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BORROWINGS

9 Months Ended

Jun. 30, 2022

NOTE 3 – BORROWINGS

Commercial Loan

On April 9, 2020, the Company received a loan from the Small Business Administration pursuant to the Paycheck Protection Program (PPP) in the principal amount of $48,750. The note bears interest at a variable rate of approximately 1% and matures in April 2022; and is currently in default. The principal amount of the loan was based on the consulting agreement salary between Nexion Biosciences, Inc., organized in the state of Florida (NBFL) (a related party) and the CEO. Since a lower salary has been paid to the CEO, the Company may have incorrectly calculated the PPP loan and therefore may be required to return funds on demand.

Payable for Patent

On August 22, 2020, the Company completed an acquisition of Agromed LLC (Agromed) in a transaction accounted for under the asset purchase method of accounting, whereby the assets acquired and the liabilities, if any assumed, are to be valued at fair value, and compared to the fair value of the consideration given to identify if there are any identifiable intangible assets to be recognized as a result of the transaction. Based on ASC 805, the Company first performed a screen test; determining that substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset. Agromed only held one patent and two applications for patents and had no sales, employees, or customers as of the acquisition date. Accordingly, the assets acquired are not considered a business and the recorded cost of the acquisition was based upon the fair value of the assets acquired. As consideration for Agromed, the Company was to pay $150,000 by March 31, 2021 and issued 230,000 shares of the Company’s common stock valued at $114,828. Accordingly, the patent was recorded at $264,828 on the date of acquisition. Subsequently, it was discovered that the patent had been transferred to another party prior to August 2020. Such transfer had not been recorded with the United States Patent and Trademark Office and therefore neither the Company nor the seller were aware of the seller at the time of the acquisition. As a result, the Company is no longer honoring the agreement to pay $150,000 but decided to let the seller retain the shares. The $150,000 note payable was written off along with the patent during the quarter ended September 30, 2021, resulting in a loss on the failed acquisition of $114,828 for the fiscal year ended September 30, 2021.

Notes Payable

From time to time, the Company enters into unsecured notes payable with individual investors. Only Noteholder E (below) has security in the form of a personal guarantee by the CEO and prior consultant (Note 6). The terms of these notes are listed below. Several of the notes are convertible into shares of the Company’s common stock as detailed in the following schedule.

									Number of shares the note is
									convertible
Noteholder	Origination	Maturity	Interest Rate			Loan Balance			into
Noteholder A	2019	12/31/2021*		0	%	$	217,000			n/a
Noteholder B	03/19/19	4/29/2019*		20	%		420,000			n/a
Noteholder C	03/01/19	2/29/2020*		18	%		32,500			n/a
Noteholder D	04/29/19	unspecified		0	%		300,000			30,000
Noteholder E	08/01/19	8/31/2019*		0	%		37,500			n/a
Noteholder F	02/27/20	04/30/20*		0	%	2,500		**		5,000
Noteholder G	08/03/21	08/03/23		10	%		12,500			25,000
Noteholder H	06/27/22	06/27/24		5	%		300,000			1,000,000
						$	1,322,000			1,060,000

* past-due at June 30, 2022

** Note is payable in a combination of $2,500-$6,000 cash and 5,000 to 15,000 shares

The notes do not have default provisions except Noteholder B receives a default penalty of $10,000 each month the note goes unpaid.

During the nine months ended June 30, 2022, $989,000 principal and $146,946 interest was converted into 2,316,147 common stock shares of the Company. One note holder had a change in settlement terms, resulting in the recognition of $5,000 loss on debt settlement in the accompanying statement of operations for the nine months ended June 30, 2022.

Future maturities of the notes payable are as follows:

2023	$	12,500

2024	$	300,000

Interest expense totaled $73,242 and $64,778, respectively, for the nine months ended June 30, 2022 and 2021, including default penalties. Late fees totaled $90,000 and $90,000, respectively, for the nine months ended June 30, 2022 and 2021.