Note 2 - Financial Condition, Going Concern and Management Plans

On November 19, 2021, the Company closed a bridge financing round totaling $3.1
million of a Series D preferred stock sold to investors in a private placement.
Each Series D Unit will have a purchase price of $1.00 per Unit, with each Unit
consisting of (a) one share of a newly formed Series D Convertible Preferred
Stock, par value $0.01 per share (the "Series D Preferred Stock"), (b) one
warrant (the "Series A Warrants") to purchase 2.1 shares of the Company's Common
Stock at a purchase price of $0.50 per whole share of Common Stock, and (c) one
warrant (the "Series B Warrants" and together with the Series A Warrants, the
"Warrants") to purchase 2.1 shares of Common Stock at a purchase price of $0.75
per whole share.



Pursuant to the Certificate of Designations, Preferences and Rights of the
Series D Convertible Preferred Stock of the Company, Inc., filed with the
Secretary of State of the State of Delaware on October 18, 2021 (the "COD"),
there are 10,000,000 shares of the Company's preferred stock that have been
designated as the Series D Preferred Stock and each share of the Series D
Preferred Stock is convertible at the option of the holder thereof, or
automatically upon the request of the Company's underwriters that the Series D
Preferred Stock convert to shares of Common Stock or upon listing of the
Company's Common Stock on a national securities exchange. The number of shares
of Common Stock issuable upon the conversion of each share of Series D Preferred
Stock is calculated by dividing the Conversion Amount (defined in the COD as the
Stated Value, $1.05 per share, plus accrued and unpaid dividends) by the $0.25
conversion price (the "Conversion Price").



On November 11, 2021, the Company filed a registration statement on form S-1 in
connection with a planned up-list to a national exchange; on June 30, 2022 the
Company its third amendment to the S-1; and on August 3, 2022, the Company files
its fourth amendment to the S-1.



As of the date of this filing, the Company has closed on $3,100,000 of its
Series D Preferred stock. To achieve its growth strategy, the Company will need
to raise additional financing prior to up listing on Nasdaq. The Company will
not proceed with this offering in the event its Common Stock is not approved for
listing on the Nasdaq Capital Market though it will continue to seek financing
for its expansion and operating needs in the debt or equity markets.

Between December 30, 2021 through the date of this filing, the Company has entered into a total $5.0 million of promissory notes with certain related parties and other note holders. All notes carry a 10% interest rate per annum, accruing in monthly installments. These notes have been used to fund 2022 operations to date.

The Company entered into a debt-for-equity exchange agreement with Gardner
Builders Holdings, LLC (the "Creditor") on January 7, 2022 (the "Agreement").
Pursuant to the Agreement, the Company issued shares of restricted common stock,
par value $0.01 per share, of MITI (the "Restricted Shares") to the Creditor in
exchange for the Company Debt Obligations, as defined below.



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The Agreement settles for certain accounts payable amounts owed by the Company
to the Creditor (the "Accounts Payable Amount") as well as upcoming amounts that
will become due between the date of the Agreement and April 1, 2022. The
Agreement also settles incurred interest and penalties on the amounts due
through January 5, 2022, as well as future interest payments on amounts incurred
in the first quarter of 2022 (collectively, the "Additional Costs", and combined
with the Accounts Payable Amount, the "Company Debt Obligations"). The Accounts
Payable Amount is $500,000, the Additional Costs is $294,912.56 and the
conversion price is $0.25. As a result, 3,179,650 Restricted Shares were
authorized to be issued.



As of June 30, 2022, the Company had cash and cash equivalents of $36,000,
current liabilities of $10.5 million, and has incurred a loss from operations.
The Company intends to a) develop and own primary care clinics operated by nurse
practitioners, b) develop and acquire telemedical technologies, and c) evaluate
other healthcare related opportunities. The Company's activities are subject to
significant risks and uncertainties, including failing to secure additional
funding to execute its business plan.



As a result of these factors, there is substantial doubt about the ability of
the Company to continue as a going concern for one year from the date the
financial statements are issued. The Company's continuance is dependent on
raising capital and generating revenues sufficient to sustain operations. The
Company believes that the necessary capital will be raised and has entered
discussions to do so with certain individuals and companies. However, as of the
date of these condensed consolidated financial statements, no formal agreement
exists.



The accompanying condensed consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts classified as liabilities that might be necessary should the
Company be forced to take any such actions.



PPP Loan



During March 2020, in response to the COVID-19 crisis, the federal government
announced plans to offer loans to small businesses in various forms, including
the Payroll Protection Program, or "PPP", established as part of the Corona
Virus Aid, Relief and Economic Security Act ("CARES Act") and administered by
the U.S. Small Business Administration. On April 25, 2020, the Company entered
an unsecured Promissory Note with Bank of America for a loan in the original
principal amount of approximately $460,400, and the Company received the full
amount of the loan proceeds on May 4, 2020. The June 30, 2022 balance, including
accrued interest, was approximately $470,400.



COVID -19 Impact



The Company has had some impact on its operations because of the effects of the
COVID-19 pandemic, primarily with accessibility to staffing, consultants and in
the capital markets, and it is adjusting as needed within its available
resources. The Company will continue to assess the effect of the pandemic on its
operations. The extent to which the COVID-19 pandemic will continue to impact
the Company's business and operations will depend on future developments that
are highly uncertain and cannot be predicted with confidence, such as the
ultimate geographic spread of the disease, the duration of the outbreak, the
duration and effect of possible business disruptions and the short-term effects
and ultimate effectiveness of the travel restrictions, quarantines, social
distancing requirements and business closures in the United States and other
countries to contain and treat the disease. While the potential economic impact
brought by, and the duration of, COVID-19 may be difficult to assess or predict,
a widespread pandemic could result in significant disruption of global financial
markets, reducing the Company's ability to access capital, which could in the
future negatively affect the Company's liquidity. In addition, a recession or
market correction resulting from the spread of COVID-19 could materially affect
the Company's business and the value of its securities.

Note 3 - Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the accounting principles generally accepted in the
United States of America ("U.S. GAAP") for interim financial information and
pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the
Securities and Exchange Commission ("SEC") and on the same basis as the Company
prepares its annual audited consolidated financial statements. In the opinion of
management, the accompanying unaudited condensed consolidated financial
statements reflect all adjustments, consisting of normal recurring adjustments,
considered necessary for a fair presentation of such interim results.



The results for the condensed consolidated statement of operations are not
necessarily indicative of results to be expected for the year ending December
31, 2022 or for any future interim period. The condensed consolidated balance
sheet at June 30, 2022 has been derived from unaudited financial statements;
however, it does not include all of the information and notes required by U.S.
GAAP for complete financial statements. The accompanying condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements for the year ended December 31, 2021 and notes thereto
included in the Company's annual report on Form 10-K filed on April 5, 2022.



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Principles of Consolidation - The accompanying condensed consolidated financial
statements include the accounts of Mitesco, Inc., and its wholly owned
subsidiaries MitescoNA, LLC, The Good Clinic, LLC, and Acelerar Healthcare
Holdings, LTD. In addition, we manage two entities under a variable interest
entity arrangement and have control over the operating activities of these legal
entities in which we do not maintain a controlling ownership interest but over
which we will have direct influence over the operations and are the primary
beneficiary. We expect that these entities will typically be subject to nominee
ownership and transfer restriction agreements that effectively transfer the
majority of the economic risks and rewards of their ownership to the Company.
The Company's management, restriction and other agreements concerning such
nominee-owned entities typically includes both financial terms and protective
and participating rights to the entities' operating, strategic and non-clinical
governance decisions which transfer substantial powers over and economic
responsibility for these entities to the Company. As such, the Company applies
the guidance of the Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") 810 - Consolidation ("ASC 810"), to determine
when an entity that is insufficiently capitalized or not controlled through its
voting interests, referred to as a variable interest entity should be
consolidated. All intercompany balances and transactions have been eliminated.



Use of Estimates - The preparation of these financial statements requires our
management to make estimates and assumptions about future events that affect the
amounts reported in the financial statements and related notes. Future events
and their effects cannot be determined with absolute certainty. Therefore, the
determination of estimates requires the exercise of judgment.



Cash - The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents. The Company had cash and cash
equivalents of approximately $36,000 as of June 30, 2022, and $1.2 million as of
December 31, 2021.



Property, Plant, and Equipment - Property and equipment is recorded at the lower
of cost or estimated net recoverable amount and is depreciated using the
straight-line method over its estimated useful life. Property acquired in a
business combination is recorded at estimated initial fair value. Property,
plant, and equipment are depreciated using the straight-line method based on the
lesser of the estimated useful lives of the assets or the lease term based upon
the following life expectancy:



                              Years
Office equipment              3 to 5
Furniture & fixtures          3 to 7
Machinery & equipment         3 to 10
Leasehold improvements     Term of lease




Revenue Recognition - On January 1, 2018, the Company adopted the new revenue
recognition accounting standard issued by the Financial Accounting Standards
Board ("FASB") and codified in the ASC as Topic 606 ("ASC 606"). The revenue
recognition standard in ASC 606 outlines a single comprehensive model for
recognizing revenue as performance obligations, defined in a contract with a
customer as goods or services transferred to the customer in exchange for
consideration, are satisfied. The standard also requires expanded disclosures
regarding the Company's revenue recognition policies and significant judgments
employed in the determination of revenue.



The Company applied the modified retrospective approach to all contracts when
adopting ASC 606. As a result, at the adoption of ASC 606 what was previously
classified as the provision for bad debts in the statement of operations is now
reflected as implicit price concessions (as defined in ASC 606). For changes in
credit issues not assessed at the date of service, the Company will
prospectively recognize those amounts in other operating expenses on the
statement of operations. For periods prior to the adoption of ASC 606, the
provision for bad debts has been presented consistent with the previous revenue
recognition standards that required it to be presented separately as a component
of net operating revenues.



Our revenues generally relate to net patient fees received from various payers
and patients themselves under contracts in which our performance obligations are
to provide services to the patients. Revenues are recorded during the period our
obligations to provide services are satisfied. The contractual relationships
with patients, in most cases, also involve a third-party payer (Medicare,
Medicaid, managed care health plans and commercial insurance companies,
including plans offered through the health insurance exchanges) and the
transaction prices for the services provided are dependent upon the terms
provided by (Medicare and Medicaid) or negotiated with (managed care health
plans and commercial insurance companies) the third-party payers. The payment
arrangements with third-party payers for the services we provide to the related
patients typically specify payments at amounts less than our standard charges
and generally provide for payments based upon predetermined rates for services
or discounted fee-for-service rates. Management continually reviews the
contractual estimation process to consider and incorporate updates to laws and
regulations and the frequent changes in managed care contractual terms resulting
from contract renegotiations and renewals.



Stock-Based Compensation-We recognize the compensation costs of share-based
compensation arrangements based on the grant-date fair value and recognize the
costs in the financial statements over the period during which employees are
required to provide services. Share-based compensation cost for stock options is
estimated at the grant date based on each option's fair-value as calculated by
the Black-Scholes-Merton ("BSM") option-pricing model. Share-based compensation
arrangements may include stock options, restricted share plans,
performance-based awards, share appreciation rights and employee share purchase
plans. Such compensation amounts, if any, are amortized over the respective
vesting periods of the option grant.



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Equity instruments issued to those other than employees are recognized pursuant
to FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718):
Improvements to Nonemployee Share-Based Payment Accounting. This ASU relates to
the accounting for non-employee share-based payments. The amendment in this
update expands the scope of Topic 718 to include all share-based payment
transactions in which a grantor acquired goods or services to be used or
consumed in a grantor's own operations by issuing share-based payment awards.
The ASU excludes share-based payment awards that relate to: (1) financing to the
issuer; or (2) awards granted in conjunction with selling goods or services to
customers as part of a contract accounted for under Topic 606, Revenue from
Contracts from Customers. The share-based payments are to be measured at
grant-date fair value of the equity instruments that the entity is obligated to
issue when the goods or service has been delivered or rendered and all other
conditions necessary to earn the right to benefit from the equity instruments
have been satisfied. This standard became effective for public business entities
for fiscal years beginning after December 15, 2018, including interim periods
within that fiscal year. We adopted the provisions of this ASU on January 1,
2019. The adoption had no impact on our results of operations, cash flows, or
financial condition.



Convertible Instruments-The Company reviews the terms of convertible debt and
equity instruments to determine whether there are conversion features or
embedded derivative instruments including embedded conversion options that are
required to be bifurcated and accounted for separately as a derivative financial
instrument. In circumstances where the convertible instrument contains more than
one embedded derivative instrument, including conversion options that are
required to be bifurcated, the bifurcated derivative instruments are accounted
for as a single compound instrument. Also, in connection with the sale of
convertible debt and equity instruments, the Company may issue free standing
warrants that may, depending on their terms, be accounted for as derivative
instrument liabilities, rather than as equity. When convertible debt or equity
instruments contain embedded derivative instruments that are to be bifurcated
and accounted for separately, the total proceeds allocated to the convertible
host instruments are first allocated to the fair value of the bifurcated
derivative instrument. The remaining proceeds, if any, are then allocated to the
convertible instruments themselves, usually resulting in those instruments being
recorded at a discount from their face amount. When the Company issues debt
securities, which bear interest at rates that are lower than market rates, the
Company recognizes a discount, which is offset against the carrying value of the
debt. Such discount from the face value of the debt, together with the stated
interest on the instrument, is amortized over the life of the instrument through
periodic charges to income. In addition, certain conversion features are
recognized as beneficial conversion features to the extent the conversion price
as defined in the convertible note is less than the closing stock price on the
issuance of the convertible notes.



Common Stock Purchase Warrants-The Company accounts for common stock purchase
warrants in accordance with the Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") Topic 815, Accounting for Derivative
Instruments and Hedging Activities. As is consistent with its handling of stock
compensation and embedded derivative instruments, the Company's cost for stock
warrants is estimated at the grant date based on each warrant's fair-value as
calculated by the Black Sholes option-pricing model value method for valuing the
impact of the expense associated with these warrants.



Stockholders' Equity-Shares of common stock issued for other than cash have been
assigned amounts equivalent to the fair value of the service or assets received
in exchange.



Per Share Data-Basic loss per share is computed by dividing net loss by the
weighted average number of common shares outstanding for the year. Diluted loss
per share is computed by dividing net loss by the weighted average number of
common shares outstanding plus common stock equivalents (if dilutive) related to
warrants, options, and convertible instruments.



Financial Instruments and Fair Values-The fair value of a financial instrument
represents the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
Fair value estimates are made at a specific point in time, based upon relevant
market information about the financial instrument. In determining fair value, we
use various valuation methodologies and prioritize the use of observable inputs.
We assess the inputs used to measure fair value using a three-tier hierarchy
based on the extent to which inputs used in measuring fair value are observable
in the market:

Level 1 - inputs include exchange quoted prices for identical instruments and are the most observable.

Level 2 - inputs include brokered and/or quoted prices for similar assets and observable inputs such as interest rates.

Level 3 - inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the asset or liability.

The use of observable and unobservable inputs and their significance in
measuring fair value are reflected in our hierarchy assessment. The carrying
amount of cash, prepaid assets, accounts payable and accrued liabilities
approximate fair value due to the short-term maturities of these instruments.
Because cash and cash equivalents are readily liquidated, management classifies
these values as Level 1. The fair value of the derivative liabilities
approximates their book value as the instruments are short-term in nature and
contain market rates of interest. Because there is no ready market or observable
transactions, management classifies the derivative liabilities as Level 3.



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New Accounting Standards



From time to time, new accounting pronouncements are issued by the Financial
Accounting Standards Board ("FASB") or other standard setting bodies that the
Company adopts as of the specified effective date. Unless otherwise discussed,
the Company does not believe that the impact of recently issued standards that
are not yet effective will have a material impact on its financial position or
results of operations upon adoption.

Recent Accounting Standards Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, "Debt - Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in
Entity's Own Equity (Subtopic 815-40)". This ASU reduces the number of
accounting models for convertible debt instruments and convertible Preferred
Stock. As well as amend the guidance for the derivatives scope exception for
contracts in an entity's own equity to reduce form-over-substance-based
accounting conclusions. In addition, this ASU improves and amends the related
EPS guidance. This standard is effective for us on January 1, 2022, including
interim periods within those fiscal years. Adoption is either a modified
retrospective method or a fully retrospective method of transition. We are
currently assessing the impact the new guidance will have on our condensed
consolidated financial statements.



There are various other updates recently issued, most of which represent
technical corrections to the accounting literature or application to specific
industries and are not expected to a have a material impact on the Company's
consolidated financial position, results of operations or cash flows.

Note 4 - Net Loss Per Share Applicable to Common Shareholders

Net Loss per Share Applicable to Common Stockholders

Basic loss per common share is computed by dividing net loss by the weighted
average number of common shares outstanding during the reporting period. Diluted
loss per common share is computed similarly to basic loss per common share
except that it reflects the potential dilution that could occur if dilutive
securities or other obligations to issue common stock were exercised or
converted into common stock.

The following table sets forth the computation of loss per share for the three and six months ended June 30, 2022, and 2021, respectively:

                                               For the Three Months Ended           For the Six Months Ended
                                                        June 30,                            June 30,
                                                 2022              2021              2022              2021

Numerator:

Net loss applicable to common shareholders $ (3,885,677 ) $ (1,523,769 ) $ (7,610,563 ) $ (4,278,721 )

Denominator:

Weighted average common shares outstanding 221,523,073 201,678,218 217,634,736 194,455,386

Net loss per share:
Basic and diluted                            $       (0.02 )   $       (0.01 )   $       (0.03 )   $       (0.02 )

The Company excluded all common equivalent shares outstanding for warrants, options, and convertible instruments to purchase common stock from the calculation of diluted net loss per share because all such securities are antidilutive for the periods presented. As of June 30, 2022, and 2021, the following shares were issuable and excluded from the calculation of diluted loss:

                                         For the Six Months Ended
                                                 June 30,
                                           2022             2021
Common stock options                     16,354,961       11,696,211
Common stock purchase warrants           33,290,673       12,600,000

Convertible Preferred Stock Series C 4,362,575 8,150,705 Accrued interest on Preferred Stock 480,056 376,803 Potentially dilutive securities 54,488,265 32,823,719

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Note 5 - Related Party Transactions

For the six months ended June 30, 2022:

Mitesco, Inc. (the "Company") issued a 10% Promissory Note due June 30, 2022,
dated December 30, 2021, to the Michael C. Howe Living Trust (the "Lender").
Michael C. Howe is the Chief Executive Officer of the Good Clinic LLC, one of
our subsidiaries. The principal amount of the Note is $1,000,000, carries a 10%
interest rate per annum, payable in monthly installments, and had a maturity
date that is the earlier of (i) six months from the date of execution (on July
19, 2022 this date was extended to September 10, 2022) or (ii) the date on which
the Company successfully lists its shares of common stock on Nasdaq or NYSE.
 The purchase price of the Note payable to the Company for the Note was $850,000
and was funded on December 30, 2021. An original issue discount in the amount of
$150,000 was recorded. The amount payable at maturity will be $1,000,000 plus
10% of that amount plus any accrued and unpaid interest. Following an event of
default, as defined in the Note, the principal amount shall bear interest for
each day until paid, at a rate per annum equal to the lesser of the maximum
interest permitted by applicable law and 18%. The Note contains a "most favored
nations" clause that provides that, so long as the Note is outstanding, if the
Company issues any new security, which the Lender reasonably believes contains a
term that is more favorable than those in the Note, the Company shall notify the
Lender of such term, and such term, at the option of the Lender, shall become a
part of the Note. At June 30, 2022, the principal balance of this note was
$1,000,000; $116,507 of the original issue discount was amortized to interest
expense during the six months ended June 30, 2022, and the remaining original
issue discount at June 30, 2022 was $33,493.



The Company issued a 10% Promissory Note due August 14, 2022, dated February 14,
2022 (the "Diamond Note 1"), to Lawrence Diamond (the "Lender"). Mr. Diamond is
the Chief Executive Officer of the Company and a member of its Board of
Directors. The principal amount of the Note is $175,000, carries a 10% interest
rate per annum, payable in monthly installments, and has a maturity date that is
the earlier of (i) six (6) months from the date of execution, or (ii) the date
on which the Company successfully lists its shares of common stock on Nasdaq or
NYSE. The purchase price of the Note payable to the Company for the Note was
$148,750 and was funded on February 14, 2022. The amount payable at maturity
will be $175,000 plus 10% of that amount plus accrued and unpaid interest.
Following an event of default, as defined in the Note, the principal amount
shall bear interest for each day until paid, at a rate per annum equal to the
lesser of the maximum interest permitted by applicable law and 18%. The Note
contains a "most favored nations" clause that provides that, so long as the Note
is outstanding, if the Company issues any new security, which the Lender
believes contains a term that is more favorable than those in the Note, the
Company shall notify the Lender of such term, and such term, at the option of
the Lender, shall become a part of the Note. In addition to the Note and Lender
will be issued 367,500 5-year warrants that may be exercised at $.50 per share
and 367,500 5-year warrants that may be exercised at $.75 per share. These
warrants have all of the same terms as those previously issued in conjunction
with the Company's Series C Preferred shares and its Series D Preferred shares.
The warrants have an aggregate commitment date fair value of $2,914. At June 30,
2022, the principal balance of this note was $175,000; $20,877 of the original
issue discount was amortized to interest expense during the six months ended
June 30, 2022, and the remaining original issue discount at June 30, 2022 was
$5,373.



The Company issued a 10% Promissory Note due June 18, 2022 (the "Diamond Note
2"), dated March 18, 2022, to Lawrence Diamond (the "Lender"), which was
subsequently amended. Lawrence Diamond is the Chief Executive Officer of the
Company. The principal amount of the Diamond Note is $235,294, carries a 10%
interest rate per annum, payable in monthly installments, and has a maturity
date that is the earlier of (i) April 4, 2022, (ii) the date on which the
Company successfully lists its shares of common stock on Nasdaq or NYSE, or
(iii) the date of receipt of the Company of the next round of debt or equity
financing in an amount of at least $1,000,000. The purchase price of the Diamond
Note payable to the Company for the Diamond Note was $200,000 and was funded on
March 18, 2022. The amount payable at maturity will be $235,294 plus 10% of that
amount plus any accrued and unpaid interest. Following an event of default, as
defined in the Diamond Note, the principal amount shall bear interest for each
day until paid, at a rate per annum equal to the lesser of the maximum interest
permitted by applicable law and 18%. The Diamond Note contains a "most favored
nations" clause that provides that, so long as the Note is outstanding, if the
Company issues any new security, which the Lender reasonably believes contains a
term that is more favorable than those in the Diamond Note, the Company shall
notify the Lender of such term, and such term, at the option of the Lender,
shall become a part of the Note. In addition, the Lender will be issued 200,000
5-year warrants that may be exercised on substantially the same terms as the
Series A warrant issued in connection with the Company's Series D Convertible
Preferred Stock. The warrants have an aggregate commitment date fair value of
$2,213. All amounts due for The Diamond Note, with the exception of $23,529, was
paid on April 8, 2022. $23,529 remained outstanding as of June 30, 2022.



On March 22, 2022, the Company issued 168,221 shares of common stock with a
contract price of $0.25 per share or $42,055 and a grant date market value of
$0.127 per share or $21,364 were issued to Larry Diamond, its Chief Executive
Officer, as compensation for the waiver of certain covenants as set forth and
defined in Diamond Note 1.



On April 27, 2022, the Company issued 96,471 shares of common stock with a
contract price of $0.25 per share or $24,118 and a grant date market value of
$0.16 or $15,434 to Larry Diamond, its Chief Executive Officer, as commitment
shares as set forth and defined in Diamond Note 2. The Company also issued
five-year warrants to purchase 92,942 shares of common stock at a price of $0.50
to Mr. Diamond pursuant to a promissory note.



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On April 27, 2022, the Company issued a 10% Promissory Note due June 30, 2022
(the "Diamond Note 3") to Lawrence Diamond (the "Lender"). Lawrence Diamond is
the Chief Executive Officer of the Company. The principal amount of the Diamond
Note 3 is $235,294, carries a 10% interest rate per annum, payable in monthly
installments, and has a maturity date that is the earlier of (i) April 4, 2022
(on July 12, 2022 this date was extended to September 10, 2022) (ii) the date on
which the Company successfully lists its shares of common stock on Nasdaq or
NYSE, or (iii) the date of receipt of the Company of the next round of debt or
equity financing in an amount of at least $1,000,000. The purchase price of the
Diamond Note 3 payable to the Company for the Diamond Note 3 was $200,000 and
was funded on April 27, 2022. The amount payable at maturity will be $235,294
plus 10% of that amount plus any accrued and unpaid interest. Following an event
of default, as defined in the Diamond Note 3, the principal amount shall bear
interest for each day until paid, at a rate per annum equal to the lesser of the
maximum interest permitted by applicable law and 18%. The Diamond Note 3
contains a "most favored nations" clause that provides that, so long as the Note
is outstanding, if the Company issues any new security, which the Lender
reasonably believes contains a term that is more favorable than those in the
Diamond Note 3, the Company shall notify the Lender of such term, and such term,
at the option of the Lender, shall become a part of the Note. At June 30, 2022,
the principal balance of this note was $235,294; $13,858 of the original issue
discount was amortized to interest expense during the six months ended June 30,
2022, and the remaining original issue discount at June 30, 2022 was $21,436.



The Company issued a 10% Promissory Note due as described below (the "Diamond
Note 4"), dated May 18, 2022, to Lawrence Diamond. The principal amount of the
Diamond Note 4 is $47,059.00, carries a 10% interest rate per annum, payable in
monthly installments, and had an initial maturity date that was the earlier of
(i) four business days after the date on which we successfully lists its shares
of common stock on Nasdaq or NYSE, or (ii) two business days after the date of
receipt of the Company of the next round of debt or equity financing in a net
amount of at least $600,000. On August 3, 2022, the maturity date was amended to
(i) September 10, 2022 or (ii) five days after the date on which we successfully
list our shares of common stock on any of the NYSE American, the Nasdaq Global
Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market. The
purchase price of the Diamond Note 4 payable to us for the Diamond Note 4was
$40,000 and was funded on May 18, 2022. The amount payable at maturity will be
$47,059 plus 10% of that amount plus any accrued and unpaid interest. Following
an event of default, as defined in the Diamond Note 4, the principal amount
shall bear interest for each day until paid, at a rate per annum equal to the
lesser of the maximum interest permitted by applicable law and 18%. The Diamond
Note 4 contains a "most favored nations" clause that provides that, so long as
the Diamond Note 4is outstanding, if we issue any new security, which the Lender
reasonably believes contains a term that is more favorable than those in the
Diamond Note 4, we shall notify Mr. Diamond of such term, and such term, at the
option of Mr. Diamond, shall become a part of the Note. In addition, Mr. Diamond
will be issued (1) 19,294 five-year warrants (the "May 18 Diamond Warrants")
that may be exercised on substantially the same terms as the Series A warrant
issued in connection with our Series D Convertible Preferred Stock and (2)
19,294 shares of Common Stock as commitment shares. At June 30, 2022, the
principal balance of this note was $47,059; $1,862 of the original issue
discount was amortized to interest expense during the six months ended June 30,
2022, and the remaining original issue discount at June 30, 2022 was $5,197.



On May 23, 2022, the Company issued a 10% Promissory Note due as described below
(the "Finnegan Note 1") to Jessica Finnegan.  The principal amount of the
Finnegan Note 1 is $47,059, carries a 10% interest rate per annum, payable in
monthly installments, and has a maturity date that is the earlier of (i) four
business days after the date on which we successfully lists its shares of common
stock on Nasdaq or NYSE, or (ii) two business days after the date of receipt of
the Company of the next round of debt or equity financing in a net amount of at
least $600,000. The purchase price of the Finnegan Note 1 was $40,000 resulting
in an original issue discount of $7,059 and was funded on May 18, 2022. The
amount payable at maturity will be $47,059 plus 10% of that amount plus any
accrued and unpaid interest, resulting in a premium and related discount in the
amount of $4,706. Following an event of default, as defined in the Finnegan Note
1, the principal amount shall bear interest for each day until paid, at a rate
per annum equal to the lesser of the maximum interest permitted by applicable
law and 18%. The Finnegan Note 1 contains a "most favored nations" clause that
provides that, so long as the Finnegan Note 1 is outstanding, if we issue any
new security, which the Lender reasonably believes contains a term that is more
favorable than those in the Finnegan Note 1, we shall notify Ms. Finnegan of
such term, and such term, at the option of Ms. Finnegan, shall become a part of
the Note. In addition, Ms. Finnegan will be issued (1) 19,295 five-year warrants
with a fair value of $2,000 (the "May 18 Finnegan Warrants") that may be
exercised on substantially the same terms as the Series A warrant issued in
connection with our Series D Convertible Preferred Stock and (2) 19,295 shares
of Common Stock with a value of $3,240 as commitment shares; these amounts were
charged to discount on the note, resulting in a total discount on this note in
the amount of $17,005. At June 30, 2022, the principal balance of this note was
$47,059; $3,843 of the discounts were amortized to interest expense during the
six months ended June 30, 2022, and the remaining discounts at June 30, 2022
were $13,162.



The Company issued five 10% Promissory Notes due as described below
(collectively, the "May 26 Notes"), dated May 26, 2022, to Larry Diamond, Jenny
Lindstrom, and other related parties (the "May 26 Lenders"), in respect of which
we received proceeds of $175,000. Jenny Lindstrom is the Chief Legal Officer of
the Company.



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The May 26 Notes carry a 10% interest rate per annum, payable in monthly
installments, and has a maturity date that is the earlier of (i) November 30,
2022, or (ii) the date on which we successfully lists our shares of common stock
on Nasdaq or NYSE. The aggregate amount payable at maturity will be $205,883
plus 10% of that amount plus any accrued and unpaid interest. Following an event
of default, as defined in the May 26 Notes, the principal amount shall bear
interest for each day until paid, at a rate per annum equal to the lesser of the
maximum interest permitted by applicable law and 18%. The May 26 Notes contain a
"most favored nations" clause that provides that, so long as the May 26 Notes
are outstanding, if we issue any new security, which the May 26 Lenders
reasonably believe contains a term that is more favorable than those in the May
26 Notes, we shall notify the May 26 Lenders of such term, and such term, at the
option of the May 26 Lenders, shall become a part of the May 26 Notes. In
addition, the May 26 Lenders will be issued in the aggregate (1) 84,412
five-year warrants (the "May 26 Warrants") and (2) 84,412 shares of Common Stock
as commitment shares. The May 26 Warrants have an initial exercise price of
$0.50 per share. The May 26 Warrants are not exercisable for six months
following their issuance. The May 26 Lenders may exercise the May 26 Warrants on
a cashless basis if after the six-month anniversary of date of issuance, the
shares of Common Stock underlying the May 26 Warrants are not then registered
pursuant to an effective registration statement. At June 30, 2022, the principal
balance of these notes were $205,883; $6,631 of the original issue discounts
were amortized to interest expense during the six months ended June 30, 2022,
and the remaining original issue discounts at June 30, 2022 were $24,252.



The Company issued a 10% Promissory Note due as described below ( the "Howe
Note"), dated June 9, 2022, to Michael C. Howe Living Trust and in respect of
which we received proceeds of $255,000. Michael C. Howe is the Chief Executive
Officer of the Good Clinic LLC, one of the Company's subsidiaries.



The Howe Note carries a 10% interest rate per annum, payable in monthly
installments. The Howe Note has a maturity date that is the earlier of (i)
September 10, 2022, or (ii) the date on which we successfully list our shares of
common stock on Nasdaq or NYSE. The amount payable at maturity will be $300,000
plus 10% of that amount plus any accrued and unpaid interest. In addition, the
Company issued (1) 123,000 five-year warrants with a fair value of $21,500 and
(2) 123,000 shares of Common Stock with a market value of $44,000 as commitment
shares. The Warrants have an initial exercise price of $0.50 per share and are
not exercisable for six months following their issuance. At June 30, 2022, the
principal balance of this note was $300,000; $5,798 of the original issue
discounts were amortized to interest expense during the six months ended June
30, 2022, and the remaining original issue discount at June 30, 2022 were
$39,202.



On June 13, 2022, the Company issued 200,000 ten-year options with an exercise
price of $0.25 and a fair value of $23,316 to Tom Brodmerkel, its Chairman, to
the position of Chief Financial Officer.

Note 6 - Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following at June 30,
2022 and 2021:



                                                  June 30,        December 31,
                                                    2022              2021
Trade accounts payable                           $ 5,447,673     $    3,933,305
Accrued payroll and payroll taxes                    341,040             

23,554

Other                                                      -             

19,205

Total accounts payable and accrued liabilities $ 5,788,713 $ 3,976,064

Note 7 - Right to Use Assets and Lease Liabilities - Operating Leases

The Company has operating leases for its clinic with a remaining lease term of
approximately 7.2 years. The Company's lease expense was entirely comprised of
operating leases. Lease expense for the three months ended June 30, 2022 and
2021 amounted to approximately $199,800 and $38,500, respectively. Lease expense
for the six months ended June 30, 2022 and 2021 amounted to approximately
$389,300 and $59,200, respectively.



The Company's ROU asset amortization for the three months ended June 30, 2022
and 2021 was approximately $85,200 and $18,500, respectively. The Company's ROU
asset amortization for the six months ended June 30, 2022 and 2021 was
approximately $165,700 and $24,700, respectively.

The difference between the lease expense and the associated ROU asset amortization consists of interest at a rate of 12% per annum.

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As of June 30, 2022, the Company had total operating lease liabilities of approximately $4.4 million and right-of-use assets of approximately $3.9 million, which were included in the condensed consolidated balance sheet.

Right to use assets - operating leases are summarized below:

                                      June 30,           December 31,
                                        2022                 2021
Right to use assets, net           $     3,883,529      $    3,886,866

Right to use assets - operating leases are summarized below:

                                        June 30,         December 31,
                                          2022               2021
Lease liability                      $    4,393,664     $    4,134,802
Less: current portion                      (260,700 )         (161,838 )

Lease liability, non-current $ 4,132,964 $ 3,972,964

Maturity analysis under these lease agreements are as follows:

For the twelve months ended June 30, 2023           $     746,876
For the twelve months ended June 30, 2024                 907,369
For the twelve months ended June 30, 2025                 897,472
For the twelve months ended June 30, 2026                 916,801
For the twelve months ended June 30, 2027                 937,074
Thereafter                                              2,361,735
Total                                                   6,767,327
Less: Present value discount                           (2,373,663 )
Lease liability                                     $   4,393,664




Note 8 - Debt



Howe Note 1



Mitesco, Inc. (the "Company") issued a 10% Promissory Note (the "Howe Note 1")
due June 30, 2022, dated December 30, 2021, to the Michael C. Howe Living Trust
(the "Lender"). Michael C. Howe is the Chief Executive Officer of the Good
Clinic LLC, one of our subsidiaries. The principal amount of the Note is
$1,000,000, carries a 10% interest rate per annum, payable in monthly
installments, and has a maturity date that is the earlier of (i) six months from
the date of execution (on July 19, 2022 this date was extended to September 10,
2022), or (ii) the date on which the Company successfully lists its shares of
common stock on Nasdaq or NYSE. The purchase price of the Note payable to the
Company for the Note was $850,000 and was funded on December 30, 2021. An
original issue discount in the amount of $150,000 was recorded. The amount
payable at maturity will be $1,000,000 plus 10% of that amount plus any accrued
and unpaid interest. Following an event of default, as defined in the Note, the
principal amount shall bear interest for each day until paid, at a rate per
annum equal to the lesser of the maximum interest permitted by applicable law
and 18%. The Note contains a "most favored nations" clause that provides that,
so long as the Note is outstanding, if the Company issues any new security,
which the Lender reasonably believes contains a term that is more favorable than
those in the Note, the Company shall notify the Lender of such term, and such
term, at the option of the Lender, shall become a part of the Note. At June 30,
2022, the principal balance of this note was $1,000,000; $116,507 of the
original issue discount was amortized to interest expense during the six months
ended June 30, 2022, and the remaining original issue discount at June 30, 2022
was $33,493.



Warrants. As further consideration for the Purchase Price payable hereunder,
promptly following the Issue Date, the Borrower shall issue to the Lender two
common stock purchase warrants, entitling the Lender to purchase (i) 2,100,000
shares of the Borrower's common stock on substantially the same terms as the
Series A warrant issued in connection with the Borrower's Series D Convertible
Preferred Stock, and (ii) 2,100,000 shares of the Borrower's common stock on
substantially the same terms as the Series B warrant issued in connection with
the Borrower's Series D Convertible Preferred Stock. one warrant (the "Series A
Warrants") to purchase 2.1 shares of the Company's common stock, par value $0.01
per share (the "Common Stock") at a purchase price of $0.50 per whole share of
Common Stock, and one warrant (the "Series B Warrants" and together with the
Series A Warrants, the "Warrants") to purchase 2.1 shares of Common Stock at a
purchase price of $0.75 per whole share. Given the current stock price is less
than the exercise price of the warrants, the warrants have no value.



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Diamond Note 1



The Company issued a 10% Promissory Note due August 14, 2022, dated February 14,
2022 (the "Diamond Note 1"), to Lawrence Diamond (the "Lender"). Mr. Diamond is
the Chief Executive Officer of the Company and a member of its Board of
Directors. The principal amount of the Diamond Note 1 is $175,000, carries a 10%
interest rate per annum, payable in monthly installments, and has a maturity
date that is the earlier of (i) six (6) months from the date of execution, or
(ii) the date on which the Company successfully lists its shares of common stock
on Nasdaq or NYSE. The purchase price of the Note payable to the Company for the
Note was $148,750 and was funded on February 14, 2022. The amount payable at
maturity will be $175,000 plus 10% of that amount plus accrued and unpaid
interest. Following an event of default, as defined in the Note, the principal
amount shall bear interest for each day until paid, at a rate per annum equal to
the lesser of the maximum interest permitted by applicable law and 18%. The Note
contains a "most favored nations" clause that provides that, so long as the Note
is outstanding, if the Company issues any new security, which the Lender
believes contains a term that is more favorable than those in the Note, the
Company shall notify the Lender of such term, and such term, at the option of
the Lender, shall become a part of the Note. In addition to the Note and Lender
will be issued 367,500 5-year warrants that may be exercised at $.50 per share
and 367,500 5-year warrants that may be exercised at $.75 per share. These
warrants have all of the same terms as those previously issued in conjunction
with the Company's Series C Preferred shares and its Series D Preferred shares.
The warrants have an aggregate commitment date fair value of $2,914. At June 30,
2022, the principal balance of this note was $175,000; $20,877 of the original
issue discount was amortized to interest expense during the six months ended
June 30, 2022, and the remaining original issue discount at June 30, 2022 was
$5,373.



On March 22, 2022, the Company issued 168,221 shares of common stock with a
contract price of $0.25 per share of $42,055 and a grant date market value of
$0.127 per share or $21,364 were issued to Larry Diamond, its Chief Executive
Officer, as compensation for the waiver of certain covenants as set forth and
defined in Diamond Note 1.



Diamond Note 2



The Company issued a 10% Promissory Note due June 18, 2022 (the "Diamond Note
2"), dated March 18, 2022, to Lawrence Diamond (the "Lender"), which was
subsequently amended. Lawrence Diamond is the Chief Executive Officer of the
Company. The principal amount of the Diamond Note 2 is $235,294, carries a 10%
interest rate per annum, payable in monthly installments, and has a maturity
date that is the earlier of (i) April 4, 2022 (on July 12, 2022 this date was
extended to September 10, 2022), (ii) the date on which the Company successfully
lists its shares of common stock on Nasdaq or NYSE, or (iii) the date of receipt
of the Company of the next round of debt or equity financing in an amount of at
least $1,000,000. The purchase price of the Diamond Note payable to the Company
for the Diamond Note was $200,000 and was funded on March 18, 2022. The amount
payable at maturity will be $235,294 plus 10% of that amount plus any accrued
and unpaid interest. Following an event of default, as defined in the Diamond
Note, the principal amount shall bear interest for each day until paid, at a
rate per annum equal to the lesser of the maximum interest permitted by
applicable law and 18%. The Diamond Note contains a "most favored nations"
clause that provides that, so long as the Note is outstanding, if the Company
issues any new security, which the Lender reasonably believes contains a term
that is more favorable than those in the Diamond Note, the Company shall notify
the Lender of such term, and such term, at the option of the Lender, shall
become a part of the Note. In addition, the Lender will be issued 200,000 5-year
warrants that may be exercised on substantially the same terms as the Series A
warrant issued in connection with the Company's Series D Convertible Preferred
Stock. The warrants have an aggregate commitment date fair value of $2,213. All
amounts due for The Diamond Note, with the exception of $23,529, was paid on
April 8, 2022. $23,529 remained outstanding as of June 30, 2022.



On April 27, 2022, the Company issued 96,471 shares of common stock with a
contract price of $0.25 per share or $24,118 and a grant date market value of
$0.16 or $15,434 to Larry Diamond, it's Chief Executive Officer, as commitment
shares as set forth and defined in Diamond Note 2. The Company also issued
five-year warrants to purchase 92,942 shares of common stock at a price of $0.50
to Mr. Diamond pursuant to a promissory note.



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AJB Capital Note



On March 18, 2022, the Company entered into a Securities Purchase Agreement (the
"Purchase Agreement") with AJB Capital Investments, LLC (the "Investor") with
respect to the sale and issuance to the Investor of: (i) an initial commitment
fee in the amount of $430,000 in the form of 1,720,000 shares (the "Commitment
Fee Shares") of the Company's common stock (the "Common Stock"), which
Commitment Fee Shares can be decreased to 720,000 shares ($180,000) if the
Company repays the Note on or prior to its maturity (the "True-Up Provision"),
(ii) a promissory note in the aggregate principal amount of $750,000, and (iii)
Common Stock Purchase Warrants to purchase up to an aggregate of 750,000 shares
of the Common Stock (the "Warrants"). The Note and Warrants were issued on March
17, 2022 (the "Original Issue Date") and were held in escrow pending
effectiveness of the Purchase Agreement. Pursuant to the terms of the Purchase
Agreement, the initial Commitment Fee Shares were issued at a value of $430,000,
the Note was issued in a principal amount of $750,000 for a purchase price of
$675,000, resulting in an original issue discount of $75,000; the warrants had a
commitment date fair value of $24,952; and the commitment fee shares had a
commitment date fair value of $324,962, resulting in a total discount in the
amount of $424,914. The Warrants were issued, with an initial exercise price of
$0.50 per share, subject to adjustment as described herein. The aggregate cash
subscription amount received by the Company from the Investor for the issuance
of the Commitment Fee Shares, Note and Warrants was $616,250, due to a reduction
in the $675,000 purchase price as a result of broker, legal, and transaction
fees. $194,656 of the discount was amortized to interest expense during the six
months ended June 30, 2022, and the remaining discount at June 30, 2022 was
$230,258. At June 30, 2022, the principal balance of this note was $750,000.

Anson East Master Fund LP and Anson Investments Master Fund LP

On April 6, 2022, the Company entered into separate Securities Purchase
Agreement with each of Anson East Master Fund LP and Anson Investments Master
Fund LP with respect to the sale and issuance to AEMF and AIMF of: (i) an
aggregate initial commitment fee in the amount of $430,000 in the form of
1,720,000 shares (the "Commitment Fee Shares") of the Company's common stock
(the "Common Stock"), which Commitment Fee Shares can be decreased to 722,400
shares ($180,000) if the Company repays the Notes on or prior their maturity,
(ii) promissory notes in the aggregate principal amount of $750,000 (the
"Notes"), and (iii) Common Stock Purchase Warrants to purchase up to an
aggregate of 750,000 shares of the Common Stock (the "Warrants") at an initial
exercise price of $0.50 per share, subject to adjustment. The Notes and Warrants
were issued on April 6, 2022 (the "Original Issue Date") and were held in escrow
pending effectiveness of the Purchase Agreements. The notes were issued in a
total principal amount of $750,000 for a total purchase price of $675,000,
resulting in an original issue discount of $75,000; the warrants had an
aggregate commitment date fair value of $168,130; and the commitment shares had
an aggregate commitment date fair value of $563,665, resulting in a total
discount in the amount of $638,665. $160,121 of the discount was amortized to
interest expense during the six months ended June 30, 2022, and the remaining
discount at June 30, 2022 was $478,544. At June 30, 2022, the principal balance
of this note was $750,000.



GS Capital Partners



On April 18, 2022, the Company entered into a Securities Purchase Agreement (the
"Purchase Agreement") with GS Capital Partners (the "Investor") with respect to
the sale and issuance to the Investor of: (i) an initial commitment fee in the
amount of $159,259 in the form of 637,036 shares (the "Commitment Fee Shares")
of the Company's common stock (the "Common Stock"), which Commitment Fee Shares
can be decreased to 266,280 shares ($66,570) if the Company repays the Note on
or prior to their maturity, (ii) promissory note in the principal amount of
$277,777, and (iii) Common Stock Purchase Warrants to purchase up to 277,777
shares of the Common Stock (the "Warrants") at an initial exercise price of
$0.50 per share, subject to adjustment. The Note and Warrants were issued on
April 18, 2022 (the "Original Issue Date") and were held in escrow pending
effectiveness of the Purchase Agreement. The notes were issued in a total
principal amount of $277,777 for a total purchase price of $250,000, resulting
in an original issue discount of $27,777; the warrants had an aggregate
commitment date fair value of $26,846; and the commitment shares had an
aggregate commitment date fair value of $135,312. The Company also recorded a
discount in the amount of $22,500 for the costs of financing, resulting in a
total discount in the amount of $212,435. $54,386 of the discount was amortized
to interest expense during the six months ended June 30, 2022, and the remaining
discount at June 30, 2022 was $159,049. At June 30, 2022, the principal balance
of this note was $277,777.



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Diamond Note 3



On April 27, 2022, the Company issued a 10% Promissory Note due June 30, 2022
(the "Diamond Note 3") to Lawrence Diamond (the "Lender"). Lawrence Diamond is
the Chief Executive Officer of the Company. The principal amount of the Diamond
Note 3 is $235,294, carries a 10% interest rate per annum, payable in monthly
installments, and has a maturity date that is the earlier of (i) April 4, 2022
(on July 12, 2022 this date was extended to September 10, 2022), (ii) the date
on which the Company successfully lists its shares of common stock on Nasdaq or
NYSE, or (iii) the date of receipt of the Company of the next round of debt or
equity financing in an amount of at least $1,000,000. The purchase price of the
Diamond Note 3 payable to the Company for the Diamond Note 3 was $200,000
resulting in an original issue discount of $35,294 and was funded on April 27,
2022. The amount payable at maturity will be $235,294 plus 10% of that amount
plus any accrued and unpaid interest, resulting in a premium and related
discount in the amount of $23,529. The Company also issued 96,471 shares of
stock with a value of $16,200 as a commitment fee and five-year warrants with a
fair value of $8,800 to purchase 96,471 shares of common stock at a price of
$0.50 per share; these amounts were charged to discount on the note, resulting
in a total discount on this note in the amount of $83,823. Following an event of
default, as defined in the Diamond Note 3, the principal amount shall bear
interest for each day until paid, at a rate per annum equal to the lesser of the
maximum interest permitted by applicable law and 18%. The Diamond Note 3
contains a "most favored nations" clause that provides that, so long as the Note
is outstanding, if the Company issues any new security, which the Lender
reasonably believes contains a term that is more favorable than those in the
Diamond Note 3, the Company shall notify the Lender of such term, and such term,
at the option of the Lender, shall become a part of the Note. At June 30, 2022,
the principal balance of this note was $235,294; $34,861 of the discounts were
amortized to interest expense during the six months ended June 30, 2022, and the
remaining discounts at June 30, 2022 were $48,962.



Kishon Investments, LLC



On May 10, 2022, the Company entered into a Securities Purchase Agreement (the
"Purchase Agreement") with Kishon Investments, LLC (the "Investor") with respect
to the sale and issuance to the Investor of: (i) an initial commitment fee in
the amount of $159,259 in the form of 637,036 shares (the "Commitment Fee
Shares") of the Company's common stock (the "Common Stock"), (ii) promissory
note in the principal amount of $277,777 due on November 10, 2022, and (iii)
Common Stock Purchase Warrants to purchase up to 277,777 shares of the Common
Stock (the "Warrants") at an initial exercise price of $0.50 per share, subject
to adjustment. The Note and Warrants were issued on May 10, 2022 (the "Original
Issue Date") and were held in escrow pending effectiveness of the Purchase
Agreement. The note was issued in a total principal amount of $277,777 for a
total purchase price of $250,000, resulting in an original issue discount of
$27,777; the warrants had an aggregate commitment date fair value of $15,780;
and the commitment shares had an aggregate commitment date fair value of
$122,712, resulting in a total discount in the amount of $166,269. $32,463 of
the discount was amortized to interest expense during the six months ended June
30, 2022, and the remaining discount at June 30, 2022 was $133,806. At June 30,
2022, the principal balance of this note was $277,777.



Diamond Note 4



The Company issued a 10% Promissory Note due as described below (the "Diamond
Note 4"), dated May 18, 2022, to Lawrence Diamond. The principal amount of the
Diamond Note 4 is $47,059, carries a 10% interest rate per annum, payable in
monthly installments, and had a maturity date that was the earlier of (i) four
business days after the date on which we successfully lists its shares of common
stock on Nasdaq or NYSE, or (ii) two business days after the date of receipt of
the Company of the next round of debt or equity financing in a net amount of at
least $600,000. On August 3, 2022, the maturity date was amended to (i)
September 10, 2022 or (ii) five days after the date on which we successfully
list our shares of common stock on any of the NYSE American, the Nasdaq Global
Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market. The
purchase price of the Diamond Note 4payable to us for the Diamond Note 4was
$40,000, resulting in an original issue discount of $7,059, and was funded on
May 18, 2022. The amount payable at maturity will be $47,059 plus 10% of that
amount plus any accrued and unpaid interest, resulting in a premium and related
discount in the amount of $4,706. Following an event of default, as defined in
the Diamond Note 4, the principal amount shall bear interest for each day until
paid, at a rate per annum equal to the lesser of the maximum interest permitted
by applicable law and 18%. The Diamond Note 4contains a "most favored nations"
clause that provides that, so long as the Diamond Note 4is outstanding, if we
issue any new security, which the Lender reasonably believes contains a term
that is more favorable than those in the Diamond Note 4, we shall notify Mr.
Diamond of such term, and such term, at the option of Mr. Diamond, shall become
a part of the Note. In addition, Mr. Diamond will be issued (1) 19,294 five-year
warrants (the "May 18 Diamond Warrants") with a fair value of $2,960 that may be
exercised on substantially the same terms as the Series A warrant issued in
connection with our Series D Convertible Preferred Stock and (2) 19,294 shares
of Common Stock with a value of $3,160 as commitment shares; these amounts were
charged to discount on the note, resulting in a total discount on this note in
the amount of $17,885. At June 30, 2022, the principal balance of this note was
$47,059; $5,392 of the discounts were amortized to interest expense during the
six months ended June 30, 2022, and the remaining discount at June 30, 2022 were
$12,493.



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Finnegan Note 1



On May 23, 2022, the Company issued a 10% Promissory Note due as described below
(the "Finnegan Note 1") to Jessica Finnegan. The principal amount of the
Finnegan Note 1 is $47,059, carries a 10% interest rate per annum, payable in
monthly installments, and has a maturity date that is the earlier of (i) four
business days after the date on which we successfully lists its shares of common
stock on Nasdaq or NYSE, or (ii) two business days after the date of receipt of
the Company of the next round of debt or equity financing in a net amount of at
least $600,000. The purchase price of the Finnegan Note 1 was $40,000 resulting
in an original issue discount of $7,059 and was funded on May 18, 2022. The
amount payable at maturity will be $47,059 plus 10% of that amount plus any
accrued and unpaid interest, resulting in a premium and related discount in the
amount of $4,706. Following an event of default, as defined in the Finnegan Note
1, the principal amount shall bear interest for each day until paid, at a rate
per annum equal to the lesser of the maximum interest permitted by applicable
law and 18%. The Finnegan Note 1 contains a "most favored nations" clause that
provides that, so long as the Finnegan Note 1 is outstanding, if we issue any
new security, which the Lender reasonably believes contains a term that is more
favorable than those in the Finnegan Note 1, we shall notify Ms. Finnegan of
such term, and such term, at the option of Ms. Finnegan, shall become a part of
the Note. In addition, Ms. Finnegan will be issued (1) 19,295 five-year warrants
with a fair value of $2,000 (the "May 18 Finnegan Warrants") that may be
exercised on substantially the same terms as the Series A warrant issued in
connection with our Series D Convertible Preferred Stock and (2) 19,295 shares
of Common Stock with a value of $3,240 as commitment shares; these amounts were
charged to discount on the note, resulting in a total discount on this note in
the amount of $17,005. At June 30, 2022, the principal balance of this note was
$47,059; $3,843 of the discounts were amortized to interest expense during the
six months ended June 30, 2022, and the remaining discounts at June 30, 2022
were $13,162.



May 26, 2022 Notes



The Company issued five 10% Promissory Notes due as described below
(collectively, the "May 26 Notes"), dated May 26, 2022, to Larry Diamond, Jenny
Lindstrom, and other related parties (the "May 26 Lenders"), in the aggregate
principal amount of $205,883.



The May 26 Notes carry a 10% interest rate per annum, payable in monthly
installments, and has a maturity date that is the earlier of (i) November 30,
2022, or (ii) the date on which we successfully lists our shares of common stock
on Nasdaq or NYSE. The aggregate principal amount payable at maturity will be
$205,883 plus 10% of that amount plus any accrued and unpaid interest, resulting
in an aggregate premium and related discount in the amount of $20,588. The
aggregate amount funded was $175,000 resulting in an original issue discount of
$30,883. Following an event of default, as defined in the May 26 Notes, the
principal amount shall bear interest for each day until paid, at a rate per
annum equal to the lesser of the maximum interest permitted by applicable law
and 18%. The May 26 Notes contain a "most favored nations" clause that provides
that, so long as the May 26 Notes are outstanding, if we issue any new security,
which the May 26 Lenders reasonably believe contains a term that is more
favorable than those in the May 26 Notes, we shall notify the May 26 Lenders of
such term, and such term, at the option of the May 26 Lenders, shall become a
part of the May 26 Notes. In addition, the May 26 Lenders were issued in the
aggregate (1) 84,412 five-year warrants (the "May 26 Warrants") with an
aggregate fair value of $8,750 and (2) 84,412 shares of Common Stock as
commitment shares with an aggregate value of $14,175; these amounts were charged
to discount on the note, resulting in an aggregate discount on these notes in
the amount of $74,396. The May 26 Warrants have an initial exercise price of
$0.50 per share. The May 26 Warrants are not exercisable for six months
following their issuance. The May 26 Lenders may exercise the May 26 Warrants on
a cashless basis if after the six-month anniversary of date of issuance, the
shares of Common Stock underlying the May 26 Warrants are not then registered
pursuant to an effective registration statement. At June 30, 2022, the principal
balance of these notes was $205,883; $6,631 of the discounts were amortized to
interest expense during the six months ended June 30, 2022, and the remaining
discounts at June 30, 2022 were $24,252.



June 9, 2022 Notes



The Company issued two 10% Promissory Notes due as described below
(individually, the "Howe Note" and the "Dragon Note", and collectively, the
"June 9 Notes"), dated June 9, 2022, to Michael C. Howe Living Trust and Dragon
Dynamic Funds Platform Ltd. (the "June 9 Lenders") in the aggregate principal
amount of $888,235. Michael C. Howe is the Chief Executive Officer of the Good
Clinic LLC, one of the Company's subsidiaries.



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The June 9 Notes carry a 10% interest rate per annum, payable in monthly
installments. The Howe Note has a maturity date that is the earlier of (i)
September 10, 2022, or (ii) the date on which we successfully list our shares of
common stock on Nasdaq or NYSE. The Dragon Note has a maturity date that is the
earlier of (i) December 9, 2022, or (ii) the date on which we successfully list
our shares of common stock on Nasdaq or NYSE. The aggregate amount payable at
maturity will be $888,235 plus 10% of that amount plus any accrued and unpaid
interest, resulting in a premium and related discount in the aggregate amount of
$58,824. The aggregate amount funded was $755,000 resulting in an original issue
discount of $133,235. In addition, the June 9 Lenders will be issued in the
aggregate (1) 364,176 five-year warrants (the "June 9 Warrants") with a fair
value of $32,465 and (2) 364,176 shares of Common Stock with a value of $66,440
as commitment shares; these amounts were charged to discount on the note. The
Company also paid issuance costs related to these notes in the aggregate amount
of $77,500 which were charged to discount on the notes, resulting in an
aggregate discount on these notes in the amount of $368,464. The June 9 Warrants
have an initial exercise price of $0.50 per share. The June 9 Warrants are not
exercisable for six months following their issuance. At June 30, 2022, the
principal balance of these notes were $888,235; $45,607 of the discounts were
amortized to interest expense during the six months ended June 30, 2022, and the
remaining discounts at June 30, 2022 were $322,857.



PPP Loan



During March 2020, in response to the COVID-19 crisis, the federal government
announced plans to offer loans to small businesses in various forms, including
the Payroll Protection Program, or "PPP", established as part of the Corona
Virus Aid, Relief and Economic Security Act ("CARES Act") and administered by
the U.S. Small Business Administration. On April 25, 2020, the Company entered
an unsecured Promissory Note with Bank of America for a loan in the original
principal amount of approximately $460,400, and the Company received the full
amount of the loan proceeds on May 4, 2020. The June 30, 2022 balance, including
accrued interest, was $470,375.

These amounts are reflected in the table below:

Notes Payable Table 1:



                                        June 30,        December 31,
                                          2022              2021
Notes Payable                         $  4,937,466     $    1,000,000
PPP Loan                                   460,406            460,406
                                         5,397,872          1,460,406
Less: Discounts                         (1,620,263 )         (411,568 )

Notes payable - net of discounts $ 3,777,609 $ 1,048,838

Current Portion, net of discounts $ 3,777,609 $ 1,048,838 Long-term portion, net of discounts $ - $

            -

Note 9 - Stockholders' Equity (Deficit)

Common Stock

The Company has authorized 500,000,000 shares of common stock, par value $0.01; 225,209,745 shares were issued and outstanding on June 30, 2022.

Common Stock Transactions During the Six Months Ended June 30, 2022

On January 12, 2022, the Company entered into a settlement agreement with an
ex-employee. Pursuant to the terms of this agreement, the Company agreed to pay
the amount of $19,032 for accrued salary, and the employee returned to the
Company for cancellation 400,000 shares of common stock previously issued as
compensation. These shares were valued at par value of $0.01 or a total value of
$4,000; the Company recorded a gain on cancellation of these shares in the
amount of $15,032.

The Company entered into a debt-for-equity exchange agreement with Gardner Builders Holdings, LLC ("Gardner") on January 7, 2022 (the "Debt for Equity Agreement"). Pursuant to the Debt for Equity Agreement, the Company issued shares of restricted common stock to Gardner in exchange for the Company Debt Obligations, as defined below.

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The Agreement settled for certain accounts payable amounts owed by the Company
to the Creditor (the "Accounts Payable Amount") as well as upcoming amounts that
will become due between the date of the Agreement and April 1, 2022. The
Agreement also settled accrued interest and penalties on the amounts due through
January 5, 2022, as well as interest payments on amounts incurred in the first
quarter of 2022 (collectively, the "Additional Costs", and combined with the
Accounts Payable Amount, the "Company Debt Obligations"). The Accounts Payable
Amount was $500,000, the Additional Costs were $294,912 and the conversion price
was $0.25. As a result, 3,179,650 Restricted Shares were authorized to be
issued.



On March 22, 2022 and March 31, 2022, the Company issued an aggregate 1,541,721
shares of common stock as waiver fees to holders of the Series C and Series D
Preferred Stock for their waivers of certain covenants as set forth and defined
in the Series C and Series D Certificates of Designations. The Company valued
these shares at their contractual price of $0.25 per share and recorded the
amount of $385,431 as waiver fees during the six months ended June 30, 2022. The
Company recorded an aggregate gain upon issuance of these shares in the amount
of $198,273 based on the market price of the Company's common stock on the date
of issuance.



On March 31, 2022, the Company issued 1,720,000 Commitment Fee Shares to AJB
Capital Investors, LLC. A Monte Carlo model was used to value the warrants and
call features, and a probability weighted expected return model was used to
value the True-Up Provision. The contractual price of the common stock $0.25 per
share; valuation purposes, the common stock was valued at the market price on
the date of the transaction of $0.127 per share. The derivative liability was
valued at $106,608 on the date of the transaction and was revalued at $75,158 on
June 30, 2022. The discount on the notes due to the Commitment Fee Shares and
warrants was valued at $349,914. The Company recorded the amount of $226,106 to
additional paid-in capital pursuant to this transaction.

On March 31, 2022, the Company issued 382,353 shares of common stock at a price of $0.25 per share which were previously subscribed for the conversion of accounts payable in the amount of $95,558.

On April 18, 2022, the Company entered into a Securities Purchase Agreement (the
"Purchase Agreement") with GS Capital Partners (the "Investor") with respect to
the sale and issuance to the Investor of: (i) an initial commitment fee in the
amount of $159,259 in the form of 637,036 shares (the "Commitment Fee Shares")
of the Company's common stock (the "Common Stock"), which Commitment Fee Shares
can be decreased to 266,280 shares ($66,570) if the Company repays the Note on
or prior to their maturity, (ii) promissory note in the principal amount of
$277,777, and (iii) Common Stock Purchase Warrants to purchase up to 277,777
shares of the Common Stock (the "Warrants"). The Note and Warrants were issued
on April 18, 2022 (the "Original Issue Date") and were held in escrow pending
effectiveness of the Purchase Agreement.



Pursuant to the terms of the Purchase Agreement, the initial Commitment Fee
Shares were issued at a value of $159,259, the Note was issued in the principal
amount of $277,777 for a purchase price of $250,000, resulting in the original
issue discount of $27,777; and the Warrants were issued, with an initial
exercise price of $0.50 per share, subject to adjustment.

On April 27, 2022, the Company issued 720,000 shares of stock to Cavalry Fund 1 LP as compensation for the waiver of certain covenants as set forth in the Series C Certificate of Designation.

On April 27, 2022, the Company issued 96,471 shares of common stock with a
contract price of $0.25 per share or $24,118 and a grant date market value of
$0.16 or $15,434 to Larry Diamond, its Chief Executive Office, as commitment
shares as set forth and defined in Diamond Note 3. The Company recorded these
shares at their relative fair value of the components of Diamond Note 3, or
$16,200, and recorded a loss in the amount of $765 on this transaction. The
Company also issued five-year warrants to purchase 96,471 shares of common stock
at a price of $0.50 to Mr. Diamond pursuant to Diamond Note 3. See Note 8.



On May 10, 2022, the Company entered into a Securities Purchase Agreement (the
"Purchase Agreement") with Kishon Investments, LLC (the "Investor") with respect
to the sale and issuance to the Investor of: (i) an initial commitment fee in
the amount of $159,259 in the form of 637,036 shares (the "Commitment Fee
Shares") of the Company's common stock (the "Common Stock"), (ii) promissory
note in the principal amount of $277,777 due on November 10, 2022, and (iii)
Common Stock Purchase Warrants to purchase up to 277,777 shares of the Common
Stock (the "Warrants"). The Note and Warrants were issued on May 10, 2022 (the
"Original Issue Date") and were held in escrow pending effectiveness of the
Purchase Agreement.



Pursuant to the terms of the Purchase Agreement, the initial Commitment Fee
Shares were issued at a value of $159,259, the Note was issued in the principal
amount of $277,777 for a purchase price of $250,000, resulting in the original
issue discount of $27,777; and the Warrants were issued, with an initial
exercise price of $0.50 per share, subject to adjustment. See Note 8.



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On May 18, 2022, the Company issued 19,294 shares of common stock to Larry
Diamond, it's Chief Executive Officer at a contractual price of $0.25 per share
and a market price at issuance date of $0.1517 per share as commitment shares as
set forth and defined in Diamond Note 4. The Company recorded these shares at
their relative fair value of the components of Diamond Note 4, or $3,160, and
recorded a loss in the amount of $249 on this transaction. The Company also
issued five-year warrants to purchase 19,294 shares of common stock at a price
of $0.50 to Mr. Diamond pursuant to Diamond Note 4. See Note 8.



On May 23, 2022, the Company issued 19,295 shares of common stock to Jessica
Finnegan at a contractual price of $0.25 per share and a market price at
issuance date of $0.1794 per share as commitment shares as set forth and defined
in Finnegan Note 1. The Company recorded these shares at their relative fair
value of the components of Finnegan Note 1, or $3,240, and recorded a gain in
the amount of $222 on this transaction. The Company also issued five-year
warrants to purchase 19,295 shares of common stock at a price of $0.50 to Ms.
Finnegan pursuant to Finnegan Note 1. See Note 8.



On May 26, 2022, the Company issued 84,412 shares of common stock to the May 26
Lenders at a contractual price of $0.25 per share and a market price at issuance
date of $0.1517 per share as commitment shares as set forth and defined in the
May 26, 2022 Notes. The Company recorded these shares at their relative fair
value of the components of the May 26 Note, or $14,175, and recorded a loss in
the amount of $1,369 on these transactions. The Company also issued five-year
warrants to purchase 84,412 shares of common stock at a price of $0.50 to the
May 26 Lenders pursuant to the May 26, 2022. See Note 8.



On June 9, 2022, the Company issued 364,176 shares of common stock to the June 9
Lenders at a contractual price of $0.25 per share and a market price at issuance
date of $0.1485 per share as commitment shares as set forth and defined in the
June 9 Notes. The Company recorded these shares at the relative fair value of
the components of June 9 Notes, or $66,400, and recorded an aggregate loss in
the amount of $9,356 on these transactions. The Company also issued five-year
warrants to purchase 364,176 shares of common stock at a price of $0.50 to the
May 26 Lenders pursuant to the June 9 notes. See Note 8.

Common Stock Transactions During the Six Months Ended June 30, 2021

On January 4, 2021, the Company issued 4,123,750 shares of common stock at a
price of $0.012 per share pursuant to the conversion of $45,000 of principal and
$4,485 of accrued interest in Eagle Equities Note 4.



On January 6, 2021, the Company issued 3,505,964 shares of common stock at a
price of $0.01224 per share pursuant to the conversion of $39,000 of principal
and $3,913 of accrued interest in Eagle Equities Note 4.



On January 11, 2021, the Company issued 4,463,507 shares of common stock at a
price of $0.01224 per share pursuant to the conversion of $50,000 of principal
and $4,633 of accrued interest in Eagle Equities Note 5.



On January 14, 2021, the Company issued 4,319,378 shares of common stock at a
price of $0.01266 per share pursuant to the conversion of $50,000 of principal
and $4,683 of accrued interest in Eagle Equities Note 5.



On January 21, 2021, the Company issued 6,449,610 shares of common stock at a
price of $0.0154 per share pursuant to the conversion of $93,000 of principal
and $6,324 of accrued interest in Eagle Equities Note 6.



On January 28, 2021, the Company issued 7,285,062 shares of common stock at a
price of $0.01575 per share pursuant to the conversion of $107,200 of principal
and $7,540 of accrued interest in Eagle Equities Note 6.



On February 1, 2021, the Company issued 6,672,000 shares of common stock in a
private placement (the "2021 Private Placement") at a price of $0.25 per share
for cash proceeds of $1,668,000.



On February 5, 2021, the Company entered into a settlement agreement with the
holders of the Eagle Equities Note 7 whereby the Company issued 1,184,148 shares
of common stock at a price of $0.24984 per share in satisfaction of $200,200 of
principal and all accrued interest and prepayment penalties due under this note.



On February 5, 2021, the Company entered into a settlement agreement with the
holders of the Eagle Equities Note 8 whereby the Company issued 639,593 shares
of common stock at a price of $0.23851 per share in satisfaction of $114,400 of
principal and all accrued interest and prepayment penalties due under this note.



On February 5, 2021, the Company entered into a settlement agreement with the
holders of the Eagle Equities Note 9 whereby the Company issued 605,177 shares
of common stock at a price of $0.24984 per share in satisfaction of $114,400 of
principal and all accrued interest and prepayment penalties due under this note.



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On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 10 whereby the Company issued 1,095,131 shares of common stock at a price of $0.23748 per share in satisfaction of $200,200 of principal and all accrued interest and prepayment penalties due under this note.

On February 22, 2021, the Company issued 336,000 shares of common stock for the exercise of options at a price of $0.03 per share.

On March 11, 2021, the Company issued 600,000 shares of common stock to four
officers of The Good Clinic in exchange for 4,800 shares of Series A Preferred
Stock. The 4,800 shares of Series A Preferred Stock were cancelled.

On March 17, 2021, the Company issued 300,000 shares of common stock at a price of $0.31 per share to a service provider.

On March 23, 2021, the Company issued 461,358 shares of common stock at a price of $0.26 per share to the underwriters of the 2021 Private Placement.

On April 19, 2021, the Company issued 1,962 shares of common stock for professional fees which had been performed in a prior period. The Company recorded these shares at the par value of $0.01 per share.

On May 4 through May 26, 2021, the Company issued 4,237,424 shares of common
stock for the conversion of 1,059,356 shares of Series C Preferred Stock at a
price of $0.25 per share.

On May 12, 2021, the Company issued 2,500,000 shares of common stock at a price of $0.03 per share for the exercise of stock options by an investor.

On June 10 through June 29, 2021, the Company issued 5,116,668 shares of common stock at a price of $0.03 per share for the exercise of stock options by officers and directors.

On June 23, 2021, the Company cancelled 2,000,000 shares of common stock held by
an ex-officer in connection with a settlement agreement. The cancellation of
these shares was recorded at the par value of $0.01 per share. Also, in
connection with the settlement agreement, the Company issued 637,953 shares to
the ex-officer at the market price of $.20 per share.



Also, during the six months ended June 30, 2021, the Company charged the amount
of $7,897 to operations in connection with the vesting of stock granted to its
officers and board members; the Company also charged the amount of $201,294 to
operations in connection with the vesting of options granted to its officers and
board members.



Preferred Stock



We have authorized to issue 100,000,000 shares of Preferred Stock with such
rights designations and preferences as determined by our Board of Directors. We
have designated 500,000 shares of series A stock, 3,000,000 shares of Series C
Preferred, 10,000,000 shares of Series D Preferred and we have designated
400,000 shares as Series X Preferred Stock.



Series A Preferred Stock

Series A Preferred Stock Transactions During the Six Months Ended June 30, 2022

None.

Series A Preferred Stock Transactions During the Six Months Ended June 30, 2021

During the six months ended June 30, 2021, the Company accrued dividends in the
amount of $1,000 on the Series A Preferred Stock. On March 11, 2021, the Company
issued 600,000 shares of common stock to the four officers of The Good Clinic in
exchange for the previously issued Series A Preferred Stock and accrued
dividends. The Series A preferred stock was canceled. The Preferred Stock was
valued at cost of $71,558, and the common stock was valued at the market price
of $0.463 per share or a total value of $277,800. This transaction resulted in a
deemed dividend to the Preferred A shareholders in the amount of $206,242.



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Series C Preferred Stock

Series C Preferred Stock Transactions During the Six Months Ended June 30, 2022

During the six months ended June 30, 2022, the Company accrued dividends on the Series C Preferred Stock in the amount of $32,955.

Series C Preferred Stock Transactions During the Six Months Ended June 30, 2021

On March 25, 2021, the Company sold 3,000,000 shares of its Series C Preferred
Stock along with (i) five-year warrants to purchase 6,300,000 shares of the
Company's common stock at a price of $0.50 per share, and (ii) five-year
warrants to purchase 6,300,000 shares of the Company's common stock at a price
of $0.75 per share for proceeds of $3,000,000.



Between May 4 and May 26, 2021, 1,059,356 shares of Series C Preferred Stock
were converted at a price of $0.25 per share to 4,237,424 shares of common
stock. During the six months ended June 30, 2021, the Company accrued dividends
on the Series C Preferred Stock in the amount of $42,078.

The Series C Preferred Stock has the following terms:

Ranking. The Series C Preferred Stock and the Series D Preferred, discussed
below, ranks senior to all other preferred stock of the Company except in
relation to the Series X Cumulative Redeemable Perpetual Preferred Stock, which
ranks Pari passu to the Series C Preferred Stock, with respect to the
preferences as to dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Company.



Voting Rights. Holders of the Series C Preferred Stock have the right to vote on
any matter presented to holders of our Common Stock for their action or
consideration at any meeting of the stockholders (or by written consent of
stockholders in lieu of meeting), each holder of our Series C Preferred Stock
shall be entitled to cast the number of votes equal to the number of whole
shares of Common Stock into which the shares of Series C preferred Stock held by
such holder, as described below, are convertible as of the record date for
determining stockholders entitled to vote on (or consent to) such matter, voting
with the Common Stock as a single class.



Conversion. Each holder of our Series C Preferred Stock is entitled to convert
their shares of Series C Preferred Stock, in whole or in part, at the Conversion
Rate, which is determined by dividing the Conversion Amount (the Stated Value of
$1.05, plus any accrued but unpaid dividends) by the Conversion Price ($0.25 per
share). In addition, upon certain triggering events, the holders of our Series C
Preferred Stock have the right to convert their Series C Preferred Stock at the
lesser of the Conversion Price or 75% of the average VWAP for the five trading
days prior to the date of the notice of conversion. The Conversion Price is
subject to adjustment upon certain stock splits and recapitalization as well as
upon the sale of Common Stock or Common Stock Equivalents. Each share of the
Series C Preferred Stock is convertible at the option of the holder thereof, or
automatically or upon the closing of an underwritten offering of at least $10
million of the Company's securities or upon listing of the Company's Common
Stock on a national securities exchange.



Dividends. Each share of Series C Preferred Stock accrues dividends on a
quarterly basis in arrears, at the rate of 6% per annum of the Stated Value
($1.05 per share plus any accrued but unpaid dividends) and is to be paid within
15 days after the end of each of our fiscal quarters. Each holder of the Series
C Preferred Stock is entitled to receive dividends or distributions on each
share of the Series C Preferred Stock on an as converted into Common Stock basis
when and if dividends are declared on the Common Stock by our Board of
Directors.



Liquidation Rights. The holders of our Series C Preferred stock are entitled to
receive in cash out of our assets, whether from capital or from earnings
available for distribution to our stockholders (the "Liquidation Funds"), before
any amount shall be paid to the holders of any of shares of capital stock that
rank junior to the Series C Preferred Stock, but Pari passu with any shares of
capital stock that have a parity ranking with the Series C Preferred stock
("Parity Stock") then outstanding, an amount per share of Series C Preferred
Stock equal to the greater of (A) the Conversion Amount on the date of such
payment or (B) the amount per share such holder of the Series C Preferred Stock
would receive if such holder converted their Series C Preferred Stock into
Common Stock immediately prior to the date of such payment, provided that if the
Liquidation Funds are insufficient to pay the full amount due to the holders of
the Series C Preferred Stock and holders of shares of Parity Stock, then each
holder Series C Preferred Stock and each holder of Parity Stock shall receive a
percentage of the Liquidation Funds equal to the full amount of Liquidation
Funds payable to such holder and such holder of Parity Stock as a liquidation
preference, in accordance with their respective certificate of designations (or
equivalent), as a percentage of the full amount of Liquidation Funds payable to
all holders of Series C Preferred Stock and all holders of shares of Parity
Stock. All such amounts shall be paid or set apart for payment before the
payment or setting apart for payment of any amount for, or the distribution of
any Liquidation Funds of the Corporation to the holders of shares of capital
stock that may rank junior to that of the Series C Preferred Stock Junior Stock.



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Rights and Preferences. The rights, preferences, and privileges of holders of
our Series C Preferred Stock are subject to, and may be adversely affected by,
the rights of holders of shares of any series of Preferred Stock that we may
designate and issue in the future that may rank senior to the Series C Preferred
Stock.



Redemption Rights. Upon receipt of a conversion notice, we have the right (but
not the obligation) to redeem all or part of the Series C Preferred Stock (which
the applicable holder of the Series C Preferred Stock is seeking to convert) at
a price per share equal to the product of 125% of the (1) Stated Value plus (2)
the Additional Amount (the "Redemption Price"). If we decide to exercise the
redemption right, within one trading day, we shall deliver written notice to
such holder(s) of Series C Preferred Stock that the Series C Preferred Stock
will be redeemed (the "Redemption Notice") on the date that is three trading
days following the date of the Redemption Notice (such date, the "Redemption
Date"). On the Redemption Date, we shall redeem the shares of Series C Preferred
Stock specified in such request by paying in cash therefor a sum per share equal
to the Redemption Price. In no event shall a Redemption Notice be given if we
may not lawfully redeem our capital stock. On or before the Redemption Date, the
Redemption Price for such shares shall be paid by wire transfer of immediately
available funds to an account designated in writing by the applicable holder.



Price Adjustments Protection. The conversion price is subject to appropriate
adjustment in the event of share dividends, share splits, reorganizations or
similar events affecting our shares of Common Stock. Other than for certain
exempt issuances, in the event we issue or sell any securities, including
options or convertible securities, or amend outstanding securities, at an
effective price, with an exercise price or at a conversion price less than the
Conversion Price, then the Conversion Price shall be reduced to such lower
price.



Preemptive or Similar Rights Additionally, except for a public offering or
certain exempt issuances of our securities, holders of the Series C Preferred
Stock shall have the right to participate in any offering of our Common Stock or
Common Stock Equivalents (as defined in the COD) in a transaction exempt from
registration under the Securities Act in an amount equal to an aggregate of 30%
of the financing on the same terms, conditions and price provided to investors
in such an offering, such right shall expire on the 15 month anniversary of the
issuance date of the Series C Preferred Stock. Further, until the earlier of 18
months from the issuance date of the Series C Preferred Stock and the date that
there are less than 20% of the shares of Series C Preferred Stock outstanding,
the Investors have most favored nations protection in the event we issue or sell
Common Stock or Common Stock Equivalents that the Investors believe are more
favorable than the terms and conditions under the Private Placement.

Fully Paid and Nonassessable. All our issued and outstanding shares of Series C Preferred Stock are fully paid and nonassessable.

Series D Preferred Stock



Pursuant to the Certificate of Designations, Preferences and Rights of the
Series D Preferred Stock of the Company, Inc., filed with the Secretary of State
of the State of Delaware on October 18, 2021 (the "COD"), there are 10,000,000
shares of our preferred stock that have been designated as the Series D
Preferred Stock and each share of the Series D Preferred Stock is convertible at
the option of the holder thereof, or automatically upon the request of the our
underwriters that the Series D Preferred Stock convert to shares of Common Stock
or upon listing of the our Common Stock on a national securities exchange. The
number of shares of Common Stock issuable upon the conversion of each share of
Series D Preferred Stock is calculated by dividing the Conversion Amount
(defined in the COD as the Stated Value, $1.05 per share, plus accrued and
unpaid dividends) by the $0.25 conversion price.

Series D Preferred Stock Transactions During the Six Months Ended June 30, 2022

During the six months ended June 30, 2022, the Company accrued dividends on the Series D Preferred Stock in the amount of $96,847.

Series D Preferred Stock Transactions During the Six Months Ended June 30, 2021

None.



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Series X Preferred Stock



The Company has 24,227 shares of its 10% Series X Cumulative Redeemable
Perpetual Preferred Stock (the "Series X Preferred Stock") outstanding as of
June 30, 2022 and December 31, 2021. The Series X Preferred Stock has a par
value of $0.01 per share, no stated maturity, a liquidation preference of $25.00
per share, and will not be subject to any sinking fund or mandatory redemption
and will remain outstanding indefinitely unless the Company decides to redeem or
otherwise repurchase the Series X Preferred Stock; the Series X Preferred Stock
is not redeemable prior to November 4, 2020. The Series X Preferred Stock will
rank senior to all classes of the Company's common and preferred stock and
accrues dividends at the rate of 10% on $25.00 per share. The Company reserves
the right to pay the dividends in shares of the Company's common stock at a
price equal to the average closing price over the five days prior to the date of
the dividend declaration. Each one share of the Series X Preferred Stock is
entitled to 20,000 votes on all matters submitted to a vote of our shareholders.

Series X Preferred Stock Transactions During the Six Month Ended June 30, 2022

On June 7, 2022, the Company issued 405,131 shares of common stock at an average price of $0.2149 per share as payment for dividends payable on the Series X Preferred Stock in the amount of $87,053.

During the six months ended June 30, 2022, the Company accrued dividends in the amount of $30,282 on the Series X Preferred Stock.

Series X Preferred Stock Transactions During the Six Months Ended June 30, 2021

During the six months ended June 30, 2021, the Company accrued dividends in the amount of $31,536 on the Series X Preferred Stock.

Stock Options



The following table summarizes the options outstanding at June 30, 2022 and the
related prices for the options to purchase shares of the Company's common stock:



                                                         Weighted                           Weighted
                                       Weighted           average                            average
                                        average          exercise                           exercise
    Range of         Number of         remaining         price of         Number of         price of
    exercise          options         contractual       outstanding        options         exercisable
     prices         outstanding      life (years)         options        exercisable         options

$  0.03- 0.39       16,354,961              8.78     $       0.213        5,469,961     $       0.161
                      16,354,961              8.78     $       0.213        5,469,961     $       0.161

Transactions involving stock options are summarized as follows:

                                                     Weighted- Average
                                      Shares        Exercise Price ($)
Outstanding at December 31, 2021     18,329,543     $             0.206
Granted                                 200,000     $              0.25
Expired                              (2,174,582 )                 0.155
Outstanding at June 30, 2022         16,354,961     $             0.213
Options vested and exercisable        5,469,961     $             0.161




On June 13, 2022, the Company issued 200,000 ten-year options with an exercise
price of $0.25 and a fair value of $23,316 to Tom Brodmerkel, its Chairman, to
the position of Chief Financial Officer.



During the three months ended June 30, 2022 and 2021, the Company charged the
amount of approximately $135,295 and $195,000, respectively, for the vesting of
stock options. During the six months ended June 30, 2022 and 2021, the Company
charged the amount of approximately $302,310 and $201,000, respectively, for the
vesting of stock options.

At June 30, 2022, the total stock-based compensation cost related to unvested awards not yet recognized was $2.2 million.

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The Company valued stock options during the six months ended June 30, 2022 and
2021 using the Black-Scholes valuation model utilizing the following variables:



                            June 30,          June 30,
                              2022              2021
Volatility                      143.6 %     167.8% to 183.5 %
Dividends                  $        -     $               -
Risk-free interest rates         3.04 %       0.82% to 1.69 %
Term (years)                     5.00         5.00 to 10.00




Warrants



The following table summarizes the warrants outstanding on June 30, 2022, and
the related prices for the warrants to purchase shares of the Company's common
stock (see note 8):



                                                     Weighted- Average
                                      Shares        Exercise Price ($)

Outstanding on December 31, 2021     29,820,000     $             0.625
Granted                               3,470,673     $             0.526
Exercised                                     -     $                 -
Outstanding on June 30, 2022         33,290,673     $             0.615

The Company valued warrants during the six months ended June 30, 2022 and 2021 using the Black-Scholes valuation model utilizing the following variables:

                               June 30,             June 30,
                                 2022                 2021
Volatility                   143.6 to 150.7 %     171.6% to 183.5 %
Dividends                  $              -     $               -

Risk-free interest rates 0.76% to 3.04 % 1.15% to 1.63 % Term (years)

                   0.25 to 5.00          5.00 to 6.50

Note 10 - Commitments and Contingencies

Legal

There are no pending or anticipated legal actions at this time.

Note 11 - Subsequent Events



On July 7, 2022, the Company issued two 10% Promissory Notes due as described
below (individually, the "Schrier Note" and the "William Mackay Note", and
collectively, the "Notes"), to Charles Schrier and William Mackay Investments
LLC, (together, the "Lenders") and in respect of which the Company received
proceeds of $270,000.



The Notes carry a 10% interest rate per annum, accrued monthly and payable at
maturity. The Schrier Note has a maturity date that is the earlier of (i)
January 8, 2023, or (ii) five business days after the date on which the Company
successfully lists its shares of common stock on Nasdaq or NYSE. The William
Mackay Note has a maturity date that is the earlier of (i) August 8, 2022, or
(ii) five business days after the date on which the Company successfully lists
its shares of common stock on Nasdaq or NYSE.



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The aggregate amount payable at maturity will be $317,647 plus 10% of that
amount plus any accrued and unpaid interest. Following an event of default, as
defined in the Notes, the principal amount shall bear interest for each day
until paid, at a rate per annum equal to the lesser of the maximum interest
permitted by applicable law and 18%. The Notes contain a "most favored nations"
clause that provides that, so long as the Notes are outstanding, if the Company
issues any new security, which the Lenders reasonably believe contains a term
that is more favorable than those in the Notes, the Company shall notify the
Lenders of such term, and such term, at the option of the Lenders, shall become
a part of the Notes. In addition, the Lenders will be issued in the aggregate
(1) 130,235 five-year warrants (the "Warrants") and (2) 130,235 shares of Common
Stock as commitment shares ("Commitment Shares"). The Commitment Shares are
priced at $0.25. The Warrants have an initial exercise price of $0.50 per share.
The Warrants are not exercisable for six months following their issuance. The
Lenders may exercise the Warrants on a cashless basis if after the six-month
anniversary of date of issuance, the shares of Common Stock underlying the
Warrants are not then registered pursuant to an effective registration
statement.



On July 21, 2022, the Company issued a 10% Promissory Notes due to Michael C
Howe Living Trust (the "Lender") and in respect of which the Company received
proceeds of $255,000.



The Note carries a 10% interest rate per annum, accrued monthly and payable at
maturity. The note has a maturity date that is the earlier of (i) September 10,
2022, or (ii) five business days after the date on which the Company
successfully lists its shares of common stock on Nasdaq or NYSE



The amount payable at maturity will be $300,000 plus 10% of that amount plus any
accrued and unpaid interest. Following an event of default, as defined in the
Notes, the principal amount shall bear interest for each day until paid, at a
rate per annum equal to the lesser of the maximum interest permitted by
applicable law and 18%. The Note contains a "most favored nations" clause that
provides that, so long as the Note is outstanding, if the Company issues any new
security, which the Lender reasonably believes contains a term that is more
favorable than those in the Note, the Company shall notify the Lender of such
term, and such term, at the option of the Lender, shall become a part of the
Note. In addition, the Lender will be issued (1) 123,000 five-year warrants (the
"Warrants") and (2) 123,000 shares of Common Stock as commitment shares
("Commitment Shares"). The Commitment Shares are priced at $0.25. The Warrants
have an initial exercise price of $0.50 per share. The Warrants are not
exercisable for six months following their issuance. The Lender may exercise the
Warrants on a cashless basis if after the six-month anniversary of date of
issuance, the shares of Common Stock underlying the Warrants are not then
registered pursuant to an effective registration statement.



On July 21, 2022, the Company issued a 10% Promissory Notes due to Juan Carlos
Iturregui (the "Lender") and in respect of which the Company received proceeds
of $25,000. Mr. Iturregui is a member of the Company's Board of Directors.



The Note carries a 10% interest rate per annum, accrued monthly and payable at
maturity. The note has a maturity date that is the earlier of (i) January 21,
2023, or (ii) five business days after the date on which the Company
successfully lists its shares of common stock on Nasdaq or NYSE.



The amount payable at maturity will be $29,412 plus 10% of that amount plus any
accrued and unpaid interest. Following an event of default, as defined in the
Notes, the principal amount shall bear interest for each day until paid, at a
rate per annum equal to the lesser of the maximum interest permitted by
applicable law and 18%. The Note contains a "most favored nations" clause that
provides that, so long as the Note is outstanding, if the Company issues any new
security, which the Lender reasonably believes contains a term that is more
favorable than those in the Note, the Company shall notify the Lender of such
term, and such term, at the option of the Lender, shall become a part of the
Note. In addition, the Lender will be issued (1) 12,059 five-year warrants (the
"Warrants") and (2) 12,059 shares of Common Stock as commitment shares
("Commitment Shares"). The Commitment Shares are priced at $0.25. The Warrants
have an initial exercise price of $0.50 per share. The Warrants are not
exercisable for six months following their issuance. The Lender may exercise the
Warrants on a cashless basis if after the six-month anniversary of date of
issuance, the shares of Common Stock underlying the Warrants are not then
registered pursuant to an effective registration statement.



On July 26, 2022, the Company issued a 10% Promissory Notes due to Erik Scott
Nommsen (the "Lender") and in respect of which the Company received proceeds of
$50,000.



The Note carries a 10% interest rate per annum, accrued monthly and payable at
maturity. The note has a maturity date that is the earlier of (i) September 10,
2022, or (ii) five business days after the date on which the Company
successfully lists its shares of common stock on Nasdaq or NYSE.



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The amount payable at maturity will be $58,823 plus 10% of that amount plus any
accrued and unpaid interest. Following an event of default, as defined in the
Notes, the principal amount shall bear interest for each day until paid, at a
rate per annum equal to the lesser of the maximum interest permitted by
applicable law and 18%. The Note contains a "most favored nations" clause that
provides that, so long as the Note is outstanding, if the Company issues any new
security, which the Lender reasonably believes contains a term that is more
favorable than those in the Note, the Company shall notify the Lender of such
term, and such term, at the option of the Lender, shall become a part of the
Note. In addition, the Lender will be issued (1) 24,117 five-year warrants (the
"Warrants") and (2) 24,117 shares of Common Stock as commitment shares
("Commitment Shares"). The Commitment Shares are priced at $0.25. The Warrants
have an initial exercise price of $0.50 per share. The Warrants are not
exercisable for six months following their issuance. The Lender may exercise the
Warrants on a cashless basis if after the six-month anniversary of date of
issuance, the shares of Common Stock underlying the Warrants are not then
registered pursuant to an effective registration statement.

On July 27, 2022, the Company issued a 10% Promissory Notes due to James H. Caplan (the "Lender") and in respect of which the Company received proceeds of $50,000.

The Note carries a 10% interest rate per annum, accrued monthly and payable at
maturity. The note has a maturity date that is the earlier of (i) January 21,
2023, or (ii) five business days after the date on which the Company
successfully lists its shares of common stock on Nasdaq or NYSE.



The amount payable at maturity will be $58,823 plus 10% of that amount plus any
accrued and unpaid interest. Following an event of default, as defined in the
Notes, the principal amount shall bear interest for each day until paid, at a
rate per annum equal to the lesser of the maximum interest permitted by
applicable law and 18%. The Note contains a "most favored nations" clause that
provides that, so long as the Note is outstanding, if the Company issues any new
security, which the Lender reasonably believes contains a term that is more
favorable than those in the Note, the Company shall notify the Lender of such
term, and such term, at the option of the Lender, shall become a part of the
Note. In addition, the Lender will be issued (1) 24,117 five-year warrants (the
"Warrants") and (2) 24,117 shares of Common Stock as commitment shares
("Commitment Shares"). The Commitment Shares are priced at $0.25. The Warrants
have an initial exercise price of $0.50 per share. The Warrants are not
exercisable for six months following their issuance. The Lender may exercise the
Warrants on a cashless basis if after the six-month anniversary of date of
issuance, the shares of Common Stock underlying the Warrants are not then
registered pursuant to an effective registration statement.



On August 3, 2022, the Company amended the maturity date of the Diamond Note 4
to the earlier of (i) September 10, 2022 or (ii) five days after the date on
which we successfully list our shares of common stock on any of the NYSE
American, the Nasdaq Global Select Market, the Nasdaq Global Market, or the
Nasdaq Capital Market.

On August 4, 2022, the Company issued a 10% Promissory Notes due to Jack Enright (the "Lender") and in respect of which the Company received proceeds of $102,000.

The Note carries a 10% interest rate per annum, accrued monthly and payable at maturity. The note has a maturity of February 3, 2023.

The amount payable at maturity will be $120,000 plus 10% of that amount plus any
accrued and unpaid interest. Following an event of default, as defined in the
Notes, the principal amount shall bear interest for each day until paid, at a
rate per annum equal to the lesser of the maximum interest permitted by
applicable law and 18%. The Note contains a "most favored nations" clause that
provides that, so long as the Note is outstanding, if the Company issues any new
security, which the Lender reasonably believes contains a term that is more
favorable than those in the Note, the Company shall notify the Lender of such
term, and such term, at the option of the Lender, shall become a part of the
Note. In addition, the Lender will be issued 49,200 shares of Common Stock as
commitment shares ("Commitment Shares"). The Commitment Shares are priced at
$0.25.



On August 4, 2022, the Company issued a 10% Promissory Notes due to Jessica,
Kevin C., Brody, Isabella and Jack Finnegan (collectively, the "Lenders") and in
respect of which the Company received proceeds of $25,000.

The Note carries a 10% interest rate per annum, accrued monthly and payable at maturity. The note has a maturity of February 3, 2023.

The amount payable at maturity will be $29,412 plus 10% of that amount plus any
accrued and unpaid interest. Following an event of default, as defined in the
Notes, the principal amount shall bear interest for each day until paid, at a
rate per annum equal to the lesser of the maximum interest permitted by
applicable law and 18%. The Note contains a "most favored nations" clause that
provides that, so long as the Note is outstanding, if the Company issues any new
security, which the Lender reasonably believes contains a term that is more
favorable than those in the Note, the Company shall notify the Lenders of such
term, and such term, at the option of the Lenders, shall become a part of the
Note. In addition, the Lenders will be issued in aggregate (1) 12,059 five-year
warrants (the "Warrants") and (2) 12,059 shares of Common Stock as commitment
shares ("Commitment Shares"). The Commitment Shares are priced at $0.25. The
Warrants have an initial exercise price of $0.50 per share. The Warrants are not
exercisable for six months following their issuance. The Lenders may exercise
the Warrants on a cashless basis if after the six-month anniversary of date of
issuance, the shares of Common Stock underlying the Warrants are not then
registered pursuant to an effective registration statement.



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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto appearing elsewhere herein.

We are working to open primary care clinics around the US that are in
residential centers and leverage the expertise, training, and license of Nurse
Practitioners. We are focusing on wellness as a core of the practice. Mitesco's
mission is to increase convenience and access to care, improve the quality of
care, and reduce its cost.



We opened our first primary care clinic "The Good Clinic" in Northeast
Minneapolis, Minnesota in February 2021, and have added five additional
operating clinics as of the date of this filing for a total of six clinics open
and operating. We announced leases for two new clinics in the greater Denver,
Colorado area. These new locations, and a new location in Wayzata, Minnesota are
expected to open in the fourth quarter of 2022. We plan to open clinics in
residential concentrations of population to enhance the convenience, especially
timely due to the changes in community travel patterns resulting from the
pandemic. Our clinicians use both telehealth (virtual) and in-person visits to
treat and coach the clients along their journey to better health and quality of
life. Our clinics are led by Nurse Practitioners that use their license,
extensive training, expertise, and empathy to help people remain stable or
improve their health. We emphasize wellness, beginning with a clients'
co-developed plan that identifies from where a person is starting and constructs
a plan for how they can achieve their goals. The practice uses an integrated
health approach that includes an assessment of both the individual's behavioral
and physical health and combines this with their activation level and their
goals. The clinic offers wellness coaching, behavioral health care, episodic
care, dermatologic services, and supplements. We seek to care for the whole
person's needs.



Like the first clinic, we seek to locate clinics convenient to residential
centers. In pursuit of this approach, we intend to continue to expand our
relationship with Lennar Corporation and other large-scale developers. While we
have no formal relationship with these developers other than as a tenant, we
believe such relationships give us an advantage in recruiting and retaining
clients in close proximity to our locations



Business Summary

Our operating subsidiary, The Good ClinicTM, produced increased operational results in the second quarter of 2022 as compared to the first quarter of 2022.

During the first quarter of 2022, The Good Clinic client visits were driven mainly by the demand for COVID-19 testing and vaccinations, which generally require shorter appointments. Even though the visits are briefer, these interactions with new clients allow us to demonstrate our differentiating clinic experience. As a result, we converted first-time customers into ongoing clients.

Metrics from the three months ended June 30, 2022:

• The Good Clinic recorded a 45% quarter-over-quarter increase in unique (i.e., first-time) clients.

• The total number of visits in the second quarter of 2022 increased by 11%, as compared to the first quarter of 2022.

• The average length of appointment times increased during the second quarter of 2022, which we measure as minutes of care. There was a 112% increase in total care minutes during the second quarter of 2022, as compared to the first quarter of 2022, with the average minutes per visit increasing by 91%.

These metrics indicate the client's adoption of our primary care concept focused
on preventive care and improved well-being. Moreover, the quarterly results
illustrate that The Good Clinic providers are delivering more complex care and
are therefore receiving higher per-visit reimbursements.



Results of Operations



The following period-to-period comparisons of our financial results are not
necessarily indicative of results for the current period of any future periods.
Further, as a result of any acquisitions of other businesses, we may experience
large expenditures specific to the transactions that are not incident to our
operations.



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Comparison of the Three Months Ended June 30, 2022 and 2021

Revenue

The Company recognized revenue of approximately $0.2 million for the three months ended June 30, 2022, compared to $8,200 for the three months ended June 30, 2021. The increase in revenue is the result of the service and product revenue from The Good Clinic's six locations.

Cost of Sales



The Company incurred approximately $0.6 million of cost of goods sold for the
three months ended June 30, 2022, compared to $3,600 for the three months ended
June 30, 2021. During the first quarter of 2021 there were only a few direct
clinical services performed due to the lack of in force payer contracts and the
newness of the clinic. As such, the allocation of the expenses related to
clinical staff were attributed to operating expenses and not cost of sales. The
increase in cost of goods sold is the result of the opening and operating of The
Good Clinic's six locations and having in force payer relationships.



Gross (Loss) Profit



Our gross loss was approximately $0.4 million for the three months ended June
30, 2022, compared to gross profit of $4,600 for the three months ended June 30,
2021.



Operating Expenses

Our total operating expenses for the three months ended June 30, 2022, were approximately $2.3 million. For the comparable period in 2021, the operating expenses were approximately $1.4 million.

Operating expenses for the three months ended June 30, 2022, were comprised
primarily of $1.4 million of payroll, payroll taxes and employee benefit
expenses, $0.2 million in rent and utilities, $0.1 million in legal and
professional fees; $0.1 million in marketing; $0.2 million in depreciation, $0.2
million in stock-based compensation expenses and $0.1 million in other operating
costs.



Operating expenses for the three months ended June 30, 2021 were comprised
primarily of $0.4 million of payroll and payroll taxes; $0.3 million of non-cash
compensation, $0.2 million in legal and professional fees; $0.1 million in
marketing, $0.1 million in consulting fees and $0.3 million in other operation
costs.



Other Income and Expenses



Interest expense was approximately $0.9 million for the three months ended June
30, 2022, compared to approximately $1,100 for the three months ended June 30,
2021.

During the three months ended June 30, 2022, we recorded a loss on waiver and commitment fee shares of approximately $11,600.

During the three months ended June 30, 2022, we recorded a loss on the revaluation of derivative liabilities of approximately $0.2 million

During the three months ended June 30, 2021, we recorded a loss on legal settlement of $70,000.

During the three months ended June 30, 2022, the Company declared Preferred Stock dividends of approximately $0.1 million compared to approximately $0.1 million for the three months ended June 30, 2021.

Net loss



For the three months ended June 30, 2022, we had a net loss available to common
shareholders of approximately $3.9 million, or a net loss per share, basic and
diluted of ($0.02) compared to a net loss available to common shareholders of
approximately $1.5 million, or a net loss per share, basic and diluted of
($0.01), for the three months ended June 30, 2021.



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Comparison of the Six Months Ended June 30, 2022 and 2021

Revenue



The Company recognized revenue of approximately $0.3 million for the six months
ended June 30, 2022, compared to $11,200 for the six months ended June 30, 2021.
The increase in revenue is the result of the service and product revenue from
The Good Clinic's six locations.



Cost of Sales



The Company incurred approximately $1.2 million of cost of goods sold for the
six months ended June 30, 2022, compared to $5,300 for the six months ended June
30, 2021. During the first and second quarters of 2021 there were only a few
direct clinical services performed due to the lack of in force payer contracts
and the newness of the clinic. As such, the allocation of the expenses related
to clinical staff were attributed to operating expenses and not cost of sales.
The increase in cost of goods sold is the result of the opening and operating of
The Good Clinic's six locations and having in force payer relationships.



Gross (Loss) Profit

Our gross loss was approximately $0.9 million for the six months ended June 30, 2022, compared to gross profit of $5,900 for the six months ended June 30, 2021.

Operating Expenses

Our total operating expenses for the six months ended June 30, 2022, were approximately $4.9 million. For the comparable period in 2021, the operating expenses were approximately $2.4 million.

Operating expenses for the six months ended June 30, 2022, were comprised
primarily of $2.4 million of payroll, payroll taxes and employee benefit
expenses, $0.5 million in rent and utilities, $0.4 million in legal and
professional fees, $0.2 million in marketing; $0.3 million in consulting fees,
$0.4 million in depreciation, $0.4 million in stock-based compensation expenses
and $0.3 million in other operating costs.



Operating expenses for the six months ended June 30, 2021 were comprised
primarily of $0.5 million of payroll and payroll taxes; $0.3 million of non-cash
compensation, $0.6 million in legal and professional fees, $0.3 million in
marketing, $0.3 million in consulting fees and $0.4 million in other operation
costs.



Other Income and Expenses



Interest expense was approximately $1.7 million for the six months ended June
30, 2022, compared to approximately $1.0 million for the six months ended June
30, 2021.

During the six months ended June 30, 2022, we recorded a gain on waiver and commitment fee shares of approximately $0.2 million.

During the six months ended June 30, 2022, we recorded a gain on settlement of accrued salary of approximately $15,000.

During the six months ended June 30, 2022, we recorded a loss on settlement of
accounts payable of $0.1 million as compared to a gain on settlement of accounts
payable of approximately $6,000 for the six months ended June 30, 2021.



During the six months ended June 30, 2022, we recorded a loss on the revaluation
of derivative liabilities of approximately $0.1 million, compared to a loss of
approximately $0.5 million for the six months ended June 30, 2021.

During the six months ended June 30, 2021, we recorded a loss on legal settlement of $0.1 million.

During the six months ended June 30, 2021, we recorded a gain on the settlement of notes payable of approximately $1,800.

During the six months ended June 30, 2022, the Company declared Preferred Stock
dividends of approximately $0.2 million compared to approximately $0.1 million
for the six months ended June 30, 2021.

During the six months ended June 30, 2021, the Company recorded Preferred Stock deemed dividends of approximately $0.3 million.

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Net loss



For the six months ended June 30, 2022, we had a net loss available to common
shareholders of approximately $7.6 million, or a net loss per share, basic and
diluted of ($0.03) compared to a net loss available to common shareholders of
approximately $4.3 million, or a net loss per share, basic and diluted of
($0.02), for the six months ended June 30, 2021.

Liquidity and Capital Resources

To date, we have not generated sufficient revenue from operations to support our operations. We have financed our operations through the sale of equity securities and short-term borrowings. As of June 30, 2022, we had cash of approximately $36,000 compared to cash of approximately $1.2 million as of December 31, 2021.

Net cash used in operating activities was approximately $4.0 million for the six months ended June 30, 2022. This is the result of our business development efforts pertaining to the start-up of the first six clinics. Cash used in operations for the six months ended June 30, 2021, was approximately $2.1 million.

Net cash used in investing activities was approximately $0.2 million for the six
months ended June 30, 2022. The amounts relate to the purchase of fixed assets
and leasehold improvement on our clinics. Net cash used for investing activities
for the six months ended June 30, 2021 was $0.5 million.



Net cash provided by financing activities for the six months ended June 30,
2022, was approximately $3.1 million, consisting of proceeds from notes payable,
net of discounts, of $3.3 million offset by principal payment on related party
notes payable of $0.2 million. Net cash provided by financing activities for the
six months ended June 30, 2021, was $4.3 million consisting of proceeds from a
private placement offering of common stock of $1.7 million and $2.8 million from
the sale of Series C Preferred Stock and warrants. Partially offsetting the
proceeds was approximately $0.2 million of payment on notes payable.



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