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

~~For the three and nine month periods ended September 30, 2013 and September 30, 2012 (Restated)~~

~~(Unaudited)~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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

~~For the nine months ended September 30, 2013~~(Unaudited and ~~September 30, 2012 (Restated)~~Restated)

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

Marizyme, Inc., a Nevada corporation through its subsidiaries, is a global provider of technology solutions for businesses and government agencies. We focus on developing and delivering solutions that help our customers to gain value and reduce cost in the development, deployment and management of the applications used in the course of conducting their business (“business applications”). We do this by building software and providing services that aid in:

Our customers include corporate and government IT departments, solutions integrators (“SIs”) and independent software vendors (“ISVs”). Our corporate customers are from a variety of industries, including insurance, financial services, pharmaceuticals, healthcare, manufacturing, logistics, and education. The install-base of our software products spans more than 5,000,000 users in 38 countries on four continents. We principally market and sell our products and services directly in the United States, Canada, United Kingdom, Germany, Austria, Switzerland, the Nordics and India; and indirectly through local distributors and resellers representing Australia, South America and regionally in Europe.

Our software and services are designed to mainly serve organizations that have investments in IBM’s Lotus® Notes and Domino platform. The IBM Lotus® Notes and Domino platform is both a system for enterprise emailformerly known as well as an application platform, meaning that it can be used as both an email system and an environment in which business applications can be deployed and used. This platform was originally brought to market by Lotus Development Corp. in 1989, and was subsequently acquired by IBM in 1995. According to Radiate, in 2011, IBM Lotus Domino will have a worldwide installed base of 189 million mailboxes. Currently, the installed base for On-Premises IBM Lotus Domino mailboxes represents the majority of worldwide IBM Lotus Domino mailboxes, accounting for 87% of worldwide IBM Lotus Domino mailboxes. By 2015, this percentage is expected to decrease to 80%, as hosted email grows in popularity. (The Radiate Group Inc., April 2011, “IBM Lotus Notes/Domino Market Analysis, 2011-2015“)

GBS Enterprises Incorporated (the “Company” or “Marizyme”), conducted its primary business through its majority owned subsidiary, GBS Software AG (“GROUP”), a German-based public-company.

By December 31, 2016, the Company had sold the controlling interest in GROUP and other subsidiaries, keeping only a minority interest in GROUP. On March 21, 2018, the Company formed a wholly owned subsidiary named Marizyme, Inc., a Nevada corporation, and merged with it, effectively changing the Company’s name to Marizyme, Inc. On June 1, 2018, the Company exchanged the shares of GROUP and all the intercompany assets and liabilities for 100% of the shares of X-Assets Enterprises, Inc, a Nevada Corporation. As part of a type-D business restructuring on September 5, 2018, the Company then distributed the X-Assets shares to its stockholders on a 1 for 1 basis.

Beginning after the X-Assets share distribution, Marizyme refocused on the life sciences and began to seek technologies to acquire.

On September 12, 2018, the Company consummated an asset acquisition with ACB Holding AB, Reg. No. 559119-5762, a Swedish corporation to acquire ~~companies, which have developed software~~all rights, title, and ~~specialized services for the Lotus Notes and Domino market. This growth by acquisition strategy has resulted~~interest in less competition for our software products; a large concentration of highly skilled employees with unique expertise in the area of Lotus Notes and Domino; staff and physical offices on three continents providing greater access to a global market; significant market awareness and greater market share amongst organizations that use Lotus Notes and Domino; and a comprehensive portfolio of solutions specific to the needs and requirements of organizations which use Lotus Notes and Domino.

While our products and services remain in use and demand, over the last several years, the market itself has been undergoing a paradigm shift. New technologies, especially in the areas of Cloud Computing and Mobile applications, have grown in popularity due to the potential cost savings and operational efficiencies they can offer. As organizations make investments in these new technologies, they are faced with highly complex and costly projects to migrate (“migration”) or replace their ~~existing systems that don’t operate in the cloud or on mobile devices (“modernization”) – this includes their existing email and business applications that run on Lotus Notes and Domino.~~

~~To that end, we have acquired and developed technologies that help organizations reduce the time, cost, resources and risks associated with these highly complex migration and modernization projects.~~

~~We were incorporated in Nevada on March 20, 2007 as SWAV Enterprises Ltd. (“SWAV”). SWAV was an importer and wholesaler of Chinese manufactured goods.~~

~~On April 26, 2010, SWAV purchased certain~~Krillase technology ~~assets of Lotus Holdings Ltd. (“Lotus”)~~ in exchange for ~~2,265,240~~16.98 million shares of SWAV common stock. Also on April 26, 2010, Lotus (on behalf of the SPPEF Members as discussed below) purchased an aggregate of 11,984,770 of the outstanding shares of common stock from the selling shareholders of SWAV for an aggregate of $370,000. As a result of the two sets of transactions, Lotus owned an aggregate of 14,250,010 shares of common stock of SWAV, representing approximately 95.0% of the 15,000,000 shares of SWAV common stock outstanding on April 26, 2010.

~~On September 6, 2010, SWAV’s name was changed to GBS Enterprises Incorporated. On October 14, 2010, the Company’s trading symbol on the OTC Bulletin Board was changed from SWAV to GBSX.~~

~~Lotus~~Common Stock. Krillase is a ~~holding company which was formed under the laws of Gibraltar for the purpose of financing merger~~naturally occurring enzyme that acts to break protein bonds and ~~acquisition projects, specifically~~has applications in ~~the niche market of small or microcap companies listed on the Frankfurt Stock Exchange with complex shareholder structures~~dental care, wound healing, and ~~whose stock is trading below one Euro (€1.00) per share.~~thrombosis.

Lotus typically finances its merger and acquisition projects through the use of Special Purpose Private Equity Funds (“SPPEFs”). Typically, SPPEFs are funded by a company’s major shareholders (the “Major Shareholders”) seeking to raise capital for projects and who fund at least 50% of the SPPEF, with the remaining portion being provided through the investment community and network of investors in Lotus. Each SPPEF is co-managed by a representative of the company’s Major Shareholders (the “Representative Secretary”) and an attorney appointed by Lotus (the “Lotus Representative”).

On February 25, 2010, a group of shareholders (the “GROUP Major Shareholders”) of GROUP Business Software AG, a German public company trading on the Frankfurt Stock Exchange under the symbol “INW” (“GROUP”), engaged Lotus to provide financial consulting and advisory services, on a non-exclusive basis, for the primary task of establishing a SPPEF. On March 12, 2010, the GROUP Major Shareholders and Lotus established and funded a SPPEF with $1,400,000, consisting of $1,000,000 from the GROUP Major Shareholders and $400,000 from a Lotus investor (collectively, the “SPPEF Members”).

In early April 2010, the SPPEF Members decided to acquire SWAV. As disclosed above, on April 26, 2010, Lotus, on behalf of the SPPEF Members, acquired an aggregate of 11,984,770 shares of SWAV common stock from the selling shareholders of SWAV for an aggregate purchase price of $370,000. The 11,984,770 shares of SWAV common stock represented approximately 79.9% of the 15,000,000 outstanding shares of SWAV common stock on April 26, 2010. Upon the consummation of the acquisition, the then executive officers and directors of SWAV resigned and Mr. Joerg Ott, the Chief Executive Officer of GROUP and a GROUP Major Shareholder, was appointed the Chief Executive Officer of SWAV and sole member of SWAV’s Board of Directors.

On November 1, 2010, the Company repurchased an aggregate of 3,043,985 of the 11,984,770 shares of the Company’s common stock originally purchased by Lotus on April 26, 2010. In consideration for the 3,043,985 shares of the Company’s common stock, the Company issued to Lotus a Secured Demand Note, dated November 1, 2010 (the “First Demand Note”), for the principal amount of $300,000 bearing interest at the rate of 5% per annum. The First Demand Note was repaid in September 2011.

~~Effective~~ December 30, 2010, pursuant to securities purchase agreements between the Company and six GROUP Major Shareholders, the Company purchased an aggregate of 7,115,500 shares of GROUP common stock from the six GROUP Major Shareholders in consideration for an aggregate for 3,043,985 shares of the Company’s common stock (the “December Transaction”). As a result the Company owned approximately 28.2% of the outstanding common stock of GROUP.

After the December Transaction was completed, the additional GROUP Major Shareholders accepted the share swap offer from the Company and effectuated a reverse merger of GROUP and the Company. To effectuate the reverse merger, on January 5, 2011, the Company repurchased from Lotus an aggregate of 2,361,426 of the 11,984,770 shares of the Company’s common stock originally purchased by Lotus on April 26, 2010. In consideration for these 2,361,426 shares, the Company issued to Lotus a Secured Demand Note, dated January 5, 2011 (the “Second Demand Note”), for the principal amount of $200,000 bearing interest at the rate of 5% per annum. The Second Demand Note was repaid in November 2011.

Effective January 6, 2011, pursuant to securities purchase agreements between the Company and the remaining GROUP Major Shareholders, the Company purchased an aggregate of 5,525,735 shares of GROUP common stock from the remaining GROUP Major Shareholders in consideration for an aggregate of 2,361,426 shares of the Company’s common stock (the “January Transaction”). The 5,525,735 GROUP shares represented approximately 21.9% of the outstanding shares of common stock of GROUP. As a result of the December Transaction and January Transaction, the Company purchased an aggregate of 12,641,235 shares of GROUP from the GROUP Major Shareholders in consideration for an aggregate of 5,405,411 shares of the Company’s common stock, resulting in the Company owning approximately 50.1% of the outstanding common stock of GROUP and effectuating a reverse merger of the Company and GROUP whereby GROUP became the accounting acquirer.

On February 27, 2012, the Company acquired an additional 883,765 shares of common stock of GROUP from GAVF LLC for an average purchase price of $.070 per share, or approximately $619,000, after an outstanding loan of GROUP was converted into an aggregate of 1,750,000 shares of GROUP common stock, thereby increasing GROUP’s outstanding common stock to 26,982,000 shares. By acquiring the new shares, the Company increased its ownership of GROUP common stock to an aggregate of 13,525,000 shares, representing approximately 50.1% of the outstanding common stock of GROUP.

Effective April 1, 2011, the Company acquired 100% of the outstanding common shares of Pavone AG, a German corporation, for $350,000 in cash and 1,000,000 shares of its common stock. The fair value of the common stock was determined to be $4.90 per share, representing the market value at the end of trading on the date of the acquisition. The total value of the investment, including the assumption of $ 583,991 in debt was $5,843,991. Pavone’s extensive workflow software for Lotus Notes and Domino along with their large customer base is well suited to GBS Enterprises portfolio strategy. The acquisition of Pavone complements GBS's majority ownership in GROUP and the Company believes that it further strengthens their leading industry position on the IBM Lotus Platforms and expands their cloud computing technology offerings beyond the IBM Lotus market. Pavone currently has offices in Germany and the UK. They have over 2,500 customers and over 150,000 users worldwide.

Effective June 1, 2011, the Company acquired 100% of the outstanding common shares of GroupWare, Inc., a Florida corporation (“GroupWare”). As consideration the Company paid $250,000 and issued 250,000 shares of its common stock. The fair value of the common stock was determined to be $4.34 per share, representing the market value at the end of trading on the date of the acquisition. The total value of the investment, including the assumption of $ 694,617 in debt was $ 2,029,617. Upon the consummation of the acquisition, the management and board of GroupWare resigned and Joerg Ott, the Company’s Chief Executive Officer and sole director, was appointed as the Chief Executive Officer and sole director of GroupWare. GroupWare is based in Lubeck, Germany with offices in St. Petersburg, Florida. GroupWare's ePDF server delivers centralized, network-wide PDF solutions for messaging, workflow, document, content and data management. The Company believes that the acquisition strengthens the GBS Modernizing/Migrating offering, which helps bring IBM Lotus Notes client applications to the web, by substituting traditional printing methods provided by the Notes client with simple-to-use print-to-PDF capabilities in the browser.

On July 25, 2011, the Company acquired 100% of the issued and outstanding shares of common stock of IDC Global, Inc., a Delaware corporation (“IDC”). Pursuant to the acquisition agreement, dated July 15, 2011, the Company agreed to issue the shareholders an aggregate of 800,000 shares of common stock and made a cash payment of $750,000. The agreement required an additional payment to the management shareholders of 80,000 shares of common stock and signing bonuses to personnel of $35,000. The Company also agreed to reimburse IDC up to $25,000 for incurred accounting and legal fees related to the transaction. The fair value of the common stock was determined to be $3.70 per share, representing the market value at the end of trading on the date of the agreement. The total value of the investment, including $883,005 of debt assumption, was $4,066,000. IDC was a privately held company that provides nationwide network and data center services. IDC delivers customized, high availability technology solutions for WAN, Wireless Services, Co-location & Hosting, Managed Services, and Network Security. IDC includes two Data Center facilities located in the downtown Chicago area and Colocation facilities in three other Data Centers in New York, London, England and Frankfurt, Germany. IDC provides internet infrastructure Services (IaaS) to the business community helping customers make the transition from large, static and expensive on-premise computing to dynamic, flexible and cost-effective off-premise computing. IDC is helping customers make the transition from large, static and expensive on-premise computing to dynamic, flexible and cost-effective off-premise computing.

On February 1, 2013, GBS entered into a Stock Purchase Agreement, dated February 1, 2013 (the “Agreement”), with IDC and Global Telecom & Technology Americas, Inc., a Virginia corporation (“GTT). Pursuant to the Stock Purchase Agreement, we sold 100% of the issued and outstanding capital stock of IDC to GTT for an aggregate purchase price of $4,600,000 (the “Purchase Price”), subject to certain holdback provisions amounting to $1.093 million as described more fully in the Stock Purchase Agreement. The Purchase Price is also subject to adjustment on a dollar-for-dollar basis for adjustments the Net Working Capital (defined as Current Assets minus Current Liabilities) of IDC by GTT within 90 days of closing.

On September 27, 2011, the Company entered into an acquisition agreement with SD Holdings, Ltd. (“SYN”), a Mauritius corporation, and the shareholders of SYN owning 100% of issued and outstanding shares of SYN. SYN owns 100% of all issued and outstanding shares of Synaptris, Inc., a California corporation (“Synaptris”), and 100% of all issued and outstanding shares of Synaptris Decisions Private Limited, a company formed in India (“Synaptris India”). Pursuant to the acquisition agreement, the Company purchased one hundred percent (100%) of the issued and outstanding shares of SYN (“SYN Shares”) effective November 1, 2011 in consideration for $525,529 and agreed to issue 700,000 shares of common stock, subject to adjustment. Actual shares issued were 612,874. The fair value of the common stock was determined to be $2.05 per share, representing the market value at the end of trading on the date of the agreement.

On April 1, 2012, the Company sold SYN, Synaptris and Synaptris India for $1,877,232 to Lotus Holding, Ltd. in an effort to restructure the Company’s multilevel subsidiary - structure derived from the historical mergers and acquisitions, and to reduce overhead and administrative costs.

~~Pursuant to an existing transfer agreement, effective July 1, 2012,~~2019, the Company entered into a contingent asset purchase agreement (the “Agreement”), as amended on March 31, 2020 and May 29, 2020, with ~~SYN for $1,877,232, which transferred all assets, including intellectual property rights,~~Somahlution, LLC, Somahlution, Inc., and liabilities of the IntelliPRINT and FewClix product lines, customer contracts and certain employees for operations in a new subsidiary, GBS India Private Limited, an incorporated entity formed under the Indian Companies Act 1956 (“GBS India”). A royalty fee in the amount of approximately $350,000 has been agreed upon for the benefit the Company. Additionally a profit based fee of up to $700,000 may be earned based on license and revenue recognized from the sold IntelliVIEW and IntelliVIEW NXT products.

On August 1, 2012, the Company acquired 100% of the outstanding shares of capital stock of GBS India. We anticipate GBS India’s presence in India to accelerate our plan to expand our product development team particularly for our strategic offerings in India.

On July 6, 2012 and August 9, 2012, wholly-owned subsidiaries Pavone AG and Groupware AG, respectively, were merged into Pavone GmbH. The mergers were consummated solely for administrative purposes. Pavone GmbH is a wholly-owned subsidiary of the Company.

~~The Company serves the UK market with GROUP’s subsidiary GBS, Ltd. Therefore, subsidiary Pavone, Ltd, as being a shell company, was dissolved on July 8, 2012.~~

On October 1, 2012, GROUP Business Software AG sold all of the software and operational assets (constituting substantially all of the assets) of its wholly-owned subsidiary, ebVokus GmbH, along with the associated maintenance and project agreements to a non-affiliated third party for a purchase price of approximately $459,000, approximately $258,000 (200,000 Euros: 1 EUR = $1.29 USD on October 1, 2012) was paid at closing and the remaining $201,000 was paid on February 15, 2013 (150,000 Euro: 1EUR = $1.35 USD on February 15, 2013).

~~On November 23, 2012, GROUP Business Software AG sold its entire participation (50%) in B.E.R.S AD for a total of 25,000 BGN.~~

~~Group Live N.V. operating~~Somaceutica, LLC, companies duly organized under the laws of Delaware (collectively, “Somah”) to acquire all of the ~~Netherlands~~assets and none of the liabilities of Somah (the “Acquisition”), including DuraGraft®, a ~~100% subsidiary~~one-time intraoperative vascular graft treatment for use in vascular and bypass surgeries that maintains endothelial function and structure, and other related properties. On July 30, 2020, the Company and Somah entered into Amendment No. 3 to the Agreement which finalized this Agreement. Pursuant to the terms of ~~GROUP declared its end~~this amendment, it was agreed that, as part of ~~business May 31, 2012, registered~~the Acquisition, the Company would acquire the outstanding capital stock of Somahlution, Inc., held by Somahlution, LLC, rather than the assets of Somahlution, Inc. This change to the Agreement was made to accommodate the European Union (“EU”) requirements with respect to the future manufacturing under Somahlution, Inc. of CE marked products for sale in the ~~commercial register~~EU.

On September 25, 2020, the Company formed Somaceutica, Inc., a Florida corporation.

On September 25, 2020, the Company formed Marizyme Sciences, Inc., a Florida corporation.

The Company’s common stock, $0.001 par value per share (the “Common Stock”), is currently quoted on the OTC Markets QB Tier under the ticker symbol “MRZM.”

On January 16, 2021, Roger Schaller was appointed as the Company Executive Vice President of Commercial Operations.

On January 29, 2021, Amy Chandler was promoted to Executive Vice President of Regulatory and Quality Affairs.

On February 3, 2021, Julie Kampf was appointed as a Director on the Company’s board of directors.

On February 22, 2021, Dr. Vithal Dhaduk was appointed as a Director on the Company’s board of directors.

On March 18, 2021, Dr. Neil Campbell resigned as Chief Executive Officer, President and Director.

On March 19, 2021, James Sapirstein was appointed as Interim Chief Executive Officer.

On April 2, 2021, Dr. Satish Chandran was terminated as Chief Technology Officer.

On June ~~22, 2012. Following~~24, 2021, James Saperstein, our Interim Chief Executive Officer resigned, and Vithal Dhaduk was appointed as our Chairman of the ~~local procedures the company has been dissolved from the register~~Company’s board of directors.

On July 6, 2021, Vithal Dhaduk was appointed as ~~per April 5, 2013, registered April 16, 2013.~~Interim Chief Executive Officer.

The accompanying unaudited ~~interim~~condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in ~~accordance with generally accepted accounting principles~~the normal course of business and the ability of the Company to continue as a going concern for ~~interim~~a reasonable period of time. The Company had a net loss of $3,850,795 and cash used in operating activities of $2,975,603 for the six months ended June 30, 2021 and an accumulated deficit of $40,676,429at June 30, 2021. The Company’s continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue receiving investment capital and loans from third parties to sustain its current level of operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is in the process of securing working capital from investors for common stock, convertible notes payable, and/or strategic partnerships. No assurance can be given that the Company will be successful in these efforts. The financial statements ~~prepared under~~do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles ~~generally accepted~~ in the United States of ~~America. They do not include all information and footnotes required by generally accepted accounting principles for complete~~America (“U.S. GAAP”).

The unaudited condensed consolidated financial ~~statements. However, except as disclosed herein, they include all adjustments, which are, in~~statements of the ~~opinion of management, necessary to present fairly the financial position, results of operations and cash flows~~Company for the ~~interim~~three and six month periods ~~presented in accordance with accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies~~ended June 30, 2021 and ~~methods of their application as the Company’s audited financial statements. All adjustments are of a normal recurring nature.~~

~~Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that can be expected for the year ending December 31, 2013.~~

~~The financial statements and accompanying notes are~~2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the ~~more~~requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2020 was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2021. These financial statements should be read in conjunction with that report.

The accompanying unaudited condensed consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries, Somahlution, Inc. (“Somahlution”), Somaceutica, Inc. (“Somaceutica”) and Marizyme Sciences, Inc. (“Marizyme Sciences”). All significant intercompany balances and transactions have been eliminated on consolidation.

The preparation of the unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to the allocation of the purchase price in a business combination to the underlying assets and liabilities, recoverability of long-term assets including intangible assets and goodwill, amortization expense, valuation of warrants, stock-based compensation, warrant liability, derivative liability, contingent liabilities and deferred tax valuations.

The Company accounts for business acquisitions using the acquisition method of accounting based on Accounting Standards Codification (“ASC”) 805 — “Business Combinations”, which requires recognition and measurement of all identifiable assets acquired and liabilities assumed at their fair value as of the date control is obtained. The Company determines the fair value of assets acquired and liabilities assumed based upon its best estimates of the acquisition-date fair value of assets acquired and liabilities assumed in the acquisition. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired. Subsequent adjustments to fair value of any contingent consideration are recorded to the Company’s consolidated statements of operations.

Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest. The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model.

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At June 30, 2021 and December 31, 2020, the Company had $2,104 and $2,902,762 in cash, respectively, and 0 cash equivalents.

Certain amounts in the prior year’s unaudited condensed consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses, total assets, or stockholders’ equity as previously reported. The reclassifications were for the Statement of Operation which combined its expenses into two categories whereas, for comparison purposes for the six months ended June 30, 2021 to June 30, 2020, professional fees and stock-based compensation was segregated.

The Company establishes an allowance for doubtful accounts to ensure trade and notes receivable are not overstated due to non-collectability. The Company’s allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical experience, and other risk considerations. The Company did not have an allowance at June 30, 2021 or December 31, 2020. The Company did not record any bad debt expense in each of the three and six months ended June 30, 2021 and 2020.

Inventory consisted of primarily finished goods and is valued at the lower of cost or net realizable value. Inventory is held in a third-party warehouse in foreign countries. Cost is determined using the FIFO method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. The Company has determined that 0 inventory reserve was necessary as of June 30, 2021 and December 31, 2020.

The Company uses the fair value hierarchy to measure the value of its financial instruments. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The basis for fair value measurements for each level within the hierarchy is described below:

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

The carrying amounts of certain cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and amounts due to related parties approximate fair value due to the short-term nature of these instruments.

The fair value of lease obligations is determined using discounted cash flows based on the expected amounts and timing of the cash flows discounted using a market rate of interest adjusted for appropriate credit risk.

The contingent liabilities consist of present values of royalty payments, performance warrants and pediatric voucher warrants, future rare pediatric voucher sales, and liquidation preference. Management measured these contingencies in accordance with Level 3 of the fair value hierarchy.

The Company has no financial assets measured at fair value on a recurring basis. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

The following table summarizes our financial instruments that are measured at fair value on a recurring basis as of June 30, 2021:

The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs:

SCHEDULE OF RECONCILIATION OF ALL LIABILITIES MEASURED AT FAIR VALUE USING LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS

Fixed assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life. Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in consolidated statements of operations.

Costs incurred to file patent applications and acquired intangibles are capitalized when the Company believes that there is a high likelihood that the patent will be issued and there will be future economic benefit associated with the patent. These costs will be amortized on a straight-line basis over a 20-year life from the date of patent filing. All costs associated with abandoned patent applications are expensed. In addition, the Company will review the carrying value of patents and other intangible assets for indicators of impairment at least annually and if it determines that the carrying value is impaired, it values the patent and any other intangible assets at fair value. As of June 30, 2021, $122,746 has been capitalized for patents which have not been amortized.

The Company follows ASC 360 for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company determined that there were 0 impairments of long-lived assets at June 30, 2021 and December 31, 2020.

We recognize revenue under Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods and services transferred to the customer. The following five steps are applied to achieve that core principle:

We have identified one performance obligation which is related to our DuraGraft product sales for our Distribution Partner channel, we recognize revenue for product sales at the time of delivery of the product to our Distribution Partner (customer). The customer is invoiced, and Payment Terms are Net 30. As our products have an expiration date, if a product expires before use, we will replace the product on the shelf at no charge. Revenue disaggregation for three months ended June 30, 2021 amounted to $2,586 in Spain, $1,920 in Singapore, and $17,313 in Switzerland and for the six months ended June 30, 2021 amounted to $80,180 in Spain, $8,650 in Singapore, $25,969 in Switzerland, $17,376 in Philippines, and $28,610 in Austria.

Cost of sales includes the actual cost of merchandise sold; the cost of transportation of merchandise from our third-party vendor to our distributer.

The Company computes basic and diluted income (loss) per share amounts pursuant to ASC 260 of the FASB Accounting Standards Codification. Basic loss per share is computed by dividing net loss available to common stockholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share is computed by dividing net loss available to common stockholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled.

The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions as of June 30, 2021 and December 31, 2020. Interest and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the three and six months ended June 30, 2021 and 2020.

In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial and descriptive information about its reportable operating segments. The Company has 1 operating segment as of June 30, 2021 and December 31, 2020.

The Company estimates the grant date value of certain warrants issued with debt using a valuation method, such as the Black-Scholes option pricing model, or, if the terms are more complex - the Monte Carlo option lattice model. We record the amounts as interest expense or debt discount, depending on the terms of the agreement. These estimates involve multiple inputs and assumptions, including the market price of the Company’s common stock, stock price volatility and other assumptions as deemed appropriate. These inputs and assumptions are subject to management’s judgment and can vary materially from period to period.

The Company records the estimated fair value of the warrants as of the date of issuance and at each balance sheet reporting date thereafter. As of June 30, 2021, none of the convertible notes or warrants that resulted in the recording of the related derivative liabilities had a change in estimated value as they were granted at the end of May 2021 and any change at June 30, 2021 was deemed immaterial.

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its consolidated financial statements.

The Company places its temporary cash investments with financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company has amounts over insured limits.

Amounts on deposit may at times exceed the FDIC insurance limit. The Company has not experienced any losses in such accounts.

For the three and six months ended June 30, 2021, four customers/distributors selling to end customers made up 100% of the revenues. As of June 30, 2021, three customers/distributors made up 100% of accounts receivable.

All research and development costs, payments to laboratories and research consultants are expensed when incurred.

Effective January 1, 2020, the Company adopted the provision of Accounting Standards Update (“ASU”) 2016-02, “Leases” (Topic 842). The provisions of this ASU require the Company to record a right-of-use asset and related lease liability related to their leases.

The Company leases its administrative office and laboratories under an operating lease agreement. The Company entered into an agreement in December 2020 for approximately 8,500 square feet which is for a five-and-one-half year period. The base rent is $10,817 per month. In addition, the Company is obligated to pay monthly operating expenses of approximately $12,000 per month. The lease included incentives of waived base rent for certain periods. The base rent will increase by 2.5% for the second year through the end of the term.

The Company’s consolidated balance sheets reflect the value of the right-of-use asset and related lease liability. This value was calculated based on the present value of the remaining base rent lease payments. The discount rate used was 3.95% which is the average commercial interest available at the time. As a result, the value of the right-of-use asset and related lease liability is as follows:

The maturities of the lease liabilities are as follows as of June 30, 2021 for the periods ended December 31:

For the three and six months ended June 30, 2021, operating cash flows paid in connection with operating leases amounted to $12,008 and $47,576, respectively.

On September 12, 2018, the Company consummated an asset acquisition with ACB Holding AB, Reg. No. 559119-5762, a Swedish corporation to acquire all right, title and interest in their Krillase technology in exchange for 16.98 million shares of common stock. Krillase is a naturally occurring enzyme that acts to break protein bonds and has applications in wound debridement, would healing, dental care and thrombosis. The transaction was recorded at the fair value of the shares, $28,600,000. No amortization has been recorded as all of the patents are not yet in a position to produce cash flows. The Company anticipates Krillase being placed into service in 2023. The Company has evaluated this asset for impairment and has determined that due to COVID-19 delaying the next steps for this technology, along with the associated value of the research and development, the status of the clinical trials, and other pertinent proprietary technology, there is no impairment required.

During 2020, the Company incurred legal and filing fees of $17,801 associated with a patent application for pharmaceutical compositions and methods for the treatment of thrombosis. The patents are pending.

On December 15, 2019, the Company entered into a contingent asset purchase agreement (the “Agreement”), as amended on March 31, 2020 and May 29, 2020, with Somahlution, LLC, Somahlution, Inc., and Somaceutica, LLC, companies duly organized under the laws of Delaware (collectively, “Somah” or “Seller”) to acquire all of the assets and none of the liabilities of Somah (the “Acquisition”), including DuraGraft®, a one-time intraoperative vascular graft treatment for use in vascular and bypass surgeries that maintains endothelial function and structure, and other related properties.

On July 31, 2020, the Company and Somah entered into Amendment No. 3 to the Agreement and the Agreement was finalized. Pursuant to the terms of this amendment, it was agreed that, as part of the Acquisition, the Company would acquire the outstanding capital stock of Somahlution, Inc., held by Somahlution, LLC, rather than the assets of Somahlution, Inc. This change to the Agreement was made to accommodate the European Union (“EU”) requirements with respect to the future manufacturing under Somahlution, Inc. of CE marked products for sale in the EU. In Amendment No. 3, the Company agreed to assume certain payables of Somah related to clinical and medical expenses. It was agreed that the payments on the assumed debts would be recorded as a prepaid royalty against future royalties. As of June 30, 2021 and December 31, 2020, prepaid royalties were $340,969 and $344,321, respectively, and were recorded as a non-current asset. See Note 9.

Pursuant to the Agreement and in consideration of the outstanding capital stock of Somahlution, Inc., the Company agreed to issue to Somah:

On July 30, 2020, the Company completed the acquisition of Somah (the “Somah Transaction”). The acquisition of Somah provides the Company with access to DuraGraft and other related intangible assets, which upon approval by FDA, will further the Company’s continued growth and international-wide product rollout.

In accordance with ASC 805-10 the substance of a transaction constitutes a business combination as the business of Somah meets the definition of a business under the standard. The transaction was accounted for in accordance with the acquisition method of accounting, and the assets acquired, and the liabilities assumed have been recorded at their respective estimated fair values as of the acquisition date. The purchase price is based on management’s estimate of fair value of the common shares and warrants issued as well as contingent consideration and liquidation preference given up. The final allocation of the purchase price consideration to the assets acquired and liabilities assumed has been completed and finalized.

Details of the carrying amount and the fair value of identifiable assets and liabilities acquired and purchase consideration paid is as follows:

See Note 8 for a detailed description of amortization recorded on DuraGraft related intangible assets.

Dr. Vithal D. Dhaduk, a co-founder of Somahlution, LLC (“Dhaduk”), is the subject of a complaint filed in the United States District Court, Middle District of Pennsylvania, Civil Action No. 3:17 cv 02243 in December 2017 by Mukeshkkumar B. Patel (“Patel”), a former business partner of Dhaduk, which complaint makes claims of breach of contract, promissory estoppel and unjust enrichment regarding a Memorandum of Understanding, dated July 16, 2015, between Patel and Dhaduk (“MOU”). The MOU provided that Dhaduk would pay Patel $9.45 million as consideration for Patel’s agreement to, among other things, (i) exit certain legal entities that were purportedly jointly owned by certain affiliates of Dhaduk and Patel, including Somahlution LLC, and (ii) relinquish his ownership interests in such entities. On December 2, 2019, the court granted Patel’s motion for summary judgment on his breach of contract claim, which judgment Dhaduk is currently appealing (such legal proceedings, collectively referred to as the “Dhaduk Litigation”). The Company is not a named defendant in the Dhaduk Litigation, and the court’s summary judgment is against Dhaduk in his personal capacity.

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of June 30, 2021, there were no pending or threatened lawsuits.

On July 13, 2019, the Company signed a consulting agreement with an individual to advise the Board of Directors. The individual receives $30,000 per month through July 13, 2022 and received an option to purchase 250,000 shares of common stock at a strike price of $1.50, which vest monthly through July 13, 2021. The vesting of these options was accelerated by the Board on September 2, 2020. See Note 10. The agreement also provided for royalties derived directly from the assets related to wound healing, debridement, grafting, dental applications for both human and pet, and thrombosis (see Note 5 – Krillase). The royalties associated with the acquisition of Krillase will be calculated as follows:

On December 15, 2019, the Company entered into the Agreement, as amended on March 31, 2020 and May 29, 2020, with Somah (see Note 5). The royalties associated with the Agreement will be calculated as follows:

The royalties are in perpetuity. As of June 30, 2021, there has been no revenue related to the above royalties.

The Company, after the acquisition of Somah, has been leasing the office space on a month-to-month basis with a monthly rate of $10,701. The Company maintained this office space through December 31, 2020.

On September 1, 2020, Bruce Harmon executed a consulting agreement and was named as chief financial officer. He is compensated $120,000 annually, received 40,000 shares of common stock vesting over one year. On October 22, 2020, Mr. Harmon received 120,000 options for common stock vesting over three years with an exercise price of $1.25. See Note 10. On November 1, 2020, Mr. Harmon became an employee of the Company thereby cancelling the consulting agreement. On March 5, 2021, Mr. Harmon executed a letter of understanding for employment. See Note 1.

On November 1, 2020, Dr. Neil J. Campbell executed an employment agreement and was named as chief executive officer, president and director. He is compensated $375,000 annually, received 500,000 options for common stock vesting over three years, with an exercise price of $1.25. On March 18, 2021, Dr. Campbell resigned all positions. See Notes 1 and 12. We expect to enter into a settlement and release agreement with Dr. Campbell but as of the date of this report no such agreement has been finalized.

On November 30, 2020, Dr. Steven Brooks executed a letter of understanding for employment as chief medical officer.

On December 1, 2020, Dr. Donald Very executed a letter of understanding for employment as executive vice president of research and development.

On January 16, 2021, Roger Schaller executed a letter of understanding for employment as executive vice president of commercial operations.

The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy. We may experience impact from quarantines, market downturns and changes in customer behavior related to pandemic fears and impact on our workforce if the virus continues to spread. In addition, one or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the coronavirus impacts our results will depend on future developments and reactions throughout the world, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus. It is likely to result in a potential material adverse impact on our business, results of operations and financial condition. Wider-spread COVID-19 globally could prolong the deterioration in economic conditions and could cause decreases in or delays in advertising spending and reduce and/or negatively impact our short-term ability to grow our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations.

Fixed assets, stated at cost, less accumulated depreciation at June 30, 2021 and December 31, 2020 consisted of the following:

Depreciation expense for the three months ended June 30, 2021 and 2020 was $1,125 and $0, respectively, and for the six months ended June 30, 2021 and 2020 was $4,425 and $0, respectively.

On July 31, 2020, the Company completed the Somah Transaction and acquired DuraGraft® technology in exchange for 10,000,000 shares of common stock, 3,000,000 warrants and certain contingent considerations (Note 5). Somah is engaged in developing products to prevent ischemic injury to organs and tissues and DuraGraft® is a one-time intraoperative vascular graft treatment for use in vascular and bypass surgeries that maintains endothelial function and structure, and other related properties.

As a result of restatement to account for measurement period adjustments, described in Notes 5 and 12, the value of DuraGraft intangibles purchased with the Somah Transaction increased by $4,920,298. The intangible assets acquired included:

The useful lives of the intangible assets are based on the life of the patent and related technology. The patents and related technology for Krillase are not currently being amortized as they have not yet been put into operations.

Future amortizations for DuraGraft related intangible assets for the next five years will be $435,108 for each year from 2021 through 2026 and $2,989,613 for 2027 and thereafter. Amortization related to in process research and development will be determined upon the Company achieving commercialization.

The Company has recorded a prepaid royalty to the shareholders of Somahlution, LLC in regard to the acquisition (see Note 5). The primary beneficial owner is Dr. Vithal Dhaduk, currently the CEO (appointed in June 2021, and previously a director appointed in 2021) and significant shareholder of the Company. Prepaid royalties were $340,969 at June 30, 2021 and $344,321 at December 31, 2020.

During the three months ended June 30, 2021, a shareholder and consultant of the Company loaned the Company $215,000 at an interest rate of 0%, which is included on the balance sheet at June 30, 2021 as Due to Related Party. The payment terms are undefined and as such the Company determined to classify the balance owed as a current liability.

In June 2021, the former CEO loaned the Company $20,000 at an interest rate of 0%. Upon termination of the CEO’s employment in June 2021, the Company agreed to repay the loan of $20,000 plus an additional $30,000, for a total of $50,000 included in Due to Related Party on the balance sheet at June 30, 2021. The Company paid the $50,000 in July 2021.

On May 27, 2021, the Company entered into a Unit Purchase Agreement to sell up to 4,000,000 units (the “Units”) at a price per Unit of $2.50 (the “Price Per Unit”). Each Unit is comprised of (i) a convertible promissory note (the “Note”) convertible into common stock of the Company, (ii) a warrant to purchase one share of common stock of the Company (the “Class A Warrant”); and (iii) a second warrant to purchase common stock of the Company (the “Class B Warrant”).

In May 2021, the Company issued and sold 29,978 Units at a price of $2.50 per Unit for gross proceeds of $74,945, consisting of Notes of $74,945, Class A Warrants for the purchase of 29,978 shares of common stock and Class B Warrants for the purchase of 29,978 shares of common stock. The Company incurred related issuance costs of $6,745 which will be amortized over the term of the Notes.

In July 2021, the Company issued and sold 440,000 Units under the Unit Purchase Program for gross proceeds of $1,100,000. The Units included Notes for $1,100,000, Class A Warrants for 440,000 shares of common stock and Class B Warrants for 440,000 shares of common stock.

The Company made the preliminary conclusion that the Notes had an embedded derivative related to the automatic conversion feature discount which requires bifurcation. The Company estimated the value of this derivative as $24,982 and recorded this derivative as a liability on the balance sheet as of June 30, 2021.

The Company estimated the value of the Class A Warrants and Class B Warrants and ascribed this value to the remainder of the proceeds at the issuance date of the Units as this estimated value exceeded the remainder of the gross proceeds, recording the warrants as a liability on the balance sheet of $49,963 as of June 30, 2021.

As all the Unit proceeds were allocated to the estimated values of the derivative and the warrants, the Company recorded the value of the Notes as $0 on issuance of the Units and will accrete to the face value of the Notes through maturity date. During the three and six months ended June 30, 2021, the Company recognized $3,491 of interest expense related to this accretion. At June 30, 2021, total future maturities of principal for the Notes was $74,945, all of which matures in May 2023. At June 30, 2021, this principal balance is reduced by the remaining debt discount ascribed to the derivative and warrants of $71,454, with a Note balance of $3,491 on the balance sheet at June 30, 2021.

Term - The Notes will mature 24 months from the initial closing date unless earlier converted or prepaid.

Interest - Interest shall accrue on the outstanding principal amount of the Notes at a simple rate of 10% per annum. Interest shall be paid at maturity or converted along with principal at the time of conversion of the Notes.

Optional Conversion - The outstanding principal amount of the Notes and all accrued, but unpaid interest shall be convertible at any time at the option of the holder at an initial conversion price of $2.50 (the “Conversion Price”).

Automatic Conversion - In the event the Company consummates, while the Note is outstanding, an equity financing with a gross aggregate amount of securities sold of not less than $10,000,000 (the “Qualified Financing”), then all outstanding principal, together with all unpaid accrued interest under the Notes, shall automatically convert into shares of the equity financing at the lesser of (i) 75% of the cash price per share paid in the Qualified Financing and

(ii) the conversion price of $2.50 per unit. If preferred stock is issued in the equity financing and the conversion price of the Notes is less than the cash price per share issued in the Qualified Financing, the Company may, solely elect to convert the Notes into shares of a newly created series of capital stock having the identical rights, privileges, preferences and restrictions as the preferred stock issued in the Qualified Financing, and otherwise on the same terms and conditions.

The Notes are secured by a first priority security interest in all assets of the Company.

The Class A Warrants entitle the holder to the right, for a period of five (5) years from each closing date, to purchase shares of the Company’s Common stock at an exercise price equal to the lower of (i) $3.13 or (ii) the Automatic Conversion Price (initially $2.50); provided, however, that the exercise price shall not be less than $1.00 (except as the result of antidilution adjustments). Company may force the exercise of the Class A Warrants if, at any time following the sixty day anniversary of the final closing date or termination of the offering, (i) the shares issuable upon exercise of the Class A Warrants are registered or the purchasers otherwise have the ability to trade the underlying shares without restriction, (ii) the 20-day volume-weighted daily average price of the Company’s Common Stock exceeds $6 per share, and (iii) the average daily trading volume is at least $1,000,000 shares during such 20-day period. The Class A Warrants contain customary antidilution adjustments and additionally, if after the issuance date of the Class A Warrants, the Company issues or sells any shares of common stock (other than in the Qualified Financing or exempted securities) or issues any rights, warrants, or options, without consideration or for consideration per share less than the exercise price of the Warrants, then the exercise price of the Warrants shall be reduced to an exercise price equal to the consideration paid per share.

The Class B Warrants will entitle the Purchasers to the right, for a period of five (5) years from each closing date, to purchase shares of the Company’s common stock at an exercise price equal $5.00 per share. The Company may force the exercise of the Class B Warrants if, at any time following the sixty day anniversary of the initial closing date, (i) the shares issuable upon exercise of the Class B Warrants are registered or the purchasers otherwise have the ability to trade the underlying shares without restriction, (ii) the 20-day volume-weighted daily average price of the Company’s Common Stock exceeds $8 per share, and (iii) the average daily trading volume is at least $1,000,000 during such 20-day period. The Class B Warrants contain customary antidilution adjustments but do not contain price based antidilution protection.

Our Articles of Incorporation authorize the issuance of 25,000,000 shares of “blank check” preferred stock with a par value of $0.001. As of June 30, 2021, and December 31, 2020, there were 0 shares issued and outstanding, respectively.

Our Articles of Incorporation authorize the issuance of 75,000,000 shares of common stock with a par value of $0.001.

As of June 30, 2021 and December 31, 2020, there were 35,928,188 shares of common stock issued and outstanding.

On January 13, 2021, the Board of Directors approved the Marizyme, Inc. 2021 Stock Incentive Plan (“SIP”). The SIP incorporates stock options issued prior to January 13, 2021. The SIP authorized 5,300,000 options for issuance. As of June 30, 2021, there remains 512,500 options available for issuance.

The summary of option activity for the six months ended June 30, 2021 is as follows:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires ~~management~~us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and ~~disclosures~~disclosure of contingent assets and liabilities at the date of the financial ~~statements~~statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results ~~could~~may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from ~~those estimates.~~these estimates under different future conditions.

~~The~~See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 1, “Summary of Significant Accounting ~~Standards Board (“FASB”) authoritative guidance regarding segment reporting establishes standards~~Policies” in our audited financial statements for the ~~way that public business enterprises report~~year ended December 31, 2020, included in our Annual Report on Form 10-K as filed on April 15, 2021, for a discussion of our critical accounting policies and estimates.

We had no off-balance sheet arrangements as of June 30, 2021 and December 31, 2020.

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information ~~about operating segments in annual financial statements~~required by this item.

Evaluation of Disclosure Controls and ~~requires that those enterprises report selected information about operating segments in interim financial reports. It also establishes standards for related disclosures about products~~Procedures

The Securities and ~~services, geographic areas~~Exchange Commission defines the term “disclosure controls and ~~major customers. The Company has determined that it operates in only one segment – the development and maintenance of computer software programs and support products.~~

The Company adopted the FASB Codification topic (“ASC”) 220, “Reporting Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Comprehensive income consists of net incomemean a company’s controls and other ~~gains and losses affecting stockholder's equity~~procedures of an issuer that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. Since inception, the Company’s other comprehensive income represents foreign currency translation adjustments and small net actuarial losses on pension plans.

ASC 260, “Earnings per share,” requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations. Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect isdesigned to reduce a loss or increase earnings per share. Diluted net income (loss) per share on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive. Accordingly, although the diluted weighted average number of common stock outstanding is disclosed on the statements of operation, the calculated net loss per share is the same for both the basic and diluted as both are based on the basic weighted average of common stock outstanding. There were no adjustments required to net income for the period presented in the computation of diluted earnings per share.

Financial instruments consist of cash and cash equivalents, accounts and other receivable, financial assets, notes payable, liabilities to banks, accounts payable, accrued liabilities and other liabilities, due to related parties and retirement benefit obligations. Financial assets and liabilities are measured upon first recognition and reviewed at the financial statement date. Changes in fair value are recognized through profit and loss. Unless otherwise noted, it is management’s opinionensure that ~~the Company is not exposed to significant interest or credit risks arising from these financial instruments.~~

We use the US dollar as our reporting currency. The functional currencies of our significant foreign subsidiaries are the local currency, which includes the Euro, the British Pound, the Indian Rupee, and the Bulgarian Lev. Accordingly, some assets and liabilities are incurred in those currencies and we are subject to foreign currency risks.

The Company follows ASC 820, “Fair Value Measurements and Disclosures”, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. This new accounting standard establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, ~~at fair value,~~processed, summarized and reported, within the ~~Company considers~~time periods specified in the ~~principal or most advantageous market in which the Company would transact~~Securities and ~~the market-based risk measurements or assumptions~~Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that ~~market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.~~

~~The Company has adopted ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not~~information required to be ~~measured at fair value.~~disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company ~~has not elected~~maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the ~~fair value option for any eligible financial instruments.~~

~~Cash~~reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and ~~cash equivalents~~

~~The Company considers all highly liquid instruments with a maturity of three months or less at~~reported within the time ~~of issuance~~periods specified under the SEC’s rules and forms and that information required to be ~~cash equivalents.~~

~~Pursuant to ASC 330 (Inventories), inventories held for sale are recognized under inventories. Inventories were measured at the lower of cost or market. Cost~~disclosed is ~~determined on a first-in-first out basis, without any overhead component.~~

Intangible assets predominately comprise goodwill, acquired software and capitalized software development services. Intangible assets acquired in exchange for payment are reflected at acquisition costs. If the development costs can be capitalized per ASC 985-20-25, these are reflected as ascribable personnel and overhead costs.

Company created software can be intended for sale to third parties or used by the Company itself. If the conditions for capitalization are not met, the expenses are recorded with their effect on profit in the year in which they were incurred.

The Company amortizes intangible assets with a limited useful life to the estimated residual book value in accordance with ASC regulations. In addition, in special circumstances according to ASC 350-30, a recoverability test is performed and, if applicable, unscheduled amortization is considered.

~~The useful life of acquired software is between three and five years and three years for Company created software.~~

Intangible assets obtained as part of an acquisition which do not meet the criteria for a separate entry are identified as goodwill. Goodwill is reviewed once a year during an impairment test, whereby the appraised fair value of the invested capital of the reporting unit, is compared with the carrying (book) value of its invested capital amount (including goodwill.) Use value is generally applied in order to determine the recoverability of goodwill and intangible assets with an indefinite useful life. The projected financial plan prepared by the management serves as the basis for this determination of use value and the planning assumptions are each adjusted for the current state of knowledge. Reasonable assumptions regarding macroeconomic trends and historical developments are taken into account in making these adjustments. Future estimated cash flows are determined based on the expected growth rates of the markets in question.

If the carrying amount of the reporting unit exceeds the appraised fair value, the impairment based on use value measures the amount of loss, if any, and an unscheduled amortization expense is recorded. If the appraised value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered to be impaired.

Property, plant and equipment are valued at acquisition or manufacturing costs reduced by scheduled and, if necessary, unscheduled depreciation. Fixed assets are depreciated on a straight-line basis, prorated over their expected useful life. Scheduled depreciation for property, plant and equipment is based on useful lives of 3 to 10 years. Leasehold Improvements are depreciated up to 40 years.

If fixed assets are sold, retired or scrapped, the profit or loss arising from the difference between the net sales proceeds and the residual book value are included under other operating earnings and expenses.

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC topic, 360.10. This guidance requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its’ expected cash flows or appraised value In this instance, the asset is considered to be impaired and is written down to fair value.

Our license revenues consist of revenues earned from the licensing of our software products. These products are generally licensed on a perpetual basis. Pricing models have generally been based either upon the physical infrastructure, such as the number of physical desktop computers or servers, on which our software runs or on a per user basis. License revenues are recognized when the elements of revenue recognition for the licensed software are complete, generally upon electronic shipment of the software and the software key to provide full access to all functionalities for our customers. In general, our invoices reflect license, service and maintenance components. In the case of multi element contracts, the revenues allocated to the software license in most cases represent the residual amount of the contract after the fair value of the other elements has been determined. Certain products of our software offering are licensed on a subscription basis.

Software maintenance revenues are recognized ratably on a pro-rata basis over the range of the contract period. Our contract periods typically range from one to five years. Vendor-specific objective evidence (“VSOE”) of fair value for software maintenance services is established by the rates charged in stand-alone sales of software maintenance contracts or the stated renewal rate for software maintenance. Customers who are party to software maintenance agreements with us are entitled to receive support, product updates and upgrades on a when-and-if-available basis.

Professional services include pre-project consulting, software design, customization, project management, implementation and training. Professional services are not considered essential to the functionality of our products, as these services do not alter the product capabilities and may be performed by our customers or by other vendors. Professional services engagements performed for a fixed fee, for which we are able to make reasonably dependable estimates of progress toward completion, are recognized on a proportional performance basis based on hours incurred and estimated hours of completion. Professional services engagements that are on a time and materials basis are recognized based on hours incurred. Revenues on all other professional services engagements are recognized upon completion. Our professional services may be sold with software products or on a stand-alone basis. Vendor Specific Objective Evidence (VSOE) of fair value for professional services is based upon the standard rates we charge for such services when sold separately.

The functional currency of the Company is US dollars. For financial reporting purposes, the financial statements of the subsidiary companies whose functional currency is other than US dollars were translated into US dollars using the current rate method. Assets and liabilities were translated at the exchange rates at the balance sheet dates, revenue and expenses were translated at the average exchange rates and stockholders’ equity was translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.

According to FASB ASC 450 “Contingencies”, provisions are made whenever there is a current obligation to third parties resulting from a past event which is likely in the future to lead to an outflow of resources and of which the amount can be reliably estimated. Provisions not already resulting in an outflow of resources in the following year are recognized at their discounted settlement amount on the financial statement date. The discount taken is based on market interest rates. The settlement amount also includes the expected cost increases. Provisions are not set off against contribution claims. If the amended estimate leads to a reduction of the obligatory amount, the provision is proportionally reversed and the earnings are recognized in other operating earnings.

Income taxes are provided in accordance with FASB Codification topic 740, “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss-carry forwards.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that, that some portion or all of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.

In July 2012, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. With the objective of reducing the cost and complexity of performing an impairment test for indefinite-lived intangible assets by simplifying how an entity tests those assets for impairment and to improve consistency in impairment testing guidance among long-loved asset categories. The amendments permit an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles – Goodwill and Other – General Intangibles Other than Goodwill. The more-likely-than-not threshold is defined as having the likelihood of more than 50 percent. The amendments are effective for annualchief executive and interim ~~impairment tests performed beginning April 1, 2013. Adoption of this new standard is not expected~~chief financial officer to ~~have significant impact to the Company’s financial statement.~~allow timely decisions regarding disclosure.

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

As previously disclosed, the Company has exchanged a total of 5,405,411 shares of common stock in exchange for 50.1% of the outstanding common shares of GROUP. Although the Company was the legal acquirer, the transaction was accounted for as a recapitalization of GROUP in the form of a reverse merger, whereby GROUP becomes the accounting acquirer and is deemed to have retroactively adopted the capital structure of the Corporation. Accordingly, the accompanying consolidated financial statements reflect the historical consolidated financial statements of GROUP for periods presented prior to January 6, 2011. All costs associated with the reverse merger transaction were expensed as incurred. Those expenses totaled approximately $300,000 and were included in professional fees in administrative expenses.

The Company has based its financial reporting for the consolidation with GROUP in accordance with the FASB ASC 805-40 as it relates to reverse acquisitions. Goodwill has been measured as the excess of the fair value of the consideration effectively transferred by the Company, the acquiree, for financial reporting purposes, over the net amount of the Company’s recognized identifiable assets and liabilities.

We have recorded the acquired assets and liabilities of Group Business Software Enterprises, Inc. on the acquisition date of January 6, 2011, at their fair value and the operations of Group Business Software Enterprises, Inc. have been included in the consolidated financial statements since the acquisition date.

The assets and liabilities of GROUP, the acquirer for financial reporting purposes, are measured and recognized in the consolidated financial statements at their precombination carrying amounts in accordance with ASC 805-40-45-2(a). Therefore, the non-controlling interest reflects the non-controlling shareholders’ proportionate interest in the pre-combination carrying amounts of GROUP’s net assets even though the non-controlling interests in other acquisitions are measured at their fair values at the acquisition date.

Due to the Company’s perceived increase in the demand for Modernization, Mobility and Optimization offerings, the Company made a strategic decision in 2012 to focus on its core offerings in the IBM Notes and Domino market and to divest its non-core businesses. As a result, on February 1, 2013, GBS entered into a Stock Purchase Agreement, dated February 1, 2013 (the “Agreement”), with IDC Global, Inc., a Delaware corporation and a wholly-owned subsidiary of GBS (“IDC”), and Global Telecom & Technology Americas, Inc., a Virginia corporation (“GTT). Pursuant to the Stock Purchase Agreement, we sold 100% of the issued and outstanding capital stock of IDC to GTT for an aggregate purchase price of $4,600,000 (the “Purchase Price”),

Discontinued Operations and their results of operations, financial positions and cash flows are shown separately for the nine months ended on September 30, 2012 for comparative purposes. Summarized financial information for discontinued operations is set forth as follows:

~~The subsidiaries listed below were included in the basis of consolidation (KUSD = 1,000’s of US Dollars):~~

As of the financial statement date, the Company’s cash and cash equivalents totaled 259 KUSD (December 31, 2012 restated year end: 1,155 KUSD). Included in that amount are cash equivalents of 3 KUSD (December 31, 2012 restated year end: 3 KUSD).

As of the financial statement date, Accounts Receivable was 3,528 KUSD (December 31, 2012 restated year end: 4,143 KUSD). Receivables are generally measured at their nominal value and taking into account all foreseeable risks. Probable default risks are handled with specific allowances for bad debts. With regard to the trade receivables which are neither impaired nor delinquent, there are no indications as of the financial statement date that the debtors will not meet their payment obligations.

~~Prepaid expenses in the amount of 208 KUSD were primarily recorded for prepaid rent, insurance and advance on technological collaboration events (December 31, 2012 restated year end: 84 KUSD).~~

Other Receivables as of the financial statement date were 277 KUSD (December 31, 2012 restated year end: 677 KUSD) which includes tax deposits (248 KUSD), benefit credits (14 KUSD), other deposits (4K USD) and other miscellaneous receivables (11 KUSD).

~~Deferred tax assets as of the financial statement date were 1,076 KUSD (December 31, 2012 restated year end: 1,132 KUSD). All deferred tax assets are long term.~~

Property, plant and equipment are measured at cost less scheduled straight-line depreciation. Depreciation of the computer hardware listed as office equipment is distributed over a period of three to five years. The depreciation period for other office equipment is three to ten years. Office furnishings are depreciated over a period of eight to ten years. Leasehold Improvements are depreciated up to 40 years.

The costs of developing new software products and updating products already marketed by the Company are generally recognized as expenses in the period in which they arise. Provided they meet the conditions for capitalization as per FASB ASC 985-20-25, they are capitalized. Capitalized development costs can be attributed to the defined products. These products are technically realizable and there is a target market for them.

The development costs arising in the reporting period result from the personnel costs attributed to the development work as well as overhead costs, provided that these are related to the development work and do not represent general administrative costs. The ascribable overhead costs are directly recognized.

~~Capitalized development costs are generally amortized over a period of three years starting with the date of marketability of the new products or major releases.~~

~~The intangible financial assets carried in this item are licenses acquired in exchange for payment.~~

These financial assets are measured at acquisition cost less scheduled straight-line amortization. The assets added in the scope of the cost price allocation of the business divisions acquired this year.

~~The useful life spans were based uniformly throughout the Company according to those used by the parent company. Scheduled amortization is performed over a period from three to ten years.~~

The useful life of the domain “gbs.com”, was estimated as unlimited. This is because no other legal, contractual or other factors exist which would limit its useful life. It is not systematically amortized, but rather annually. Should there exist signs indicating towards impairment it is tested for recoverability and, if necessary, written down to the amount which could be obtained for it if sold.

Amortization of concessions, industrial property and similar rights and assets, as well as licenses to such rights and assets are presented in the Statement of Operations and Comprehensive Income/Loss within Cost of Goods Sold.

~~The balance of this account of 132 KUSD primarily includes rent and other security deposits (December 31, 2012 restated year end: 156 KUSD).~~

~~Included in this account of 3,888 KUSD (December 31, 2012 restated year end: 7 KUSD) is primarily an operating line of creditof GROUP AG.~~

As of the financial statement date, trade accounts payable amounted to 2,061 KUSD (December 31, 2012 restated year end: 3,095 KUSD). Trade payables are carried at their repayment amount and all have a residual term of up to one year.

Other provisions are created as of the financial statement date in an amount necessary according to a reasonable commercial appraisal, to cover future payment obligations, perceivable risks and uncertain liabilities of the Company. Amounts deemed to be most likely to occur, in careful assessment, are accrued.

Provisions for salaries of 599 KUSD (December 31, 2012 restated year end: 861 KUSD) include the provisions created for the variable salaries of the sales staff for the sales objectives reached in this business period.

Vacation provisions of 247 KUSD (December 31, 2012 restated year end: 315 KUSD) include the obligations of GROUP’s companies to their employees for remaining vacation claims from the reporting period. The amount of the provision is calculated on the gross salary of the individual employee plus the employer contribution to social security/Medicare and based on the unused vacation days as of the financial statement date.

~~Other employment of 97 KUSD (December 31, 2012 restated year end: 114 KUSD) were accrued for severance and compensation insurance and compensation levy.~~

~~For liabilities not yet settled, a provision totaling 196 KUSD (December 31, 2012 restated year end: 1059 KUSD) was created.~~

~~Other Provisions of 465 KUSD (December 31, 2012 restated year end: 446 KUSD) include miscellaneous provisions.~~

~~Expenses of accounting and other external consulting of the Company were recognized at 109 KUSD (December 31, 2012 restated year end: 128 KUSD).~~

~~A provision for anticipated legal consulting of 68 KUSD was recorded (December 31, 2012 restated year end: 73 KUSD).~~

~~For warranty claims, a provision of 82 KUSD (December 31, 2012 restated year end: 96 KUSD) was created determined by service income.~~

Accruals for future periods leading to realization of sales after the financial statement date are reported under deferred income. The deferred income items listed as of the financial statement date in the amount of 6,847 KUSD (December 31, 2012 restated year end: 6,100 KUSD) primarily include maintenance income collected in advance for the period after the end of the ~~financial statement date. They are amortized~~period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Interim Chief Executive Officer and VP of Finance, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on ~~a straight-line basis over their respective contract terms~~.

~~Notes to~~this evaluation, the Interim Chief Executive Officer and VP of Finance have concluded that the Company’s disclosure controls and procedures are not effective as of such date. The Interim Chief Executive Officer and VP of Finance have determined that the Company continues to have the following deficiencies which represent a material weakness:

Additional hiring is contingent upon the Company’s efforts to obtain additional funding through equity or debt and the results of its operations.

Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

As required by Rule 13a-15(d) of the Exchange Act, our management, including our Interim Chief Executive Officer, and our VP of Finance conducted an evaluation of the internal control over financial reporting to determine whether any changes occurred during the quarter ended June 30, ~~2013~~

~~Other short-term liabilities~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, our Interim Chief Executive officer and VP of ~~242 KUSD (December 31, 2012 restated year end: 860 KUSD) and includes miscellaneous short term obligations including amounts due on business assets~~

Finance concluded that there were changes during the quarter ended June 30, 2021. The Company ~~has authorized capital~~hired an VP of ~~75,000,000 shares of common stock~~Finance and 25,000,000 shares of “blank check” preferred stock, each with a par value of $0.001. No class of preferred stock has been designated or issued. As of September 30, 2013, there were shares 30,837,624 of common stock outstanding. At the time of the Reverse Merger of the Company by GROUP on January 6, 2011, there were 16,500,000 shares of common stock of the Company outstanding and, as the Reverse Merger was accounted for as a recapitalization and applied retroactively, this balance is recorded as the balance outstanding since inception.additional accounting staff to facilitate increased internal controls.

~~In March, 2012 another investor exercised their private purchase warrant and bought 5,000 shares of common stock for net proceeds of $7,500.~~

Also in March, 2012, as a result of purchasing warrants at nominal value, wherein each warrant allowed the holder to purchase one common share at $0.50 for a period of three years, certain investors exercised those warrants and bought 900,000 shares of common stock for net proceeds of $450,000.

On April 16, 2012, the Company sold 120,000 Units to Joerg Ott, the then Chief Executive Officer and Chairman of the Board of Directors of the Company, for a price of $1.50 per Unit, for a total purchase price of $180,000. Each Unit consisted of one share of Common Stock of the Company and one warrant to purchase one share of Common Stock of the Company from the date of issuance until the third anniversary date of the date of issuance for $1.50 per share. The Company sold the Units and underlying securities to Mr. Ott in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

On April 28, 2012, $632,500 in notes payable were converted at $1.15 per unit into 550,000 units with each unit consisting of one common share of common stock and one warrant. Each warrant allows the holder to purchase one common share at $1.75 for a period of three years. The Company issued the Note pursuant to Section 4(a)(2) (formerly Section 4(2)) under the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

On April 30, 2012, $460,000 in notes payable to Lotus Holdings Ltd. (“Lotus Holdings”) were converted at $1.15 per unit into 400,000 units, with each unit consisting of one share of common stock and one warrant. Each warrant allows the holder to purchase one common share at $1.75 for a period of three years. The Company issued the Lotus Note pursuant to Section 4(a)(2) (formerly Section 4(2)) under the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

Also on April 30, 2012, $172,500 in debt to a company owned by Joerg Ott, the then Chief Executive Officer and Chairman of the Board of Directors of the Company, were converted at $1.15 per unit into 150,000 units, with each unit consisting of one share of common stock and one warrant. Each warrant allows the holder to purchase one common share at $1.75 for a period of three years. The Company issued the debt pursuant to Section 4(a)(2) (formerly Section 4(2)) under the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

On May 10, 2012, the Company sold 30,000 Units to Markus R. Ernst, the Chief Financial Officer of the Company, for a purchase price of $1.50 per unit, for a total purchase price of $45,000. Each unit consists of one share of common stock of the Company and one warrant, allowing the holder to purchase one share of common stock of the Company from the date of issuance until the third anniversary date of the date of issuance for $1.50 per share. The Company sold the units and underlying securities to Mr. Ernst in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

On May 15, 2012, the Company issued 150,000 unregistered shares of common stock to Kjell Jahn, the former selling stockholder of GroupWare, AG, a Florida corporation purchased by the Company in June 2011. The Company issued the shares in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

On July 5, 2012, the Company entered into a convertible promissory note agreement (the “Loan Agreement”) with Mohammad A. Shihadah, a member of the Board. Pursuant to the Loan Agreement, the Company issued a convertible promissory note, dated July 5, 2012 (the “Note”), to Mr. Shihadah for the principal amount of $50,000, bearing interest at a rate of 8% per year and maturing on the earlier of the first anniversary date of the date of issuance or such other time as described in more detail in the Note.

The Note was convertible in full at $0.50 per share into common stock of the Company if this conversion was exercised on or before September 30, 2012. If not exercised, Mr. Shihadah would receive a 3-year warrant to purchase shares at 50,000 shares of common stock at $1.00 per share.

The conversion was not exercised by September 30, 2012, therefore, as per the termsof the Loan Agreement Mr. Shihadah was issued a 3-year warrant to purchase shares at 50,000 shares of common stock at $1.00 per share.

On July 5, 2012, the Company entered into a convertible promissory note agreement (the “Loan Agreement”) with K Group Ltd. Pursuant to the Loan Agreement, the Company issued a convertible promissory note, dated July 5, 2012 (the “Note”), to K Group Ltd. for the principal amount of $250,000, bearing interest at a rate of 8.5% per year and maturing on the earlier of the first anniversary date of the date of issuance or such other time as described in more detail in the Note.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

The Note was convertible in full at $0.50 per share into common stock of the Company if this conversion was exercised on or before September 30, 2012. If not exercised, K Group Ltd. would receive a 3-year warrant to purchase shares at 250,000 shares of common stock at $1.00 per share.

The conversion was not exercised by September 30, 2012, therefore, as per the terms of the Loan Agreement K Group was issued a 3-year warrant to purchase shares at 250,000 shares of common stock at $1.00 per share.

On July 5, 2012, the Company entered into a convertible promissory note agreement (the “Loan Agreement”) with Vitamin B Venture GmbH. Pursuant to the Loan Agreement, the Company issued a convertible promissory note, dated July 5, 2012 (the “Note”), to Vitamin B Venture GmbH for the principal amount of $252,500, bearing interest at a rate of 8.5% per year and maturing on the earlier of the first anniversary date of the date of issuance or such other time as described in more detail in the Note.

The Note was convertible in full at $0.50 per share into common stock of the Company if this conversion was exercised on or before September 30, 2012. If not exercised Vitamin B Venture GmbH would receive a 3-year warrant to purchase shares at 250,000 shares of common stock at $1.00 per share.

The conversion was not exercised by September 30, 2012, therefore, as per the terms of the Loan Agreement Vitamin B Venture GmbH was issued a 3-year warrant to purchase shares at 250,000 shares of common stock at $1.00 per share.

On August 13, 2012, the Company entered into a note purchase and security agreement (the “Loan Agreement”) with John A. Moore, a member of the Board. Pursuant to the Loan Agreement, the Company issued a secured promissory note, dated October 26, 2012 (the “Note”), to Mr. Moore for the principal amount of $1,000,000, bearing interest at a rate of 20% per year and maturing on the earlier of the first anniversary date of the date of issuance or such other time as described in more detail in the Note, without any penalty for prepayment. To secure the obligations of the Company under the Note, the Company granted Mr. Moore a secured priority security interest in the Company’s Accounts Receivable and its subsidiaries located in the United States of America, as more fully described in the full text of the document.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

~~In c~~onnection with the execution of the Loan Agreement, on October 26, 2012, the Company issued the Lender a common stock purchase warrant (the “Warrant”), pursuant to which the Lender is entitled to purchase 100,000 shares of common stock at an exercise price of $0.35 until the third anniversary date of the date of issuance. The Warrant was issued in a private transaction between the Company and the Lender and was exempt from registration under the Securities and Exchange Act of 1933, as amended, pursuant to Section 4(a)(2) (formerly Section 4(2)) thereof.

In connection with the Loan Agreement, on February 22, 2013, the Company and Mr. Moore amended the Note pursuant to which Mr. Moore agreed to convert the interest due under the Note into shares of GBSX common stock at a rate of $0.30 per share. Pursuant to the amendment, the Company issued 450,960 shares of Common Stock to Mr. Moore. The Company issued the shares in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

On October 26, 2012, the Company entered into a note purchase and security agreement (the “Loan Agreement”) with Stephen D. Baksa, a member of the Board. Pursuant to the Loan Agreement, the Company issued a secured promissory note, dated October 26, 2012 (the “Note”), to Mr. Baksa for the principal amount of $1,000,000, bearing interest at a rate of 20% per year and maturing on the earlier of the first anniversary date of the date of issuance or such other time as described in more detail in the Note, without any penalty for prepayment. To secure the obligations of the Company under the Note, the Company granted the Baksa a first priority security interest in all of the Company’s right, title and interest in and to the shares of IDC Global, Inc. then owned by the Company. The Note contains customary provisions upon an Event of Default, as more fully described in the full text of the document.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

In connection with the execution of the Loan Agreement, on October 26, 2012, the Company issued the Lender a common stock purchase warrant (the “Warrant”), pursuant to which the Lender is entitled to purchase 500,000 shares of common stock at an exercise price of $0.20 until the third anniversary date of the date of issuance. The Warrant was issued in a private transaction between the Company and the Lender and was exempt from registration under the Securities and Exchange Act of 1933, as amended, pursuant to Section 4(a)(2) (formerly Section 4(2)) thereof. On February 12, 2013, Mr. Baksa exercised the right to purchase 500,000 shares of common stock at the exercise price of $0.20.

In connection with the Loan Agreement, on February 22, 2013, the Company and Mr. Baksa amended the Note pursuant to which Mr. Baksa agreed to convert the interest due under the Note into shares of GBSX common stock at a rate of $0.30 per share. Pursuant to the amendment, the Company issued 200,000 shares of Common Stock to Mr. Baksa. The Company issued the shares in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities

~~Transactions occurring in 2013~~

As stated above, on February 12, 2013, and in connection with the above October 26, 2012 Loan Agreement the Company issued an aggregate of 500,000 restricted shares of Common Stock to Board Member, Stephen Baksa pursuant to exercise of a common stock purchase warrant issued on October 26, 2012 and exercisable for $0.20 per share. The Company issued the securities in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

On February 12, 2013, the Company sold an aggregate of 250,000 restricted shares of Common Stock to an Accredited Investor (as that term is defined the Securities Act) pursuant to exercise of a common stock purchase warrant issued on November 30, 2012 and exercisable for $0.20 per share. The Company issues the securities in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

~~As of March 31, 2013, these shares had not yet been issued and remain as Subscriptions Receivable.~~

As stated above, on February 22, 2013 and in connection with the above August 13, 2012 Loan Agreement, the Company and Board Member, John Moore amended the Note pursuant to which Mr. Moore agreed to convert the interest due under the Note into shares of GBSX common stock at a rate of $0.30 per share. Pursuant to the amendment, the Company issued 450,960 shares of Common Stock to Mr. Moore. The Company issued the shares in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

As stated above, on February 22, 2013, and in connection with the above October 26, 2012 Loan Agreement, the Company and Board Member Stephen Baksa amended the Note pursuant to which Mr. Baksa agreed to convert the interest due under the Note into shares of GBSX common stock at a rate of $0.30 per share. Pursuant to the amendment, the Company issued 200,000 shares of Common Stock to Mr. Baksa. The Company issued the shares in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

On March 20, 2013, the Company issued an aggregate of 450,950 restricted shares of Common Stock to Board Member, John Moore pursuant to a February 22, 2013 amendment to a Secured Promissory Note Agreement entered into on August 13, 2012 between the Company and the Board Member. The Company issued the securities in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

On March 27, 2013, the Company issued an aggregate of 200,000 restricted shares of Common Stock to Board Member, Stephen Baksa pursuant to a February 22, 2013 amendment to a Secured Promissory Note Agreement entered into on October 26, 2012 between the Company and the Board Member. The Company issued the securities in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

On March 27, 2013, the Company issued 200,000 restricted shares of Common Stock to a third party non-affiliated consultant in consideration for consulting services rendered by the consultant to the Company. The Company issued the securities in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

On April 26, 2013, the Company entered into a note purchase and security agreement (the “Loan Agreement”) with Stephen D. Baksa (the “Lender’), a member of the Board. Pursuant to the Loan Agreement, the Company issued a secured promissory note, dated April 26, 2013 (the “Note”), to Mr. Baksa for the principal amount of $200,000, bearing interest at a rate of 2% per month and maturing on June 30, 2013 or such other time as described in more detail in the Note, without any penalty for prepayment. This Note is secured by fifty percent (50%) of certain financial holdbacks to the Company pursuant to the Stock Purchase Agreement, dated February 1, 2013, by and among the Company, IDC Global, Inc. and Global Telecom & Technology Americas, Inc. The Company issued the Note upon reliance on Section 4(a)(2) (formerly 4(2)) of the Securities Act in light of the fact it was a private transaction and did not involve a public offering of securities.

In connection with the execution of the Loan Agreement, on April 29, 2013, the Company issued the Lender a common stock purchase warrant (the “Warrant”), pursuant to which the Lender is entitled to purchase 100,000 shares of common stock at an exercise price of $0.25 from May 1, 2013 until April 30, 2016. The Warrant was issued in a private transaction between the Company and the Lender and was exempt from registration under the Securities pursuant to Section 4(a)(2) (formerly Section 4(2)) thereof.

In connection with the execution of the Loan Agreement, on April 29, 2013, the Company issued the Lender a conditional common stock purchase warrant (the “Conditional Warrant”) which is exercisable in the event that Note is not paid in full by June 30, 2013, pursuant to which the Lender is entitled to purchase 100,000 shares of common stock at an exercise price of $0.25 from July 1, 2013 until June 30, 2016 as described more fully in the Note. The Conditional Warrant was issued in a private transaction between the Company and the Lender and was exempt from registration under the Securities Act, pursuant to Section 4(a)(2) (formerly Section 4(2)) thereof.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

On April 26, 2013, the Company entered into a note purchase and security agreement (the “Loan Agreement”) with Vitamin B Venture GmbH (the “Lender”), an entity of which Joerg Ott, the Company’s Chairman and Chief Executive Officer, has voting and dispositive control. Pursuant to the Loan Agreement, the Company issued to the Lender a secured promissory note, dated October 26, 2012 (the “Note”), for the principal amount of $200,000, bearing interest at a rate of 2% per month and maturing on June 30, 2013 or such other time as described in more detail in the Note, without any penalty for prepayment. This Note is secured by fifty percent (50%) of certain financial holdbacks to be paid to the Company pursuant to the Stock Purchase Agreement, dated February 1, 2013, by and among the Company, IDC Global, Inc. and Global Telecom & Technology Americas, Inc. The Company issued the Note upon reliance on Section 4(a)(2) (formerly 4(2)) of the Securities Act in light of the fact it was a private transaction and did not involve a public offering of securities.

In connection with the execution of the Loan Agreement, on April 29, 2013, the Company issued the Lender a common stock purchase warrant (the “Warrant”), pursuant to which the Lender is entitled to purchase 100,000 shares of common stock at an exercise price of $0.25 from May 1, 2013 until April 30, 2016. The Warrant was issued in a private transaction between the Company and the Lender and was exempt from registration under the Securities Act pursuant to Section 4(a)(2) (formerly Section 4(2)) thereof.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

On August 6, 2013, the Company issued 25,000 restricted shares of Common Stock to a third party non-affiliated consultant in consideration for consulting services rendered by the consultant to the Company. The Company issued the securities in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

~~Other changes in common stock are disclosed in Note 23, Supplementary Cash Flow Disclosures.~~

~~Options~~

~~The Company has not issued any options, so that none are outstanding as of September 30, 2013.~~

~~Warrants~~

The Company has issued warrants in four different manners. In each instance, the warrant allows the holder to purchase a common share within a three year period from issuance at a specific price per share. In the first instance, warrants have been issued as part of a private placement offering wherein the investor purchases a common share, and a warrant. The fair value of those warrants has been determined (and is shown below) by utilizing the residual method, whereby the current market value of the stock is deducted from the unit price and the remainder is allocated to the warrant. The valuation of the warrants issued is for disclosure purposes only and has no impact to the financial statements. A description of those warrants has been described above under common shares.

The second manner in which warrants are issues is in respect to financing by way of the issuance of notes payable or the conversion of debt into shares. In these instances, the fair value of the warrant has been determined using the effective interest rate method whereby the note is discounted when the interest rate is less than other similar notes and discount is allocated to the warrant and credited to additional paid in capital. The corresponding charge to discount is then amortized over the life of the note. Where there is no difference in interest terms, no value is attributable to the warrant.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

The Company has also sold warrants at nominal value to certain investors. In this instance the fair value of the warrants has been determined using a Black-Scholes option pricing model with volatility, equity value and interest rate inputs noted below. The valuation of the warrants issued is for disclosure purposes only and has no impact to the financial statements.

Lastly, the Company has issued warrants to outside consultants in payments for services. The warrants are issued as “cashless” warrants and have been valued using a Black-Scholes option pricing model with volatility, equity value and interest rate inputs noted below.. The fair value of warrants issued for financing are determined for disclosure purposes as there is no impact to the financial statements. The fair value for other services, namely legal, and consulting have been recorded in the financial statements with a charge to the corresponding expense account and a credit to additional paid in capital.

~~Black Scholes assumptions for warrants issued were as follows:~~

For the Period Ending
September 30,
2013 2012
Annualized Volatility
120.26 % 118.64 %
Risk Free Interest Rate 0.66 % 0.40 %
Expected Life 3 years 3 years
Dividend Rate Nil Nil

~~The following share purchase warrant transactions have not been disclosed elsewhere.~~

On April 1, 2011, the former CFO was issued 100,000 share purchase warrants, which gave him the option of purchasing 100,000 shares of common stock for a period of 3 years at a price of $1.50 per common share. The value of this issuance, using the Black Scholes pricing model was determined to $34,000 and this amount was recorded as a consulting expense.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

In March 2012, the Company issued an aggregate of 2,020,000 warrants to five “accredited investors” pursuant to Section 4(a)(2) (formerly Section 4(2)) of the Securities Act. Each investor warrant is exercisable for the three-year period commencing from the date of issuance for $0.50 per share of Common Stock and has the same terms as the Private Placement Warrants. As noted above investors immediately exercised warrants and purchased 900,000 shares of common stock for $450,000.On March 27, 2012, the Company issued an aggregate of 250,000 warrants to 3 outside consultants pursuant to Section 4(a)(2) (formerly Section 4(2)) of the Securities Act. Each warrant is exercisable for the three-year period commencing from the date of issuance for $1.10 per share of Common Stock and has the same terms as the Private Placement Warrants. The value of this issuance, using the Black Scholes pricing model was determined to $270,208 and this amount was recorded as a professional expense.

In December 2012, The Company issued 16,875 warrants to an outside consultant pursuant to Section 4(a)(2) (formerly Section 4(2)) of the Securities Act. Each warrant is exercisable for the three-year period commencing from the date of issuance for $0.21 per share of Common Stock and has the same terms as the Private Placement Warrants. The value of this issuance, using the Black Scholes pricing model was determined to $2,624 and this amount was recorded as a consulting expense.

~~Notes to the Interim Financial Statements~~

~~September 30, 2013~~

~~GBS Enterprises Incorporated~~

~~Unaudited~~

# of shares Fair value Balance
allowed to Issue Expiry Strike at End of
purchase Date Date Price Issuance Issued Exercised Period
$ $ # # #

Opening - Jan 1, 2012 6,846,280 5,000 6,841,280
Amended (2,000,000 ) 10/1/2010 6/1/2013 4.00 - - - -
Reissued 2,000,000 6/1/2012 6/1/2015 1.00 556,785 - - -
Issued for legal services 3/31/2012 3/31/2012 1.10 270,208 (2) 250,000 - 250,000
Issued for nominal value 3/28/2012 3/28/2015 0.50 2,457,662 2,020,000 900,000 1,120,000
Sold with share units 4/16/2012 4/16/2015 1.50 90,000 120,000 - 120,000
Issued with debt conversion 4/28/2012 4/28/2015 1.75 - 550,000 - 550,000
Issued with debt conversion 4/30/2012 4/30/2015 1.75 - 500,000 - 500,000
Sold with share units 5/10/2012 5/10/2015 1.50 25,800 30,000 - 30,000
Issued with debt 7/5/2012 7/5/2012 0.50 26,500 550,000 - 550,000
Issued with debt 8/13/2012 8/13/2015 0.35 - 100,000 100,000 100,000
Issued with debt 10/26/2012 10/29/2015 0.20 - 500,000 500,000 -
Issued with debt 11/30/2012 11/30/2015 0.20 - 500,000 250,000 250,000
Issued for consulting services 12/21/2012 12/21/2015 0.21 2,624 (1) 16,875 - 16,875
Closing - Dec 31, 2012 5,136,875 1,755,000 10,328,155

Opening - Jan 1, 2013 10,328,155 10,328,155
Transfer (3/11/2011) 739,000 2/6/2013 3/11/2014 1.50 - - - 739,000
Closing - Mar 31, 2013 5,136,875 1,755,000 11,067,155

Issued with debt 4/26/2013 4/26/2016 0.25 - 400,000 - 400,000
Closing - Jun 30, 2013 5,536,875 1,755,000 11,467,155

Closing - September 30, 2013 5,536,875 1,755,000 11,467,155

~~(1) recorded as consulting expense~~

~~(2) recorded as legal expense~~

~~Note 21 REVENUE ALLOCATION~~

~~Gross revenue may be broken down by the following products for the nine months ended September 30, 2013 are as follows:~~

~~Sales Revenues~~	~~9/30/2013~~
	~~KUSD~~


~~Licenses~~		~~2,605~~
~~Maintenance~~		~~7,500~~
~~Service~~		~~2,443~~
~~Third-Party Products~~		~~1,736~~
~~LND Third-Party Products~~		~~1,330~~
~~Others~~		0
		~~15,613~~30

The Company’s management, including the Interim ~~Financial Statements~~Chief Executive Officer and VP Finance, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

~~Revenues by geographical area for the nine months ended September 30, 2013 are as follows~~:

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial ~~statement date, Other income was 20 KUSD (December~~condition or operating results.

For information regarding the various risk factors that may affect our business, please refer to our Annual Report on Form 10-K for the year ended December 31, ~~2012 year end: Other Expense 33 KUSD).~~2020 filed with the SEC on April 15, 2021, which may be accessed via EDGAR through the Internet at www.sec.gov.

~~Notes to~~ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~The significant non-cash transactions through September 30, 2013~~2021, we did not conduct any unregistered sales of our equity securities that were not previously disclosed in a current report of Form 8-K and we did not repurchase any of our common stock, except as follows:

~~Notes~~As provided to ~~the Interim Financial Statements~~mike and subsequent financing

On ~~July 10, 2013,~~April 16, 2021, the Board of Directors of the Company ~~reappointed Joerg Ott as~~formed the Chief Executive Officer (Principal Executive Officer) of the Company, effective immediately. Mr. Ott replaced Mr. Gary D. MacDonald who had been serving as the Company’s Interim Chief Executive Officer since July 11, 2012.following committees:

Audit Committee: Terry Brostowin (Chair), Dr. Vithal Dhaduk, and Dr. William Hearl

Compensation Committee: Julie Kampf (Chair), Dr. Vithal Dhaduk, and Terry Brostowin

Nomination and Board Governance Committee: Dr. William Hearl (Chair), and Julie Kampf

On ~~August 2, 2013, Gary D. MacDonald resigned as member of the Board of Directors of the Company~~June 24, 2021, and as, Managing Director of GBS-UK. From March 1, 2012 to the date of his resignation, Mr. MacDonald also served as member of the Board’ Audit Committee. Mr. MacDonald’s resignation was not due to any disagreement with the Company or the Board.

On October 23, 2013, the Company filed a lawsuit (GBS Enterprises, Inc. v. Reliance Globalcom, Inc.) in the Superior Court of the State of California, County of San Francisco, seeking a declaratory judgment that the Company has no obligation to Reliance Globalcom Inc. (“Reliance”) for any claims or liabilities in connection with ~~a Master Services Agreement (“MSA”) executed by Reliance and IDC Global Inc. (“IDC”) a then wholly owned subsidiary~~the termination of the Company in March 2010. On February 1, 2013, GBS sold IDC to Global Telecom & Technology Inc. (“GTT”). Pursuant to the governing Stock Purchase Agreement (SPA), GTT gained all right, title and interest in 100% of all of IDC’s stock, all of which had been owned by GBS. Pursuant to the Stock Purchase Agreement, GTT withheld $528,777.93 of the purchase price from payment to GBS to cover potential exposure due to the Identified Dispute described herein between IDC and Reliance. The Stock Purchase Agreement requires that, within three days of notice to GTT that the Identified Dispute described herein has been resolved, GTT will release the $528,777.93 to GBS. The Company is seeking declaratory reliefhis employment, James Sapirstein was removed from the ~~Court stating~~audit, compensation and nomination and board governance committees.

On July 12, 2021, and in connection with the ~~Company is not liable to Reliance and that GTT may release~~termination of his consulting agreement, Bruce Harmon was removed from the ~~$528,777.93 in funds owed to the Company. There were no material developments in this case since the filing of the lawsuit.~~audit committee.

The following exhibits are filed as part of this report or incorporated by reference:

Pursuant to the requirements ~~of Section 13 or 15(d)~~ of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Nevada		~~27-3755055~~82-5464863
(State or ~~other jurisdiction~~Other Jurisdiction of ~~incorporation or~~		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

~~organization)~~
		555 Heritage Drive, Suite 205, Jupiter, Florida33458
~~585 Molly Lane~~ ~~Woodstock, GA~~		~~30189~~
(Address of principal executive offices)		~~(Zip~~ (Zip Code)

☐	Large accelerated filer¨	☐	Accelerated filer¨
☒
Non-accelerated filer¨ ~~(Do not check if a smaller reporting company)~~	☒	Smaller reporting companyx
		☒	Emerging growth company

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Not applicable.

	~~Item~~	Page
	PART I—FINANCIAL INFORMATION

ITEM 1.	Consolidated Financial Statements (unaudited)	5
ITEM 2.	Management’s Discussion and ~~Supplementary Data~~Analysis of Financial Condition and Results of Operations	24
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	30

	PART II—OTHER INFORMATION

ITEM 1.	Legal Proceedings	32
ITEM 1A.	Risk Factors	32
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
ITEM 3.	Defaults Upon Senior Securities	32
ITEM 4.	Mine Safety Disclosures	32
ITEM 5.	Other Information	32
ITEM 6.	Exhibits	32
	Signatures	35

Index to Financial Statements		Page
Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020		5

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 (unaudited) and the Three and Six Months Ended June 30, 2020 (unaudited)		6

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 (unaudited) and the Three and Six Months Ended June 30, 2020 (unaudited)		7

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 (unaudited) and the Six Months Ended June 30, 2020 (unaudited)		8

Notes to Condensed Consolidated Financial Statements (unaudited)		9

	June 30, 2021			December 31, 2020
Restatement - Notes 5 and 12	Unaudited and Restated
ASSETS:
Cash	$	2,104		$	2,902,762
Accounts receivable		119,271			40,585
Prepaid expense		28,356			106,390
Inventory		16,740			56,340
Total current assets		166,471			3,106,077

Fixed assets, net		2,698			7,122
Operating lease right-of-use assets, net		1,228,648			1,317,830
Intangible assets, net		46,493,897			42,278,211
Prepaid royalties, non-current		340,969			344,321
Deposits		30,000			30,000
Goodwill		5,416,000			-
Total non-current assets		53,512,212			43,977,484
Total assets	$	53,678,683		$	47,083,561

LIABILITIES AND STOCKHOLDERS’ EQUITY:
Accounts payable and accrued expenses	$	1,209,110		$	478,103
Due to related party		265,000			-
Operating lease obligations, current portion		243,070			243,292
Total current liabilities		1,717,180			721,395

Operating lease obligations, non-current portion		1,001,492			1,074,538
Derivative liability		24,982			-
Warrant liability		49,963			-
Convertible promissory note, net of debt discount		3,491			-
Contingent liabilities		9,648,000			-
Total non-current liabilities		10,727,928			1,074,538
Total liabilities		12,445,108			1,795,933

Commitments and contingencies (see Note 6)		-			-

Stockholders’ equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2021 and December 31, 2020		-			-
Common stock, par value $0.001, 75,000,000 shares authorized, 35,928,188 shares issued and outstanding as of September 30, 2021 and December 31, 2020		35,928			35,928
Additional paid in-capital		81,874,076			82,077,334
Accumulated deficit		(40,676,429	)		(36,825,634	)
Total stockholders’ equity		41,233,575			45,287,628
Total liabilities and stockholders’ equity	$	53,678,683		$	47,083,561

				Restated
	September 30,			December 31,
	2013			2012
	$			$
Assets
Current Assets
Cash and cash equivalents - Note 6		259,614			1,154,602
Accounts Receivable - Note 7		3,528,260			4,143,448
Inventory - Note 3		21,684			-
Prepaid expenses - Note 8		207,811			84,304
Other current receivables - Note 9		276,856			676,976
Assets held for sale		-			384,862
Total current assets		4,294,224			6,444,192

Non-Current Assets
Assets held for sale		-			1,846,645
Property, plant and equipment - Note 11		282,601			332,839
Other non-current receivables - Note 12		1,217			428,422
Deferred tax assets non-current - Note 10		1,076,010			1,132,103
Goodwill - Note 13		31,260,500			34,254,881
Software - Note 14		10,232,633			12,207,031
Other assets - Note 15		132,489			156,379
Total non-current assets		42,985,450			50,358,300

Total assets		47,279,675			56,802,492

Liabilities and stockholders' equity
Current liabilities
Notes payable		1,775,010			2,313,572
Liabilities to banks - Note 16		3,887,764			6,774
Accounts payables and accrued liabilities - Note 17		3,946,070			6,241,733
Deferred income - Note 18		6,846,920			6,099,570
Other short term liabilities - Note 19		242,252			860,032
Due to related parties		-			2,115,869
Liabilities held for sale		-			589,634
Total current liabilities		16,698,017			18,227,184

Non-Current liabilities
Liabilities to banks		-			3,716,102
Retirement benefit obligation		172,414			165,876
Liabilities held for sale		-			159,898
Total non-current liabilities		172,414			4,041,876

Total liabilities		16,870,431			22,269,060

Stockholders' equity
Capital stock - Note 20
Authorized:
75,000,000 common shares of $.001 par value each
25,000,000 preferred shares of $.001 par value each
Issued and outstanding:
30,837,624 shares of common stock
(29,461,664 shares of common stock at December 31, 2012)		30,838			29,462
Additional paid in capital		50,009,107			49,691,195
Subscription Receivable		50,000			-
Accumulated deficit		(21,646,422	)		(18,974,582	)
Other comprehensive income		(299,034	)		442,841

		28,144,489			31,188,916
Noncontrolling interest in subsidiaries		2,264,754			3,344,516

Total stockholders' equity		30,409,243			34,533,432

Total stockholders' equity and liabilities		47,279,675			56,802,492


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Restatement - Notes 5 and 12	Restated						Restated
Revenue	$	160,785		$	-		$	234,737		$	-

Operating expenses:
Direct costs of revenue		119,221			-			150,063			-
Professional fees		592,781			203,992			1,251,839			438,835
Salary expenses		824,074			-			1,860,531			-
Stock-based compensation		194,657			221,058			562,375			442,116
Other general and administrative expenses		342,791			9,861			534,535			25,330
Total operating expenses		2,073,524			434,911			4,359,343			906,281
Total operating loss		(1,912,739	)		(434,911	)		(4,124,606	)		(906,281	)

Other expense
Interest expense		(4,189	)		-			(4,189	)		-
Change in fair value of contingent liabilities		278,000			-			278,000			-
Total other expense		273,811			-			273,811			-

Net loss	$	(1,638,928	)	$	(434,911	)	$	(3,850,795	)	$	(906,281	)

Loss per share – basic and diluted	$	(0.05	)	$	(0.02	)	$	(0.11	)	$	(0.05	)

Weighted average number of shares of common stock outstanding – basic and diluted		35,928,188			20,027,062			35,928,188			19,961,309

								1
					Additional Paid-in			Treasury		Accumulated
	Shares		Amount		Capital			Stock		Deficit			Total
Restatement - Notes 5 and 12					Restated					Restated
Balance, December 31, 2020		35,928,188	$	35,928	$	82,077,334			-	$	(36,825,634	)	$	45,287,628
Common stock issued for services									-
Common stock issued for services, shares
Common shares issued in lieu of AP
Common shares issued in lieu of AP, shares
Exercise of options
Exercise of options, shares
Adjustment of warrants value in connection with finalizing the business combination
Stock-based compensation		-		-		334,385					-			334,385
Net loss - restated		-		-		-					(2,211,867	)		(2,211,867	)
Balance, March 31, 2021		35,928,188	$	35,928	$	82,411,719			-	$	(39,037,501	)	$	43,410,146
Stock-based compensation		-		-		194,657			-		-			194,657
Adjustment of warrants value in connection with finalizing the business combination		-		-		(732,300	)				-			(732,300	)
Net loss - restated		-		-		-					(1,638,928	)		(1,638,928	)
Balance, June 30, 2021		35,928,188	$	35,928	$	81,874,076			-	$	(40,676,429	)	$	41,233,575

	For the three months ended						For the nine months ended
				Restated						Restated
	September 30,			September 30,			September 30,			September 30,
	2013			2012			2013			2012
	$			$			$			$

Revenues - Note 21
Products		4,133,565			4,719,446			13,170,113			15,247,883
Services		932,091			990,333			2,442,935			3,516,745
		5,065,656			5,709,778			15,613,048			18,764,628
Cost of goods sold
Products		563,950			922,839			2,738,549			3,833,550
Services		1,709,105			2,289,927			4,951,817			6,616,975
		2,273,055			3,212,767			7,690,366			10,450,525
Gross profit		2,792,601			2,497,011			7,922,682			8,314,103

Operating expenses
Selling expenses		2,033,242			2,625,773			6,627,311			9,990,170
Administrative expenses		1,145,304			1,229,281			3,922,440			3,940,092
General expenses		120,364			318,350			392,329			711,227
		3,298,910			4,173,403			10,942,080			14,641,489

Operating income (loss)		(506,309	)		(1,676,392	)		(3,019,398	)		(6,327,386	)

Other Income (expense) - Note 22
Other Income (expense)		44,726			892,702			566,430			52,543
Interest income		-			209			420			2,866
Interest expense		(140,213	)		(133,741	)		(546,333	)		(241,405	)
		(95,487	)		759,169			20,517			(185,996	)

Income (loss) before income taxes		(601,796	)		(917,223	)		(2,998,882	)		(6,513,382	)

Income tax (income) expense		487			(287,718	)		13,807			(1,409,759	)

Income (loss) before discontinued operations		(602,283	)		(629,504	)		(3,012,689	)		(5,103,623	)

Discontinued operations - Note 4		-			(33,125	)		-			63,246

Net income (loss)		(602,283	)		(662,629	)		(3,012,689	)		(5,040,377	)

Net Loss Attributable to noncontrolling Interest		535,588			(271,574	)		(340,849	)		(1,699,550	)
Net income (loss) attributable to stockholders		(1,137,871	)		(391,055	)		(2,671,840	)		(3,340,827	)

Net earnings (loss) per share, basic and diluted	$	(0.0373	)	$	(0.0137	)	$	(0.0879	)	$	(0.1168	)

Weighted average number of common stock outstanding, basic and diluted		30,492,650			28,611,701			30,379,612			28,611,701

Statement of Comprehensive Income (Loss):

Net Income (Loss)		(602,283	)		(662,629	)		(3,012,689	)		(5,040,377	)
Foreign currency Translation Adjustment		(365,488	)		(2,503,497	)		(1,480,788	)		(116,135	)

Comprehensive income (loss)		(967,771	)		(3,166,126	)		(4,493,477	)		(5,156,512	)

Less: Net Income (Loss) attributable to noncontrolling interest		535,588			(271,574	)		(340,849	)		(1,699,550	)
Less: Other Comprehensive Income (Loss) attributable to noncontrolling interest		(182,378	)		(1,223,936	)		(738,913	)		(32,642	)

Total Comprehensive income (loss) attributed to stockholders		(1,320,981	)		(1,670,617	)		(3,413,715	)		(3,424,320	)


	Six Months Ended June 30,
	2021			2020
Restatement - Notes 5 and 12	Restated
Cash flows from operating activities:
Net loss	$	(3,850,795	)	$	(906,281	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		(186,216	)		-
Stock-based compensation		529,042			567,115
Stock-based compensation – restricted common stock		33,333			-
Change in fair value of contingent liabilities		(278,000	)		-
Change in operating assets and liabilities:
Accounts receivable		(78,686	)		-
Prepaid expense		44,701			-
Inventory		39,600			-
Accounts payable and accrued expenses		506,418			152,620
Due to related party		265,000			-
Net cash used in operating activities		(2,975,603	)		(186,546	)

Cash flows from financing activities:
Proceeds from short term loan		-			1,000
Proceeds from convertible promissory note		74,945			-
Paid-in capital		-			189,910
Net cash provided by financing activities		74,945			190,910

Net (decrease)/ increase in cash		(2,900,658	)		4,364
Cash at beginning of period		2,902,762			90
Cash at end of period	$	2,104		$	4,454

Non-cash investing and financing activities:
Derivative liabilities	$	24,982		$	-
Warrant liabilities	$	49,963		$	-
Contingent liabilities	$	9,648,000		$	-

				Restated
	September 30, 2013			September 30, 2012
	$			$

Cash flow from operating activities
Net loss / net income		(3,012,689	)		(5,103,623	)
Adjustments
Deferred income taxes		56,093			(1,421,720	)
Depreciation and amortization		3,399,200			3,289,383
Write-down of Goodwill and Intangibles		-			3,079,168
Consulting expense		74,000			-
Interest Expense		195,288			-
Gains (Losses) on Sale of Assets		-			(1,566,119	)
Gains (Losses) from equity investment		-			(26,751	)
Changes in operating assets and liabilities:
Accounts receivable, prepaid assets, other current receivables		3,574,403			1,471,490
Other Assets		-			(37,398	)
Retirement benefit obligation		6,538			-
Inventories		(21,684	)		119,245
Accounts payable and other liabilities		(2,915,625	)		(2,438,073	)

Net cash provided (used) by operating activities		1,355,523			(2,634,397	)
Net cash provided (used) by discontinued		-			63,246

Cash flow from investing activities
Sale (Purchase) of intangible assets		487,309			(2,527,077	)
Sale (Purchase) of property, plant and equipment		-			(579,206	)
Increase (Decrease) in Financial assets		-			614,480

Net cash provided (used) in investing activities		487,309			(2,491,803	)

Cash flow from financing activities
Net borrowings - banks		164,889			1,067,397
Other borrowings		(538,562	)		(2,074,044	)
Capital paid-in		100,000			3,583,176
Loans from related party		(2,115,869	)		(28,432	)

Net cash provided (used) in financing activities		(2,389,541	)		2,548,096

Effect of exchange rate changes on cash		(348,280	)		6,991

Net increase (decrease) in cash		(894,988	)		(2,507,867	)
Cash and cash equivalents - Beginning of the year		1,154,602			3,250,821

Cash and cash equivalents - End of Quarter		259,614			742,954

	●	Level 1 – Quoted prices for identical assets or liabilities in active markets.
	●	Level 2 – Quoted prices for identical or similar assets and liabilities in markets that are not active; or other model-derived valuations whose inputs are directly or indirectly observable or whose significant value drivers are observable.
	●	Level 3 – Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are unobservable and for which assumptions are used based on management estimates.

	iii.	Rare pediatric voucher sales liability was valued based on the scenario-based methodology where the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset – 20.8%. In the six months ended June 30, 2021, changes in these assumptions resulted in $2,000 increase in fair value of this liability. At June 30, 2021, the fair market value of the rare pediatric voucher sales liability was $1,150,000.

	iv.	The present value of liquidation preference liability, included in the contingent consideration, was determined using the Black-Scholes option pricing method and represents the fair value of the maximum payment amount according to the Agreement. The following assumptions were used in the Black-Scholes option pricing model: risk free rate of 0.21%, expected volatility of 78.93%, expected dividend of $0, and expected life of 5 years. No changes to the fair value of liquidation preference liability were recorded in the period ended June 30, 2021. At June 30, 2021, the fair market value of the liquidation preference was $1,823,000.

	Fair Value Hierarchy
June 30, 2021	Level 1		Level 2		Level 3		December 31, 2020
Liabilities
Warrant liability	$	-	$	-	$	49,963	$	-
Derivative liability		-		-		24,982		-
Contingent liability		-		-		9,648,000		-
Total	$	-	$	-	$	9,722,945	$	-

June 30, 2021	Contingent Liabilities
Balance at December 31, 2020		-
Initial valuation of contingent liabilities assumed on Somah acquisition¹	$	9,926,000
Change in fair value		(278,000	)
Balance at June 30, 2021	$	9,648,000

Classification		Estimated Useful Lives
Equipment		5 to 7 years
Furniture and fixtures		4 to 7 years

Step 1:	Identify the contract with the customer

Step 2:	Identify the performance obligations in the contract

Step 3:	Determine the transaction price

Step 4:	Allocate the transaction price to the performance obligations in the contract

Step 5:	Recognize revenue when the company satisfies a performance obligation


2021	$	104,498
2022		277,142
2023		277,142
2024		277,142
2025		277,142
Thereafter		130,950
Total lease payments		1,344,016
Less: Present value discount		(99,454	)
Total	$	1,244,562

	●	10,000,000 restricted shares of common stock of the Company;
	●	Warrants to purchase 3,000,000 restricted common shares of the Company with a strike price of $5.00 per common share and a term of five years;
	●	The Company, on a pro rata basis, shall grant the Seller the following contingent consideration upon receiving the U.S. Federal Drug Administration (“FDA”) final approval and insurance reimbursement approval on the product:

	○	Grant of performance warrants for 4,000,000 restricted common shares of the Company, with a strike price determined based on the average of the closing prices of the common shares for the 30 calendar days following the announcement of FDA approval;
	○	Royalties to be paid on all net sales of the product acquired from Somah of 6% on the first $50 million of international net sales (and 5% on the first $50 million of U.S. net sales), 4% for greater than $50 million up to $200 million, and 2% for greater than $200 million;
	○	Payment of 10% of cash value of the rare pediatric voucher sales following the U.S. Federal Drug Administration approval and subsequent sale to an unaffiliated third party of a rare pediatric voucher based on Somah’s DuraGraft product;
	○	Grant of rare pediatric voucher warrants to purchase an aggregate of 250,000 commons shares with a strike price determined based on the average of the closing prices of the common shares for the 30 calendar days following the announcement of FDA approval, and
	○	Liquidation preference, up to a maximum of $20 million upon the sale by the Company of all or substantially all of the assets relating to the Somah products. Upon the sale of either or both of the DuraGraft or Somah derived solid organ transplant products, the Company will pay 15% of the net sale proceeds towards the liquidation preference maximum amount.

	As previously reported		Amendment			As restated
Consideration given up
Common shares	$	12,500,000	$	-		$	12,500,000
Warrants		1,932,300		(732,300	)		1,200,000
Contingent consideration¹		-		9,926,000			9,926,000
Total consideration given up	$	14,432,300	$	9,193,700		$	23,626,000

Fair value of identifiable assets acquired, and liabilities assumed
Net working capital	$	275,480	$	(244,572	)	$	30,908
Property, plant, and equipment		9,092		-			9,092
Intangible assets		14,147,728		4,022,272			18,170,000
Goodwill		-		5,416,000			5,416,000
Total identifiable assets	$	14,432,300	$	9,193,700		$	23,626,000

	●	DuraGraft patent, with estimated remaining economic life of 13 years,
	●	“Distribution Relationships” intangible asset related to DuraGraft product, with estimated remaining economic life of 10 years, and
	●	In-process research and development intangible asset – “Cyto Protectant Life Sciences” with indefinite economic life.

	June 30, 2021
	Restated							December 31, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Krillase intangible assets	$	28,600,000	$	-		$	28,600,000	$	28,600,000	$	-		$	28,600,000
DuraGraft, patent		5,256,000		(370,615	)		4,885,385		14,147,729		(589,489	)		13,558,240
Distributor Relationship		308,000		(28,233	)		279,767		-		-			-
IPR&D - Cyto Protectant Life Sciences		12,606,000		-			12,606,000		-		-			-
Patents in Process		122,745		-			122,745		119,971		-			119,971
Total Intangibles	$	46,892,745	$	(398,848	)	$	46,493,897	$	42,867,700	$	(589,489	)	$	42,278,211

Balance, December 31, 2019	$	28,613,000
Acquired in asset purchase agreement		14,147,729
Additions		106,971
Amortization expense		(589,489	)
Balance, December 31, 2020		42,278,211
Acquired in Somah Transaction (amended)		4,022,271
Additions		2,775
Amortization expense (amended)		190,640
Balance, June 30, 2021	$	46,493,897

				Weighted			Weighted
				Average			Average		Total
	Number of			Exercise			Contractual		Intrinsic
	Options			Price			Life		Value
Outstanding at December 31, 2020		3,800,943		$	1.36
Granted		732,500		$	1.25
Exercised		-		$	-
Forfeited		(412,500	)	$	1.25
Outstanding at June 30, 2021		4,120,943		$	1.36			8.82	$	388,350
Exercisable at June 30, 2021		3,082,402		$	1.39	��

	●	Intangible assets (Notes 5 and 8),
	●	Goodwill (Note 5),
	●	Accounts payable and accrued expenses,
	●	Contingent liabilities (Notes 3 and 5),
	●	Amortization expense (Note 8).

	Three Months Ended June 30,			Six Months Ended June 30,
	2021			2021
Net loss, as previously reported	$	(2,460,842	)	$	(5,271,393	)
Adjustment to other general and administrative expenses		244,572			244,572
Adjustment to amortization expense on intangible assets		299,342			898,026
Change in fair value of contingent liabilities		278,000			278,000
As restated	$	(1,638,928	)	$	(3,850,795	)
Net loss	$	(1,638,928	)	$	(3,850,795	)
Restated loss per share – basic and diluted	$	(0.05	)	$	(0.11	)

	Previously Reported			Increase (Decrease)			Restated
Assets:
Intangible assets, net	$	41,573,599		$	4,920,298		$	46,493,897
Goodwill		-			5,416,000			5,416,000
Total Assets	$	43,342,385		$	10,336,298		$	53,678,683

Liabilities:
Contingent liabilities		-			9,648,000			9,648,000
Total Liabilities	$	2,797,108		$	9,648,000		$	12,445,108

Stockholders’ equity:
Additional paid in capital	$	82,606,376		$	(732,300	)	$	81,874,076
Accumulated deficit		(42,097,027	)		1,420,598			(40,676,429	)
Total liabilities and stockholders’ equity	$	43,342,385		$	10,336,298		$	53,678,683

	Six Months Ended June 30,
	2021
Balance, June 30, 2021, as reported previously	$	40,545,277
Adjustment to net loss		1,420,598
Adjustment to fair value of warrants issued on acquisition of Somah		(732,300	)
As restated	$	41,233,575

	●	MB101 – Therapy for complex wounds and burns

	●	MB102 – Therapy for acute ischemic stroke

	●	MB104 – Therapy for deep vein thrombosis

	●	MB105 – Therapy for dissolving plaque and biofilms on teeth

	●	First, leverage and maximize near-term revenue generating opportunities with products for commercial or clinical applications that have low regulatory risk,

	●	Second, develop products for applications of the Krillase platform that address unmet medical needs or address medical market needs better than existing products in the marketplace, in clinical applications that have higher regulatory risk, but significant commercial potential.

	●	DuraGraft is a CE-marked endothelial damage inhibitor that protects free vascular grafts and endothelium against ischemic injury.

	●	DuraGraft is approved in Europe for graft protection and preservation during bypass (cardiac and peripheral) and other vascular surgeries.

	●	DuraGraft protects graft tissue from harvesting through anastomosis and is used during coronary artery bypass grafting, or CABG, (and other vascular surgeries) as a treatment to maintain the structural and functional integrity of the endothelium of isolated vascular grafts.

	●	The use of DuraGraft is associated with the reduction of post-CABG complications associated with graft disease and failure; myocardial infarction, repeat revascularization, and major adverse cardiovascular events, or MACE.

	●	CABG remains the standard treatment for multi-vessel coronary artery disease or left main artery disease.

	●	Benefits of CABG are, however, limited by high patient level of vein graft failure (VGF) rates (50%) that have not changed in decades.

	●	“The Early Promise of Coronary Bypass Grafting has not been fulfilled and an insidiously deadly variety of atherosclerosis progressively chokes vein grafts and extinguishes their benefits,” Fitzgibbons, 1996.

	●	“VGF remains one of the leading causes of poor in-hospital and long-term outcomes after CABG,” Harskamp, 2013.

	●	“The Issue of Low Patency Rates Owing to VGF Needs Urgent Attention,” de Vries, 2016.

	●	Vein graft failure is result of damage to graft endothelium that occurs during CABG surgery.

	●	Ischemic reperfusion injury is the primary cause of endothelial damage.

	●	Vein graft failure post-CABG is associated with poor clinical outcomes.

	●	DuraGraft minimizes endothelial damage, reduces graft disease, and improves clinical outcomes.