(11) Subsequent Events

On January 18, 2023, the Company’s board of directors in accordance with the recommendations of the Company’s approved the issuance of 1,530,944 Non-Qualified Stock Options to certain directors and consultants and 699,540 Incentive Stock Options to officers and employees with an exercise price of $1.50 per share. All directors’ stock options vested 100% on the day of grant and all officers and employees stock options vested 25% on the day of grant and the remaining 75% vested equally over the subsequent thirty-six (36) months. Consultant’s Non-Qualified Stock Options vest equally per month over the subsequent twelve months.

On February 28, 2023, the Company entered into a Securities Issuance and Exchange Agreement (the “Issuance and Exchange Agreement”) with an accredited investor (the “Investor”) whereby the Investor agreed to accept shares of a series of the Company’s preferred stock in exchange for three categories of cash amounts owed to the Investor. The series of preferred stock has not yet been created; however, each share of the newly created preferred stock will have a value of $25,000 and the conversion price of the preferred stock will be $2.50 such that, upon conversion into shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), each share of preferred stock will convert into ten thousand (10,000) shares of Common Stock.

The Investor agreed to accept shares of preferred stock in exchange for (i) $6,226,125 of unpaid accrued dividends on shares of Series AA Preferred Stock held by the Investor; (ii) $2,255,587 of unpaid accrued interest on secured convertible promissory notes issued to the Investor by the Company from November 15, 2019 to August 31, 2021 with such notes having an original principal amount of $9,393,150; and (iii) $1,535,500 in principal owed pursuant to secured convertible promissory notes issued to the Investor by the Company from November 15, 2019 to February 12, 2020 (with such amount included within the $9.39 million in notes discussed in Note 9).

The $10,017,212 owed to the Investor will be exchanged for 400.6885 shares of the Company’s preferred stock once such series of preferred stock is created via the filing of a Certificate of Designation with the Commonwealth of Massachusetts. These 400.6885 shares of preferred stock will be convertible into approximately 4,000,000 shares of Common Stock.

On February 28, 2023, the Company received an executed Notice of Conversion from an accredited investor (the “Investor”) who elected to convert 101,154 shares of Series D, Series G, Series H, Series H2, Series J and Series K Convertible Preferred Stock (the “Preferred Stock”) into 493,540 shares of common stock (the “Common Stock”) of the Company.

From January 1, 2023, through March 31, 2023, the Company issued ten (10) convertible loans for approximately $2,900,000, which each carry a 10-40% annual interest rate and four (4) to twelve (12) month terms and convertible to the Company’s common stock at a $2.50 conversion price. The Company issued 618,150 common stock and 325,000 preferred stock along with the loan issuance. In this period, the Company also borrowed $55,000 from related parties with 10% original issue discount and 10% per month interest rate and entered into seven (7) new Merchant Cash lender agreements with an original total outstanding balance of $1,498,769 and obligated the Company to pay $60,157 each week to the lenders.

In this time the Company also repaid one loan totaling $460,000 on January 20, 2023, which was issued on November 3, 2022, and matured on January 3, 2023. The Company also extended one loan in the amount of $26,000 to May 31, 2023, which was issued on December 1, 2022, and matured on March 1, 2023, and issued 2,500 shares of common stock as extension fees.

During this period the Company also issued 203,613 shares to a lender who converted $509,032 of liabilities and debt principal (consisting of $302,482 principal, $206,050 accrued interest and $500 for conversion fees) into common stock, sold 40,000 shares of common stock to two (2) investors at $2.50 per share and issued 884,000 shares of common stock and 100,000 warrants to acquire common stock (five-year term and $3.50 strike price) to consultants for investor relations services.