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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of

our financial condition and results of operations in conjunction with financial statements and notes thereto included elsewhere in this

Annual Report on Form 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.

Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute

to these differences include those discussed in the section titled “Risk Factors.”

Overview

MassRoots, Inc. was formed in April 2013 as a technology platform for

the cannabis industry. In March 2021, we relaunched our website, MassRoots.com, which aims to enable cannabis consumers to find the best

products, connect with other enthusiasts, and deliver fresh content that both delights and informs our audience. Additionally, we plan

to monetize our YouTube Channel, which has 273,000 subscribers, through product placements and sponsorships. Management believes

that our YouTube Channel has one of the largest followings in the regulated cannabis industry while our Instagram account is followed

by 378,000 users.

Competitors

We compete with other cannabis information platforms such as WeedMaps

and Leafly, which provide information with respect to dispensary locations, strain information, and news relating to the cannabis industry.

Blockchain Technology

In December 2017, we formed MassRoots Blockchain

Technologies, Inc., our wholly-owned subsidiary, to explore how blockchain technology may be utilized in the cannabis industry.

Recent Developments and Other Sources of

Funding

Financings

On January

7, 2020, we issued and sold a convertible note in the principal amount of $55,000 (including a $5,000 original issuance discount) to an

accredited investor which note matures on July 7, 2020.

March 5, 2020, we issued and sold a convertible note in the aggregate principal amount of $72,600 (including a $6,600 original issuance

discount) to an accredited investor which note matures on September 5, 2020.

March 17, 2020, we issued and sold a convertible note in the aggregate principal amount of $17,600 (including a $1,600 original issuance

discount) to an accredited investor which note matures on September 17, 2020.

On April

17, 2020, we issued and sold convertible notes in the aggregate principal amount of $330,000 (including an aggregate of $30,000 original

issuance discount) to accredited investors which notes mature on October 17, 2020.

On May 3, 2020, we received a loan in the principal

amount of $50,000 pursuant to the PPP of the CARES Act. The PPP loan matures in May 2022 and bears an interest rate of 1% per annum. The Company has applied for forgiveness of the principal and accrued

interest due under the loan.

On June 26, 2020, we issued and sold a secured

promissory note in the principal amount of $60,000 with 10% annual interest. On the two-year anniversary of the issuance of this note,

June 26, 2022, all principal and interest becomes due and payable.

On July 8, 2020, we issued and sold a promissory

note in the principal amount of $22,911 with 10% annual interest maturing on December 31, 2020.

On July

13, 2020, we issued and sold convertible notes in the aggregate principal amount of $110,000 (including an aggregate of $10,000 original

issuance discount) to accredited investors which notes mature on January 13, 2021.

On August

31, 2020, we issued and sold convertible notes in the aggregate principal amount of $66,000 (including an aggregate of $6,000 original

issuance discount) to accredited investors which notes mature on March 1, 2021.

On September

1, 2020, we issued and sold convertible notes in the aggregate principal amount of $49,500 (including an aggregate of $4,500 original

issuance discount) to accredited investors which notes mature on March 1, 2021.

On November 25, 2020, the Company

entered into a securities purchase agreement with an accredited investor for the sale of 3.3 shares of the Company’s Series X Convertible

Preferred Stock, par value $0.0001 per share, resulting in aggregate proceeds of $66,000. The purchase and issuance of such shares of

Series X Preferred Stock closed on December 1, 2020.

On December 21, 2020, the Company

entered into a securities purchase agreement with an accredited investor for the sale 7.5 shares of the Company’s Series X Convertible

Preferred Stock, par value $0.0001 per share, resulting in aggregate proceeds of $150,000. The purchase and issuance of such shares of

Series X Preferred Stock closed on December 23, 2020.

On December 22, 2020, the Company

entered into a securities purchase agreement with an accredited investor for the sale 5.25 shares of the Company’s Series X Convertible

Preferred Stock, par value $0.0001 per share, resulting in aggregate proceeds of $105,000. The purchase and issuance of such shares of

Series X Preferred Stock closed on December 29, 2020.

Results of Operations For the Year Ended December

31, 2020 Compared to the Year Ended December 31, 2019

For the Fiscal Year ended

Net loss per share - basic and diluted $ (0.08 ) $ (0.19 ) $ 0.11 57.9 %

Since inception on April 26, 2013, and during

the year ended December 31, 2020, our business operations have been primarily focused developing our mobile applications, web

platform and blockchain features for our products, and increasing our User-base.

Revenues

For the year ended December 31, 2020,

we generated $6,964 in revenues, as compared to $23,703 for the year ended December 31, 2019, a decrease of $16,739. This decrease

is primarily related to service interruptions on our platform and downsizing of our sales and corporate staff.

Operating Expenses

For the years ended December 31, 2020 and 2019,

our operating expenses were $1,167,175 and $3,469,139, respectively, a decrease of $2,301,964. The decrease was mainly attributed to stock-based

compensation to our employees and key consultants which, for 2020, was $0 as compared to $222,700 for 2019, a non-cash decrease of $222,700.

In addition, impairment expense decreased by $196,315 as impairment expense was $0 in 2020 as compared to $196,315 in 2019, which was

mainly attributed to impairment expenses associated with our business portal. There was an decrease in payroll and related expenses of

$853,064 as payroll and related expenses were $303,850 for 2020 as compared to $1,156,914 for the same period in 2019, which was the result

of a decrease in our labor force. Advertising expense increased by $29,197 to $58,961 for 2020 as compared to $29,764 for 2019 due to

a re-focus on the Company’s YouTube channnel. For the years ended December 31, 2020 and 2019, we recorded amortization of software

costs of $0 and $38,549, respectively.

Our other general and administrative expenses

decreased to $803,081 for the year ended December 31, 2020 from $1,460,867 for the year ended December 31, 2019, a decrease of $657,786.

This decrease was mainly attributed to the following:

The decrease of these expenditures resulted in

our total operating expenses declining to $1,167,175 during the year ended December 31, 2020 compared to $3,469,139 during the year ended

December 31, 2019, a decrease of $2,301,964.

Loss from Operations

Our loss from operations decreased $2,285,225

to $1,160,211 during the year ended December 31, 2020, from $3,445,436 during the year ended December 31, 2019.

Other (Expense)

During the year ended December 31, 2020, we

incurred other (expense) of $(13,550,249), as compared to $(30,823,476) for the year ended December 31, 2019, a decrease of

$17,273,227. This decrease is primarily due to a gain of the forgiveness of debt of $250,000 and a gain on settlement of convertible

notes payable and accrued interest, warrants and accounts payable of $162,109,131 for the year ended December 31, 2020. The

Company’s derivative liability for authorized shares shortfall expense increased by $(151,398,053) to $(170,319,590) in fiscal

year 2020 from ($18,921,537) during fiscal year 2019. Preferred stock issuance costs fell to $0 during the year ended December 31,

2020 from $(5,585,594) during the same period in 2019. The Company realized a $882 gain on the conversion of convertible debentures

during fiscal year 2020 as compared to a $(603,529) loss in fiscal year 2020. In addition, interest expense increased by $203,851 to

$(5,139,321) during fiscal year 2020 as compared to $(4,935,470) during fiscal year 2019. Lastly, the expense for the loss on change

in fair value of derivative liabilities decreased by $234,064, to $(451,351) during fiscal year 2020, as compared to $(685,415)

during the prior year.

Net Loss

Our net loss decreased by $19,558,452 to

$14,710,460 during the year ended December 31, 2020, from $34,268,912 during the year ended December 31, 2019.

Liquidity and Capital Resources

Net cash used in operations for the year

ended December 31, 2020 and 2019 was $1,037,843 and $1,797,227, respectively. The decrease in 2020 resulted primarily from the net

loss of $14,710,460, partially offset by non-cash items including derivative liability for authorized shares shortfall of

$170,319,590, gain on settlement of convertible notes payable and accrued interest, warrants and accounts payable of $162,109,131,

interest and amortization of debt discount of $5,139,321, change in fair value of derivative liabilities of $451,351, gain on

forgiveness of debt of $250,000 and gain on conversion of convertible notes payable of $882, as well as an increase in accrued

payroll and related expenses of $140,005 and an increase in accounts payable and accrued expenses of $77,520. The decrease in 2019

resulted primarily from the net loss of $34,268,912, partially offset by non-cash items including derivative liability for

authorized shares shortfall of $18,921,537, preferred stock issuance costs of $5,585,594, interest and amortization of debt discount

of $4,716,970, change in fair value of derivative liabilities of $685,415, and loss on conversion of convertible notes payable of

$603,529, as well as an increase in accrued payroll and related expenses of $732,027 and an increase in accounts payable and accrued

expenses of $557,360.

Net cash provided by (used in) investing activities

for the year ended December 31, 2020 and 2019 was $0 and $90,981, respectively. Net cash provided by investing activities for the year

ended December 31, 2019 was attributed to proceeds from sale of investments of $90,981.

Net cash provided by financing activities

for the year ended December 31, 2020 and 2019 was $1,038,208 and $1,677,798, respectively. For the year ended December 31, 2020,

these funds came mainly from the sale of Series X Preferred Stock amounting to $321,000, proceeds from issuance of convertible debt

of $637,000, proceeds from issuance of non-convertible notes payable of $82,911, proceeds from the issuance of a $50,000 PPP loan,

offset by repayment of advances in the amount of $3,009, repayment of non-convertible notes in the amount of $39,641, and the

repayment of $13,749 in bank overdrafts. Comparatively, for the year ended December 31, 2019, these funds came mainly from the sale

of Series B Preferred Stock and warrants amounting to $1,407,500, proceeds from issuance of convertible debt of $549,000 and

proceeds from issuance of non-convertible notes payable of $175,000, offset by repayment of advances in the amount of

$595,000.

Capital Resources

As of December 31, 2020, we had cash on hand of

$1,485. We currently have no external sources of liquidity such as arrangements with credit institutions that will have or are reasonably

likely to have a current or future effect on our financial condition or immediate access to capital.

We are dependent on the sale of our securities

to fund our operations, and will remain so until we generate sufficient revenues to pay for our operating costs; however, no assurance

can be given that additional financing will be available on terms favorable to us, or at all.

Fundraising

During the year ended December 31, 2020, the Company

received proceeds of $637,000, $132,911, and $321,000 from the issuance of convertible notes, non-convertible notes, and Series X preferred

shares, respectively.

Required Capital over the Next Fiscal Year

We do not believe that we have sufficient capital

to become cash-flow positive from operations. We expect that we will need to raise additional funds to continue to fund operations.

We prepared the accompanying consolidated financial

statements assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities

in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and

allow us to continue as a going concern. Our ability to continue as a going concern depends on our ability to obtain adequate capital

to fund operating losses until we generate adequate cash flows from operations to fund our operating costs and obligations. If we are

unable to obtain adequate capital, we could be forced to cease operations.

We depend upon our ability to secure equity and/or

debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all. Our management has determined

that there is substantial doubt about our ability to continue as a going concern within one year after the consolidated financial statements

are issued.

The accompanying consolidated financial statements

do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification

of liabilities that might result from this uncertainty.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, which

simplifies the guidance on accounting for convertible debt instruments by removing the separation models for: (1) convertible debt with

a cash conversion feature; and (2) convertible instruments with a beneficial conversion feature. As a result, the Company will not separately

present in equity an embedded conversion feature in such debt. Instead, we will account for a convertible debt instrument wholly as debt,

unless certain other conditions are met. We expect the elimination of these models will reduce reported interest expense and increase

reported net income for the Company’s convertible instruments falling under the scope of those models before the adoption of ASU

2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury

stock method will be no longer available. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021,

with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the

impact of ASU 2020-06 on its consolidated financial statements.

In August 2018, the FASB

issued Accounting Standards Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes

to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes certain disclosure requirements,

including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers

between levels, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 also adds disclosure requirements, including

changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements,

and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments

on changes in unrealized gains and losses, and the range and weighted average of significant unobservable inputs used to develop Level

3 fair value measurements, should be applied prospectively for only the most recent interim or annual period presented in the initial

fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. ASU

2018-13 became effective for us on January 1, 2020. The adoption of this update did not have a material impact on the Company’s

consolidated financial statements and related disclosures.

There are other various updates

recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and

are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company,”

we are not required to provide the information required by this Item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY

DATA

The financial statements required to be included

in this report appear as indexed in the appendix to this report beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Pursuant to Rules 13a-15(b) and 15-d-15(b) under

the Exchange Act, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer (“CEO”)

and Chief Financial Officer (“CFO”) of the effectiveness of our disclosure controls and procedures as of the end of the period

covered by this report. The term “disclosure controls and procedures,” as defined under Rules 13a-15(e) and 15d-15(e) under

the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed

by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the

time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and

procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the

Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial

officer, as appropriate to allow timely decisions regarding required disclosure. Based upon such evaluation, our CEO and CFO concluded

that our disclosure controls and procedures as of December 31, 2020 were not effective due to identified control deficiencies regarding

the lack of segregation of duties and the need for a stronger internal control environment.

To address the material weaknesses, we performed

additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this Annual Report on

Form 10-K have been prepared in accordance with generally accepted accounting principles in the U.S. Accordingly, management believes

that the financial statements included in this report fairly present in all material respects our financial condition, results of operations

and cash flows for the periods presented.

Our principal executive officer and principal

financial officer do not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives

of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the

benefits of controls must be considered relative to their costs. Due to 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, have been detected.

Management’s Report on Internal Control

over Financial Reporting

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our management,

including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial

reporting as of December 31, 2020. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring

Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). A material weakness is

a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility

that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

There was a material weakness in our internal

control over financial reporting due to the fact that we did not have an adequate process established to ensure appropriate levels of

review of accounting and financial reporting matters, which resulted in our closing process not identifying all required adjustments and

disclosures in a timely fashion.

We plan to take steps to enhance and improve the

design of our internal control over financial reporting. To remediate our material weaknesses, we plan to appoint additional qualified

personnel with the requisite knowledge to improve the levels of review of accounting and financial reporting matters; however, such remediation

efforts are largely dependent upon our securing additional financing or generating significant revenue to cover the costs of implementing

the changes required.

Until we remediate our material weakness in internal

control over financial reporting such weaknesses could result in material misstatements in our financial statements not being prevented

or detected.

The Company’s management, including the

Company’s CEO and CFO, does not expect that the Company’s internal control over financial reporting will prevent all errors

and all fraud. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because

of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

The Company’s CEO and CFO has identified

control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. The small size

of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit

of such remediation.

Because of the above material weakness, management

has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2020, based on the criteria

established in “Internal Control-Integrated Framework” issued by the COSO.

This Annual Report does not include an attestation

of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject

to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit

us to provide only management’s report in this Annual Report.

Changes in Internal Control over Financial

Reporting

There have been no changes in our internal control

over financial reporting during the fourth quarter ended December 31, 2020 that have materially affected, or are reasonably likely to

materially affect, our internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

The information set forth below is included

herein for the purpose of providing the disclosure required under “Item 1.01 – Entry into a Material Definitive Agreement.”

of Form 8-K.

Between December 22 and March

23, 2021, the Company entered into a number of securities exchange agreements (each, individually, the “Exchange Agreement”)

with twenty two (22) holders of its equity and debt securities (each, individually, the “Purchaser”) for the total issuance

and sale of 659.605674 shares of the Company’s newly-created Series Y Convertible Preferred Stock, par value $0.001 per share (the

“Series Y Preferred Stock”), resulting in aggregate exchange of 14,896,874,671 warrants to purchase common stock of the Company

at $0.0004 per share and the exchange of the promissory notes in the aggregate principal amount and accrued interest totaling $5,947,876.20.

The Purchasers constituted a significant portion of warrantholders and debtholders of the Company.

The terms

and condition of Exchange Agreement for each Purchaser are essentially the same, except for the date of the agreement and the number of

securities exchanged, as more particularly illustrated in the table below:

The Company may hold one or more subsequent closings

to sell the remaining shares of Series Y Preferred Stock pursuant to securities Exchange Agreements substantially in the form of the Exchange

Agreement (the “Refinancing”).

The

Exchange Agreement contains certain customary representations, warranties, and covenants for transactions of this type.

The foregoing description of

the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Exchange

Agreement, a copy of which is attached hereto as Exhibit 10.45 and is incorporated herein by reference.

The information set forth below is included

herein for the purpose of providing the disclosure required under “Item 3.02 – Unregistered Sales of Equity Securities.”

and “Item 5.03 – Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.” of Form 8-K.

Reference

is made to the disclosures set forth above for the purpose of providing the disclosure required under “Item 1.01 – Entry

into a Material Definitive Agreement.” which are hereby incorporated herein by reference.

659.605674

shares of Series Y Preferred Stock sold pursuant to the Exchange Agreement in accordance with and subject to the limitations contained

in the Series Y COD (defined infra). The shares of Series Y Preferred Stock have not been registered under the Securities Act of

1933, as amended (the “Securities Act”). The Company issued an aggregate of 659.605674 shares of Series Y Preferred Stock

in reliance upon Section 3(a)(9) of the Securities Act of 1933, as amended, as involving an exchange by the Company exclusively with its

security holders.

The information set forth below is included

herein for the purpose of providing the disclosure required under “Item 3.03 – Material Modification to Rights of Security

Holders.” of Form 8-K.

In connection with the Financing, on December

30, 2020, the Company filed the Certificate of Designations, Preferences and Rights of the Series Y Convertible Preferred Stock (the “Series

Y COD”) with the Delaware Secretary of State.

Pursuant to the Series Y COD, 1,000 shares of

the Company’s blank check preferred stock have been designated as “Series Y Preferred Stock.” The Series Y Preferred

Stock have the following rights, preferences, powers, privileges and restrictions, qualifications and limitations:

Dividends.

The holders of Series Y Preferred Stock shall have no dividend rights except as may be declared by the Company’s board of directors.

Ranking. The

Series Y Preferred Stock rank senior to the Company’s Common Stock and preferred stock with respect to the payment of dividends

and distributions of the assets of the Company upon liquidation, dissolution or winding up of the Company. Series Y Preferred Stock is,

however, junior to Series X Preferred Stock of the Company.

Voting. Except

as otherwise required by law, or as provided in the section entitled “Protective Provisions,” shares of Series Y Preferred

Stock are not entitled to vote on any matter. As to all matters for which voting by class is specifically required by law, each outstanding

share of Series Y Preferred Stock is entitled to one vote.

Protective Provisions.

Except where the vote or written consent of the holders of a greater number of shares is required by law, without first obtaining the

affirmative vote or the written consent of a majority of the outstanding Series Y Preferred Stock, including the Required Holder (as defined

in the Series Y COD), the Company will not: (a) amend or repeal any provision of, or add any provision to, its Certificate of Incorporation

or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action

would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit,

of the Series Y Preferred Stock; (b) increase or decrease (other than by conversion) the authorized number of Series Y Preferred Stock;

(c) create or authorize (by reclassification or otherwise) any new class or series of shares that has a preference over or is on a parity

with the Series Y Preferred Stock with respect to dividends or the distribution of assets on the liquidation, dissolution or winding up

of the Company; (d) pay dividends or make any other distribution on any shares of any capital stock of the Company junior in rank to the

Series Y Preferred Stock; (e) issue any Series Y Preferred Stock other than as provided in the Series Y COD; or (f) circumvent a right

of the Series Y Preferred Stock.

Participation in Future

Financing. Except for certain exempt issuances, from the Initial Closing Date until the eighteen (18) month anniversary of the

Initial Closing Date, upon any issuance by the Company of Common Stock or Common Stock Equivalents for cash consideration, indebtedness

or a combination of such in a transaction exempt from registration under the Securities Act (a “Subsequent Financing”), the

holders of the Series Y Preferred Stock will have the right to participate in an amount equal to an aggregate of thirty percent (30%)

of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing. In addition, the Purchaser

has the right to exchange the Series Y Preferred Stock as consideration in a Subsequent

Financing.

Redemption.

Upon receipt of a conversion notice for Series Y Preferred Stock from a holder, the Company shall have the right (but not the obligation)

to redeem all or part of the Series Y Preferred Stock which the holder is seeking to convert at a price per share equal to the product

of 125% of the (1) Series Y Stated Value plus (2) the Series Y Additional Amount.

Purchase Rights If

at any time the Company grants, issues or sells any options, convertible securities or rights to purchase stock, warrants, securities

or other property pro rata to all or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”),

then each holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such

holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon complete conversion of all the

Series Y Preferred Stock (without taking into account any limitations or restrictions on the convertibility of the Series Y Preferred

Stock) held by such holder immediately prior to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights.

Price Protection.

Except for certain exempt issuances, in the event the Company issues or sells any securities, including options or convertible securities

(or amends any outstanding securities of the Company), at an effective price of, or with an exercise or conversion price of less than

the Series Y Conversion Price, then upon such issuance or sale, the Series Y Conversion Price shall be reduced to the sale price or the

exercise or conversion price of the securities issued or sold.

The

foregoing description of the Series Y COD is not complete and is qualified in its entirety by reference to the full text of the Series

Y COD, a copy of which is attached hereto as Exhibit 3.8 and is incorporated herein by reference.

PART III