UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~_______________~~ to ~~_______________~~

Commission File Number: 000-29621

NovAccess Global Inc.

(Exact name of registrant as specified in its charter)

Colorado	84-1384159
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

~~8834 Mayfield Road, Suite C, Chesterland,~~8584 E. Washington Street #127, Chagrin Falls, Ohio ~~44026~~44023

(Address of principal executive offices)(Zip Code)

~~440-644-1027~~(213) 642-9268

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. There were ~~13,328,120~~18,398,673 shares of common stock outstanding on May ~~19, 2021.~~13, 2022.

Table of Contents

PART I — FINANCIAL INFORMATION	1
Item 1. Financial Statements.	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1715
Cautionary Statement Concerning Forward-Looking Statements	1715
Results of Operations for the Three Months Ended March 31, ~~2021~~2022 Compared to the Three Months Ended March 31, ~~2020~~2021	1715
Results of Operations for the Six Months Ended March 31, ~~2021~~2022 Compared to the Six Months Ended March 31, ~~2020~~2021	18 16
Liquidity and Capital Resources	1817
Off-Balance Sheet Arrangements	1917
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	1918
Item 4. Controls and Procedures.	1918
Evaluation of Disclosure Controls and Procedures	1918
Changes in Internal Control Over Financial Reporting	1918

PART II — OTHER INFORMATION	2019
Item 1. Legal Proceedings.	2019
Item 1A. Risk Factors.	2019
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	2019
Item 3. Defaults Upon Senior Securities.	2019
Item 4. Mine Safety Disclosures.	2019
Item 5. Other Information.	2019
Item 6. Exhibits.	2120
SIGNATURES	2221

Part I—Financial Information

Item 1. Financial Statements.

NOVACCESS GLOBAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2021

September 30, 2020

(Unaudited)

ASSETS

CURRENT ASSETS

   Cash
$ 21,998 $ 178

                        TOTAL ASSETS
$ 21,998 $ 178

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES

   Accounts payable
$ 251,829 $ 88,519
   Other payable
66,894 65,304
   Accrued expenses and interest on notes payable
95,709 65,215
   Accrued payroll
23,290 -
   Deferred Compensation
120,508 -
   License Fees Payable
40,402 50,402
   Derivative liability
1,809,098 2,989,165
   Due to related party
74,940 68,312
   Loan payable, related party
25,000 24,287
   Convertible promissory note, related party
12,000 12,000
   Convertible promissory notes, current portion
94,209 91,704

                        Total Current Liabilities
2,613,879 3,454,908

LONG TERM LIABILITIES

  Convertible promissory notes
115,000 115,000

                        Total Long Term Liabilities
115,000 115,000

                       TOTAL LIABILITIES
2,728,879 3,569,908

SHAREHOLDERS' DEFICIT

   Preferred stock 50,000,000 shares authorized, shares issued and outstanding designated as follows:

      Preferred Stock Series B, $0.01 par value, 25,000 authorized
      25,000 and 0 shares issued and outstanding, respectively
250 250
Common stock, no par value;
     2,000,000,000 authorized common shares
     12,856,342 and 1,603,492 shares issued and outstanding, respectively
41,121,365 33,369,424
   Additional paid in capital
5,335,398 11,710,398
   Paid in capital, common stock warrants
4,210,960 4,210,960
   Paid in capital, preferred stock
5,088,324 5,088,324
   Accumulated deficit
(58,463,178 ) (57,949,086 )

                      TOTAL SHAREHOLDERS' DEFICIT
(2,706,881 ) (3,569,730 )

                      TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT
$ 21,998 $ 178

	March 31, 2022			September 30, 2021
	(Unaudited)
ASSETS

CURRENT ASSETS
Cash	$	61,609		$	180,668
Employee Advances		-			380
Prepaid expenses		21,898			27,086

TOTAL ASSETS	$	83,507		$	208,134


LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable	$	161,922		$	143,074
Other payable		66,894			66,894
Accrued expenses and interest on notes payable		105,783			356,683
Accrued payroll		11,268			10,712
Deferred Compensation		270,433			201,383
License Fees Payable		36,912			40,402
Derivative liability		2,400,203			2,553,979
Derivative liability warrants		597,997			372,643
Due to related party		86,073			82,922
Payable to TN3		200,000			-
Promissory notes payable net of debt discount and debt issuance costs of $188,247 and $395,027, respectively		561,753			104,973
Bridge Loans Payable - related parties		4,608			-
Convertible loan payable		12,000			12,000
Convertible promissory notes net of debt discount and debt issuance costs of $0 and $69,567, respectively		-			24,683

Total Current Liabilities		4,515,846			3,970,348

LONG TERM LIABILITIES
Convertible promissory notes		165,880			165,880

Total Long Term Liabilities		165,880			165,880

TOTAL LIABILITIES		4,681,726			4,136,228

SHAREHOLDERS' DEFICIT
Preferred stock 50,000,000 shares authorized, shares issued and outstanding designated as follows:
Preferred Stock Series B, $0.01 par value, 25,000 authorized 600 and 25,000 shares issued and outstanding, respectively		6			250
Common stock, 0 par value; 2,000,000,000 authorized common shares 17,523,673 and 14,404,030 shares issued and outstanding, respectively		42,921,963			41,882,535
Additional paid in capital		5,356,398			5,351,398
Paid in capital, common stock warrants		4,210,960			4,210,960
Paid in capital, preferred stock		4,747,108			5,088,324
Accumulated deficit		(61,834,654	)		(60,461,561	)

TOTAL SHAREHOLDERS' DEFICIT		(4,598,219	)		(3,928,094	)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	83,507		$	208,134

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

NOVACCESS GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED MARCH 31, ~~2021~~2022 AND ~~2020~~2021

(Unaudited)

Three Months Ended

Six Months Ended

March 31, 2021

March 31, 2020

March 31, 2021

March 31, 2020

OPERATING EXPENSES

Selling, general and administrative expenses
281,320 139,203 1,681,210 260,809
Depreciation and amortization expense
- - - -

TOTAL OPERATING EXPENSES
281,320 139,203 1,681,210 260,809

LOSS FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSES)
(281,320
)
(139,203
)
(1,681,210
)
(260,809
)

OTHER INCOME/(EXPENSES)

Gain (Loss) on change in derivative liability
(382,538
)
(59,458
)
1,180,067 (75,537
)
Interest expense
(5,348
)
(7,604
)
(12,949
)
(15,552
)

TOTAL OTHER INCOME/(EXPENSES)
(387,886
)
(67,062
)
1,167,118 (91,089
)

NET (LOSS) FROM CONTINUING OPERATIONS
$ (669,206
)
$ (206,265
)
$ (514,092
)
$ (351,898
)

NET INCOME FROM DISCONTINUED OPERATIONS
- 244,808 - 288,777

NET INCOME (LOSS)
(669,206
)
38,543 (514,092
)
(63,121
)

BASIC INCOME (LOSS) PER SHARE
$ (0.05
)
$ 0.00 $ (0.06
)
$ (0.00
)

DILUTED INCOME (LOSS) PER SHARE
$ (0.05
)
$ 0.00 $ (0.06
)
$ (0.00
)

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING

BASIC
12,455,164 1,601,888 9,099,121 1,601,888
DILUTED
12,455,164 6,078,866 9,099,121 1,601,888

	Three Months Ended						Six Months Ended
	March 31, 2022			March 31, 2021			March 31, 2022			March 31, 2021

OPERATING EXPENSES
Research and development expenses		45,516			8,446			87,915			8,446
Selling, general and administrative expenses		381,428			272,873			661,358			1,672,764

TOTAL OPERATING EXPENSES		426,944			281,319			749,273			1,681,210

LOSS FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSES)		(426,944	)		(281,319	)		(749,273	)		(1,681,210	)

OTHER INCOME/(EXPENSES)
Gain (Loss) on change in derivative liability		(492,425	)		(382,539	)		(33,399	)		1,180,067
Extinguishment of derivatives		-			-			96,205			-
Extinguishment of debt		(54,813	)		-			(54,813	)		-
Interest expense		(255,603	)		(5,348	)		(631,813	)		(12,949	)

TOTAL OTHER INCOME/(EXPENSES)		(802,841	)		(387,887	)		(623,820	)		1,167,118

NET INCOME (LOSS)		(1,229,785	)		(669,206	)		(1,373,093	)		(514,092	)

BASIC INCOME (LOSS) PER SHARE	$	(0.08	)	$	(0.05	)	$	(0.09	)	$	(0.06	)

DILUTED INCOME (LOSS) PER SHARE	$	(0.08	)	$	(0.05	)	$	(0.09	)	$	(0.06	)

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC		15,379,289			12,455,164			14,914,920			9,099,121
DILUTED		15,379,289			12,455,164			14,914,920			9,099,121

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

NOVACCESS GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT

FOR THE SIX MONTHS ENDED MARCH 31, ~~2021~~2022 AND ~~2020~~2021

SIX MONTHS ENDED MARCH 31, 2020

Stock
Options/

Paid in

Preferred Stock,
Class A

Preferred Stock,
Class B

Common Stock

Additional
Paid-in

Warrants
Paid in

Capital,
Preferred

Accumulated

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Capital

Stock

Deficit

Total

Balance at September 30, 2019
5,000 $ 50 - - 1,601,888 $ 33,369,424 $ 5,335,398 $ 3,811,700 $ - $ (44,752,523 ) $ (2,235,951 )

Net Loss
- - - - - - - - - (63,121 ) (63,121 )
Balance at March 31, 2020
5,000 $ 50 - $ - 1,601,888 $ 33,369,424 $ 5,335,398 $ 3,811,700 $ - $ 44,815,644 ) $ (2,299,072 )

SIX MONTHS ENDED MARCH 31, 2021
																Stock Options/ Warrants Paid in
																		Paid in Capital, Preferred
													Additional Paid-in
	Preferred Stock, Class A				Preferred Stock, Class B				Common Stock				Additional Paid-in							Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Capital		Stock		Deficit			Total
Balance at September 30, 2020		-	$	-		25,000	$	250		1,603,492	$	33,369,424	$	11,710,398		$	4,210,960	$	5,088,324	$	(57,949,086	)	$	(3,569,730	)

Common stock issued for StemVax Acquisition - from stock payable		-		-		-		-		7,500,000		6,375,000		(6,375,000	)		-		-		-			-

Stock compensation cost		-		-		-		-		2,000,000		936,000		-			-		-		-			936,000

Common stock issued for Services		-		-		-		-		311,945		145,941		-			-		-		-			145,941

Common Stock Issued - Subscriptions		-		-		-		-		1,440,905		295,000		-			-		-		-			295,000

Net Income		-		-		-		-		-		-		-			-		-		(514,092	)		(514,092	)
Balance at March 31, 2021 (Unaudited)		-	$	-		25,000	$	250		12,856,342	$	41,121,365	$	5,335,398		$	4,210,960	$	5,088,324	$	(58,463,178	)	$	(2,706,881	)

SIX MONTHS ENDED MARCH 31, 2021

Stock
Options/

Paid in

Preferred Stock,
Class A

Preferred Stock,
Class B

Common Stock

Additional
Paid-in

Warrants
Paid in

Capital,
Preferred

Accumulated

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Capital

Stock

Deficit

Total

Balance at September 30, 2020
- $ - 25,000 $ 250 1,603,492 $ 33,369,424 $ 11,710,398 $ 4,210,960 $ 5,088,324 $ (57,949,086 ) $ (3,569,730 )

Common stock issued for StemVax Acquisition - from stock payable
- - - - 7,500,000 6,375,000 (6,375,000 ) - - - -

Stock compensation cost
- - - - 2,000,000 936,000 - - - - 936,000

Common stock issued for Services
- - - - 311,945 145,941 - - - - 145,941

Common Stock Issued - Subscriptions
- - - - 1,440,905 295,000 - - - - 295,000

Net Loss
- - - - - - - - - (514,092 ) (514,092 )
Balance at March 31, 2021 (Unaudited)
- $ - 25,000 $ 250 12,856,342 $ 41,121,365 $ 5,335,398 $ 4,210,960 $ 5,088,324 $ (58,463,178 ) $ (2,706,881 )

SIX MONTHS ENDED MARCH 31, 2022
																	Stock Options/ Warrants Paid in
																			Paid in Capital, Preferred
															Additional Paid-in
	Preferred Stock, Class A				Preferred Stock, Class B						Common Stock				Additional Paid-in							Accumulated
	Shares		Amount		Shares			Amount			Shares		Amount		Capital		Capital		Stock			Deficit			Total
Balance at September 30, 2021		-	$	-		25,000.00		$	250			14,404,030	$	41,882,535	$	5,351,398	$	4,210,960	$	5,088,324		$	(60,461,561	)	$	(3,928,094	)

Preferred Stock Redemption		-		-		(24,400	)		(244	)		1,502,670		525,935		-		-		(341,216	)		-			184,475

Stock compensation cost		-		-		-			-			10,000		8,000		-		-		-			-			8,000

Common Stock issued for services		-		-		-			-			265,973		119,480		-		-		-			-			73,861

Common Stock issued , subscriptions		-		-		-			-			791,000		170,200		-		-		-			-			170,200

Common Stock issued as repayment of loans		-		-		-			-			250,000		104,813		-		-		-			-			50,000

Common Stock issued as commitment fee on promissory note payable		-		-		-			-			300,000		111,000		-		-		-			-			111,000

Common Stock Issuable, Subscriptions		-		-		-			-			-		-		5,000		-		-			-			5,000

Net Loss		-		-		-			-			-		-		-		-		-			(1,373,093	)		(1,373,093	)
Balance at March 31, 2022 (Unaudited)		-	$	-		600.00		$	6			17,523,673	$	42,921,963	$	5,356,398	$	4,210,960	$	4,747,108		$	(61,834,654	)	$	(4,598,219	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

NOVACCESS GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED MARCH 31, ~~2021~~2022 AND ~~2020~~2021

(Unaudited)

For the Six Months Ended

March 31, 2021

March 31, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)
$ (514,092 ) $ (63,121 )
  Adjustment to reconcile net income (loss) to net cash
      provided by (used in) operating activities

    (Gain)/Loss on change in derivative liability
(1,180,067 ) 75,537
     Stock compensation expense
936,000 -
     Stock issued for services
145,941 -

    Changes in Assets and Liabilities:

    Prepaid expenses
- 3,805
    Accounts payable
163,310 (42,942 )
    Other payable
1,590 -
    License fees payable
(10,000 ) -
    Accrued expenses and interest on notes payable
32,999 (1,761 )
    Accrued payroll
23,290 -
    Deferred Compensation
120,508 -

              NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES - CONTINUING OPERATIONS (280,521 ) (28,482 )

              NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES - DISCONTINUED OPERATIONS - 140,134

NET CASH (USED IN) PROVIDED BY OPERATIONS
(280,521 ) 111,652

CASH FLOWS FROM FINANCING ACTIVITIES:

    Stock subscriptions received
295,000 -
    Due to related party
6,628 -
    Payments on related party promissory notes
- (7,200 )
    Proceeds from a related party loan
25,000 -
    Payments on related party loan payable
(24,287 ) -

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
302,341 (7,200 )

NET INCREASE (DECREASE) IN CASH
21,820 104,452

CASH, BEGINNING OF PERIOD
178 7,964

CASH, END OF PERIOD
$ 21,998 $ 112,416

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

   Interest paid
$ 1,386 $ 4,840
   Taxes paid
$ - $ -

SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS

   Accrued interest capitalized into convertible note
$ 2,505 $ 2,235
   Shares issued for StemVax Acquisition – from stock payable
$ 6,375,000 $ -

	For the Six Months Ended
	March 31, 2022			March 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(1,373,093	)	$	(514,092	)
Adjustment to reconcile net loss to net cash provided by (used in) operating activities
Amortization of debt discount and debt issuance costs recorded as interest expense		479,689			-
(Gain)/Loss on change in derivative liability		33,399			(1,180,067	)
Extinguishment of derivatives		(96,205	)		-
Extinguishment of debt		54,813			-
Stock compensation expense		53,619			936,000
Stock issued and issuable for services		73,861			145,941
Stock issued as commitment fee on promissory note payable		79,043			-
Non-cash interest expense on bridge loan		546			-


Changes in Assets and Liabilities:
Employee advances		380			-
Prepaid expenses		5,188			-
Accounts payable		39,700			163,310
Other payable		-			1,590
License fees payable		(3,490	)		(10,000	)
Accrued expenses and interest on notes payable		144,100			32,999
Accrued payroll		556			23,290
Deferred Compensation		69,050			120,508

NET CASH USED IN OPERATING ACTIVITIES		(438,844	)		(280,521	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Stock subscriptions received		175,200			295,000
Due to related party		3,151			6,628
Proceeds from a note payable		213,000			-
Payments to TN3 for redemption of preferred stock		(50,000	)		-
Payments on convertible notes payable		(94,250	)		-
Proceeds from bridge loans payable - related parties		75,000			-
Payment on the bridge loans payable		(2,316	)
Proceeds from a related party loan		-			25,000
Payments on related party loan payable		-			(24,287	)


NET CASH PROVIDED BY FINANCING ACTIVITIES		319,785			302,341

NET INCREASE (DECREASE) IN CASH		(119,059	)		21,820

CASH, BEGINNING OF PERIOD		180,668			178

CASH, END OF PERIOD	$	61,609		$	21,998

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	71,245		$	1,386
Taxes paid	$	-		$	-

SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS
Accrued interest capitalized into convertible note	$	546		$	2,505
Shares issued for StemVax Acquisition – from stock payable	$	-		$	6,375,000
Cash payable to TN3 for preferred stock	$	200,000		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

NOVACCESS GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

MARCH 31, ~~2021~~2022 AND ~~2020~~2021

1. ORGANIZATION AND LINE OF BUSINESS

Organization

NovAccess Global Inc. (“NovAccess,” the “Company”) is a Colorado corporation formerly known as Sun River Mining Inc. and XsunX, Inc. The Company was originally incorporated in Colorado on February 25, 1997. Effective September 24, 2003, the Company completed a plan of reorganization and name change to XsunX, Inc. In June 2020, the Company was acquired and changed its name to NovAccess Global Inc.

Line of Business

~~During~~NovAccess Global Inc. is a biopharmaceutical company that is developing novel immunotherapies to treat brain tumor patients in the ~~year ended September 30, 2020, the Company discontinued its direct delivery method for its solar contracting operations. Also, during the year ended September 30, 2020 the Company began efforts~~United States with plans to expand ~~its operations~~globally. We specialize in cutting-edge research related to ~~include~~utilizing a patient’s own immune system to attack the cancer. We are filing an Investigational New Drug Application (IND) and working closely with the Food and Drug Administration (FDA) to obtain approval for human clinical trials to determine safety and efficacy of our drug product for brain cancer patients. Once we have successfully completed the clinical trials and proven that the new therapy is safe and efficacious, we plan to commercialize the product. We also have expertise in successfully executing clinical trials, bringing products to market and increasing the market size of products through our advisory board. Our scientists are well versed in immunology, stem cell biology, neuroscience, molecular biology, imaging, small molecules development, gene therapy and other technical assays needed for protein and genetic analysis of cancer cells.

NovAccess operates as a research and development (R&D) company out of Ohio and California, and our executive management and scientific advisory board provide over 15 years of extensive experience in all aspects of biopharmaceutical R&D and commercialization of ~~developmental healthcare solutions in~~drug candidates. We guide our performance by striving to deliver consistently on the ~~biotechnology, medical,~~following core objectives: (1) Accountability — taking responsibility for providing safe and ~~health~~effective options for patients; (2) Integrity — doing what is ethically right for the patient; (3) Excellence — doing your best and ~~wellness markets. These efforts are ongoing. There can be no assurance that~~working hard; and (4) Teamwork — bringing together a strong working team to deliver the Company’s efforts to expand operations into healthcare solutions in the biotechnology, medical, and health and wellness markets will be successful, or that the Company will continue to generate revenues of significance similar to prior periods.best products for brain tumor patients.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the six months ended March 31, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the year ended September 30, ~~2021.~~2022. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended September 30, ~~2020.~~2021.

Going Concern

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company does not generate ~~significant~~ revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. The Company has obtained funds from its shareholders and lenders since its inception through the period ended March 31, ~~2021.~~2022. Management believes the existing shareholders and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of its business.

~~2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

This summary of significant accounting policies of NovAccess is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Table of Contents

NOVACCESS GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

MARCH 31, 2022 AND 2021

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary StemVax, LLC. All significant inter-company accounts and transactions between these entities have been eliminated in these condensed consolidated financial statements.

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The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements. Significant estimates made in preparing these consolidated financial statements include the estimate of ~~useful lives of property and equipment, revenue recognition,~~derivative liabilities, the deferred tax valuation allowance, and the fair value of stock ~~options, and derivative liabilities.~~options. Actual results could differ from those estimates.

For purposes of the statements of cash flows, cash and cash equivalents include cash in banks and money markets with an original maturity of three months or less.

Property and equipment are stated at cost, and are depreciated using ~~straight line~~the straight-line method over its estimated useful lives:

The Company capitalizes property and equipment over $500. Property and equipment under $500 are expensed in the year purchased. The depreciation expense for the three months ended March 31, 2021, and 2020, was $0 and $239, respectively. The depreciation expense for the six months ended March 31, 2021, and 2020, was $0 and $478, respectively. Depreciation expense is now included in the discontinued operations.

We recognize revenue from discontinued operations when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.

Revenues and related costs on construction contracts were recognized as the performance obligations for work were satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, was recognized as the customer obtained control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs were charged to the periods as incurred. However, in the event a loss on a contract was foreseen, the Company would recognize the loss as it is determined.

Revisions in cost and profit estimates during the course of the contract were reflected in the accounting period in which the facts for the revisions became known. Provisions for estimated losses on uncompleted contracts were made in the period in which such losses were determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may have resulted in revisions to costs and income, which were recognized in the period the revisions were determined.

Contract receivables of discontinued operations were recorded on contracts for amounts currently due based upon progress billings, as well as any retentions, which were collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors were recorded for amounts currently due based upon work completed or materials received, as were retention due subcontractors, which were payable upon completion of the contract. General and administrative expenses were charged to operations as incurred and were not allocated to contract costs.

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The Company previously billed its customers in accordance with contractual agreements. The agreements generally required billings to be on a progressive basis as work was completed. Credit was extended based on evaluation of clients’ financial condition and collateral was not required. The Company maintained an allowance for doubtful accounts for estimated losses that may have arose, if any customer was unable to make required payments. As of March 31, 2021 and September 30, 2020, there was no allowance for doubtful accounts.

Management previously performed a quantitative and qualitative review of the receivables past due from customers on a monthly basis. The Company recorded an allowance against uncollectible items for each customer after all reasonable means of collection had been exhausted, and the potential for recovery was considered remote. The contract receivables of discontinued operations balance were $0 at March 31, 2021 and September 30, 2020.

Customers in our target market of California who purchased solar energy systems are covered by a warranty of up to 10 years in duration for material defects and workmanship. In addition, we provide a pass-through warranty of the major components such as module mounting, inverter and solar panel manufacturers’ warranties to our customers, which generally range from 10 to 25 years. The manufacturers of these major components provide the warranty directly to our customers. In the event of a component failure the manufacturers provide replacement of the major components such as inverters and solar modules at no charge to our customer, which is an industry standard. In the event of a component failure such as an inverter the standard warranty from the supplier we use, SolarEdge, provides a twelve (12) year no-charge replacement warranty to the customer, and would also provide NovAccess or our subcontractor, with $125 compensation for labor replacement costs, should we be requested to replace an inverter or other SolarEdge components. Additionally, we employed the use of licensed subcontractors for the bulk of our installation processes, who as licensed contractors are required to warrant their work for material defects and workmanship for ten (10) years. The Company has a limited history of project installations, and in accessing the potential for warranty related costs and other allowances, we believe that our reliance on the manufacturers and subcontractor warranties would leave a limited and inconsequential cost associated with warranty claims. During the six months ended March 31, 2021 and 2020, the Company did not experience costs related to warranty claims.

Share-based Payment applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are to follow a fair value of those equity instruments. We are required to follow a fair value approach using an option-pricing model, such as the Binomial lattice valuation model, at the date of a stock option grant. The deferred compensation calculated under the fair value method would then be amortized over the respective vesting period of the stock option. This has not had a material impact on our results of operations.

Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the ~~year.~~period. Diluted net earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the effect of stock options and stock-based awards plus the assumed conversion of convertible debt (Notes 4 and 5). 

Diluted weighted average number of shares for the three and six months ended March 31, 2022 and March 31, 2021 is the same as basic weighted average number of shares because the Company had net losses for these respective periods.

~~The Company has included shares issuable from convertible debt of $221,209 for the three months ended March 31, 2020, because their impact on the income per share is dilutive.~~

~~The Company also included shares issuable from 2,000,000 options issued to compensate our former directors for serving on the board without compensation in fiscal 2019.~~

Fair Value of Financial Instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, ~~2021,~~2022, the balances reported for cash, prepaid expenses, accounts payable, accrued expenses approximate the fair value because of their short maturities.

We adopted ~~ASC~~Accounting Standards Codification (“ASC”) Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, an established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

We measure certain financial instruments at fair value on a recurring basis. The Company had no assets that are required to be valued on a recurring basis as of March 31, ~~2021~~2022 and September 30, ~~2020.~~2021. The Company had liabilities that are required to be measured at fair value on a recurring basis as follows at March 31, ~~2021~~2022 and September 30, ~~2020:~~2021:

The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:

In May 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) 2021-04—Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in an interim period. The Company ~~is currently evaluating the effects of the adoption of ASU No. 2021-04 on its consolidated financial statements.~~

In August 2016, FASB issued ASU 2016-15, “Statement of Cash Flows” (Topic 230) – Classification of Certain Cash Receipts and Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2018, and interim periods with fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The Company has evaluated the impact of the adoption of ASU ~~2016-15,~~2021-04, which had no effect on the Company’s financial statements.

In August 2017, FASB issued ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company has evaluated the impact of the adoption of ASU 2017-12, which had no effect on the Company’s financial statements.

~~In June 2018, FASB issued ASU 2018-07,~~ ~~Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting~~, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The new guidance is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company has evaluated the impact of the adoption of ASU 2018-07, which had no effect on the Company’s financial statements.

~~In August 2018, the FASB issued ASU 2018-13,~~ ~~Fair Value Measurement (Topic 820), Disclosure Framework~~ – ~~Changes to the Disclosure Requirements for Fair Value Measurement.~~ The amendments in this Update modify certain disclosure requirements of fair value measurements and are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company has evaluated the impact of the adoption of ASU 2018-13, which had no effect on the Company’s financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

At March 31, ~~2021,~~2022, the Company’s authorized stock consisted of 2,000,000,000 shares of common stock, with no par value. Effective August 25, 2020, we filed articles of amendment to our articles of incorporation with the Colorado Secretary of State to effectuate a 1-for-1,000 reverse stock split of the Company’s outstanding shares of common stock.

The Company is also authorized to issue 50,000,000 shares of preferred stock with a par value of $0.01 per share. The rights, preferences and privileges of the holders of the preferred stock are determined by the Board of Directors prior to issuance of such shares.

AtAs of March 31, ~~2021~~2022 the Company had ~~25,000~~600 shares of issued and outstanding Series B Preferred Stock following the conversion of 5,000 shares of Series A Preferred Stock and redemption of 24,400 shares of Series B Preferred Stock. The Series A shares were originally issued in consideration for the contribution of services by Tom Djokovich, the ~~Company’s then~~former President and Chief Executive Officer, to the Company valued at ~~fifty~~50 dollars, which the Board deemed full and fair consideration. Because of such issuance, Mr. Djokovich had the ability to influence and determine stockholder votes. On March 18, 2020, the Company, Mr. Djokovich, and TN3, LLC, a Wyoming limited liability company owned by Daniel G. Martin (“TN3”), entered into a Stock Purchase Agreement (the “Agreement”). Pursuant to the Agreement, Mr. Djokovich agreed to sell his 5,000 shares of Series A Preferred Stock to TN3 in a private sale for cash. The holder of the Series A Preferred Stock ~~may~~could cast votes equal to not less than 60% of the total outstanding voting power of the Company on all matters voted on by the shareholders of the Company. On September 4, 2020, the Company issued 25,000 shares of unregistered Series B Convertible Preferred stock, $0.01 par value per share to TN3 in exchange for the redemption of 5,000 shares of Series A preferred stock. On March 14, 2022 the Novaccess redeemed 24,400 shares of the Company’s Series B Convertible Preferred Stock held by TN3. Irvin Consulting LLC, a company owned by Dwain Irvin, the CEO of NovAccess, purchased remaining 600 shares (please refer to Note 12 for more details).

Each share of outstanding Series B Preferred Stock entitles the holder to cast 40,000 ~~votes on any action presented to the shareholders.~~votes. Each share of Series B Preferred Stock ~~converts~~is convertible at the option of the holder into 10,000 common shares. In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation, the holders of shares of Series B Preferred Stock shall be paid out based on an as converted basis. Dividend for Series B Preferred Stock shall be declared on an as converted basis.

Effective August 25, 2020, we filed articles of amendment to our articles of incorporation with the Colorado Secretary of State to effectuate a 1-for-1,000 reverse stock split of the Company’s outstanding shares of common stock.

During the six months ended March 31, 2022, the Company issued 3,119,643 shares of common stock. 1,502,670 shares were issued to TN3 as part of the transaction to redeem 24,400 shares of Series B Preferred Stock, 265,973 shares were issued to various vendors for services provided; 791,000 shares were issued in relation to stock subscriptions; 300,000 shares were issued as a commitment fee on a promissory note payable; 250,000 shares were issued as repayment of bridge loans (please refer to Note 4 for more details); and 10,000 shares were issued to related parties (please refer to Note 12 for more details).

During the six months ended March 31, 2021, the Company issued 11,252,850 shares of common stock. For an expense of $145,941 based on the closing market value on grant date 311,945 shares were issued to various vendors for services provided; 1,440,905 shares were issued in relation to stock subscriptions for net proceeds of $295,000; and 9,500,000 shares were issued to related parties for services and expense at $936,000 based upon the closing market value on grant ~~date (please refer to Note 13 for more details).~~date.

~~During the period ended March 31, 2020, the Company had no issuance of shares of common stock.~~

As of March 31, ~~2021,~~2022, the outstanding convertible promissory notes are summarized as follows:

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On October 20, 2015, the Company entered into a third extension of the Note originally issued September 30, 2013. The extension terms included mandatory payments of $10,000 per month beginning November 1, 2015 until the note in the amount of $143,033 is paid in full. The Note bears interest at 12% annum and has a conversion price of 60% of the lowest volume weighted average price (“VWAP”) occurring during the twenty trading days preceding any conversion date by Holder. The balance of the provisions of the Note remained substantially the same. As of March 31, 2021the balance of the Note was $43,329, which includes capitalized interest for the period of $2,505. As of March 31, 2021, the Note has matured and is in default. On May 11, 2021, the Lender has agreed to convert the outstanding principal and interest into shares of our common stock pursuant to the terms of the note.

On November 20, 2014, the Company issued a 10% unsecured convertible promissory note (the ~~“November~~“2014 Note”) for the principal sum of up to $400,000 plus accrued interest on any advanced principal funds. The ~~November~~2014 Note matures eighteen months from each advance. The ~~November~~2014 Note may be converted by the lender into shares of common stock of the Company at the lesser of ~~$12.5~~$12.50 per share or (b) fifty percent (50%) of the lowest trade prices following issuance of the ~~November~~2014 Note or (c) the lowest effective price per share granted to any person or entity. On November 20, 2014, the lender advanced $50,000 to the Company under the ~~November~~2014 Note at inception. On various dates from February 18, 2015 through September 30, 2016, the lender advanced an additional $350,000 under the ~~November~~2014 Note. ~~The tranches advanced on~~During the ~~November Note mature on~~period ended September 30, 2021, the Company and lender agreed to extend the maturity date for the outstanding balance to June 30, ~~2021 and August 18, 2021.~~2023. As of March 31, ~~2021,~~2022, there remains an aggregate outstanding principal balance of $50,880.

On May 10, 2017, the Company issued a 10% unsecured convertible promissory note (the ~~“May~~“2017 Note”) for the principal sum of up to $150,000 plus accrued interest on any advanced principal funds. The ~~Lender~~lender may pay additional consideration at the ~~Lenders~~lender’s discretion. The Company received a tranche in the amount of $25,000 upon execution of the ~~May~~2017 Note. On various dates, the Company received additional tranches in the aggregate sum of $90,000. The ~~May~~2017 Note matured twelve months from each tranche. Within thirty (30) days prior to the maturity date, the ~~Lender~~lender may extend the maturity date to sixty (60) months. During the period ended September 30, 2021, the Company and lender agreed to extend the maturity date for the outstanding balance to June 30, 2023. The ~~May Note tranches mature from May 12, 2022 through December 14, 2022. The May~~2017 Note may be converted by the lender into shares of common stock of the Company at the lesser of $10 per share or (b) fifty percent (50%) of the lowest trade price of common stock recorded on any trade day after the effective date, or (c) the lowest effective price per share granted to any person or entity. As of March 31, ~~2021,~~2022, the balance remaining on the May Note was $115,000.

On June 2, 2021, the Company issued a 12% unsecured convertible promissory note (the “June Note”) for the principal sum of $55,500 plus accrued interest. The June Note was to mature on June 2, 2022. The June Note could be converted by the lender into shares of common stock of the Company at sixty-one percent (61%) of the lowest trade price of common stock recorded during the fifteen (15) trading days prior to conversion. On October 5, 2021 the Company paid the balance of this note to the lender including accrued interest and prepayment settlement fee of $17,520. The Company recorded amortization of debt discount of $36,493 and amortization of debt issuance costs of $1,458, both of which were recognized as interest expense during the six months ended March 31, 2022. The Company also recognized a gain of $59,915 on the extinguishment of this convertible note during the six months ended March 31, 2022. As of March 31, 2022, the balance of the June Note was $0.

On July 6, 2021, the Company issued a 12% unsecured convertible promissory note (the “July Note”) for the principal sum of $38,750 plus accrued interest. The July Note was to mature on July 6, 2022. The July Note could be converted by the lender into shares of common stock of the Company at sixty-one percent (61%) of the lowest trade price of common stock recorded during the fifteen (15) trading days prior to conversion. On December 30, 2021 the Company paid the balance of this note to the lender including accrued interest and prepayment settlement fee of $16,936. The Company recorded amortization of debt discount of $29,620 and amortization of debt issuance costs of $1,996, both of which were recognized as interest expense during the six months ended March 31, 2022. The Company also recognized a gain of $36,289 on the extinguishment of this convertible note during the six months ended March 31, 2022. As of March 31, 2022, the balance of the June Note was $0.

On August 20, 2021, the Company issued a 10% unsecured promissory note (the “August Note”) for the principal sum of $500,000 plus accrued interest. The August Note was to mature on February 20, 2022, unless extended for up to an additional six months. The August Note may be converted, only following an event of default, and therefore not included in summary of convertibles note, by the lender into shares of common stock of the Company at the lesser of 90% (representing a 10% discount) multiplied by the lowest trading price during the previous twenty (20) trading day period ending on the issuance date, or during the previous twenty (20) trading day period. In February 2022 the Company extended the term of the August note for an additional six months. The extended maturity date is February 20, 2023. The Company recorded amortization of debt discount of $391,319 related to derivative portion of the August Note, amortization of debt issuance costs of $75,000, and $34,181 amortization of debt discount representing commitment fee all of which were recognized as interest expense during the six months ended March 31, 2022 in the consolidated statement of operations for the six months ended March 31, 2022. As of March 31, 2022, the balance of the August Note was $500,000.

On February 16, 2022, the Company issued a 10% unsecured promissory note (the “February note”) for the principal sum of $250,000 plus accrued interest. The February Note matures on August 15, 2022, unless extended for up to an additional six months. The February Note may be converted, only following an event of default, and therefore is not included in summary of convertibles note, by the lender into shares of common stock of the Company at the lesser of 90% (representing a 10% discount) multiplied by the lowest trading price during the previous twenty (20) trading day period ending on the issuance date, or during the previous twenty (20) trading day period. The Company recorded amortization of debt discount of $32,849 related to derivative portion of the February Note and amortization of debt issuance costs of $9,250, and $19,654 amortization of debt discount representing commitment fee, all of which were recognized as interest expense during the three months ended March 31, 2022, in the consolidated statement of operations for the three months ended March 31, 2022. As of March 31, 2022, the balance of the August Note was $250,000, which is the total of initial debt discount of $134,384, initial debt issuance costs of $37,000 and initial debt discount representing a commitment fee of $78,616.

We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory notes was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The ~~note has~~notes have no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the notes under paragraph 815-15-25-4, whereby there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the notes in their entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically according to the stock price fluctuations based upon the Binomial lattice model calculation.

The convertible notes issued and described in this Note 4 above, do not have fixed settlement provisions because their conversion prices are not fixed. The conversion feature has been characterized as a derivative liability to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.

We record the full value of the derivative as a liability at issuance with an offset to valuation discount, which will be amortized over the life of the ~~Notes.~~notes.

At March 31, ~~2021,~~2022, the fair value of the derivative liability was ~~$1,809,098.~~$2,400,203.

For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used Binomial lattice valuation model. The significant assumptions used in the Binomial lattice valuation of the derivatives are as follows:

As of March 31, 2016, Company issued ~~the remaining~~an unsecured Convertible Promissory ~~Notes~~Note (the ~~“Notes”~~“Note”) in the amount of $12,000 to a former Board member (the “Holder”) in exchange for retention as a director during the fiscal year ending September 30, 2014. The Note can be converted into shares of common stock by the Holder for ~~$4.5~~$4.50 per share. The Note matured on October 1, 2015, and bore a one-time interest charge of $1,200 which was applied to the principal on October 1, 2014. So long as any shares issuable under a conversion are subject to transfer and sale restrictions imposed pursuant to SEC Rule 144 of the Rules promulgated under the Securities Act of 1933, the Company shall, upon written request by Holder, file Form S-8, if applicable, with the U.S. Securities and Exchange commission to register the issued. ~~The convertible note has a fixed settlement provision and does not qualify as a derivative.~~

~~6. REVENUE FROM CONTRACTS WITH CUSTOMERS – DISCONTINUED OPERATIONS~~On August 20, 2021, for value received in connection with the issuance of the August Note (see note 4 for more details), the Company issued 1,000,000 warrants to the lender with an exercise price of $1.50 per share with a five-year exercise period.

~~Revenues and related costs on construction contracts were recognized as~~On February 16, 2022, for value received in connection with the performance obligations for work were satisfied over time in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, are recognized as the customer obtains controlissuance of the ~~goods and services promised in~~February Note (see note 4 for more details), the ~~contract (i.e., performance obligations). The cost~~Company issued 500,000 warrants to the lender with an exercise price of ~~uninstalled materials or equipment would generally be excluded from our recognition of profit, unless specifically produced or manufactured for~~$1.50 per share with a ~~project, because such costs are not considered to be a measure of progress.~~five-year exercise period.

~~The following table represents a disaggregation of revenue by type of good or service from contracts with customers for the three and six months ended~~At March 31, ~~2021 and 2020.~~

Contract assets represents revenues recognized in excess of amounts billed on contracts in progress. Contract liabilities represents billings in excess of revenues recognized on contracts in progress. Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheets, as they will be liquidated in the normal course of the contract completion. The contract asset at March 31, 20212022, and September 30, ~~2020 were $0. The contract~~2021, the fair value of the derivative liability ~~at March 31, 2021~~warrants was $597,997 and ~~September 30, 2020 were $0.~~$372,643, respectively.

~~Table~~

For the purpose of ~~Contents~~determining the fair market value of the derivative liability for the embedded conversion, the Company used the Binomial lattice valuation model. The significant assumptions used in the Binomial lattice valuation of the derivatives are as follows:

Risk free interest rate		2.42%
Stock volatility factor		Between 140% and 145%
Months to Maturity		5 years
Expected dividend yield		NaN

~~NOVACCESS GLOBAL, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~MARCH 31, 2021 AND 2020~~

7. OPTIONS

On June 2, 2020, the Company issued ~~2,000,000,000~~2,000,000 options to purchase common ~~stock.~~stock at an exercise price of $0.01 per share (adjusted for the August 2020 stock split). These options will be exercisable on a cashless basis for a period of ten years from the effective date of the one-for-1,000 reverse stock split at an exercise price of $0.00001 per share on a pre-stock split basis. The number of options on the post stock split basis is 2,000,000, and the exercise price of $0.01 per share.August 25, 2020. The purpose of the options is to compensate our directors for serving on the board without compensation in fiscal 2019. It is difficult to assess the value of the options given the highly limited trading in our common stock, the fact that the options shares have not been and are not expected to be registered for resale and will be restricted, and the speculative nature of the Company’s future business plans. However, we estimated the value of the services provided by each of our directors during 2019 and believe that the value of the options to be issued to each of our resigning directors approximates that amount.

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NOVACCESS GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

MARCH 31, 2022 AND 2021

7. OPTIONS (Continued)

At March 31, ~~2021,~~2022, the weighted average remaining contractual life of options outstanding:

March 31, 2021

Weighted

Average

Remaining

Exercisable

Options

Options

Contractual

Prices

Outstanding

Exercisable

Life (years)

$
.01

2,000,000

2,000,000

9.17

March 31, 2022

Weighted

Average

Remaining

Exercisable

Options

Contractual

Prices

Outstanding

Exercisable

Life (years)

0.01

2,000,000

8.41

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following at March 31, ~~2021~~2022 and September 30, ~~2020:~~2021:

3/31/2021

9/30/2020

Trade accounts payable
$ 251,829 $ 88,519
Credit cards payable
66,894 65,304
Accrued liabilities
95,709 65,215
Accrued payroll
23,290 -
Deferred compensation
120,508 -
License Fees Payable
40,402 50,402
598,632 269,440

	03/31/2022		9/30/2021
Trade accounts payable	$	161,922	$	143,074
Credit cards payable		66,894		66,894
Accrued liabilities and interest on notes payable		105,783		356,683
Accrued payroll		11,268		10,712
Deferred compensation		270,433		201,383
License fees payable		36,912		40,402
		653,212		819,148

9. ~~LOAN~~BRIDGE LOANS PAYABLE ~~RELATED PARTY~~

~~During the period ended September 30, 2020,~~Related Parties

In December 2021, the Company’s ~~chairman~~CEO and ~~the CEO~~CFO each advanced funds to the Company for operating expenses in the total amount of ~~$24,287.~~$50,000. The notes were payable on demand with a five business day written notice and bear interest at a rate of 10% per annum. The Company could prepay all or any part of the balance owed without penalty. In the event of the default, the notes were to bear additional interest at a rate of 12% per annum. On January 25, 2022 the Company issued 125,000 shares of its common stock in settlement of a bridge loan to the Company’s CFO and recognized a loss on extinguishment of debt in the amount of $17,313. Any potential gain would not have been recognized on extinguishment of this loan due to the nature of the relationship between the parties. The company recognized and paid interest expense in the amount of $237 to our CFO during the period ended March 31, 2022.

During the period ended March 31, 2022 the Company made payments to our CEO in the total amount of $20,938, of which $18,616 were used to purchase 600 shares of Serie B Preferred stock, and $2,316 were related to reimbursement of expenses. The company recognized and capitalized into the principle of the loan interest expense of $546. As of March 31, ~~2021, these balances have been reimbursed.~~2022, the balance on the bridge loan payable to our CEO was $4,068. No balance was outstanding on the notes payable to our CFO.

Service Provider

In December 2021, one of the Company’s service providers advanced funds to the Company for operating expenses in the total amount of $25,000. On ~~March 30, 2021~~February 14, 2022 the Company issued ~~an unsecured promissory~~125,000 shares of its common stock to the service provider in settlement of the note ~~to Innovest Global, Inc. with~~payable. The Company recognized a ~~principal and waived interest~~loss on extinguishment of debt in the amount of ~~$25,000. Our Chairman Dan Martin is CEO~~$37,500. During the period ended March 31, 2022 the Company recognized and paid interest expense of ~~Innovest.~~$226 in relation to this loan. No balance was outstanding on the note payable to our service provider as of March 31, 2022.

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NOVACCESS GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

MARCH 31, 2022 AND 2021

10. DUE TO RELATED PARTY

During the periods prior to the period ended March 31, ~~2021,~~2022, Innovest Global, Inc. (Innovest) advanced funds to the Company for operating expenses in the amount of ~~$74,940.~~$86,073. As of March 31, ~~2021,~~2022, the amount has not been reimbursed to ~~Innovest Global, Inc.~~Innovest. Our former Chairman ~~Dan~~Daniel Martin iswas the CEO of ~~Innovest.~~

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~~NOVACCESS GLOBAL, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~MARCH 31, 2021 AND 2020~~

~~11. BUSINESS TRANSITION~~

~~On June 2, 2020, in connection with TN3’s acquisition of shares of NovAccess Series B preferred stock from Tom Djokovich, our former president~~Innovest when the funds were advanced. Imputed interest is calculated on an annual basis at the market rate and chief executive officer, the Company entered into a transition services agreement (the “Services Agreement”) with Solar Energy Builders, Inc. (the “Service Provider”), a company controlled by Mr. Djokovich. The Company has exited the XsunX solar businessis estimated to transition to the biotechnology business. The Company discontinued its direct delivery method for its solar contracting operations by outsourcing the completion of sold projects under the Transition Services Agreement with the Service Provider. The Company’s intent is to transition from providing contracting services directly to its customers to marketing solar services to potential customers and referring those customers to the Service Provider or engaging the Service Provider to provide the services to customers on behalf of the Company. The Company’s operations in future periods will be focused on generating a referral fee of 1% of any gross sales generated through these referrals. We anticipate that this change in operations, and delivery method, will have a negative impact on our gross sales and resulting revenues, if any. However, during the period ended September 30, 2020 the Company began efforts to expand its operations to include the commercialization of developmental healthcare solutions in the biotechnology, medical, and health and wellness markets which efforts are ongoing. There can be no assurance that the Company’s change to its contracting operations to focus on referral fee revenues, and its efforts to expand operations into healthcare solutions in the biotechnology, medical, and health and wellness markets will be successful, or that the Company will continue to generate revenues of significance similar to prior periods.

Mr. Djokovich withdrew his position as the qualifying individual for the Company’s contractor license for the XsunX solar business and terminated the Transition Services Agreement. Mr. Djokovich may accept contracts initially marketed by the Company with the Service Provider as the qualifying individual for the solar license, without obligation to the Company for any cash flows therefrom.

~~12. DISCONTINUED OPERATIONS~~

~~Financial information for the Company for the three and six months ended March 31, 2021 and 2020, respectively, and~~equal $516 as of March 31, ~~2021 and September 30, 2020 are presented in the following table:~~2022.

11. COMMITMENTS AND CONTINGENCIES

Three months ended March 31,

Six months ended March 31,

2021

2020

2021

2020

SALES
$ - $ 625,636 $ - $ 826,022

COST OF GOODS SOLD
- 380,589 - 536,767

GROSS PROFIT
- 245,047 - 289,255

OPERATING EXPENSES

       Depreciation expense
- 239 - 478

                TOTAL OPERATING EXPENSES OF DISCONTINUED OPERATIONS - 239 - 478

                    NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS $ - $ 244,808 $ - $ 288,777

There are no material pending legal proceedings to which we are a party to, nor are there any such proceedings known to be contemplated by governmental authorities. None of our directors, officers, or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

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~~NOVACCESS GLOBAL, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~MARCH 31, 2021 AND 2020~~

12. ~~DISCONTINUED OPERATIONS (Continued)~~

March 31,

September 30,

2021

2020

ASSETS

CURRENT ASSETS

     Contract receivables of discontinued operations
$ - $ -

                    Total Current Assets of discontinued operations
- -

Net Property and Equipment of discontinued operations
- -

                     TOTAL ASSETS OF DISCONTINUED OPERATIONS
$ - $ -

LIABILITIES

CURRENT LIABILITIES

      Contract liabilities of discontinued operations
- -

                    Total Current Liabilities of discontinued operations
- -

                    TOTAL CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
$ - $ -

~~13.~~ RELATED PARTY TRANSACTIONS

As of March 31, 2016, Company issued the remaining unsecured Convertible Promissory Notes (the “Notes”) in the amount of $12,000 to a Board member (the “Holder”) in exchange for retention as a director during the fiscal year ending September 30, 2014. The Note can be converted into shares of common stock by the Holder for $4.5 per share. The Note matured on October 1, 2015 and bore a one-time interest charge of $1,200, which was applied to the principal on October 1, 2014.

On September 4, 2020, the Company entered into a management services agreement (the “Agreement”) with TN3, LLC. Pursuant to the Agreement, TN3 ~~will~~was to provide NovAccess with office space in Chesterland, Ohio and management, administrative, marketing, bookkeeping and IT services for a fee of $30,000 a month. The initial term of the Agreement iswas three years, with subsequent one-year renewals. During the three months ended March 31, 2022, the Company entered into a transaction with TN3 ~~holds all~~to redeem its shares of ~~our outstanding~~the Company’s Series B Convertible preferred stock (please refer to more details below). This transaction terminated the Agreement, including satisfaction for all services provided and ~~is owned by Daniel G. Martin, our chief executive officer at~~any amounts outstanding. As of March 31, 2022 there was zero balance reported as the ~~time of this transaction, and~~outstanding payable amount in relation to the ~~sole member of our board of directors.~~Agreement.

On ~~November 23, 2020~~October 4, 2021, the Company issued ~~7,500,000~~10,000 shares of common stock to ~~Innovest Global, Inc. for the September 8, 2020 acquisition of StemVax, LLC. Our Chairman Dan Martin is CEO of Innovest.~~

~~On November 23, 2020 the Company issued 1,800,000 shares of common stock to Dwain K. Morris-Irvin~~Neil J. Laird to compensate him for serving as our chief ~~executive~~financial officer. The stock-based compensation expense in the amount of ~~$846,000~~$8,000 was reported on the Company’s financial statements for the six months ended March 31, ~~2021.~~2022.

On ~~October 21, 2020, L. Michael Yukich joined~~January 31, 2022, the Company asentered into a preferred stock redemption agreement (the “redemption agreement”) with Daniel G. Martin, at the time our sole board member and chairman, TN3, LLC, a company owned by Mr. Martin, Dwain K. Morris-Irvin, our chief ~~financial officer. His offer letter provides for the issuance of 200,000~~executive officer, and Irvin Consulting, LLC, a company owned by Dr. Irvin. TN3 owned 25,000 shares of our Series B convertible preferred stock. Pursuant to the redemption agreement, on March 14, 2022, NovAccess redeemed 24,400 of the preferred shares and Irvin Consulting purchased 600 of the preferred shares from TN3. In connection with the redemption, we issued to TN3 1,502,670 shares of unregistered common ~~stock~~stock. To redeem the preferred shares, the Company is to ~~compensate him for his services. These shares were issued by~~pay TN3 a total of $250,000 over a period of ten months, with payment accelerated if the ~~Company’s transfer agent on January 19, 2021.~~company raises significant capital. The ~~stock-based compensation expense~~company paid $50,000 to TN3 in relation to this transaction during the ~~amount of $90,000 was reported in the Company’s financial statements for the six~~three months ended March 31, ~~2021.~~

~~During the period ended September 30, 2020, the Company’s chairman and the CEO each advanced funds to the Company for operating expenses in the total amount of $24,287.~~2022. As of March 31, ~~2021, these balances have been reimbursed.~~

~~On March 30, 2021~~2022 the ~~Company issued an unsecured promissory note~~balance owed to ~~Innovest Global, Inc. with a principal and waived interest in the amount of $25,000. Our Chairman Dan Martin~~TN3 on this transaction is ~~CEO of Innovest.~~

During the periods ended March 31, 2021, Innovest Global, Inc. (Innovest) advanced funds to the Company for operating expenses in the amount of $74,940. As of March 31, 2021, the amount has not been reimbursed to Innovest Global, Inc.$200,000.

Upon completion of the redemption, Mr. Martin resigned from the NovAccess board of directors and was replaced by Dr. Irvin and John Cassarini. On March 18, 2022, the board of directors of NovAccess voted to expand the size of the company’s board to three members and appointed Jason M. Anderson to the board to fill the resulting vacancy.

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NOVACCESS GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

MARCH 31, ~~2021~~2022 AND ~~2020~~2021

~~14.~~13. SUBSEQUENT EVENTS

Management has evaluated subsequent events as of May ~~19, 2021,~~13, 2022, the date the consolidated financial statements were available to be issued according to the requirements of ASC topic 855.

~~Subsequent~~On May 5, 2022, NovAccess entered into a securities purchase agreement (the “SPA”) with AJB Capital Investments, LLC (“AJB”) and issued a promissory note in the principal amount of $1.0 million (the “note”) to AJB pursuant to the ~~fiscal quarter ended March 31,~~SPA. The loan closed and was funded on May 9, 2022. NovAccess used $500,000 of the proceeds of the loan to repay AJB’s August 20, 2021 ~~471,778 shares of common stock were issued by~~loan and will use the ~~Company, including 200,000 shares~~remaining loan proceeds for ~~investment in the Company by various private investors, and 271,778 to outside service providers.~~general working capital purposes.

~~On May 11, 2021,~~The note has an original issuance discount of 10% of the ~~holder of~~principal and bears interest at 12% a ~~convertible~~year. The note is due on November 5, 2022, but may be extended for six months by NovAccess, at which time the rate will increase to 15%. NovAccess must repay the note with ~~a balance as~~the proceeds of ~~March 31, 2021 of $43,329 has agreed to convert~~any loan or capital raise exceeding $5.0 million and may otherwise prepay the ~~outstanding principal and interest into shares of our common stock pursuant to~~note at any time without penalty. Under the terms of the ~~note.~~

note, NovAccess may not sell a significant portion of its assets without the approval of AJB, may not issue additional debt that is not subordinate to AJB, must comply with the company’s reporting requirements under the Securities Exchange Act of 1934, and must maintain the listing of the company’s common stock on the OTC Market or other exchange, among other restrictions and requirements. NovAccess’ failure to make required payments under the note or to comply with any of these covenants, among other matters, would constitute an event of default. Upon an event of default under the SPA or note, the note will bear interest at 18%, AJB may immediately accelerate the note due date, AJB may convert the amount outstanding under the note into shares of NovAccess common stock at a discount to the market price of the stock, and AJB will be entitled to its costs of collection, among other penalties and remedies.

NovAccess provided customary representations and covenants to AJB in the SPA. NovAccess’ breach of any representation or failure to comply with the covenants would constitute an event of default. Also pursuant to the SPA, NovAccess paid AJB a commitment fee of 875,000 unregistered shares of the company’s common stock (the “commitment fee shares”). If, after May 5, 2023 and before May 5, 2025, AJB is unable to sell the commitment fee shares for $700,000, then AJB may require NovAccess to issue additional shares or pay cash in the amount of the shortfall. However, if NovAccess pays the note off before November 5, 2022, then the company may redeem 437,500 of the commitment shares for one dollar. Pursuant to the SPA, NovAccess also issued to AJB a common stock purchase warrant (the “warrant”) to purchase 1.0 million shares of the company’s common stock for $0.01 a share. The warrant expires on May 5, 2027. NovAccess also entered into a security agreement with AJB (the “security agreement”) pursuant to which NovAccess granted to AJB a security interest in all of the company’s assets, including the equity of StemVax, LLC, securing NovAccess’ obligations under the SPA, note and warrant. In addition, NovAccess entered into a registration rights agreement with AJB (the “registration agreement”) pursuant to which NovAccess agreed to file with the Securities and Exchange Commission a Form S-1 by August 3, 2022 to register for resale the commitment fee shares and the shares issuable upon exercise of the warrant.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Statement Concerning Forward-Looking Statements

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors, including those discussed under Item 1A. Risk Factors of our Form 10-K for the fiscal year ended September 30, ~~2020.~~2021.

We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this report. ~~You~~Readers should carefully review the factors described in other documents that NovAccess files from time to time with the SEC.

Results of Operations for the Three Months Ended March 31, ~~2021~~2022 Compared to the Three Months Ended March 31, ~~2020~~2021

Revenue and Cost of Sales:

The Company generated no revenue for the second quarter of fiscal 2021 ended March 31, 2021 compared to $625,636 for the second quarter of fiscal 2020 ended March 31, 2020. The lack of revenue in the second quarter of 2021 was due to our change in focus from selling commercial solar systems and steel canopy construction services to investing in the biotechnology industry following our acquisition of StemVax, LLC, a biopharmaceutical company developing novel therapies for brain tumor patients, in September 2020. The costsor cost of goods sold in the second quarters of fiscal years ended March 31, 2022 and 2021.

Research and development expenses

In the second quarter of ~~2021~~2022 the Company incurred $45,516 in research and ~~2020 was $0~~development expenses related to activities performed by Dr. Christopher Wheeler and ~~$380,589, respectively.~~

~~Pursuant~~Dr. Dwain K. Morris-Irvin related to preparing the ~~reporting requirements of ASC 205-20,~~ ~~Presentation of Financial Statements~~ — ~~Discontinued Operations~~~~, we have determined that the Company’s solar business qualifies~~application to obtain FDA approval to start human clinical trials for ~~presentation as a discontinued operation. Therefore, we have reclassified and presented these operating results as discontinued operations~~StemVax Glioblast (SVX-GB) compared to $8,446 incurred in the ~~accompanying statements~~second quarter of ~~operations.~~2021.

Selling, General and Administrative Expenses:

Selling, general and administrative (SG&A) expenses increased by ~~$142,117~~$108,555 during the second quarter ~~of fiscal 2021~~2022 to ~~$281,319~~$381,428 as compared to ~~$139,203~~$272,873 for the second quarter of ~~fiscal 2020.~~2021. The increase in SG&A expenses was related primarily to an increase of ~~$52,146~~$55,541 in ~~professional~~legal expenses related to the Series B Convertible Preferred Stock redemption transaction, increase of $48,018 in accounting and CFO services fees, recognition of $25,000 in insurance expense and $45,619 in stock compensation for a service provider, partially offset by $38,643 decrease in payroll related expenses due to ~~our fundraising and other investor related activities and $89,971 in outside services expense incurred~~the Company having a lower head count in the second quarter of ~~2021.~~2022 compared to the second quarter of 2021, as well as a decrease of $25,600 in other professional fees and outside services due to termination of management services Agreement with TN3 and timing of investors relations services.

Other Income/(Expenses):

Other ~~expenses~~net expense increased by ~~$320,825 from $67,062~~$414,954 to $802,841 for the second quarter of fiscal ~~2020 to~~2022 from $387,887 for the second quarter of fiscal 2021. The increase in net total other ~~expenses~~expense was primarily due to recognition of a $109,886 higher loss on net change in fair market value of the derivative instruments in the second quarter of ~~$382,539~~2022 compared to the loss recognized in the second quarter of 2021, ~~compared~~as well as recognition of $202,053 amortization of debt discount, commitment fees on notes payable and debt issuance costs on loans entered to ~~a loss of $59,458 recognized~~ in ~~the second quarter of 2020.~~fiscal 2022.

Net Loss:

For the second quarter of fiscal ~~2021,~~2022, our net loss was ~~$669,206~~$1,229,785 as compared to a net ~~income~~loss of ~~$38,543 (net of $244,808 income from discontinued operations)~~$669,206 for the second quarter of fiscal ~~2020.~~2021. The ~~majority of the~~ increase in net loss of ~~$707,749~~$560,579 was due to an increase in net other expenses associated with the net change in derivative instruments estimated each period and byincrease in interest expense and other financing costs, as well as an increase in SG&A expenses and higher research and development expenses recognized in 2021. The derivative instruments estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices defined in the respective agreements and probabilities of certain outcomes based on managements’ estimates. These inputs are subject to significant changes from period to period. As a result, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.fiscal 2022.

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Results of Operations for the Six Months Ended March 31, ~~2021~~2022 Compared to the Six Months Ended March 31, ~~2020~~2021

Revenue and Cost of Sales:

The Company generated no revenue for the six months ended March 31, 2021 compared to $826,022 for the six months ended March 31, 2020. The lack of revenue in the first half of 2021 was due to our change in focus from selling commercial solar systems and steel canopy construction services to investing in the biotechnology industry following our acquisition of StemVax, LLC, a biopharmaceutical company developing novel therapies for brain tumor patients, in September 2020. The costsor cost of goods sold for the six months ended March 31, ~~2021~~2022 and ~~2020 was $0~~March 31, 2021.

Research and ~~$536,767, respectively.~~development expenses

~~Pursuant~~In the six months ended March 31, 2022 the Company incurred $87,915 in research and development expenses related to activities performed by Dr. Christopher Wheeler and Dr. Dwain K. Morris-Irvin related to preparing the ~~reporting requirements of ASC 205-20,~~ ~~Presentation of Financial Statements~~ — ~~Discontinued Operations~~~~, we have determined that the Company’s solar business qualifies~~application to obtain FDA approval to start human clinical trials for ~~presentation as a discontinued operation. Therefore, we have reclassified and presented these operating results as discontinued operations~~StemVax Glioblast (SVX-GB) compared to $8,446 recognized in the ~~accompanying statements of operations.~~six months ended March 31, 2021.

Selling, General and Administrative Expenses:

Selling, general and administrative (SG&A) expenses ~~increased~~decreased by ~~$1,420,401~~$1,011,406 during the six months ended March, 31 ~~2021~~2022 to ~~$1,681,210~~$661,358 as compared to ~~$260,809~~$1,672,764 for the ~~first half of~~six months ended March 31, 2021. The ~~increase~~decrease in SG&A expenses was related primarily to the Company recognizing ~~$936,000~~$846,000 in stock compensation expense in connection with the issuance of stock to our chief executive officer ~~and chief financial officer for services rendered; an increase of $206,066~~ in ~~professional fees due to our fundraising and other investors related activities; $190,000 in outside services expense incurred during the first half of 2021;~~fiscal 2021, as well as a ~~$78,471 increase~~decrease of $36,381 in other stock compensation expense. Payroll expenses also decreased by $117,904 in fiscal 2022 due to a $50,000 bonus accrual for our CEO in fiscal 2021, outsourcing CFO services and allocating a portion of our CEO compensation to research and development expenses in fiscal 2022. The decrease in payroll ~~related expenses.~~and stock compensation expenses are partially offset by increases of $61,117 in professional fees and outside services due to change in providers and timing of investors relations services.

Other Income/(Expenses):

~~Other income/(expenses) increased~~Net other income decreased by ~~$1,258,207~~$1,790,938 from other ~~expense~~income of ~~$91,089~~$1,167,118 for the six months ended March 31, ~~2020~~2021 to other ~~income~~expenses of ~~$1,167,118~~$623,820 for ~~first half of 2021.~~the six months ended March 31, 2022. The ~~increase~~decrease in net total other income was primarily due to recognition of a $1,213,446 lower gain on net change in fair market value of the derivative instruments ~~of $1,180,067~~ in the ~~first half of 2021~~six months ended March 31, 2022 compared to athe gain recognized in the six months ended March 31, 2021, as well as recognition of $526,348 amortization of debt discount, commitment fees on notes payable, and debt issuance costs, partially offset by recognition of $96,205 gain on extinguishment of derivative liability and loss of ~~$75,537 recognized in 2020.~~$54,813 on extinguishment of bridge loans.

Net Loss:

For the six months ended March 31, ~~2021,~~2022, our net loss was ~~$514,092~~$1,373,093 as compared to a net loss of ~~$63,121 (net of $288,777 income from discontinued operations)~~$514,092 for the ~~first half of 2020.~~six months ended March 31, 2021. The ~~majority of the~~ increase in net loss of ~~$450,971~~$859,001 was due to ~~an increase~~a decrease in ~~SG&A expenses in 2021 partially offset by an increase in~~net other income associated with the net change in derivative instruments estimated each period. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices defined in the respective agreements and probabilities of certain outcomes based on managements’ estimates. These inputs are subject to significant changes from period to period. As a result, the estimated fair value of the derivative liabilities will fluctuate from period to period and ~~the fluctuation may be material.~~increase in interest expense and other financing costs partially offset by a decrease in SG&A expenses in 2022.

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Liquidity and Capital Resources

We had a working capital deficit as of March 31, ~~2021~~2022 of ~~$2,591,881,~~$4,432,339, compared to a working capital deficit of ~~$3,454,730~~$3,762,214 as of September 30, ~~2020.~~2021. The ~~decrease~~increase of ~~$862,849~~$670,125 in working capital deficit was primarily the result of ~~a decrease in derivative liability and increase in cash partially offset by~~ an increase in ~~accounts~~the balance of promissory notes payable ~~accrued expenses,~~ and ~~deferred compensation.~~payable to TN3 for the Series B Preferred Stock redemption.

For the six months ended March 31, ~~2021,~~2022, our cash flow used byin operating activities was ~~$280,521,~~$438,844, compared to cash flow ~~provided by~~used in operating activities of ~~$111,652~~$280,521 for ~~first half of 2020. Out of these amounts, $280,521 and $28,482 was used by continuing operating activities in~~ the first half of ~~2021 and 2020, respectively. The balance of $140,134 was provided by discontinued operating activities in 2020.~~2021. The net ~~decrease~~increase of ~~$392,173~~$158,323 in cash flow ~~provided by~~used in operating activities was primarily due to lower stock compensation expense, higher net loss and changes in assets and liabilities, ~~and lack of revenue~~partially offset by lower gain on change in ~~2021.~~derivative liabilities.

There was no cash flow provided by/(used in) investing activities for the six months ended March 31, ~~2021~~2022 or ~~2020.~~2021.

Cash flow provided by financing activities was ~~$302,341~~$319,785 for the six months ended March 31, ~~2021,~~2022, compared to cash ~~used~~provided by financing activities of ~~$7,200~~$302,341 during the first half of ~~2020.~~2021. The increase in cash flow provided by financing activities was primarily the result of ~~stock subscriptions sold to investors.~~the mix of funds raised by selling equity and debt instruments.

~~Table~~

The Company will need to raise additional funds to finance its ongoing operations, complete its Investigational New Drug (IND) application to the FDA and to make payments under its loan agreements. We expect this will require approximately $3.0 million through December 31, 2022. We plan to raise this capital through the issuance of ~~Contents~~

additional common stock as well as obtaining additional debt as needed.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships such as entities often referred to as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance-sheet arrangements or for other contractually narrow or limited purposes. As a result, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Because NovAccess is a “smaller reporting company” as defined by the Securities and Exchange Commission (the “SEC”) we are not required to provide quantitative and qualitative disclosures about market risk.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management team, with the participation of our chief executive officer, Dwain K. Morris-Irvin, and chief financial officer, ~~L. Michael Yukich,~~Neil J. Laird, evaluated the effectiveness of the design and operation of NovAccess’ disclosure controls and procedures (as defined under the Securities Exchange Act) as of March 31, ~~2021.~~2022. Based upon this evaluation, Messrs. Morris-Irvin and ~~Yukich~~Laird concluded that the Company’s disclosure controls and procedures were ~~not~~ effective as of March ~~31, 2021.~~31.

Changes in Internal Control Over Financial Reporting

Our senior management team is responsible for establishing and maintaining adequate internal control over financial reporting, defined under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board, senior management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. We continue to review our internal control over financial reporting and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

During the quarter the Company implemented enhanced review procedures for the accounting of certain derivatives and other income. This included engaging a third party to review the assumptions and calculation. There were no other changes in our internal control over financial reporting identified in connection with the evaluation required by the Securities Exchange Act that occurred during our ~~second~~first fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings.

We are not involved in any legal proceedings.

Item 1A. Risk Factors.

Please refer to the risk factors listed under Item 1A. Risk Factors of our Form 10-K for the fiscal year ended September 30, ~~2020~~2021 for information relating to certain risk factors applicable to NovAccess.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the quarter end of March 31, ~~2021,~~2022, we issued ~~1,010,199~~1,069,306 unregistered shares of our common stock ~~that were not previously reported on Form 8-K~~ for capital raising and compensatory purposes as described in more detail below.

On January 19, 2021, we issued 200,000 unregistered shares of our common stock to L. Michael Yukich to compensate him for serving as our chief financial officer. On February 24, 2021, we issued 2,500 unregistered shares to Dr. Elaine King Miller, a member of our advisory board, for her advisory services provide to NovAccess. On March 24, 2021, we issued 5,000 unregistered shares to each of Mr. Renard Currie, Dr. Andrew Norris and Dr. Lachlan Thompson, members of our advisory board, for their advisory services provide to NovAccess. The issuances of shares to our management team were exempt from registration under Section 4(a)(2) of the Securities Act of 1933.

On each of January 8, 2021, January 28, January 29 and March 4, 2021, we issued 8,889 of our unregistered shares to Satya Chillara, an employee of Darrow Associates, for investor relations services provided to NovAccess for the months of December 2020 and January, February and March 2021. The issuances of shares to Ms. Chillara were exempt from registration under Section 4(a)(2) of the Securities Act.

During the quarter ~~ended~~end of March 31, ~~2021,~~2022, we offered unregistered shares of our common stock in a private placement to accredited investors to fund our working capital needs. ~~We sold 757,143 shares to five investors during~~During the quarter ~~at prices ranging from~~we sold to ten investors 840,000 shares for an aggregate amount of $170,000. Neil J. Laird, the company’s chief financial officer, and Letzhangout, LLC, a company that provides accounting consulting services to NovAccess (“Letzhangout”), each purchased 250,000 shares in the private placement for $0.20 ~~to $0.35~~ a share ~~for a total~~(a portion of ~~$170,000.~~which was paid by the cancellation of loans made to the company in December 2021). The issuance of shares in the private placement was exempt from registration under Section 4(a)(2) of the Securities Act and Rule ~~506(b)~~506(a) under the Securities Act.

On March 31, 2022, we issued 108,750 of our unregistered shares to Letzhangout, LLC for accounting services provided to NovAccess. On February 14, 2022, we issued 85,000 shares to Letzhangout for accounting services. We recognized stock compensation expense in the amount of $45,619 in relation to stock issuances to this service provider. On February 23, 2022, we issued 35,556 shares of our shares to Satya Chillara, an employee of Darrow Associates, for investor relations services provided to NovAccess. The issuances of shares to our service providers were exempt from registration under Section 4(a)(2) of the Securities Act.

Item 3. Defaults Upon Senior Securities.

On October 20, 2015, we entered into a third extension of a promissory note issued to Gemini Master Fund, Ltd. on September 30, 2013. The extension terms included mandatory payments of $10,000 per month beginning November 1, 2015 untilDuring the note in the amount of $143,033 was paid in full by March 30, 2017. The note bears interest at 12% per year, and is convertible by the holder into shares of our common stock at a per share conversion price of 60% of the lowest volume weighted average price of our stock occurring during the twenty trading days preceding the conversion date. As ofquarter ended March 31, ~~2021, the note~~2022, NovAccess was not in material default ~~and had a remaining balance of $43,329, which includes capitalized interest for the quarter of $1,257. Gemini has agreed~~with respect to ~~convert the outstanding principal and interest into shares of our common stock pursuant to the terms of the note.~~any its material indebtedness.

Item 4. Mine Safety Disclosures.

We are not engaged in mining operations.

Item 5. Other Information.

On March 30, 2021, we entered into a loan agreement with Innovest Global, Inc. in connection with $25,000 loaned by Innovest to NovAccess. The loan is due upon demand. Our chairman Daniel G. Martin is the CEO and chairman of Innovest. The Innovest loan agreement and issuances of unregistered shares of our common stock during the quarter ended March 31, 2020 described under ~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~ ~~above were required to be reported on Form 8-K.~~ We have disclosed on Form 8-K all ~~other~~ reportable events that occurred in the quarter ended March 31, ~~2021.~~2022.

Table of Contents

Item 6. Exhibits.

Exhibit		Description
~~10.1~~		~~Loan Agreement for $25,000 between NovAccess Global Inc. and Innovest Global, Inc. dated March 30, 2020~~
31.1		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act — Dwain Morris-Irvin
31.2		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act — ~~L. Michael Yukich~~Neil J. Laird
32.1		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
101		The following materials from the NovAccess Global Inc. Quarterly Report on Form 10-Q for the period ended March 31, ~~2021,~~2022, formatted in ~~XBRL (eXtensible~~iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at March 31, ~~2021~~2022 and September 30, ~~2020,~~2021, (ii) the Condensed Consolidated Statements of Operations for the Three and Six ~~months~~Months Ended March 31, ~~2021~~2022 and March 31, ~~2020,~~2021, (iii) the Condensed Consolidated Statements of Shareholders’ Deficit for the Six Months Ended March 31, ~~2021~~2022 and ~~2020,~~2021, (iv) the Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, ~~2021~~2022 and March 31, ~~2020,~~2021, and (v) ~~related notes~~Related Notes to the Condensed Consolidated Financial Statements.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NovAccess Global Inc.

Date: May ~~19, 2021~~13, 2022	/s/ Dwain K. Morris-Irvin
	Dwain K. Morris-Irvin, Chief Executive Officer
	(Principal Executive Officer)

Date: May ~~19, 2021~~13, 2022	/s/ ~~L. Michael Yukich~~Neil J. Laird
	~~L. Michael Yukich,~~Neil J. Laird, Chief Financial Officer
	(Principal Financial and Accounting Officer)

22
21

iso4217:USD xbrli:shares

Leasehold improvements	Length of the lease
Computer software and equipment	3 Years
Furniture & fixtures	5 Years
Machinery & equipment	5 Years

	Total		(Level 1)		(Level 2)		(Level 3)

Assets:	$	-	$	-	$	-	$	-
Liabilities:

Derivative Liability at fair value as of March 31, 2021	$	1,809,098	$	-	$	-	$	1,809,098

Derivative Liability at fair value as of September 30, 2020	$	2,989,165	$	-	$	-	$	2,989,165

	Derivative Liability			Derivative Liability Warrants
Balance as of September 30, 2021		2,553,979			372,643
Extinguishment of derivatives		(96,205	)		-
Initial derivative liabilities		134,384			-
Net (Gain)/Loss on change in fair value of derivative liability		(191,955	)		225,354
Ending balance as of March 31, 2022	$	2,400,203		$	597,997

	March 31, 2021			September 30, 2020
	(Unaudited)
ASSETS

CURRENT ASSETS
Cash	$	21,998		$	178

TOTAL ASSETS	$	21,998		$	178


LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable	$	251,829		$	88,519
Other payable		66,894			65,304
Accrued expenses and interest on notes payable		95,709			65,215
Accrued payroll		23,290			-
Deferred Compensation		120,508			-
License Fees Payable		40,402			50,402
Derivative liability		1,809,098			2,989,165
Due to related party		74,940			68,312
Loan payable, related party		25,000			24,287
Convertible promissory note, related party		12,000			12,000
Convertible promissory notes, current portion		94,209			91,704

Total Current Liabilities		2,613,879			3,454,908

LONG TERM LIABILITIES
Convertible promissory notes		115,000			115,000

Total Long Term Liabilities		115,000			115,000

TOTAL LIABILITIES		2,728,879			3,569,908

SHAREHOLDERS' DEFICIT
Preferred stock 50,000,000 shares authorized, shares issued and outstanding designated as follows:
Preferred Stock Series B, $0.01 par value, 25,000 authorized 25,000 and 0 shares issued and outstanding, respectively		250			250
Common stock, no par value; 2,000,000,000 authorized common shares 12,856,342 and 1,603,492 shares issued and outstanding, respectively		41,121,365			33,369,424
Additional paid in capital		5,335,398			11,710,398
Paid in capital, common stock warrants		4,210,960			4,210,960
Paid in capital, preferred stock		5,088,324			5,088,324
Accumulated deficit		(58,463,178	)		(57,949,086	)

TOTAL SHAREHOLDERS' DEFICIT		(2,706,881	)		(3,569,730	)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	21,998		$	178

	Three Months Ended						Six Months Ended
	March 31, 2021			March 31, 2020			March 31, 2021			March 31, 2020

OPERATING EXPENSES
Selling, general and administrative expenses		281,320			139,203			1,681,210			260,809
Depreciation and amortization expense		-			-			-			-

TOTAL OPERATING EXPENSES		281,320			139,203			1,681,210			260,809

LOSS FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSES)		(281,320	)		(139,203	)		(1,681,210	)		(260,809	)

OTHER INCOME/(EXPENSES)
Gain (Loss) on change in derivative liability		(382,538	)		(59,458	)		1,180,067			(75,537	)
Interest expense		(5,348	)		(7,604	)		(12,949	)		(15,552	)

TOTAL OTHER INCOME/(EXPENSES)		(387,886	)		(67,062	)		1,167,118			(91,089	)

NET (LOSS) FROM CONTINUING OPERATIONS	$	(669,206	)	$	(206,265	)	$	(514,092	)	$	(351,898	)

NET INCOME FROM DISCONTINUED OPERATIONS		-			244,808			-			288,777

NET INCOME (LOSS)		(669,206	)		38,543			(514,092	)		(63,121	)

BASIC INCOME (LOSS) PER SHARE	$	(0.05	)	$	0.00		$	(0.06	)	$	(0.00	)

DILUTED INCOME (LOSS) PER SHARE	$	(0.05	)	$	0.00		$	(0.06	)	$	(0.00	)

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC		12,455,164			1,601,888			9,099,121			1,601,888
DILUTED		12,455,164			6,078,866			9,099,121			1,601,888

SIX MONTHS ENDED MARCH 31, 2020

															Stock Options/		Paid in
	Preferred Stock, Class A				Preferred Stock, Class B				Common Stock				Additional Paid-in		Warrants Paid in		Capital, Preferred		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Capital		Stock		Deficit			Total
Balance at September 30, 2019		5,000	$	50		-		-		1,601,888	$	33,369,424	$	5,335,398	$	3,811,700	$	-	$	(44,752,523	)	$	(2,235,951	)

Net Loss		-		-		-		-		-		-		-		-		-		(63,121	)		(63,121	)
Balance at March 31, 2020		5,000	$	50		-	$	-		1,601,888	$	33,369,424	$	5,335,398	$	3,811,700	$	-	$	44,815,644	)	$	(2,299,072	)

	For the Six Months Ended
	March 31, 2021			March 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)	$	(514,092	)	$	(63,121	)
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities
(Gain)/Loss on change in derivative liability		(1,180,067	)		75,537
Stock compensation expense		936,000			-
Stock issued for services		145,941			-

Changes in Assets and Liabilities:
Prepaid expenses		-			3,805
Accounts payable		163,310			(42,942	)
Other payable		1,590			-
License fees payable		(10,000	)		-
Accrued expenses and interest on notes payable		32,999			(1,761	)
Accrued payroll		23,290			-
Deferred Compensation		120,508			-

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES - CONTINUING OPERATIONS		(280,521	)		(28,482	)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES - DISCONTINUED OPERATIONS		-			140,134

NET CASH (USED IN) PROVIDED BY OPERATIONS		(280,521	)		111,652


CASH FLOWS FROM FINANCING ACTIVITIES:
Stock subscriptions received		295,000			-
Due to related party		6,628			-
Payments on related party promissory notes		-			(7,200	)
Proceeds from a related party loan		25,000			-
Payments on related party loan payable		(24,287	)		-


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		302,341			(7,200	)

NET INCREASE (DECREASE) IN CASH		21,820			104,452

CASH, BEGINNING OF PERIOD		178			7,964

CASH, END OF PERIOD	$	21,998		$	112,416

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	1,386		$	4,840
Taxes paid	$	-		$	-

SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS
Accrued interest capitalized into convertible note	$	2,505		$	2,235
Shares issued for StemVax Acquisition – from stock payable	$	6,375,000		$	-

	For the three months ended					For the six months ended
	March 31,					March 31,
	2021			2020		2021			2020
Gain (Loss) to common shareholders (Numerator)	$	(669,206	)	$	38,543	$	(514,092	)	$	(63,121	)

Basic weighted average number of common shares outstanding (Denominator)		12,455,164			1,601,888		9,099,121			1,601,888

Diluted weighted average number of common shares outstanding (Denominator)		12,455,164			6,078,866		9,099,121			1,601,888

	For the three months ended						For the six months ended
	March 31,						March 31,
	2022			2021			2022			2021
Loss to common shareholders (Numerator)	$	(1,229,785	)	$	(669,206	)	$	(1,373,093	)	$	(514,092	)

Basic weighted average number of common shares outstanding (Denominator)		15,379,289			12,455,164			14,914,920			9,099,121

Diluted weighted average number of common shares outstanding (Denominator)		15,379,289			12,455,164			14,914,920			9,099,121

	Total		(Level 1)		(Level 2)		(Level 3)

Assets:	$	-	$	-	$	-	$	-

Liabilities:

Derivative Liability at fair value as of September 30, 2021	$	2,553,979	$	-	$	-	$	2,553,979
Derivative Liability warrants at fair value as of September 30, 2021	$	372,643	$	-	$	-	$	372,643
Derivative Liability at fair value as of March 31, 2022	$	2,400,203	$	-	$	-	$	2,400,203
Derivative Liability warrants at fair value as of March 31, 2022	$	597,997	$	-	$	-	$	597,997

Balance as of September 30, 2020	$	2,989,165
Net Gain on change in fair value of derivative liability		(1,180,067	)
Ending balance as of March 31, 2021	$	1,809,098

Convertible Promissory Notes	$	209,209
Less current portion		94,209
Total long-term liabilities	$	115,000

Year Ending
September 30,
2021	$	94,209
2022		75,000
2023		40,000
	$	209,209

Risk free interest rate		Between ~~0.01%~~0.73%and ~~0.16%~~ 2.28%
Stock volatility factor		Between ~~191.0%~~144.0% and ~~375.0%~~336.0%
Months to Maturity		0 - 5 years
Expected dividend yield		~~None~~NaN

	3/31/2021		9/30/2020
Trade accounts payable	$	251,829	$	88,519
Credit cards payable		66,894		65,304
Accrued liabilities		95,709		65,215
Accrued payroll		23,290		-
Deferred compensation		120,508		-
License Fees Payable		40,402		50,402
		598,632		269,440

	Three months ended March 31,				Six months ended March 31,
	2021		2020		2021		2020

SALES	$	-	$	625,636	$	-	$	826,022

COST OF GOODS SOLD		-		380,589		-		536,767

GROSS PROFIT		-		245,047		-		289,255

OPERATING EXPENSES

Depreciation expense		-		239		-		478

TOTAL OPERATING EXPENSES OF DISCONTINUED OPERATIONS		-		239		-		478

NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS	$	-	$	244,808	$	-	$	288,777

	March 31,		September 30,
	2021		2020
ASSETS

CURRENT ASSETS

Contract receivables of discontinued operations	$	-	$	-

Total Current Assets of discontinued operations		-		-

Net Property and Equipment of discontinued operations		-		-

TOTAL ASSETS OF DISCONTINUED OPERATIONS	$	-	$	-

LIABILITIES

CURRENT LIABILITIES

Contract liabilities of discontinued operations		-		-

Total Current Liabilities of discontinued operations		-		-

TOTAL CURRENT LIABILITIES OF DISCONTINUED OPERATIONS	$	-	$	-