NOTE 2 – BASIS OF PRESENTATION AND GOING CONCERN

For the year ended December 31, 2022, the Company used net cash in operating activities for its operations of $2,712,090 and incurred a loss from its operations of $5,481,291. As of December 31, 2022, the Company’s accumulated deficit is $35,177,625. As of December 31, 2022, the Company has negative working capital of $1,215,409 and cash of $225,276. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s $480,000 of Series A redeemable convertible preferred stock was in default as of December 31, 2022, but the holders of the Series A stock have agreed to stay any action pursuant to a conditional conversion agreement until the end of March 2023, and management is in discussions with these holders to extend those agreements.

The Company has supported operations through the issuance of common stock, preferred stock and debt over the last 12 months. This includes the current $3.5 million common stock and warrant offering, of which $1,405,500 has been raised as of December 31, 2022; the $2.5 million Series B preferred stock offering in the first quarter of 2021; the exercise in late 2021 of approximately $470,000 in warrants issued in connection with the Series B offering; and a convertible debt offering in the amount of $605,000 conducted in the fourth quarter of 2021. With respect to the convertible notes, they are convertible into common stock prior to the maturity date of December 31, 2023, or automatically upon the Company completing a qualified offering in the amount of $5 million or uplisting its common shares to NASDAQ; and bear interest at the rate of 6% per annum, with all interest and principal due at maturity, unless earlier converted. See Note 6 for further discussion.

Management expects expenses to increase in 2023 as our drug technology continues clinical trials, and as a result, we will need to raise additional capital to support these operations. Management believes that it can do so through equity raises in 2023. If the Company is not successful in raising additional capital, it may need to delay clinical trials, reduce overhead, or in the most extreme scenario, shut down operations.

There is no guarantee whether the Company will be able to generate revenue and/or raise capital sufficient to support its operations. The ability of the Company to continue as a going concern is dependent on management’s plans which include implementation of its business model to develop and commercialize its drug candidate, seek strategic partnerships to advance clinical trials and other research endeavors which could provide additional capital to the Company, and continue to raise funds for the Company through equity or debt offerings. There is no assurance, however, that the Company will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to the Company. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.