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, 2023



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
    Incorporation or organization) |  | (I.R.S.
                                            Employer
    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 fi led 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 OTCQB® Venture Market (“OTCQB”)
as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $0.041.



As
of January 16, 2024, there were 506,357,952 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                                                                                    | 29  
|ITEM
    2.  | PROPERTIES                                                                                                   | 29  
|ITEM
    3.  | LEGAL PROCEEDINGS                                                                                            | 29  
|ITEM
    4.  | MINE SAFETY DISCLOSURE                                                                                       | 29  
|PART II.     |                                                                                                             
|ITEM
    5.  | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 30  
|ITEM
    6.  | RESERVED                                                                                                     | 31  
|ITEM
    7.  | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        | 32  
|ITEM
    7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                   | 36  
|ITEM
    8.  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  | 37  
|ITEM
    9.  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         | 38  
|ITEM
    9A. | CONTROLS AND PROCEDURES                                                                                      | 38  
|ITEM
    9B. | OTHER INFORMATION                                                                                            | 39  
|ITEM
    9C. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS                                          | 39  
|PART III     |                                                                                                             
|ITEM
    10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                       | 40  
|ITEM
    11. | EXECUTIVE COMPENSATION                                                                                       | 43  
|ITEM
    12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS               | 45  
|ITEM
    13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                    | 47  
|ITEM
    14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                       | 49  
|PART IV      |                                                                                                             
|ITEM
    15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                   | 50  



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



Endexx®is a Consumer Products (CPG) company specializing in Plant-Based formulations and Innovative delivery systems, focused on creating
“Better Products for a Better You”©. Our focus is on developing the most innovative and effective products
using all-natural plant-based ingredients. Our companies, HylaTM and CBD UnlimitedTM, harness the power of plants and deliver
clean ingredient formulations with innovative technology systems.



Through
Hyla, our recently acquired majority-owned subsidiary, we produce and sell organic, plant-based, all-natural, zero-nicotine, tobacco-free
vape products under the Hyla brand. 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.



Through
CBD Unlimited, we develop hemp-derived, cannabidiol-enhanced 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, mergers and acquisitions, and securing commitments from large retailers
with a national and/or international presence.



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 plant-based products. We are based in Cave Creek, Arizona with
additional offices in Los Angeles, California and Houston, Texas.



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.



4







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 related health and wellness product lines:



Hyla
US Holdco Limited



Effective
August 31, 2022, we closed the transactions contemplated by a Control Acquisition Agreement, pursuant to which we purchased 51% of the
issued and outstanding capital stock of Hyla (Please see Item 9b for additional disclosure). Hyla specializes in producing and selling
organic, plant-based, all-natural zero-nicotine, tobacco-free vape products under the HYLA brand. We now offer a wide range of premium
and mass-market vape devices that contain natural guarana extract blended with proprietary botanical formulas. All HYLA vapes are manufactured
in Underwriters Laboratories Global Safety certified facilities and undergo rigorous testing and quality controls.





CBD
Unlimited, Inc.



Through
CBD Unlimited and other subsidiaries, we develop, manufacture, and distribute 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 premium hemp-derived oils, topicals, delayed release capsules, extracts, tea and
coffee, grooming and skincare, and a newly launched high performance, value line of hemp-derived health and skin care products.



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.



5







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 Khaled’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. (See, Involvement in Certain Legal Proceedings.)



Planned-for
Future State of Operations



CBD
Unlimited and Hyla are operational, as is our operating agreement with Khode. In the near- and mid-term, we currently are planning to
(i) expand Hyla’s distribution and sales channels both internationally and domestically, (ii) expand retail and ecommerce sales
channels for CBD Unlimited and its brand lines, and (iii) seek additional distribution partners and evaluate strategic alliances and
potential acquisitions.



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 continued growth. Recent projections from
According to a Comprehensive Research Report by Market Research Future (MRFR), “Cannabidoil Market Information By Form, Route
of Administration, End User, Product, Application, Source and Region Forecast till 2030”the market size was valued $9.1 billion
in 2021 and is expected to reach $59.3 billion by 2030 (an 18.2% compound annual growth rate during the forecast period of 2022-2030).



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, as well as have been proven to be some of the best performing products according to key retailers like Walgreens.



The
vape industry is currently being disrupted by regulators and customers looking to have healthier and safer product solutions for consumers.
Our organic, plant-based, all-natural, zero-nicotine, tobacco-free vape products fill a significant void in the market and continue to
see growing demand as tobacco-based products are banned or lose favor with consumers.



6







Our
Current Consumer Products



Our
focus is on the development, manufacturing, and distribution of plant-based and clean-ingredient consumer products, including nutritional
supplements, plant-based alternatives, and delivery systems for healthier living for the consumer market in the form of hemp-based, non-psychoactive
cannabinoids, terpenoid extracts, and other plant- based ingredients that are infused into products. Our current products encompass hemp-derived
oils, topical skin care for skin health, pain relief support, and beauty products, value price hemp-derived creams and balms, a premium
line of hemp-derived health and beauty care products, and organic, plant-based, all-natural, zero-nicotine, tobacco-free vape products.
Our PhytoBites® 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 and plant-derived products that can also 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 of our hemp-derived 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. Our plant-based vape products follow similar rigorous standards to make
sure they are the most premium in the market.



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 plant-based
products to our customers. All of our products are sold on our e-commerce sites: www.cbdunlimited.com or www.tryhyla.com,
which seamlessly bring together our products, marketing content, and education into two platforms. We also have specific products like
our Value Line, which are marketed to the mass-pharmacy, mass-retail, and mass-food markets.



Distribution
Methods



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



A
portion of our sales comes through our e-commerce platforms, and orders are fulfilled from various fulfillment centers domestically and
internationally. Demand for our products is increasing and we are transitioning our distribution to centralized third-party logistics
and fulfillment centers in an aim to reduce.



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 world where we believe our products are most likely to succeed with 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 platforms. We
utilize social media, print, radio, and digital marketing, as well as broad distribution agreements. We currently have distribution agreements
with:



| | ● | Numerous
    domestic and international distributors, including established partners in key international markets such as Italy, UAE, Egypt and
    other key regions in the Middle East, Europe and Asia;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                           
| | ● | Numerous
    brokers specializing in defined product and channel categories having beneficial relationships with key buyers.                                                                              



7







Marketing



The
key goal of our sales and marketing strategy is to provide broad exposure of our products and their differentiation to our target consumers.
We have adopted a multi-pronged approach to marketing our products and building brand awareness. Currently, our strategy is primarily
focused on sampling opportunities where possible, key sponsorships opportunities, as well as digital marketing efforts inclusive of paid
digital media, organic social media, search engine optimization, email marketing, and numerous other tactics. We are constantly iterating
and testing our marketing spend to maximize results and return on investment.



Competition



For
our CBD Unlimited business, 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. Many of our historical key competitors included Medterra CBD,
Kadenwood, LLC, Charlotte’s Web Holdings, Inc., Cresco Labs, Inc., Curaleaf Holdings Inc., CV Sciences, Inc., Elixinol Wellness
Ltd., Neuropathix, Inc., Ovation Science Inc., and Zynerba Pharmaceuticals, Inc.; however, there are new competitors entering the market
regularly such as direct-to-consumer facing brands Highline Wellness Inc. and



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
studies and field work, 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 allow them to provide superior products or pricing, respectively,
which could put us at a competitive disadvantage.



For
our Hyla business, the competition ranges from traditional tobacco-based product brands that are expanding into, or are already dominating,
the consumer demand for vape-type products to more modern brands that are attempting to follow Hyla’s early success in the plant-based,
alternative vaping space. Fortunately, Hyla has a first mover advantage as it relates to organic, plant-based, all-natural, zero-nicotine,
tobacco-free vape products and has seen early traction both domestically and internationally. This does not make Hyla not susceptible
to being disrupted or overtaken by a competitor; however, it is our belief that Hyla’s experience in creating best-in-class products
and a robust product expansion pipeline will help fend off competition far into the future.



Suppliers



For
our CBD Unlimited business, 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, NSF, and ISO-certified facilities. Additionally, all of our ingredients and finished goods are tested for purity and quality
by ISO-certified third-party laboratories: Kaycha Labs, Delta Verde Laboratories, DB Labs, LLC, Eurofins Scientific SE and now comply
with newly established United Laboratories protocol. We make available to our customers copies of the laboratories’ certificates
of analysis, which disclose Cannabinoid, terpenes, and THC concentration, mycotoxins, microbial, heavy 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.



For
our Hyla vape business, we have long term relationships with key suppliers in the United States that exclusively manufacture all our
plant-based flavored liquid that goes into our disposable devices, which are manufactured in China. The strategic benefit of this arrangement
protects Hyla from any copycat or competitor getting access to the unique formulas that are proprietary to our products. All our manufacturers,
both domestically and internationally, comply with all local and international manufacturing standards and regulations pertinent to our
industry.



8







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 platforms, we have strong relationships with wholesalers, distributors, and retailers.
Our CBD Unlimited products are now in approximately 8,000 mass-retail stores, gas stations, convenience stores, and independent “Mom
and Pop” locations in the United States, and our Hyla products are in approximately ten thousand retail locations and rapidly expanding,
both domestically and internationally.



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.



9







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.



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.



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 a registered trademark
for “Endexx” and a registered trademark for “PhytoBites.” Additionally, we have applied for several trademarks
of our products’ names and logos, including “CBD Unlimited,” “Maggie’s Balm,” and “Blesswell.”
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, 2023 and 2022 totaled $5,249 and $27,066, respectively, and relate
to the development of our products. None of these costs was borne directly by our customers.



Employees



As
of January 16, 2024, we have approximately ten full-time employees across our businesses. 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



Because
our class of Common Stock is registered pursuant to Section 12(g) of the Exchange Act, we are subject to the requirements of Section
13(a) thereunder, which requires us to file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form
8-K, and 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 are 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 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 rapidly 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 $6,274,597 for the year ended September 30, 2023 and $4,884,486 for the year ended September 30, 2022. As of September 30, 2023,
we had a stockholders’ deficit of $17,331,610. The decrease in net loss was the result of the sum of certain positive results in
the 2023 fiscal year compared to the 2022 fiscal year:



| | ● | an
    decrease in gross profit of $1,958,633, resulting from a substantial increase in revenues of $1,770,375, combined with a greater-than-proportional
    increase in the cost of revenues of $2,605,806, and a significant increase in inventory impairment of $1,123,202;                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                         
| | ● | a
    decrease in operating expenses of $1,168,457, resulting from a decrease in advertising and promotion expense of $67,702, decrease
    in payroll expenses of $349,801, decreases in professional fees of $459,259 and decreases in impairment expenses of $249,560; and                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                                         
| | ● | an
    increase in other expense of $1,477,417 resulting from significant loss from the fair value of derivative liability offset by significant
    gain from settlement of derivative liability and discount amortization, interest expenses, and default penalties, and significant
    gains on settlement of liabilities and disposition of assets.



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, 2023 and 2022 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, 2023 and 2022 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 the 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.



11







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 will 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 will 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.



Another
“Pandemic” like 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.



Our
co-packers source raw materials used in our products from suppliers located in the United States. The impact of “Pandemics”,
“Tariffs,” and international business complexities can affect any of our suppliers, distributors, and resellers, or transportation
or logistics providers. Cost of goods and services, combined with inflation, 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 pandemics, tariffs, and general economic conditions 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,
continue to work remotely. If our operations or productivity continue to be impacted by these variables, these occurrences will continue
to impact our business, financial condition, and cash flow, all in a negative manner. The extent to which any of the above occurrences,
whether or not foreseen may 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 these
variables on our business will slowly abate.



12







However,
as these occurrences have continued for a prolonged period, they have 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 no 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 that 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.



13







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.



14







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.



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.



15







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.



16







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.



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.



17







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.



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 that will put us at a competitive disadvantage in the market.



18







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.



19







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.



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.



20







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 Hyla plant-based vape products both internationally and domestically. 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.



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.



21







Risks
Relating to Our Hyla Business



Significant
federal, state and local governmental actions, including actions by the FDA, and various private sector actions may have an adverse impact
on us. Actions by the FDA and other federal, state, or local governments or agencies may impact not only the adult tobacco and
vape consumer acceptability of or access to tobacco, or similarly categorized non-tobacco-based products like those of Hyla (for example,
through product standards that may be proposed by the FDA for non-nicotine and flavors), but also may limit adult consumer choices, delay
or prevent the launch of new or modified non-tobacco-based vapes or other products with claims of reduced risk compared with tobacco-based
products, require the recall or other removal of non-tobacco products from the marketplace (for example, as a result of product contamination
or because the FDA determines that removal is necessary for the protection of public health), impose additional manufacturing, labeling,
or packing requirements, or interrupt manufacturing or otherwise significantly increase the cost of doing business. Any one or more of
these actions may have a material adverse impact on the business, consolidated results of operations, cash flows, or financial position
of Hyla and of us.



Hyla’s
business faces significant competition (including across categories) and its failure to compete effectively could have an adverse effect
on the results of operations or cash flows of Hyla and us. Despite not being a tobacco- based product, Hyla business operates
and sells into highly competitive tobacco and tobacco-based vape categories. This competition also exists across categories as adult
tobacco consumer preferences evolve. Significant methods of competition include products with nicotine, product quality, taste, price,
product innovation, marketing, packaging, distribution, and promotional activities. A highly competitive environment could negatively
impact the profitability, market share and shipment volume of Hyla’s products, which could have an adverse effect on the results
of operations or cash flows of Hyla and us.



Hyla
may be unsuccessful in anticipating changes in adult consumer preferences, responding to changes in consumer purchase behavior, or managing
through difficult competitive and economic conditions, which could have an adverse effect on the results of operations and cash flows
of Hyla and us. Hyla is subject to intense competition and changes in adult consumer preferences. To be successful, Hyla must
continue to:



| | ● | promote
    its brand equity successfully;                                                                                                                                                                 
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | anticipate
    and respond to new and evolving adult consumer preferences;                                                                                                                                 
| | ● | develop,
    manufacture, market and distribute new and innovative products that appeal to adult consumers (including, where appropriate, through
    arrangements with, or investments in, third parties);
| | ● | improve
    productivity; and                                                                                                                                                                              
| | ● | protect
    or enhance margins through cost savings and price increases.                                                                                                                                   



The
willingness of adult consumers to purchase premium consumer product brands depends in part on economic conditions. In periods of economic
uncertainty, adult consumers may purchase more discount brands and/or, in the case of tobacco and vape products, consider lower-priced
tobacco and vape products, which could have a material adverse effect on the business, results of operations, cash flows, or financial
position of Hyla and us. While Hyla works to broaden its product portfolio to compete effectively with lower-priced products, the failure
to do so could negatively impact Hyla’s ability to compete in these circumstances.



Hyla
may be unsuccessful in developing and commercializing adjacent products or processes, including innovative non-tobacco-based products
that may reduce the health risks associated with current tobacco products in the market and that appeal to adult tobacco consumers, which
may have an adverse effect on Hyla’s ability to grow revenue and put Hyla at a competitive disadvantage. Hyla has growth
strategies involving further moves and potential moves into adjacent products or processes, including innovative non-tobacco, but tobacco-like,
products. Some innovative non-tobacco products may reduce the health risks associated with current tobacco products on the market, while
continuing to offer adult tobacco consumers (within and outside the United States) products that meet their taste expectations and evolving
preferences. Examples include Hyla’s current vape products that do not contain nicotine and that reduce or eliminate exposure to
cigarette smoke and/or constituents identified by public health authorities as harmful, such as e-vapor products. Hyla may not succeed
in its efforts to introduce such new products, which would have an adverse effect on the ability to grow revenue.



22







Further,
Hyla cannot predict whether regulators, including the FDA, will permit the marketing or sale of products with claims of reduced risk
to adult consumers, the speed with which the FDA may make such determinations or whether regulators will impose an unduly burdensome
regulatory framework on such products. Nor can we predict whether adult tobacco consumers’ purchasing decisions would be affected
by reduced risk claims if permitted.



Adverse
developments on any of these matters could negatively impact the commercial viability of such products. If Hyla does not succeed in its
efforts to develop and commercialize its innovative organic, plant-based, all-natural, zero- nicotine, tobacco-free vape products or
to obtain regulatory approval for the marketing or sale of products with claims of reduced risk, but one or more of Hyla’s competitors
does succeed, Hyla may be at a competitive disadvantage, which could have an adverse effect on Hyla’s financial performance or
ours.



Significant
changes in price, availability or quality of raw materials or component parts could have an adverse effect on the profitability and business
of Hyla and ours. Any significant change in prices, quality or availability of raw materials or component parts could adversely
affect Hyla’s profitability and business and ours.



Because
Hyla relies on a few significant facilities and a small number of key suppliers, an extended disruption at a facility or in service by
a supplier could have a material adverse effect on its business and the results of operations, cash flows, or financial position of Hyla
and us. Hyla faces risks inherent in reliance on a few significant facilities and a small number of key suppliers. A natural
or man-made disaster or other disruption that affects the manufacturing operations of Hyla or the operations of any key suppliers of
Hyla, including as a result of a key supplier’s unwillingness to supply goods or services to a Hyla, could adversely impact the
operations of Hyla. An extended disruption in operations experienced by Hyla or key suppliers could have a material adverse effect on
Hyla’s business and the results of operations, cash flows, or financial position of Hyla and us.



Hyla
could decide or be required to recall products, which could have a material adverse effect on the business, reputation, results of operations,
cash flows, or financial position of Hyla or us. In addition to a recall that could be required by the FDA, Hyla could decide,
or other laws or regulations could require it, to recall products due to the failure to meet quality standards or specifications, suspected
or confirmed and deliberate or unintentional product contamination, or other adulteration, product misbranding, or product tampering.
Product recalls could have a material adverse effect on the business, reputation, results of operations, cash flows, or financial position
of Hyla or us.



The
failure of Hyla’s information systems or service providers’ information systems to function as intended, or cyber-attacks
or security breaches, could have a material adverse effect on the business, reputation, results of operations, cash flows or financial
position of Hyla. Hyla relies extensively on information systems, many of which are managed by third-party service providers
(such as cloud providers), to support a variety of business processes and activities, including: complying with regulatory, legal, financial
reporting and tax requirements; engaging in marketing and e-commerce activities; managing and improving the effectiveness of its operations;
manufacturing and distributing its products; collecting and storing sensitive data and confidential information; and communicating internally
and externally with employees, investors, suppliers, trade customers, adult consumers, and others. To date, interruptions of its information
systems have been infrequent and have not had a material impact on its operations. However, because technology is increasingly complex
and cyber-attacks are increasingly sophisticated and more frequent, there can be no assurance that such incidents will not have a material
adverse effect on Hyla in the future. Failure of Hyla’s systems or service providers’ systems to function as intended, or
cyber-attacks or security breaches, could result in loss of revenue, assets, personal data, intellectual property, trade secrets or other
sensitive and confidential data, violation of applicable privacy and data security laws, damage to Hyla’s reputation and its brand,
operational disruptions, legal challenges, and significant remediation and other costs to Hyla.



International
business operations subject Hyla to various United States and foreign laws and regulations, and violations of such laws or regulations
could result in reputational harm, legal challenges, and/or significant costs.Hyla engages (directly or indirectly) in certain
international business activities that are subject to various United States and foreign laws and regulations. In addition, foreign regulations,
as well as how these regulations interact with United States regulations are constantly evolving. Violations of these laws or regulations,
or allegations of such violations, could result in reputational harm, legal challenges, and/or significant costs to Hyla or us.



23











Hyla
may be unable to attract and retain the best talent due to the impact of decreasing social acceptance of tobacco usage and tobacco-like
products. Although none of Hyla’s products contains tobacco, Hyla’s ability to implement its strategy of attracting
and retaining talent may be impaired by the impact of decreasing social acceptance of tobacco usage or tobacco-like products and tobacco
regulation and control actions. The vape and tobacco industry competes for talent with the consumer products industry and other companies
that enjoy greater societal acceptance. As a result, Hyla may be unable to attract and retain sufficient talent and personnel.



Future
economic and financial conditions could adversely impact our financial condition and results. Hyla’s business is sensitive
to global, national, and regional macroeconomic conditions, as well as specific inflation levels and buying patterns. Adverse developments,
including heightened economic uncertainty, could reduce the demand for consumer products like Hyla’s, which could have a material
adverse effect on Hyla’s revenue, results of operations, cash flows and financial position and ours.



| | ● | Conditions
    in the credit markets could adversely impact Hyla’s and our results of operations and financial position; and                                                                                                           
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Turmoil
    in the credit markets or a contraction in the availability of credit would make it more difficult for Hyla to meet its capital requirements
    and could cause Hyla to change its financial relationship with its vendors.
| | ● | Access
    to credit and capital is key for financing large customer orders. If turmoil in the credit markets were to occur, it could materially
    adversely impact Hyla’s and our results of operations and financial position.     



Hyla’s
business could be adversely affected if it loses key distribution clients. Hyla operates its business through key distributors
in markets across the globe. The loss of one or more distributors could materially affect the results of Hyla as a whole. The loss of
several of Hyla’s largest distributors could have a material adverse effect on its business, results of operations, cash flows,
and financial position and ours.



Hyla’s
two largest clients (measured by revenue generated) accounted for 50% of Hyla’s revenue for the year ended September 30, 2022.
A significant reduction in spending on Hyla’s products by those clients, or the loss of several of Hyla’s larger clients,
could have a material adverse effect on Hyla’s business, results of operations, and financial position and ours.



Hyla’s
ability to generate new business from new and existing clients may be limited. To increase its revenues, Hyla needs to obtain
additional distribution clients or generate demand for additional products from existing clients. Hyla’s ability to generate initial
demand for its product from new distribution clients and additional demand from existing distribution clients is subject to such clients’
and potential clients’ requirements, their pre-existing vendor relationships, financial conditions, strategic plans and internal
resources, as well as the quality of Hyla’s products and reputation. To the extent Hyla cannot generate new business from new and
existing clients due to these limitations, the Hyla’s ability to grow its business and to increase its revenues will be limited.



Hyla
is exposed to the risk of client defaults. Hyla often incurs expenses on behalf of its clients for product that is to be manufactured
and delivered. The difference between the gross production cost and the revenue earned by Hyla can be significant. While Hyla takes precautions
against default on payment for these orders (such as credit analysis, advance billing of clients, and receipt of client deposits) and
has historically had a very low incidence of default, Hyla is still exposed to the risk of significant uncollectible receivables from
its clients. The risk of a material loss could significantly increase in periods of severe economic downturn. Such a loss could have
a material adverse effect on Hyla’s results of operations, cash flows and financial position and ours.



Significant
Reliance on Key Shareholder of the Company. Hyla is currently a majority owned subsidiary of ours. Previously, it was wholly
owned by Hyla UK, which was established and built on the relationships of one individual who remains its majority shareholder. Although
this individual executed a non-competition agreement with us when we acquired majority interest in Hyla, due to his connections and relationships
in the market in which Hyla does business, any loss of this individual or his continued support of Hyla could have a material adverse
effect on its results of operations, cash flows, and financial position and ours.



24









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 506,357,952 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 16, 2024. 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.



25









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’sOTCQB® Venture Market may be volatile and sporadic. Currently, our Common Stock is
quoted on the OTC Markets Group Inc.’s (the “OTCM”) OTCQB® Venture 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 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 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 OTCQB® Venture 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.



26









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 OTCQB®
Venture 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 OTCQB® Venture 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.



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.



27









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.



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.



28









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.



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. 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 occupy this facility pursuant to a one-year lease that expired on April 1, 2023. Subject to an agreement with our landlord, our monthly
rent has increased from $5,000 to $7,500 from and after April 1, 2023. We currently believe that we no longer need this physical space
and are working with our landlord to vacate the space and transition to a more remote workforce setup.



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.



29









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 2023:



None.



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 8, 2022, the Company issued 3,500,000 shares of common stock valued at $133,000 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
May 8, 2022, the Company issued 600,000 shares of common stock valued at $22,800 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
May 19, 2022, the Company issued 8,928,571 shares of its common stock to a certain noteholder 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).



30









Market
Information



Our
Common Stock is quoted on the OTCM’s OTCQB® Venture 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.





|                                              |  | High
    Closing Bid 
Price Per Share |        |  | Low
    Closing Bid 
Price Per Share |  
|--------------------------------------------- |  | ------------------------------------- | ------ |  | ------------------------------------ | -
|Fiscal
    Year 2024                          |  |                                       |        |  |                                      |  
|Second
    Quarter (through January 12, 2024) |  | $                                     | 0.0201 |  |                                      | $
|First
    Quarter                             |  | $                                     | 0.0365 |  |                                      | $
|                                              |  |                                       |        |  |                                      |  
|Fiscal
    Year 2023                          |  |                                       |        |  |                                      |  
|Fourth
    Quarter                            |  | $                                     | 0.0485 |  |                                      | $
|Third
    Quarter                             |  | $                                     | 0.0448 |  |                                      | $
|Second
    Quarter                            |  | $                                     | 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 |  |                                      | $









On
January 12, 2024, the closing bid price of our Common Stock as reported by OTCM was $0.0185 per share.



Holders



As
of January 16, 2024, we had approximately 438 record holders of shares our Common Stock. As of January 16, 2024, we had
506,357,952 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 the dividend policy will made at the discretion of our Board.



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.



31







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



Endexx®
is a Consumer Products (CPG) company specializing in Plant-Based formulations and Innovative delivery systems, focused on creating “Better
Products for a Better You”©. Our focus is on developing the most innovative and effective products using all-natural plant-based
ingredients. Our companies, CBD UnlimitedTM and HylaTM, harness the power of plants and deliver clean ingredient formulations
with innovative technology systems.



Through
CBD Unlimited, 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. Through Hyla, we produce and sell organic, plant-based, all-natural, zero-nicotine, tobacco-free
vape products under the Hyla brand. 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. All of Hyla’s
products are sold on its e-commerce site: www.tryhyla.com.



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.



32









Results
of Operations



Fiscal
Year Ended September 30, 2023 Compared to Fiscal Year Ended and September 30, 2022 Revenues



Revenues
for the fiscal year ended September 30, 2023 were $3,908,385, as compared to $2,138,010 for the fiscal year ended September 30, 2022,
a $1,770,375 (or 83%) increase in revenues. The improvement in revenue for fiscal 2023 is 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



Gross
profit for the fiscal year ended September 30, 2023 was a loss of $765,523, as compared to a profit of $1,193,110 for the fiscal year
ended September 30, 2022, representing a $1,958,633 decrease. This decline in gross profit in 2023 was attributable to increased costs
of revenues and an increase in inventory impairment of $1,301,544 for the year ended September 30, 2023, compared to an inventory impairment
of $178,342 for the year ended September 2022.



Operating
Expenses



Operating
expenses for the fiscal year ended September 30, 2023, were $3,941,467, as compared to $5,109,924 for the fiscal year ended September
30, 2022, an decrease of $1,168,457. The decrease in operating expenses over the prior period can be attributed to a $67,702 decrease
in advertising and promotional fees, $349,801 decrease in payroll expenses, $459,259 decrease in professional fees and a $249,560 decrease
in impairment expenses.



We
expect that operating expenses will remain consistent 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.



Other
Expense



Other
expense for the fiscal year ended September 30, 2023 was $3,705,163, as compared to other expense of $1,227,746 for the year ended September
30, 2022, a $1,477,417 year-over-year increase. The increase resulted from a gain from the change in fair value of derivative liability
offset by significant increases in financing costs and discount amortization, interest expenses. Derivative liabilities are associated
with loans that are convertible or 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.



Total
Net Loss



As
a result of the above, our net losses for the years ended September 30, 2023 and 2022 totaled $7,412153 and $5,144,560, respectively.
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 continue
to abate, as the supply chain continues to recover.



Going
Concern



We
have incurred operating losses since inception and have negative cash flow from operations. As of September 30, 2023, we had a stockholders’
deficit of $17,331,610, a working capital deficit of $25,643,895, and we incurred a net loss totaling $7,412153 in fiscal year 2023.
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.



33









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.



Liquidity
and Capital Resources



As
of September 30, 2023, we had a cash position of $7,644. 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, 2023, our cash used in operating activities amounted to an outflow of $1,557,357, compared to cash
used during the 12 months ended September 30, 2022 of $2,088,304. We expect cash outflows from operations to continue to improve as the
Company continues to improve its operations and market conditions improve into the upcoming fiscal year.



Cash
Flow – Investing Activities



Net
cash used in investing activities in the 12 months ended September 30, 2023 was $0, compared to net cash used in investing activities
in the 12 months ended September 30, 2022 of $573,763. We expect limited cash flows from investing activities as the Company focuses
on improving existing operations.



Cash
Flow – Financing Activities



For
the 12 months ended September 30, 2023, our cash provided by financing activities amounted to $908,225, which includes $1,022,000 in
proceeds from the issuance of notes payable, $930,000 in proceeds from a line credit and $1,066,000 used for the repayment of certain
notes payable.



For
the 12 months ended September 30, 2022, our cash provided by financing activities amounted to $3,297,976, which includes $2,964,853 in
proceeds from the issuance of convertible notes and $333,123 in proceeds from the issuance of notes payable.



34









Basis
of Presentation



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 subsidiaries were
consolidated with the consolidated financial statements of the Company. All significant intercompany accounts and transactions have been
eliminated in consolidation.



Recently
Issued Accounting Pronouncements



In
August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging
- Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s
Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities
and equity. This ASU (a) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing
guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features
and cash conversion features in equity, separately from the host convertible debt or preferred stock; (b) revises the scope exception
from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s
own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (c) revises
the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share for convertible instruments
by using the “if-converted” method. In addition, entities must presume share settlement for purposes of calculating diluted
earnings per share when an instrument may be settled in cash or shares. For smaller reporting companies, ASU 2020-06 is effective for
fiscal years beginning after December 15, 2023. The Company is currently evaluating the impact that ASU 2020-06 may have on its consolidated
financial statements and related disclosures.



As
of September 30, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these
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 consolidated financial statements.



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.



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.



Prepaid
Expenses



The
Company considers all items incurred for future services to be prepaid expenses.



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.



35









Intangible
Assets



Intangible
assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its
intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management
tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.



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 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.



Fair
Value of Financial Instruments



FASB
ASC Topic 820, Fair Value Measurement, defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally
accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial
instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based
upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made
to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit
quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments
are applied consistently over time.



Derivative
Financial Instruments



FASB
ASC Topic 820, Fair Value Measurement, requires bifurcation of certain embedded derivative instruments, and measurement at their fair
value for accounting purposes. A holder redemption feature embedded in the Company’s notes payable requires bifurcation from its
host instrument and is accounted for as a freestanding derivative.



Under
the Company’s contract ordering policy, the Company first considers common shares issued and outstanding as well as reserved but
unissued equity awards, such as under an equity award program. All remaining equity linked instruments such as, but not limited to, options,
warrants, and debt and equity with conversion features are evaluated based on the date of issuance. If the number of shares which may
be issued under the Company’s agreements exceed the authorized number of shares or are unable to be determined, equity linked instruments
from that date forward are considered to be derivative liabilities until such time as the number of shares which may be issued under
the Company’s agreements no longer exceed the authorized number of shares and are able to be determined.



Convertible
Instruments



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



Stock-Based
Compensation



All
share-based payments to employees, directors and contractors, including grants of stock options, restricted shares or warrants, are recognized
in the statement of operations based on their fair values at the time of grant in accordance with ASC Topic 718, Compensation - Stock
Compensation.



Off
Balance Sheet Arrangements



As
of September 30, 2023 and on September 30, 2022, 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.



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



Not
applicable.



36









Item
8. Financial Statements and Supplementary Data.



Table
of Contents



|                                                                                                 | Page
|------------------------------------------------------------------------------------------------ | ----
|                                                                                                 |     
|Report of Independent Registered Public Accounting Firm                                          | F-1 
|                                                                                                 |     
|Consolidated Balance Sheets as of September 30, 2023 and 2022                                    | F-2 
|                                                                                                 |     
|Consolidated Statements of Operations for the years ended September 30, 2023 and 2022            | F-3 
|                                                                                                 |     
|Consolidated Statements of Stockholders’ Deficit for the years ended September 30, 2023 and 2022 | F-4 
|                                                                                                 |     
|Consolidated Statements of Cash Flows for the years ended September 30, 2023 and 2022            | F-5 
|                                                                                                 |     
|Notes to the Consolidated Financial Statements                                                   | F-6 





37









REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



[INSERT
HERE]







F-1







ENDEXX
CORPORATION

CONSOLIDATED
BALANCE SHEETS

SEPTEMBER
30, 2023 AND 2022

[INSERT
HERE]



F-2







ENDEXX
CORPORATION

CONSOLIDATED
STATEMENTS OF OPERATIONS

FOR
THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

[INSERT
HERE]



F-3







ENDEXX
CORPORATION

CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR
THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

[INSERT
HERE]



F-4







ENDEXX
CORPORATION

CONSOLIDATED
STATEMENTS OF CASH FLOWS

FOR
THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

[INSERT
HERE]



F-5















ENDEXX
CORPORATION AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

[INSERT
HERE]





F-6













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 September 30, 2022. Based on this evaluation, our principal executive officer and principal
financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2022.



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 September 30, 2022 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;                                               
|----- | ------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                   
|(ii)  | insufficient staffing resources resulting in financial
    statement closing process; and                         
|      |                                                                                                                   
|(iii) | lack of review of significant contracts and recording
    new contracts with the appropriate accounting treatment.



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, we performed additional analyses and other procedures and retained additional accounting professionals
in September 2022 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.



38









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.



By
virtue of our receipt of additional financing during our 2023 fiscal year, we undertook remediation measures to address the above-described
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 by hiring 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 September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.



Item
9b. Other Information



None.



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



Not
applicable.





39







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, Audit Committee Member, Compensation Committee Member, and Governance and Nominating Committee Member                                                                            |  | 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                         
|Claude Zdanow   |  | 35  |  | Independent Director, Audit
    Committee Member, Compensation Committee Member, and Governance and Nominating Committee Member                                                                               |  | November 1, 2023                           



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 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.



40









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.





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 the 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.



Claude
Zdanow – Director. Mr. Zdanow has served as the Chief Executive Officer of Integrum Group, LLC. (“Integrum”)
since March of 2023 and from June 2021 until then as its President. Additionally, he is the founder of and serves as the Managing Partner
of 35 Wellsona Holdings LLC, a position that he has held since January 2021. Mr. Zdanow also a principal of Claude Philippe Wines LLC,
which he founded in June 2021. Between July 2007 and May 2021, he served as the Chief Executive Officer of Stadiumred, Inc. We believe
that Mr. Zdanow’s background and experience in management consulting and a history of acquisitions of complementary business entities,
including assistance with the acquisition of Hyla, has provided him with the relevant experience to serve on our Board.



41









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.



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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



42







| | (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, 2023 and 2022; 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, 2023
    and 2022.



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 our 2022 fiscal year.



|Name and Position                   |  | Fiscal  Year |      | Salary  ($) |  | Stock Awards  ($) (1) |         | Total  ($)
|----------------------------------- |  | ------------ | ---- | ----------- |  | --------------------- | ------- | ----------
|                                    |  |              |      |             |  |                       |         |           
|Todd Davis (2)                      |  |              |      |             |  |                       |         |           
|Chief Executive Officer, President, |  |              | 2023 |             |  | $                     | 125,000 |           
|and Chairman of the Board           |  |              | 2022 |             |  | $                     | 153,000 |           
|                                    |  |              |      |             |  |                       |         |           
|Steven M Plumb (6)                  |  |              |      |             |  |                       |         |           
|Chief Financial Officer             |  |              | 2023 |             |  | $                     | 45,800  |           
|                                    |  |              | 2022 |             |  | $                     | 5,000   |           
|                                    |  |              |      |             |  |                       |         |           
|Ronald Cotting (4)                  |  |              |      |             |  |                       |         |           
|Director of Operations              |  |              | 2023 |             |  | $                     | 20,034  |           
|                                    |  |              | 2022 |             |  | $                     | 125,000 |           
|                                    |  |              |      |             |  |                       |         |           
|Stephen A. Herron, Sr. (5)          |  |              |      |             |  |                       |         |           
|Director of Sales                   |  |              | 2023 |             |  | $                     | 19,686  |           
|                                    |  |              | 2022 |             |  | $                     | 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.         
| | (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.                                                                                                                                                         
| | (6) | Mr. Plumb joined the Company
    as our Chief Financial Officer on August 29, 2022.                                                                                                                                                                                           



43









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.





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.



Mr.
Davis earned total cash compensation for his services to us in the amount of $125,000 in our 2023 fiscal year, of which $58,000 was deferred,
and $153,000 in our 2022 fiscal year.



Outstanding
Equity Awards at Fiscal Year-End



We
did not have any option awards or unvested stock awards outstanding as of September 30, 2023.



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”).



44









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 2023 fiscal year, we had four 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 2023 and 2022 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 16, 2024, 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 (2)                                                       |  |                |  |                                           |            |                      
|c/o 38246 N. Hazelwood Circle                                             |  |                |  |                                           |            |                      
|Cave Creek, AZ 85331                                                      |  | Common Stock   |  |                                           | 28,254,345 |                      
|Steven M Plumb, CFO                                                       |  |                |  |                                           |            |                      
|9130 Cliffwood Drive                                                      |  |                |  |                                           |            |                      
|Houston, TX 77096                                                         |  | Common Stock   |  |                                           | -          |                      
|Nick Mehdi                                                                |  |                |  |                                           |            |                      
|4719 Chenybriar Ave.                                                      |  |                |  |                                           |            |                      
|Sugar Land, TX 77479                                                      |  | Common Stock   |  |                                           | -          |                      
|Irving Minnaker  550 South Ocean Blvd, Apt. 1201 Boca Raton Florida 33432 |  | Common Stock   |  |                                           | -          |                      
|Dustin Sullivan 212 Island Drive Island Lake, IL 60042                    |  | Common Stock   |  |                                           | 3,825,654  |                      
|Claude Zdanow 8605 Santa Monica Blvd. PMB 36522 Los Angeles, CA 90069     |  | Common Stock   |  |                                           |            |                      
|Directors and Executive Officers as a Group (5 persons)                   |  | Common Stock   |  |                                           | 32,079,999 |                      



45









*
Less than 1%



|(1) | Applicable percentage of
    ownership is based on 506,357,952 shares of our Common Stock outstanding as of January 16,
    2024, 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.



The
following table sets forth, as of January 16, 2024, 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 (2) 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 (3) 826 N. La Cienega Blvd. Los Angeles, CA 90069 |  | Series H
                                                      Convertible Preferred Stock |  |                                           | 3,846,341.48 |                      



*
Less than 1%



|(1) | Applicable percentage of ownership is based on 4,878,048.8 shares of our
Series H Convertible Stock outstanding as of January 16, 2024.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                        
|(2) | LNMS LLC is managed by Nick Mehdi, who makes all of
    its investment decisions.                                                      
|    |                                                                                                                                        
|(3) | 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.





46









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
2023.



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, 2021, and September
30, 2022, BMB was paid $105,582 and $127,444, respectively, for such services. Additionally, during the years ended September 30, 2021,
and September 30, 2022, BMB collected and processed the Company’s credit card charges from sales and advanced funds totaling $94,692
and $44,701, respectively. The transaction fee for the service is three percent plus interest calculated on each credit facility utilized.



47









Director
Independence



Our
Board is currently composed of five members: Messrs. Davis, Mehdi, Minnaker, Sullivan, and Zdanow. 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 Messrs. Mehdi, Minnaker, and 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
    Claude
    Zdanow |  | Todd
    Davis (Chair)
    Irving Minnaker
    Dustin Sullivan
    Nick Mehdi
    Claude
    Zdanow |  | Todd
    Davis (Chair)
    Irving Minnaker
    Dustin Sullivan
    Nick Mehdi
    Claude
    Zdanow



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, Zdanow, and Davis (Chairman) serve on the Audit Committee. As of the date of this Offering Circular,
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, Zdanow and Davis (Chairman) serve as members of the Compensation Committee.
Messrs. Mehdi, Minnaker, Sullivan and Zdanow 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, Zdanow 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,
Sullivan and Zdanow 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.



48









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 2023 and 2022 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 years ending September 30, 2023 and September 30, 2023 and reviewed the Company’s quarterly
financial statements for each of the first three fiscal quarters during fiscal 2023.





|                   |  | September 30, |         |  | September 30, |  
|------------------ |  | ------------- | ------- |  | ------------- | -
|Description        |  | 2023          |         |  | 2022          |  
|Audit fees         |  | $             | 88,226  |  |               | $
|Audit-related fees |  | $             | 16,500  |  |               | $
|Legal fees         |  | $             | 0       |  |               | $
|All other fees     |  | $             | 67,862  |  |               | $
|Total              |  | $             | 172,588 |  |               | $







49







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                                                                                                                                      



50







|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                                               
|        |  |                                                                                                                                                     
|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



51







|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)                                                                                                       
|       |  |                                                                                                                                                                                      
|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  |  | Reserved                                                                                                                                                                             
|       |  |                                                                                                                                                                                      
|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                                                           



52







|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 further 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                                                                                                                                          
|       |  |                                                                                                                                                                                                
|21.1*  |  | Subsidiaries of the Registrant                                                                                                                                                                 



53







|23.1     |  | Reserved                                                                                                            
|-------- |  | --------------------------------------------------------------------------------------------------------------------
|         |  |                                                                                                                     
|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 Annual Report on Form 10-K (Amendment No. 1), filed with the Commission on June 9, 2023, each of which is incorporated herein by
reference thereto.



**
- 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.





54







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 16, 2024   | 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 16, 2024
|----------------------------------- |  | -----------------------
|Todd Davis                          |  |                        
|President, Chief Executive Officer, |  |                        
|Secretary and Chairman and Director |  |                        
|                                    |  |                        
|/s/ Steven
    M Plumb              |  | Dated: January 16, 2024
|Steven M Plumb                      |  |                        
|Chief Financial Officer             |  |                        
|                                    |  |                        
|/s/ Nick
    Mehdi                  |  | Dated: January 16, 2024
|Nick Mehdi                          |  |                        
|Director                            |  |                        
|                                    |  |                        
|/s/ Irving
    Minnaker             |  | Dated: January 16, 2024
|Irving Minnaker                     |  |                        
|Director                            |  |                        
|                                    |  |                        
|/s/ Dustin
    Sullivan             |  | Dated: January 16, 2024
|Dustin Sullivan                     |  |                        
|Director                            |  |                        
|                                    |  |                        
|/s/ Claude
    Zdanow _             |  | Dated: January 16, 2024
|Claude Zdanow                       |  |                        
|Director                            |  |                        







55