We evaluated the controls over the Company’s identification of, and recording of related party transactions, and of the revenue recognition process, including walkthroughs of internal controls. We confirmed certain balances and transactions with related parties. To evaluate the related party’s satisfaction of performance obligations, our audit procedures included, among others, reviewing contracts and evaluating management’s assumptions used to determine the distinct performance obligations, and reviewing the branding work performed by the Company for various products. In addition, to identify undisclosed related party transactions we performed the following: 1) made inquiries of management and other individuals throughout the Company; 2) obtained a selection of expenses and reviewed for related party indicators; 3) reviewed public filings and other online information available; 4) confirmed with the transfer agent regarding significant shareholders; and 5) related procedures performed in other parts of the audit engagement.

As disclosed in Note 2, 9 and 12, the Company recognizes revenue when or as the Company satisfies a customer agreement performance obligation by transferring control of a product or service to a customer, in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. In determining revenue recognition for certain customer agreements, significant judgment was exercised by the Company, and included the following: 1) An assessment of the products and services promised in contracts or customer agreements, and the identification of a performance obligation for each promise to transfer to the customer a product or service that is distinct. 2) Determination of relative standalone selling price for distinct performance obligations. 3) The timing of product or service delivery for performance obligations. 4) Net revenues and accounts receivable recognized from healthcare insurers and government payers consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical denial and collection experience and, additionally for healthcare insurers, the terms of the Company’s contractual arrangements. As disclosed by management, the process for estimating revenues and the ultimate collection of receivables associated involves significant assumptions and judgments. Given these factors, the related audit effort in evaluating management’s judgments in determining revenue recognition for these customer agreements was extensive, which led us to determine this as a critical audit matter.

Our principal audit procedures related to the Company’s revenue recognition for these customer agreements included an evaluation of the controls related to the identification of distinct performance obligations and the determination of the timing of revenue recognition. We also evaluated management’s significant accounting policies related to certain customer agreements. In addition, we selected customer agreements and performed the following procedures: 1) Obtained and read the customer agreements or contracts for each selected agreement. 2) Evaluated and tested management’s identification of significant terms for completeness, including the identification of distinct performance obligations. 3) Evaluated the appropriateness of management’s application of their accounting principles, in their determination of revenue recognition conclusions. 4) Tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the consolidated financial statements. 5) These procedures also included, among others, testing management's process for developing the estimate for contractual allowances, including (i) evaluating the appropriateness of the methodology, (ii) testing the completeness and accuracy of the historical contractual allowance and collection data from the Company’s billing system, which is an input to the methodology, and (iii) evaluating the reasonableness of management’s assumptions used to estimate contractual allowances (net accounts receivable).

F-2

~~IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share data)~~

IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY YEARS ENDED JUNE 30, 2003, 2002, AND 2001 (in thousands, except share data)

IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY YEARS ENDED JUNE 30, 2003, 2002, AND 2001 (in thousands, except share data) CONTINUED

~~IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, except share data)~~

IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (in thousands, except share data)

~~IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED~~

DALRADA FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2003, 2002, AND 2001 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ---------------------------------------------- Basis of Presentation - ----------------------- CORPORATION

(The accompanying notes are an integral part of these consolidated financial ~~statements include~~statements)

(The accompanying notes are an integral part of these consolidated financial statements)

Dalrada Financial Corporation, (“Dalrada”), was incorporated in September 1982 under the laws of ~~Imaging Technologies Corporation, ("ITEC" or~~ the ~~"Company") formerly Personal Computer Products, Inc., incorporated~~State of California. It was reincorporated in May 1983 under the laws of the State of Delaware and reincorporated again on May 5, 2020, under the laws of the state of ~~California during March 1982 and subsequently reincorporated~~Wyoming. Dalrada Financial Corporation trades under the ~~laws~~symbol, OTCQB: DFCO.

In June 2018, the Company created a new subsidiary, Dalrada Precision Corp. (“Dalrada Precision”). Dalrada Precision was formed to provide manufacturing solutions which start with the design and development of high-quality machine parts and components, and end with an efficient global supply chain.

In October 2018, the Company created a new subsidiary, Dalrada Health Products Corp (“Dalrada Health”) for the distribution of medical disposables, hospital equipment and furniture, medical devices, laboratory and dental products, and sanitizing, disinfectant and PPE products & services.

On December 6, 2019, Dalrada, via its wholly owned subsidiary, Dalrada Precision, acquired 100% of the ~~state~~issued and outstanding shares of ~~Delaware during May 1983,~~Likido Ltd. (HQ), a United Kingdom company (“Likido”). Likido is an international technology company developing advanced solutions for the harvesting and ~~its following active majority owned subsidiaries (there are eight inactive subsidiaries not listed): a) SourceOne~~recycling of energy.

On January 9, 2020, Dalrada acquired 72% of the issued and outstanding shares of Prakat Solutions Inc. a Texas corporation, (“Prakat”). Prakat provides global customers with software and technology solutions specializing in Test Engineering,

On or about March 23, 2020, Dalrada Health acquired 100% of the issued and outstanding shares of Shark Innovative Technologies Corp. (“Shark”). Shark is a cleaning solutions provider using electrostatic machines to spray and deodorize residential spaces, healthcare facilities, hospitality, transportation, manufacturing, automotive, schools/education systems, and other facilities requiring cleaning services.

On January 29, 2021, Dalrada Health acquired 100% of the issued and outstanding shares of International Health Group, Inc., ~~("SourceOne"~~a California corporation (“IHG”)~~, incorporated under~~. IHG provides highly trained nursing and medical assistants for hospitals and home health facilities since 2006. IHG Medical Assistant programs include CNA (“Certified Nursing Assistant”) and HHA (“Home Health Aide”) training and the ~~laws~~fast-track 22-Day CNA Certification Program at its state-approved testing facility (see “Note 4. Business Combinations and Acquisition” for additional information).

On February 3, 2021, Dalrada Health acquired 100% of the ~~state~~limited liability units of ~~Delaware on November 9, 2001 (owned~~Pacific Stem Cells, LLC, a California limited liability company (“Pacific Stem”). Pacific Stem provides regenerative therapy as a potential solution for the prevention, detection, and treatment of cellular breakdown associated with aging and a variety of other conditions (see “Note 4. Business Combinations and Acquisition” for additional information).

On April 21, 2021, the Company acquired 100% ~~by the Company); b) EnStructure, Inc. ("EnStructure"), incorporated under the laws~~ of the ~~state~~limited liability units of ~~Nevada on May 10, 2001 (owned~~Ignite IT LLC, a Wisconsin limited liability company (“Ignite”). Ignite is a manufacturer and seller of eco-friendly deep cleaners, parts washers and degreasers that are specially formulated to lift hydrocarbon-based dirt and grease (see “Note 4. Business Combinations and Acquisition” for additional information).

In June 2021, the Company launched Empower Genomics Corp. (“Empower”) to enter the genetic and diagnostics testing industry.

In June 2021, the Company launched Solas Corp. (“Solas”) as an end-to-end management and oversight company for health and wellness practices throughout the California.

On July 23, 2021, the Company, through Dalrada Health, entered into a Limited Liability Company Agreement, for a 51% membership interest, with Pala Diagnostics, LLC, a California limited liability company (“Pala”). Pala was formed to provide diagnostic testing, specifically COVID-19.

On April 7, 2022, the Company acquired 100% ~~by the Company); c) Dealseekers.com, Inc., ("Dealseekers"), incorporated under the laws~~ of the ~~state~~issued and outstanding shares of ~~Delaware on May~~Silicon Services Consortium (Europe) LTD, a United Kingdom company (“DepTec”). DepTec designs, develops, manufactures, and services chemical vapor and physical vapor deposition systems for the microchip and semiconductor industries (see “Note 4. Business Combinations and Acquisition” for additional information).

On June 7, ~~1999 (owned 71.4% by~~2022, the ~~Company); d) Quik Pix, Inc. ("QPI"), incorporated under the laws~~Company acquired 100% of the ~~state~~limited liability units of RxHealth LLC, a Louisiana limited liability company (“Watson”). Watson specializes in providing expert care and managing disease states through comprehensive prescription management, education, nursing, and total health solutions (see “Note 4. Business Combinations and Acquisition” for additional information).

The Company's principal executive offices are located at 600 La Terraza Blvd., Escondido, California in 1980 and, as a result of a merger, reincorporated as a Delaware corporation in March 2000 (owned 85% by the Company); and e) Greenland Corporation ("Greenland"), incorporated under the laws of the state of Nevada as Zebu, Inc. in July 1986, and renamed Greenland in September 1994 (approximately 88% owned by the Company). ). Greenland also has two wholly-owned subsidiaries that are included in the consolidated financial statements. All significant inter-company accounts and transactions have been eliminated. The accompanying92025.

These consolidated financial statements have been prepared ~~assuming~~on a going concern basis, which implies that the Company will continue ~~as a going concern. For~~to realize its assets and discharge its liabilities in the ~~year ended June 30, 2003, the Company experienced a net loss~~normal course of ~~$6,855,000 and as~~business. As of June 30, ~~2003,~~2022, the Company had a ~~negative~~ working capital ~~deficiency~~deficit of ~~$28,446,000~~$9,357,651 and ~~had a negative shareholders' deficiency~~an accumulated deficit of ~~$24,901,000. In addition, the Company is in default on certain note payable obligations and is being sued by numerous trade creditors for nonpayment of amounts due.~~$121,436,490. The Company ~~is also delinquent in its payments relating to payroll tax liabilities. These conditions raise~~incurred negative cash flows from operations for the years ended June 30, 2022, and 2021, and raises substantial doubt about ~~its~~the Company’s ability to continue as a going concern. ~~On August 20, 1999, at the request of Imperial Bank, the Company's primary lender, the Superior Court of San Diego appointed an operational receiver who took control~~The continuation of the ~~Company's day-to-day operations on August 23, 1999. On June 21, 2000,~~Company as a going concern is dependent upon the successful financing through equity and/or debt investors and growing the subsidiaries anticipated to be profitable while reducing investments in ~~connection with a settlement agreement reached with Imperial Bank (see Note 8),~~areas that are not expected to have long-term benefits. The Company expects to fund any short-term operational deficits through collection of outstanding accounts receivable from HRSA, insurance providers, the ~~Superior Court~~sale of ~~San Diego issued an order dismissing the operational receiver. On October 21, 1999, NASDAQ notified~~Likido units as well as loans from related parties.

These consolidated financial statements of the Company that it no longer complied with the bid price and net tangible assets/market capitalization/net income requirements for continued listing on The NASDAQ SmallCap Market. At a hearing on December 2, 1999, a NASDAQ Listing Qualifications Panel also raised public interest concerns relating to the Company's financial viability. The Company's common stock was delisted from The NASDAQ Stock Market effective with the close of business on March 1, 2000. As a result of being delisted from The NASDAQ SmallCap Market, shareholders may find it more difficult to sell common stock. This lack of liquidity also may make it more difficult to raise capitalhave been prepared in the future. Trading of the Company's common stock is now being conducted over-the-counter through the NASD Electronic Bulletin Board and covered by Rule 15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers who recommend these securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to a transaction prior to sale. Securities are exempt from this rule if the market price is at least $5.00 per share. The Securities and Exchange Commission adopted regulations that generally define a "penny stock" as any equity security that has a market price of less than $5.00 per share. Additionally, if the equity security is not registered or authorized on a national securities exchange or the NASDAQ and the issuer has net tangible assets under $2,000,000, the equity security also would constitute a "penny stock." The Company's common stock does constitute a penny stock because the Company's common stock has a market price less than $5.00 per share, the Company's common stock is no longer quoted on NASDAQ and the Company's net tangible assets do not exceed $2,000,000. As the Company's common stock falls within the definition of penny stock, these regulations require the delivery, prior to any transaction involving the Company's common stock, of a disclosure schedule explaining the penny stock market and the risks associated with it. Furthermore, the ability of broker/dealers to sell the Company's common stock and the ability of shareholders to sell the Company's common stock in the secondary market would be limited. As a result, the market liquidity for the Company's common stock would be severely and adversely affected. The Company's management can provide no assurance that trading in the Company's common stock will not be subject to these or other regulations in the future, which would negatively affect the market for the Company's common stock. In order for the Company to continue in existence, it must obtain additional funds to provide adequate working capital to finance operations, and begin to generate positive cash flows from its operations. During the years ended June 30, 2003, 2002 and 2001, the Company has raised an aggregate of $2,950,000 through the issuance of convertible debentures. However, there can be no assurance that the Company will be able to complete any additional debt or equity financings on favorable terms or at all, or that any such financings, if completed, will be adequate to meet the Company's capital requirements including compliance with the Imperial Bank settlement agreement. Any additional equity or convertible debt financings could result in substantial dilution to the Company's shareholders. If adequate funds are not available, the Company may be required to delay, reduce or eliminate some or all of its planned activities, including any potential mergers or acquisitions. The Company's inability to fund its capital requirements would have a material adverse effect on the Company. The Company is also looking at making strategic acquisitions of companies that have positive cash flows. The Company has also reduced is personnel and moved its corporate office in an effort to reduce operating costs. The financial statements do not include any adjustments that might result from the outcome of this going concern uncertainty. Nature of Business - -------------------- The Company business operations are as follows: a) The Company is a financial services provider and a professional employer organization (PEO) that provides comprehensive personnel management services including benefits and payroll administration, medical and workers' compensation insurance programs, personnel records management, and employer liability management; b) The Company also develops and mounts photographic and digital images for use in display advertising for tradeshows, building interiors, and other point-of-sale locations; and c) The Company designs, develops and sells digital imaging solutions and color management software products for use in graphics, publishing, digital photography, and other business and technical markets. Use of Estimates - ------------------ The preparation of financial statements in conformityaccordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is June 30.

These consolidated financial statements include the accounts of ~~America~~the Company and its wholly-owned subsidiaries: Dalrada Precision Corp., a company incorporated in the State of California, since June 25, 2018 (date of incorporation), Dalrada Health Products, a company incorporated in the State of California, since October 2, 2018 (date of incorporation), Dalrada Technologies, LLC, a company incorporated in the State of Wyoming, since January 1, 2020 (date of incorporation), Dalrada Energy Services, Inc., a company incorporated in the State of Wyoming, since March 17, 2022 (date of incorporation), since their respective acquisition dates (see Note 4). All inter-company transactions and balances have been eliminated in consolidation.

The consolidated financial statements include the accounts of all entities controlled by the Company through its direct or indirect ownership of a majority voting interest. Additionally, the consolidated financial statements include the accounts of variable interest entities (“VIEs”) in which the Company has a variable interest and for which the Company is the “primary beneficiary” as it has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE. All significant intercompany accounts and transactions are eliminated in consolidation.

Income attributable to the minority interest in the Company's majority owned and controlled consolidated subsidiaries is recorded as net income attributable to noncontrolling interests in the consolidated statements of operations and the noncontrolling interest is reflected as a separate component of consolidated stockholders' equity in the consolidated balance sheet.

The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Significant estimates made by the Company's management include but are not limited to recoverability of property and equipment and proprietary products through future operating profits. Actual results could materially differ from those estimates. Revenue Recognition - -------------------- PEO Service Fees and Worksite Employee Payroll Costsreporting period. The Company ~~recognizes its revenues associated with its PEO business pursuant~~regularly evaluates estimates and assumptions related to ~~EITF 99-19 "Reporting Revenue Gross as a Principal versus Net as an Agent."~~ the revenue, valuation of inventory, valuation of accrued payroll tax liabilities, valuation of acquired assets and liabilities, variables used in the computation of share-based compensation, litigation, and evaluation of goodwill and intangible assets for impairment.

The ~~Company's revenues are reported net of worksite employee payroll cost (net method). Pursuant to discussions with the Securities and Exchange Commission staff, the~~ Company changed its presentation of revenues from the gross method to an approach that presents its revenues net of worksite employee payroll costs (net method) primarily because the Company is not generally responsible for the output and quality of work performed by the worksite employees. In determining the pricing of the markup component of the gross billings, the Company takes into considerationbases its estimates ~~of the costs directly associated with its worksite employees, including payroll taxes, benefits~~ and workers' compensation costs, plus an acceptable gross profit margin. As a result, the Company's operating results are significantly impacted by the Company's ability to accurately estimate, controlassumptions on current facts, historical experience, and manage its direct costs relative to the revenues derived from the markup component of the Company's gross billings. Consistent with its revenue recognition policy, the Company's direct costs do not include the payroll cost of its worksite employees. The Company's direct costs associated with its revenue generating activities are comprised of allvarious other costs related to its worksite employees, such as the employer portion of payroll-related taxes, employee benefit plan premiums and workers' compensation insurance premiums. Sales of Products Revenue is recognized when earned. The Company's revenue recognition policies are in compliance with all applicable accounting regulations, including American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 97-2, Software Revenue Recognition, and SOP 98-9, Modification of SOP 97-2, With Respect to Certain Transactions. Revenue from products licensed to original equipment manufacturers is recorded when OEMs ship licensed products while revenue from certain license programs is recorded when the software has been delivered and the customer is invoiced. Revenue from packaged product sales to and through distributors and resellers is recorded when related products are shipped. Maintenance and subscription revenue is recognized ratably over the contract period. When the revenue recognition criteria required for distributor and reseller arrangements are not met, revenue is recognized as payments are received. Provisions are recorded for returns and bad debts. The Company's software arrangements do not contain multiple elements, and the Company does not offer post contract support. Contingent Liabilities The Company accrues and discloses contingent liabilities in its consolidated financial statements in accordance with Statement of Financial Accounting Standards ("SFAS") No. 5, Accounting for Contingencies. SFAS No. 5 requires accrual of contingent liabilities that are considered probable to occur and that can be reasonably estimated. For contingent liabilities that are considered reasonably possible to occur, financial statement disclosure is required, including the range of possible loss if it can be reasonably determined. The Company has disclosed in its audited financial statements several issuesfactors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are ~~reasonably possible to occur, although it cannot determine the range of possible loss in all cases. As these issues develop,~~not readily apparent from other sources. The actual results experienced by the Company ~~will continue to evaluate~~may differ materially and adversely from the ~~probability of future loss~~Company’s estimates. To the extent there are material differences between the estimates and the potential range of such losses. If such evaluation were to determine that a loss was probable and the loss could be reasonably estimated, the Company would be required to accrue its estimated loss, which would reduce net income in the period that such determination was made. Reclassifications Certain reclassifications have been made to the prior year consolidated financial statements to conform to the current year's presentation. These reclassifications had no effect on previously reportedactual results, future results of operations ~~or retained earnings. Cash and Cash Equivalents - ----------------------------~~ will be affected.

The Company considers all highly liquid ~~investments purchased~~instruments with ~~original maturities~~a maturity of three months or less at the time of issuance to be cash equivalents. Concentration of Credit Risk - ------------------------------- The Company places its cash in what it believes to be credit-worthy financial institutions. However, cash balances may exceed FDIC and SPIC insured levels at various times during the year.

Financial instruments that ~~could~~ potentially subject the Company to ~~concentration~~concentrations of credit risk ~~include~~consist principally of cash, accounts ~~receivable.~~receivable, and cash equivalents. The Company generally ~~requires clients~~maintains balances in various operating accounts at financial institutions that management believes to ~~pay invoices~~be of high credit quality, in amounts that may exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

When estimating its allowance for ~~service fees no later than one day prior~~credit losses related to revenues from Covid Testing, the Company differentiates its receivables based on the following customer types: healthcare insurers, government payers, and cash payers. Additionally, the Company applies assumptions and judgments for assessing collectability and determining net revenues and accounts receivable from its customers. Historical collection factors we considered for assessing collectability and determining net revenues and accounts receivable from our customers include the period of time that the receivables have been outstanding, history of payment amounts, status of collections due, and applicable statutes of limitations.

During the year ended June 30, 2022, healthcare insurers and government payers accounted for over 61% of total revenues. Also, healthcare insurers and government payers amounted to total revenue of $11,824,717. The accounts receivable related to both healthcare insurers and government payers is $4,129,953 as of June 30, 2022.

As of the year ended June 30, 2022, $880,500 is owed by a customer from the sale of several Likido units.

Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities, notes payable, and amounts due to related parties. Pursuant to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values:

The Company records a contingent consideration liability relating to stock price guarantees included in its acquisition and consulting agreements. The estimated fair value of the contingent consideration is recorded using a significant observable measure and is therefore classified as a Level 2 financial instrument.

The fair value of the contingent consideration liability related to the Company’s business combinations is valued based on a forward contract and the guaranteed equity value at settlement as defined in the acquisition agreement (see “Note 4. Business Combinations and Acquisition). The fair value of the contingent consideration is then calculated based on the guaranteed equity value at settlement as defined in the acquisition agreement. (See “Note 14. Commitments and Contingencies”).

Changes in contingent consideration liability during the year ended June 30, 2022, are as follows:

The change in fair value was due to the issuance of 333,333 common stock shares pursuant to the acquisition and the change in exchange rates for which the liability needs to be satisfied, British Pounds.

The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC Topic 815, Derivatives and Hedging Activities (“ASC 815”).

Applicable U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable ~~payroll date. As such,~~generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Company accounts for convertible instruments (when the Company ~~generally does~~has determined that the embedded conversion options should not ~~require collateral. Allowance Method Used to Record Bad Debts - -----------------------------------------------~~be bifurcated from their host instruments) as follows. The Company ~~provides~~records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the shares.

Accounts receivables are derived from products and services delivered to customers and are stated at their net realizable value. Each month, the Company reviews its receivables on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts ~~equal~~is necessary based on any known or perceived collection issues. Any balances that are eventually deemed uncollectible are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of June 30, 2022, and 2021, the Company had an allowance of doubtful accounts of $119,791 and $37,465, respectively.

Pala and Empower have a standardized approach to estimate the ~~estimated uncollectible amounts.~~amount of consideration that we expect to be entitled to for its COVID-19 testing revenue, including the impact of contractual allowances (including payer denials), and patient price concessions. The ~~Company's estimate is~~Company principally estimates the allowance for credit losses by pool based on historical collection experience, ~~and a review~~the current credit worthiness of the customers, current ~~status~~economic conditions, expectations of ~~trade accounts receivable. It is reasonably possible~~future economic conditions and the period of time that the ~~Company's estimate~~receivables have been outstanding. Adjustments to our estimated contractual allowances and implicit patient price concessions are recorded in the current period as changes in estimates.

In March 2022, the U.S. Health Resources and Services Administration (“HRSA”) informed providers that, after March 22, 2022, it would stop accepting claims for testing and treatment for uninsured individuals under the HRSA COVID-19 Uninsured Program and that claims submitted prior to that date would be subject to eligibility and availability of funds. For the ~~allowance for doubtful accounts will change. Accounts receivable are presented net of an allowance for doubtful accounts of $725,000 and $280,000 at~~year ended June 30, ~~2003, and~~2022, revenue for testing of uninsured individuals under the HRSA COVID-19 Uninsured Program represented 41% of our COVID-19 testing net revenue. As of June 30, ~~2002, respectively.~~ 2022, 26% of our net accounts receivable was associated with claims for reimbursement for COVID-19 testing of uninsured individuals. As a result of HRSA ceasing the COVID-19 Uninsured Program, the Company reduced its Accounts Receivable by $1,661,618 for the year ended June 30, 2022. Although we believe that our estimates for contractual allowances and patient price concessions are appropriate, actual results could differ from those estimates.

Inventory ~~- --------- Inventory are valued~~is recorded at the lower of cost or ~~market; cost being determined by the~~net realizable value on a first-in first-out ~~method. Long-Lived Assets - ------------------ Property~~basis. As of June 30, 2022 and ~~Equipment~~ 2021, inventory is comprised of raw materials purchased from suppliers, work-in-progress, and finished goods produced or purchased for resale. The Company establishes inventory reserves for estimated obsolete or unsaleable inventory equal to the difference between the cost of inventory and the estimated realizable value based upon assumptions about future market conditions.

Property and equipment are ~~recorded~~stated at ~~cost.~~cost less accumulated depreciation and amortization. Depreciation ~~including~~and amortization expense is recognized using the straight-line method over the estimated useful life of each asset, as follows:

Estimated useful lives are periodically assessed to determine if changes are appropriate. Maintenance and repairs are charged to expense as incurred. When assets ~~recorded under capitalized leases,~~are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation or amortization are eliminated from the balance sheet and any resulting gains or losses are included in the statement of operations loss in the period of disposal.

The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is ~~generally computed~~allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

The Company estimates and records the acquisition date fair value of contingent consideration as part of purchase price consideration for acquisitions. Additionally, each reporting period, the Company estimates changes in the fair value of contingent consideration and recognizes any change in fair in the consolidated statement of operations. The estimate of the fair value of contingent consideration requires very subjective assumptions to be made of future operating results, discount rates and probabilities assigned to various potential operating result scenarios. Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and therefore, materially affect the Company’s future financial results. The contingent consideration liability is to be settled with the issuance of shares of common stock once contingent provisions set forth in respective acquisition agreements have been achieved. Upon achievement of contingent provisions, respective liabilities are relieved and offset by increases to common stock and additional paid in capital in the stockholders’ deficit section of the Company’s consolidated balance sheets.

The Company reviews its long-lived assets (property and equipment and amortizable intangible assets) for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value.

Goodwill is tested annually at June 30 for impairment and upon the occurrence of certain events or substantive changes in circumstances.

The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity may choose to perform the qualitative assessment on none, some or all of its reporting units or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment tests. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. The quantitative impairment test calculates any goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill. As of June 30, 2022, there were quantitative factors that indicated goodwill was impaired in the amount of $218,308.

An intangible asset is an identifiable non-monetary asset without physical substance. Such an asset is identifiable when it is separable, or when it arises from contractual or other legal rights. Separable assets can be sold, transferred, licensed, etc. Examples of intangible assets include computer software, licenses, trademarks, patents, films, and copyrights. The Company’s intangible assets are finite lived assets and are amortized on a straight-line basis over the estimated useful lives of the assets.

The Company adopted ASU 2014-09, Revenue from Contracts with Customers, and its related amendments (collectively known as “ASC 606”), effective January 1, 2019. The Company determines revenue recognition through the following steps:

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

The Company’s revenue is derived from the sales of its products, which represents net sales recorded in the Company’s consolidated statements of operations. Product sales are recognized when performance obligations under the terms of the contract with the customer are satisfied. Typically, this would occur upon transfer of control, including passage of title to the customer and transfer of risk of loss related to those goods. The Company measures revenue as the amount of consideration to which it expects to be entitled in exchange for transferring goods (transaction price). The Company records reductions to revenue for estimated customer returns, allowances, markdowns, and discounts. The Company bases its estimates on historical rates of customer returns and allowances as well as the specific identification of outstanding returns, markdowns and allowances that have not yet been received by the Company. The actual amount of customer returns and allowances is inherently uncertain and may differ from the Company’s estimates. If the Company determines that actual or expected returns or allowances are significantly higher or lower than the reserves it established, it will record a reduction or increase, as appropriate, to net sales in the period in which it makes such a determination. Reserves for returns, and markdowns are included within accrued expenses and other liabilities. Allowance and discounts are recorded in accounts receivable, net and the value of inventory associated with reserves for sales returns are included within prepaid expenses and other current assets ~~ranging~~on the consolidated balance sheets.

The Company estimates warranty claims reserves based on historical results and research and determined that a warranty reserve was not necessary as of June 30, 2022, or 2021.

Net revenues from ~~three~~COVID-19 testing accounted for over 61% of the Company’s total net revenues for the twelve months ended June 30, 2022, and primarily comprised of a high volume of relatively low-dollar transactions. Pala and Empower, which provides clinical testing services and other services, satisfies its performance obligations and recognizes revenues primarily upon completion of the testing process (when results are reported) or when services have been rendered. Pala and Empower do not invoice the patients themselves for testing but relies on healthcare insurers and government payers for reimbursement for COVID-19 testing. Pala has a standardized approach to ~~seven years. Amortization~~estimate the amount of ~~leasehold improvements~~consideration that we expect to be entitled to, including the impact of contractual allowances (including payer denials), and patient price concessions. We regularly assess the state of our billing operations in order to identify issues which may impact the collectability of receivables or revenue estimates. We believe that the collectability of our receivables is ~~provided~~directly linked to the quality of our billing processes, most notably those related to obtaining the correct information in order to bill effectively for the services we provide. As such, we strive to implement “best practices” and work with our third-party billing company to reduce the number of requisitions that we receive from healthcare providers with missing or incorrect billing information. We believe that our collection and revenue estimation processes, along with our close monitoring of our billing operations, help to reduce the risk associated with material adjustments to reserve estimates. However, changes to our estimate of the impact of contractual allowances (including payer denials) and patient price concessions could have a material impact on our results of operations and financial condition in the period that the estimates are adjusted. Adjustments to our estimated contractual allowances and implicit patient price concessions are recorded in the current period as changes in estimates. Although we have limited track record, further adjustments to the allowances, based on actual receipts, may be recorded upon settlement.

DES records a sales-type where the Company is the lessor. The Company records its investment in the plant and equipment, used to upgrade a customer’s real property, leased to franchisees on a net basis, which is comprised of the present value of fixed lease payments not yet received over the ~~initial term~~course of the energy savings agreements. The current and long-term portions of our net investment in sales-type leases are included in “Accounts Receivable, net – related parties” and “Long-term receivables – related parties” respectively. Unearned income is recognized as interest income over the lease term. Sales-type leases result in the recognition of gain or loss at the commencement of the lease, which is recorded to “Revenues – related party.”

DepTec recognizes revenues using a cost-based input method, by which we use actual costs incurred relative to the total estimated contract costs to determine, as a percentage, progress toward contract completion. Provisions for estimated losses on ~~a straight-line basis. Maintenance, repairs, and minor renewals and betterments~~uncompleted contracts are ~~charged to expense.~~ made in the period in which such losses are determined.

The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to resultalso earns service revenue from its ~~use~~other subsidiaries, including information technology and ~~eventual disposition. In cases where undiscounted expected future cash flows~~consulting services via Prakat, educational programs, and courses via IHG, and management services for Solas. For Prakat and Solas, revenues are ~~less than~~recognized when performance obligations have been satisfied and the ~~carrying~~services are complete. This is generally at a point of time upon written completion and client acceptance of the project, which represents transfer of control to the customer. For IHG, revenues are recognized over the course of a semester while services are performed.

ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the reporting period and an explanation of when the entity expects to recognize revenue by either a quantitative basis or a qualitative basis.

Deferred Revenues are made up of deposits and pre-payments related to products not yet delivered, and/or services not yet performed. Deferred revenues for the year ended June 30, 2022, was $720,923 compared to $219,999 as of the year ended June 30, 2021.

The following table presents the Company's revenue disaggregated by revenue source:

The following table provides information about receivables and contract liabilities from contracts with customers:

The Company invoices customers based upon contractual billing schedules, and accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities represent a set-up fee prepayment received from a customer in advance of performance obligations met.

Cost of revenue consists primarily of inventory sold and related freight for product sales and direct labor for information technology and consulting services. The following table is a breakdown of cost of revenue:

Advertising costs are expensed as incurred. During the fiscal years ended June 30, 2022, and 2021, advertising expenses were $560,777 and $563,907, respectively.

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation using the fair value ~~an impairment loss is recognized equal to an amount by~~method. All transactions in which goods or services are the ~~carrying value exceeds~~consideration received for the issuance of equity instruments are accounted for based on the fair value of ~~assets. The factors considered by management in performing this assessment include current operating results, trends and prospects,~~the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the ~~effects~~cost of ~~obsolescence, demand, competition,~~the services received as consideration are measured and ~~other economic factors. Based~~recognized based on ~~this assessment, there was an impairment charge recorded~~the quoted market price of ~~$64,000 at~~the equity instruments issued. During the years ended June 30, ~~2003. Goodwill~~2022, and ~~Intangible Assets Long-lived~~2021, stock-based compensation expenses were $2,772,770 and $801,672, respectively.

The functional currency of the Company is the United States dollar. The functional currency of the Likido and DepTec subsidiaries is the Great British Pound. The functional currency of Prakat is the Indian Rupee. The financial statements of the Company’s subsidiaries were translated to United States dollars in accordance with ASC 830, Foreign Currency Translation Matters, using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and expenses. Gains and losses arising on foreign currency denominated transactions are ~~reviewed whenever indicators~~included in consolidated statements of ~~impairment~~operations.

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the consolidated financial statements. During the years ended June 30, 2022, and 2021, the Company’s only component of comprehensive income was foreign currency translation adjustments.

Non-controlling interests are ~~present~~classified as a separate component of equity in the Company's consolidated balance sheets and statements of changes in stockholders’ deficit. Net loss attributable to non-controlling interests are reflected separately from consolidated net loss in the consolidated statements of comprehensive loss and statements of changes in stockholders’ deficit. Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the controlling and non-controlling interests. In addition, when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary will be initially measured at fair value and the ~~undiscounted cash flows are not sufficient to recover~~difference between the ~~related asset~~ carrying ~~amount. At June 30, 2003, intangible assets included the excess~~value and fair value of the investment in Greenland Corporation over the fair market of the net assets acquired of approximately $2,822,000. The intangible assets were reviewed during 2003, in light of the Company's acquisition of Greenland Corp. and the resultant decline in the market value of Greenland's stock. This review indicated that the goodwillretained interest will be recorded as a result of the Greenland acquisition was impaired. Consequently, the carrying value of the Greenland goodwill totaling $296,000 was written off as a component of operating expenses during 2003. At June 30, 2002, the Company wrote off $1,750,000 of related to intangible assets as the Company determined that such intangible assets have been impaired. The write off consisted of $569,000 of goodwill that was recorded as a result of the Company's acquisition of Eduadvantage.com in December 2000 and $1,181,000 of the customer list recorded as a result of the Company's acquisition of SourceOne Group in November 2001. The underlying businesses of both Eduadvantage.com and SourceOne Group lost a significant amount of the revenue base that was originally purchased by the Company and therefore, a write down of the intangible assets purchased in these acquisition is necessary since the performance on an undiscounted cash flow basis of the assets purchased is not sufficient to recover the intangible assets. Patent Costs - ------------- Patent costs include direct costs of obtaining the patent. Costs for new patents are capitalized and amortized over the estimated useful life of the patent, generally over the life of the patent on a straight-line method. The cost of patents in process is not amortized until issuance. In the event of a patent being superseded, the unamortized costs are written off immediately. Accumulated amortization relating to the patent was approximately $60,000 at June 30, 2003, and none for 2002 and 2001 Other Intangible Assets - Purchased PEO Contracts - ------------------------------------------------------- Other intangible assets consist of purchased PEO contracts. Other intangible assets are recorded at cost and amortized on a straight-line basis over their estimated useful life, generally over the shorter of the definitive terms of the related agreementsgain or ~~five years. Accumulated amortization was $49,000 at June 30, 2003, and none for 2002 and 2001. Advertising Costs - ------------------~~ loss.

The Company expenses advertising and promotion costs as incurred. During fiscal 2003, 2002 and 2001, the Company incurred advertising and promotion costs of approximately $22,000, $66,000 and $224,000, respectively. Research and Development - -------------------------- Research and development costs are charged to expense as incurred. Loss Per Common Share - ------------------------ The Company reports earningscomputes net income (loss) per share in accordance with ~~SFAS No. 128, "Earnings~~ASC 260, Earnings per ~~Share." Basic~~Share. ASC 260 requires presentation of both basic and diluted earnings ~~(loss)~~ per share ~~are~~(“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares ~~available. Diluted earnings (loss) per share~~outstanding during the periods using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the periods is ~~computed similar to basic earnings (loss) per share except that the denominator is increased to include~~used in determining the number of ~~additional common~~ shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share have not been presented since the effect of the assumed ~~conversion of options and warrants~~ to ~~purchase common shares would have an anti-dilutive effect. The following potential common shares have been excluded~~be purchased from the ~~computation~~exercise of stock options or warrants.

As all potentially dilutive securities are anti-dilutive as of June 30, 2022, diluted net loss per share is the same as basic net loss per share. Potentially dilutive items outstanding as of June 30, 2022 are as follows:

The average closing price during the year exceeded the exercise prices; as a result, there was no effect during the year ended June 30, 2022.

In accordance with ASC 260, “Earnings Per Share”, the following table reconciles basic shares outstanding to fully diluted shares outstanding for the year ended June 30, 2003: warrants - 6,002,356 and stock options - 34,158,100. Offering Costs - --------------- Offering costs including distribution fees, due diligence fees, wholesaling costs, legal and accounting fees, and printing are capitalized before the sale of the related stock and then charged against gross proceeds when the stock is sold. Debt Issuance Costs - --------------------- Debt issuance costs are principally the values attributed2021:

The adjustments to the ~~detachable warrants issued in connection with~~numerator were insignificant during the ~~convertible debentures~~year ended June 30, 2021.

The Company accounts for income taxes using the asset and ~~the value of the preferential conversion feature associated with the convertible debentures. These debt issuance costs are accounted for~~liability method in accordance with ~~Emerging Issues Task Force ("EITF") 00-27 issued by the Financial~~ ASC 740, Accounting ~~Standards Board ("FASB"). Income Taxes - ------------- The Company utilizes SFAS No. 109, "Accounting~~ for Income Taxes~~" which requires the recognition of~~. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of ~~events that have been included in~~temporary differences between the financial ~~statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the~~reporting and tax bases of assets and liabilities, and ~~their financial reporting amounts at each period end based on~~for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws ~~and statutory tax rates applicable to the periods~~that will be in ~~which~~effect when the differences are expected to ~~affect taxable income. Valuation allowances are established, when necessary,~~reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount ~~expected~~that is believed more likely than not to be realized.

In August 2021, Dalrada, through its subsidiary Dalrada Health Products (“Dalrada Health”), entered a joint venture (“JV”) with Vivera Pharmaceuticals, Inc (“Vivera”) for a 51% ownership and controlling interest. The JV, Pala Diagnostics, LLC (“Pala”) is a CLIA-certified diagnostics lab focused on SARS-CoV-2 testing for now with additional testing capabilities to be introduced. The JV has been treated as a business combination.

The Company ~~recognizes~~determined that Pala is a Variable Interest Entity (VIE); we believe that the Company has the power to direct the activities that most significantly impact the economic performance of Pala, and accordingly, Dalrada is considered the primary beneficiary of the VIE. The Company has consolidated the activities of the VIE.

Pursuant to the partnership agreement, Dalrada contributed equity in the amount of ~~taxes payable or refundable~~$500,000 for operating capital and Vivera contributed property and equipment at a fair value of $111,185. This amount was recorded to non-controlling interest equity balance in the consolidated balance sheets.

Pursuant to the JV agreement, Dalrada issued 250,000 shares of common stock to Vivera in October 2021. The fair value of $58,560 was recorded to goodwill as of June 30, 2022.

In December 2021, Dalrada Health filed suit against Vivera and Paul Edalat, Vivera’s Chairman and CEO, for misappropriation of funds on behalf of the joint venture in the amount of $2,104,509. See “Item 3. Legal Proceedings” for additional information related to the lawsuit with Vivera.

Effective April 7, 2022, the Company acquired 100% of the common stock of DepTec at a valuation of 2,000,000 Great Britain Pounds (“GBP”). In consideration for the ~~current year~~acquisition, the Company shall issue 3,000,000 shares of its common stock evenly every quarter for 24 months with the initial distribution to take place on the effective date (the “Share Consideration”).

If at the end of the 24-month stock distribution period, beginning on the effective date of April 7, 2022 (the “Distribution Period”), the value of common stock consideration does not equate to 4,000,000 GBP (the “Target Amount”) in value (based on the GBP to USD currency exchange rate of 1.30690 on April 7, 2022, is $5,228,000 USD), then the Company shall issue additional shares equal to the shortfall between the value of the Share Consideration and ~~recognizes deferred tax liabilities and assets for~~ the ~~expected future tax consequences~~Target Amount (the “Valuation Shortfall”). The value of ~~events and transactions that have been recognized~~the issued stock shall be deemed at the date of issue, which is the end of the Distribution Period.

As a result of the Valuation Shortfall, the Company recorded contingent consideration (see Note 2. Summary of Significant Accounting Policies) in connection to the ~~Company's financial statements or tax returns.~~ acquisition. The following is a summary of the purchase price consideration:

The Company ~~currently has substantial net operating loss carryforwards.~~ acquired DepTec to expand it Precision Manufacturing segment into the microchip and semiconductor industries. Furthermore, DepTec’s location, experience and manufacturing capabilities can leverage synergies with Likido. A founder and principal of DepTec is a related party to the CEO of the Company.

The ~~Company has recorded~~DepTec transaction was accounted for as a 100% valuation allowance against net deferred tax assets due to uncertainty of their ultimate realization. Stock-Based Compensation - ------------------------- The Company accounts for employee stock optionsbusiness combination in accordance with Accounting ~~Principles Board Opinion ("APB"~~Standards Codification (“ASC”) ~~No. 25, "Accounting~~Topic 805, Business Combinations (“ASC 805”). The Company has determined preliminary fair values of the assets acquired and liabilities assumed. These values are subject to change as we perform additional reviews of our assumptions utilized.

The Company has made a preliminary allocation of the purchase price regarding the acquisition related to the assets acquired and liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation:

Intangible assets acquired include trademarks, developed technology and customer relationships, which are amortized on a straight-line basis over ten to fifteen years. The fair value estimates of the intangibles for ~~Stock Issued~~the purchase price allocation were based on an analysis of the present value of future cash flows, relief from royalty, and a replacement cost approach.

Goodwill is primarily attributable to ~~Employees". Under APB 25,~~the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is not deductible for tax purposes.

Effective June 7, 2022, the Company ~~does not recognize compensation expense related~~acquired 100% of the common stock of Watson. In consideration for the acquisition, the Company shall issue 2,000,000 shares of its common stock per the following schedule: 1,000,000 shares to ~~options~~be issued ~~under~~at the ~~Company's employee stock option plans, unless~~effective date of the ~~option is granted at~~Agreement; and 1,000,000 shares issued in even amounts every quarter over a ~~price below market price~~period of two years beginning on the effective date of ~~grant. In 1996, SFAS No. 123 "Accounting for Stock-Based Compensation", became effective for~~June 7, 2022.

The following is a summary of the ~~Company. SFAS No. 123, which prescribes the recognition~~purchase price consideration:

The common stock value of ~~compensation expense~~$918,000 was based on the value of 2,000,000 common stock shares at the Company’s price per share on the effective date of acquisition, or June 7, 2022.

The Company acquired Watson to further integrate Dalrada Health Products into the education, nursing, and other health solutions through a comprehensive pharmaceutical opportunity with licenses in 50 States including Washington D.C. Dalrada Health Products expects to strategically integrate the services of the diagnostic laboratories with the pharmaceutical business.

The Watson transaction was accounted for as a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The Company has determined preliminary fair values of the assets acquired and liabilities assumed. These values are subject to change as we perform additional reviews of our assumptions utilized.

The Company has made a preliminary allocation of the purchase price regarding the acquisition related to the assets acquired, liabilities assumed and noncontrolling interests as of the purchase date. The following table summarizes the purchase price allocation:

Intangible assets acquired include trademarks and licenses, which are amortized on a straight-line basis over fifteen to seventeen years. The fair value estimates of the intangibles for the purchase price allocation were based on an analysis of the present value of future cash flows, relief from royalty, and a replacement cost approach.

Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is not deductible for tax purposes.

Effective January 29, 2021, the Company acquired 100% of the common stock of IHG. In consideration for the acquisition, the Company issued 1,000,000 shares of its common stock at $0.44 per share, or a total fair value of ~~options on~~$440,000. The Company acquired IHG to expand into the ~~grant date, allows companies to continue applying APB 25 if certain pro forma disclosures are made assuming hypothetical fair value method,~~educational sector of the Health and Human Services Industry.

The International Health Group transaction was accounted for ~~which the Company uses the Black-Scholes option-pricing model. For non-employee stock based compensation, the Company recognizes an expense~~as a business combination in accordance with ~~SFAS No. 123~~Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The Company has determined the fair values of the assets acquired and liabilities assumed.

The Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired, liabilities assumed and noncontrolling interests as of the purchase date. The following table summarizes the purchase price allocation:

The intangible assets for IHG are in the form of its curriculum development and will be amortized on a straight-line basis over its determined useful life of ten years for the following reasons:

Effective February 3, 2021, the Company acquired 100% of the membership units of Pacific Stem. In consideration for the acquisition, the Company issued $352,650 in cash consideration and issued 1,000,000 shares of its common stock at $0.354 per share for a total fair value of $706,650. The Company acquired Pacific Stem as an opportunity to enter the growing alternative Health and Human Services Industry.

The Pacific Stem Cells transaction was accounted for as a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The Company has determined preliminary fair values of the ~~equity securities based on~~assets acquired and liabilities assumed. These values are subject to change as we perform additional reviews of our assumptions utilized. Goodwill is primarily attributable to the go-to-market synergies that are expected to arise because of the acquisition. The goodwill is not deductible for tax purposes.

On April 21, 2021, the Company closed the transaction by moving into a Membership Interest Purchase Agreement to acquire Ignite IT LLC (“Ignite”). The Company acquired all of the issued and outstanding membership interests, including business plans and access to contacts of Ignite. In consideration for the acquisition, the Company issued a promissory note for $20,000.

The Company evaluated the acquisition of the purchased assets under ASC 805 and concluded that as substantially all of the fair value of the ~~security on~~gross assets acquired is concentrated in an identifiable group of similar assets, the date of grant. For stock-based awards, the value is based on the market value for the stock on the date of grant and if the stock has restrictions as to transferability, a discount is provided for lack of tradability. Stock option awards are valued using the Black-Scholes option-pricing model. The Company applies Accounting Principles Board Opinion No. 25 and related Interpretations in accounting for its stock option plans. The Company has opted under SFAS No. 123 to disclose its stock-based compensation with no financial effect. The pro forma effects of applying SFAS No. 123 in this initial phase-in period are not necessarily representative of the effects on reported net income or loss for future years. Had compensation expense for the Company's stock option plans been determined based upon the fair value at the grant date for awards under these plans consistent with the methodology prescribed under SFAS No. 123, the Company's pro forma net loss and net loss per share would have been as follows for the years ended June 30:

This option valuation model requires input of highly subjective assumptions. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing model does not necessarily provide a reliable single measure of fair value of its employee stock options. The weighted average fair value of the options granted during fiscal years 2003 and 2002 is estimated on the date of grant using the Black-Scholes option-pricing model. No options were granted in fiscal 2001. The weighted average fair values and weighted average assumptions used in calculating the fair values were as follows for the years ended June 30:

Fair Value of Financial Instruments - --------------------------------------- For certain of the Company's financial instruments, including accounts receivable, bank overdraft, accounts payable, and accrued expenses, the carrying amounts approximate fair value, due to their relatively short maturities. The amounts owed for long-term debt also approximate fair value because current interest rates and terms offered to the Company are at current market rates. Comprehensive Loss - ------------------- The Company adopted SFAS No. 130, "Reporting Comprehensive Income." This statement establishes standards for reporting other comprehensive income and its components in a financial statement. Comprehensive income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. Examples of items to be included in comprehensive income, which are excluded from net income, include foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. Comprehensive income is not presented in the Company's financial statements since the Companytransaction did not ~~have any of~~meet the items of other comprehensive income in any period presented. Minority Interest in Consolidated Subsidiary - ------------------------------------------------ "Minority interest in consolidated subsidiary" represents the minority stockholders' proportionate share of the equity of QPI. At June 30, 2003 the Company owned 88% of Greenland's capital stock, and has voting control. The Company's 88% controlling interest requires that Greenland's operations be included in the consolidated financial statements. The outstanding preferred stock of Greenland that is not owned by the Company is shown as "Preferred Stock - - minority interest in subsidiary" in the 2003 and 2002 Consolidated Balance Sheet. Segment Disclosure - ------------------- SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," was issued, which changes the way public companies report information about segments. SFAS No. 131, which is based on the selected segment information, requires quarterly and entity-wide disclosures about products and services, major customers, and the material countries in which the entity holds assets and reports revenues. Recent Accounting Pronouncements - ---------------------------------- In April 2003, the FASB issued SFAS 149 - "Amendment of Statement 133 on Derivative Instruments and Hedging Activities", effective for contracts entered into or modified after June 30, 2003, except as stated below and for hedging relationships designated after June 30, 2003. In addition, except as stated below, all provisions of this Statement should be applied prospectively. The provisions of this Statement that relate to Statement 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continuerequirements to be applied in accordance with their respective effective dates. In addition, paragraphs 7(a) and 23(a), which relate to forward purchases or sales of when-issued securities or other securities that do not yet exist, should be applied to both existing contracts and new contracts entered into after June 30, 2003. The Company does not participate in such transactions, however, is evaluating the effect of this new pronouncement, if any, and will adopt FASB 149 within the prescribed time. In May 2003, the FASB issued SFAS 150 - "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity", effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a freestanding financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. Some of the provisions of this Statement are consistent with the current definition of liabilities in FASB Concepts Statement No. 6, Elements of Financial Statements. The Company is evaluating the effect of this new pronouncement and will adopt FASB 150 within the prescribed time. 2. ACCOUNTS RECEIVABLE -------------------- Accounts receivable consisted of the following as of:

The Company reviews accounts receivable periodically during the year for collectibility. An allowance for doubtful accounts and sales returns is established for any receivables whose collection is in doubt or for estimated returns. 3. INVENTORY The Company wrote down its inventory during the year ended June 30, 2003. Inventory consisted of the following as of:

4. RELATED PARTY TRANSACTIONS Transactions with a Director of the Company - ------------------------------------------------- A director of the Company is a majority shareholder in a consulting firm that provides management and public relations services to the Company. The Company accrued consulting fees and expenses to this consulting firm in the amount of approximately $120,000 and $60,000 in 2003 and 2002, respectively. Transactions with Officers and Key Executives - -------------------------------------------------- During 2003 and 2002, common stock with an aggregate fair market value of $60,000 and $444,000, respectively, was awarded to key executives as compensation and advances. 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of:

Depreciation and amortization expense for the years ended June 30, 2003, 2002, and 2001, was approximately, $200,000, $118,000 and $806,000, respectively. 6. ACQUISITIONS ExpertHR of Oklahoma - ---------------------- Effective April 1, 2003, the Company formed a wholly-owned subsidiary of Greenland Corporation, ExpertHR Oklahoma. Subsequent to its formation, the new Company purchased a group of PEO clients for $921,000 of convertible preferred stock of Greenland Corporation. ExpertHR of Oklahoma, Inc., at that time, was a newly formed corporation whose only asset was the PEO contracts purchased by Greenland. The entire purchase price of the purchased contracts of $921,000 has been allocated to contracts in the accompanying consolidated balance sheet and is being amortized over the expected life of the contracts of 5 years Greenland Corporation - ---------------------- On January 14, 2003, the Company completed the acquisition of shares, representing controlling interest, of Greenland Corporation ("Greenland"). Under the terms of the Greenland acquisition, ITEC acquired 19,183,390 shares of common stock of Greenland and received warrants to purchase an additional 95,319,510 shares of Greenland common stock contingent upon the contribution of certain PEO contracts to Greenland. The payment of the exercise price of the warrants was made via the contribution of the required PEO contracts. The purchase price was $2,225,000 in the form of a promissory note payable to Greenland and is convertible into shares of ITEC common stock, the number of which will be determined by a formula applied to the market price of the shares at the time that the promissory note is converted. The promissory note of $2,225,000 is payable to Greenland and is eliminated during the consolidation. The Company contributed the required PEO contracts to Greenland resulting in the warrants being exercised. 115.1 million Greenland common shares were issued to ITEC and delivered pursuant to the terms of the Closing Agreement. The conditions of the exercise of warrants pursuant to the Closing Agreement were met. Accordingly, ITEC holds voting rights to 115.1 million shares of Greenland common stock, representing approximately 85% of the total outstanding Greenland common shares. On January 14, 2003, four new directors were elected to serve on Greenland's Board of Directors as nominees of ITEC. As of the date of this report, ITEC holds four seats of seven. Greenland's Chief Executive Officer, Thomas Beener, remains in his position. Brian Bonar, ITEC's CEO serves as Chairman of Greenland's Board of Directors. The purchase price was determined through analysis of Greenland's financial reports as filed with the Securities and Exchange Commission and the potential future performance of Greenland's ExpertHR subsidiary. The total purchase price was arrived at through negotiations. Greenland's ExpertHR subsidiary provides professional employer services (PEO) to niche markets. Greenland's Check Central subsidiary is an information technology company that has developed the Check Central Solutions' transaction processing system software and related MAXcash Automated Banking Machine (ABM kiosk designed to provide self-service check cashing and ATM-banking functionality. Greenland's common stock trades on the OTC Bulletin Board under the symbol GRLC. Pursuant to the terms of the Agreement, the actual purchase price was $0, based on the stated purchase price of $2,225,000 per the agreement less promissory note payable to $2,225,000 to Greenland, which was eliminated in the consolidation. The operating results of Greenland beginning January 14, 2003 are included in the accompanying consolidated statements of operations. The total purchase price was valued at approximately $0 and is summarized and allocated as follows in accordance with SFAS No. 141 and 142:

The excess purchase price was allocated to goodwill, as there were no other identifiable intangible assets of Greenland in which to allocate part of the purchase price. Quik Pix, Inc. - ---------------- On January 14, 2003, ITEC completed its acquisition of approximately 85% of the issued and outstanding shares of common stock of Quik Pix, Inc. ("QPI"). The purchase price was 12,500,000 shares of ITEC restricted common stock valued at $125,000. In addition, ITEC agreed to pay $45,000 to a shareholder of QPI. Established in 1982, QPI is a visual marketing support firm. Its principal product, PhotoMotion, is patented. PhotoMotion is a unique color medium that uses existing originals to create the illusion of movement and allows for three to five distinct images to be displayed with an existing light box. QPI visual marketing products are sold to a range of clientele including advertisers and their agencies. The purchase price was determined through analysis of QPI's financial condition and the potential future performance of its business operations. The total purchase price was arrived at through negotiations. Pursuant to the terms of the Agreement, the actual purchase price was $170,000 based on the fair value of the common stock issued of $125,000 and the payable of $45,000 to a shareholder of QPI. The operating results of QPI beginning January 14, 2003 are included in the accompanying consolidated statements of operations. The total purchase price was valued at approximately $170,000 and is summarized as follows in accordance with SFAS No. 141 and 142:

The excess purchase price of $1,618,000 was allocated to QPI's patent. QPI has a patent related to Photomotion images, which expires in July 2020. This intangible asset is being amortized over the remaining life of the patent. Dream Canvas Technology, Inc. - -------------------------------- The Company completed the acquisition of Dream Canvas Technology, Inc. (DCT) in October 2002 and paid the sum of $40,000 with the issuance of 100,000 shares of its common stock. In December 2002 the Company sold DCT to Baseline Worldwide Limited for $75,000 in cash. The Company reported this transaction on Form 8-K, filed on December 19, 2002, which is incorporated by reference. SourceOne, Inc. - ---------------- On November 12, 2001, the Company acquired all of the outstanding shares of SourceOne, Inc. ("SourceOne") from Neotactix, Inc. for 500,000 shares (valued at $300,000) of the Company's common stock and the assumption of $750,000 of payments due SourceOne from Neotactix. The Company paid $250,000 in cash at closing. The balance of $500,000 is payable in cash or stock on a quarterly payment schedule beginning in April 2002. If the Company chooses to pay this debt in stock, the stock issued must be registered with the SEC and the price per share will be the best bid price on the day the payment is made. As of June 30, 2002, the Company has not made any additional payments, as there is currently a dispute over certain liabilities that have arisen since the purchase date. SourceOne is a professional employer organization ("PEO") that provides comprehensive personnel management services, including benefits and payroll administration, health and workers' compensation insurance programs, personnel records management, and employer liability management. The following summarized the fair market values net assets acquired:

The customer list purchased in the above acquisition was being amortized over a period of five years. The value of the customer list at the date of acquisition was greater than the excess purchase price so the entire excess purchase was allocated to the customer list. EduAdvantage Effective December 1, 2000, the Company acquired all of the outstanding shares of Eduadvantage.com in exchange for 175,000 of the Company's common stock. EduAdvantage.com is a California corporation that is primarily engaged in a web-based business. The acquisition has been accounted for as a ~~purchase transaction. The following summarized the net assets acquired.~~

~~Asset Acquisition On March 1, 2003,~~business combination and therefore was accounted for as an asset acquisition. Accordingly, the Company ~~purchased certain PEO contracts from Staff Pro Leasing 2~~recorded the acquired research and ~~Staff Pro Leasing, Inc. for $269,483. The purchase price was paid via~~development at a fair value of $20,000 as an ~~initial cash payment of $44,915 and the remainder of the purchase price is~~expense in the ~~form~~consolidated statements of a promissory note to be paid over 24 months. The entire purchase price is shown as contracts in the accompanying consolidated balance sheet and is being amortized over the expected life of the contracts of 5 years. On October 25, 2001, the Company acquired certain assets from three related parties. These assets related to the Company's office products and services business activities, and represent an aggregate of $250,000, which included inventory, fixed assets and accounts receivable. The purchase price of the assets was 375,000 shares of the Company's common stock that was determined by the market price of the Company's common stock at the date of acquisition. - The number of shares issued in this transaction was subsequently reduced to $250,000 thus reducing the purchase price to $173,333. operations.

The following unaudited pro forma financial information presents the ~~consolidated operations of the Company~~Company’s financial results as if the ~~above-mentioned~~various acquisitions had occurred as of ~~the beginning of the periods presented. This~~July 1, 2021. The unaudited pro forma financial information ~~is provided for illustrative purposes only, and~~ is not necessarily indicative of what the ~~operating~~financial results ~~that~~actually would have ~~occurred~~been had the ~~acquisitions~~acquisition been ~~consummated at~~completed on this date. In addition, the ~~beginnings of the periods presented, nor~~unaudited pro forma financial information is ~~it necessarily~~not indicative of, nor does it purport to project the Company’s future financial results. The pro forma information does not give effect to any ~~future~~estimated and potential cost savings or other operating ~~results.~~ efficiencies that could result from the acquisitions:

(In thousands, except per share data) YEAR ENDED JUNE 30, - ------------------------------------- --------------------- 2003 2002 2001 --------------------- --------- --------- Net revenue, as reported. . . . . . . $ 4,190 $ 7,408 $ 3.452 - ------------------------------------- --------------------- --------- --------- Net revenue, pro forma. . . . . . . . $ 4,473 $ 10,862 $ 7,104 - ------------------------------------- --------------------- --------- --------- Net loss, as reported . . . . . . . . $ (6,855) $(13,688) $ (9,888) - ------------------------------------- --------------------- --------- --------- Net loss, pro forma . . . . . . . . . $ (9,059) $(20,877) $(18,811) - ------------------------------------- --------------------- --------- --------- Loss per share, as reported . . . . . $ (0.07) $ (1.12) $ (1.51) - ------------------------------------- --------------------- --------- --------- Loss per share, pro forma . . . . . . $ (0.11) $ (0.84) $ (0.96) - ------------------------------------- --------------------- --------- ---------
	F-24

~~7. OTHER ACCRUED EXPENSES Other accrued expenses~~

Property and equipment, net consisted of the following as of June 30, 2022, and 2021:

Depreciation expense of $252,937 and $83,606 for the years ended June 30, 2022, and 2021, respectively, were included in selling, general and administrative expenses in the statements of operations.

(In thousands). . . . . . . . . . . . . . . . JUNE 30, 2003 2002 ------------ --------- Compensation and employee benefits. $ 2,130 $ 1,542 Interest. . . . . . . . . . . . . . 5,134 3,858
	F-25

Intangible assets, net consisted of the following as of June 30, 2022, and June 30, 2021:

Amortization expense of $116,886 and $28,891 for the years ended June 30, 2022, and 2021, respectively, were included in selling, general and administrative expenses in the statements of operations. The Company’s intangible assets are subject to amortization and are amortized over the straight-line methods over their estimated period of benefit.

As of June 30, 2022, and 2021, the Company had $2,055,736 and $1,953,024, respectively, of accrued payroll taxes, penalties and interest relating to calendar years 2004 - 2007. The total balance for accrued payroll taxes has accumulated on a quarterly basis beginning on their respective quarterly filing dates. Accrued interest is compounded daily at an estimated effective interest rate of 7.33%. The quarterly sub-totals that make up the $2,055,736 balance have a calculated expiration date of 10 years according to the Internal Revenue Service statute of limitations. As the tax periods surpass their estimated expiration date, the Company removes the liability from the consolidated balance sheets, and an equivalent amount is recognized as “Gain on expiration of accrued tax liability” within other income on the consolidated statements of operations. For fiscal years ended June 30, 2022, and 2021, the Company recognized $30,155 and $491,953, respectively, of penalties and interest within interest expense on the consolidated statements of operations. For fiscal years ended June 30, 2022, and 2021, the Company recognized $0 and $9,054,041, respectively, within “Gain on expiration of accrued tax liability” because of quarterly tax liabilities that expired during the fiscal years. The amount owing may be subject to additional late filing fees and penalties that are not quantifiable as at the date of these consolidated financial statements. In addition, the Company periodically reviews the historical filings in determining if the statute has been paused or extended by the Internal Revenue Service.

Notes Payable ~~- ----------------------------------------~~ – Related Parties

The following is a summary of notes payable – related parties as of June 30, 2022, and 2021:

The following is a summary of current and long-term notes payable – related parties as of June 30, 2022:

All notes are unsecured, bear interest at 3% per annum, and are due 360 days from the date of issuance, ranging from June 25, 2020, to June 25, 2022. Each entity has significant influence or common ownership with the Company’s Chief Executive Officer. Several of these notes are in default. The Company has not received any notices of default or demands for payment. All notes are unsecured and those which are past-due are due on demand. As of June 30, 2022, and 2021, total accrued interest for Notes Payable-Related Parties was $362,855 and $182,147, respectively. The Company recorded interest expense from Notes Payable-Related Party for fiscal years ending June 30, 2022, and 2021, of $180,708 and $144,782, respectively.

Pacific Stem and IHG’s EIDL loans, dated June 7, 2020 and May 10, 2020, respectively, include a 3.75% interest rate for up to 30 years; the payments are deferred for the first two years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. The EIDL loan has no penalty for prepayment. The EIDL loans attach collateral which includes the following property that EIDL borrower owns or shall acquire or create immediately upon the acquisition or creation thereof: all tangible and intangible personal property, including, but not limited to: (a) inventory, (b) equipment, (c) instruments, including promissory notes (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, including health-care insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software and (k) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest the EIDL borrower grants includes all accessions, attachments, accessories, parts, supplies and replacements for the collateral, all products, proceeds and collections thereof and all records and data relating thereto. The EIDL loans are technically in default as a result of a change in ownership without SBA’s prior written consent. The Company has contacted the Small Business Administration regarding the transfer of ownership and has not yet finalized the transfer of ownership.

Likido’s COVID-19 Government Loan includes a 2.5% interest rate for up to six years; the payments are deferred for the first year (during which interest will accrue).

Watson’s outstanding loans includes an interest rate of 5% with a maturity date of April 29, 2025. The outstanding loans are collateralized by personal property and include monthly payments in the amount of $3,320 with a balloon payment at the maturity date in the amount of $466,460. Watson’s Letter of Credit includes an interest rate of Prime + 1% and a maturity date of May 5, 2021.

The following are the expected payments as of June 30, 2022, including the total amount of imputed interested related:

On ~~June 6, 2000,~~February 4, 2022, the ~~Company~~Company” entered into a ~~settlement~~securities purchase agreement (“SPA”) with ~~Imperial Bank ("Imperial"~~YA II PN, Ltd. (the “Buyer”) for issuance and sale of convertible debentures (the “Debentures”) in the aggregate principal amount of $3,000,000, including net proceeds received of $2,880,000 from February to March 2022.

The Debentures have a fixed conversion price of $0.9151 per share (the “Fixed Conversion Price”). The principal and interest, which will accrue at a rate of 5% per annum, payable under the Debentures will mature 15 months from the issuance date (the “Maturity Date”), unless earlier converted or redeemed by the Company. At any time before the Maturity Date, the Buyer may convert the Debentures into the Company’s common stock at the Fixed Conversion Price. Beginning on May 1, 2022 and continuing on the first day of each calendar month thereafter through February 1, 2023, the Principal amount plus a 20% redemption premium and plus accrued and unpaid interest will be subject to monthly redemption (“Monthly Redemption”). Under ~~this agreement,~~Monthly Redemption, the Company ~~would~~shall redeem an applicable redemption amount in accordance with the redemption schedule provided in the Debenture, which is subject to pro rata adjustment to reflect the conversion or redemption otherwise effected pursuant to the Debenture contemporaneous with or prior to the scheduled redemption date, in cash, in common stock through the Buyer’s conversion of the Debenture (at any time after the applicable redemption date), or a combination of both at the Company’s option. With respect to each Monthly Redemption all or partially in common stock, the conversion price shall be the lower of (1) the Fixed Conversion Price, or (2) 100% of the lowest daily VWAP during the ten consecutive trading days immediately preceding the date of conversion (the “Variable Conversion Price”). The conversion price shall be adjusted from time to time pursuant to the other terms and conditions of the Debenture. At no point will the conversion price be less than $0.01.

The Company, in its sole discretion, may redeem in cash amounts owed under the Debentures prior to the Maturity Date by providing the Buyer with advance written notice at least 10 trading days prior to such redemption, provided that the Shares are trading below the Fixed Conversion Price at the time of the redemption notice. The Company shall pay ~~$150,000 per month until~~a redemption premium equal to 20% (the “Redemption Premium”) of the ~~balance was~~principal amount being redeemed.

In connection with the Debenture, the Company issued to the Buyer warrants equal to 30% coverage exercisable at a strike price equal to the Fixed Conversion Price determined at the date of the initial closing, or a total of 983,499 warrants to purchase common stock. The Warrants shall be exercisable for four years and shall be exercised on a cash basis provided the Company is not in default and the shares underlying the Warrant are subject to an effective registration statement at the time of the Investor’s exercise. There is a cashless provision.

The Company analyzed the conversion feature of the warrants and determined they did not need to be bifurcated under ASC 815. Based on adoption of ASU-2020-06, the debt will be accounted for as traditional convertible debt with no portion of the proceeds attributed to the conversion feature. The warrants issued with the debt will be accounted for as a debt discount and will be amortized as interest expense over the life of the note. The warrants were valued using the Monte Carlo model and the Company recognized $1,427,495 as a debt discount related to the warrants. Key variables used in the valuation are as follows:

In connection with the Debenture, the Company incurred $120,000 in issuance costs. Furthermore, the Company issued 192,000 shares of common stock to the Buyer and broker at a fair value of $115,200. Both the issuance costs and fair value of common stock were recorded as a debt discount.

The total debt discounts related to the convertible notes were $1,659,442 and amortized using a straight-line method over a fifteen-month period. During the fiscal year ended June 30, 2022, the Company amortized $434,970 of debt discount, incurred interest expense of $56,712 and accrued interest of $24,520.

The total redemption premiums related to the convertible notes were $600,000 and amortized using a straight-line method over a 10-month period, starting in May 2022. During the fiscal year ended June 30, 2022, the Company paid redemption premiums related of $60,000 and $20,000in ~~full. Payments have been reduced~~cash and stock, respectively. In addition, the Company recorded accretion of $120,000 related to ~~$100,000 per month through January 2002 and further reduced to $50,000 subsequent to January 2002.~~ interest expense.

During the year ended June 30, ~~2002,~~2022, the Company ~~paid $1,023,000 toward this obligation. Due~~redeemed $300,000 and $100,000 of the Debentures in cash and stock, respectively. 373,436 shares of the Company’s common stock were issued through the stock redemption.

The net balance of the convertible note, after unamortized debt discount of $1,224,472, was $1,375,528 as of June 30, 2022. See “Note 16. Subsequent Events” for additional redemptions after fiscal year ended June 30, 2022.

On June 30, 2019, the Company issued a convertible note for $1,875,000 to the ~~uncertainty regarding~~Chief Executive Officer of the ~~Company's ability to meet its obligations and certain defaults under this agreement,~~Company for compensation. Under the ~~debt has been classified as current. The debt~~terms of the note, the amount due is ~~accruing~~unsecured, bears interest at ~~12.9%~~3% per annum, ~~which will be waived if all principal payments are made timely. Accrued interest related to these notes~~and was due ~~Imperial totaling $1,375,000 at~~360 days from the date of issuance. On June 30, ~~2003 is~~2019, the Company issued note agreement which included ~~in other accrued expenses. The debt is collateralized by substantially all assets~~a conversion feature of the ~~Company. The~~outstanding balance ~~due~~at $0.034 per share. As the conversion price was equal to ~~Imperial at~~the fair value of the common shares on the date of the agreement, there was no beneficial conversion feature.

In September 2021, the Company converted, along with the related party notes above, principal of $1,875,000 and accrued $126,563 in interest into 3,065 shares of Series G convertible preferred stock.

During the year ended June 30, ~~2003~~2022, the Company received cash funding or expenses paid on behalf of the Company from related parties totaling $11,492,218. The expenses paid on behalf primarily relate to operation expenditures and ~~2002 was $1,490,000 and $1,615,000, respectively.~~payroll. In most cases, promissory notes were created on a quarterly basis totaling the amounts referenced above. The remaining amounts are included within accounts payable – related parties for which the related parties expect repayment. During the year ended June 30, 2022, the Company made payments to the related parties against the promissory note balances of $233,556. As of June 30, ~~2003~~2022, amounts included within accounts payable and ~~2002,~~accrued liabilities – related parties for expense and payroll related advances were $576,173.

During the year ended June 30, 2022, the Company incurred expenses from services provided by related parties totaling $779,135. Services provided to the Company include management services, payroll processing services, rent and chartered flight services. As of June 30, 2022, amounts included within accounts payable and accrued liabilities – related parties for expense and payroll related advances were $646,570.

During the year ended June 30, 2022, the Company incurred $592,881 in services performed by non-employee board members. As of June 30, 2022, amounts included within accounts payable and accrued liabilities - related parties for expense and payroll related advances were $47,390.

During the year ended June 30, 2022, the Company generated net revenues of approximately $585,000 through Covid tests performed at locations or entities controlled by related parties. This amount mentioned above is included within revenues on the consolidated statements of operations.

During the year ended June 30, 2021, the Company incurred $72,000 to a related entity for providing management services. As of June 30, 2021, the Company owed ~~Export-Import Bank ("ExIm") $1,680,000 plus interest under~~$357,025 in the form of promissory notes and $2,654 included within accounts payable and accrued liabilities – related parties.

During the year ended June 30, 2021, the Company incurred $515,646 to a ~~Working Capital Guarantee Facility whereby Imperial~~related entity for chartered business flights. During the year ended June 30, 2021, the Company made payments totaling $98,409 to a ~~demand upon ExIm who responded by making~~related entity for chartered business flights. In 2021, the Company issued a ~~claim payment~~promissory note totaling $417,237 in exchange for the remaining amounts payable to ~~Imperial.~~the related entity at terms similar to those disclosed in Note 6.

During the year ended June 30, 2021, the Company received cash of $2,510,088 from a related party entity that processes payroll for the Company. As of June 30, 2021, the Company owed $3,087,690 in the form of promissory notes and $208,943 included within accounts payable and accrued liabilities – related parties.

During the year ended June 30, 2021, the Company received cash of $2,604,891 from a related party entity to fund operations. As of June 30, 2021, the Company owed $2,723,943 in the form of promissory notes and $0 included within accounts payable and accrued liabilities – related parties.

During the year ended June 30, 2021, the Company received cash of $644,430 from a related party entity to fund operations. As of June 30, 2021, the Company owed $2,135,663 in the form of promissory notes and $0 included within accounts payable and accrued liabilities – related parties.

During the year ended June 30, 2021, the Company issued 500,000 common shares to each board member, including the Chief Executive Officer, for an aggregate of 4,500,000 shares. The ~~note bears interest at 10% per annum. ExIm has made a demand for immediate payment and note is currently~~fair value of $730,000 was recorded in ~~default.~~ the consolidated statements of operations.

The following is a summary of revenues recorded by the ~~borrowings under bank notes payable:~~

~~Notes Payable, including amounts due~~Company’s to related parties ~~- --------------------------------------------------------------~~ with common ownership:

See Notes 4, 7, 8, 9, 10, 12, 14 and 16 for additional related party transactions.

The ~~following summarizes short-term notes payable,~~Company has 100,000 shares authorized of Series F Super Preferred Stock (“Series F Stock”), par value, $0.01, of which ~~are~~5,000 shares of Series F Stock (at a fair value of $170) were issued to the CEO in ~~default,~~December 2019. Each share of Series F Stock entitles the holder to the greater of (i) one hundred thousand votes for each share of Series F Stock, or (ii) the number of votes equal to the number of all outstanding shares of Common Stock, plus one additional vote such that the holders of Series F Stock shall always constitute most of the voting rights of the Corporation. In any vote or action of the holders of the Series F Stock voting together as a separate class required by law, each share of issued and ~~due on demand:~~

~~Notes payable mature~~outstanding Series F Stock shall entitle the holder thereof to one vote per share. The holders of Series F Stock shall vote together with the shares of Common Stock as ~~follows:~~

~~Convertible Debentures - -----------------------~~ one class.

On ~~December 12, 2000,~~February 1, 2022, the Company ~~entered~~converted a total of $6,303,589 and $228,617 of related party principal and interest, respectively, into a Convertible Note Purchase Agreement with Amro International, S.A., Balmore Funds, S.A. and Celeste Trust Reg. Pursuant to this agreement, the Company sold to each of the purchasers convertible promissory notes in the aggregate principal amount of $850,000 bearing interest at the rate of eight percent (8%) per annum, due December 12, 2003, each convertible into10,002 shares of ~~the Company's common stock. Interest~~Series G Convertible Preferred Stock (“Series G Stock”). The Series G Stock shall ~~be payable,~~convert at ~~the option~~one share of ~~the purchasers, in cash or~~Series G Stock to 2,177 shares of common ~~stock. At any time after~~stock (equivalent to converting the related dollars into common shares at $0.30 per share). Series G Stock do not have voting rights.

In August 2021, December 2021, March 2022, and May 2022, the Company issued 87,500 shares of common stock related to the acquisition of Pacific Stem Business. See “Note 4. Combinations and Acquisition” for additional information related to the acquisition of Pacific Stem Cells.

In October 2021, December 2021, March 2022, and May 2022, the Company issued 125,000 shares of common stock related to the acquisition International Health Group. See “Note 4. Combinations and Acquisition” for additional information related to the acquisition of International Health Group.

In September 2021, the Company repurchased 329,478 shares of common stock from a Company employee for a total fair value of $14,827, or $0.045 per share.

In September 2021, the Company issued 2,000,000 shares to the board of directors pursuant to the 2020 stock compensation plan. The 2,000,000 shares of common stock were granted on July 19, 2021, at $0.28 per share for a total fair value of $560,000.

In October 2021, the Company issued 250,000 shares to Vivera pursuant to the Pala agreement. See “Note 3. Investment in Pala Diagnostics” for additional information related to the issuance of stock related to the Pala Diagnostics joint venture.

In December 2021, the Company issued 500,000 shares of common stock pursuant to a consulting agreement for health care management services. The 500,000 shares of common stock were granted on December 20, 2021, at $0.76 per share for a total fair value of $380,000.

In December 2021, the Company cancelled 6,500,000 common shares issues to its Directors and an advisor and returned them to treasury. 6,500,000 cashless warrants were issued to the Directors and the advisor in place of the common shares that were cancelled. See “Note 12. Stock-Based Compensation” for additional information related to the issuance of the ~~notes, each note is convertible into such number of~~warrants.

In March 2022, the Company issued 192,000 shares of common stock ~~as is determined by dividing (a) that portion~~pursuant to a consulting agreement for a total fair value of $115,200. See “Note 7. Notes Payable” for additional information related to the ~~outstanding principal balance~~common stock issued pursuant to the convertible debt.

In June 2022, the Company issued 164,659 shares of the note as of the date of conversion by (b) the lesser of (x) an amount equal to seventy percent (70%) of the average closing bid prices for the three (3) trading days prior to December 12, 2000 and (y) an amount equal to seventy percent (70%) of the average closing bid prices for the three (3) trading days having the lowest closing bid prices during the thirty (30) trading days priorcommon stock pursuant to the conversion ~~date. The Company has recognized~~of $68,630 of convertible debt and its related premium and interest ~~expense of $364,000 relating~~expense. See “Note 7. Notes Payable” for additional information related to the ~~beneficial conversion feature of~~common stock issued pursuant to the ~~above notes. Additionally,~~convertible debt.

In June 2022, the Company issued 208,777 shares of common stock pursuant to the conversion of $65,034 of convertible debt and its related premium and interest expense. See “Note 7. Notes Payable” for additional information related to the common stock issued pursuant to the convertible debt.

In June 2022, the Company issued 500,000 shares of common stock related to the acquisition of Watson. See “Note 4. Business Combinations and Acquisition” for additional information related to the common stock issued related to the acquisition of Watson.

Effective January 19, 2021, the Company issued 361,420 pursuant to a ~~warrant~~share exchange agreement. The fair value of $93,369 was included in research and development expenses in the consolidated statements of operations.

Effective March 22, 2021, the Company issued 4,500,000 shares to the board of directors pursuant to the 2020 stock compensation plan. 3,500,000 shares of common stock were granted on July 9, 2020, at $0.08 per share and 1,000,000 shares of common stock were granted on February 25, 2021, at $0.45 per share, for a total fair value of $730,000.

As of June 30, 2022, and 2021, the Company had 72,174,620 and 73,838,662 common shares issued and outstanding, respectively.

On July 9, 2020, the Board authorized the Dalrada Financial Corp 2020 Stock Compensation Plan to be used to compensate the company board of directors. The plan allocates the issuance of up to 3,500,000 shares. On February 25, 2021, the Company amended the plan to issue up to 4,500,000 shares and issued an aggregate of 4,500,000 common shares, or 500,000 shares to each board member (9). 3,500,000 shares of common stock were granted on July 9, 2020, at $0.08 per share and 1,000,000 shares of common stock were granted on February 25, 2021, at $0.45 per share, for a total fair value of $730,000, which is included in the ~~purchasers~~consolidated statements of operations.

On May 10, 2021, the Company granted 1,000,000 options to purchase ~~502,008 shares of the Company's~~ common stock atto its Chief Financial Officer with an exercise price ~~equal to $1.50~~of $0.47 per share. The ~~purchasers may~~options expire in ten years after issuance. The fair value of the options granted was $0.43 per share, or $430,027 which was calculated using the Black-Scholes model.

On November 10, 2021, the Company cancelled 6,500,000 shares issued to the Board of Directors and issued 6,500,000 cashless warrants. 4,500,000 cashless warrants were to vest immediately, and 2,000,000 cashless warrants were to vest over a 12-month period. All cashless warrants carry a $0.45 exercise price and a ten-year term. The Company recorded stock-based compensation related to the 6,500,000 shares in prior periods. The issuance of the warrants ~~through December 12, 2005. During fiscal 2003, 2002~~was treated as a modification and, ~~2001, notes payable~~as a result of $0, $0 and $675,000, respectively, was converted into the Company's common stock. On July 26, 2001, the Company entered into a convertible note purchase agreement with certain investors whereby the Company sold to the investors a convertible debenture in the aggregate principal amount of $1,000,000 bearing interest at the rate of eight percent (8%) per annum, due July 26, 2004, convertible into shares of the Company's common stock. Interest is payable, at the option of the investor, in cash or shares of the Company's common stock. The note is convertible into such number of shares of the Company's common stock as is determined by dividing (a) that portion of the outstanding principal balance of the note by (b) the conversion price. The conversion price equals the lesser of (x) $1.30 and (y) 70% of the average of the 3 lowest closing bid prices during the 30 trading days prior to the conversion date. Additionally, the Company issued a warrant to the investor to purchase 769,231 shares of the Company's common stock at an exercise price equal to $1.30 per share. The investor may exercise the warrant through July 26, 2006. In accordance with EITF 00-27, the Company first determined the value of the ~~note~~stock-based compensation of the shares cancelled being greater than the stock-based compensation related to the cashless warrants issued, no additional stock-based compensation expense was recorded for the year ended June 30, 2022.

On November 30, 2021, the Company issued 2,275,000 cashless warrants to employees and ~~the~~consultants for services performed. 825,000 cashless warrants vested immediately and 1,450,000 cashless warrants vests over a 36-month period. The cashless warrants include an exercise price of $0.45 per share. The cashless warrants expire in ten years after issuance. The fair value of the ~~detachable~~cashless warrants ~~issued in connection with this convertible debenture. The proportionate value of~~granted was $0.73 per share, or $1,651,093 which was calculated using the note and the warrants is $492,000 and $508,000, respectively. The value of the note was then allocated between the note and the preferential conversion feature, which amounted to $0 and $492,000, respectively. Black-Scholes model.

On September 21, 2001, the Company entered into a convertible note purchase agreement with an investor whereby the Company sold to the investor a convertible promissory note in the aggregate principal amount of $300,000 bearing interest at the rate of eight percent (8%) per annum, due September 21, 2004, convertible into shares of the Company's common stock. Interest is payable, at the option of the investor, in cash or shares of the Company's common stock. The note is convertible into such number of shares of the Company's common stock as is determined by dividing (a) that portion of the outstanding principal balance of the note by (b) the conversion price. The conversion price equals the lesser of (x) $0.532 and (y) 70% of the average of the 3 lowest closing bid prices during the 30 trading days prior to the conversion date. Additionally,February 16, 2022, the Company issued ~~a warrant~~2,250,000 cashless warrants to ~~the investor to purchase 565,410 shares~~new members of the ~~Company's common stock at~~Board of Directors. The cashless warrants vest over a 12-month period and hold an exercise price ~~equal to $0.76~~of $0.45 per share. The investor may exercise the warrant through September 21, 2006. In December 2001, $70,000 of this note was converted into 209,039 shares of common stock. In accordance with EITF 00-27, the Company first determined the value of the note and thecashless warrants expire in ten years after issuance. The fair value of the ~~detachable~~cashless warrants ~~issued in connection with this convertible debenture.~~ granted was $0.59 per share, or $1,338,644 which was calculated using the Black-Scholes model.

The ~~proportionate~~intrinsic value of outstanding warrants was $0 and $0 million as of June 30, 2022, and 2021, respectively.

During the ~~note~~year ended June 30, 2022, and 2021, stock-based compensation expense was $2,772,770 and $801,672, respectively. Total unrecognized compensation cost of non-vested options was $1,690,423 on June 30, 2022, which will be recognized over the ~~warrants~~next fiscal year.

Company manages its business and makes its decisions within its segments. The Company classifies its operations into five segments: Health, Energy, Manufacturing, Technology, and Corporate. The Company evaluates the performance of its segments primarily based on revenues and operating income (loss).

Segment information for the years ended June 30, 2022, and 2021 is ~~$106,000~~as follows:

The following table presents property and ~~$194,000, respectively.~~ equipment, net, by country:

The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets. Lease expense for variable lease components is recognized when the obligation is probable.

Operating lease right of use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the ~~note was then allocated between~~lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the ~~note and~~lease term. The Company primarily leases buildings (real estate) which are classified as operating leases. ASC 842 requires a lessee to discount its unpaid lease payments using the preferential conversion feature, which amounted to $0 and $106,000, respectively. On November 7, 2001, the Company entered into a convertible note purchase agreement with an investor whereby the Company sold to the investor a convertible promissory noteinterest rate implicit in the ~~aggregate principal amount~~lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in the Company's leases, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of ~~$200,000 bearing interest at~~lease payments.

The lease term for all the ~~rate of eight percent (8%) per annum, due November 7, 2004, convertible into shares~~Company's leases includes the non-cancellable period of the ~~Company's common stock. Interest is payable, at~~lease plus any additional periods covered by either a Company option to extend (or not to terminate) the option of the investor, in cash or shares of the Company's common stock. The note is convertible into such number of shares of the Company's common stock as is determined by dividing (a) that portion of the outstanding principal balance of the note by (b) the conversion price. The conversion price equals the lesser of (x) $0.532 and (y) 70% of the average of the 3 lowest closing bid prices during the 30 trading days prior to the conversion date. Additionally, the Company issued a warrant to the investor to purchase 413,534 shares of the Company's common stock at an exercise price equal to $0.76 per share. The investor may exercise the warrant through November 7, 2006. In accordance with EITF 00-27, the Company first determined the value of the note and the fair value of the detachable warrants issued in connection with this convertible debenture. The proportionate value of the note and the warrants is $92,000 and $108,000, respectively. The value of the note was then allocated between the note and the preferential conversion feature, which amounted to $0 and $92,000, respectively. On January 22, 2002, the Company entered into a convertible note purchase agreement with an investor whereby the Company sold to the investor a convertible promissory note in the aggregate principal amount of $500,000 bearing interest at the rate of eight percent (8%) per annum, due January 22, 2003, convertible into shares of the Company's common stock. Interest is payable, at the option of the investor, in cash or shares of the Company's common stock. The note is convertible into such number of shares of the Company's common stock as is determined by dividing (a) that portion of the outstanding principal balance of the note by (b) the conversion price. The conversion price equals the lesser of (x) $0.332 and (y) 70% of the average of the 3 lowest closing bid prices during the 30 trading days prior to the conversion date. Additionally, the Company issued a warrant to the investor to purchase 3,313,253 shares of the Company's common stock at an exercise price equal to $0.332 per share. The investor may exercise the warrant through January 22, 2009. In accordance with EITF 00-27, the Company first determined the value of the note and the fair value of the detachable warrants issued in connection with this convertible debenture. The proportionate value of the note and the warrants is $101,000 and $399,000, respectively. The value of the note was then allocated between the note and the preferential conversion feature, which amounted to $0 and $101,000, respectively. On August 5, 2002, the Company entered into a convertible note purchase agreement with an investor in the aggregate principal amount of $100,000 bearing interest at the rate of eight percent (8%) per annum, due August 5, 2005, convertible into shares of the Company's common stock. Interest is payable, at the option of the investor, in cash or shares of the Company's common stock. The note is convertible into such number of shares of the Company's common stock as is determined by dividing (a) that portion of the outstanding principal balance of the note by (b) the conversion price. The conversion price equals the lesser of (x) $0.03 and (y) 70% of the average of the 3 lowest closing bid prices during the 30 trading days prior to the conversion date. In accordance with EITF 00-27, the value of the note was allocated between the note and the preferential conversion feature, which amounted to $57,000 and $43,000, respectively. On January 31, 2003, the Company entered into a convertible note purchase agreement with an investor whereby the Company converted a previous advance from the investor into a convertible promissory note in the aggregate principal amount of $150,000 bearing interest at the rate of eight percent (8%) per annum, due January 31, 2005, convertible into shares of the Company's common stock. Interest is payable, at the option of the investor, in cash or shares of the Company's common stock. The note is convertible into such number of shares of the Company's common stock as is determined by dividing (a) that portion of the outstanding principal balance of the note by (b) the conversion price. The conversion price equals the lesser of (x) $0.0226 and (y) 70% of the average of the 3 lowest closing bid prices during the 30 trading days prior to the conversion date. In accordance with EITF 00-27, the value of the note was allocated between the note and the preferential conversion feature, which amounted to $86,000 and $64,000, respectively. On April 1, 2003, the Company entered into a convertible note purchase agreements with three investors whereby the Company converted a previous advances from the investors into a convertible promissory notes in the aggregate principal amount of $390,000 bearing interest at the rate of eight percent (8%) per annum, due April 1, 2005, convertible into shares of the Company's common stock. Interest is payable, at the option of the investor, in cash or shares of the Company's common stock. The note is convertible into such number of shares of the Company's common stock as is determined by dividing (a) that portion of the outstanding principal balance of the note by (b) the conversion price. The conversion price equals the lesser of (x) $0.0226 and (y) 70% of the average of the 3 lowest closing bid prices during the 30 trading days prior to the conversion date. In accordance with EITF 00-27, the value of the note was allocated between the note and the preferential conversion feature, which amounted to $223,000 and $167,000, respectively. Below is a roll-forward schedule of the convertible debentures:

The weighted average interest rate on notes payable outstanding at June 30, 2003 and 2002, was 8.7% and 9.7% respectively. 9. SHAREHOLDERS' DEFICIENCY Amendment To The Certificate Of Incorporation. - --------------------------------------------------- On September 28, 2001, the Company's shareholders authorized an amendment to the Certificate of Incorporation to: (i) effect a stock combination (reverse split) of the Company's common stock in an exchange ratio to be approved by the Board, ranging from one (1) newly issued share for each ten (10) outstanding shares of common stock to one (1) newly issued share for each twenty (20) outstanding shares of common stock (the "Reverse Split"); and (ii) provide that no fractional shares or scrip representing fractions of a share shall be issued, but in lieu thereof, each fraction of a share that any shareholder would otherwise be entitled to receive shall be rounded up to the nearest whole share. There will be no change in the number of the Company's authorized shares of common stock and no change in the par value of a share of Common Stock. On September 28, 2001, the Company's shareholders approved a Board proposal to amend the Certificate of Incorporation to increase the number of shares of common stocklease that the Company is ~~authorized~~reasonably certain to ~~issue from 200,000,000~~exercise, or an option to ~~500,000,000 shares. On August 9, 2002,~~extend (or not to terminate) the ~~Company's board of directors approved and effected a 1~~lease controlled by the lessor. Options for ~~20 reverse stock split. All share and per share data~~lease renewals have been ~~retroactively restated to reflect this stock split. 5% Series A Convertible, Redeemable Preferred Stock - --------------------------------------------------------- Holders of~~excluded from the ~~5% convertible preferred stock ("Series A") are entitled to receive, when and as declared by the Board of Directors, but only out of amounts legally available~~lease term (and lease liability) for the ~~payment thereof, cumulative cash dividends at the annual rate of $50.00 per share, payable semi-annually. The 5% convertible preferred stock is convertible, at any time, into shares~~majority of the Company's ~~common stock, at a price of $17.50 per common share. This conversion price~~leases as the reasonably certain threshold is ~~subject to certain anti-dilution adjustments,~~not met.

Lease payments included in the event of certain future stock splits or dividends, mergers, consolidations or other similar events. In addition, the Company shall reserve, and keep reserved, out of its authorized but un-issued shares of common stock, sufficient shares to effect the conversion of all sharesmeasurement of the ~~5% convertible preferred stock. In~~lease liability are comprised of fixed payments, variable payments that depend on index or rate, and amounts probable to be payable under the ~~event of any involuntary or voluntary liquidation, dissolution, or winding up of the affairs~~exercise of the Company option to purchase the ~~5% convertible preferred shareholders shall be entitled to receive $1,000 per share, together~~underlying asset if reasonably certain.

Variable lease payments not dependent on a rate or index associated with ~~accrued dividends, to the date of distribution or payment, whether or not earned or declared. The 5% convertible preferred stock is callable, at~~ the Company's ~~option, at call prices ranging~~leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed as probable. Variable lease payments are presented as operating expenses in the Company's income statement in the same line item as expense arising from ~~$1,050 to $1,100 per share. No call on the 5% convertible preferred stock was made during fiscal 2003, 2002 and 2001.~~fixed lease payments. As of June 30, 2003, the accumulated dividend in arrears was approximately $381,000 on the Series A. Private Equity Line Of Credit Agreement - -------------------------------------------- On July 5, 2000, the Company entered into a Private Equity Line of Credit Agreement with Impany Investment Limited ("Impany"). Pursuant to this agreement, the Company has the right, subject to certain conditions, to sell up to $36,000,000 of common stock over the next two years to Impany, which Impany may resell to the public under a registration statement filed with the SEC in September 2000. (The SEC has not yet declared this registration statement effective). Beginning on the date the registration statement is declared effective by the SEC, and continuing for two years thereafter, the Company may in its sole discretion sell, or put, shares of the Company's common stock to Impany. From time to time during the two-year term, the Company may make 18 monthly draw downs, by giving notice and requiring Impany to purchase shares of the Company's common stock, for the draw down amount. Impany's purchase price will be based upon the average of the three lowest closing bid prices of the common stock over the period of five (5) trading days during which the purchase price of the common stock is determined with respect to the put date, which period shall begin two (2) trading days prior to the put date and end two (2) trading days following the put date. During fiscal 2001, the Company sold $750,000 of common stock under this agreement. Funding under this agreement is not currently available to the Company since the Company has not been able to get its registration statement declared effective by the SEC. Common Stock Warrants - ----------------------- In August 2000, the Company issued "retention" warrants to employees that allow the purchase of up to 166,050 shares of common stock at a purchase price of $0.20 per share. These warrants became exercisable in January 2001 for those employees who have remained employed by the Company through that period. The Company took a charge of approximately $175,000 since the exercise price of the warrants was less than the value of the Company's common stock at the date of issuance. In August 2000, the Company issued warrants to officers and key employees that allow the purchase of 106,800 shares of common stock at a purchase price of $6.00 per share. These warrants are exercisable immediately. In December 2000 in connection with the issuance of a convertible note payable, the Company issued warrants to purchase 502,000 shares of the Company's common stock at an exercise price equal to $1.50 per share. The purchasers may exercise the warrants through December 12, 2005. The value of these warrants was estimated at $123,000 using the Black-Scholes option-pricing model. The following assumptions were used: average risk-free interest rate of 4.0%; expected life of 1 year; dividend yield of 0%; and expected volatility of 30%. In connection with the Private Equity Line of Credit Agreement, the Company issued a warrant on July 5, 2000 to Impany to purchase up to 100,000 shares of its common stock at an exercise price equal to $11.40 per share. Impany may exercise the warrant through January 5, 2003. The value of these warrants was estimated at $145,000 using the Black-Scholes option-pricing model. The following assumptions were used: average risk-free interest rate of 4.0%; expected life of 1 year; dividend yield of 0%; and expected volatility of 30%. In connection with certain convertible debentures issued during fiscal 2002, the Company issued to the debenture holders warrants to purchase up to 5,061,450 shares of its common stock at an exercise prices ranging from $0.0332 to $1.30. The warrants expire between July 26, 2006 and January 22, 2009. The value of these warrants was estimated at $1,209,000. The Black-Scholes option-pricing model was used to determine the value of these warrants. The following assumptions were used: average risk-free interest rate of 3.5%; expected life of 5 years; dividend yield of 0%; and expected volatility of 179%. The value was then compared to the value of the underlying convertible debenture and the proportionate value was assigned to the detachable warrants and the underlying convertible debenture. The value of the warrants of $1,209,000 is being amortized over the term of the underlying convertible debenture. The amortization expense for fiscal 2002 was $437,000. In fiscal 2002, the Company also issued 4,750,300 warrants to certain consultants. The exercise prices of the warrants range from $0.10 to $0.80. All these warrants were exercised during fiscal 2002. The value of these warrants was estimated at $1,584,000 using the Black-Scholes option-pricing model. The following assumptions were used: average risk-free interest rate of 3.5%; expected life of 1 year; dividend yield of 0%; and expected volatility of 179%. In fiscal 2003, the Company also issued 2,830,300 warrants to certain consultants. The exercise prices of the warrants range from $0.05 to $0.10. All these warrants were exercised during fiscal 2003. The value of these warrants was estimated at $70,000 using the Black-Scholes option-pricing model. The following assumptions were used: average risk-free interest rate of 3.5%; expected life of 0.25 years; dividend yield of 0%; and expected volatility of 179%. The following is a summary of the warrant activity:

The weighted average remaining contractual life of warrants outstanding at June 30, 2003 is 4.2 years. Of the warrants exercisable at June 30, 2003, 4,565,010 have an exercise price ranging from $0.20 to $0.76 and the remaining 1,437,340 have an exercise price ranging from $1.30 to $10.00. For warrants granted during the year ended June 30, ~~2003 where the exercise price was less than the stock price at the date~~2021, management determined that there were no variable lease costs.

Right of ~~the grant, the weighted-average fair value of such options was $0.025 and the weighted-average exercise price of such options was $0.0558.~~ Use Asset

In ~~connection with the issuance of these warrants,~~May 2020, the Company entered into a five-year lease agreement to lease a commercial building in Escondido, California. The building is owned by a related party. The Company recognized a right of use asset and liability of $1,694,843and used an ~~expense~~effective borrowing rate of ~~$70,000.~~3.0% within the calculation. Imputed interest is $116,482. The ~~fair value of these warrants was determined using~~lease agreements mature in April 2025. Total amounts expensed under the ~~Black-Scholes pricing model. Common Stock Option Plans - ----------------------------~~ lease during the years ended June 30,2022, and 2021, were $396,081 and $343,205, respectively, for which $49,104 is included accounts payable and accrued liabilities – related parties.

In ~~July 1984 ("1984 Plan"), November 1987 ("1988 Plan") and September, 1996 ("1997 Plan"),~~May 2020, the Company ~~adopted stock option plans, under which incentive stock options~~entered into three-year lease agreement to lease a warehouse in Brownsville, Texas. The Company recognized a right of use asset and ~~non-qualified stock options may be granted to employees, directors,~~liability of $177,124 and ~~other key persons, to purchase shares~~used an effective borrowing rate of 3.0% within the ~~Company's common stock, at an exercise price equal to no less than the fair market value of such stock on the date of grant, with such options exercisable~~calculation. Imputed interest is $8,399. The lease agreements mature in installments at dates typically ranging from one to not more than ten years after the date of grant. Under the terms of the 1988 and 1997 Plans, loans may be made to option holders, which permit the option holders to pay the option price, upon exercise, in installments. A total of 10,600 and 50,000 shares of common stock are authorized for issuanceApril 2025. Total amounts expensed under the 1988 and 1997 Plans, respectively. No shares are available for future issuance under the 1984 Plan due to the expiration of the plan during 1994. As of June 30, 1999, options to acquire 100 shares were outstanding under the 1984 Plan and options to acquire 33,500 shares remained available for grant under the 1988 and 1997 Plans. In addition, the Board of Directors, outside the 1984, 1988 and 1997 Plans ("Outside Plan"), granted to employees, directors and other key persons of ITEC or its subsidiaries options to purchase shares of the Company's common stock, at an exercise price equal to no less than the fair market value of such stock on the date of grant. Options are exercisable in installments at dates typically ranging from one to not more than ten years after the date of grant. In October 1995, the Board of Directors authorized the exercise price for employee options and warrants to be reduced to the current market value. Accordingly, the exercise price on an aggregate of 911 and 13,750 options under the 1988 and Outside Plans, respectively, were canceled and reissued at an exercise price of $20.00 per share. The 1997 Employee Stock Purchase Plan ("Purchase Plan") was approved by the Company's shareholders in September 1996. The Purchase Plan permits employees to purchase the Company's common stock at a 15% discounted price. The Purchase Plan is designed to encourage and assist a broad spectrum of employees of the Company to acquire an equity interest in the Company through the purchase of its common stock. It is also intended to provide participating employees the tax benefits under Section 421 of the Code. The Purchase Plan covers an aggregate of 25,000 shares of the Company's common stock. All employees, including executive officers and directors who are employees, customarily employed more than 20 hours per week and more than five months per year by the Company are eligible to participate in the Purchase Plan on the first enrollment date following employment. However, employees who hold, directly or through options, five percent or more of the stock of the Company are not eligible to participate. Participants may elect to participate in the Purchase Plan by contributing up to a maximum of 15 percent of their compensation, or such lesser percentage as the Board may establish from time to time. Enrollment dates are the first trading day of January, April, July and October or such other dates as may be established by the Board from time to time. On the last trading day of each December, March, June and September, or such other dates as may be established by the Board from time to time, the Company will apply the funds then in each participant's account to the purchase of shares. The cost of each share purchased is 85 percent of the lower of the fair market value of common stock on (i) the enrollment date or (ii) the purchase date. The length of the enrollment period may not exceed a maximum of 24 months. No participant's right to acquire shares may accrue at a rate exceeding $25,000 of fair market value of common stock (determined as of the first trading day in an enrollment period) in any calendar year. No shares have been issued under the Purchase Plan. 2001 Stock Option and Stock Purchase Plans. - ------------------------------------------------- The Company's shareholders approved the 2001 Stock Option Plan, pursuant to which 5,000,000 shares of common stock are reserved for issuance to eligible employees and directors of, and consultants to, the Company or any of its subsidiaries. Upon expiration, cancellation or termination of unexercised options, the shares of the Company's Common Stock subject to such options will again be available for the grant of options under the 2001 Stock Option Plan. Options granted under the 2001 Stock Option Plan may either be incentive or nonqualified stock options. The Company's shareholders approved the 2001 Stock Purchase Plan, as amended, which enables eligible employees to purchase in the aggregate up to 2,500,000 shares of common stock. Stock Option Activity - ----------------------- The following is a summary of the stock option activity:

~~The weighted average remaining contractual life of options outstanding issued under the Stock Option Plans is 2.6 years at June 30, 2003. For options granted~~lease during the year ended June ~~30, 2003 where the exercise price was less than the stock price at the date of the grant, the weighted-average fair value of such options was $0.012~~20, 2022, and ~~the weighted-average exercise price of such options was $0.0124. In connection with the issuance of these options, the~~2021 were $62,054 and $45,329, respectively.

The Company’s Prakat subsidiary entered into a lease agreement to lease office space through September 2026. The Company recognized a right of use asset and liability of $140,874 and used an ~~expense~~effective borrowing rate of $09.2% within the calculation.

In August 2020, the Company’s Likido subsidiary entered in a new operating agreement for warehouse space. The lease matured in July 2021. Upon maturity, rent payments are made on a month-to-month basis.

In June 2017, the Company’s IHG subsidiary entered a lease for 3 separate office suites in San Diego, California. The lease expired in January 2022.

In May 2021, the Company’s PSC subsidiary entered into a three-year and 6-month lease agreement to lease a medical office space in Poway, California. The Company recognized a right of use asset and liability of $277,856 and used an effective borrowing rate of 3.0% within the calculation.

In January 2022, the Company’s IHG subsidiary entered into a five-year and 5-month lease agreement to lease a medical office space in Chula Vista, California. The Company recognized a right of use asset and liability of $287,345 and used an effective borrowing rate of 3.0% within the calculation.

In May 2022, the Company’s IHG subsidiary entered into a six-year and 3-month lease agreement to lease a office space in San Diego, California. The Company recognized a right of use asset and liability of $916,666 and used an effective borrowing rate of 4.0% within the calculation.

InAugust 2020, the Company’s DepTec subsidiary entered into a five-year lease agreement to lease office space. The Company recognized a right of use asset and liability of $140,569 and used an effective borrowing rate of 3.0%

In May 2021, the Company’s Watson subsidiary entered into a three-year lease agreement to lease a building in Florence, Alabama. The Company recognized a right of use asset and liability of $90,827 and used an effective borrowing rate of 3.0%

The following are the expected lease payments as of June 30, 2022, including the total amount of imputed interested related:

See “Item 3. Legal Proceedings” for additional information related ~~since the exercise price was equal~~ to the ~~value~~lawsuits.

We file income tax returns in the United States federal jurisdiction and in various state, local, and foreign jurisdictions. In the normal course of ~~the Company's stock at the date of issuance. Common stock issued~~business, we are subject to examination by taxing authorities. The Company is currently on extension and has yet to file their income tax return for ~~services and compensation - ------------------------------------------------------- The table below shows all the issuances of common stock for services during~~ the year ended June 30, ~~2003, 2002 and 2001. The value~~2022.

As of the services was derived by multiplying the market value of the Company's common stock at the date a transaction for services was entered into by the number of shares issued. Common stock issued for services and compensation - ------------------------------------------------------- The table below shows all the issuances of common stock for services during the year ended June 30, 2003, 2002 and 2001. The value of the services was derived by multiplying the market value of the Company's common stock at the date a transaction for services was entered into by the number of shares issued.

~~10. SEGMENT AND GEOGRAPHIC INFORMATION ------------------------------------- During fiscal 2003,~~2022, the Company managed and internally reported the Company's business as three (3) reportable segments as follows: (1) imaging products; (2) imaging software; (3) professional employer organization Segment information for the fiscal year ended June 30, 2003, 2002, and 2001 was as follows:

Information regarding revenue by products and service groups is not presented for the fiscal year ended June 30, 2001 because it is currently impracticable to do so due to various reorganizations of the Company's accounting systems. A comprehensive accounting system was implemented during fiscal 2002. As of and during the years ended June 30, 2003, 2002, and 2001, no customer accounted for more than 10% of consolidated accounts receivable or total consolidated revenues. Net sales from principal geographic areas were as follows:

11. INCOME TAXES The Company's provision for income taxes is accounted for in accordance with SFAS 109. SFAS 109 requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under the SFAS 109 asset and liability method, deferred tax assets and liabilities are determined based upon the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is then provided for deferred tax assets that are more likely than not to not be realized. The provision (benefit) for income taxes is as follows for the years ended June 30:

~~The components of deferred income taxes are as follows at June 30:~~

~~The Company's~~had federal and state net operating loss ~~carryforwards~~carry forwards of $26,089,624 that may be offset against future taxable income which will begin to expire in ~~various years~~2038 through ~~2017.~~ 2041.

The ~~Company has made numerous equity issuances that could result in limitations on the annual utilization~~reconciliation of ~~the Company's net operating loss carryforwards. The Company has not performed an analysis to determine the effect of such changes. The provision for~~ income ~~taxes results in an effective rate that differs from the federal statutory rate. Reconciliation between the actual~~ tax ~~provision and taxes~~expense computed at the U.S. federal statutory rate ~~is as follows for~~to the ~~years ended June 30:~~

12. COMMITMENTS AND CONTINGENCIES ------------------------------- Lease Commitment - ----------------- The Company leases its operating facilities under a lease agreement that expires in March 2006. Subsequent to June 30, 2002, the Company signed a new a new lease for its corporate facility that expires in October 2005 that is included in the future minimum lease payments in that table below. In addition, the Company leases other facilities and equipment under operating and capital short-term leases. Total rental expense was approximately $228,000, $492,000 and $457,000income tax provision for the years ended June 30, ~~2003, 2002~~2022, and ~~2001, respectively. Future minimum lease payments under non-cancelable capital and operating leases with initial or remaining terms of one year or more are~~2021 is as follows:

~~Legal Matters - --------------~~

The provision for income tax for the year ended June 30, 2022, is included in selling, general and administrative expenses.

Deferred income taxes reflect the net tax effects of: (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes; and (b) operating loss and tax credit carryforwards. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In ~~October 1999,~~making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Significant components of deferred tax assets as of June 30, 2022, and 2021 were as follows:

Reconciliation of the ~~law firms of Weiss & Yourman and Stull, Stull & Brody made a public announcement that they had filed a lawsuit against~~statutory federal income tax to the ~~Company and certain current and past officers and/or directors, alleging violation of federal securities laws and, in November 1999, the lawsuit, filed~~Company's effective tax:

The difference in the ~~name~~effective rate and the statutory rate is due to permanent differences, primarily deductibility of ~~Nahid Nazarian Behfarin,~~penalties and interest on ~~her own behalf~~accrued payroll tax liabilities and ~~others purported to be similarly situated, was served on~~ the Company. In January 2003, the Company entered into a Stipulation of Settlement with the plaintiffs. It agreed to pay the plaintiffs 5,000,000 shares of common stock and $200,000 in cash. The Parties have accepted the settlement. ITEC has issued the shares, and its insurance carrier has paid the $200,000 cash payment. Pursuant to a hearing in May 2003 the Court provided approval to the settlement. On August 22, 2002, the Company was sued by its former landlord, Carmel Mountain #8 Associates, L.P. or past due rent on its former facilities at 15175 Innovation Drive, San Diego, CA 92127. ITEC was a party to a lawsuit filed by Symphony Partners, L.P. related to its acquisition of SourceOne Group, LLC. As reported on Form 8-K, dated July 22, 2003, the plaintiffs sought payment of $702 thousand. In June 2003, the Company entered into a settlement with the plaintiffs for a cash payment of $274 thousand, which has been paid. ITEC is one of dozens of companies sued by The Massachusetts Institute of Technology, et al., related to a patent held by the plaintiffs that may be related to part of the Company's ColorBlind software. Subsequent to the period reported in this filing, in June 2003, the Company entered into a settlement with the plaintiffs who have agreed to dismiss their claims against ITEC with prejudice in exchange for a settlement fee payment of $10,000, which has been paid. The Company has been sued in Illinois state court along with AIA/Mirriman, its insurance brokers by the Arena Football League-2 ("AFS"). Damages payable to AF2, should they win the suit, could exceed $700,000. The Company expects to defend its position and rely on representations of its insurance brokers. Throughout fiscal 2001, 2002 and 2003, and through the date of this filing, approximately fifty trade creditors have made claims and/or filed actions alleging the failure of the Company to pay its obligations to them in a total amount exceeding $3.0 millions which has been reduced to $1.8 million during the 2003. These actions are in various stages of litigation, with many resulting in judgments being entered against the Company. Several of those who have obtained judgments have filed judgment liens on the Company's assets. These claims range in value from less than one thousand dollars to just over one million dollars, with the great majority being less than twenty thousand dollars. In connection with ITEC's acquisition of controlling interest of Greenland Corporation, the following are the outstanding legal matters for Greenland Corporation: Greenland, along with Seren Systems ("Seren"), its then current and primary software developer and supplier for its own ABM terminals, was in the process of completing development of the check cashing service interface to the Mosaic Software host system being implemented to support a large network of V.com terminals. In September 2000, Seren unilaterally halted testing and effectively shutdowns any further check cashing development for the V.com project. The parties participating in this project may have been financially damaged,gains related to the ~~delay in performance by Greenland and Seren. None~~expiration of the parties have brought suit against Greenland and/or Seren at this time. There is no assurance, however, that such suit(s) will not be brought in the future. On May 23, 2001 Greenland filed a Complaint in San Diego County naming Michael Armani as the defendant. The Complaint alleges breachstatute of ~~contract by Michael Armani in connection with two separate stock purchase agreements. Greenland seeks damages in the amount of $474,595. On August 7, 2001 Greenland filed a request~~limitations for ~~Entry of Default against Mr. Armani in the amount of $474,595 and the court granted entry of default. Subsequently Mr. Armani filed a motion to set aside the entry of default and on~~accrued payroll tax liabilities.

In July 2022 through October 26, 2001 the court granted said motion and the entry of default was set aside. Greenland and Mr. Armani participated in mediation and as a result entered into a settlement agreement whereby Mr. Armani agreed to make certain cash payments to Greenland and the parties entered into mutual release of all claims. Mr. Armani defaulted in his obligation to make the first cash payment and consequently, Greenland obtained a judgment against Mr. Armani for $100,000. Greenland is continuing its efforts to collect on the judgment. On May 23, 2001 Arthur Kazarian, Trustee for the General Wood Investment Trust (the "Landlord") filed a Complaint in San Diego County naming Greenland as a defendant. The Complaint alleges breach of contract pursuant to the terms of the lease agreement between31, 2022, the Company and the Landlord for the real property located at 1935 Avenida Del Oro, Oceanside, California and previously occupied by Greenland. The Complaint seeks damages in the amount of approximately $500,000. Although Greenland remains liable for the payments remaining for the term of the lease, the Landlord has a duty to mitigate said damages. Greenland recorded a lease termination liability of $275,000 during the year ended December 31, 2001. Greenland entered into a settlement agreement with Arthur Kazarian, Trustee for the General Wood Investment Trust (the "Landlord") whereby Greenland agreed to pay the sum of $220,000 to the Landlord in installments payments of $20,000 in May 2002, $50,000 in October 2002 and the remaining balance in December 2002. In the event Greenland defaults in any or all scheduled payments, the Landlord is entitled to a stipulated judgment of approximately $275,000. Greenland was unable to make the scheduled payments and as a result, on July 8, 2002, the Landlord has entered a judgment lien against Greenland in the amount of $279,654. Greenland entered into an agreement with Intellicorp, Inc. ("Intellicorp") whereby Intellicorp agreed to invest $3,000,000 in exchange for seats on the board of directors and restricted shares of common stock of Greenland. After making the initial payment of $500,000, Intellicorp defaulted on the balance. Greenland sued for recovery of the unpaid $2,500,000. Greenland had issued ~~46,153,848~~8,132,415 shares of common stock for the investment, which were returned to Greenland and cancelled. A default judgment was entered against defendant IntelliCorp, IntelliGroup, and Isaac Chang. In June 2003, a judgment was enteredconversion of $1,231,471 in ~~the Superior Court~~convertible notes held by YA II PN, LTD at an average conversion price of the State of California, County of San Diego, against the defendants in favor of Greenland. The amount of the judgment was $3,950,640.02 and was comprised of an award of $2,950,640.02 for compensatory damages and an award of $1,000,000.00 for punitive damages. The Court found, by clear and convincing evidence that the Defendants acted maliciously and with the intent to defraud Greenland when they entered into a private placement transaction to fund Greenland. The defendant's ability to pay is unknown. The appeal period has expired and the Company is beginning the collection process. Max Farrow, a formal officer of Greenland, filed a Complaint in San Diego County naming Greenland, Thomas J. Beener, Intelli-Group, Inc., Intelli-Group LLC and Intelli-Corp, Inc. as defendants. The Complaint alleges breach of contract in connection with Mr. Farrow's resignation as an officer and director of the Company in January 2001. Greenland and Mr. Thomas Beener, entered into a settlement agreement with Max Farrow whereby Mr. Farrow agreed to release Mr. Beener from all claims, obligations etc., in exchange for the issuance of 8 million restricted shares of Greenland common stock. The good faith settlement was approved by the court and the agreed upon consideration was delivered to Mr. Farrow. Greenland entered into a settlement with Farrow whereby Greenland agreed to a judgment of $125,000. However, the judgment will not be enforced until such time as efforts to collect against IntelliCorp et al have been exhausted. In the event funds are collected from IntelliCorp. Mr. Farrow will receive the first $125,000 plus 50% of the next $200,000 collected. Greenland will retain all amounts collected thereafter. Fund Recovery, a temporary staffing services filed a complaint against Greenland alleging breach of contract. A summary judgment motion is pending. Greenland recorded the liability amount of $14,000 in the consolidated financial statements. John Ellis has filed a demand for arbitration in San Diego County against Greenland seeking damages of approximately $70,000 for an alleged breach of contract action. Greenland believes it has valid defenses to the allegations. Mr. Ellis appears to have abandoned this action in arbitration and has elected to pursue a civil suit. Ellis has appeared to have abandoned arbitration. However, arbitration action is proceeding and the parties are attempting mediation to avoid the cost and time of an arbitration proceeding. NKS Enterprises, Inc. commenced a legal action against Greenland in San Diego Superior Court in Vista California seeking damages in connection with the purchase and operation of a MaxCash ABM. The case was settled in December 2002. The maximum amount to be paid under the settlement is $100,000. In exchange, Greenland will receive the MaxCash ABM sold to NKS Enterprises. This amount was recorded as a liability in the consolidated financial statements. In connection with the Company's controlling interest of Quik Pix, Inc., the Company is not aware of any pending litigation. From time to time, Greenland and QPI may be involved in litigation relating to claims arising out of their operations in the normal course of business. 13. GAIN ON EXTINGUISHMENT OF DEBT ---------------------------------- During the year ended June 30, 2003, the Company recognized a gain on extinguishment of debt of $2,370,000. This gain resulted primarily from the write off of stale accounts payable as discussed below, as well as a gain on a settlement of a long-term note payable of $702,000, which was settled for $274,000 in cash resulting in a gain of $428,000. With respect to the write-off of accounts payable, the Company reviewed its accounts payable and determined that $1,942,000 was associated with unsecured creditors. The Company, based upon an opinion provided by independent legal counsel, has been released as the obligator of these liabilities. Accordingly, management has elected to adjust its accounts payable and to classify such adjustments as extinguishment of debt. 14. SUBSEQUENT EVENTS ------------------ From$0.1514.

On July 1, ~~2003 to November 6, 2003,~~2022, the Company issued ~~109,963,339~~500,000 shares of ~~its~~ common stock ~~to consultants, for warrant exercises, for conversion~~as part of ~~convertible debt, and~~the consideration for the ~~reduction~~acquisition of ~~debt. SELECTED QUARTERLY FINANCIAL DATA - ------------------------------------ (unaudited) (in thousands, except~~Deposition Technologies.

On October 10, 2022, the Company acquired 100% of Bothof Brothers Construction, Inc., a California corporation, for a transaction valued at $1,530,000, of which $1,080,000 will be paid in salary to the seller over a 36-month period, plus 3,000,000 cashless warrants with a strike price of $0.15 per share, ~~amounts)~~ valued at $450,000. The warrants will vest quarterly over a 24-month period.

(In thousands) . . . . . . . . . . . . . . . . QUARTERS ENDED - ---------------------------------------------- ---------------- SEPT. 30, 2002 DEC. 31, 2002 MAR. 31, 2003 JUNE 30, 2003 ---------------- --------------- --------------- --------------- Net revenues . . . . . . . . . . . . . . . . . $ 1.106 $ 397 $ 576 $ 2,111 - ---------------------------------------------- ---------------- --------------- --------------- --------------- Net income (loss) before cumulative effect of accounting change . . . . . . . . . . . . . (2,052) (652) 42 (4,193) - ---------------------------------------------- ---------------- --------------- --------------- --------------- Cumulative effect of accounting change . . . . - - - - - ---------------------------------------------- ---------------- --------------- --------------- --------------- Net income (loss). . . . . . . . . . . . . . . $ (2,052) $ (652) $ 42 $ (4,193) - ---------------------------------------------- ---------------- --------------- --------------- --------------- Net income (loss) per share before cumulative effect of accounting change - basic . . . . $ (0.08) $ (0.01) $ (0.00) $ (0.03) - ---------------------------------------------- ---------------- --------------- --------------- --------------- Cumulative effect of accounting change per share - basic . . . . . . . . . . . . . . . $ (0.08) $ (0.01) $ (0.00) $ (0.03) - ---------------------------------------------- ---------------- --------------- --------------- --------------- Net income (loss) per share - basic. . . . . . $ (0.08) $ (0.01) $ (0.00) $ (0.03) - ---------------------------------------------- ---------------- --------------- --------------- --------------- Net income (loss) per share - diluted. . . . . $ (0.08) $ (0.01) $ (0.00) $ (0.03) - ---------------------------------------------- ---------------- --------------- --------------- --------------- Shares used in per share calculation (basic) . 24,662 66,284 140,754 157,744 - ---------------------------------------------- ---------------- --------------- --------------- --------------- Shares used in per share calculation (diluted) 24,662 66,284 140,754 157,744 - ---------------------------------------------- ---------------- --------------- --------------- ---------------
	F-40

~~ITEM~~

Item 9. ~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. ~~CONTROLS AND PROCEDURES Within 90 days prior to the date~~Controls and Procedures

Evaluation of ~~this report, we carried out an evaluation, under the supervision~~Disclosure Controls and Procedures

Our management, with the participation of ~~the Company's management, including~~ our ~~Chief Executive Officer~~principal executive and ~~our Principal Accounting Officer, of~~principal financial officer, evaluated the effectiveness of our disclosure controls and procedures ~~pursuant to Rule 13a-14 under~~as of the ~~Securities Exchange Act~~end of ~~1934, as amended.~~the period covered by this Annual Report. Based ~~upon~~on that evaluation, ~~the Chief Executive Officer~~our CEO and ~~the Principal Accounting Officer~~our CFO, concluded that our disclosure controls and procedures ~~are~~as of the end of the period covered by the Annual Report were not effective ~~in all material respects, with respect to~~and that the ~~recording, processing, summarizing, and reporting, within the time periods specified in the Securities and Exchange Commission's rules and forms, of~~ information required to be disclosed by us in ~~the~~ reports ~~that we file or submit~~filed under the Exchange ~~Act. There were~~Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our CEO and our CFO, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no ~~significant changes~~evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of our CEO and our CFO, evaluated the effectiveness of our internal controls orover financial reporting as of June 30, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in ~~other factors~~Internal Control – Integrated Framework. Based on this evaluation, our management, with the participation of the CEO and CFO, concluded that, ~~could significantly affect~~as of June 30, 2022, our internal controls ~~subsequent~~over financial reporting were not effective.

During the year ended June 30, 2021, the CFO determined that Management's assessment of the effectiveness of the registrant's internal control over financial reporting is as of the year ended June 30, 2022. The Company believes that internal control over financial reporting is not effective. We and our independent registered public accounting firm have identified the following current material weakness, which some were first identified on June 30, 2021, and others identified as June 30, 2022, considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations:

This Annual Report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report.

The effectiveness of our internal control over financial reporting as of June 30, 2022, has not been audited by our independent registered public accounting firm by virtue of our exemption from such requirement as a smaller reporting company.

There have been no changes in internal control over financial reporting except as noted above.

Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

The following table sets forth certain information regarding our directors, executive officers and key employees as of June 30, 2020 and as of the date of the ~~evaluation referred~~filing of this report:

Brian Bonar, CEO and director has over 16 years with Dalrada. Prior to ~~above.~~ ~~PART III ========= ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. - -------- -------------------------------------------------------- DIRECTORS~~joining Dalrada, Mr. Bonar worked for more than eighteen years with IBM in the US, Asia, and Europe. He has formerly worked at QMS, and Rastek Corporation, The ~~directors~~Solvis Group, and was on the Board of Directors of Allegiant Professional and Alliance National Insurance Company. Mr. Bonar is also the founder of Bezier Systems.

Mr. Bonar is involved with various private entities and has been recognized by the “Cambridge Who’s Who” on several occasions as the executive of the year. In 2012, he was recognized as the CEO of the fastest growing public company in Orange County. He is the Chairman of Trucept, Inc. as well as President and Chief Executive Officer of various privately held corporations. He is also on the board of American Marine LLC and founded American Management Services (AMS) Outsourcing, a PEO-focused company.

Mr. Bonar holds the honorary title, Lord Bonar of Wilcrick, Cardiff, Wales United Kingdom. He received a BSC in Mechanical Engineering from the Strathclyde University, Glasgow Scotland and an MBA and PHD in the field of International Business Development Studies from the Stafford University, England UK.

Brian McGoff is a seasoned leader with over 25 years of experience in operations, complex sales, M&A, tech transfer and commercialization of early-stage software, business strategy for venture backed start-ups, and executive ~~officers~~communications. He is recognized for developing new strategies and solutions focused on improving operations and increasing revenue across multiple industries including health care, life sciences, higher education, financial services, retail/CPG, and government. These roles involved working with key business and technology stakeholders across Asia, Middle East, Africa, Europe, Australia, New Zealand, Latin America, Central America, and Canada providing first-hand experience in global business and technology trends and markets.

Prior to Dalrada Financial Corporation, Mr. McGoff contributed most recently to HSP Advisors for a short time in 2022, six years with IBM Corporation - Philadelphia, Pennsylvania from 2016 through 2022 as Business Unit Executive, Public Sector, AI Applications , four years with Health Start Partners – Media, Pennsylvania from 2012 through 2016 as Chief Operating Officer, and twelve years with IBM – New York, New York from 2000 through 2012 having held various executive positions.

Kyle McCollum, is current the Chief Financial Officer of the Company. Prior to that, Mr. McCollum was with Better Choice Company ~~their ages~~Inc. (ticker: BTTR) for three years where Mr. McCollum acted as Corporate Secretary and ~~positions~~SVP of Corporate Finance.

In 2018, Mr. McCollum helped form Bona Vida, a pet CBD company, were he served as Chief Financial Officer. In May 2019, Bona Vida merged into Better Choice Company Inc., a publicly listed pet health and wellness company (ticker: BTTR), where Mr. McCollum acted as Corporate Secretary and SVP of Corporate Finance. With Better Choice Company, he assisted in the merger of Bona Vida and TruPet with Better Choice Company as well as the acquisition of Halo Purely for Pets. Mr. McCollum also guided several 10-Q’s and its 2019 10-K with audit.

From 2013 to 2017 Mr. McCollum was Chief Financial Officer of Das & Co., a New York based family office. At Das & Co. Mr. McCollum managed all accounting, tax, audit, portfolio valuation, asset management, financial/investment reporting, and operations for Landmark Banyan Real Estate Fund, a US$200 million India Real Estate Fund comprised of over 10 developments. Mr. McCollum was also Chief Operating Officer of all Das & Co.’s holding and operating subsidiaries including Apex Resources, its mining company in Tanzania, and LDC Developers, its real estate development company.

Mr. McCollum has also served as Director of Finance at 29th Street Capital, a California based real estate investment firm with a publicly stated asset value base of US $500 million. Prior to 29th Street Capital, Mr. McCollum was Director of Finance and Corporate Compliance at Fletcher Robbe International Attorneys at Law, an international transactional and securities-based law firm with offices in Century City, New York, Hong Kong and Beijing. While at Fletcher Robbe International Attorneys at Law, Mr. McCollum focused on complex finance transactions, mergers & acquisitions, securities and guided several foreign listed public companies on international cross-listing to U.S. public exchanges. Mr. McCollum earned a Bachelor of Science and Master of Accountancy degree from the University of Montana and holds a Certified Public Accounting license.

Pauline Gourdie, Director - Ms. Gourdie is currently the owner/operator of CSL Staffing (“CSL”), which she established in 2016. CSL is a boutique general staffing service, providing staffing solutions for businesses in the San Diego and greater Southern California areas. For seven years prior to that, Ms. Gourdie was the President/Owner of Gourdie Consulting Corp which provided business consulting services across Americas & Europe. Ms. Gourdie possesses over 20 years of experience managing individuals and teams and was instrumental in the implementation of fulfilment and manufacturing centers for IBM and Lenovo in the United States, United Kingdom, Eastern Europe, and China.

Ms. Gourdie holds a Bachelor of Science degree in Industrial and Labor Relations from Cornell University and brings to Dalrada an extensive knowledge of supply chain management, customer account and relationship management, and recruitment and development. Ms. Gourdie was appointed to the Dalrada board as of July 29, 2019 and does not receive compensation in her role as a director.

Brian Kendrick, Director – Kendrick has been the Managing Director of Allegro Jet Management since 2014. Mr. Kendrick has over 30 years of business experience starting with a short stint with Burroughs as a computer programmer. Mr. Kendrick developed one of the industry's first systems for tracking owners of aircraft throughout the world and managed all aspects from the inspection and purchase of aircraft to delivery. Appointed July 29, 2019.

Fletcher A. Robbe, Director - As managing partner of Fletcher Robbe International Attorneys at Law, Mr. Robbe brings 43 years of international and domestic business and financial acumen as well as practical hands-on experience to the personal and confidential representation of his clients comprised of Foreign Governments, Multi-National Public and Private Corporations, Investment Banking Institutions, Family Offices and Private Wealth Individuals. Mr. Robbe previously served as General Counsel for the Los Angeles World Trade Association. Appointed July 29, 2019.

Harvey Hershkowitz, Director - Mr. Hershkowitz for the last five years has been the chairman of the Board for Palomar Hospital. Mr. Hershkowitz has more than 35-years’ experience in the healthcare industry with the ~~Company~~top Fortune 10 companies including consulting, Information Technology (IT), software, professional services, nursing schools, management, building and development. In addition, he has successfully spearheaded companies in business, IT, residential, wellness centers, commercial development, acute care hospitals, skilled nursing facilities, major physician groups, biosciences, pharmaceutical and healthcare construction boards. Serving on many boards including being Chairman to many, Mr. Hershkowitz also has a notable track record with spring-boarding start-ups, raising capital, and positioning corporations in the global market where he actively expands his reach and network. On February 22, 2022, the Corporation appointed Harvey Hershkowitz as President of Dalrada Health Products.

Anthony Zolezzi is currently the CEO of Diomics Inc. as of ~~June 30, 2003 are~~August 2019 and is on the Board of Directors of TwinLab and Wild Oats Organic Marketplace. Previously, in 2018, Mr. Zolezzi was named the CEO of Twinlab Consolidated Holdings, Inc., and appointed to Twinlab’s Board of Directors in May 2018. Mr. Zolezzi, for the last six years, is also an operating partner at Pegasus Capital Advisors, a private asset management company focused on the wellness sectors. As a serial entrepreneur, Mr. Zolezzi has dedicated his career to the well-being of both people and the planet, co-founding businesses that provide potential solutions to both health concerns and key environmental issues as ~~follows:~~

~~Brian Bonar~~well as focusing on ways that biotech breakthroughs can enhance consumer health and wellness. Zolezzi has ~~served as~~authored and co-authored six books.

Mr. Zolezzi is a ~~director~~graduate of Loyola Marymount University, earned an MBA at San Diego State and completed the Executive Program at the Kellogg School at Northwestern. Zolezzi is a former board member of Vitamin Angels, a non-profit focused on providing nutritional support in impoverished countries. He also co-founded and is a former board member of the ~~Company~~Organic Center for Education and Promotion, and a former member of the Organic Alliance Board of Directors. Mr. Zolezzi also serves as an advisory board member with the Menus of Change program, a joint venture between The Culinary Institute of America and Harvard T.H.Chan School of Public Health, and the Keurig Corporation.

Tom Giles, since ~~August 1995~~November 2017, is the chief Revenue Officer of Corporate Development and ~~became~~Co-founder of WeR.Ai.Prior to WeR.Ai., Mr. Giles was the ~~Company's~~General Partner Healthcare at Frost Data Capital from July 2014 to June 2017, the General Manager of Healthcare at Nex Cubed from June 2017 to December 2018, and an advisor at ARVDRK Technologies from September 2017 to December 2018. Though the years, Mr. Giles also held high level positions at companies such as IBM and Trivium Health Inc. Mr. Giles is currently an adviser to the Boards at the following companies: Trials.ai, Diomics Corporation, Narrative Wave, and has been a board member of several other companies.

Mr. Giles' executive management leadership includes technology and healthcare industries with a focus on artificial intelligence (AI) and machine learning (ML) to reduce time and expense to market. Mr. Giles' accomplishments include raising more than $200 million in capital for startups and venture funds in addition to building strategic partnerships with some of the largest global companies including IBM, GE, Accenture, T-Mobile, and DST. He has also held industry lead and advisory roles in early-stage ventures and incubators. Mr. Giles holds a Bachelor’s degree in Business from San Diego State University, California. On March 3, 2022, Dalrada Energy Services, a subsidiary of Dalrada Financial Corp., appointed Tom Giles as President.

Dr. David Bacon is currently an active Navy CAPTAIN with 22 years of active-duty service. During the SARS-CoV-2 pandemic, Dr. Bacon was responsible for reviewing proposals for funding in the areas of therapeutics, diagnostics, and wearable monitors. He reviewed more than 400 proposals and provided his expert opinion on the scientific rationale and study design. Dr. Bacon’s professional background includes: Former program Area Manager for the DoD’s HIV and Emerging Infectious Diseases research programs; Science and Technology Program management/program development Chemistry Division, Naval Research Laboratory; Deployed as Officer-in-Charge, Kandahar Airfield, Afghanistan and Camp Arifjan, Kuwait; Deployed as sole microbiologist aboard USNS Comfort in support of Continuing Promise 2009; Head, Laboratory Sciences, Navy Environmental and Preventive Medicine Unit 2, Norfolk, VA; Director, Parasitology Program, Naval Medical Research Unit 6 (NAMRU-6), Lima, Peru, Deputy Director, Parasitology Department, NAMRU-6, Lima, Peru; Member of scientific assessment team commissioned by the Iraq Survey Group to investigate biological weapons programs in Baghdad, Iraq; Deployed as element commander of a biological weapons detection laboratory, Baghdad, Iraq and Principal Investigator, Malaria Program Naval Medical Research Center, Research Area.

Dr. Bacon earned a B.S. from the University of New Hampshire (Medical Technology) in May 1990 and a Ph.D. from the University of New Hampshire (Microbiology) in May 1997.

The Honorable Bijan R. Kian, currently the Chairman of the Board ~~in December 1999. From August 1992 through April 1994,~~of Directors of TODAQ USA Corporation since July 2020, as well as the Chairman of the Board of directors of Lenders Technology for the last 10 plus years, was twice confirmed by the United States Senate and has served three presidents of the United States from both political parties. In 2016, Mr. ~~Bonar~~Kian served as Deputy Lead on the ~~Company's~~Office of Director of ~~Technology Sales and from April 1994 through September 1994 as~~National Intelligence for the ~~Company's Vice~~ President ~~Sales and Marketing. In September 1994,~~Transition Team. Formerly, Mr. Bonar became the Company's Executive Vice President and, in July 1997, was appointed as the Company's President and Chief Operating Officer. In April 1998 Mr. Bonar assumed the post of CEO. From 1991 to 1992, Mr. Bonar was Vice President of Worldwide Sales and Marketing for Bezier Systems, Inc., a San Jose, California-based manufacturer and marketer of laser printers. From 1990 to 1991, he was Worldwide Sales Manager for Adaptec, Inc., a San Jose-based laser printer controller developer. From 1988 to 1990, Mr. Bonar was Vice President of Sales and Marketing for Rastek Corporation, a laser printer controller developed located in Huntsville, Alabama. From 1984 to 1988, Mr. Bonar was employed as Executive Director of Engineering at QMS, Inc., an Alabama-based developer and manufacturer of high-performance color and monochrome printing solutions. Prior to these positions, Mr. Bonar was employed by IBM, U.K. Ltd. for approximately 17 years. Dr. Richard H. Green hasKian served as a ~~director since September 2000.~~Member of the Export-Import Bank of the United States, A Member of the White House Business Council, Director of Foreign Investment for the Staten of California and a Senior Fellow for global public policy at the United States Naval Postgraduate School and Member of the Board of directors at the National Defense University Foundation. He is ~~currently~~recognized around the President of International Power & Environmental Company (IPEC), a consulting company located in San Diego, California. From 1993 through 1995, he served as Deputy Secretary of the State of California Environmental Protection Agency (Cal/EPA). From 1988 through 1993 Dr. Green served as Manager of Program Engineering and Review Office in the Office of Technology and Applications at the Jet Propulsion Laboratory (JPL) in Pasadena, California, where he had held various management positions since 1967. From 1965 through 1967, Dr. Green served as Senior Engineer for The Boeing Company, Space Division. From 1983 through 1985, Dr. Green held the Corwin D. Denny Chair as Professor of Energy and Director of the Energy Institute at the University of LaVerne, and from 1961 through 1964 served as Assistant Professor of Civil Engineering (Environmental Sciences) at Washington State University. Dr. Green currently is a member of the Governing Board of Pasadena City College. Dr. Green completed his bachelor's degree at Whitman College in 1958, his Master of Science at Washington State University in 1961, and his Ph.D. at Washington State University, under a United States Public Health Services Career Development Award, in 1965. Robert A. Dietrich has servedworld as a ~~director of the Company since January 2000. Mr. Dietrich is President and CEO of Cyberair Communications Inc., a privately-held telecommunications company with strategic interests~~senior executive in ~~Internet communications and "bandwidth" expansion technologies, as well as domestic~~global trade and international ~~telephone services, in Irvine, California. Recently,~~ security.

Mr. Dietrich was named President and CEO of Semper Resources Corporation, a public natural resources holding company in Irvine, California. From 1996 to 2000, Mr. Dietrich was Managing Director and CFO of Ventana International, Ltd., Irvine, California, a venture capital and private investment-banking firm. From 1990 to 1994, Mr. Dietrich was Vice President and Chief Financial Officer of CEI, Inc., in Santa Ana, California, a commercial furnishings firm, prior to joining Ventana. Mr. DietrichKian is a graduate of the University of ~~Notre Dame,~~Brighton, with continuing education at Oxford, Harvard Kennedy School, and MIT. A Fellow at the Royal Society of Arts in the United Kingdom, Mr. Kian is also the recipient of the Ellis Island Medal of Honor.

Jose Arrieta is currently with Imagineeer LLC, a ~~bachelor's degree~~company he founded when he left Government employment. Imagineeer is an IT solutions company that currently is focused on fund raising, blockchain enabled diagnostic development, cyber security solutions and quantum inspired optimization capabilities. Mr. Arrieta works with Federal customers evaluating and valuing venture backed technology starts ups in ~~accounting,~~the health and national security space. Mr. Arrieta currently sits on a number of boards and advises 5 technology startups. Imagineeer is also working to build an ecosystem to facilitate secure, autonomous, data driven, AI powered science-based organizations Mr. Arrieta is also the former Chief Information Officer and Interim Chief Data Officer of HHS. He is a respected leader in applying emerging technologies, especially blockchain, artificial intelligence/machine learning and process automation. He oversaw $6.3B in IT investments, $800B in grants and $26B in Federal contracts while at HHS. Mr. Arrieta has also published articles on valuing disruptive technology companies and the ~~University~~importance of ~~Detroit, with a master's degree in finance. He served as a lieutenant~~industry / government communications. Jose led the creation / implementation of the largest public health surveillance capability in the ~~U.S. Navy's Atlantic Command Operations Control Center. Eric W. Gaer has served~~United States during the pandemic and the first enterprise grade supervised machine learning capability to help more accurately distribute testing supplies and predict hot spots across the United States. He created a public private key, distributed ledger infrastructure to establish digital identities for commercial, federal, state end points to aid the COVID 19 vaccination and testing efforts. He created and taught the first blockchain course (blockchain and cryptos) at the Johns Hopkins University as well as entrepreneurial finance. On July 18, 2022, Dalrada Financial Corp., Named Jose Arrieta as Chief Strategy Officer of Dalrada Financial Corporation and President of Dalrada Technologies.

Amy Scannell is currently General Counsel of Tipp Investments, LLC, is in Escondido California since June 2019. Tipp Investments, LLC is a ~~director since March 2000. Since 1998, Mr. Gaer has been~~company with broad investment interests including commercial real estate, agriculture, and aviation. Scannell was admitted to the ~~President~~California bar in 2019 and ~~CEO of Arroyo Development Corporation,~~the Massachusetts bar in 2015. Prior to Tipp Investments, Scannell worked as an associate attorney for Baskin & Associates, LLC, a ~~privately-held, San Diego-based management consulting company. From 1996 to 1998, he was Chairman, President~~family law litigation firm in Boston, Massachusetts. Scannell received her Juris Doctorate from Suffolk University Law School in Boston Massachusetts and CEO of Greenland Corporation, a publicly-held high technology company in San Diego, California. In 1995, he was CEO of Ariel Systems, Inc., a privately-held engineering development company in Vista, California. Over the past 25 years, Mr. Gaer has served in executive management positions at a variety of high-technology companies, including ITEC, Daybreak Technologies, Inc., Venture Software, Inc., and Merisel, Inc. In 1970, he received a Bachelor of Arts ~~degree in mass communications~~ from ~~California~~Westfield State University ~~Northridge. Stephen J. Fryer~~in Westfield, Massachusetts.

Vincent Monteparte is Principal and Venture Partner in the venture capital and investment banking industry, having managed transactions and investments ranging from $40M to $500M. His leadership transformed uniquely positioned mid-market organizations in the enterprise software sector to upwards of $2 billion in enterprise valuations. A diverse background in technology, aerospace, transportation, logistics, real estate and healthcare has ~~served~~led Mr. Monteparte to roles as Venture Partner at Sway Ventures, a US-based venture capital firm investing in early to mid-stage technology companies and Principal at Global Capital Markets, an investment banking firm focusing on mid-market transactions for technology, manufacturing, distribution, service and retail companies.

Mr. Monteparte began his career as an entrepreneur and founded various companies, most recently Miro Technologies. At Miro, he led the development of a SaaS solution to modernize maintenance, repair, overhaul, and supply chain operations for complex assets. The business was sold to Boeing for 14x return on invested capital with an IRR of 48%. Additionally, Mr. Monteparte has since held various senior level executive roles leading teams and positioning multinational corporations to growth.

Mr. Monteparte holds a series 63 and 79 license and Board Advisory positions for BlueSky eLearn, a leading learning management software platform and Measurabl, a global ESG SaaS Software company. He received a B.A. in Aeronautical Engineering from Embry-Riddle Aeronautical University and an MBA from the Pepperdine University Graziadio School of Business, where he earned the Most Distinguished Alumni Award. In his spare time, Mr. Monteparte co-chairs the Business & Entrepreneurship Committee at Pepperdine, where he acts as a ~~director~~mentor to young entrepreneurs and executives in career and portfolios.

Anuradha Biwas Anuradha Biswas is currently the CEO of Prakat Solutions, a tech company she founded in December 2009. Prakat earned the Best Start-up award at StartupCity and was featured in media towards creating an inclusive tech environment for the disabled. She has also built teams that possess strong domain competencies in FinTech, AgriTech, Telecom, Retail, Healthcare, Manufacturing, Legal & IT Infrastructure.

Her initial experiences was with Infosys, where she helped build the testing business for CA Technologies and Aztec (MindTree). Ms. Biswas also made key contributions in companies like VeriFone & Cybercash including organization building, service portfolio creation, business planning and enabling sales & global service delivery teams. Ms. Biswas also holds prestigious positions in Industry bodies like NASSCOM which is a premier trade body and Chamber of Commerce of the ~~Company since March 2000. He is currently Chairman~~Tech industry in India and comprises over 3000 member companies.

Ms. Biswas created a social impact by building Inclusive Technology & Work force and initiated plus actively promotes an annual event called GAAD (Global Accessibility Awareness Day) India. She leads initiatives with women empowerment groups like eMERG, Wequity and promotes Thought leadership through Academia and Tech Forums across industries, some of them being:

Anuradha actively encourages second careers for everyone, supporting them with technological impetus, networking support and go-to-market backing. She consciously inspires younger professionals & budding entrepreneurs, a quality she picked up from her mentors.

Some of her recent accolades include the Solidarity Idol Award at the Wequity Awards, 2020 and the Entrepreneur of the year by eMERG in 2018. She’s been featured in distinguished publications like The Economic Times, The Hindu, The Enterprise Magazine etc. Anuradha was also an Indian delegate to Argentina, the Atlantic Canada - India Supplier Diversity Mission to various parts of Atlantic Canada, the Canada-India Business Women's Forum in Toronto, and Women's Business Enterprise National Council National Conference in Orlando.

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board of Directors and ~~CEO of Pen Interconnect, Inc. ("Pen"),~~hold office until the officer dies or resigns or the Board elects a ~~--- high technology company in Irvine, California. He began his employment service at Pen in 1997 as Senior~~successor or removes the officer.

David Pickett, Executive Vice President of Sales and ~~Marketing. At Pen, he became a director in 1995~~Business Development of Dalrada and ~~was appointed President and CEO in 1998. From 1989 to 1996,~~Dalrada Precision Corp. President. Mr. ~~Fryer was a principal in Ventana International, Ltd., a venture capital and private investment-banking firm in Irvine, California. He has over 28 years~~Pickett’s professional background includes 25 years’ experience in executive relationship development and business growth with several companies including Celestica Inc. and Axxion Inc. Mr. Pickett has worked with the ~~computer industry~~largest OEM and Fortune 500 companies in the ~~United States, Asia~~world. Mr. Pickett’s vast knowledge base of engineering and ~~Europe. Mr. Fryer graduated from~~manufacturing operational and supply chain requirements has proven to be a strategic asset for accelerating the ~~University~~growth of ~~California~~Dalrada Precision’s global manufacturing and clean energy initiatives through its portfolio company Likido.

No determination has been made as to whether any member of the audit committee qualified as an audit committee financial expert as defined in ~~1960 with a bachelor's degree in mechanical engineering. EXECUTIVE OFFICERS The~~Item 401 of Regulation S-K.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of beneficial ownership and changes in the beneficial ownership of our securities with the SEC of Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial Ownership of Securities). Directors, executive officers and beneficial owners of more than 10% of our Common Stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file. The required filings will be made.

We have adopted an informal Code of Ethics that applies to our officers, directors, which we feel is sufficient at this time.

On July 9, 2020, the Board authorized the Dalrada Financial Corp 2020 stock compensation plan to be used to compensate the company board of directors. The plan allocates the issuance of up to 3,500,000 shares. On February 25, 2021, the Company amended the plan to issue up to 4,500,000 shares and issued an aggregate of 4,500,000 common shares, or 500,000 shares to each board member (9). 3,500,000 shares of common stock were granted on July 9, 2020, at $0.08 per share and 1,000,000 shares of common stock were granted on February 25, 2021, at $0.45 per share, for a total fair value of $730,000, which is included in the consolidated statements of operations

On August 16, 2021, the Company approved Amendment No.1 of the 2020 Stock Compensation Plan used to compensate the Company board of directors. The Amended plan allocates the issuance of up to 6,500,000 shares which includes an additional 2,000,000 shares valued at $0.28 per shares or $560,000.

On September 30, 2021, the Board of Directors through email correspondence, approved Amendment No. 3 of the 2020 Stock Compensation Plan used to compensate the Company board of directors. The Board Directors agree to the following changes;

On February 16, 2022, the Company issued 2,250,000 cashless warrants to new members of the Board of Directors. The cashless warrants vest over a 12-month period and hold an exercise price of $0.45 per share. The cashless warrants expire in ten years after issuance. The fair value of the cashless warrants granted was $0.59 per share, or $1,338,644 which was calculated using the Black-Scholes model.

On July 1, 2019, the Company entered into an employment agreement with the Chief Executive Officer of the Company. Pursuant to the agreement, the Company will compensate the Chief Executive Officer a base salary of $393,000 per annum, annual increases of 10% and a quarterly bonus based on whether the Company achieve a net profit. He will be issued common stock of the Company sufficient to provide a 10% ownership position only upon a reverse split, which shares are to be maintained for a period of two years. In addition to all other benefits and compensation, he shall be eligible for a quarterly bonus of $47,000 based on if the Company achieves a net profit for that quarter.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table provides certain information regarding the ownership of our common stock, as of June 30, ~~2003, are~~2021 and as ~~follows:~~

~~Brian Bonar is also a director~~ of the Company. See above for a discussion of Mr. Bonar's business experience. James R. Downey, Jr. joined the Company in January 2003 and was appointed Chief Operating Officer and Chief Accounting Officer by the Board of Directors on February 25, 2003. Mr. Downey has over 33 years of operational and financial experience in a wide range of industries and firms. From 1999 to 2003, he was an owner/manager of his own businesses. From 1992 through 1999 he served as the Chief Financial Officer of a primary metals multi-plant manufacturer and a high technology manufacturer of sheet metal components used in jet engines and other aerospace applications. From 1987 to 1992 he was the Director of Manufacturing Consulting for western New England for the firm of Coopers & Lybrand. From 1981 to 1987, he was the Chief Financial Officer and Vice President of Instrument Manufacturing for Zygo Corporation, a manufacturer of non-contact test and measurement instrumentation and precision optical components. From 1971 to 1981 he was both an audit and consulting manager for Price Waterhouse & Co. and Peat Marwick, Mitchell and Co. He graduated from the University of Colorado in 1970 with a degree in Business Administration and is a Certified Public Accountant. Philip J. Englund was Senior Vice President, General Counsel and Secretarydate of the ~~Company since February 1999. He resigned his positions with the Company on August 23, 2002. ITEM 11. EXECUTIVE COMPENSATION. - -------- -----------------------~~ filing of this annual report by:

As of June 30, 2022, we had a ~~3-year period from date~~total of ~~grant. Adjusted for 1-for-20 reverse stock split at August 9, 2002. (4) Calculated based on the closing price~~72,174,620 shares of ~~the Company's~~ common stock ~~on October 15, 2003 ($0.03). AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES The following~~issued and outstanding. Except as indicated in footnotes to this table, ~~provides information on option exercises~~the persons named in the 2003 Fiscal Year by the Named Officers and the value of such Named Officers' unexercised options at June 30, 2003. Warrants to purchase Common Stock are included as options. No stock appreciation rights were held by them at the end of the 2003 Fiscal Year.

(1) Mr. McKee resigned effective August 3, 2001 (2) Mr. Englund resigned effective August 23, 2002. (3) Mr. Downey joined the Company on January 6, 2003 (4) At the 2003 Fiscal Year end, the closing price of the Common Stock on that date as quoted by the NASD Electronic Bulletin Board was $0.01. Share amountsthis table have been adjusted for the 1-for-20 reverse split at August 9, 2002 COMPENSATION OF DIRECTORS Each member of the Board of Directors of the Company receives a fee of $500 from the Company for each meeting attended. EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, AND CHANGE-IN-CONTROL ARRANGEMENTS None COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Compensation Committee currently consists of Messrs. Gaer and Green. Neither of these individuals was an officer or employee of the Company at any time during the 2003 Fiscal Year. Mr. Gaer owns a company that receives consulting fees from the Company. AUDIT COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Audit Committee currently consists of Messrs. Green and Dietrich. Neither of these individuals was an officer or employee of the Company at any time during the 2003 Fiscal Year. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. - -------- The following table sets forth certain information known to the best of the Company's knowledge with respect to the beneficial ownership of Common Stock as of October 15, 2003, by (i) all persons who are beneficial owners of five percent (5 percent) or more of the Common Stock, (ii) each director, and (iii) all current directors and executive officers individually and as a group. Unless otherwise indicated, each of the shareholders has sole voting and investment power with respect to all shares of common stock indicated below. Except where noted, the address of all listed beneficial owners is in care of our office address.

Item 13. Certain Relationships, Related Transactions and Director Independence

All notes are unsecured, bear interest at 3% per annum, and are due 360 days from the date of issuance, ranging from June 25, 2020 to June 25, 2022. Each entity has significant influence or common ownership with the Company’s Chief Executive Officer. Several of these notes are in default. The Company has not received any notices of default or demands for payment.

As of June 30, 2019, the Company issued a convertible note for $1,875,000 to the Chief Executive Officer of the Company for compensation. Under the terms of the note, the amount due is unsecured, bears interest at 3% per annum, and was due 360 days from the date of issuance. On June 30, 2019, the Company issued note agreement which included a conversion feature of the outstanding balance at $0.034 per share. As the conversion price was equal to the fair value of the common shares ~~beneficially owned, subject~~on the date of the agreement, there was no beneficial conversion feature. As of June 30, 2021, the principal balance was $1,875,000 and the accrued interest was $112,500.

As of June 30, 2022, and 2021, the Company owed $414,073 and $556,317, respectively to ~~community property laws, where applicable.~~

~~(1) Percentage~~related parties for reimbursement of various operating expenses, accrued salaries, management fees, etc. which has been recorded in accounts payable and accrued liabilities – related parties. As of June 30, 2022, and 2021, this amount includes $0 and $7,650 of management fees, which consists of accounting and administrative services to Trucept Inc., a related party company controlled by the Chief Executive Officer of the Company. The management fee agreement calls for monthly payments of $7,500. The agreement is ongoing until terminated by either party. As of June 30, 2021, amounts included with accounts payable and accrued liabilities – related parties for which relate to advances for operating expenses were $1,029,309. In 2021, the Company issued promissory notes totaling $879,830 in exchange for conversion of accrued salary to the Chief Executive Officer. As of June 30, 2021, the outstanding principal balance of the promissory notes was $879,830 and the accrued interest is $5,862

In November 2019, the Chief Executive Officer converted $170 in amounts owed from the Company into 5,000 shares of Series F Super Preferred Stock.

On July 1, 2019, the Company formalized an employment agreement with its Chief Executive Officer, which entitles him to compensation of three hundred and ninety-three thousand dollars ($393,000) per year. Annual increases will be up to 10% based performance criteria to be determined at a later date. He will be issued common stock of the Company sufficient to provide a 10% ownership isposition post reverse split which shares be maintained for a period of two years. In addition to all other benefits and compensation, he shall be eligible for a quarterly bonus of $47,000 based on ~~291,195,402~~if the Company achieves a net profit for that quarter. As of June 30, 2022 and 2021, the Company had $0 and $556,317, accrued within accounts payable and accrued liabilities – related parties, respectively. In 2021, the Chief Executive Officer converted $879,830 of accrued salary into a promissory note.

In February 2021, the Company issued 500,000 common shares to each board member, including the Chief Executive Officer, for an aggregate of ~~Common Stock outstanding~~4,500,000 shares. The fair value of $730,000 was recorded in the consolidated statements of operations.

The following is a summary of revenues recorded by the Company’s to related parties with common ownership:

The OTC Bulletin Board does not have a requirement that a majority of our Board of Directors be independent. However, with respect to the definition of independence utilized by NASDAQ, our officers and directors would be deemed to be independent.

Our Audit Committee is comprised of our officers and directors. NASDAQ requires at least three members on ~~October 15, 2003. Shares~~the Audit Committee, each of ~~Common Stock subject to stock options, warrants~~whom must be independent. NASDAQ also requires that, if its Chief Executive Officer’s compensation is determined by its Compensation Committee, the Compensation Committee must be comprised solely of independent directors. The Company currently does not meet either of these requirements.

The NASDAQ rules have both objective tests and ~~convertible securities which are currently exercisable~~a subjective test for determining who is an “independent director.” The objective tests state, for example, that a director is not considered independent if he or ~~convertible or will become exercisable or convertible within 60 days after October 15, 2003 are deemed outstanding for computing the percentage~~she is an employee of the Company or is a partner, executive officer or controlling stockholder of an entity to which the Company made, or from which the Company received, payments in the current or any of the past three fiscal years that exceed the greater of $200,000 or 5% of the recipient’s consolidated gross revenue for that year or a family member serves in the current fiscal year or has served at any time during the last three fiscal years as an executive officer of the Company. The subjective test states that an independent director must be a person ~~or group holding such options, warrants or convertible securities but are not deemed outstanding for computing~~who lacks a relationship that, in the ~~percentage~~opinion of ~~any other person or group. (2) Includes 12,000,000 shares issuable upon~~the Board, would interfere with the exercise of ~~warrants that are currently exercisable~~independent judgment in carrying out the responsibilities of a director.

The Company paid or ~~will become exercisable within 60 days after October 15, 2003. (3) Includes 9,125,000 shares issuable upon exercise~~accrued the following fees in each of warrants that are currently exercisable or will become exercisable within 60 days after October 15, 2003. (4) Includes 4,875,000 shares issuable upon exercise of warrants that are currently exercisable or will become exercisable within 60 days after October 15, 2003. (5) Includes 7,375,000 shares issuable upon exercise of warrants that are currently exercisable or will become exercisable within 60 days after October 15, 2003. (6) Includes 40, 750,000 shares issuable upon exercise of warrants that are currently exercisable or will become exercisable within 60 days after October 15, 2003. ITEM13. CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONS. - ------ ------------------------------------------ During the ~~year~~prior two fiscal years to its independent certified public accountants, dbbmckennon, for the years ended June 30, ~~2003, the Company accrued consulting expenses~~2022, and 2021.

"Audit Fees" consisted of $110,000 due Arroyo Development Corporation, owned by Mr. Eric Gaer, a member of the Board of Directors. There was no officer or director indebtedness to the Company. ITEM14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. - ------ ------------------------------------------ (1) Audit Fees - The aggregate fees billed for ~~each of the last two fiscal years by our principal accountants, Stonefield Josephson, Inc. and Pohl, McNabola, Berg & Company, LLP, for professional~~ services rendered for the audit of ~~our~~the Company’s annual financial statements and audit related fees are for review of the financial statements included in ~~our~~the Company’s quarterly reports on Form ~~10-Qs or services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements for those fiscal years were as follows:~~

(2) Audit-Related Fees - The aggregate fees billed for each of the last two fiscal years for assurance and related services by our principal accountants, Stonefield Josephson, Inc. and Pohl, McNabola, Berg & Company, LLP, that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph were as follows:

(3) Tax Fees - There were no fees billed for each of the last two fiscal years for professional services provided by our principal accountants Stonefield Josephson, Inc. and Pohl, McNabola, Berg & Company, LLP, for tax compliance, tax advice, and tax planning. (4) All Other Fees - There were no fees billed for each of the last two fiscal years for the products and services provided by our principal accountants, Stonefield Josephson, Inc. and Pohl, McNabola, Berg & Company, LLP, other than the services reported in paragraphs (1), (2), and (3) above. (5) Our audit committee's pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor. (6) The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributable to work performed by persons other than the principal accountant's full-time, permanent employees was approximately 10% ~~PART IV ======== ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) DOCUMENTS FILED AS PART OF THIS FORM 10-K: (1) FINANCIAL STATEMENTS~~ 10-Q.

The financial ~~statements of the Company~~statement schedules are included herein as required under Item 8 of this Annual Report on Form 10-K. See Index to Financial Statements on page 23. (2) FINANCIAL STATEMENT SCHEDULES: Financial Statement Schedules have been omitted because they are ~~not applicable or not required~~inapplicable or the requested information ~~required to be set forth therein~~ is ~~included~~shown in ~~the~~our financial statements or related notes thereto. (b) REPORTS ON FORM 8-K. Form 8-K filed September 17, 2002 Form 8-K filed December 19, 2002 Form 8-K filed January 21, 2003 Form 8-K filed March 14, 2003 Form 8-K filed May 27, 2003 Form 8-K filed July 22,3003 (c) EXHIBITS. The following exhibits are filed as part of, or incorporated by reference into, this Form 10-K. 3(a) Certificate of Incorporation of the Company, as amended, and currently in effect. See also below (Incorporated by reference to Exhibit 3(a) to 1988 Form 10-K) * 3(b) Certificate of Amendment of Certificate of Incorporation of the Company, filed February 8, 1995, as amended, and currently in effect (Incorporated by reference to Exhibit 3(b) to 1995 Form 10-K) * 3(c) Certificate of Amendment of Certificate of Incorporation of the Company, filed May 23, 1997, as amended, and currently in effect (Incorporated by reference to 1997 Form 10-K) * 3(d) Certificate of Amendment of Certificate of Incorporation, filed January 12, 1999, as amended and currently in effect (Incorporated by reference to Form 10-Q for the period ended December 31, 1998) * 3(e) Certificate Eliminating Reference to Certain Series of Shares of Stock from the Certificate of Incorporation, filed January 12, 1999, as amended and currently in effect (Incorporated by reference to Form 10-Q for the period ended December 31, 1998) * 3(f) By-Laws of the Company, as amended, and currently in effect (Incorporated by reference to Exhibit 3(b) to 1987 Form 10-K) * 3(g) Certificate of Amendment of Certificate of Incorporation, filed May 12, 2000, as amended and currently in effect (Incorporated by reference to Exhibit 3(g) to 2001 Form 10-K) * 4(a) Amended Certificate of Designation of Imaging Technologies Corporation with respect to the 5% Convertible Preferred Stock (Incorporated by reference to Exhibit 4(d) to 1987 Form 10-K) * 4(b) Amended Certificate of Designation of Imaging Technologies Corporation with respect to the 5% Series B Convertible Preferred Stock (Incorporated by reference to Exhibit 4(b) to 1988 Form 10-K) * 4(c) Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of Imaging Technologies Corporation (Incorporated by reference to Exhibit 4(c) to 1998 Form 10-K) * 4(d) Certificate of Designation, Powers, Preferences and Rights of the Series of Preferred Stock to be Designated Series D Convertible Preferred Stock, filed January 13, 1999 (Incorporated by reference to Form 10-Q for the period ended December 31, 1998) * 4(e) Certificate of Designation, Powers, Preferences and Rights of the Series of Preferred Stock to be Designated Series E Convertible Preferred Stock, filed January 28, 1999 (Incorporated by reference to Form 10-Q for the period ended December 31, 1998) * 10(a) Private Equity Line of Credit Agreement by and among certain Investors and the Company (Incorporated by reference to Form 8-K, filed July 26, 2000) * 10(b) Convertible Note Purchase Agreement dated December 12, 2000 between the Company and Amro International, S.A., Balmore Funds, S.A., and Celeste Trust Reg. (Incorporated by reference to Form 8-K, filed January 19, 2001. * 10(c) Convertible Note Purchase Agreement dated July 26, 2001 between the Company and Balmore Funds, S.A. (Incorporated by reference to Form 8-K filed August 2, 2001. * 10(d) Share Purchase Agreement, dated December 1, 2000, between ITEC and EduAdvantage.com, Inc. (Incorporated by reference to Form 10-Q for the period ended September 30, 2000) * 10(e) Agreement to Acquire Shares, dated December 1, 2000, between ITEC and Quik Pix, Inc. (Incorporated by reference to Form 10-Q for the period ended September 30, 2000) and subsequently cancelled. * 10(f) Agreement to Acquire Shares, dated December 17, 2000, between ITEC and Pen Internconnect, Inc. (Incorporated by reference to Form 10-Q for the period ended September 30, 2000) and subsequently cancelled. * 10(g) Share Purchase Agreement, dated December 1, 2000, between ITEC and EduAdvantage.com, Inc. (Incorporated by reference to Form 10-Q for the period ended September 30, 2000) * 10(h) Convertible Promissory Note dated September 21, 2001 between the Company and Stonestreet Limited Partnership. (Incorporated by reference to Exhibit 10(u) of 2001 Form 10-K) * 10(i) Convertible Note Purchase Agreement dated September 21, 2001 between the Company and Stonestreet Limited Partnership. (Incorporated by reference to Exhibit 10(v) of 2001 Form 10-K) * 10(j) Registration Rights Agreement dated September 21, 2001 between the Company and Stonestreet Limited Partnership. (Incorporated by reference to Exhibit 10(w) of 2001 Form 10-K) * 10(k) Form of Warrant to Purchase 11,278,195 Shares of Common Stock of ITEC, dated September 21, 2001, between ITEC and Stonestreet Limited Partnership. (Incorporated by reference to Exhibit 10(x) of 2001 Form 10-K) * 10(l) Asset Purchase Agreement, dated October 25, 2001, among the Company and Lisa Lavin, Gary J. Lavin, and Roland A. Fernando. (Incorporated by reference to Exhibit 10(a) to September 2001 Form 10-Q) * 10(m) Audited Financial Statements of SourceOne Group, LLC. (Incorporated by reference to Form 8-K filed on January 25, 2002) * 10(n) Secured Convertible Debenture issued by the Company to Bristol Investment Fund, Ltd., dated January 22, 2002. (Incorporated by reference to Exhibit 10(a) of December 2001 Form 10-Q) * 10(o) Securities Purchase Agreement between the Company and Bristol Investment Fund, Ltd., dated January 22, 2002. (Incorporated by reference to Exhibit 10(b) of December 2001 Form 10-Q) * 10(p) Registration Rights Agreement between the Company and Bristol Investment Fund, Ltd., dated January 22, 2002. (Incorporated by reference to Exhibit 10(c) of December 2001 Form 10-Q) * 10(q) Transaction Fee Agreement between the Company and Alexander Dunham Securities, Inc., dated January 22, 2002. (Incorporated by reference to Exhibit 10(d) of December 2001 Form 10-Q) * 10(r) Stock Purchase Warrant issued to Alexander Dunham Securities, Inc., dated January 22, 2002. (Incorporated by reference to Exhibit 10(e) of December 2001 Form 10-Q) * 10(s) Stock Purchase Warrant issued to Bristol Investment Fund, Ltd., dated January 22, 2002. (Incorporated by reference to Exhibit 10(f) of December 2001 Form 10-Q) * 10(t) Security Agreement between the Company and Bristol Investment Fund, Ltd., dated January 22, 2002. (Incorporated by reference to Exhibit 10(g) of December 2001 Form 10-Q) * 10(u) Convertible Promissory Note between the Company and Stonestreet Limited Partnership, dated November 7, 2001. (Incorporated by reference to Exhibit 10(h) of December 2001 Form 10-Q) * 10(v) Convertible Note Purchase Agreement between the Company and Stonestreet Partnership, dated November 7, 2001. (Incorporated by reference to Exhibit 10(i) of December 2001 Form 10-Q) * 10(w) Registration Rights Agreement between the Company and Stonestreet Limited Partnership, dated November 7, 2001. (Incorporated by reference to Exhibit 10(j) of December 2001 Form 10-Q) * 10(x) Stock Purchase Warrant issued to Stonestreet Limited Partnership, dated November 7, 2001 . (Incorporated by reference to Exhibit 10(k) of December 2001 Form 10-Q * 10(y) Acquisition Agreement between the Company and Dream Canvas, Inc., dated May 17, 2002; subject to completion of its terms. (Incorporated by reference to Exhibit 10(y) of Form 10-K filed November 18, 2002.) * 10(z) Closing Agreement between the Company and Quik Pix, Inc., dated July 23, 2002, subject to completion of its terms. (Incorporated by reference to Exhibit 10(z) of Form 10-K filed November 18, 2002.) * 10(aa) Agreement to Acquire Shares between the Company and Greenland Corporation, dated August 5, 2002, subject to completion of its terms.(Incorporated by reference to Exhibit 10(aa) to Form 10-K filed November 18, 2002.) * 10(ab) Acquisition Agreement, dated December 13, 2002, between the Company and Baseline Worldwide, Limited. (Incorporated by reference to Exhibit 99.3 of Form 8-K filed December 19, 2002.) * 10(ac) Secured Promissory Note in the amount of $2,250,000 issued by the Company to Greenland Corporation, dated January 7, 2003. (Incorporated by reference to Exhibit 99.1 of Form 8-K filed January 21, 2003.) * 10(ad) Security Agreement, dated January 7, 2003, between the Company and Greenland Corporation. (Incorporated by reference to Exhibit 99.2 of Form 8-K filed January 21, 2003.) * 10(ae) Agreement to Acquire Shares, dated August 9, 2002 between the Company and Greenland Corporation. (Incorporated by reference to Exhibit 99.3 of Form 8-K filed January 21, 2003.) * 10(af) Closing Agreement, dated January 7, 2003, between the Company and Greenland Corporation. (Incorporated by reference to Exhibit 99.4 of Form 8-K filed January 21, 2003.) * 10(ag) Share Acquisition Agreement, dated June 12, 2002, between the Company and Quik Pix, Inc. (Incorporated by reference to Exhibit 99.5 of Form 8-K filed January 21, 2003.) * 10(ah) Closing Agreement, dated July 23, 2002, between the Company and Quik Pix, Inc. (Incorporated by reference to Exhibit 99.6 of Form 8-K filed January 21, 2003.) * 10(ai) Stock Purchase Agreement among the Company, Greenland Corporation, and ExpertHR-Oklahoma, dated March 18, 2003. (Incorporated by reference to Exhibit 10(j) to Form 10-Q filed May 20, 3003). * 10(aj) Assignment of Patent between John Capezzuto and Quik Pix, Inc. dated January 14, 2003. ** 10(ak) Promissory Note between the Company and John Capezzuto dated June 1, 2003 (signed June 9, 2003)** 10(al) Promissory Note between the Company and John Capezzuto dated June 9, 2003 ** 10(am) Agreement and Assignment of Rights, dated February 1, 2003, between Accord Human Resources, Inc. and Greenland Corporation, and Imaging Technologies. (Incorporated by reference to Exhibit 10(k) of Form 10-KSB filed April 7, 2003 by Greenland Corporation.) * 10(an) Agreement and Assignment of Rights, dated March 1, 2003, between StaffPro Leasing 2, Greenland Corporation, and ExpertHR. (Incorporated by reference to Exhibit 10(l) of Form 10-KSB filed April 7, 2003 by Greenland Corporation.) * 10(ao) Promissory Note, dated March 1, 2003, payable to StaffPro Leasing 2 by Greenland Corporation. (Incorporated by reference to Exhibit 10(k) of Form 10-KSB filed April 7, 2003 by Greenland Corporation.) * 10(op) Agreement to Acquire Shares between the Company and The Christensen Group, et al, dated April 1, 2003. ** 21 List of Subsidiaries of the Company ** 23.1 Consent of Independent Accountants - Boros & Farrington ** 23.2 Consent of Independent Accountants - Stonefield Josephson, Inc. ** 23.3 Consent of Independent Accountants - Pohl, McNabola, Berg and Company ** 99.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** 99.2 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 **

Pursuant to the requirements of Section 13 or 15(d) of the ~~Securities~~ Exchange Act, ~~of 1934,~~ the Registrant has duly caused this ~~Annual~~ Report ~~on Form 10-K~~ to be signed on its behalf by the undersigned thereunto duly authorized. Date: November 12, 2003 IMAGING TECHNOLOGIES CORPORATION By:/s/ BRIAN BONAR ----------------- Brian Bonar Chief Executive Officer By:/s/ JAMES R. DOWNEY, JR. ---------------------------- James R. Downey, Jr. Chief Accounting Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints, Brian Bonar as his attorney-in-fact, each with full power of substitution and resubstitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that said attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the ~~Securities~~ Exchange Act ~~of 1934,~~ this ~~Annual~~ Report ~~on Form 10-K~~ has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Wyoming	38-3713274
(state or other jurisdiction of incorporation or organization)	(I.R.S. Employer ID. No.)

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.005 par value per share		DFCO		None

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
Emerging growth company ☐

PART I

Item 1.	Description of Business	1
Item 1A.	Risk Factors	3
Item 1B.	Unresolved Staff Comments	3
Item 2.	Description of Property	4
Item 3.	Legal Proceedings	4
Item 4.	Mine Safety Disclosures	4

PART II

Item 5.	Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities	5
Item 6.	Selected Financial Data	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 8.	Financial Statements and Supplementary Data	18
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	19
Item 9A.	Controls and Procedures	19
Item 9B.	Other Information	20

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	21
Item 11.	Executive Compensation	27
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	30
Item 13.	Certain Relationships, Related Transactions and Director Independence	30
Item 14.	Principal Accountant Fees and Services	33
Item 15.	Exhibits and Financial Statement Schedules	33
	Signatures	34

		Square
		Footage		Lease
Location	Type	(approximate)		Expiration
Escondido, California	Corporate Headquarters		16,137		2025
San Diego, California	Office, Medical Suite		56,561		2028
Chula Vista, California	Office, Medical Suite		3,200		2027
Poway, California	Medical Suite		56,510		2024
Florence, Alabama	Pharmacy		1,433		2024
Brownsville, Texas	Warehouse		10,000		2023
Livingston, Scotland	Warehouse		3,900		2025
Bengaluru, India	Office		5,800		2026

Period	High		Low
Fiscal 2022
First Quarter ended September 30, 2021	$	0.3590	$	0.0100
Second Quarter ended December 31, 2021	$	0.9200	$	0.2890
Third Quarter ended March 31, 2022	$	0.9190	$	0.2650
Fourth Quarter ended June 30, 2022	$	0.7200	$	0.0300

Fiscal 2021
First Quarter ended September 30, 2020	$	0.1000	$	0.6000
Second Quarter ended December 31, 2020	$	0.3000	$	0.2300
Third Quarter ended March 31, 2021	$	0.5100	$	0.3300
Fourth Quarter ended June 30, 2021	$	0.5100	$	0.2300

	Year Ended June 30, 2022
	Dalrada Health		Dalrada Energy		Dalrada Precision Manufacturing			Dalrada Technologies		Corporate			Consolidated
Revenues	$	13,617,639	$	1,261,774	$	2,123,437		$	2,239,763	$	25,000		$	19,267,613
Income (Loss) from Operations		2,225,304		967,639		(2,834,342	)		30,177		(10,824,022	)		(10,435,244	)

		Year Ended June 30, 2021
		Dalrada Health			Dalrada Energy		Dalrada Precision Manufacturing			Dalrada Technologies			Corporate			Consolidated
Revenues	$	1,739,389		$	–	$	481,313		$	1,185,982		$	–		$	3,406,684
Income (Loss) from Operations		(1,327,125	)		–		(2,024,154	)		(276,385	)		(4,942,487	)		(8,570,151	)

	·	Lighting (LED Enhancement)
	·	HVAC Upgrades
	·	Building Management
	·	Power Factor Correction Technology
	·	Air Handling / Thermal Equalization
	·	Likido® High Efficiency Heat Pumps
	·	Advanced Water Conservation Technology
	·	Solar
	·	Metaverse

	·	Employee compensation and benefits increased by $3,193,462, or 165% from the prior year and is a result of the rapid expansion of the Company as well as adding several key members to our management team that have significant operating experience. Several employees are shared resources across the four business segments and are included in the corporate segment.

	·	Legal and professional fees increased by $946,428, or 105% from the prior year and is a result of the Company’s acquisitions and continued vertical growth within each segment.

	·	Sales and marketing costs decreased by $167,343, or 37% from the prior year as a result of paid media, content creation expenses and other marketing expenses being recognized across each segment. Marketing costs are geared towards customer acquisition and retention and building brand awareness.

	·	Other general and administrative costs for general corporate expenses, including information technology, rent, travel, and insurance increased by $146,161, or 22% from the prior year and is a result of the Company’s rapid expansion.

	·	Employee compensation and benefits increased by $343,873, or 85% from the prior year and is a result of the joint venture with Pala Diagnostics, the expansion of Empower Genomics and Solas as well as the acquisition of Watson.

	·	Legal and Professional Fees increased by $900,811, or 197% from the prior year and is a result of clinical studies related to the CerVIA kit, consulting related to diagnostics and acquisitions for Dalrada Health. The increase in legal fees was a result of the lawsuit with Vivera Pharmaceuticals.

	·	Sales and marketing costs increased by $109,592, or 90% from the prior year as a result of paid media, content creation expenses, events and other marketing expenses related to Empower Genomics, Pala Diagnostics, Solas, and GlanHealth.

	·	Other general and administrative costs for general corporate expenses, including information technology, rent, travel, and insurance increased by $2,434,558, or 210% from the prior year and is a result of the joint venture with Pala Diagnostics, the expansion of Empower Genomics and Solas as well as the acquisition of Watson.

	·	Legal and Professional Fees include consultants related to the implementation of energy savings strategies for the segment.

	·	Other general and administrative costs for general corporate expenses, including travel and taxes.

	·	Employee compensation and benefits increased by $128,546, or 66% from the prior year and is a result of a larger customer base and wage inflation.

	·	Legal and Professional Fees decreased by $156,804, or 32% from the prior year.

	·	Sales and marketing costs decreased by $30,630, or 85% from the prior year.

	·	Other general and administrative costs for general corporate expenses, including information technology, rent, travel, and insurance increased by $72,954, or 48% from the prior year.

	Year Ended
	June 30,
	2022			2021
Net cash used in operating activities	$	(10,349,808	)	$	(5,583,788	)
Net cash used in investing activities		(574,040	)		(385,830	)
Net cash provided by financing activities		11,668,585			5,964,554
Net change in cash during the period, before effects of foreign currency	$	744,737		$	(5,064	)

	·	General. DFCO discloses all material related party transactions, including the nature of the relationship, the nature of the transactions, the dollar amounts of the transactions, the amounts due to or from related parties.
	·	Receivables. DFCO separately discloses any receivables from officers, employees, or affiliated entities.

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Stockholders’ Deficit	F-5
Consolidated Statements of Cash Flows	F-6
Notes to the Consolidated Financial Statements	F-8