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0
3991
1851
0
0
780
8677
12254
20673
3685
1709
13583
0
0
0
2564
1547
834
6761
0
0
82720
12260
4450
1067
264
3883
0.50
0.50
63000
147000
1000000
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1500000
2000000
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2000000
2000000
1250000
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1650000
1500000
1500000
30351
27724
37366
207452
0.10
0.10
0.030
0.12
0.10
44913101
45363101
700000
-250000
45363101
P1Y9M29D
P1Y7M21D
0.08
0.08
0.030
0.12
0.08
7500000
9200000
20000000
15000000
10000000
60000000
6000000
17000000
3500000
72653473
4900000
P10Y
P10Y
P5Y
P10Y
P5Y
P10Y
P5Y
P5Y
P5Y
3000000
3000000
18886559
1625000
800000
8400000
23500000
23500000
109908433
50441914
3275000
109908433
P36M
P60M
2019-10
2026-06
0.00
0.02
0.17
3750000
32387
P3Y4M13D
50000
125000
200000
0.025
0.02
75202
61255
164588
129000
237300
101700
149555
64095
339000
213650
8636
10170
1500000
793151
593075
0.07
0.07
0.07
3325000
106158433
P3Y11M4D
P3Y4M13D
0.09
0.09
0.09
No
No
179109
false
8735
478
400
23525
19191
32260
20069
499670
525509
11383
18294
1193313
563872
1519106
1629741
3620181
1573690
1023151
924957
1197973
500000
20000
20000
2388041
2467106
9790262
7161186
128725
135342
9918987
7296528
630311
583326
707914
49414586
47777681
-58770571
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-3571297
-8725674
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800131
978981
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42355411
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707914
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563872
650000
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90010
196915
51085
1070297
1384819
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1043085
1361732
697973
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7059
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45544
16176
9046
6175
0
4384
8044
7235
5160
4475
16870
45219
6625
8702
650000
6095535
67000
650000
650000
1197973
500000
9758002
P5Y
P7Y
P3Y
P10Y
P3Y
24834
25006
946515
3502
17007
967024
971604
3502
11447
956655
6911
6864
40000
15000
137743
192743
192743
40000
15000
137743
21810
2497955
2519765
45692
45692
20000
277939
650000
9719
268221
Expire during the period October 2019 to December 2023
4696468
P2Y9M14D
1500000
100000
300000
50000
15530
277940
147300
7500000
4500000
3450000
2750000
24407
18864
372060
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18294
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 8 – STOCK-BASED COMPENSATION</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows FASB Accounting Standards Codification
(“ASC”) 718 <i>“Compensation — Stock Compensation” </i>for share-based payments which requires all stock-based
payments, including stock options, to be recognized as an operating expense over the vesting period, based on their grant date fair values.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In October 2009, the Board of Directors authorized
the approval of a stock option plan covering 7,500,000 shares of common stock, which was increased to 10,000,000 shares in December 2009
and approved by stockholders in January 2010. The Plan provides for the direct issuance of common stock and the grant of incentive and
non-incentive stock options. As of September 30, 2018, 9,200,000 options have been granted, with terms ranging from five to ten years,
and 800,000 have been cancelled leaving a balance of 8,400,000 of options outstanding. During the three months ended September 30, 2019,
we issued 1,500,000 shares of restricted stock out of the plan, leaving 100,000 options or grants available for grant under the plan.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2012, 3,500,000 stock options, with a term
of five years, were granted outside of a stock option plan. In March 2017, the term of these options was extended for an additional five
years. In June 2016, and 2017, 6,000,000 and 17,000,000 stock options, with a term of ten years, were granted, respectively, outside of
a stock option plan, and 3,000,000 shares were cancelled, leaving a balance of 23,500,000 outstanding outside of a defined option plan.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2013 the Board of Directors authorized
the approval of a stock option plan covering 20,000,000 shares of common stock, which was increased to 60,000,000 shares in March 2013
and approved by stockholders in March 2013. The Plan provides for the direct issuance of common stock and the grant of incentive and non-incentive
stock options. As of September 30, 2019, 72,653,473 options have been granted, with terms ranging from five to ten years, 3,325,000 have
been exercised and 18,886,559 have been cancelled, and 50,441,914 remain outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 17, 2016, the Shareholders approved the
2015 Employee Benefit and Consulting Services Compensation Plan covering 15,000,000 shares. The Plan provides for the direct issuance
of common stock and the grant of incentive and non-incentive stock options. As of September 30, 2019, 4,900,000 options have been granted
with a term of five years, and 1,625,000 have been cancelled leaving a balance outstanding of 3,275,000 options.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Incentive Stock Options:</i> The Company estimates
the fair value of each stock option on the date of grant using the Black-Scholes-Merton valuation model. The volatility is based on expected
volatility over the expected life of thirty-six to sixty months. As the Company has not historically declared dividends, the dividend
yield used in the calculation is zero. Actual value realized, if any, is dependent on the future performance of the Company’s common
stock and overall stock market conditions. There is no assurance the value realized by an optionee will be at or near the value estimated
by the Black-Scholes-Merton model.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 3.25in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of the activity of the Company’s stock
options for the three months ended September 30, 2019 is presented below (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Number of</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Remaining</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Optioned</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Aggregate</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Exercise</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Optioned</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Contractual</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Grant Date</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Intrinsic</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Price</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Shares</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Term in Years</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Fair Value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Value</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 38%"><font style="font-size: 10pt">Balance as of June 30, 2019</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">0.07</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">109,908,433</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; text-align: right"><font style="font-size: 10pt">3.93</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">0.09</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">           -</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Expired</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Exercised</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; padding-left: 10pt"><font style="font-size: 10pt">Cancelled</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Balance as of September 30, 2019</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.07</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">109,908,433</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3.37</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.09</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Vested and exercisable as of September 30, 2019</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.07</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">106,158,433</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3.37</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.09</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Outstanding options at September 30, 2019, expire
during the period October 2019 to June 2026 and have exercise prices ranging from $0.02 to $0.17.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Compensation expense associated with stock options
for the three months ended September 30, 2019 and 2018 was $37,366 and $207,452 respectively and was included in general and administrative
expenses in the condensed consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At September 30, 2019, the Company had 3,750,000 shares
of nonvested stock option awards. The total cost of nonvested stock option awards which the Company had not yet recognized was $32,387.
Such amounts are expected to be recognized in the current year.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 9 – LOSS PER SHARE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows ASC 260, <i>“Earnings Per
Share”,</i> for share-based payments that are considered to be participating securities within the definition provided by the standard.
All share-based payment awards that contained non-forfeitable rights to dividends, whether paid or unpaid, were designated as participating
securities and included in the computation of earnings per share (“EPS”).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth the computation of
basic and diluted loss per share (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="text-align: center"><font style="font-size: 10pt">Three Months Ended</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2018</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; padding-bottom: 2.5pt"><font style="font-size: 10pt">Net loss</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">(2,968,994</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"><font style="font-size: 10pt">)</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">(1,624,946</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Weighted average common shares outstanding:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Basic and diluted</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">606,938,649</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">471,961,937</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Basic and diluted loss per share</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(0.00</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(0.00</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">)</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 10 - COMMITMENTS AND CONTINGENCIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Agreement with University of Arizona</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Solterra entered into an exclusive Patent License
Agreement with the University of Arizona (“UA”) in July 2009. On March 3, 2017, Solterra entered into an amended license agreement
with UA. Pursuant to UA License Agreement, as amended, Solterra is obligated to pay minimum annual royalties of $50,000 by June 30, 2017,
$125,000 by September 15, 2017 and $200,000 on each June 30th thereafter, subject to adjustments for increases in the consumer price index.
Such minimum royalty payments shall be credited against royalties due in each respective royalty year, July 1 to June 30, following the
due date. Royalties based on net sales are 2% of net sales of licensed products for non-display electronic component applications and
2.5% of net sales of licensed products for printed electronic displays. The UA License Agreements and subsequent amendments have been
filed on Form 8-K and are incorporated by reference herein. The Company is in the process of renegotiating the minimum royalty commitments
and while oral modifications have been agreed to a final amendment has not been finalized. As of September 30, 2019, no royalties have
been accrued for this obligation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Agreement with Texas State University</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company entered into a Service Agreement with
Texas State University (“TSU”) by which the Company occupies certain office and lab space at TSU’s STAR Park (Science
Technology and Advanced Research) Facility. The agreement is month-to-month and can be terminated with 60-days written notice of either
party.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Operating Leases</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company leases certain office and lab space under
a month-to-month operating lease agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Rental expense for the operating lease for the three
months ended September 30, 2019 and 2018 was $24,407 and $18,864, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 13 – TRANSACTIONS WITH AFFILIATED PARTIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At September 30, 2019 and 2018, the Company had accrued
salaries payable to executives in the amount of $793,151 and $593,075, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth the computation of
basic and diluted loss per share (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="text-align: center"><font style="font-size: 10pt">Three Months Ended</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2018</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; padding-bottom: 2.5pt"><font style="font-size: 10pt">Net loss</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">(2,968,994</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"><font style="font-size: 10pt">)</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">(1,624,946</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Weighted average common shares outstanding:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Basic and diluted</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">606,938,649</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">471,961,937</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Basic and diluted loss per share</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(0.00</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">(0.00</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">)</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of the activity of the Company’s stock
options for the three months ended September 30, 2019 is presented below (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Number of</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Remaining</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Optioned</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Aggregate</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Exercise</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Optioned</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Contractual</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Grant Date</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Intrinsic</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Price</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Shares</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Term in Years</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Fair Value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Value</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 38%"><font style="font-size: 10pt">Balance as of June 30, 2019</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">0.07</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">109,908,433</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; text-align: right"><font style="font-size: 10pt">3.93</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">0.09</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">           -</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Expired</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Exercised</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; padding-left: 10pt"><font style="font-size: 10pt">Cancelled</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Balance as of September 30, 2019</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.07</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">109,908,433</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3.37</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.09</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Vested and exercisable as of September 30, 2019</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.07</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">106,158,433</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3.37</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.09</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">June 30,</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">(unaudited)</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Furniture and fixtures</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">3,502</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">3,502</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font-size: 10pt">Computers and software</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">17,007</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">11,447</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Machinery and equipment</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">946,515</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">956,655</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">967,024</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">971,604</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Less: accumulated depreciation</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">467,354</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">446,095</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt; text-align: justify"><font style="font-size: 10pt">Total property and equipment, net</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">499,670</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">525,509</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are stated at cost. Depreciation
is computed on the straight-line basis over the estimated useful lives of the various classes of assets as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-align: justify"><font style="font-size: 10pt">Furniture and fixtures</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 21%; text-align: right"><font style="font-size: 10pt">7 years</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font-size: 10pt">Computers and software</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3 years</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify"><font style="font-size: 10pt">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3 - 10 years</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Nature of Operations</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Quantum Materials Corp., a Nevada corporation, and
its wholly owned subsidiaries, QMC HealthID Inc. and Solterra Renewable Technologies, Inc. (collectively referred to as the “Company”)
are headquartered in San Marcos, Texas. The Company is a nanotechnology company specializing in the design, development, production and
supply of quantum dots, including tetrapod quantum dots, a high-performance variant of quantum dots, and highly uniform nanoparticles,
using its patented automated continuous flow production process. Quantum dots and other nanoparticles are expected to be increasingly
utilized in a range of applications in the life sciences, television and display, solid state lighting, solar energy, battery, security
ink, and sensor sectors of the market. QMC HealthID Inc is specifically focused on providing a complete point of care testing solution
that leverages the Company’s distributed ledger technology utilizing the QMC HealthID application and platform which is currently
being developed with a quantum dot enabled point of care lateral flow test platform. Key uncertainties and risks to the Company include,
but are not limited to, if and how quickly various industries adopt and fully embrace quantum dot technology and technological changes,
including those developed by the Company’s competitors, rendering the Company’s technology uncompetitive or obsolete. This
also includes achieving Federal Drug Administration approval and emergency use authorization for medical tests that diagnose Covid-19
and other diagnostic purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Sequencing</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted a sequencing policy under
Accounting Standards Codification (“ASC”) 815-40-35 Derivatives and Hedging (“ASC 815”) whereby in the event that
reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability
to demonstrate it has sufficient authorized shares as a result of certain securities convertible or exchangeable for a potentially indeterminable
number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest
grants receiving the first allocation of shares. Pursuant to ASC 815, issuances of securities to the Company’s employees or directors
are not subject to the sequencing policy.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of Estimates:</u> The preparation of the condensed
consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue Recognition:</u> The Company recognizes
revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect
to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are
within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance
obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations
in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. The five-step model is applied to contracts
when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the
customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised
within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct.
We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as)
the performance obligation is satisfied.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white">Title and risk
of loss generally pass to our customers upon shipment. In limited circumstances where either title or risk of loss pass upon destination,
we defer revenue recognition until such events occur. The transaction price is allocated to the separate performance obligations on a
relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these
services are sold on a standalone basis. For the three months ended September 30, 2019 and 2018 our revenue was immaterial.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Financial Instruments:</u> Financial instruments
consist of cash and cash equivalents, restricted cash, payables, and convertible debentures. The carrying value of these financial instruments
approximates fair value due to either their short-term nature or interest rates that approximate prevailing market rates unless otherwise
disclosed in these consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Property and Equipment:</u> Property and equipment
are stated at cost. Depreciation is computed on the straight-line basis over the estimated useful lives of the various classes of assets
as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-align: justify"><font style="font-size: 10pt">Furniture and fixtures</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 21%; text-align: right"><font style="font-size: 10pt">7 years</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font-size: 10pt">Computers and software</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3 years</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify"><font style="font-size: 10pt">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3 - 10 years</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Licenses and Patents:</u> Licenses and patents
are stated at cost. Amortization is computed on the straight-line basis over the estimated useful life of five years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Debt Issuance Costs:</u> The costs related to the
issuance of debt are presented on the balance sheet as a direct deduction from the related debt and amortized to interest expense using
the effective interest method over the maturity period of the related debt. Unamortized debt discount was $30,350.81 and $27,724 on September
30, 2019 and June 30, 2019, respectively. Amortization expense for the three months ended June 30, 2019 and 2018 was $2,895 and $90,010,
respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Beneficial Conversion:</u> Debt and equity instruments
that contain a beneficial conversion feature are recorded as a deemed dividend to the holders of the convertible notes. The deemed dividend
associated with the beneficial conversion is calculated as the difference between the fair value of the underlying common stock less the
proceeds that have been received for the equity instrument limited to the value received. The beneficial conversion amount is recorded
as beneficial conversion expense and an increase to additional paid-in-capital.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Derivative Instruments:</u> The Company enters
into financing arrangements which may consist of freestanding derivative instruments or hybrid instruments that contain embedded derivative
features. The Company accounts for these arrangements in accordance with ASC 815, “<i>Accounting for Derivative Instruments and
Hedging Activities”,</i> as well as related interpretation of this standard. In accordance with this standard, derivative instruments
are recognized as either assets or liabilities in the consolidated balance sheets and are measured at fair values with gains or losses
recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized
at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative
instruments and hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and
obligations of each instrument.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company estimates fair values of derivative financial
instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values.
In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that
it embodies and the expected means of settlement. For less complex derivative instruments, such as freestanding warrants, the Company
generally uses the Black-Scholes model, adjusted for the effect of dilution, because it embodies all the requisite assumptions (including
trading volatility, estimated terms, dilution and risk-free rates) necessary to fair value these instruments. Estimating fair values of
derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change
over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques
(such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of the Company’s common stock.
Since derivative financial instruments are initially and subsequently carried at fair values, income (expense) going forward will reflect
the volatility in these estimates and assumption changes. Increases in the trading price of the Company’s common stock and increases
in fair value during a given financial quarter result in the application of non-cash derivative expense. Conversely, decreases in the
trading price of the Company’s common stock and decreases in trading fair value during a given financial quarter result in the application
of non-cash derivative income.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair value measurements:</u> The Company estimates
fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants in the principal market for the asset or liability. The valuation techniques require inputs that are categorized using a
three-level hierarchy, from highest to lowest level of observable inputs, as follows: (1) significant observable inputs, including unadjusted
quoted prices for identical assets or liabilities in active markets (“Level 1”), (2) significant other observable inputs,
including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less
active markets (“Level 2”) and (3) significant unobservable inputs, including those that require considerable judgment for
which there is little or no market data (“Level 3”). When multiple input levels are required for a valuation, the Company
categorizes the entire fair value measurement according to the lowest level of input that is significant to the measurement even though
other significant inputs that are more readily observable may have also utilized.</p>
1.40
20000000
0.01
442564332
450969648
583314787
630310563
73900
73900
236590
164589
3032
43333
118224
15069
-128968
350489
365558
128968
3031375
15068772
15068772
2133333
3333333
2081017
422297
8470
21341
344
20997
282
8188
8470
344055
282348
282348
37336
207452
207452
37336
16870
16870
75202
52765
22437
51777
4517
39652
7608
4516553
277940
513
-30800
30287
277940
200759
21916
-578946
757789
779705
578946
21926474
21926474
9718182
3527337
31745
31870
214882
98645
98645
214882
214882
53000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Asset Purchase Agreement with Capstan Platform,
Inc.</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 6, 2019 the Company completed the
asset purchase under an agreement (the “Capstan Purchase Agreement”) of the distributed ledger technology assets of
Capstan Platform, Inc. (“Capstan”) for a purchase price of $650,000 which is payable in common shares or cash. The
company issued 9,718,182 common shares during the three months ended September 30, 2019 and an additional 3,527,337 common shares
were issued during March 2021 in connection with this asset purchase and 6,095,535 remain issuable at the date of this filing. As a
part of the Capstan Purchase Agreement the Company paid $67,000 to settle existing debt to certain creditors held by Capstan. In
addition, the Company recorded $650,000 of intangible software assets acquired in the purchase. At the date of this filing the
software platform is still under construction and no amortization of such assets has been recorded.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 6 – NOTES PAYABLE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Promissory Note</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In September 2018, the Company issued a promissory
note secured by the Company’s CEO for $20,000 with interest rate of 6%, maturing on March 9, 2019. The note is convertible into
the Company’s common stock, at the lenders discretion, at a rate of $.04 per share, with warrants to purchase an equal amount of
stock. Interest expense for the three months ended September 30, 2019 and 2018 was $0 and $69, respectively. As of September 30, 2019
and June 30, 2019, $20,000 of principal was outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 2 – PROPERTY AND EQUIPMENT</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">June 30,</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">(unaudited)</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Furniture and fixtures</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">3,502</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">3,502</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font-size: 10pt">Computers and software</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">17,007</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">11,447</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Machinery and equipment</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">946,515</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">956,655</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">967,024</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">971,604</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Less: accumulated depreciation</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">467,354</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">446,095</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt; text-align: justify"><font style="font-size: 10pt">Total property and equipment, net</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">499,670</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">525,509</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Depreciation expense for the three months ended September
30, 2019 and 2018 was $24,834 and $25,006, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows Financial Accounting Standards
Board (“FASB”) Accounting Standards Update (“ASU”) 2011-04 <i>“Fair Value Measurement”</i> as it relates
to financial assets and financial liabilities, which defines fair value, establishes a framework for measuring fair value under GAAP and
expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require
or permit fair value measurements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">This guidance defines fair value as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. Hierarchical levels, as defined in this guidance and directly related to the amount of subjectivity associated with the inputs to
fair valuations of these assets and liabilities are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1 – Unadjusted quoted prices in active
markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2 – Inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets
or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs
other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally
from or corroborated by observable market data by correlation or other means.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3 – Valuations based on unobservable inputs
reflecting management’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations
require significant judgment.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2019, and June 30, 2019, the fair
value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued
expenses, approximates book value due to the short maturity of these instruments. Based upon borrowing rates currently available to the
Company for loans with similar terms, the carrying value of its debt obligations approximates fair value. As of September 30, 2019, and
June 30, 2019, the Company held no investments. The Company hired an independent resource to value its derivative liability as follows
(unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Fair Value Table</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Balance at September 30, 2019</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Quoted Prices in Active Markets for Identical Liabilities (Level 1)</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Significant Other Observable Inputs (Level 2)</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Significant Unobservable Inputs (Level 3)</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 28%; text-align: justify"><font style="font-size: 10pt">Derivative liability</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">      -</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 15%; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 15%; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font-size: 10pt">Liability for insufficient shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,497,955</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,497,955</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,497,955</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">        -</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,519,765</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Level Three Roll-forward</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Derivative Liability</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Total</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Balance June 30, 2019</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">45,692</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">45,692</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font-size: 10pt">Addition of derivative liabilities</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">50,522</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">50,522</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify"><font style="font-size: 10pt">Settlement of derivative liabilities</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(45,692</font></td>
<td><font style="font-size: 10pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(45,692</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Change in fair value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(28,712</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(28,712</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt; text-align: justify"><font style="font-size: 10pt">Balance September 30, 2019</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company hired an independent resource to value
its derivative liability as follows (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Fair Value Table</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Balance at September 30, 2019</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Quoted Prices in Active Markets for Identical Liabilities (Level 1)</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Significant Other Observable Inputs (Level 2)</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Significant Unobservable Inputs (Level 3)</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 28%; text-align: justify"><font style="font-size: 10pt">Derivative liability</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">      -</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 15%; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 15%; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font-size: 10pt">Liability for insufficient shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,497,955</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,497,955</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,497,955</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">        -</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,519,765</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Level Three Roll-forward</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Derivative Liability</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Total</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; text-align: justify"><font style="font-size: 10pt">Balance June 30, 2019</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">45,692</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">45,692</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font-size: 10pt">Addition of derivative liabilities</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">50,522</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">50,522</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify"><font style="font-size: 10pt">Settlement of derivative liabilities</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(45,692</font></td>
<td><font style="font-size: 10pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(45,692</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt; text-align: justify"><font style="font-size: 10pt">Change in fair value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(28,712</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(28,712</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt; text-align: justify"><font style="font-size: 10pt">Balance September 30, 2019</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">21,810</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of activity of the Company’s stock
warrants for the three months ended September 30, 2019 is presented below (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Remaining</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Exercise</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Number of</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Contractual</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Grant Date</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Price</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Warrants</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Term in Years</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Fair Value</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 42%"><font style="font-size: 10pt">Balance as of June 30, 2019</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 12%; text-align: right"><font style="font-size: 10pt">0.10</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 12%; text-align: right"><font style="font-size: 10pt">44,913,101</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; text-align: right"><font style="font-size: 10pt">1.83</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; text-align: right"><font style="font-size: 10pt">0.08</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Expired</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0.030</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">700,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2.79</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0.03</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt"><font style="font-size: 10pt">Exercised</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; padding-left: 10pt"><font style="font-size: 10pt">Cancelled</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">0.12</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(250,000</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">0.12</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Balance as of September 30, 2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">0.10</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">45,363,101</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">1.64</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">0.08</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Vested and exercisable as of September 30, 2019</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.10</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">45,363,101</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">1.64</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.08</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 11 — LITIGATION</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company was served in Hays County, Texas in a
complaint for breach of contract in February 2017. In April 2017, the Company settled this complaint for $129,000 payable over a four-month
period. As of the filing date of this Form 10-K, the balance in arrears is approximately $53,000 plus interest and other charges which
has been accrued at June 30, 2019. The Company repaid $237,300 in principal plus interest to L2 Capital LLC and $101,700 plus interest
to SBI Investments LLC on September 30, 2017, and $149,555 plus interest to L2 Capital LLC and $64,095 plus interest to SBI Investments
LLC on November 3, 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>CAUSE NUMBER 17-2033; Hays County, Texas</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Two lenders, SBI Investments LLC, 2014-1, and L2 Capital,
LLC, asked the Company’ transfer agent, Empire Stock Transfer, Inc., to set aside fifty-million (50,000,000) shares of stock as
collateral for four loan agreements the Company had entered into in late March 2017. This joint request occurred despite the fact that
or about September 30, 2017 Quantum had repaid $339,000 (plus accrued interest of $10,170) on two of the loans. Subsequently, in November
2017, the Company also repaid $213,650 and $8,636 of accrued interest on two of the remaining loans on their due dates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Quantum filed suit for an injunction to stop the release
of the stock on September 28, 2017. The two lenders, SBI Investments LLC, 2014-1 (SBI), and L2 Capital, LLC (L2), hired the national law
firm of K&L Gates to stop the injunction; problematically, this same firm had previously represented the Company. The Company filed
a motion to disqualify the law firm for that conflict, and they subsequently withdrew.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">SBI and L2, with new counsel, and Cleveland Terrazas
PLLC, brought suit against the Company on October 10, 2017 for $1.5 million on the four notes that had been repaid and were not in actual
default, though SBI Investments LLC, 2014-1, and L2 Capital, LLC claimed technical defaults. The court in Hays County granted the Company’s
temporary injunction and set the full case for trial. The next day, SBI Investments LLC, 2014-1, and L2 Capital, LLC dismissed their suit
against the Company and refiled similar actions in Kansas and Florida on the notes claiming that one note was paid on a Monday when it
was due on a Sunday, demanding late payment in stock (they refused cash), and another was paid on a Friday when it was due Saturday, claiming
a pre-payment penalty. All three suits are related to the same transactions. The lenders claimed 140% interest, attorney’s fees,
20 million shares of stock, and damages.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The case has been dismissed as of the date of this
report.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>CAUSE NUMBER: 17CV06093; Johnson County, Kansas</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Kansas lawsuit, instituted on October 30, 2017,
is based on the same nucleus of facts. The putative default is the failure to properly and timely file a Form S-1 with the SEC. Three
causes of action are alleged: the first is breach of contracts regarding the Registration Rights Agreement against the Company; the second
claim is for breach of contract of the first L2 promissory note against the Company; the final claim is for breach of contract regarding
the second L2 promissory note against both the Company and Stephen Squires, individually. The claims against Squires individually were
abandoned. Trial was conducted October 13<sup>th</sup>, 2020. Final arguments were submitted in writing to the court February 2021. The
court has not yet ruled.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company denies all the above-mentioned allegations
and will vigorously defend all claims.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>CAUSE NUMBER: 2017-025283-CA-01; Miami-Dade County,
Florida</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Florida lawsuit, instituted on October 30, 2017,
largely mirrors the suit in Kansas; defaults are alleged as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 6, 2017, the Company filed a revised Form
10-Q/A report (the Report) with the SEC, restating its financial statements. In comparison to the unrestated financial statement previously
filed by the Company, SBI alleged that the Revised Report materially and adversely affects SBI’s rights with respect to the notes,
constituting a breach of each of the notes. Furthermore, because each note contains a cross-default clause, SBI alleged that each of the
Company’s breaches of a specific note also constituted a breach of every other note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 27, 2017, the Company’s auditor resigned,
and the Company replaced its auditor without seeking or obtaining the consent of SBI. SBI alleged that this replacement of the Company’s
auditor constituted a breach of the SBI notes, and because each note contains a cross-default clause, of every other note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company denies all of the above-mentioned allegations
and will vigorously defend all claims.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The case was reheard in late March 2018 and a 45-day
continuance was decided resulting in an April 30, 2018 rehearing. After a day of litigation in San Marcos, the Company’s motion
to enjoin L2 and SBI and prevent them from obtaining stock before a full trial on the merits was granted on October 27, 2017, by Judge
Gary Steel. L2 and SBI objected to the injunction and appealed to the Third Court of Appeals in Austin, TX. On March 8, 2018, in a unanimous
opinion, the Third Court of Appeals denied the appeal, sustained the injunction in favor of the Company and awarded costs of court.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 29, 2018, at a discovery hearing, wherein
the Company asked the court to order L2 and SBI to produce evidence to support their positions, L2 and SBI requested and received a stay
of litigation, postponing the trial date of April 2018, which they had previously requested, and also postponing discovery until rulings
in Florida and Kansas, or until further order of the court. The court also announced that when Florida and Kansas have spoken, discovery
will be expedited. A jurisdiction hearing for the Florida case on August 15, 2018 resulted in the lawsuit being dismissed and a hearing
is scheduled in Kansas in April 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company expects to be successful in the L2 and
SBI litigation. The ultimate outcome is not determinable and as such, no liability has been recorded for this contingent liability at
September 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>CAUSE NUMBER: PSC190273; Riverside California</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Edward James Schloss file a complaint against Quantum
Materials Corp and Solterra alleging financial elder abuse, fraud, breach of written contract, breach of oral contract, constructive termination,
retaliation, failure to pay wages, waiting time penalties, failure to permit inspection of employee records, unfair competition, intentional
infliction of emotional distress and failure to indemnify employee expenses. Mr. Schloss was a former officer and later a contractor to
the company after his dismissal and is owed fees. The Company expects to be successful in the litigation. The ultimate outcome is not
determinable and as such, no liability has been recorded for this contingent liability at September 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>CAUSE NUMBER: 19-2774; Hays County Texas</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">This litigation filed November 12, 2019 in Hays County
(San Marcos) alleged misappropriation of trade secrets and related claims based on Quantum Material Corp’s (“QMC” or
“Company”) hiring of a previous employee of the Plaintiff (Practice Interactive, Inc. d/b/a Intiva Health “Intiva”).
Intiva initiated the case by securing a no-notice temporary restraining order against the Company and the employee (“Hartigan”).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At a temporary injunction trial in December 2019,
the court granted a limited injunction against Hartigan and found no basis to enjoin the Company. The court set the bond at $50,000: Intiva
never took action to post the bond; thus the injunction never went into effect. The order also set the case for trial in July 2021. Although
the plaintiff only recently proposed a discovery and trial schedule, no discovery has occurred. The parties filed a Rule 11 Agreement
on December 15, 2020.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>CAUSE NUMBER: 18-2393;
Hays County, Texas</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The current litigation with
K&L Gates was pending before the Texas Supreme Court. It was awaiting a ruling to determine if the strong opinion at the 3rd Court
of Appeals in Austin in favor of Quantum Materials will be reversed. The state Supreme Court on Oct 15, 2020 declined to take the interlocutory
appeal. The case has now been sent back to Hays County for a jury trial.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Quantum Materials retained
K&L Gates (“Gates”) on a myriad of issues. As part of that representation, a lawyer from Gates sat in on confidential
board meetings and participated in the company’s most important negotiations, including but not limited to a new contract with the
founder and former CEO, Steve Squires, to become CEO again. Gates billed a very substantial fee in a very short period of time. Over $300,000.
Before negotiations occurred on what Squires believed to be an excessive bill, SBI Investments and L2, creditors of Quantum Materials,
demanded that the transfer agent, Empire Stock Transfer, transfer huge amounts of stock as collateral for loans.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Quantum Materials sued Empire
to prevent this transfer, first winning a Temporary Restraining Order, then a Temporary Injunction, and finally, after an appeal to the
3rd Court of Appeals in Austin, an appellate victory.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Before that appellate victory
and before the Injunction trial, K&L Gates entered an appearance for SBI Investments and L2, even though they were still under contract
with Quantum Materials as intervenors. Quantum Materials objected and raised objections to their firm, entering an appearance against
them. K&L Gates forced substantial research, and briefs to be filed before withdrawing before the Temporary Injunction trial. (see
TRO, TI order, appellate opinion.)</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Either K&L Gates shared
all information with their “new” client, to the disadvantage of their “old” client, a duty under full disclosure,
or they didn’t share. Gates claimed that the contract with Quantum Materials waived all conflicts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Following up on the actions
begun by Gates on behalf of SBI Investments and L2, the suit by Gates against Quantum Materials was dismissed in Texas, and another law
firm sued Quantum Materials in both Florida and Kansas. In Florida, the case was ultimately dismissed, and legal fees were ordered to
be paid to Quantum Materials. Much of the Kansas case has been dismissed, but the balance is set to be tried in Kansas in October. (see
the report on Kansas case.)</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Ultimately, Quantum Materials
sued K&L Gates for fiduciary violations and Deceptive Trade Practices and other claims (see suit), and Gates filed a counterclaim
for its $300,000 in alleged fees. Gates filed an action to dismiss the case, called a “SLAPP” action, and after a hearing
on the merits in Hays County, lost. Gates then appealed to the 3rd court of appeals in Austin, and after briefing and oral argument, again
lost. Gates has now appealed its most recent defeat to the Texas Supreme Court.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is supplemental cash flow information:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is supplemental disclosure of non-cash
investing and financing activities (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="text-align: center"><font style="font-size: 10pt">Three Months Ended</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2018</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%"><font style="font-size: 10pt">Cash paid for interest</font></td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">179,109</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt"> -</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Cash paid for income taxes</font></td>
<td> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="text-align: center"><font style="font-size: 10pt">Three Months Ended</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2018</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td colspan="2" style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td colspan="2" style="text-align: center"> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; padding-bottom: 2.5pt"><font style="font-size: 10pt">Conversion of debentures, and accrued interest into shares of common stock</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">285,564</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">21,342</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Allocated value of common stock and warrants issued with convertible debentures</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">75,202</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Derivative liability issued with convertible debentures</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">15,530</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Stock issued for purchase of intangible assets</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">277,940</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Accrued expenses for intangible assets</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">372,060</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"> </td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Stock issued for amounts in accounts payable</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">61,255</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Prepaid expense paid in shares of common stock</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">164,588</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is supplemental disclosure of non-cash
investing and financing activities (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="text-align: center"><font style="font-size: 10pt">Three Months Ended</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2018</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%"><font style="font-size: 10pt">Cash paid for interest</font></td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">179,109</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt"> -</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Cash paid for income taxes</font></td>
<td> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="text-align: center"><font style="font-size: 10pt">Three Months Ended</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2018</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td colspan="2" style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td colspan="2" style="text-align: center"> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; padding-bottom: 2.5pt"><font style="font-size: 10pt">Conversion of debentures, and accrued interest into shares of common stock</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">285,564</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double; width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; width: 16%; text-align: right"><font style="font-size: 10pt">21,342</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Allocated value of common stock and warrants issued with convertible debentures</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">75,202</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Derivative liability issued with convertible debentures</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">15,530</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Stock issued for purchase of intangible assets</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">277,940</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Accrued expenses for intangible assets</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">372,060</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"> </td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Stock issued for amounts in accounts payable</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">61,255</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Prepaid expense paid in shares of common stock</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">164,588</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
-1070297
-1384819
457792
23756489
126.70
0.0
1.63
372060
10500000
15000000
320000
-1898697
-240127
28712
-82162
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 1 – BASIS OF PRESENTATION</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Nature of Operations</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Quantum Materials Corp., a Nevada corporation, and
its wholly owned subsidiaries, QMC HealthID Inc. and Solterra Renewable Technologies, Inc. (collectively referred to as the “Company”)
are headquartered in San Marcos, Texas. The Company is a nanotechnology company specializing in the design, development, production and
supply of quantum dots, including tetrapod quantum dots, a high-performance variant of quantum dots, and highly uniform nanoparticles,
using its patented automated continuous flow production process. Quantum dots and other nanoparticles are expected to be increasingly
utilized in a range of applications in the life sciences, television and display, solid state lighting, solar energy, battery, security
ink, and sensor sectors of the market. QMC HealthID Inc is specifically focused on providing a complete point of care testing solution
that leverages the Company’s distributed ledger technology utilizing the QMC HealthID application and platform which is currently
being developed with a quantum dot enabled point of care lateral flow test platform. Key uncertainties and risks to the Company include,
but are not limited to, if and how quickly various industries adopt and fully embrace quantum dot technology and technological changes,
including those developed by the Company’s competitors, rendering the Company’s technology uncompetitive or obsolete. This
also includes achieving Federal Drug Administration approval and emergency use authorization for medical tests that diagnose Covid-19
and other diagnostic purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Sequencing</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted a sequencing policy under
Accounting Standards Codification (“ASC”) 815-40-35 Derivatives and Hedging (“ASC 815”) whereby in the event that
reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability
to demonstrate it has sufficient authorized shares as a result of certain securities convertible or exchangeable for a potentially indeterminable
number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest
grants receiving the first allocation of shares. Pursuant to ASC 815, issuances of securities to the Company’s employees or directors
are not subject to the sequencing policy.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Asset Purchase Agreement with Capstan Platform,
Inc.</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 6, 2019, the Company completed
the asset purchase under an agreement (the “Capstan Purchase Agreement”) of the distributed ledger technology assets of Capstan
Platform, Inc. (“Capstan”) for a purchase price of $650,000 which is payable in common shares or cash.
The company issued 9,718,182 common shares during the three months ended September 30, 2019 and an additional 3,527,337 common shares
were issued during March 2021 in connection with this asset purchase and 6,095,535 remain issuable at the date of this filing. As a part
of the Capstan Purchase Agreement the Company paid $67,000 to settle existing debt to certain creditors held by Capstan. In addition,
the Company recorded $650,000 of intangible software assets acquired in the purchase. At the date of this filing the software platform
is still under construction and no amortization of such assets has been recorded.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Contract Liabilities</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; color: #212529">The Company
issued advanced billings to Amtronics India LLC related to its exclusive license and development agreement related to the production of
quantum dots in Assam, India (“License Agreement”), which have been recorded as contract liabilities on the condensed
consolidated balance sheets and will be recognized as revenue in accordance with <font style="background-color: white">ASU 2014-09
Revenue from Contracts with Customers (Topic 606) </font>once the performance obligations are satisfied. <font style="background-color: white">As
of September 30, 2019, and 2018 contract liabilities were $1,197,973 and $500,000, respectively. </font>The current liability represents
the next twelve months’ portion of the license fees revenue. For each of the period ended September 30, 2019 and 2018, no
revenue was recorded related to the License Agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2018, the Company entered into a license
and development agreement with Amtronics India LLC related to the volume production of quantum dots in Assam, India. The agreement is
part of a larger project for the design, training, research and development of a quantum dot manufacturing facility in Assam. This project
has been under discussion for nearly three years. A ground-breaking ceremony took place in Assam on January 16, 2019, and the Company
anticipated operations being established and operational prior to year-end 2019. In addition to an upfront fee and royalty, the agreement
provides for the Company to sell equipment and training services, which the Company expects will provide additional revenues. The project
was delayed due to historic flooding in the region during 2019 and 2020. The project was and continues to be delayed due to the severe
Covid-19 outbreak and subsequent quarantine occurring throughout India. Construction on the project has resumed and planning for a new
timeline has begun.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company believes that the terms of the licensing
agreement will enable the Company to begin to leverage its intellectual property portfolio and to begin generating revenues without overburdening
the Company’s scientific staff in a manner that would disrupt new discovery. The other participants in the Assam project have the
responsibility of, among other things, developing the site, constructing the facilities and hiring staff. The Company has agreed to construct
and supply the proprietary equipment, assisting in the development and scale up of the 3<sup>rd</sup> generation solar, display and
SSL products, training and providing a broad range of consulting services at additional cost, representing a potential ongoing revenue
opportunity for the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Going Concern</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded losses from continuing operations
in the current period presented and has a history of losses. As of September 30, 2019, the Company had a working capital deficit of $9,758,002 and
net cash used in operating activities was $159,684 for the three months ended September 30, 2019. The ability of the Company to continue
as a going concern is dependent upon its ability to reverse negative operating trends, obtain revenues from operations, raise additional
capital, and/or obtain debt financing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In conjunction with anticipated revenue streams, management
is currently negotiating equity and debt financing, the proceeds from which would be used to settle outstanding debts, to finance operations,
and for general corporate purposes. We are continuing our plan to further grow and expand operations and seek sources of capital
to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity
for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will
occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue
as a going concern.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited consolidated financial
statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification
of liabilities that might be necessary if the Company is unable to continue as a going concern.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Basis of Presentation:</u> The accompanying
unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange
Commission and contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly its financial position
as of September 30, 2019 and its results of operations and its cash flows for the periods presented. The condensed consolidated balance
sheet at June 30, 2019 has been derived from the Annual Report on Form 10-K for the fiscal year ended June 30, 2019. The accompanying
unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial
statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019. Operating results for the interim periods
presented are not necessarily indicative of the results that may be experienced for the fiscal year ending June 30, 2020.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of Estimates:</u> The preparation of the
condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue Recognition:</u> The Company recognizes
revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect
to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are
within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance
obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations
in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. The five-step model is applied to contracts
when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the
customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised
within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct.
We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as)
the performance obligation is satisfied.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white">Title and risk
of loss generally pass to our customers upon shipment. In limited circumstances where either title or risk of loss pass upon destination,
we defer revenue recognition until such events occur. The transaction price is allocated to the separate performance obligations on a
relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these
services are sold on a standalone basis. For the three months ended September 30, 2019 and 2018 our revenue was immaterial.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Financial Instruments:</u> Financial instruments
consist of cash and cash equivalents, restricted cash, payables, and convertible debentures. The carrying value of these financial instruments
approximates fair value due to either their short-term nature or interest rates that approximate prevailing market rates unless otherwise
disclosed in these consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and Cash Equivalents:</u> Cash and cash
equivalents consist of cash in bank. <font style="background-color: white">The Company considers any highly liquid short-term investments
purchased with a maturity of three months or less to be cash equivalents.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Property and Equipment:</u> Property and equipment
are stated at cost. Depreciation is computed on the straight-line basis over the estimated useful lives of the various classes of assets
as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</font></td>
<td style="width: 2%"> </td>
<td style="width: 1%"> </td>
<td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7 years</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Computers and software</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3 years</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3 - 10 years</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Licenses and Patents:</u> Licenses and patents
are stated at cost. Amortization is computed on the straight-line basis over the estimated useful life of five years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Debt Issuance Costs:</u> The costs related
to the issuance of debt are presented on the balance sheet as a direct deduction from the related debt and amortized to interest expense
using the effective interest method over the maturity period of the related debt. Unamortized debt discount was $30,350.81 and $27,724
on September 30, 2019 and June 30, 2019, respectively. Amortization expense for the three months ended June 30, 2019 and 2018
was $2,895 and $90,010, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Earnings per Share:</u> The Company utilizes
ASC 260, “Earnings per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic
and diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common
shares outstanding. Diluted net loss per share is computed similar to basic loss per share except that the denominator is adjusted for
the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into
common stock. Potentially dilutive securities are not included in the calculation of the diluted loss per share if their effect would
be anti-dilutive. As such, these potential shares were excluded from the shares used to calculate diluted earnings per share as their
inclusion would reduce net loss per share for the three months ended September 30, 2019 and 2018. There are 750,000,000 shares authorized
resulting in approximately 23,756,489 of insufficient shares as of September 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Derivative Instruments:</u> The Company enters
into financing arrangements which may consist of freestanding derivative instruments or hybrid instruments that contain embedded derivative
features. The Company accounts for these arrangements in accordance with ASC 815, “<i>Accounting for Derivative Instruments and
Hedging Activities”,</i> as well as related interpretation of this standard. In accordance with this standard, derivative instruments
are recognized as either assets or liabilities in the consolidated balance sheets and are measured at fair values with gains or losses
recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized
at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative
instruments and hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and
obligations of each instrument.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company estimates fair values of derivative financial
instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values.
In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that
it embodies and the expected means of settlement. For less complex derivative instruments, such as freestanding warrants, the Company
generally uses the Black-Scholes model, adjusted for the effect of dilution, because it embodies all the requisite assumptions (including
trading volatility, estimated terms, dilution and risk-free rates) necessary to fair value these instruments. Estimating fair values of
derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change
over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques
(such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of the Company’s common stock.
Since derivative financial instruments are initially and subsequently carried at fair values, income (expense) going forward will reflect
the volatility in these estimates and assumption changes. Increases in the trading price of the Company’s common stock and increases
in fair value during a given financial quarter result in the application of non-cash derivative expense. Conversely, decreases in the
trading price of the Company’s common stock and decreases in trading fair value during a given financial quarter result in the application
of non-cash derivative income.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair value measurements:</u> The Company estimates
fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants in the principal market for the asset or liability. The valuation techniques require inputs that are categorized using a
three-level hierarchy, from highest to lowest level of observable inputs, as follows: (1) significant observable inputs, including unadjusted
quoted prices for identical assets or liabilities in active markets (“Level 1”), (2) significant other observable inputs,
including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less
active markets (“Level 2”) and (3) significant unobservable inputs, including those that require considerable judgment for
which there is little or no market data (“Level 3”). When multiple input levels are required for a valuation, the Company
categorizes the entire fair value measurement according to the lowest level of input that is significant to the measurement even though
other significant inputs that are more readily observable may have also utilized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recent Accounting Pronouncements</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02, Leases,
which updates guidance on accounting for leases. The update requires that a lessee recognize in the statement of financial position a
liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases
with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize
lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating
leases; however, this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification
of lease payments in the statement of cash flows. The standards update is effective for interim and annual periods after December 15,
2018 with early adoption permitted. Entities are required to use a modified retrospective adoption, with certain relief provisions, for
leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted. <font style="background-color: white">We
adopted this standard effective July 1, 2019 and it did not have a material impact on our condensed consolidated financial
statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2018, the FASB issued ASU No. 2018-05, Income
Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The amendment provides guidance on
accounting for the impact of the Tax Cuts and Jobs Act (the “Tax Act”) and allows entities to complete the accounting under
ASC 740 within a one-year measurement period from the Tax Act enactment date. This standard is effective upon issuance. The Tax Act has
several significant changes that impact all taxpayers, including a transition tax, which is a one-time tax charge on accumulated, undistributed
foreign earnings. The Company adopted the guidance effective July 1, 2018. The adoption of this standard did not have a material impact
on the Company’s condensed consolidated financial statements or related disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2017, the FASB issued ASU 2017-09, <i>Compensation
– Stock Compensation (Topic 718) – Scope of Modification Accounting. </i>The amendments included in this update provide
guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting.
The amendments in this update will be applied prospectively to an award modified on or after the adoption date. The Company adopted the
guidance effective July 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated condensed financial
statements or related disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Pronouncements Yet To Be Adopted</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #252525">In December 2019, the FASB issued
ASU No<b>. </b>2019-12: <i>Simplifying the Accounting for Income Taxes (Topic 740)</i>. The objective of the standard is to
improve areas of GAAP by removing certain exceptions permitted by ASC 740 and clarifying existing guidance to facilitate consistent application.
The standard will become effective for the Company beginning on June 1, 2021. The Company is currently evaluating the new standard to
determine the potential impact on its financial condition, results of operations, cash flows, and financial statement disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #252525"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2019, the FASB issued ASU 2019-08, <i>Compensation
- Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements - Share-based Consideration
Payable to a Customer</i>.  The objective of the standard is to clarify that an entity must measure and classify share-based payment
awards granted to a customer by applying the guidance in Topic 718. ASU 2019-08 is effective for fiscal years beginning after December
15, 2019, including interim reporting periods within those fiscal years. The Company will adopt ASU 2019-08 effective July 1, 2020
and its adoption is not expected to have a material impact on the Company’s financial condition or its results of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #252525"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2020, the FASB issued ASU 2020-06, “<i>Accounting
for Convertible Instruments and Contracts in an Entity’s Own Equity,</i>” which simplifies and clarifies certain calculation
and presentation matters related to convertible and equity and debt instruments. Specifically, ASU-2020-06 removes requirements to separately
account for conversion features as a derivative under ASC Topic 815 and removing the requirement to account for beneficial conversion
features on such instruments. Accounting Standards Update 2020-06 also provides clearer guidance surrounding disclosure of such instruments
and provides specific guidance for how such instruments are to be incorporated in the calculation of Diluted EPS. The guidance under ASU
2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption
is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company will adopt this standard using a modified
retrospective approach effective January 1, 2021. The Company is currently evaluation the effects of adoption on its consolidated financial
statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, the FASB issued Accounting Standards
Update 2016-13 <i>“Financial Instruments-Credit Losses”</i> (“ASC Topic 326”), which amends the guidance
on the impairment of financial instruments. The standard adds an impairment model, referred to as current expected credit loss, which
is based on expected losses rather than incurred losses. The standard applies to most debt instruments, trade receivables, lease receivables,
reinsurance receivables, financial guarantees and loan commitments. Under the guidance, companies are required to disclose credit quality
indicators disaggregated by year of origination for a five-year period. The new guidance is effective for fiscal years and interim periods
within those fiscal years beginning after December 15, 2019. We do not anticipate that this will have a material impact to our consolidated
financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management does not believe that any other
recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying
condensed consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 5 – DEBENTURES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth activity associated
with the convertible and non-convertible debentures:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">June 30,</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">Debenture</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Reference</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">(unaudited)</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 53%"><font style="font-size: 10pt">Convertible debentures issued in September 2014</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 13%; text-align: right"><font style="font-size: 10pt">25,050</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">25,050</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 13%; text-align: center"><font style="font-size: 10pt">A</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in April - June 2016</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,060,716</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,218,772</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">B</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debenture issued in August 2016</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">200,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">200,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">B</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in January - March 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">60,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">60,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">C</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible promissory notes issued in March 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">222,350</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">222,350</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">D</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debenture issued in June 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">100,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">E</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debenture issued in July 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">100,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">100,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">F</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debenture issued in September 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">150,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">150,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">G</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debenture issued in November 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">27,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">27,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">H</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debenture issued in December 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">75,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">75,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">I</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debenture issued in February 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">45,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">45,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">J</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in March 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">65,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">65,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">K</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debentures issued in April 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">100,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">60,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">L</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in April 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">70,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">70,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">M</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debentures issued in April 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">20,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">20,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">N</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in June 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">40,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">O</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debentures issued in July 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">45,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">45,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">P</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in August 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">30,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">30,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">Q</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debentures issued in September 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">25,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">25,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">R</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in December 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">52,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">52,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">S</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Non-convertible debentures issued in July 2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">175,000</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"><font style="font-size: 10pt">T</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,547,116</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,630,172</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Less: unamortized discount</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">30,351</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">27,724</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,516,765</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,602,448</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Less: current portion</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">2,388,041</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">2,467,106</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total convertible debentures, net of current portion</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">128,725</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">135,342</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt; text-align: center"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>A) September 2014 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Between September 16, 2014 and October 28, 2014, the
Company entered into Convertible Debenture Agreements to obtain a total of $500,050 in gross proceeds from five non-affiliated parties
(collectively hereinafter referred to as the “Debenture Holders”). The Debentures have terms of five years maturing between
September 16, 2019 and October 30, 2019. The Debentures bear interest at the rate of 6% per annum and are pre-payable by the Company at
any time without penalty. The Debenture Holders have the right of conversion into unregistered and restricted shares of Common Stock at
a conversion price of $0.15 per share at any date and will receive an equal number of warrants having a strike price of $0.30 per share
and a term of five years. None of the Debentures were converted into common shares during the three months ended September 30, 2019. As
of the date of this filing the notes are past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Interest expense for the three months ended September
30, 2019 and 2018 was $384 and $384, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2019 and June 30, 2018, $25,050
of principal was outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>B) April – June, August, October and November
2016 Convertible Debentures</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the fourth quarter of the year ended June 30,
2017, the Company sold 1,565 Units for total proceeds of $1,565,000 from three affiliated and fourteen non-affiliated parties. In August
2016 the Company sold 200 additional Units for total proceeds of $200,000 and sold $50,000 in proceeds in October 2016. Each Unit consists
of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”)
over a period of five years. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest
at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.12 per-share, subject to
normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment,
issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets
(other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject
to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities
convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding
Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing
convertible securities of the Company. The conversion price was reset to $0.012 per share in June 2018 as a result of a triggering event.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible debentures, the
Company allocated the fair value of the warrants to the proceeds received in the amount of $609,595, recorded as debt discount and is
amortized using the effective interest rate method over the life of the loan, two years. The Company recognized accretion of debt discount
expense for the three months ended September 30, 2019, and 2018, of $2,564 and $2,564, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Interest expense for the three months ended September
30, 2019, and 2018, of $24,881 and $26,067, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the years ended June 30, 2018 and 2017, $455,000
and $285,000 of principal was converted into 3,791,666 and 2,375,000 shares of common stock, respectively. As of September 30, 2019 and
June 30, 2019, $1,260,716 and $1,418,772 of principal was outstanding, respectively. Maturities totaling $825,000 of principal have been
extended for one year until March and April of 2019. As of the date of this filing the notes are past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>C) January-March 2017 Convertible Debentures</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the third quarter of the year ended June 30,
2017, the Company sold 2,600 Units for total proceeds of $260,000 from five non-affiliated parties. Each Unit consists of a $1,000 Unsecured
Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s common stock, par
value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”) over a
period of five years. The Notes which were issued at face value have a maturity of two years from the date of issuance, bear interest
at the rate of 8% per annum and are convertible into unregistered and restricted shares of Common Stock at $0.12 per-share, subject to
normal and customary adjustments including (a) any subdivisions, combinations and classifications of the Common Stock; or (b) any payment,
issuance or distribution by the Company to its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets
(other than cash dividends payable out of earnings or surplus in the ordinary course of business). The conversion price also is subject
to a full ratchet adjustment upon the Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities
convertible into Common Stock for a consideration per share which is less than the then applicable conversion price of the Notes excluding
Common Stock and options issued to officers, directors, and employees of the Company, except for the exercise or conversion of existing
convertible securities of the Company. In evaluating the accounting treatment of this anti-dilution feature, the Company believes that
is has control over whether the anti-dilution feature will be exercised. The Company is able to decide on which type of financing is raised,
and thus the Company can prevent the issuance of shares at a price below the anti-dilution strike price. The number of Warrants and exercise
price is proportionately adjustable for events including subdivisions, combinations or consolidations, reclassifications, exchanges, mergers,
and reorganizations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible debentures, the
Company allocated the fair value of the warrants to the proceeds received in the amount of $73,250, recorded as debt discount and is amortized
using the effective interest rate method over the life of the loans, two years. The Company recognized accretion of debt discount expense
for the three months ended September 30, 2019 and 2018 of $2,595 and $1,547, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended June 30, 2018, $200,000 of these
debentures converted into 1,666,667 shares of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Interest expense for the three months ended September
30, 2019 and 2018 of $2,085 and $1,210, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2019 and June 30, 2019, $60,000
of principal was outstanding. As of the date of this filing the notes are past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>D) March 2017 Convertible Promissory Notes</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2017, the Company entered into Convertible
Promissory Notes with SBI Investment LLC, 2014-1 (“SBI”) and L2 Capital, LLC (“L2 Capital”) to obtain $285,000
in gross proceeds. In connection with the first funding tranche, SBI and L2 received 253,525 and 760,576 common stock warrants, respectively,
exercisable at $0.13 per share through March 28, 2022. At each subsequent funding to the first tranche, the Company will issue to each
of SBI and L2 Capital warrants to purchase 50% of the total amount of each tranche funded plus the applicable original issue discount,
divided by the lesser of (i) the closing bid of the common stock on March 29, 2017 and (ii) the closing bid price of the common stock
on the funding date of each respective tranche. The promissory notes have a term of six months from the issuance date and bear interest
at the rate of 6% per annum. The promissory notes are not pre-payable by the Company without penalty. The promissory notes are convertible
into unregistered and restricted shares of Common Stock only if there is an Event of Default as defined in the notes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2017, the Company entered into an equity
purchase agreement (“Eloc”) with SBI and L2 Capital, allowing them to purchase up to $5,000,000 of the Company’s common
stock. As consideration for SBI and L2 Capital, the Company agreed to pay SBI and L2 Capital commitment fees of $63,000 and $147,000,
respectively. These commitment fees were issued in the form of promissory notes, which bear interest at 8% per annum and have mature nine
months from the date of issuance. The promissory notes are convertible into unregistered and restricted shares of Common Stock only if
there is an Event of Default as defined in the notes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the Company allocated the fair value of the warrants to the proceeds received in the amount of $86,673, recorded as debt discount and
is amortized using the effective interest rate method over the life of the loan, eight months. The Company also recorded original issue
discount (“OID”) of $31,850 as debt discount and is amortized using the effective interest rate method over the life of the
loan, eight months.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognized accretion of debt discount
expense for the three months ended September 30, 2019 and June 30, 2019 of $0.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Interest expense for the three months ended September
30, 2019 and 2018 of $3,811 and $0, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2019, and June 30, 2019, $222,350
of principal was outstanding, respectively. During the year ended June 30, 2018, the Company paid $319,500 of principal. As of the date
of this filing the notes are past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>E) June 2017 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2017, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $100,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $100,000. The Note
Holder received 250,000 common stock warrants exercisable at $0.12 per share through June 15, 2020. The promissory note has a term of
six months maturing on December 16, 2017 and stipulates a one-time interest charge of eight percent (8%) shall be applied on the issuance
date to the principal. The maturity date of the Note was extended to May 1, 2018 in an extension agreement dated April 6, 2018. The promissory
note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted
shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights
and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the Company allocated the fair value of the warrants to the proceeds received in the amount of $54,340, recorded as debt discount and
is amortized using the effective interest rate method over the life of the loan, six months. Interest expense was recorded for the three
months ended September 30, 2019 and 2018 of $0. The Company recognized accretion of debt discount expense for the three months ended September
30, 2019 and 2018 of $0. In July 2019, the debenture and interest payable were converted to 6,136,363 shares of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>F) July 2017 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2017, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $100,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $100,000. The Note
Holder received 1,000,000 shares of common stock and 250,000 common stock warrants exercisable at $0.12 per share through September 11,
2000. The promissory note has a term of six months maturing on December 16, 2017 and stipulates a interest charge of eight percent (8%)
shall be applied to the principal. The maturity date of the Note was extended to May24, 2018 in an extension agreement dated April 6,
2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into
unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes
piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable
upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the Company allocated the fair value of the warrants to the proceeds received in the amount of $19,010 recorded as debt discount and is
amortized using the effective interest rate method over the life of the loan, six months. The Company recognized a fair value of the common
shares issued at $100,000. The Company recorded a debenture discount of $53,876 and a beneficial conversion expense of $45,544. The Company
recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018 of $0. As of September 30, 2019,
and June 30, 2019, $100,000 of principal was outstanding. In May 2018 the maturity date was extended to February 1, 2019. As of the date
of this filing the note is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Interest expense for the three months ended September
30, 2019 and 2018 was $17,066 and $0, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>G) September 2017 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In September 2017, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $150,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $150,000. The Note
Holder received 1,650,000 shares of common stock and 375,000 common stock warrants exercisable at $0.12 per share through September 11,
2000. The promissory note has a term of six months maturing on March 26, 2018 and stipulates an interest charge of eight percent (8%)
shall be applied to the principal. The maturity date of the Note was extended to February 1, 2019 in an extension agreement dated May
2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into
unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes
piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable
upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the Company allocated the fair value of the warrants to the proceeds received in the amount of $19,420 recorded as debt discount and is
amortized using the effective interest rate method over the life of the loan, six months. The Company recognized a fair value of the common
shares issued at $165,000. The Company recorded a debenture discount of $82,720 and a beneficial conversion expense of $45,219. The Company
recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018 of $0. As of September 30, 2019,
and June 30, 2019, $150,000 of principal was outstanding. In May 2018 the maturity date was extended to February 1, 2019. As of the date
of this filing the note is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Interest expense for the three months ended September
30, 2019 and 2018 was $21,100 and $0.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>H) November 2017 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2017, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $27,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $27,000. The Note
Holder received 416,600 common stock warrants exercisable at $0.15 per share through November 7, 2022. The promissory note has a term
of 24 months maturing on November 13, 2019 and stipulates an interest charge of eight percent (8%) shall be applied to the principal.
The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered
and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration
rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the
note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the Company allocated the fair value of the warrants to the proceeds received in the amount of $8,310 recorded as debt discount and is
amortized using the effective interest rate method over the life of the loan, 24 months. The Company recognized accretion of debt discount
expense for the three months ended September 30, 2019 and 2018 of $845 and $780, respectively. Interest expense for the three months ended
September 30, 2019 and 2018 of $552 and $552, respectively. As of September 30, 2019 and June 30, 2019, $27,000 of principal was outstanding.
As of the date of this filing the note is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>I) December 2017 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In December 2017, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $75,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $75,000. The Note
Holder received 1,000,000 shares of common stock and 250,000 common stock warrants exercisable at $0.12 per share through December 27,
2020. The promissory note has a term of 6 months maturing on June 30, 2018 and stipulates an interest charge of eight percent (8%) shall
be applied to the principal. The maturity date of the Note was extended to March 30, 2019 in an extension agreement dated June 2018. The
promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered
and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration
rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the
note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $16,176 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $41,175 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, six months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018
of $0. Interest expense for the three months ended September 30, 2019 and 2018 of $16,924 and $0, respectively. As of September 30, 2019
and June 30, 2019, $75,000 of principal was outstanding. As of the date of this filing the note is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>J) February 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $45,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $45,000. The Note
Holder received 1,500,000 shares of common stock and 500,000 common stock warrants exercisable at $0.12 per share through December 27,
2020. The promissory note has a term of 6 months maturing on August 8, 2018 and stipulates an interest charge of eight percent (8%) shall
be applied to the principal. The maturity date of the Note was extended to February 8, 2019 in an extension agreement dated August 2018.
The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered
and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration
rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the
note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $9,046 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $31,546 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, six months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018
of $0 and $6,761, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $12,738 and $0, respectively.
As of September 30, 2019 and June 30, 2019, $45,000 of principal was outstanding. As of the date of this filing the note is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>K) March 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $30,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $30,000. The Note
Holder received 1,500,000 shares of common stock and 500,000 common stock warrants exercisable at $0.12 per share through March 6, 2021.
The promissory note has a term of 6 months maturing on August 8, 2018 and stipulates an interest charge of eight percent (8%) shall be
applied to the principal. The maturity date of the Note was extended to March 6, 2019 in an extension agreement dated August 2018. The
promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered
and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration
rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the
note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $6,625 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $23,374 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, six months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018
of $0 and $8,677, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $11,804 and $0, respectively
was recognized. As of September 30, 2019 and June 30, 2018, $30,000 of principal was outstanding. As of the date of this filing the note
is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $35,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $35,000. The Note
Holder received 1,500,000 shares of common stock and 500,000 common stock warrants exercisable at $0.12 per share through March 23, 2021.
The promissory note has a term of six months maturing on September 23, 2018 and stipulates an interest charge of eight percent (8%) shall
be applied to the principal. The maturity date of the Note was extended to March 23, 2019 in an extension agreement dated September 2018.
The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered
and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration
rights and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the
note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $8,702 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $26,298 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, six months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018
of $0 and $12,254, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $12,562 and $0. As of September
30, 2019 and June 30, 2018, $35,000 of principal was outstanding. As of the date of this filing the note is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>L) April 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $60,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $100,000. The Note
Holder received 2,000,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through April 26,
2021. The promissory note has a term of approximately 6 months maturing on November 1, 2018 and stipulates an interest charge of eight
percent (8%) shall be applied to the principal. The maturity date of the Note was extended to May 1, 2019 in an extension agreement dated
September 2018. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion
into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes
piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all shares issuable
upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $6,175 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $41,175 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, six months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018
of $0 and $20,673, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $16,673 and $0, respectively
was recognized. As of September 30, 2019 and June 30, 2019, $100,000 and $60,000, respectively, of principal was outstanding. As of the
date of this filing the note is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>M) April 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $70,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $70,000. The Note
Holder received 1,000,000 shares of common stock and 200,000 common stock warrants exercisable at $0.12 per share through April 25, 2021.
The promissory note has a term of 2 years maturing on April 25, 2020 and stipulates an interest charge of eight percent (8%) shall be
applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder has the right
of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory
note includes piggyback registration rights and the Company shall include on the next registration statement it files with the SEC all
shares issuable upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $0 and the Company allocated the fair value of the warrants to the proceeds received
in the amount of $31,188 recorded as debt discount and is amortized using the effective interest rate method over the life of the loan,
2 years. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018 of $3,991 and
$3.685, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $1,431 and $2,458 was recognized, respectively.
As of September 30, 2019 and June 30, 2019, $70,000 of principal was outstanding. In July of 2020, the Company entered into an extension
agreement with the Note Holder to extend the maturity date of the note to April 2022.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>N) April 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $20,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $20,000. The Note
Holder received 1,166,660 common stock warrants exercisable at $0.15 per share through April 25, 2023. The promissory note has a term
of 2 years maturing on April 19, 2020 and stipulates an interest charge of eight percent (8%) shall be applied to the principal. The promissory
note is pre-payable by the Company at any time without penalty. The Note Holder has the right of conversion into unregistered and restricted
shares of Common Stock at a conversion price of $0.12 per share at any date. The promissory note includes piggyback registration rights
and the Company shall include on the next registration statement it files with the SEC all shares issuable upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $4,384 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $14,384 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, 2 years. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018 of
$1,851 and $1,709, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $409 and $724 was recognized,
respectively. As of September 30, 2019 and June 30, 2019, $20,000 of principal was outstanding. As of the date of this filing the note
is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>O) June 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $40,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $40,000. The Note
Holder received 2,000,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through June 7, 2021.
The promissory note has a term of approximately 7 months maturing on December 31, 2018 and stipulates an interest charge of eight percent
(8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder
has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date.
The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with
the SEC all shares issuable upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $8,044 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $31,957 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, 7 months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018 of
$0 and $13,583, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $0 was recognized. In July 2019,
the debenture and interest payable were converted into 3,287,458 of common shares.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>P) July 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $45,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $45,000. The Note
Holder received 2,000,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through July 9, 2021.
The promissory note has a term of approximately 7 months maturing on January 31, 2019 and stipulates an interest charge of eight percent
(8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder
has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date.
The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with
the SEC all shares issuable upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $7,235 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $33,485 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, 7 months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2019 of
$0 and $12,260, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $12,615 and $3,600, respectively
was recognized. As of September 30, 2019 and June 30, 2018 $45,000 of principal was outstanding. As of the date of this filing the note
is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Q) August 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $30,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $30,000. The Note
Holder received 1,250,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through August 27,
2021. The promissory note has a term of approximately 7 months maturing on March 30, 2019 and stipulates an interest charge of eight percent
(8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note Holder
has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at any date.
The promissory note includes piggyback registration rights and the Company shall include on the next registration statement it files with
the SEC all shares issuable upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $5,160 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $22,659 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, 7 months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018 of
$0 and $4,450. Interest expense for the three months ended September 30, 2019 and 2018 of $12,170 and $2,400, respectively was recognized.
As of September 30, 2019 and June 30, 2018, $30,000 of principal was outstanding. As of the date of this filing the note is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>R) September 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In September 2018, the Company entered into a Securities
Purchase Agreement and Convertible Promissory Note to obtain $25,000 in gross proceeds from a non-affiliated party (collectively hereinafter
referred to as the “Note Holder”) in exchange for a convertible promissory note in the principal amount of $25,000. The Note
Holder received 2,000,000 shares of common stock and 1,000,000 common stock warrants exercisable at $0.12 per share through September
17, 2021. The promissory note has a term of approximately 7 months maturing on April 30, 2018 and stipulates an interest charge of eight
percent (8%) shall be applied to the principal. The promissory note is pre-payable by the Company at any time without penalty. The Note
Holder has the right of conversion into unregistered and restricted shares of Common Stock at a conversion price of $0.12 per share at
any date. The promissory note includes piggyback registration rights and the Company shall include on the next registration statement
it files with the SEC all shares issuable upon conversion of the note.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible promissory note,
the company recorded a beneficial conversion expense of $4,475 and the Company allocated the fair value of the warrants to the proceeds
received in the amount of $19,058 recorded as debt discount and is amortized using the effective interest rate method over the life of
the loan, 7 months. The Company recognized accretion of debt discount expense for the three months ended September 30, 2019 and 2018 of
$0 and $1,067, respectively. Interest expense for the three months ended September 30, 2019 and 2018 of $12,176 and $2,000, respectively
was recognized. As of September 30, 2019 and June 30, 2019, $25,000 of principal was outstanding. As of the date of this filing the note
is past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>S) December 2018 Convertible Debenture</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the second quarter of the year ended June 30,
2019, the Company sold 52 Units for total proceeds of $52,000 from three affiliated and fourteen non-affiliated parties. Each Unit consists
of a $1,000 Unsecured Convertible Promissory Note (each, a “Note”) and a warrant to purchase 4,166 shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $0.15 per share (each, a “Warrant”)
over a period of five years. An additional 45,826 warrants with identical terms, were granted with this debenture. The Notes which were
issued at face value have a maturity of two years from the date of issuance, bear interest at the rate of 8% per annum and are convertible
into unregistered and restricted shares of Common Stock at $0.08 per-share, subject to normal and customary adjustments including (a)
any subdivisions, combinations and classifications of the Common Stock; or (b) any payment, issuance or distribution by the Company to
its stockholders of (i) a stock dividend, (ii) debt securities of the Company, or (iii) assets (other than cash dividends payable out
of earnings or surplus in the ordinary course of business). The conversion price also is subject to a full ratchet adjustment upon the
Company’s issuance of Common Stock, warrants, or rights to purchase Common Stock or securities convertible into Common Stock for
a consideration per share which is less than the then applicable conversion price of the Notes excluding Common Stock and options issued
to officers, directors, and employees of the Company, except for the exercise or conversion of existing convertible securities of the
Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the convertible debentures, the
Company allocated the fair value of the warrants to the proceeds received in the amount of $6,835, recorded as debt discount and is amortized
using the effective interest rate method over the life of the loan, two years. The Company recognized accretion of debt discount expense
for the three months ended September 30, 2019 and 2018, of $834 and $264, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Interest expense for the three months ended September
30, 2019 and 2018, was $1,063 and $300, respectively. As of September 30, 2019 and June 30, 2019, $52,000 of principal was outstanding.
As of the date of this filing the notes are past due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>T) July 2019 Non-Convertible Debentures</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2019, the Company entered into Non- Convertible
Promissory Notes to obtain $175,000 in gross proceeds from non-affiliated parties (collectively hereinafter referred to as the “Note
Holders”) in exchange for the non-convertible promissory notes in the principal amount of $175,000. The Note Holders received warrants
to purchase 700,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase
price of $0.025 per share (each, a “Warrant”) over a period of three years. The promissory note has a term of approximately
12 months maturing in July 2020 and stipulates an interest charge of ten percent (10%) shall be paid quarterly. The promissory note is
pre-payable by the Company at any time without penalty.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accounting for the non-convertible promissory note,
the company allocated the fair value of the warrants to the proceeds received in the amount of $15,530 recorded as debt discount and is
amortized using the effective interest rate method over the life of the loan, 12 months. The Company recognized accretion of debt discount
expense for the three months ended September 30, 2019 of $3,883. Interest expense for the three months ended September 30, 2019 of $2,700
was recognized. As of September 30, 2019 $175,000 of principal was outstanding. In July of 2020, the Company entered into an extension
agreement with the Note Holders to extend the maturity date of the notes to July 2021.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Warrant Liability</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued warrants to purchase 700,000 shares
of its common stock in connection with the non-convertible debentures in note T above during the three months ended September 30, 2019
and recorded these outstanding warrants as a liability at fair value utilizing a Black-Scholes-Merton model. This liability is subject
to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company’s condensed consolidated
statements of operations. The assumptions utilized in this model for warrants issued during the three months ended September 30, 2019 are
presented below (unaudited).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2019</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 79%"><font style="font-size: 10pt">Expected volatility</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">126.70</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Expected dividend yield</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0.0</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Risk-free interest rates</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1.63</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Expected term (in years)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2.78 - 2.79</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Debt Issuance Costs</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The costs related to the issuance of debt are presented
on the balance sheet as a direct deduction from the related debt and amortized to interest expense using the effective interest method
over the maturity period of the related debt. Amortization expense for the three months ended September 30, 2019 and 2018 was $2,895 and
$90,010 respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 7 – EQUITY TRANSACTIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Common Stock</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 6, 2019, the Company purchased the distributed
ledger technology assets of Capstan Platform, Inc. for $650,000 payable in common shares or cash. The company issued 9,718,182 and 3,527,337
common shares during August 2019 and March 2021, respectively, and 6,095,535 remain issuable at the date of this filing. The number of
shares issued is determined by using a five-day average, prior to the date of issuance, of our common stock closing price. During the
three months ending September 30, 2019 the aggregate fair value of the 9,718,182 issued in such period was $277,940. The remaining amount
due to the seller as of September 30, 2019 of $372,060 has been recorded in accrued expenses. See Note 1 – “Basis of Presentation”
for additional information.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended September 30, 2019,
the Company issued 15,068,772 shares for $365,558 in consulting services, $128,968 of which was accrued at June 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended September 30, 2019,
the Company issued 282,348 shares of common stock at the fair market value of $8,470 for payment of debenture interest.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended September 30, 2019,
the Company issued 21,926,474 shares of common stock at the fair market value of $779,705 for payment of debenture conversions of which
$578,946 was accrued at June 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended September 30, 2019,
the Company amortized a market value of $214,882 of stock paid for future services.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In total, the Company has recorded a fair market value
of $457,792 for common stock payable to accrued expenses as of September 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock Warrants</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of activity of the Company’s stock
warrants for the three months ended September 30, 2019 is presented below (unaudited):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td colspan="3" style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td colspan="3" style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Weighted</font></td>
<td> </td>
<td colspan="3" style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td colspan="3" style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Remaining</font></td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Average</font></td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Aggregate</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Exercise</font></td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Number of</font></td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Contractual</font></td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Grant Date</font></td>
<td> </td>
<td colspan="3" style="text-align: center"><font style="font-size: 10pt">Intrinsic</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Price</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Warrants</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Term in Years</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Fair Value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Value</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3"> </td>
<td> </td>
<td colspan="3"> </td>
<td> </td>
<td colspan="3"> </td>
<td> </td>
<td colspan="3"> </td>
<td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 38%; text-align: justify"><font style="font-size: 10pt">Balance as of June 30, 2019</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">0.10</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">44,913,101</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; text-align: right"><font style="font-size: 10pt">1.83</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">0.08</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">      -</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Expired</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0.030</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">700,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2.79</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0.030</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Exercised</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; padding-left: 10pt; text-align: justify"><font style="font-size: 10pt">Cancelled</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">0.12</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(250,000.00</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">0.12</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Vested and exercisable as of September 30, 2019</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.10</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">45,363,101</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">1.64</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.08</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Outstanding warrants at September 30, 2019 expire
during the period October 2019 to December 2023 and have exercise prices ranging from $0.03 to $0.30, valued at $4,696,468. These warrants
are issued for salary conversions of employees and consultants, and the origination warrants related to debentures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 14 - SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Debentures Issuances</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During November 2019, the company issued five convertible
debentures for $175,000 with a one-year term at 8% annual interest accompanied by warrants to purchase 1,309,665 common shares at fair
market value with a five-year term.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended March 31, 2020, the
company issued five convertible debentures for $ 2,145,000 with a one-year to two-year term at 8% annual interest accompanied by warrants
to purchase 1,838,964 common shares at fair market value with a five-year term.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended June 30, 2020, under
the Small Business Administration (“SBA”), the Company received proceeds the Paycheck Protection Program (“PPP”)
loan. These loans are forgiven if used for payroll, payroll benefits, including health insurance and retirement plans, as well as certain
rent payments, leases, and utility payments, which are limited to 40% of the loan proceeds, all of which if paid within either 8 weeks
or 24 weeks of the receipt of the loan proceeds. At the time of this filing, we have been funded for $147,300 in loans. At the time of
this filing, we anticipate having a significant amount of this loan forgiven, however the forgiveness application process is not yet complete.
If a portion of these loans are not forgiven, the unqualified portion is to be repaid over 5 years, accruing interest at 1% per annum.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended June 30, 2020, the company
issued five convertible debentures for $ 150,000 with a one-year term at 8% annual interest accompanied by warrants to purchase 3,750,000
common shares at fair market value with a five-year term.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended September 30, 2020,
the company issued seven convertible debentures for $525,000 with a one-year term at 8% annual interest accompanied by warrants to purchase
8,035,725 common shares at fair market value with a five-year term.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended December 31, 2020, the
company issued three convertible debentures for $ 3,000,000 with a one-year term at 8% annual interest which were subsequently converted
into a two convertible notes payable in March 2021 for a total of $7,500,000 as part of the Pasaca Capital investment transactions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">During February 2020, the
company entered into a marketing consulting and distribution agreement with QMVT Vertical Markets, LLC to assist in building a marketing
and sales force to operate in parallel with Research and development at Quantum Materials Corp. To move forward along with this effort,
QMVT invested a total of $2 million in two convertible notes with a 2-year term at 8% interest and convertible into 66 million shares
of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On January 26, 2021, Quantum
Materials Corp. (the “Company”) and Pasaca Capital Inc. (“Pasaca”) entered into a Securities Purchase and Financing
Agreement (the “Purchase Agreement”). Pursuant to the terms of the Purchase Agreement, at the first closing, Pasaca will convert
three previously issued promissory notes made by the Company payable to Pasaca and loan to the Company an additional $1,500,000 pursuant
to a certain Secured Convertible Promissory Note (the “Convertible Note”) made by the Company payable to Pasaca in the principal
amount of $4,500,000 (the “Senior Note”). The Senior Note is convertible into 154,228,625 shares of the Company’s common
stock (the “Note Shares”). At the second closing, Pasaca will purchase common stock of the Company (“Common Stock”)
in an amount such that, after such purchase and the conversion of the Senior Note into the Note Shares, Pasaca will own fifty-one percent
(51.0%) of the fully diluted common stock of the Company. The purchase price for the Common Stock to be sold in the second closing is
$10,500,000. Pasaca will also have the right to appoint three members to the Company’s Board of Directors. Both the first and second
closing are subject to numerous contingencies, as set forth in the Purchase Agreement. In March 2021, the Purchase Agreement was amended
and the original notes were revised into two notes. The first Convertible Note dated March 8, 2021 made by the Company payable to Pasaca
in the principal amount of $3,450,000. The note is convertible into 118,241,945 shares of the Company’s common stock with a conditional
maturity date of June 8, 2021. The second Convertible Note dated March 9, 2021 made by the Company payable to Pasaca in the principal
amount of $2,750,000 The note is convertible into 94,250,826 shares of the Company’s common stock with a conditional maturity date
of June 9, 2021.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Also as set forth on January
26, 2021, the Company and Pasaca entered into a Registration Rights Agreement (the “Registration Rights Agreement”). Pursuant
to the terms of the Registration Rights Agreement, holders of twenty percent of the total shares of Note Shares and Common Stock issued
pursuant to the Purchase Agreement (the “Registrable Shares”) shall have the right to require the Company to register at least
thirty percent of such shares for sale on Form S-1 of Form S-3 under the Securities Act of 1933, as amended (the “33 Act”).
In addition, holders of ten percent of the Registrable Securities shall have the right to require the Company to register such shares
for sale on Form S-3 under the 33 Act. The Registration Rights Agreement also provides for piggy-back registration rights. Pursuant to
the Registration Rights Agreement, should the Company determine to issue new equity securities of the Company, or securities convertible
into equity securities of the Company, it must offer such new securities to Pasaca and/or its assigns.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Also, on January 26, 2021, the Company and Pasaca
entered into a Distribution Agreement (the “Distribution Agreement”). Pursuant to the terms of the Distribution Agreement,
the Company appointed Pasaca to act as an independent distributor to resell and distribute the Company’s Quantum Dots and QMC HealthID
products. Under the Distribution Agreement, Pasaca guaranteed that the Company would receive cumulative gross royalties and/or gross sales,
licensing or other revenues under the Distribution Agreement of no less than $15,000,000, over the period including 2020 and continuing
until twelve months after the Company has completed development of a functioning product integrating the QMC HealthID IP and Innova Medical
Group’s products. Pasaca has the right to extend the revenue period by up to twenty-four months upon payment of advance royalties.
At the date of this report, we have drawn $7,250,000 in advance draws, and these accrued interest at 8% until the date of conversion.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><font style="background-color: white"><b>Common
Share Issuances</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">During the first three months
of calendar year 2021, the company issued 3,333,333 shares due from a subscription agreement entered into during 2019, 2,133,333 in exchange
for legal fees payable, 3,527,337 shares in exchange for asset purchase and 2,081,017 shares in exchange for exercise of warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Also, subsequent to September
30, 2019, the company issued 59,728,063 shares related to the conversion of eleven outstanding debentures totaling $680,000 in principal
and $320,000 interest common shares. In addition, the Company issued 422,297 shares in exchange for exercise of warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recent Accounting Pronouncements</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02, Leases,
which updates guidance on accounting for leases. The update requires that a lessee recognize in the statement of financial position a
liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases
with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize
lease assets and lease liabilities. Similar to current guidance, the update continues to differentiate between finance leases and operating
leases; however, this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification
of lease payments in the statement of cash flows. The standards update is effective for interim and annual periods after December 15,
2018 with early adoption permitted. Entities are required to use a modified retrospective adoption, with certain relief provisions, for
leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements when adopted.
<font style="background-color: white">We adopted this standard effective July 1, 2019 and it did not have a material impact on our condensed
consolidated financial statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2018, the FASB issued ASU No. 2018-05, Income
Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The amendment provides guidance on
accounting for the impact of the Tax Cuts and Jobs Act (the “Tax Act”) and allows entities to complete the accounting under
ASC 740 within a one-year measurement period from the Tax Act enactment date. This standard is effective upon issuance. The Tax Act has
several significant changes that impact all taxpayers, including a transition tax, which is a one-time tax charge on accumulated, undistributed
foreign earnings. The Company adopted the guidance effective July 1, 2018. The adoption of this standard did not have a material impact
on the Company’s condensed consolidated financial statements or related disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2017, the FASB issued ASU 2017-09, <i>Compensation
– Stock Compensation (Topic 718) – Scope of Modification Accounting. </i>The amendments included in this update provide guidance
about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The
amendments in this update will be applied prospectively to an award modified on or after the adoption date. The Company adopted the guidance
effective July 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated condensed financial
statements or related disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Pronouncements Yet To Be Adopted</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #252525">In December 2019, the FASB issued
ASU No<b>. </b>2019-12: <i>Simplifying the Accounting for Income Taxes (Topic 740)</i>. The objective of the standard is to
improve areas of GAAP by removing certain exceptions permitted by ASC 740 and clarifying existing guidance to facilitate consistent application.
The standard will become effective for the Company beginning on June 1, 2021. The Company is currently evaluating the new standard to
determine the potential impact on its financial condition, results of operations, cash flows, and financial statement disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #252525"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2019, the FASB issued ASU 2019-08, <i>Compensation
- Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements - Share-based Consideration
Payable to a Customer</i>.  The objective of the standard is to clarify that an entity must measure and classify share-based payment
awards granted to a customer by applying the guidance in Topic 718. ASU 2019-08 is effective for fiscal years beginning after December
15, 2019, including interim reporting periods within those fiscal years. The Company will adopt ASU 2019-08 effective July 1, 2020
and its adoption is not expected to have a material impact on the Company’s financial condition or its results of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; color: #252525"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2020, the FASB issued ASU 2020-06, “<i>Accounting
for Convertible Instruments and Contracts in an Entity’s Own Equity,</i>” which simplifies and clarifies certain calculation
and presentation matters related to convertible and equity and debt instruments. Specifically, ASU-2020-06 removes requirements to separately
account for conversion features as a derivative under ASC Topic 815 and removing the requirement to account for beneficial conversion
features on such instruments. Accounting Standards Update 2020-06 also provides clearer guidance surrounding disclosure of such instruments
and provides specific guidance for how such instruments are to be incorporated in the calculation of Diluted EPS. The guidance under ASU
2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption
is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company will adopt this standard using a modified
retrospective approach effective January 1, 2021. The Company is currently evaluation the effects of adoption on its consolidated financial
statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, the FASB issued Accounting Standards
Update 2016-13 <i>“Financial Instruments-Credit Losses”</i> (“ASC Topic 326”), which amends the guidance
on the impairment of financial instruments. The standard adds an impairment model, referred to as current expected credit loss, which
is based on expected losses rather than incurred losses. The standard applies to most debt instruments, trade receivables, lease receivables,
reinsurance receivables, financial guarantees and loan commitments. Under the guidance, companies are required to disclose credit quality
indicators disaggregated by year of origination for a five-year period. The new guidance is effective for fiscal years and interim periods
within those fiscal years beginning after December 15, 2019. We do not anticipate that this will have a material impact to our consolidated
financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management does not believe that any other
recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying
condensed consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Earnings per Share:</u> The Company utilizes ASC
260, “Earnings per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic and
diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares
outstanding. Diluted net loss per share is computed similar to basic loss per share except that the denominator is adjusted for the potential
dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock.
Potentially dilutive securities are not included in the calculation of the diluted loss per share if their effect would be anti-dilutive.
As such, these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce
net loss per share for the three months ended September 30, 2019 and 2018. There are 750,000,000 shares authorized resulting in approximately
23,756,489 of insufficient shares as of September 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Contract Liabilities</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; color: #212529">The Company
issued advanced billings to Amtronics India LLC related to its exclusive license and development agreement related to the production of
quantum dots in Assam, India (“License Agreement”), which have been recorded as contract liabilities on the condensed consolidated
balance sheets and will be recognized as revenue in accordance with <font style="background-color: white">ASU 2014-09 Revenue from Contracts
with Customers (Topic 606) </font>once the performance obligations are satisfied. <font style="background-color: white">As of September
30, 2019, and 2018 contract liabilities were $1,197,973 and $500,000, respectively. </font>The current liability represents the next twelve
months’ portion of the license fees revenue. For each of the period ended September 30, 2019 and 2018, no revenue was recorded related
to the License Agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2018, the Company entered into a license
and development agreement with Amtronics India LLC related to the volume production of quantum dots in Assam, India. The agreement is
part of a larger project for the design, training, research and development of a quantum dot manufacturing facility in Assam. This project
has been under discussion for nearly three years. A ground-breaking ceremony took place in Assam on January 16, 2019, and the Company
anticipated operations being established and operational prior to year-end 2019. In addition to an upfront fee and royalty, the agreement
provides for the Company to sell equipment and training services, which the Company expects will provide additional revenues. The project
was delayed due to historic flooding in the region during 2019 and 2020. The project was and continues to be delayed due to the severe
Covid-19 outbreak and subsequent quarantine occurring throughout India. Construction on the project has resumed and planning for a new
timeline has begun.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company believes that the terms of the licensing
agreement will enable the Company to begin to leverage its intellectual property portfolio and to begin generating revenues without overburdening
the Company’s scientific staff in a manner that would disrupt new discovery. The other participants in the Assam project have the
responsibility of, among other things, developing the site, constructing the facilities and hiring staff. The Company has agreed to construct
and supply the proprietary equipment, assisting in the development and scale up of the 3<sup>rd</sup> generation solar, display and SSL
products, training and providing a broad range of consulting services at additional cost, representing a potential ongoing revenue opportunity
for the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Going Concern</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded losses from continuing operations
in the current period presented and has a history of losses. As of September 30, 2019, the Company had a working capital deficit of $9,758,002
and net cash used in operating activities was $159,684 for the three months ended September 30, 2019. The ability of the Company to continue
as a going concern is dependent upon its ability to reverse negative operating trends, obtain revenues from operations, raise additional
capital, and/or obtain debt financing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In conjunction with anticipated revenue streams, management
is currently negotiating equity and debt financing, the proceeds from which would be used to settle outstanding debts, to finance operations,
and for general corporate purposes. We are continuing our plan to further grow and expand operations and seek sources of capital to pay
our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for
us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur.
The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue
as a going concern.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited consolidated financial
statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification
of liabilities that might be necessary if the Company is unable to continue as a going concern.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Basis of Presentation:</u> The accompanying unaudited
condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission
and contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly its financial position as of
September 30, 2019 and its results of operations and its cash flows for the periods presented. The condensed consolidated balance sheet
at June 30, 2019 has been derived from the Annual Report on Form 10-K for the fiscal year ended June 30, 2019. The accompanying unaudited
condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements
included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019. Operating results for the interim periods presented
are not necessarily indicative of the results that may be experienced for the fiscal year ending June 30, 2020.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth activity associated
with the convertible and non-convertible debentures:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">September 30,</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">June 30,</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">Debenture</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Reference</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">(unaudited)</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 53%"><font style="font-size: 10pt">Convertible debentures issued in September 2014</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 13%; text-align: right"><font style="font-size: 10pt">25,050</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 14%; text-align: right"><font style="font-size: 10pt">25,050</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 13%; text-align: center"><font style="font-size: 10pt">A</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in April - June 2016</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,060,716</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,218,772</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">B</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debenture issued in August 2016</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">200,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">200,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">B</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in January - March 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">60,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">60,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">C</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible promissory notes issued in March 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">222,350</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">222,350</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">D</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debenture issued in June 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">100,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">E</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debenture issued in July 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">100,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">100,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">F</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debenture issued in September 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">150,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">150,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">G</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debenture issued in November 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">27,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">27,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">H</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debenture issued in December 2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">75,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">75,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">I</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debenture issued in February 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">45,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">45,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">J</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in March 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">65,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">65,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">K</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debentures issued in April 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">100,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">60,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">L</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in April 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">70,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">70,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">M</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debentures issued in April 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">20,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">20,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">N</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in June 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">40,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">O</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debentures issued in July 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">45,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">45,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">P</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in August 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">30,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">30,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">Q</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Convertible debentures issued in September 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">25,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">25,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">R</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Convertible debentures issued in December 2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">52,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">52,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">S</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Non-convertible debentures issued in July 2019</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">175,000</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"><font style="font-size: 10pt">T</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,547,116</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,630,172</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Less: unamortized discount</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">30,351</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">27,724</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,516,765</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,602,448</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Less: current portion</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">2,388,041</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">2,467,106</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total convertible debentures, net of current portion</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">128,725</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">135,342</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt; text-align: center"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The assumptions utilized in this model for warrants
issued during the three months ended September 30, 2019 are presented below (unaudited).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2019</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 79%"><font style="font-size: 10pt">Expected volatility</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">126.70</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Expected dividend yield</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0.0</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Risk-free interest rates</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1.63</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Expected term (in years)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2.78 - 2.79</font></td>
<td> </td></tr>
</table>
1785261
P5Y
2497955
2497955
6095535
50522
50522
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and Cash Equivalents:</u> Cash and cash equivalents
consist of cash in bank. <font style="background-color: white">The Company considers any highly liquid short-term investments purchased
with a maturity of three months or less to be cash equivalents.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 3 – INTANGIBLES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Internally Developed Software</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2019, the Company acquired certain intellectual
property consisting of in-process research and development software and recorded $650,000 to Intangibles on the condensed consolidated
balance sheets as of September 30, 2019. The aggregate purchase price paid in connection with the asset purchase was $650,000. At closing,
the Company issued 9,718,182 of shares of our common stock with a fair market value of $277,940, and a note payable of $372,060 to the
sellers. The note payable is payable in cash or shares of the Company’s common stock. Subsequent to the closing, the Company issued
3<font style="background-color: white">,527,337 common shares in March 2021 and </font>6,095,535 <font style="background-color: white">remain
issuable at the date of this filing. The software consists of</font> costs incurred during the application development stage, which
include costs to design the software configuration and interfaces, coding, installation, and testing. No software amortization was recorded
during the three months ended September 30, 2019 and amortization will commence when the software module is functional and ready for intended
use.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Licenses and Patents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company maintains certain patents and licenses <font style="background-color: white">which
are key to maintaining and enhancing our competitive position in the growing nanomaterials market. Licenses and patents are stated at
cost. Amortization is computed on the straight-line basis over the estimated useful life of five years.</font> Amortization expense
for the three months ended September 30, 2019 and 2018 $6,911 and $6,864, respectively. <font style="background-color: white">The
table below sets forth our license and patents as of September 30, 2019 and June 30, 2019.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">September 30, 2019</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">June 30, 2019</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">(unaudited)</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%"><font style="font: 10pt Times New Roman, Times, Serif">William Marsh Rice University</font></td>
<td style="width: 2%"> </td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 16%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,000</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,000</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif">University of Arizona</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Bayer acquired patents</font></td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">137,743</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">137,743</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">192,743</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">192,743</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Less: accumulated amortization</font></td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">181,360</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">174,449</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Total licenses and patents, net</font></td>
<td> </td>
<td style="border-bottom: black 2.25pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,383</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,294</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white">The table below
sets forth our license and patents as of September 30, 2019 and June 30, 2019.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">September 30, 2019</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">June 30, 2019</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">(unaudited)</font></td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%"><font style="font: 10pt Times New Roman, Times, Serif">William Marsh Rice University</font></td>
<td style="width: 2%"> </td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 16%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,000</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 15%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,000</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif">University of Arizona</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Bayer acquired patents</font></td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">137,743</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">137,743</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">192,743</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">192,743</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Less: accumulated amortization</font></td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">181,360</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">174,449</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Total licenses and patents, net</font></td>
<td> </td>
<td style="border-bottom: black 2.25pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,383</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,294</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>