |  | Series H Convertible Preferred Stock |  |                                           | -            |  |                                                                                                                                                                                                                                                                                                           | 
|LNMS LLC (1) 4719 Chenybriar Ave. Sugar Land, TX 77479                               |  | Series H Convertible Preferred Stock |  |                                           | 278,048.782  |  |                                                                                                                                                                                                                                                                                                           | 
|Irving Minnaker 
550 South Ocean Blvd., Apt. 1201 Boca Raton Florida 33432           |  | Series H Convertible Preferred Stock |  |                                           | -            |  |                                                                                                                                                                                                                                                                                                           | 
|Dustin Sullivan, Director  212 Island Drive  Island Lake, IL 60042                   |  | Series H Convertible Preferred Stock |  |                                           | -            |  |                                                                                                                                                                                                                                                                                                           | 
|Directors and Executive Officers as a Group (5 persons)                              |  | Series H Convertible Preferred Stock |  |                                           | -            |  |                                                                                                                                                                                                                                                                                                           | 
|Beneficial Owner of More than 5%                                                     |  | Series H Convertible Preferred Stock |  |                                           |              |  |                                                                                                                                                                                                                                                                                                           | 
|Global Investment Holdings Limited (2) 826 N. La Cienega Blvd. Los Angeles, CA 90069 |  | Series H Convertible Preferred Stock |  |                                           | 3,846,341.48 |  |                                                                                                                                                                                                                                                                                                           | 



*
Less than 1%



|(1) | LNMS LLC is managed by Nick Mehdi, who makes all of its investment decisions.                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                   
|(2) | Global
                                            Investment Holdings Limited is managed by Max Baker, who makes all of its investment decisions.



Changes
in Control



We
do not know of any arrangements that may, at a subsequent date, result in a change in control.





43









Item
13. Certain Relationships and Related Party Transactions, and Director Independence.



Related
Party Transactions



When
we are contemplating entering into any transaction in which any executive officer, director, director nominee, or any family member of
the foregoing would have any direct or indirect interest, regardless of the amount involved, the terms of such transaction have to be
presented to the Chairman of the Board for his consideration. The Board has not adopted a written policy for related party transactions.



Except
for the transactions described below, we have had no related party transactions during the fiscal years ended September 30, 2022 and
2021.



Transactions
with Todd Davis and Rayne



Todd
Davis, our Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, and Treasurer, is the owner of Rayne.
Commencing in 2001, Mr. Davis, through Rayne (which was then an Illinois-domiciled corporation through October of 2015 and thereafter
was domiciled in Arizona), entered into a series of financial arrangements, consulting agreements (and amendments), and an employment
agreement with us. During our fiscal years prior to our 2020 fiscal year, Rayne lent funds to us, portions of which were repaid by our
issuing to Rayne shares of our Common Stock. Also, during those years, Rayne assisted us with certain business transactions and earned
fees in respect thereof, which fees were accrued and portions of which were repaid by our issuing to Rayne shares of our Common Stock.
Mr. Davis, directly, entered into an employment agreement with us in 2005, pursuant to which he is to receive $156,000 in annual compensation.
During our fiscal years prior to our 2022 fiscal year, as well as in our 2022 fiscal year, much of Mr. Davis’ compensation has
been accrued. Effective September 30, 2021, we issued 719,571 shares of our Series Z Stock to Rayne in consideration of the retirement
of our accrued obligations (approximately $2.5 million) to Rayne and Mr. Davis. In connection with the Hyla Transaction, Mr. Davis returned
all of the Series Z Stock to our treasury for cancellation.



Mr.
Davis has two primary functions with the Company. The first, for which he spends approximately 90% of his business time, is operational:
sourcing raw materials, overseeing manufacturing, tending to marketing and distribution, monitoring accounts receivable, and collecting
the receivables. Relative to his operational duties (which stem from his services as the Company’s executive officer), the Company
paid or accrued a salary for Mr. Davis. The second function, for which Mr. Davis spends approximately 10% of his business time, is financial:
interfacing with a variety of potential sources of debt and equity financing for the Company. Relative to his financial duties (which
stemmed from his services as the Company’s sole director through late March 2020), the Company periodically paid additional compensation
or a bonus to Mr. Davis through his consulting agreement, as amended. For certain personal reasons, Mr. Davis has determined to have
the Company pay his employment agreement-based compensation through his consulting agreement, rather than through his employment agreement.
So long as he performs the duties of an executive officer and a director of the Company, Mr. Davis and the Company have taken the position
that the specific form of agreement under which payment is tendered or accrued is irrelevant. Also in connection with the Hyla Transaction,
Mr. Davis and we agreed that his compensation would be fixed at $10,000 per month.



Transactions
with Black Mountain Botanicals



From
April 2019 through December 2019, Black Mountain Botanicals (BMB), an entity owned by the spouse of our President, was a contractor of
the Company for sales and procurement. During the years ended September 30, 2020, and September 30, 2019, BMB was paid $45,600 and $31,674,
respectively, for such services. Additionally, during the years ended September 30, 2020, and September 30, 2019, BMB collected and processed
the Company’s credit card charges from sales and advanced funds totaling $60,391 and $151,084, respectively, and remitted $59,626
and $146,611, respectively, in the same time period. The transaction fee for the service is three percent.





44







Director
Independence



Our
Board is currently composed of four members: Mr. Davis, Mr. Mehdi, Mr. Minnaker, and Mr. Sullivan. Our Common Stock is not currently
listed for trading on a national securities exchange and, as such, we are not subject to any director independence standards. However,
we have determined that Mr. Mehdi, Mr. Minnaker and Mr. Sullivan are independent in accordance with the rules of The Nasdaq Stock Market,
LLC, and the Commission.



Board
Committees



Our
Board has three board committees – Audit Committee, Compensation Committee, and Governance and Nominating Committee. The membership
of the committees are as follows:



|Committees |  | Audit
    Committee                                                                                            |  | Compensation
    Committee                                                                                                        |  | Governance
    and Nominating Committee                                                                                          
|---------- |  | -------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------
|Members:   |  | Todd
                                            Davis (Chair)
    Irving
    Minnaker
    Dustin
    Sullivan |  | Todd
                                            Davis (Chair)
    Irving
    Minnaker
    Dustin
    Sullivan
    Nick
    Mehdi |  | Todd
                                            Davis (Chair)
    Irving
    Minnaker
    Dustin
    Sullivan
    Nick
    Mehdi



Audit
Committee



On
January 1, 2021, our Board adopted an audit committee charter (the “Audit Committee Charter”) to govern the Audit Committee.
Currently, Messrs. Minnaker, Sullivan, and Davis (Chairman) serve on the Audit Committee. As of the date of this Annual Report on Form
10-K, none of the members qualifies as an “audit committee financial expert.”



The
Audit Committee Charter requires that each member of the Audit Committee meet the independence requirements of The Nasdaq Stock Market
LLC and the Commission and requires that the Audit Committee have at least one member that qualifies as an “audit committee financial
expert.” We intend to identify potential new directors who can serve as Audit Committee members and satisfy these requirements.
In addition to the enumerated responsibilities of the Audit Committee in the Audit Committee Charter, the primary function of the Audit
Committee is to assist our Board in its general oversight of our accounting and financial reporting processes, audits of our financial
statements, and internal control and audit functions.









Compensation
Committee



On
January 1, 2021, our Board approved and adopted a charter (the “Compensation Committee Charter”) to govern the Compensation
Committee. Currently, Messrs. Mehdi, Minnaker, Sullivan, and Davis (Chairman) serve as members of the Compensation Committee. Messrs.
Mehdi, Minnaker and Sullivan each meet the independence requirements of The Nasdaq Stock Market LLC and the Commission, qualify as a
“non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, and qualify as an outside director within
the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. In addition to the enumerated responsibilities of the
Compensation Committee in the Compensation Committee Charter, the primary function of the Compensation Committee is to oversee the compensation
of our executives, produce an annual report on executive compensation for inclusion in our proxy statement, if and when required by applicable
laws or regulations, and advise our Board on the adoption of policies that govern our compensation programs.



Governance
and Nominating Committee



On
January 1, 2021, our Board approved and adopted a charter (the “Nominating Committee Charter”) to govern the Governance and
Nominating Committee (the “Nominating Committee”). Currently, Messrs. Mehdi, Minnaker, Sullivan, and Davis (Chairman) serve
as members of the Nominating Committee. The Nominating Committee Charter requires that each member of the Nominating Committee meets
the independence requirements of the Nasdaq Stock Market LLC and the Commission; however, currently only Messrs. Mehdi, Minnaker and
Sullivan qualify as independent directors. In addition to the enumerated responsibilities of the Nominating Committee in the Nominating
Committee Charter, the primary function of the Nominating Committee is to determine the slate of director nominees for election to our
Board, to identify and recommend candidates to fill vacancies occurring between annual stockholder meetings, to review our policies and
programs that relate to matters of corporate responsibility, including public issues of significance to us and our stockholders, and
any other related matters required by federal securities laws.





45







Item
14. Principal and Accounting Fees and Services.



Each
year, the Board approves the annual audit engagement in advance. The Board also has established procedures to pre-approve all non-audit
services provided by the Company’s independent registered public accounting firm. All fiscal 2021 and 2020 non-audit services listed
below were pre-approved.



Audit
and Audit-Related Fees: This category includes the audit of our annual financial statements and review of financial statements included
in our annual and periodic reports that are filed with the SEC. This category also includes services performed for the preparation of
responses to SEC correspondence, travel expenses for our auditors, on audit and accounting matters that arose during, or as a result
of, the audit or the review of interim financial statements, and the preparation of an annual “management letter” on internal
control and other matters.



Tax
Fees: This category consists of professional services rendered by our independent auditors for tax compliance.



All
Other Fees: This category consists of fees for services other than the services described above.





The following fees were billed to us by our independent
registered public accounting firm, Turner, Stone & Company, LLP, which served as the Company’s auditor from fiscal year ending
September 30, 2021 and reviewed the Company’s quarterly financial statements for each of the first three fiscal quarters during
fiscal 2022.





|Description        |  |   |  |  | September 30, 2021 |  
|------------------ |  | - |  |  | ------------------ | -
|Audit fees         |  | $ |  |  |                    | $
|Audit-related fees |  |   |  |  |                    |  
|Legal fees         |  |   |  |  |                    |  
|All other fees     |  |   |  |  |                    |  
|Total              |  | $ |  |  |                    | $





46









PART
IV



Item
15. Exhibits and Financial Statement Schedules.



The
following exhibits are filed with or incorporated by reference into this Annual Report.





|Exhibit
    No. |  | Description                                                                                                                                                                                                         
|--------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                |  |                                                                                                                                                                                                                     
|2.1**           |  | Share Exchange Agreement by and among PanaMed, Inc and the Registrant, dated February 22, 2002                                                                                                                      
|                |  |                                                                                                                                                                                                                     
|2.2
    **      |  | Share Exchange Agreement by and among PhytoLabs, LLC and the Registrant, dated March 1, 2017                                                                                                                        
|                |  |                                                                                                                                                                                                                     
|2.3a**          |  | Common Stock Share Exchange Agreement between Go Green Global Inc and the Registrant dated May 1, 2018                                                                                                              
|                |  |                                                                                                                                                                                                                     
|2.3b**          |  | First Amended Common Stock Share Exchange Agreement by and among Go Green Global, Inc. and the Registrant, dated July 10, 2018                                                                                      
|                |  |                                                                                                                                                                                                                     
|3.1**           |  | Articles of Incorporation of the Registrant filed with the Secretary of State of the State of Nevada on September 5, 1997                                                                                           
|                |  |                                                                                                                                                                                                                     
|3.1a**          |  | Certificate of Amendment to the Articles of Incorporation filed with the Secretary of State of the State of Nevada on March 1, 2002                                                                                 
|                |  |                                                                                                                                                                                                                     
|3.1b**          |  | Certificate of Amendment to the Articles of Incorporation filed with the Secretary of State of the State of the State of Nevada on June 22, 2005                                                                    
|                |  |                                                                                                                                                                                                                     
|3.1c**          |  | Certificate of Amendment to the Articles of Incorporation filed with the Secretary of State of the State of Nevada on October 25, 2018                                                                              
|                |  |                                                                                                                                                                                                                     
|3.1d**          |  | Certificate of Amendment to the Articles of Incorporation filed with the Secretary of State of the State of Nevada on May 3, 2020                                                                                   
|                |  |                                                                                                                                                                                                                     
|3.1e**          |  | Amended and Restated Articles of Incorporation filed with the Secretary of State of the State of Nevada on January 25, 2021                                                                                         
|                |  |                                                                                                                                                                                                                     
|3.2**           |  | Amended and Restated Bylaws of the Registrant, dated January 25, 2021                                                                                                                                               
|                |  |                                                                                                                                                                                                                     
|3.3**           |  | Certificate of Designation of Series Z Preferred filed with the Secretary of State of the State of Nevada, dated January 1, 2021                                                                                    
|                |  |                                                                                                                                                                                                                     
|3.3a>           |  | Certificate of Withdrawal of Certificate of Designation for the Series Z Convertible Preferred Stock filed with the Secretary of State for the State of Nevada on September 6, 2022                                 
|                |  |                                                                                                                                                                                                                     
|3.4>            |  | Certificate of Designation of Rights, Privileges, Preferences, and Limitations of Series H Convertible Preferred Stock of the registrant filed with the Secretary of State of the State of Nevada on August 25, 2022
|                |  |                                                                                                                                                                                                                     
|4.1**           |  | Amended Common Stock Purchase Warrant of the Registrant, dated February 1, 2019                                                                                                                                     
|                |  |                                                                                                                                                                                                                     
|4.2**           |  | Amended Common Stock Purchase Warrant of the Registrant, dated June 5, 2019                                                                                                                                         
|                |  |                                                                                                                                                                                                                     
|4.3**           |  | Amended Common Stock Purchase Warrant of the Registrant, dated July 7, 2019                                                                                                                                         
|                |  |                                                                                                                                                                                                                     
|4.4**           |  | Amended Common Stock Purchase Warrant of the Registrant, dated August 1, 2019                                                                                                                                       
|                |  |                                                                                                                                                                                                                     
|4.5**           |  | Amended Common Stock Purchase Warrant of the Registrant, dated August 12, 2019                                                                                                                                      
|                |  |                                                                                                                                                                                                                     
|4.6**           |  | Amended Common Stock Purchase Warrant of the Registrant, dated September 15, 2019                                                                                                                                   
|                |  |                                                                                                                                                                                                                     
|4.7**           |  | Amended Common Stock Purchase Warrant of the Registrant, dated October 5, 2019                                                                                                                                      
|                |  |                                                                                                                                                                                                                     
|4.8**           |  | Amended Common Stock Purchase Warrant of the Registrant, dated February 5, 2020                                                                                                                                     
|                |  |                                                                                                                                                                                                                     
|4.8a^           |  | Warrant Modification and Clarification Agreement between the Registrant and the holder of eight Common Stock Purchase Warrants, dated March 31, 2021                                                                
|                |  |                                                                                                                                                                                                                     
|4.9#            |  | Common Stock Purchase Warrant granted by the Registrant, dated May 10, 2010 (2,500,000 shares)                                                                                                                      
|                |  |                                                                                                                                                                                                                     
|4.10#           |  | Common Stock Purchase Warrant granted by the Registrant, dated May 10, 2010 (5,185,185 shares)                                                                                                                      
|                |  |                                                                                                                                                                                                                     
|4.11>           |  | Form of Warrant of the registrant granted to two separate investors, effective as of August 31, 2022                                                                                                                
|                |  |                                                                                                                                                                                                                     
|10.2**          |  | Stock Purchase Agreement by and between CBD Life Brands, Inc. and the Registrant, dated March 1, 2020                                                                                                               





47









|10.3a** |  | Operating Agreement by and between Khode, LLC and the Registrant, dated October 1, 2020                    
|------- |  | -----------------------------------------------------------------------------------------------------------
|        |  |                                                                                                            
|10.3b** |  | Endorsement Agreement by and among Khode, LLC and the Registrant                                           
|        |  |                                                                                                            
|10.4**  |  | Stock Purchase Agreement by and among Retail Pro Associates, Inc. and the Registrant, dated April 25, 2020 
|        |  |                                                                                                            
|10.5**  |  | Sale and Distribution Agreement by and among CBD Health Solutions and the Registrant, dated January 28,2019
|        |  |                                                                                                            
|10.6**  |  | Distribution Agreement by and among Gold Coast and the Registrant, dated February 17, 2019                 
|        |  |                                                                                                            
|10.7**  |  | Sales Representative Agreement by and among Impulse Health and the Registrant, dated December 15, 2017     



|10.8**   |  | 3PL Agreement by and among Virtual Supply and the Registrant, dated August 7, 2019                                                                                                   
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  |                                                                                                                                                                                      
|10.9**   |  | Electronics Payment Agreement by and among Walgreens, Inc and the Registrant dated February 5, 2019                                                                                  
|         |  |                                                                                                                                                                                      
|10.10**  |  | Employment Contract – Todd Davis, dated April 5, 2005                                                                                                                                
|         |  |                                                                                                                                                                                      
|10.11**  |  | Consulting Agreement between Rayne Forecast Inc and the Registrant, dated September 1, 2001                                                                                          
|         |  |                                                                                                                                                                                      
|10.11a** |  | Amended Consulting Agreement between Rayne Forecast Inc and the Registrant, dated October 1, 2009                                                                                    
|         |  |                                                                                                                                                                                      
|10.12^   |  | Securities Purchase Agreement between the Registrant and an investor, dated October 11, 2019                                                                                         
|         |  |                                                                                                                                                                                      
|10.13^   |  | Security Agreement between the Registrant and an investor, dated October 11, 2019                                                                                                    
|         |  |                                                                                                                                                                                      
|10.14^   |  | Senior Secured Convertible Promissory Note of the Registrant in the principal amount of $750,000, dated October 19, 2019                                                             
|         |  |                                                                                                                                                                                      
|10.15^   |  | Senior Secured Convertible Promissory Note of the Registrant in the principal amount of $700,000, dated November 1, 2019                                                             
|         |  |                                                                                                                                                                                      
|10.16^   |  | Senior Secured Convertible Promissory Note of the Registrant in the principal amount of $550,000, dated January 16, 2020                                                             
|         |  |                                                                                                                                                                                      
|10.17^   |  | Update Agreement between the Registrant and an investor in respect of the Senior Secured Convertible Promissory Notes, dated October 10, 2019, November 1, 2019, and January 16, 2020
|         |  |                                                                                                                                                                                      
|10.18^   |  | Convertible Note Purchase Agreement between the Registrant and an institutional investor, dated January 22, 2021                                                                     
|         |  |                                                                                                                                                                                      
|10.19^   |  | Security Agreement between the Registrant and an institutional investor, dated January 22, 2021                                                                                      
|         |  |                                                                                                                                                                                      
|10.20^   |  | Intellectual Property Security Agreement between the Registrant and an institutional investor, dated January 22, 2021                                                                
|         |  |                                                                                                                                                                                      
|10.21^   |  | Registration Rights Agreement between the Registrant and an institutional investor, dated January 22, 2021                                                                           
|         |  |                                                                                                                                                                                      
|10.22^   |  | Senior Secured Convertible Promissory Note of the Registrant in the principal amount of $1,250,000, dated January 22, 2021                                                           
|         |  |                                                                                                                                                                                      
|10.23^   |  | Common Stock Purchase Warrant of the Registrant exercisable for up to 10,416,667 shares of the Registrant’s common stock, granted on January 22, 2021                                
|         |  |                                                                                                                                                                                      
|10.24^   |  | Percentage Payment Agreement between the Registrant and a third party, dated January 22, 2021                                                                                        
|         |  |                                                                                                                                                                                      
|10.25^   |  | Senior Secured Convertible Promissory Note of the Registrant in the principal amount of $300,000, dated March 5, 2021                                                                
|         |  |                                                                                                                                                                                      
|10.26^   |  | Common Stock Purchase Warrant of the Registrant exercisable for up to 3,111,111 shares of the Registrant’s common stock, granted on March 5, 2021                                    
|         |  |                                                                                                                                                                                      
|10.27#   |  | Securities Purchase Agreement of the Registrant, dated May 10, 2021 ($386,400)                                                                                                       
|         |  |                                                                                                                                                                                      
|10.28#   |  | Promissory Note of the Registrant, dated May 10, 2021 ($386,400)                                                                                                                     
|         |  |                                                                                                                                                                                      
|10.29#   |  | Securities Purchase Agreement of the Registrant, dated May 10, 2021 ($750,000)                                                                                                       





48









|10.30#   |  | Promissory Note of the Registrant, dated May 10, 2021 ($250,000)                                                                                                                       
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  |                                                                                                                                                                                        
|10.31#   |  | Registration Rights Agreement, dated May 10, 2021                                                                                                                                      
|         |  |                                                                                                                                                                                        
|10.32*   |  | Exchange Agreement between Rayne Forecast, Inc., and the Registrant, effective as of September 30, 2021                                                                                
|         |  |                                                                                                                                                                                        
|10.33*   |  | Exchange Agreement between Todd Davis and the Registrant, effective as of September 30, 2021                                                                                           
|         |  |                                                                                                                                                                                        
|10.34    |  |                                                                                                                                                                                        
|         |  |                                                                                                                                                                                        
|10.35>   |  | Form of Control Acquisition Agreement among the registrant, EH Sub Inc., and HYLA UK Holdco Limited, effective as of August 31, 2022                                                   
|         |  |                                                                                                                                                                                        
|10.36>   |  | Form of Self-Financing Promissory Note of the registrant issued to HYLA UK Holdco Limited, effective as of August 31, 2022                                                             
|         |  |                                                                                                                                                                                        
|10.37>   |  | Form of Intercompany Services Agreement between the registrant and Hyla US Holdco Limited, effective as of August 31, 2022                                                             
|         |  |                                                                                                                                                                                        
|10.38>   |  | Form of Promissory Note of HYLA US Holdco Limited issued to the registrant, effective as of August 31, 2022                                                                            
|         |  |                                                                                                                                                                                        
|10.39>   |  | Form of Note Purchase Agreement among the registrant and two separate investors, effective as of August 31, 2022                                                                       
|         |  |                                                                                                                                                                                        
|10.40>   |  | Form of Convertible Senior Note of the registrant sold and issued to two separate investors, effective as of August 31, 2022                                                           
|         |  |                                                                                                                                                                                        
|10.41>   |  | Form of Registration Rights Agreement between the registrant and two separate investors, effective as of August 31, 2022                                                               
|         |  |                                                                                                                                                                                        
|10.42>   |  | Form of Security Agreement of the registrant in favor of two separate investors, effective as of August 31, 2022                                                                       
|         |  |                                                                                                                                                                                        
|10.43>   |  | Form of IP Security Agreement of the registrant in favor of two separate investors, effective as of August 31, 2022                                                                    
|         |  |                                                                                                                                                                                        
|10.44>   |  | Form of Settlement, Lock-Up, and Leak-Out Agreement between the registrant and seven separate investors, effective August 31, 2022                                                     
|         |  |                                                                                                                                                                                        
|10.45>   |  | Form of Promissory Note of the registrant issued to seven separate investors, effective August 31, 2022                                                                                
|         |  |                                                                                                                                                                                        
|10.46>   |  | Form of Contribution and Exchange Agreement among the registrant, CBD Unlimited, Inc., Todd Allen Davis, and Rayne Forecast Inc., effective August 31                                  
|         |  |                                                                                                                                                                                        
|10.47>   |  | Form of Escrow Agreement among the registrant, Todd Allen Davis, Rayne Forecast Inc., and the escrow agent, effective August 31, 2022                                                  
|         |  |                                                                                                                                                                                        
|10.48>   |  | Form of Executive Agreement between the registrant and Todd Allen Davis, effective August 31, 2022                                                                                     
|         |  |                                                                                                                                                                                        
|10.49    |  | Form
    of Stockholders Agreement among the registrant, Todd Allen Davis, Rayne Forecast Inc., and CBD Unlimited, Inc., effective as of August
    31, 2022 (to be filed by amendment)
|         |  |                                                                                                                                                                                        
|10.50>   |  | Employment Agreement between Hyla US Holdco Limited and Nick Mehdi, dated June 14, 2021                                                                                                
|         |  |                                                                                                                                                                                        
|10.51<   |  | Master Distributor Agreement between Southern Glazer’s Wine and Spirits, LLC, and the Registrant, dated March 27, 2020                                                                 
|         |  |                                                                                                                                                                                        
|10.52<   |  | Sales Representative Agreement between Impulse Health LLC and the Registrant, dated April 1, 2020                                                                                      
|         |  |                                                                                                                                                                                        
|10.53<   |  | Brand Consulting Agreement between Beauty Strategy Group, LLC and the Registrant, dated April 21, 2021                                                                                 
|         |  |                                                                                                                                                                                        
|10.54<   |  | Master Service Agreement between Impact Brokers, LLC, and Khode LLC, dated October 9, 2020                                                                                             
|         |  |                                                                                                                                                                                        
|11.1**   |  | Audit Committee Charter                                                                                                                                                                
|         |  |                                                                                                                                                                                        
|11.2**   |  | Compensation Committee Charter                                                                                                                                                         
|         |  |                                                                                                                                                                                        
|11.3**   |  | Corporate Governance and Nominating Committee Charter                                                                                                                                  
|         |  |                                                                                                                                                                                        
|31.1*    |  | Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                   
|         |  |                                                                                                                                                                                        
|31.2*    |  | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                 
|         |  |                                                                                                                                                                                        
|32.1*    |  | Certification of the President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                   
|         |  |                                                                                                                                                                                        
|32.2*    |  | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                 
|         |  |                                                                                                                                                                                        
|101.INS* |  | Inline
    XBRL Instance Document                                                                                                                                                      
|         |  |                                                                                                                                                                                        
|101.SCH* |  | Inline
    XBRL Taxonomy Extension Schema Document                                                                                                                                     
|         |  |                                                                                                                                                                                        
|101.CAL* |  | Inline
    XBRL Taxonomy Extension Calculation Linkbase Document                                                                                                                       
|         |  |                                                                                                                                                                                        
|101.DEF* |  | Inline
    XBRL Taxonomy Extension Definition Linkbase Document                                                                                                                        
|         |  |                                                                                                                                                                                        
|101.LAB* |  | Inline
    XBRL Taxonomy Extension Label Linkbase Document                                                                                                                             
|         |  |                                                                                                                                                                                        
|101.PRE* |  | Inline
    XBRL Taxonomy Extension Presentation Linkbase Document                                                                                                                      
|         |  |                                                                                                                                                                                        
|104      |  | Cover
    Page Interactive Data File (embedded within the Inline XBRL document)                                                                                                        



*-
Filed Herewith.



**
- Filed as exhibits with equivalent exhibit numbers to our Registration Statement on Form 10, filed with the Commission on March 4, 2021,
each of which is incorporated herein by reference thereto.



^
- Filed as exhibits with equivalent exhibit numbers to our Pre-Effective Amendment No. 1 to our Registration Statement on Form 10, filed
with the Commission on April 8, 2021, each of which is incorporated herein by reference thereto.



#
- Filed as exhibits with equivalent exhibit numbers to our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2021,
filed with the Commission on May 24, 2021, each of which is incorporated herein by reference thereto.



>
- Filed as exhibits with equivalent exhibit numbers to our Current Report on Form 8-K, filed with the Commission on September 7, 2022,
each of which is incorporated herein by reference thereto.



<- Filed as exhibits 10.27, 10.28, 10.29, and 10.30, respectively, to our Post-Effective Amendment No. 1 to our Registration
Statement on Form 10, filed with the Commission on July 1, 2021, each of which is incorporated herein by reference
thereto.





49









SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.



ENDEXX
Corporation



|January
    13, 2023 | By: | /s/
    Todd Davis         
|-------------------- | --- | ---------------------------
|                     |     | Todd
    Davis             
|                     |     | Chief
    Executive Officer



Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.



|/s/
    Todd Davis                                                       |  | Dated:
    January 13, 2023
|------------------------------------------------------------------------ |  | ---------------------------
|Todd
    Davis                                                           |  |                            
|President,
    Chief Executive Officer,                                  |  |                            
|Secretary
    and Chairman and Director                                  |  |                            
|                                                                         |  |                            
|/s/
    Steven M Plumb                                                   |  | Dated:
    January 13, 2023
|Steven
    M Plumb                                                       |  |                            
|Chief
    Financial Officer                                              |  |                            
|                                                                         |  |                            
|/s/
    Nick Mehdi                                                       |  | Dated:
    January 13, 2023
|Nick
                                            Mehdi
    Director      |  |                            
|                                                                         |  |                            
|/s/
    Irving Minnaker                                                  |  | Dated:
    January 13, 2023
|Irving
                                            Minnaker
    Director |  |                            
|                                                                         |  |                            
|/s/
    Dustin Sullivan                                                  |  | Dated:
    January 13, 2023
|Dustin
                                            Sullivan
    Director |  |                            





50