0001493152-20-011037.txt : 20200612 0001493152-20-011037.hdr.sgml : 20200612 20200611192052 ACCESSION NUMBER: 0001493152-20-011037 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 64 CONFORMED PERIOD OF REPORT: 20200331 FILED AS OF DATE: 20200612 DATE AS OF CHANGE: 20200611 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENDONOVO THERAPEUTICS, INC. CENTRAL INDEX KEY: 0001528172 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 452552528 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55453 FILM NUMBER: 20958419 BUSINESS ADDRESS: STREET 1: 6320 CANOGA AVENUE STREET 2: 15TH FLOOR CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: (800) 489-4774 MAIL ADDRESS: STREET 1: 6320 CANOGA AVENUE STREET 2: 15TH FLOOR CITY: WOODLAND HILLS STATE: CA ZIP: 91367 FORMER COMPANY: FORMER CONFORMED NAME: Hanover Portfolio Acquisitions, Inc. DATE OF NAME CHANGE: 20110920 FORMER COMPANY: FORMER CONFORMED NAME: Hanover Portfoliio Acquisitions, Inc. DATE OF NAME CHANGE: 20110817 10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2020.

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

For the transition period from _______ to _______.

Commission File Number: 000-55453

ENDONOVO THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware		45-2552528
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

6320 Canoga Avenue, 15th Floor, Woodland Hills, CA 91367

(Address of principal executive offices, zip code)

(800) 489-4774

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class		Trading Symbol(s)		Name of principal U.S. market on which traded
Common stock, par value $0.0001		ENDV		OTCMKTS

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

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

Large accelerated filer [ ]	Accelerated filer [ ]

Non-accelerated filer [ ]	Smaller reporting company [X]

	Emerging growth company [X]

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

As of June [11] 2020, there were 10,503,151 shares of common stock, $0.0001 par value issued and outstanding.

ENDONOVO THERAPEUTICS, INC.

TABLE OF CONTENTS

FORM 10-Q REPORT

March 31, 2020

		Page Number
PART I - FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited).	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	26
Item 4.	Controls and Procedures.	26

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	27
Item 1A.	Risk Factors.	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	27
Item 3.	Defaults Upon Senior Securities.	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information.	28
Item 6.	Exhibits.	28

SIGNATURES		29

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Endonovo Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	March 31, 2020			December 31, 2019
	(Unaudited)			(Audited)

ASSETS
Current assets:
Cash	$	178		$	18,893
Accounts receivable, net of allowance for doubtful accounts of $0		3,082			22,742
Prepaid expenses and other current assets		14,660			20,920
Total current assets		17,920			62,555

Property, Plant and Equipment, net		4,289			5,915
Patents, net		3,044,452			3,206,180
Total assets	$	3,066,661		$	3,274,650

LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	576,739		$	599,470
Accrued interest		1,486,480			1,317,376
Deferred compensation		2,637,660			2,431,373
Notes payable, net of discounts of $31,510 and $12,649 as of March 31, 2020 and December 31, 2019		6,023,369			6,697,146
Notes payable - related party		157,000			165,000
Derivative liability		3,172,265			10,599,690
Series C preferred stock liability, net of discounts $766 at December 31, 2019		-			1,813,415

Total current liabilities		14,053,513			23,623,470

Acquisition payable		155,000			155,000
Total liabilities		14,208,513			23,778,470
COMMITMENTS AND CONTINGENCIES, note 9

Shareholders’ deficit
Super AA super voting preferred stock, $0.001 par value; 1,000,000 authorized and 25,000 issued and outstanding at March 31, 2020 and December 31, 2019		25			25
Series B convertible preferred stock, $0.0001 par value; 50,000 shares authorized, 600 shares issued and outstanding at March 31, 2020 and December 31, 2019		1			1

Series C convertible preferred stock, $0.0001 par value; 8,000 shares authorized, 878 and 1,814 shares issued and outstanding at March 31, 2020 and December 31, 2019		-			-

Series D convertible preferred stock, $0,0001 par value; 20,000 shares authorized, 305 and 255 issued and outstanding at March 31, 2020 and December 31, 2019		-			-

Common stock, $0.0001 par value; 2,500,000,000 shares authorized; 7,213,661 and 1,189,204 shares issued and outstanding as of March 31, 2020 and December 31, 2019		721			118
Additional paid-in capital		37,455,339			32,432,392
Stock subscriptions		(1,570	)		(1,570	)
Accumulated deficit		(48,596,368	)		(52,934,786	)
Total shareholders’ deficit		(11,141,852	)		(20,503,820	)
Total liabilities and shareholders’ deficit	$	3,066,661		$	3,274,650

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements.

Endonovo Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended
	March 31,
	2020			2019(*)

Revenue	$	69,685		$	44,952
Cost of revenue		6,260			7,711
Gross profit		63,425			37,241

Operating expenses		743,037			850,238
Loss from operations		(679,612	)		(812,997	)

Other income (expense)
Change in fair value of derivative liability		6,461,402			(8,542	)
Gain (loss) on settlement of debt		(609,275	)		38,891
Interest expense, net		(834,097	)		(1,623,577	)
Other income (expense)		5,018,030			(1,593,228	)

Income (Loss) before income taxes		4,338,418			(2,406,225	)

Provision for income taxes		-			-

Net Income (Loss)	$	4,338,418		$	(2,406,225	)

Basic Income (Loss) per share	$	1.47		$	(4.99	)
Diluted Income (Loss) per share	$	(0.14	)	$	(4.99	)
Weighted average common share outstanding:
Basic		2,952,171			481,827
Diluted		11,925,787			481,827

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements.

(*) The condensed consolidated financial statements have been retroactively restated to reflect the 1,000-for-1-reverse stock split that occurred in December 20, 2019.

Endonovo Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months ended March 31,
	2020			2019(*)
Operating activities:
Net Income (Loss)	$	4,338,418		$	(2,406,225	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization expense		163,354			162,474
Fair value of equity issued for services		9,567			92,084
Loss (gain) on extinguishment of debt		609,275			(38,891	)
Amortization of note discount and original issue discount		19,639			671,929
Amortization of discount on Series C Preferred stock liability		124			46,119
Non-cash interest expense		524,742			563,267
Non-cash value of stock, options and warrants issued for services and notes		-			5,279
Change in fair value of derivative liability		(6,461,402	)		8,542
Changes in assets and liabilities:
Accounts receivable		19,660			(6,970	)
Prepaid expenses and other current assets		6,260			-
Account payable		(22,731	)		41,497
Accrued interest		289,592			302,112
Deferred compensation		206,287			30,550
Net cash used in operating activities		(297,215	)		(528,233	)

Investing activities:

Net cash provided by (used in) investing activities		-			-

Financing activities:
Proceeds from the issuance of notes payable		236,500			320,000
Repayments on related-parties short-term advances		(8,000	)		-
Repayments of convertible debt in cash		-			(140,000	)
Proceeds from issuance of common stock and units		-			27,559
Proceeds from issuance of preferred stock		50,000			-
Net cash provided by financing activities		278,500			207,559

Net decrease in cash		(18,715	)		(320,674	)
Cash, beginning of year		18,893			379,151
Cash, end of period	$	178		$	58,477

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	39,504
Cash paid for income taxes	$	-		$	-

Non-Cash Investing and Financing Activities:
Conversion of notes payable and accrued interest to common stock	$	1,050,404		$	919,618
Conversion of fixed rate notes to Preferred C Stock	$	-		$	64,000
Conversion of Preferred C Stock to common stock	$	1,247,734		$	-

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements.

(*) The condensed consolidated financial statements have been retroactively restated to reflect the 1,000-for-1-reverse stock split that occurred in December 20, 2019.

Endonovo Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statement of Shareholders’ Deficit

(Unaudited)

For the three months ended March 31, 2019

	Series AA Preferred Stock				Series B Convertible Preferred Stock				Common Stock				Additional Paid-in		Subscription			Retained			Total Shareholder’s
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Receivable			Earnings			Deficit

Balance December 31, 2018 (*)		25,000	$	25		600	$	1		431,063	$	43	$	24,229,945	$	(1,570	)	$	(35,620,282	)	$	(11,391,838	)
Common stock issued for cash (*)		-		-		-		-		2,000		-		27,559		-			-			27,559
Common stock issued for services (*)		-		-		-		-		4,132		-		92,084		-			-			92,084
Valuation of warrants issued with Preferred Stock C		-		-		-		-		-		-		11,512		-			-			11,512
Shares issued for conversion of notes payable and accrued interest (*)		-		-		-		-		78,044		8		2,002,174		-			-			2,002,182
Valuation of stock issued with notes (*)		-		-		-		-		1,091		-		26,545		-			-			26,545
Valuation of common stock issued for note extensions		-		-		-		-		443		-		8,333		-			-			8,333
Valuation of stock options issued for service		-		-		-		-		-		-		5,170		-			-			5,170
Net loss for the quarter ended March 31, 2019		-		-		-		-		-		-		-		-			(2,406,225	)		(2,406,225	)
Balance March 31, 2019 (*)		25,000		25		600		1		516,773		51		26,403,322,		(1,570	)		(38,026,507	)		(11,624,678	)

(*) The condensed consolidated financial statements have been retroactively restated to reflect the 1,000-for-1-reverse stock split that occurred in December 20, 2019.

For three months ended March 31, 2020

	Series AA				Series B Convertible				Series D Convertible				Series C Convertible									Additional									Total
	Preferred Stock				Preferred Stock				Preferred Stock				Preferred Stock					Common Stock				Paid-in			Subscription			Retained			Shareholder’s
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount		Shares		Amount		Capital			Receivable			Earnings			Deficit

Balance December 31, 2019		25,000	$	25		600	$	1		255	$	-		-			-		1,189,204	$	118	$	32,432,392		$	(1,570	)	$	(52,934,786	)	$	(20,503,820	)

Reclassification Preferred Series C		-		-		-		-		-		-		1,814			-		-		-		2,418,269			-			-			2,418,269

Shares issued for Preferred Series D		-		-		-		-		50		-		-			-		-		-		50,000			-			-			50,000
Shares issued for conversion of notes payable and accrued interest		-		-		-		-		-		-		-			-		4,388,291		439		2,545,275			-			-			2,545,714
Shares issued for conversion of Preferred Series C to common share		-		-		-		-		-		-		(936	)		-		1,636,166		164		(164	)		-			-			-
Valuation of stock options issued for services		-		-		-		-		-		-		-			-		-		-		9,567			-			-			9,567
Net loss for the quarter ended March 31, 2020		-		-		-		-		-		-		-			-		-		-					-			4,338,418			4,338,418
Balance March 31, 2020		25,000		25		600		1		305		-		878			-		7,213,661		721		37,455,339			(1,570	)		(48,596,368	)		(11,141,852	)

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Note 1 - Organization and Nature of Business

Endonovo Therapeutics, Inc. (Endonovo or the “Company”) is an innovative biotechnology company that has developed a bio-electronic approach to regenerative medicine. Endonovo is a growth stage company whose stock is publicly traded (OTCQB: ENDV).

The Company develops, manufactures and distributes evolutionary medical devices focused on the rapid healing of wounds and reduction of pain, edema and inflammation and in the human body. The Company’s non-invasive bioelectric medical devices are designed to target inflammation, cardiovascular diseases, chronic kidney disease, and central nervous system disorders (“CNS” disorders).

The Company's non-invasive Electroceutical™ therapeutic device, SofPulse®, using pulsed short-wave radiofrequency at 27.12 MHz has been FDA-Cleared and CE Marked for the palliative treatment of soft tissue injuries and post-operative pain and edema, and has CMS National Coverage for the treatment of chronic wounds. The Company's current portfolio of pre-clinical stage Electroceuticals™ therapeutic devices address chronic kidney disease, liver disease non-alcoholic steatohepatitis (NASH), cardiovascular and peripheral artery disease (PAD), and ischemic stroke.

Endonovo’s core mission is to transform the field of medicine by developing safe, wearable, non-invasive bioelectric medical devices that deliver the Company’s Electroceutical^® Therapy. Endonovo’s bioelectric Electroceutical^® devices harnesses bioelectricity to restore key electrochemical processes that initiate anti-inflammatory processes and growth factors in the body necessary for healing to rapidly occur.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements have been presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated financial statements as of March 31, 2020 and 2019 are unaudited; however, in the opinion of management such interim condensed consolidated financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The accompanying financial information should be read in conjunction with the financial statements and the notes thereto in the Company’s most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on May 4, 2020. The results of operations for the period presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year.

The condensed consolidated financial statements of the Company include the accounts of ETI and IPR as of March 14, 2012; Aviva as of April 2, 2013; and WeHealAnimals as of November 16, 2013. All significant intercompany accounts and transactions are eliminated in consolidation.

Going Concern

These accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date these condensed consolidated financial statements are issued.

As of March 31, 2020, the Company had cash of less than $1,000 and a working capital deficiency of $14.0 million. During the three months ended March 31, 2020, the Company used approximately $0.3 million of cash in its operation. The Company has incurred recurring losses resulting in an accumulated deficit of $ 48.6 million as of March 31, 2020. These conditions raise substantial doubt as to its ability to continue as going concern within one year from issuance date of these financial statements.

During the three months ended March 31, 2020, the Company has raised approximately $286,500 in debt and equity financing. The Company is raising additional capital through debt and equity securities to continue the funding of its operations. However, there is no assurance that the Company can raise enough funds or generate sufficient revenues to pay its obligations as they become due, which raises substantial doubt about our ability to continue as a going concern.

No adjustments have been made to the carrying value of assets or liabilities as a result of this uncertainty. To reduce the risk of not being able to continue as a going concern, management is commercializing its FDA cleared and CE marked products and has commenced implementing its business plan to materialize revenues from potential, future, license agreements, has raised capital through the sale of its preferred and common stock, has entered into an investment agreement whereby the company has access to an equity line of credit and is seeking out profitable companies.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Reverse Split

In October 2019, the Company’s Board of Directors and stockholders approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1,000-for-1 reverse split of the Company’s common stock, which was effected on December 20, 2019. The par value of the common stock was not adjusted as a result of the reverse stock split. Accordingly, all common stock, stock options, warrants and related per share amounts as of and for the quarter ended March 31, 2019 have been retroactively adjusted to give effect to the reverse split.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Critical estimates include the value of shares issued for services, in connection with notes payable agreements, in connection with note extension agreements, and as repayment for outstanding debt, the useful lives of property and equipment, the valuation of the derivative liability, the valuation of warrants and stock options, and the valuation of deferred income tax assets. Management uses its historical records and knowledge of its business in making these estimates. Actual results could differ from these estimates.

Earnings (Loss) Per Share

The Company utilizes Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, “Earnings per Share.” Basic earnings (loss) per share is computed based on the earnings (loss) attributable to common shareholders divided by the weighted average number of shares outstanding for the period excluding any dilutive effects of options, warrants, unvested share awards and convertible securities. Diluted earnings (loss) per common share is calculated similar to basic earnings (loss) per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock option, warrants, common shares issuable under convertible debt and restricted stock using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. The components of basic and diluted earnings per share for the three months ended March 31, 2020 and 2019 were as follows:

	Three months ended March 31,
	2020			2019
Numerator:
Net income attributable to common shareholders	$	4,338,418		$	(2,406,225	)

Effect of dilutive securities
Convertible notes		(6,035,559	)		-
Net loss for diluted earnings per share		(1,697,141	)		-
Denominator:
Weighted-average number of common shares outstanding during the period		2,952,171			481,827
Dilutive effect of convertible notes payable		8,973,616			-
Common stock and common stock equivalents used for diluted earnings per share		11,925,787			481,827

Accounts Receivable

The Company uses the specific identification method for recording the provision for doubtful accounts, which was $0 at March 31, 2020 and December 31, 2019. Accounts receivable are written off when all collection attempts have failed.

Research and Development

Costs relating to the development of new products are expensed as research and development as incurred in accordance with FASB Accounting Standards Codification (“ASC”) 730-10, Research and Development. Research and development costs amounted to $1,003 and $63,301 for the three months ended March 31, 2020 and 2019, respectively, and are included in operating expenses in the condensed consolidated statements of operations.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in “Leases (Topic 840)” and generally requires all leases to be recognized in the condensed consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. The Company has adopted ASU 2016-02 on January 1, 2019. The adoption of ASU 2016-02 did not have a significant impact on the Company’s condensed consolidated results of operations, financial position and cash flows.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company has early adopted ASU 2018-07 and the adoption did not have a significant impact on the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. Effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty 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. Early adoption is permitted upon issuance of this Update. Any entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The Company adopted ASU 2018-13 as of January 1, 2020, and ASU 2018-13 has not had a material impact on the condensed consolidated financial position or results of operations and liquidity.

The Company has evaluated all the recent accounting pronouncements and determined that there are no other accounting pronouncements that will have a material effect on the Company’s financial statements.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Note 2 - Revenue Recognition

Contracts with Customers

We have adopted ASC 606, Revenue from Contracts with Customers effective January 1, 2018 using the modified retrospective method applied to those contracts which were not substantially completed as of January 1, 2018. These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

We routinely plan on entering into contracts with customers that include general commercial terms and conditions, notification requirements for price increases, shipping terms and in most cases prices for the products and services that we offer. Our performance obligations are established when a customer submits a purchase order notification (in writing, electronically or verbally) for goods and services, and we accept the order. We identify performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. We generally recognize revenue upon the satisfaction of these criteria when control of the product or service has been transferred to the customer at which time we have an unconditional right to receive payment. Our sales and sale prices are final and our prices are not affected by contingent events that could impact the transaction price.

Revenues for our SofPulse® product is typically recognized at the time the product is shipped, at which time the title passes to the customer, and there are no further performance obligations.

In connection with offering products and services provided to the end user by third-party vendors, we review the relationship between us, the vendor and the end user to assess whether revenue should be reported on a gross or net basis. In asserting whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction and control the goods and services used to fulfill the performance obligation(s) associated with the transaction.

Sources of Revenue

We have identified the following revenues by revenue source:

Medical care providers

As of March 31, 2020, and 2019 the sources of revenue were as follows:

	Three Months Ended
	March 31,
	2020		2019

Direct sales- Medical care providers, gross	$	69,685	$	44,952
Total sources of revenue	$	69,685	$	44,952

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Warranty

Our general product warranties do not extend beyond an assurance that the product delivered will be consistent with stated specifications and do not include separate performance obligations.

Significant Judgments in the Application of the Guidance in ASC 606

There are no significant judgments associated with the satisfaction of our performance obligations. We generally satisfy performance obligations upon delivery of the product to the customer. This is consistent with the time in which the customer obtains control of the products. Performance obligations are also generally settled quickly after the purchase order acceptance, therefore the value of unsatisfied performance obligations at the end of any reporting period is generally immaterial.

We consider variable consideration in establishing the transaction price. Forms of variable consideration applicable to our arrangements include sales returns, rebates, volume-based bonuses, and prompt pay discounts. We use historical information along with an analysis of the expected value to properly calculate and to consider the need to constrain estimates of variable consideration. Such amounts are included as a reduction to revenue from the sale of products in the periods in which the related revenue is recognized and adjusted in future periods as necessary.

Practical Expedients

Our payment terms for sales direct to distributors are substantially less than the one-year collection period that falls within the practical expedient in determination of whether a significant financing component exists.

Note 3 – Property, Plant and Equipment

The following is a summary of equipment, at cost, less accumulated depreciation at March 31, 2020 and December 31, 2019:

	March 31, 2020		December 31, 2019

Autos	$	64,458	$	64,458
Medical equipment		13,969		13,969
Other equipment		11,367		11,367
		89,794		89,794
Less accumulated depreciation		85,505		83,879
	$	4,289	$	5,915

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Depreciation expense for the three months ended March 31, 2020 and 2019 was $1,626 and $747, respectively.

Note 4 – Patents

In December 2017, we acquired from Rio Grande Neurosciences, Inc. (RGN) a patent portfolio for $4,500,000. The earliest patents expire in 2024. The following is a summary of patents less accumulated amortization at March 31, 2020 and December 31, 2019:

	March 31, 2020		December 31, 2019

Patents	$	4,500,000	$	4,500,000

Less accumulated amortization		1,455,548		1,293,820

	$	3,044,452	$	3,206,180

Amortization expense associated with patents was $161,728 for the three months ended March 31, 2020 and 2019. The estimated future amortization expense related to patents as of March 31, 2020 is as follows:

Twelve Months Ending March 31,	Amount

2021	$	646,910
2022		646,910
2023		646,910
2024		646,910
2025		456,812

Total	$	3,044,452

Note 5 - Notes Payable

Notes Payable

During the three months ended March 31, 2020, the Company issued four fixed rate promissory notes totaling $275,000 for funding of $236,500 with original terms of six to twelve months and interest rates of 8%. If the notes are not paid at maturity, two of the four notes will bear a 22% default interest rate and the other two will bear a 24% default interest rate. As of March 31, 2020, all of the new notes remain outstanding and are not in default

During the three months ended March 31, 2020, the Company converted two previous fixed rate notes into variable rate notes in an accumulated amount of $558,250 as a result of the notes not being paid at maturity and, therefore, triggering a conditional conversion option for the noteholder. The conversion rate is 70% and 75% of the Company’s common stock based on the terms included in the variable rate notes.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

The gross amount of all convertible notes with variable conversion rates outstanding at March 31, 2020 is $4,718,976 of which $2,333,576 is past maturity.

Notes payable to a related party in the aggregate amount of $157,000 were outstanding at March 31, 2020. The notes bear interest at 12% per annum. During the three months ended March 31, 2020, the Company paid $8,000 principal to this related party.

During October 2019, the Company entered into an agreement to receive a license, data delivery and ancillary marketing services in exchange for a note of $352,500 at 8% annual interest and a conversion rate of the lower of $9.00 or 82% of the lowest bid price during the five trading days prior to conversion. The note will become effective when the license period and the services start and the data is delivered.

As of March 31, 2020, fixed rate notes payable outstanding totaled $1,335,903, of which $724,903 is past maturity.

	March 31, 2020			December 31, 2019

Notes payable at beginning of period	$	6,874,795		$	8,158,198
Notes payable issued		236,500			2,101,000
Loan fees added to note payable		38,500			91,250
Settlements on note payable		-			-
Repayments of notes payable in cash		(8,000	)		(235,000	)
Less amounts converted to redeemable notes		-			(67,500	)
Less amounts converted to stock		(929,916	)		(3,173,153	)
Notes payable at end of period		6,211,879			6,874,795
Less debt discount		(31,510	)		(12,649	)
	$	6,180,369		$	6,862,146

Notes payable issued to related parties	$	157,000		$	165,000
Notes payable issued to non-related party	$	6,023,369		$	6,697,146

The maturity dates on the notes-payable are as follows:

	Notes to
12 months ending,	Related parties		Non-related parties		Total

Past due	$		$	5,443,879	$	5,443,879
March 31, 2021		-		611,000		611,000
	$		$	6,054,879	$	6,054,879

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Note 6 - Shareholders’ Deficit

Preferred Stock

The Company has authorized 5,000,000 shares of preferred stock which have been designated as follows:

	Number of Shares		Number of Shares Outstanding		Par		Liquidation
	Authorized		at March 31, 2020		Value		Value
Series AA		1,000,000		25,000	$	0.0010	$	-
Preferred Series B		50,000		600	$	0.0001	$	100
Preferred Series C		8,000		878	$	0.0001	$	1,000
Preferred Series D		20,000		305	$	0.0001	$	1,000
Undesignated		3,922,000		-		-		-

Series AA Preferred Shares

On February 22, 2013, the Board of Directors of the Company authorized an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series AA Super Voting Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

Each holder of outstanding shares of Series AA Super Voting Preferred Stock shall be entitled to one hundred thousand (100,000) votes for each share of Series AA Super Voting Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company. The Series AA Super Voting Preferred Stockholders will receive no dividends nor any value on liquidation. As of March 31, 2020, there were 25,000 shares of Series AA Preferred stock outstanding.

Series B Convertible Preferred Stock

On February 7, 2017, the Company filed a certificate of designation for 50,000 shares of Series B Convertible Preferred Stock designated as Series B (“Series B”) which are authorized and convertible, at the option of the holder, commencing six months from the date of issuance into common shares and warrants. For each share of Series B, the holder, on conversion, shall receive the stated value divided by 75% of the market price on the date of purchase of Series B and a three-year warrant exercisable into up to a like amount of common shares with an exercise price of 150% of the market price as defined in the Certificate of Designation. Dividends shall be paid only if dividends on the Company’s issued and outstanding Common Stock are paid and the amount paid to the Series B holder will be as though the conversion shares had been issued. The Series B holders have no voting rights. Upon liquidation, the holder of Series B, shall be entitled to receive an amount equal to the stated value, $100 per share, plus any accrued and unpaid dividends thereon before any distribution is made to Series C Secured Redeemable Preferred Stock or common stockholders. As of March 31, 2020, 600 shares of Series B are outstanding.

Series C Convertible Redeemable Preferred Stock

On December 22, 2017, the Company filed a certificate of designation for 8,000 shares of Series C Secured Redeemable Preferred Stock (“Series C”). Each share of the C Preferred is entitled to receive a $20.00 quarterly dividend commencing March 31, 2018 and each quarter thereafter and is to be redeemed for the stated value, $1,000 per share, plus accrued dividends in cash (i) at the Company’s option, commencing one year from issuance and (ii) mandatorily as of December 31, 2019. Management determined that the Series C should be classified as liability per the guidance in ASC 480 Distinguishing Liabilities from Equity as of December 31, 2019. On January 29, 2020, the Company filed the amended and restated certificate of designation fort its Series C Secured Redeemable Preferred Stock. The amendment changed the rights of the Series C by (a) removing the requirement to redeem the Series C, (b) removing the obligation to pay dividends on the Series C, (c) Allowing the holders of shares of Series C to convert the stated value of their shares into common stock of the Company at 75% of the last closing price of such common stock.. The C Preferred does not have any rights to vote with the common stock.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Upon liquidation, the holder of Series C, shall be entitled to receive an amount equal to the stated value, $1,000 per share, plus any accrued and unpaid dividends thereon before any distribution is made to common stockholders but after distributions are made to holders of Series B.

Management reviewed the guidance in ASC 470-60 Troubled Debt Restructurings and ASC 470-50 Debt Modifications and Extinguishments and concluded that the changes to the terms of the Series C qualified for debt extinguishment and recorded a loss on debt extinguishment totaling approximately $604,000.

Management determined the fair value of the new instrument based on the guidance in ASC 820 Fair Value Measurement. Management concluded that the preferred stock should not be classified as a liability per the guidance in ASC 480 Distinguishing Liabilities from Equity even though the conversion would require the issuance of variable number of shares since such obligation is not unconditional. Management classified the Series C in permanent equity as of March 31, 2020.

During the three months ended March 31, 2020, the Company converted 936 shares of Series C into 1,636,166 shares of common stock. As of March 31, 2020, 878 shares of Series C are outstanding.

Common Stock

On December 31, 2018, we entered into a non-transferrable Investment Agreement whereby the investor committed to purchase up to $10,000,000 of our common stock, over the course of 36 months. The aggregate number of shares issuable by us and purchasable by the investor under the Investment Agreement is 81,250. A registration statement for the sale of our common stock related to the Investment Agreement went effective on February 11, 2019.

We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Investment Agreement. The maximum amount that we are entitled to put in any one notice is the greater of: (i) 200% of the average daily volume (U.S. market only) of the common stock for the three (3) trading days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such trading days or (ii) $100,000. The purchase price shall be set at ninety-four percent (94%) of the lowest daily VWAP of our common stock during the Pricing Period. However, if, on any trading day during a Pricing Period, the daily VWAP of the common stock is lower than the floor price specified by us in the put notice, then we will withdraw that portion of the put amount for each such trading day during the Pricing Period, with only the balance of such put amount above the minimum acceptable price being put to the investor. There are put restrictions applied on days between the put notice date and the closing date with respect to that particular put. During such time, we are not entitled to deliver another put notice.

There are circumstances under which we will not be entitled to put shares to the investor, including the following:

● we will not be entitled to put shares to the investor unless there is an effective registration statement under the Securities Act to cover the resale of the shares by the investor;

● we will not be entitled to put shares to the investor unless our common stock continues to be quoted on the OTCQB market, or becomes listed on a national securities exchange;

● we will not be entitled to put shares to the investor to the extent that such shares would cause the investor’s beneficial ownership to exceed 4.99% of our outstanding shares; and

● we will not be entitled to put shares to the investor prior to the closing date of the preceding put.

In connection with the preparation of the Investment Agreement and the registration rights agreement, we incurred fees of $20,000.

In no event will we be obligated to register for resale more than $10,000,000 in value of shares of common stock, or 81,250 shares.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

During the three months ended March 31, 2020, the Company issued 4,388,291 shares of common stock for the conversion of notes and accrued interest in the amount of $2,545,714.

During the three months ended March 31, 2020, the Company issued 1,636,166 shares of common stock with a value of approximately $1,247,800, related to the conversion of Series C.

The Variable Debentures issued by the Company each have a provision requiring the Company to reserve a variable amount of shares of common stock for when the holder of the Variable Debenture converts.

Stock Options

The balance of all stock options outstanding as of March 31, 2020 is as follows:

			Weighted Average		Weighted Average Remaining		Aggregate
			Exercise Price		Contractual		Intrinsic
	Options		Per Share		Term (years)		Value
Outstanding at January 1, 2020		99,833	$	27.81		2.02		-
Granted		-	$	-		-		-
Cancelled		-	$	-		-		-
Exercised		-	$	-		-		-
Outstanding at March 31, 2020		99,833	$	27.81		1.77	$	-

Exercisable at March 31, 2020		96,532	$	28.36		1.71	$	-

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Warrants

A summary of the status of the warrants granted under these agreements at March 31, 2020, and changes during the three months then ended is presented below:

	Outstanding Warrants					Weighted Average
				Weighted Average		Remaining Contractual
	Shares			Exercise Price Per Share		Term (years)
Outstanding at January 1, 2020		73,486		$	306.28		1.37
Granted		-		$	-		-
Cancelled		(271	)	$	44.35		-
Exercised		-		$	-
Outstanding at March 31, 2020		73,215		$	307.25		1.13

Exercisable at March 31, 2020		73,215		$	307.25		1.13

The Company measures the fair value of stock options and warrants issued using the Black Scholes option pricing model using the following assumptions:

	Three months ended March 31,
	2020		2019

Expected term		-		2 years
Exercise price		-		$19.50-$27.90
Expected volatility		-		231%-242%
Expected dividends		-		None
Risk-free interest rate		-		2.45% to 2.60%
Forfeitures		-		None

Note 7 – Related Party Transactions

One former executive of the Company has entered into note payable agreements with the Company. The balance of notes payable from the related party at March 31, 2020 is $157,000. The notes bear interest at 12% per annum and initially matured on June 30, 2019. On September 29, 2019, the Company extended the maturity on all outstanding notes to December 31, 2019. During the three months ended March 31, 2020, the Company paid $8,000 principal to this related party.

As of March 31, 2020, and December 31, 2019, the balance of executives’ deferred compensation is $995,139 and $914,853, respectively, of which, $632,257 is related to deferred compensation owed to a former executive of the Company.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Note 8 – Fair Value Measurements

The Company has issued Variable Debentures which contained variable conversion rates based on unknown future prices of the Company’s common stock. This results in a conversion feature. The Company measures the conversion feature using the Black Scholes option pricing model using the following assumptions:

	Three months ended March 31,
	2020		2019

Expected term		1 month		1 month - 1 year
Exercise price		$0.09-$0.76		$10.70-$12.90
Expected volatility		157%-249%		134%-147%
Expected dividends		None		None
Risk-free interest rate		0.13% to 1.54%		2.40% to 2.87%
Forfeitures		None		None

The assumptions used in determining fair value represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change, including changes in the market value of the Company’s common stock, managements’ assessment or significant fluctuations in the volatility of the trading market for the Company’s common stock, the Company’s fair value estimates could be materially different in the future.

The Company computes the fair value of the derivative liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the derivative liability is the Company’s stock price, which is subject to significant fluctuation and is not under its control. The resulting effect on net loss is therefore subject to significant fluctuation and will continue to be so until the Company’s Variable Debentures, which the convertible feature is associated with, are converted into common stock or paid in full with cash. Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases.

The following table presents changes in the liabilities with significant unobservable inputs (level 3) for the three months ended March 31, 2020:

	Derivative
	Liability
Balance December 31, 2019	$	10,599,690

Issuance of convertible debt		524,742
Settlements by debt settlement		(1,490,765	)
Change in estimated fair value		(6,461,402	)

Balance March 31, 2020	$	3,172,265

Accounting guidance on fair value measurements and disclosures defines fair value, establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system, and defines required disclosures. It clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts business.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

The Company’s balance sheet contains derivative liabilities that are recorded at fair value on a recurring basis. The three-level valuation hierarchy for disclosure of fair value is as follows:

Level 1: uses quoted market prices in active markets for identical assets or liabilities.

Level 2: uses observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: uses unobservable inputs that are not corroborated by market data.

The fair value of the Company’s recorded derivative liability is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification. A Black Scholes option pricing model was used to determine the fair value. The Company records derivative liability on the condensed consolidated balance sheets at fair value with changes in fair value recorded in the condensed consolidated statements of operation.

The following table presents balances in the liabilities with significant unobservable inputs (Level 3) at March 31, 2020:

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total

As of March 31, 2020
Derivative liability	$	-	$	-	$	3,172,265	$	3,172,265
Total	$	-	$	-	$	3,172,265	$	3,172,265

Note 9 – Commitments and Contingencies

Legal Matters

The Company may become involved in various legal proceedings in the normal course of business.

Note 10 – Concentrations

Sales

During the three months ended March 31, 2020, we had two significant customers which accounted for 28% and 9% of sales.

Supplier

We also have a single source for our bioelectric medical devices, which account for 100% of our sales. The interruption of products provided by this supplier would adversely affect our business and financial condition unless an alternative source of products could be found.

Endonovo Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

Accounts Receivable

At March 31, 2020, we had one customer which accounted for 100% of our account receivable balances.

Note 11 – Subsequent Events

Subsequent to March 31, 2020, an aggregate of 1,854,635 shares of restricted common stock were issued on the conversion of $123,150 of principal and $27,413 of accrued interest pursuant to Variable Notes.

Subsequent to March 31, 2020, the Company issued 969,766 shares of common stock and 56,094 shares of restricted common stock pursuant to the conversion of 104 Series C at $,1000 stated value.

Subsequent to March 31, 2020, an aggregate of 409,000 shares of restricted common stock were issued pursuant to a Securities Purchase Agreement as a result of the issuance of a debenture

Subsequent to March 31, 2020, an aggregate of 385,963 shares of restricted common stock were issued pursuant to a Equity Line Purchase Agreement.

Subsequent to March 31, 2020, the Company entered into a Note Modification and Forbearance Agreement with lenders holding approximately $4,500,00 of Convertible Debt.

Subsequent to March 31, 2020, the Company entered into an Equity Line Purchase Agreement that requires the Company to apply at least 50% of the proceeds of puts to the payment of certain variable rate convertible notes.

Subsequent to March 31, 2020, the Company issued one fixed rate debenture for an aggregate amount of $525,000, with maturity of 1 year and carrying coupon of 10% or 24% upon event of default. This debenture is convertible into shares of common stock at the option of the holder upon an event of default.

As a result of these issuances, the total number of common shares outstanding is 10,503,151, Preferred B shares outstanding is 600, Preferred C shares outstanding is 720 and Preferred D shares outstanding is 305.

On May 17, 2020, the Company received a letter (the “Letter”) from an attorney representing Auctus Fund, LLC (“Auctus”), a lender to the Company, which claimed that a convertible promissory note in the original principal amount of $275,250 (the “Note”) was “in default”. The Letter, among other things, threatened litigation against the Company and its officers for damages and liquidated damages. To the Company’s knowledge no action has been initiated in any court with respect to the Note. In the event Auctus were to commence litigation, the Company would defend the same vigorously and believes it has both valid defenses to any claims by and substantial counter-claims against Auctus.

In order to encourage the holders of its Series C Preferred Stock to affect conversions into common stock, the Company has issued a “bonus” of 20% of the shares issued upon conversion to converting shareholders. Management views these shares as newly issued and not issued upon conversion of the Series C Preferred Stock. Accordingly, such shares are subject to a standard legend regarding lack of registration under the Securities Act of 1933, as amended.

On June 11, 2020, the Company granted options for the purchase of an aggregate of 74,668,000 shares at $0.1401, the then price of the Company’s common stock on the OTCQB, to 13 consultants to the Company. The options are of three year’s duration, are not immediately exercisable and prohibit any exercise which would cause the holder to become a more than 4.99% holder of the Company’s common stock. The Company is obligated to file a registration statement with respect to the shares issuable upon exercise of the options.

On June 8, 2020, the Company entered into a twelve-month consulting agreement for corporate awareness services providing for the payment cash fees of $5,000 per month and the issuance of 25,000 shares of common stock per month. 25,000 shares have been issued.

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

Cautionary Notice Regarding Forward Looking Statements

The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

This filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” and variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Overview

The Company’s non-invasive Electroceutical™ therapeutic device, SofPulse®, using pulsed short-wave radiofrequency at 27.12 MHz has been FDA-Cleared and CE Marked for the palliative treatment of soft tissue injuries and post-operative pain and edema, and has CMS National Coverage for the treatment of chronic wounds. The Company’s current portfolio of pre-clinical stage Electroceuticals™ therapeutic devices address chronic kidney disease, liver disease non-alcoholic steatohepatitis (NASH), cardiovascular and peripheral artery disease (PAD), and ischemic stroke

On January 22, 2014, Hanover Portfolio Acquisitions, Inc. (the “Company”) received written consents in lieu of a meeting of stockholders from holders of a majority of the shares of Common Stock representing in excess of 50% of the total issued and outstanding voting power of the Company approving an amendment to the Company’s Certificate of Incorporation to change the name of the Company from “Hanover Portfolio Acquisitions, Inc.” to “Endonovo Therapeutics, Inc.” The name change was affected pursuant to a Certificate of Amendment (the “Certificate of Amendment”), filed with the Secretary of State of Delaware on January 24, 2014.

Going Concern

Our independent registered auditors included an explanatory paragraph in their opinion on our consolidated financial statements as of and for the fiscal year ended December 31, 2019 that states that our ongoing losses and lack of resources causes doubt about our ability to continue as a going concern.

The World Health Organization declared the Coronavirus outbreak a pandemic on March 11, 2020 and in the United States various emergency actions have been taken on the National, State and Local levels. The effects of this pandemic on the Company’s business are uncertain.

Critical Accounting Policies

A summary of our significant accounting policies is included in Note 1 of the “Notes to the Consolidated Financial Statements,” contained in our Form 10-K for the year ended December 31, 2019. Management believes that the consistent application of these policies enables us to provide users of the financial statements with useful and reliable information about our operating results and financial condition. The summary condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S., which require us to make estimates and assumptions. We did not experience any significant changes during the three months ended March 31, 2020 in any of our Critical Accounting Policies from those contained in our Form 10-K for the year ended December 31, 2019.

New Accounting Pronouncements

See Note 1 of Notes to Condensed Consolidated Financial Statements for further discussion of new accounting standards that have been adopted or are being evaluated for future adoption.

Results of Operations

Three Months ended March 31, 2020 and 2019

	Three Months Ended March 31,						Favorable
	2020			2019			(Unfavorable)		%

Revenue	$	69,685		$	44,952		$	24,733		55.0	%
Cost of revenue		6,260			7,711			1,451		18.8	%
Gross profit		63,425			37,241			26,184		70.3	%

Operating expenses		743,037			850,238			107,201		-12.6	%

Loss from operations		(679,612	)		(812,997	)		133,385		16.4	%

Other income (expense)		5,018,030			(1,593,228	)		6,611,258		415.0	%

Net loss	$	4,338,418		$	(2,406,225	)	$	6,744,643		280.3	%

Revenue

Revenue of the Company’s SofPulse® product during the three months ended March 31, 2020 was $69,685, an increase of $24,733, or 55%, compared to $44,952 for the three months ended March 31, 2019.

Revenues for our SofPulse® product is typically recognized at the time the product is shipped, at which time the title passes to the customer, and there are no further performance obligations.

We anticipate that revenue will continue to increase in future periods as the roll out of the SofPulse® product continues.

Cost of Revenue

Cost of revenue during the three months ended March 31, 2020 was $6,260, a decrease of $1,451 or 18.8% compared to $7,711 for the three months ended March 31, 2019. Cost of revenue is recognized on those sales recorded as gross for which we are the principal in the transaction as opposed to net sales which reflect no cost of revenue.

It is anticipated that cost of revenue will increase in future quarters as the roll out of the SofPulse® product continues.

Operating Expenses

Operating expenses decreased by $107,201 or 12.6%, to $743,037 for the three months ended March 31, 2020 compared to $850,238 for the three months ended March 31, 2019. There was a decrease in research and development and professional expenses of approximately $62,000 and $59,000.

Other Income (Expense)

Other income (expense) for the quarter ended March 31, 2020 was an income of $5,018,030 compared to expense of $1,593,228 for the quarter ended March 31, 2019. This change was due primarily to a change in valuation of our derivative liabilities of approximately $6.5 million coupled with a decrease in interest expense and the amortization of debt issuance costs and amortizations of approximately $800,000. We anticipate continued large fluctuations in other income (expense) as a result of quarterly re-evaluation of derivative liabilities.

Liquidity and Capital Resources

	As of						Favorable
	March 31, 2020			December 31, 2019			(Unfavorable)
Working Capital

Current assets	$	17,920		$	62,555		$	(44,635	)
Current liabilities		14,053,513			23,623,470			9,569,957
Working capital deficit	$	(14,035,593	)	$	(23,560,915	)	$	9,525,322

Long-term debt	$	155,000		$	155,000		$	-

Stockholders’ deficit	$	(11,141,852	)	$	(20,503,820	)	$	9,361,968

	Three Months Ended March 31,						Favorable
	2020			2019			(Unfavorable)
Statements of Cash Flows Select Information

Net cash provided (used) by:
Operating activities	$	(297,215	)	$	(528,233	)	$	231,018
Investing activities	$	-		$	-		$	-
Financing activities	$	278,500		$	207,559		$	70,941

	As of				Favorable
	March 31, 2020		December 31, 2019		(Unfavorable)
Balance Sheet Select Information

Cash	$	178	$	18,893	$	(18,715	)

Accounts payable and accrued expenses	$	4,700,879	$	4,348,219	$	(352,660	)

Since inception and through March 31, 2020, the Company has raised approximately $16.4 million in equity and debt transactions. These funds have been used to commence the operations of the Company to acquire and begin the development of its intellectual property portfolio. These activities include attending trade shows and corporate development. Our accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these condensed consolidated financial statements. The Company has incurred substantial losses since inception. Its current liabilities exceed its current assets and available cash is not sufficient to fund expected future operations. The Company is raising additional capital through debt and equity securities in order to continue the funding of its operations. However, there is no assurance that the Company can raise enough funds or generate sufficient revenues to pay its obligations as they become due, which raises substantial doubt about our ability to continue as a going concern. To reduce the risk of not being able to continue as a going concern, management is commercializing its FDA cleared and CE marked products and has commenced its business plan to materialize revenues from potential, future, license agreements, has raised capital through the sale of its common stock and is seeking out profitable companies. This will be insufficient to fund operations if additional capital is not raised. The Company raised an aggregate of $ 286,500 through the sale of equity and debt securities during the three months ended March 31, 2020.

The Company is not aware of any recently issued accounting pronouncements that when adopted will have a material effect on the Company’s financial position or result of its operation.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are a Smaller Reporting Company and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Disclosure of controls and procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon 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. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As required by the SEC Rule 13a-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe 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.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following two material weaknesses which have caused management to conclude that as of March 31, 2020 our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the quarter ended March 31, 2020. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Changes in internal controls over financial reporting.

There has been no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

We are a Smaller Reporting Company (as defined in Rule 12b-2 of the Exchange Act) and are not required to provide the information under this item.

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

Number of
Common Shares		Source of
Issued		Payment	Amount
	1,636,166	Conversion Series C Preferred	$	1,247,734
	4,388,291	Conversion of notes	$	2,545,714

The above issuances of securities during the three months ended March 31, 2020 were exempt from registration pursuant to Section 4(2), and/or Regulation D promulgated under the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

Item 3. Defaults upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

Not applicable

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number		Exhibit Title

31.1		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS *		XBRL Instance Document

101.SCH *		XBRL Taxonomy Schema

101.CAL *		XBRL Taxonomy Calculation Linkbase

101.DEF *		XBRL Taxonomy Definition Linkbase

101.LAB *		XBRL Taxonomy Label Linkbase

101.PRE *		XBRL Taxonomy Presentation Linkbase

In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

* Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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

Dated: June [11], 2020

Endonovo Therapeutics, Inc.

By:

/s/ Alan Collier

Alan Collier

Chief Executive Officer

(Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer)

EX-31.1 2 ex31-1.htm

Exhibit 31.1

Certification of Principal Executive Officer and Principal Financial Officer

Pursuant to 18 U.S.C. 1350

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Alan Collier, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Endonovo Therapeutics, Inc. for the period ended March 31, 2020;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.

Dated: June [11], 2020	/s/ Alan Collier
	Chief Executive Officer and Principal Financial Officer

EX-32.1 3 ex32-1.htm

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Endonovo Therapeutics, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alan Collier, Chief Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

		/s/ Alan Collier
	Name:	Alan Collier
	Title:	Chief Executive Officer and Principal Financial Officer
	Date:	June [11], 2020

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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19639

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-22731

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124 46119

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44952

9567 92084

289592

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50000

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178

58477

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1247800

766

3066661

3274650

-48596368

-52934786

1570

37455339

32432392

721

118

14208513

23778470

155000 155000

14053513

23623470

1813415

3172265

10599690

157000

165000

157000

2637660

2431373

1486480

1317376

576739

599470

3066661

3274650

3044452

3206180

4289

5915

17920

62555

14660

20920

3082

22742

178

18893

1 1

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4338418

-2406225

4338418

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-1623577

6461402

-8542

-679612

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743037

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37241

6260

7711

26545 26545

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4338418

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1.47

-4.99

-0.14

-4.99

2952171

481827

11925787

481827

27559

64000 1247734

25000

431063

600

25000

600

1189204

25000

600

516773

255

25000

600

305

7213661

878

1091 2418269 2418269 1814 50000 50000 50

609275

-38891

604000

140000

1000

14000000

1,000-for-1-reverse stock split

1003

63301

1626

747

89794

64458

13969

11367

89794

64458

13969

11367

85505

83879

4500000

2024

4500000

1455548

1293820

646910

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275250

0.70

0.75

0.12

0.10

0.24

0.08

0.12

0.08

4718976

450000

525000

2333576

The Company entered into an agreement to receive a license, data delivery and ancillary marketing services in exchange for a note of $352,500 at 8% annual interest and a conversion rate of the lower of $9.00 or 82% of the lowest bid price during the five trading days prior to conversion. The note will become effective when the license period and the services start and the data is delivered.

In order to encourage the holders of its Series C Preferred Stock to affect conversions into common stock, the Company has issued a "bonus" of 20% of the shares issued upon conversion to converting shareholders.

2101000

236500

91250

38500

235000

8000

67500

12649

31510

6862146

6180369

165000

157000

6697146 6023369 5443879 5443879

611000

6054879

0.75

0.00

P3Y 1.50

100

1000

The Company filed the amended and restated certificate of designation fort its Series C Secured Redeemable Preferred Stock. The amendment changed the rights of the Series C by (a) removing the requirement to redeem the Series C, (b) removing the obligation to pay dividends on the Series C, (c) Allowing the holders of shares of Series C to convert the stated value of their shares into common stock of the Company at 75% of the last closing price of such common stock.. The C Preferred does not have any rights to vote with the common stock. 10000000 2.00 (i) 200% of the average daily volume (U.S. market only) of the common stock for the three (3) trading days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such trading days or (ii) $100,000. The purchase price shall be set at ninety-four percent (94%) of the lowest daily VWAP of our common stock during the Pricing Period.

0.0499

20000

100

1000

99833

74668000

96532

27.81

28.36

P2Y0M7D

P1Y9M7D

P1Y8M16D

73486

73215

-271

73215 306.28 307.25 44.35 307.25 P1Y4M13D P1Y1M16D P1Y1M16D

P0Y

P2Y

19.50

27.90

2.31

2.42

0.0245

0.0260

0.00

2019-06-30

2019-12-31

995139

914853

632257

P1Y

P6M

P12M

0.09 0.76 10.70 12.90

157

249

0.13

1.54

134

147

2.40

2.87

3172265

0.28

0.09

1.00

27413

164

-164

1636166

-936

8333

443

9567

5170

9567

6035559

1697141

11512

286500

161728

Original terms of six to twelve months and interest rates of 8%. If the notes are not paid at maturity, two of the four notes will bear a 22% default interest rate and the other two will bear a 24% default interest rate.

0.22

0.24

8000

9.00

20.00

1000

0.1401

936

1636166

P1M P1M P1Y

10599690

3172265

524742

-1490765

-6461402

5018030

-1593228

8973616 ENDONOVO THERAPEUTICS, INC. 0001528172 10-Q 2020-03-31 false --12-31 Yes Yes Non-accelerated Filer true true true false Q1 2020 10503151

The options are of three year's duration, are not immediately exercisable and prohibit any exercise which would cause the holder to become a more than 4.99% holder of the Company's common stock.

5000

Note 1 - Organization and Nature of Business   Endonovo Therapeutics, Inc. (Endonovo or the “Company”) is an innovative biotechnology company that has developed a bio-electronic approach to regenerative medicine. Endonovo is a growth stage company whose stock is publicly traded (OTCQB: ENDV).   The Company develops, manufactures and distributes evolutionary medical devices focused on the rapid healing of wounds and reduction of pain, edema and inflammation and in the human body. The Company’s non-invasive bioelectric medical devices are designed to target inflammation, cardiovascular diseases, chronic kidney disease, and central nervous system disorders (“CNS” disorders).   The Company's non-invasive Electroceutical™ therapeutic device, SofPulse®, using pulsed short-wave radiofrequency at 27.12 MHz has been FDA-Cleared and CE Marked for the palliative treatment of soft tissue injuries and post-operative pain and edema, and has CMS National Coverage for the treatment of chronic wounds. The Company's current portfolio of pre-clinical stage Electroceuticals™ therapeutic devices address chronic kidney disease, liver disease non-alcoholic steatohepatitis (NASH), cardiovascular and peripheral artery disease (PAD), and ischemic stroke.   Endonovo’s core mission is to transform the field of medicine by developing safe, wearable, non-invasive bioelectric medical devices that deliver the Company’s Electroceutical® Therapy. Endonovo’s bioelectric Electroceutical® devices harnesses bioelectricity to restore key electrochemical processes that initiate anti-inflammatory processes and growth factors in the body necessary for healing to rapidly occur.   Basis of Presentation and Principles of Consolidation   The accompanying unaudited interim condensed consolidated financial statements have been presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated financial statements as of March 31, 2020 and 2019 are unaudited; however, in the opinion of management such interim condensed consolidated financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The accompanying financial information should be read in conjunction with the financial statements and the notes thereto in the Company’s most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on May 4, 2020. The results of operations for the period presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year.   The condensed consolidated financial statements of the Company include the accounts of ETI and IPR as of March 14, 2012; Aviva as of April 2, 2013; and WeHealAnimals as of November 16, 2013. All significant intercompany accounts and transactions are eliminated in consolidation.   Going Concern   These accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date these condensed consolidated financial statements are issued.   As of March 31, 2020, the Company had cash of less than $1,000 and a working capital deficiency of $14.0 million. During the three months ended March 31, 2020, the Company used approximately $0.3 million of cash in its operation. The Company has incurred recurring losses resulting in an accumulated deficit of $ 48.6 million as of March 31, 2020. These conditions raise substantial doubt as to its ability to continue as going concern within one year from issuance date of these financial statements.   During the three months ended March 31, 2020, the Company has raised approximately $286,500 in debt and equity financing. The Company is raising additional capital through debt and equity securities to continue the funding of its operations. However, there is no assurance that the Company can raise enough funds or generate sufficient revenues to pay its obligations as they become due, which raises substantial doubt about our ability to continue as a going concern.   No adjustments have been made to the carrying value of assets or liabilities as a result of this uncertainty. To reduce the risk of not being able to continue as a going concern, management is commercializing its FDA cleared and CE marked products and has commenced implementing its business plan to materialize revenues from potential, future, license agreements, has raised capital through the sale of its preferred and common stock, has entered into an investment agreement whereby the company has access to an equity line of credit and is seeking out profitable companies.   In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.   Reverse Split   In October 2019, the Company’s Board of Directors and stockholders approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1,000-for-1 reverse split of the Company’s common stock, which was effected on December 20, 2019. The par value of the common stock was not adjusted as a result of the reverse stock split. Accordingly, all common stock, stock options, warrants and related per share amounts as of and for the quarter ended March 31, 2019 have been retroactively adjusted to give effect to the reverse split.   Use of Estimates   The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Critical estimates include the value of shares issued for services, in connection with notes payable agreements, in connection with note extension agreements, and as repayment for outstanding debt, the useful lives of property and equipment, the valuation of the derivative liability, the valuation of warrants and stock options, and the valuation of deferred income tax assets. Management uses its historical records and knowledge of its business in making these estimates. Actual results could differ from these estimates.   Earnings (Loss) Per Share   The Company utilizes Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, “Earnings per Share.” Basic earnings (loss) per share is computed based on the earnings (loss) attributable to common shareholders divided by the weighted average number of shares outstanding for the period excluding any dilutive effects of options, warrants, unvested share awards and convertible securities. Diluted earnings (loss) per common share is calculated similar to basic earnings (loss) per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock option, warrants, common shares issuable under convertible debt and restricted stock using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. The components of basic and diluted earnings per share for the three months ended March 31, 2020 and 2019 were as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Three months ended March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Numerator:</td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 69%">Net income attributable to common shareholders</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 12%; text-align: right">4,338,418</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">(2,406,225</td> <td style="width: 1%">)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Effect of dilutive securities</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Convertible notes</td> <td> </td> <td> </td> <td style="text-align: right">(6,035,559</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Net loss for diluted earnings per share</td> <td> </td> <td> </td> <td style="text-align: right">(1,697,141</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Denominator:</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Weighted-average number of common shares outstanding during the period</td> <td> </td> <td> </td> <td style="text-align: right">2,952,171</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">481,827</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Dilutive effect of convertible notes payable</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">8,973,616</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Common stock and common stock equivalents used for diluted earnings per share</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">11,925,787</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">481,827</td> <td> </td></tr> </table>   Accounts Receivable   The Company uses the specific identification method for recording the provision for doubtful accounts, which was $0 at March 31, 2020 and December 31, 2019. Accounts receivable are written off when all collection attempts have failed.   Research and Development   Costs relating to the development of new products are expensed as research and development as incurred in accordance with FASB Accounting Standards Codification (“ASC”) 730-10, Research and Development. Research and development costs amounted to $1,003 and $63,301 for the three months ended March 31, 2020 and 2019, respectively, and are included in operating expenses in the condensed consolidated statements of operations.   Recently Issued Accounting Pronouncements   In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in “Leases (Topic 840)” and generally requires all leases to be recognized in the condensed consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. The Company has adopted ASU 2016-02 on January 1, 2019. The adoption of ASU 2016-02 did not have a significant impact on the Company’s condensed consolidated results of operations, financial position and cash flows.   In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company has early adopted ASU 2018-07 and the adoption did not have a significant impact on the Company’s condensed consolidated financial statements.   In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. Effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty 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. Early adoption is permitted upon issuance of this Update. Any entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The Company adopted ASU 2018-13 as of January 1, 2020, and ASU 2018-13 has not had a material impact on the condensed consolidated financial position or results of operations and liquidity.   The Company has evaluated all the recent accounting pronouncements and determined that there are no other accounting pronouncements that will have a material effect on the Company’s financial statements.

Note 2 - Revenue Recognition   Contracts with Customers   We have adopted ASC 606, Revenue from Contracts with Customers effective January 1, 2018 using the modified retrospective method applied to those contracts which were not substantially completed as of January 1, 2018. These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.   We routinely plan on entering into contracts with customers that include general commercial terms and conditions, notification requirements for price increases, shipping terms and in most cases prices for the products and services that we offer. Our performance obligations are established when a customer submits a purchase order notification (in writing, electronically or verbally) for goods and services, and we accept the order. We identify performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. We generally recognize revenue upon the satisfaction of these criteria when control of the product or service has been transferred to the customer at which time we have an unconditional right to receive payment. Our sales and sale prices are final and our prices are not affected by contingent events that could impact the transaction price.   Revenues for our SofPulse® product is typically recognized at the time the product is shipped, at which time the title passes to the customer, and there are no further performance obligations.   In connection with offering products and services provided to the end user by third-party vendors, we review the relationship between us, the vendor and the end user to assess whether revenue should be reported on a gross or net basis. In asserting whether revenue should be reported on a gross or net basis, we consider whether we act as a principal in the transaction and control the goods and services used to fulfill the performance obligation(s) associated with the transaction.   Sources of Revenue   We have identified the following revenues by revenue source:   <table cellspacing="0" cellpadding="0" style="width: 100%; background-color: white; border-collapse: collapse"> <tr> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 48px"> </td> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; vertical-align: top; width: 24px">1.</td> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; vertical-align: top">Medical care providers</td></tr> </table>   As of March 31, 2020, and 2019 the sources of revenue were as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="6" style="text-align: center">Three Months Ended</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 69%">Direct sales- Medical care providers, gross</td> <td style="width: 2%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 12%; text-align: right">69,685</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 11%; text-align: right">44,952</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Total sources of revenue</td> <td> </td> <td>$</td> <td style="text-align: right">69,685</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">44,952</td> <td> </td></tr> </table>   Warranty   Our general product warranties do not extend beyond an assurance that the product delivered will be consistent with stated specifications and do not include separate performance obligations.   Significant Judgments in the Application of the Guidance in ASC 606   There are no significant judgments associated with the satisfaction of our performance obligations. We generally satisfy performance obligations upon delivery of the product to the customer. This is consistent with the time in which the customer obtains control of the products. Performance obligations are also generally settled quickly after the purchase order acceptance, therefore the value of unsatisfied performance obligations at the end of any reporting period is generally immaterial.   We consider variable consideration in establishing the transaction price. Forms of variable consideration applicable to our arrangements include sales returns, rebates, volume-based bonuses, and prompt pay discounts. We use historical information along with an analysis of the expected value to properly calculate and to consider the need to constrain estimates of variable consideration. Such amounts are included as a reduction to revenue from the sale of products in the periods in which the related revenue is recognized and adjusted in future periods as necessary.   Practical Expedients   Our payment terms for sales direct to distributors are substantially less than the one-year collection period that falls within the practical expedient in determination of whether a significant financing component exists.

Note 3 – Property, Plant and Equipment   The following is a summary of equipment, at cost, less accumulated depreciation at March 31, 2020 and December 31, 2019:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">March 31, 2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">December 31, 2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 54%">Autos</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 20%; text-align: right">64,458</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 19%; text-align: right">64,458</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Medical equipment</td> <td> </td> <td> </td> <td style="text-align: right">13,969</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">13,969</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Other equipment</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">11,367</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">11,367</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right">89,794</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">89,794</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Less accumulated depreciation</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">85,505</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">83,879</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid">$</td> <td style="border-bottom: black 1.5pt solid; text-align: right">4,289</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid">$</td> <td style="border-bottom: black 1.5pt solid; text-align: right">5,915</td> <td> </td></tr> </table> Depreciation expense for the three months ended March 31, 2020 and 2019 was $1,626 and $747, respectively.

Note 4 – Patents   In December 2017, we acquired from Rio Grande Neurosciences, Inc. (RGN) a patent portfolio for $4,500,000. The earliest patents expire in 2024. The following is a summary of patents less accumulated amortization at March 31, 2020 and December 31, 2019:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">March 31, 2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">December 31, 2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 54%">Patents</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 20%; text-align: right">4,500,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 19%; text-align: right">4,500,000</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Less accumulated amortization</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">1,455,548</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">1,293,820</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid">$</td> <td style="border-bottom: black 1.5pt solid; text-align: right">3,044,452</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid">$</td> <td style="border-bottom: black 1.5pt solid; text-align: right">3,206,180</td> <td> </td></tr> </table>   Amortization expense associated with patents was $161,728 for the three months ended March 31, 2020 and 2019. The estimated future amortization expense related to patents as of March 31, 2020 is as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid">Twelve Months Ending March 31,</td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Amount</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 78%; padding-left: 10pt">2021</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 18%; text-align: right">646,910</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">2022</td> <td> </td> <td> </td> <td style="text-align: right">646,910</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">2023</td> <td> </td> <td> </td> <td style="text-align: right">646,910</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">2024</td> <td> </td> <td> </td> <td style="text-align: right">646,910</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">2025</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">456,812</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Total</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">3,044,452</td> <td> </td></tr> </table>

Note 6 - Shareholders’ Deficit   Preferred Stock   The Company has authorized 5,000,000 shares of preferred stock which have been designated as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Number of Shares</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Number of Shares Outstanding</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Par</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Liquidation</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Authorized</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">at March 31, 2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Value</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Value</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 30%">Series AA</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 16%; text-align: right">1,000,000</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 18%; text-align: right">25,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">0.0010</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">-</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Preferred Series B</td> <td> </td> <td> </td> <td style="text-align: right">50,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">600</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">0.0001</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">100</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Preferred Series C</td> <td> </td> <td> </td> <td style="text-align: right">8,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">878</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">0.0001</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">1,000</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Preferred Series D</td> <td> </td> <td> </td> <td style="text-align: right">20,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">305</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">0.0001</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">1,000</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Undesignated</td> <td> </td> <td> </td> <td style="text-align: right">3,922,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> </table>   Series AA Preferred Shares   On February 22, 2013, the Board of Directors of the Company authorized an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series AA Super Voting Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.   Each holder of outstanding shares of Series AA Super Voting Preferred Stock shall be entitled to one hundred thousand (100,000) votes for each share of Series AA Super Voting Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company. The Series AA Super Voting Preferred Stockholders will receive no dividends nor any value on liquidation. As of March 31, 2020, there were 25,000 shares of Series AA Preferred stock outstanding.   Series B Convertible Preferred Stock   On February 7, 2017, the Company filed a certificate of designation for 50,000 shares of Series B Convertible Preferred Stock designated as Series B (“Series B”) which are authorized and convertible, at the option of the holder, commencing six months from the date of issuance into common shares and warrants. For each share of Series B, the holder, on conversion, shall receive the stated value divided by 75% of the market price on the date of purchase of Series B and a three-year warrant exercisable into up to a like amount of common shares with an exercise price of 150% of the market price as defined in the Certificate of Designation. Dividends shall be paid only if dividends on the Company’s issued and outstanding Common Stock are paid and the amount paid to the Series B holder will be as though the conversion shares had been issued. The Series B holders have no voting rights. Upon liquidation, the holder of Series B, shall be entitled to receive an amount equal to the stated value, $100 per share, plus any accrued and unpaid dividends thereon before any distribution is made to Series C Secured Redeemable Preferred Stock or common stockholders. As of March 31, 2020, 600 shares of Series B are outstanding.   Series C Convertible Redeemable Preferred Stock   On December 22, 2017, the Company filed a certificate of designation for 8,000 shares of Series C Secured Redeemable Preferred Stock (“Series C”). Each share of the C Preferred is entitled to receive a $20.00 quarterly dividend commencing March 31, 2018 and each quarter thereafter and is to be redeemed for the stated value, $1,000 per share, plus accrued dividends in cash (i) at the Company’s option, commencing one year from issuance and (ii) mandatorily as of December 31, 2019. Management determined that the Series C should be classified as liability per the guidance in ASC 480 Distinguishing Liabilities from Equity as of December 31, 2019. On January 29, 2020, the Company filed the amended and restated certificate of designation fort its Series C Secured Redeemable Preferred Stock. The amendment changed the rights of the Series C by (a) removing the requirement to redeem the Series C, (b) removing the obligation to pay dividends on the Series C, (c) Allowing the holders of shares of Series C to convert the stated value of their shares into common stock of the Company at 75% of the last closing price of such common stock.. The C Preferred does not have any rights to vote with the common stock.   Upon liquidation, the holder of Series C, shall be entitled to receive an amount equal to the stated value, $1,000 per share, plus any accrued and unpaid dividends thereon before any distribution is made to common stockholders but after distributions are made to holders of Series B.   Management reviewed the guidance in ASC 470-60 Troubled Debt Restructurings and ASC 470-50 Debt Modifications and Extinguishments and concluded that the changes to the terms of the Series C qualified for debt extinguishment and recorded a loss on debt extinguishment totaling approximately $604,000.   Management determined the fair value of the new instrument based on the guidance in ASC 820 Fair Value Measurement. Management concluded that the preferred stock should not be classified as a liability per the guidance in ASC 480 Distinguishing Liabilities from Equity even though the conversion would require the issuance of variable number of shares since such obligation is not unconditional. Management classified the Series C in permanent equity as of March 31, 2020.   During the three months ended March 31, 2020, the Company converted 936 shares of Series C into 1,636,166 shares of common stock. As of March 31, 2020, 878 shares of Series C are outstanding.   Common Stock   On December 31, 2018, we entered into a non-transferrable Investment Agreement whereby the investor committed to purchase up to $10,000,000 of our common stock, over the course of 36 months. The aggregate number of shares issuable by us and purchasable by the investor under the Investment Agreement is 81,250. A registration statement for the sale of our common stock related to the Investment Agreement went effective on February 11, 2019.   We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Investment Agreement. The maximum amount that we are entitled to put in any one notice is the greater of: (i) 200% of the average daily volume (U.S. market only) of the common stock for the three (3) trading days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such trading days or (ii) $100,000. The purchase price shall be set at ninety-four percent (94%) of the lowest daily VWAP of our common stock during the Pricing Period. However, if, on any trading day during a Pricing Period, the daily VWAP of the common stock is lower than the floor price specified by us in the put notice, then we will withdraw that portion of the put amount for each such trading day during the Pricing Period, with only the balance of such put amount above the minimum acceptable price being put to the investor. There are put restrictions applied on days between the put notice date and the closing date with respect to that particular put. During such time, we are not entitled to deliver another put notice.   There are circumstances under which we will not be entitled to put shares to the investor, including the following:   ● we will not be entitled to put shares to the investor unless there is an effective registration statement under the Securities Act to cover the resale of the shares by the investor;   ● we will not be entitled to put shares to the investor unless our common stock continues to be quoted on the OTCQB market, or becomes listed on a national securities exchange;   ● we will not be entitled to put shares to the investor to the extent that such shares would cause the investor’s beneficial ownership to exceed 4.99% of our outstanding shares; and   ● we will not be entitled to put shares to the investor prior to the closing date of the preceding put.   In connection with the preparation of the Investment Agreement and the registration rights agreement, we incurred fees of $20,000.   In no event will we be obligated to register for resale more than $10,000,000 in value of shares of common stock, or 81,250 shares.   During the three months ended March 31, 2020, the Company issued 4,388,291 shares of common stock for the conversion of notes and accrued interest in the amount of $2,545,714.   During the three months ended March 31, 2020, the Company issued 1,636,166 shares of common stock with a value of approximately $1,247,800, related to the conversion of Series C.   The Variable Debentures issued by the Company each have a provision requiring the Company to reserve a variable amount of shares of common stock for when the holder of the Variable Debenture converts.   Stock Options   The balance of all stock options outstanding as of March 31, 2020 is as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Weighted Average</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Weighted Average Remaining</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Aggregate</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Exercise Price</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Contractual</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Intrinsic</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Options</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Per Share</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Term (years)</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Value</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 32%">Outstanding at January 1, 2020</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 14%; text-align: right">99,833</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 14%; text-align: right">27.81</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 13%; text-align: right">2.02</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 13%; text-align: right">                   -</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Granted</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Cancelled</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Exercised</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Outstanding at March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">99,833</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">27.81</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1.77</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Exercisable at March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">96,532</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">28.36</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1.71</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td></tr> </table>   Warrants   A summary of the status of the warrants granted under these agreements at March 31, 2020, and changes during the three months then ended is presented below:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Outstanding Warrants</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Weighted Average</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Weighted Average</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Remaining Contractual</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Shares</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Exercise Price Per Share</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Term (years)</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 54%; text-align: justify">Outstanding at January 1, 2020</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 12%; text-align: right">73,486</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 12%; text-align: right">306.28</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 12%; text-align: right">1.37</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Granted</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Cancelled</td> <td> </td> <td> </td> <td style="text-align: right">(271</td> <td>)</td> <td> </td> <td>$</td> <td style="text-align: right">44.35</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Exercised</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify">Outstanding at March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">73,215</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">307.25</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1.13</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify">Exercisable at March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">73,215</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">307.25</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1.13</td> <td> </td></tr> </table>   The Company measures the fair value of stock options and warrants issued using the Black Scholes option pricing model using the following assumptions:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Three months ended March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 63%">Expected term</td> <td style="width: 2%"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 15%; text-align: center">-</td> <td style="width: 1%; text-align: center"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 15%; text-align: center">2 years</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Exercise price</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">$19.50-$27.90</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Expected volatility</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">231%-242%</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Expected dividends</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Risk-free interest rate</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">2.45% to 2.60%</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Forfeitures</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td> </td></tr> </table>

Note 7 – Related Party Transactions   One former executive of the Company has entered into note payable agreements with the Company. The balance of notes payable from the related party at March 31, 2020 is $157,000. The notes bear interest at 12% per annum and initially matured on June 30, 2019. On September 29, 2019, the Company extended the maturity on all outstanding notes to December 31, 2019. During the three months ended March 31, 2020, the Company paid $8,000 principal to this related party.   As of March 31, 2020, and December 31, 2019, the balance of executives’ deferred compensation is $995,139 and $914,853, respectively, of which, $632,257 is related to deferred compensation owed to a former executive of the Company.

Note 8 – Fair Value Measurements   The Company has issued Variable Debentures which contained variable conversion rates based on unknown future prices of the Company’s common stock. This results in a conversion feature. The Company measures the conversion feature using the Black Scholes option pricing model using the following assumptions:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Three months ended March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 63%">Expected term</td> <td style="width: 2%"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 15%; text-align: center">1 month</td> <td style="width: 1%; text-align: center"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 15%; text-align: center">1 month - 1 year</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Exercise price</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">$0.09-$0.76</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">$10.70-$12.90</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Expected volatility</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">157%-249%</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">134%-147%</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Expected dividends</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Risk-free interest rate</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">0.13% to 1.54%</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">2.40% to 2.87%</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Forfeitures</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td> </td></tr> </table>   The assumptions used in determining fair value represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change, including changes in the market value of the Company’s common stock, managements’ assessment or significant fluctuations in the volatility of the trading market for the Company’s common stock, the Company’s fair value estimates could be materially different in the future.   The Company computes the fair value of the derivative liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the derivative liability is the Company’s stock price, which is subject to significant fluctuation and is not under its control. The resulting effect on net loss is therefore subject to significant fluctuation and will continue to be so until the Company’s Variable Debentures, which the convertible feature is associated with, are converted into common stock or paid in full with cash. Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases.   The following table presents changes in the liabilities with significant unobservable inputs (level 3) for the three months ended March 31, 2020:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Derivative</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Liability</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 77%">Balance December 31, 2019</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 19%; text-align: right">10,599,690</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Issuance of convertible debt</td> <td> </td> <td> </td> <td style="text-align: right">524,742</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Settlements by debt settlement</td> <td> </td> <td> </td> <td style="text-align: right">(1,490,765</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Change in estimated fair value</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(6,461,402</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Balance March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">3,172,265</td> <td> </td></tr> </table>   Accounting guidance on fair value measurements and disclosures defines fair value, establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system, and defines required disclosures. It clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts business.   The Company’s balance sheet contains derivative liabilities that are recorded at fair value on a recurring basis. The three-level valuation hierarchy for disclosure of fair value is as follows:   Level 1: uses quoted market prices in active markets for identical assets or liabilities.   Level 2: uses observable market-based inputs or unobservable inputs that are corroborated by market data.   Level 3: uses unobservable inputs that are not corroborated by market data.   The fair value of the Company’s recorded derivative liability is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification. A Black Scholes option pricing model was used to determine the fair value. The Company records derivative liability on the condensed consolidated balance sheets at fair value with changes in fair value recorded in the condensed consolidated statements of operation.   The following table presents balances in the liabilities with significant unobservable inputs (Level 3) at March 31, 2020:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" style="border-bottom: black 1.5pt solid; text-align: center">Fair Value Measurements Using</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="text-align: center">Quoted Prices in Active Markets for Identical Assets</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Significant Other Observable Inputs</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Significant Unobservable Inputs</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">(Level 1)</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">(Level 2)</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">(Level 3)</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Total</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>As of March 31, 2020</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 36%; padding-left: 10pt">Derivative liability</td> <td style="width: 2%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 16%; text-align: right">-</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 12%; text-align: right"> -</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 12%; text-align: right">3,172,265</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 10%; text-align: right">3,172,265</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Total</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">-</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">-</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">3,172,265</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">3,172,265</td> <td> </td></tr> </table>

Note 9 – Commitments and Contingencies   Legal Matters   The Company may become involved in various legal proceedings in the normal course of business.

Note 10 – Concentrations   Sales   During the three months ended March 31, 2020, we had two significant customers which accounted for 28% and 9% of sales.   Supplier   We also have a single source for our bioelectric medical devices, which account for 100% of our sales. The interruption of products provided by this supplier would adversely affect our business and financial condition unless an alternative source of products could be found.   Accounts Receivable   At March 31, 2020, we had one customer which accounted for 100% of our account receivable balances.

Basis of Presentation and Principles of Consolidation   The accompanying unaudited interim condensed consolidated financial statements have been presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated financial statements as of March 31, 2020 and 2019 are unaudited; however, in the opinion of management such interim condensed consolidated financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The accompanying financial information should be read in conjunction with the financial statements and the notes thereto in the Company’s most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on May 4, 2020. The results of operations for the period presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year.   The condensed consolidated financial statements of the Company include the accounts of ETI and IPR as of March 14, 2012; Aviva as of April 2, 2013; and WeHealAnimals as of November 16, 2013. All significant intercompany accounts and transactions are eliminated in consolidation. Going Concern   These accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date these condensed consolidated financial statements are issued.   As of March 31, 2020, the Company had cash of less than $1,000 and a working capital deficiency of $14.0 million. During the three months ended March 31, 2020, the Company used approximately $0.3 million of cash in its operation. The Company has incurred recurring losses resulting in an accumulated deficit of $ 48.6 million as of March 31, 2020. These conditions raise substantial doubt as to its ability to continue as going concern within one year from issuance date of these financial statements.   During the three months ended March 31, 2020, the Company has raised approximately $286,500 in debt and equity financing. The Company is raising additional capital through debt and equity securities to continue the funding of its operations. However, there is no assurance that the Company can raise enough funds or generate sufficient revenues to pay its obligations as they become due, which raises substantial doubt about our ability to continue as a going concern.   No adjustments have been made to the carrying value of assets or liabilities as a result of this uncertainty. To reduce the risk of not being able to continue as a going concern, management is commercializing its FDA cleared and CE marked products and has commenced implementing its business plan to materialize revenues from potential, future, license agreements, has raised capital through the sale of its preferred and common stock, has entered into an investment agreement whereby the company has access to an equity line of credit and is seeking out profitable companies.   In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds. Reverse Split   In October 2019, the Company’s Board of Directors and stockholders approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1,000-for-1 reverse split of the Company’s common stock, which was effected on December 20, 2019. The par value of the common stock was not adjusted as a result of the reverse stock split. Accordingly, all common stock, stock options, warrants and related per share amounts as of and for the quarter ended March 31, 2019 have been retroactively adjusted to give effect to the reverse split.

Use of Estimates   The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Critical estimates include the value of shares issued for services, in connection with notes payable agreements, in connection with note extension agreements, and as repayment for outstanding debt, the useful lives of property and equipment, the valuation of the derivative liability, the valuation of warrants and stock options, and the valuation of deferred income tax assets. Management uses its historical records and knowledge of its business in making these estimates. Actual results could differ from these estimates.

Earnings (Loss) Per Share   The Company utilizes Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, “Earnings per Share.” Basic earnings (loss) per share is computed based on the earnings (loss) attributable to common shareholders divided by the weighted average number of shares outstanding for the period excluding any dilutive effects of options, warrants, unvested share awards and convertible securities. Diluted earnings (loss) per common share is calculated similar to basic earnings (loss) per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock option, warrants, common shares issuable under convertible debt and restricted stock using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. The components of basic and diluted earnings per share for the three months ended March 31, 2020 and 2019 were as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Three months ended March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Numerator:</td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 69%">Net income attributable to common shareholders</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 12%; text-align: right">4,338,418</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">(2,406,225</td> <td style="width: 1%">)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Effect of dilutive securities</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Convertible notes</td> <td> </td> <td> </td> <td style="text-align: right">(6,035,559</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Net loss for diluted earnings per share</td> <td> </td> <td> </td> <td style="text-align: right">(1,697,141</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Denominator:</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Weighted-average number of common shares outstanding during the period</td> <td> </td> <td> </td> <td style="text-align: right">2,952,171</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">481,827</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Dilutive effect of convertible notes payable</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">8,973,616</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Common stock and common stock equivalents used for diluted earnings per share</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">11,925,787</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">481,827</td> <td> </td></tr> </table>

Accounts Receivable   The Company uses the specific identification method for recording the provision for doubtful accounts, which was $0 at March 31, 2020 and December 31, 2019. Accounts receivable are written off when all collection attempts have failed.

Research and Development   Costs relating to the development of new products are expensed as research and development as incurred in accordance with FASB Accounting Standards Codification (“ASC”) 730-10, Research and Development. Research and development costs amounted to $1,003 and $63,301 for the three months ended March 31, 2020 and 2019, respectively, and are included in operating expenses in the condensed consolidated statements of operations.

Recently Issued Accounting Pronouncements   In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in “Leases (Topic 840)” and generally requires all leases to be recognized in the condensed consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. The Company has adopted ASU 2016-02 on January 1, 2019. The adoption of ASU 2016-02 did not have a significant impact on the Company’s condensed consolidated results of operations, financial position and cash flows.   In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company has early adopted ASU 2018-07 and the adoption did not have a significant impact on the Company’s condensed consolidated financial statements.   In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. Effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty 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. Early adoption is permitted upon issuance of this Update. Any entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The Company adopted ASU 2018-13 as of January 1, 2020, and ASU 2018-13 has not had a material impact on the condensed consolidated financial position or results of operations and liquidity.   The Company has evaluated all the recent accounting pronouncements and determined that there are no other accounting pronouncements that will have a material effect on the Company’s financial statements.

The components of basic and diluted earnings per share for the three months ended March 31, 2020 and 2019 were as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Three months ended March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Numerator:</td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 69%">Net income attributable to common shareholders</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 12%; text-align: right">4,338,418</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">(2,406,225</td> <td style="width: 1%">)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Effect of dilutive securities</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Convertible notes</td> <td> </td> <td> </td> <td style="text-align: right">(6,035,559</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Net loss for diluted earnings per share</td> <td> </td> <td> </td> <td style="text-align: right">(1,697,141</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Denominator:</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Weighted-average number of common shares outstanding during the period</td> <td> </td> <td> </td> <td style="text-align: right">2,952,171</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">481,827</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Dilutive effect of convertible notes payable</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">8,973,616</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Common stock and common stock equivalents used for diluted earnings per share</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">11,925,787</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">481,827</td> <td> </td></tr> </table>

We have identified the following revenues by revenue source:   <table cellspacing="0" cellpadding="0" style="width: 100%; background-color: white; border-collapse: collapse"> <tr> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 48px"> </td> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; vertical-align: top; width: 24px">1.</td> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; vertical-align: top">Medical care providers</td></tr> </table>   As of March 31, 2020, and 2019 the sources of revenue were as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="6" style="text-align: center">Three Months Ended</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 69%">Direct sales- Medical care providers, gross</td> <td style="width: 2%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 12%; text-align: right">69,685</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 11%; text-align: right">44,952</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Total sources of revenue</td> <td> </td> <td>$</td> <td style="text-align: right">69,685</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">44,952</td> <td> </td></tr> </table>

The following is a summary of equipment, at cost, less accumulated depreciation at March 31, 2020 and December 31, 2019:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">March 31, 2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">December 31, 2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 54%">Autos</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 20%; text-align: right">64,458</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 19%; text-align: right">64,458</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Medical equipment</td> <td> </td> <td> </td> <td style="text-align: right">13,969</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">13,969</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Other equipment</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">11,367</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">11,367</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right">89,794</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">89,794</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Less accumulated depreciation</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">85,505</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">83,879</td> <td> </td></tr> </table>

The following is a summary of patents less accumulated amortization at March 31, 2020 and December 31, 2019:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">March 31, 2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">December 31, 2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 54%">Patents</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 20%; text-align: right">4,500,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 19%; text-align: right">4,500,000</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Less accumulated amortization</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">1,455,548</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">1,293,820</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid">$</td> <td style="border-bottom: black 1.5pt solid; text-align: right">3,044,452</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid">$</td> <td style="border-bottom: black 1.5pt solid; text-align: right">3,206,180</td> <td> </td></tr> </table>

The estimated future amortization expense related to patents as of March 31, 2020 is as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid">Twelve Months Ending March 31,</td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Amount</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 78%; padding-left: 10pt">2021</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 18%; text-align: right">646,910</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">2022</td> <td> </td> <td> </td> <td style="text-align: right">646,910</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">2023</td> <td> </td> <td> </td> <td style="text-align: right">646,910</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">2024</td> <td> </td> <td> </td> <td style="text-align: right">646,910</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">2025</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">456,812</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Total</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">3,044,452</td> <td> </td></tr> </table>

The Company has authorized 5,000,000 shares of preferred stock which have been designated as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Number of Shares</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Number of Shares Outstanding</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Par</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Liquidation</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Authorized</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">at March 31, 2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Value</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Value</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 30%">Series AA</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 16%; text-align: right">1,000,000</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 18%; text-align: right">25,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">0.0010</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">-</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Preferred Series B</td> <td> </td> <td> </td> <td style="text-align: right">50,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">600</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">0.0001</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">100</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Preferred Series C</td> <td> </td> <td> </td> <td style="text-align: right">8,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">878</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">0.0001</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">1,000</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Preferred Series D</td> <td> </td> <td> </td> <td style="text-align: right">20,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">305</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">0.0001</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">1,000</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Undesignated</td> <td> </td> <td> </td> <td style="text-align: right">3,922,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> </table>

The balance of all stock options outstanding as of March 31, 2020 is as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Weighted Average</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Weighted Average Remaining</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Aggregate</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Exercise Price</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Contractual</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Intrinsic</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Options</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Per Share</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Term (years)</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Value</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 32%">Outstanding at January 1, 2020</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 14%; text-align: right">99,833</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 14%; text-align: right">27.81</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 13%; text-align: right">2.02</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 13%; text-align: right">                   -</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Granted</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Cancelled</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Exercised</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Outstanding at March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">99,833</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">27.81</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1.77</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Exercisable at March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">96,532</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">28.36</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1.71</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td></tr> </table>

A summary of the status of the warrants granted under these agreements at March 31, 2020, and changes during the three months then ended is presented below:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Outstanding Warrants</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Weighted Average</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Weighted Average</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Remaining Contractual</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Shares</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Exercise Price Per Share</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Term (years)</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 54%; text-align: justify">Outstanding at January 1, 2020</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 12%; text-align: right">73,486</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 12%; text-align: right">306.28</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 12%; text-align: right">1.37</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Granted</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Cancelled</td> <td> </td> <td> </td> <td style="text-align: right">(271</td> <td>)</td> <td> </td> <td>$</td> <td style="text-align: right">44.35</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Exercised</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify">Outstanding at March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">73,215</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">307.25</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1.13</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify">Exercisable at March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double"> </td> <td style="border-bottom: black 2.25pt double; text-align: right">73,215</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">307.25</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1.13</td> <td> </td></tr> </table>

The Company measures the fair value of stock options and warrants issued using the Black Scholes option pricing model using the following assumptions:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Three months ended March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 63%">Expected term</td> <td style="width: 2%"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 15%; text-align: center">-</td> <td style="width: 1%; text-align: center"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 15%; text-align: center">2 years</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Exercise price</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">$19.50-$27.90</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Expected volatility</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">231%-242%</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Expected dividends</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Risk-free interest rate</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">2.45% to 2.60%</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Forfeitures</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">-</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td> </td></tr> </table>

The Company measures the conversion feature using the Black Scholes option pricing model using the following assumptions:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Three months ended March 31,</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2020</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 63%">Expected term</td> <td style="width: 2%"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 15%; text-align: center">1 month</td> <td style="width: 1%; text-align: center"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 1%; text-align: center"> </td> <td style="width: 15%; text-align: center">1 month - 1 year</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Exercise price</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">$0.09-$0.76</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">$10.70-$12.90</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Expected volatility</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">157%-249%</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">134%-147%</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Expected dividends</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Risk-free interest rate</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">0.13% to 1.54%</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">2.40% to 2.87%</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Forfeitures</td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center">None</td> <td> </td></tr> </table>

The following table presents changes in the liabilities with significant unobservable inputs (level 3) for the three months ended March 31, 2020:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Derivative</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Liability</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 77%">Balance December 31, 2019</td> <td style="width: 2%"> </td> <td style="width: 1%">$</td> <td style="width: 19%; text-align: right">10,599,690</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Issuance of convertible debt</td> <td> </td> <td> </td> <td style="text-align: right">524,742</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 10pt">Settlements by debt settlement</td> <td> </td> <td> </td> <td style="text-align: right">(1,490,765</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 10pt">Change in estimated fair value</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(6,461,402</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Balance March 31, 2020</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">3,172,265</td> <td> </td></tr> </table> The following table presents balances in the liabilities with significant unobservable inputs (Level 3) at March 31, 2020:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" style="border-bottom: black 1.5pt solid; text-align: center">Fair Value Measurements Using</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="text-align: center">Quoted Prices in Active Markets for Identical Assets</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Significant Other Observable Inputs</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Significant Unobservable Inputs</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">(Level 1)</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">(Level 2)</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">(Level 3)</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Total</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>As of March 31, 2020</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 36%; padding-left: 10pt">Derivative liability</td> <td style="width: 2%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 16%; text-align: right">-</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 12%; text-align: right"> -</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 12%; text-align: right">3,172,265</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%">$</td> <td style="border-bottom: black 1.5pt solid; width: 10%; text-align: right">3,172,265</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Total</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">-</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">-</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">3,172,265</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">3,172,265</td> <td> </td></tr> </table>

As of March 31, 2020, fixed rate notes payable outstanding totaled $1,335,903, of which $724,903 is past maturity.   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">March 31, 2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">December 31, 2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 58%">Notes payable at beginning of period</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 18%; text-align: right">6,874,795</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 18%; text-align: right">8,158,198</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Notes payable issued</td> <td> </td> <td> </td> <td style="text-align: right">236,500</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2,101,000</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Loan fees added to note payable</td> <td> </td> <td> </td> <td style="text-align: right">38,500</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">91,250</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Settlements on note payable</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Repayments of notes payable in cash</td> <td> </td> <td> </td> <td style="text-align: right">(8,000</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right">(235,000</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Less amounts converted to redeemable notes</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">(67,500</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Less amounts converted to stock</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(929,916</td> <td>)</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(3,173,153</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Notes payable at end of period</td> <td> </td> <td> </td> <td style="text-align: right">6,211,879</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">6,874,795</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Less debt discount</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(31,510</td> <td>)</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(12,649</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6,180,369</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6,862,146</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Notes payable issued to related parties</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">157,000</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">165,000</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Notes payable issued to non-related party</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6,023,369</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6,697,146</td> <td> </td></tr> </table>

The maturity dates on the notes-payable are as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Notes to</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid">12 months ending,</td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Related parties</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Non-related parties</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Total</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 43%">Past due</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%; text-align: right">5,443,879</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%; text-align: right">5,443,879</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>March 31, 2021</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">        -</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">611,000</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">611,000</td> <td> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">6,054,879</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">6,054,879</td> <td> </td></tr> </table>

Note 5 - Notes Payable   Notes Payable   During the three months ended March 31, 2020, the Company issued four fixed rate promissory notes totaling $275,000 for funding of $236,500 with original terms of six to twelve months and interest rates of 8%. If the notes are not paid at maturity, two of the four notes will bear a 22% default interest rate and the other two will bear a 24% default interest rate. As of March 31, 2020, all of the new notes remain outstanding and are not in default   During the three months ended March 31, 2020, the Company converted two previous fixed rate notes into variable rate notes in an accumulated amount of $558,250 as a result of the notes not being paid at maturity and, therefore, triggering a conditional conversion option for the noteholder. The conversion rate is 70% and 75% of the Company’s common stock based on the terms included in the variable rate notes.   The gross amount of all convertible notes with variable conversion rates outstanding at March 31, 2020 is $4,718,976 of which $2,333,576 is past maturity.   Notes payable to a related party in the aggregate amount of $157,000 were outstanding at March 31, 2020. The notes bear interest at 12% per annum. During the three months ended March 31, 2020, the Company paid $8,000 principal to this related party.   During October 2019, the Company entered into an agreement to receive a license, data delivery and ancillary marketing services in exchange for a note of $352,500 at 8% annual interest and a conversion rate of the lower of $9.00 or 82% of the lowest bid price during the five trading days prior to conversion. The note will become effective when the license period and the services start and the data is delivered.   As of March 31, 2020, fixed rate notes payable outstanding totaled $1,335,903, of which $724,903 is past maturity.   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">March 31, 2020</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">December 31, 2019</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 58%">Notes payable at beginning of period</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 18%; text-align: right">6,874,795</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 18%; text-align: right">8,158,198</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Notes payable issued</td> <td> </td> <td> </td> <td style="text-align: right">236,500</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2,101,000</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Loan fees added to note payable</td> <td> </td> <td> </td> <td style="text-align: right">38,500</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">91,250</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Settlements on note payable</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Repayments of notes payable in cash</td> <td> </td> <td> </td> <td style="text-align: right">(8,000</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right">(235,000</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Less amounts converted to redeemable notes</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">(67,500</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Less amounts converted to stock</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(929,916</td> <td>)</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(3,173,153</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Notes payable at end of period</td> <td> </td> <td> </td> <td style="text-align: right">6,211,879</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">6,874,795</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Less debt discount</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(31,510</td> <td>)</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(12,649</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6,180,369</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6,862,146</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Notes payable issued to related parties</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">157,000</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">165,000</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Notes payable issued to non-related party</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6,023,369</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6,697,146</td> <td> </td></tr> </table>   The maturity dates on the notes-payable are as follows:   <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center">Notes to</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid">12 months ending,</td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Related parties</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Non-related parties</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Total</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 43%">Past due</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%; text-align: right">5,443,879</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%; text-align: right">5,443,879</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>March 31, 2021</td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">        -</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">611,000</td> <td> </td> <td> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">611,000</td> <td> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">6,054,879</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">6,054,879</td> <td> </td></tr> </table>

Note 11 – Subsequent Events   Subsequent to March 31, 2020, an aggregate of 1,854,635 shares of restricted common stock were issued on the conversion of $123,150 of principal and $27,413 of accrued interest pursuant to Variable Notes.   Subsequent to March 31, 2020, the Company issued 969,766 shares of common stock and 56,094 shares of restricted common stock pursuant to the conversion of 104 Series C at $,1000 stated value.   Subsequent to March 31, 2020, an aggregate of 409,000 shares of restricted common stock were issued pursuant to a Securities Purchase Agreement as a result of the issuance of a debenture   Subsequent to March 31, 2020, an aggregate of 385,963 shares of restricted common stock were issued pursuant to a Equity Line Purchase Agreement.   Subsequent to March 31, 2020, the Company entered into a Note Modification and Forbearance Agreement with lenders holding approximately $4,500,00 of Convertible Debt.   Subsequent to March 31, 2020, the Company entered into an Equity Line Purchase Agreement that requires the Company to apply at least 50% of the proceeds of puts to the payment of certain variable rate convertible notes.   Subsequent to March 31, 2020, the Company issued one fixed rate debenture for an aggregate amount of $525,000, with maturity of 1 year and carrying coupon of 10% or 24% upon event of default. This debenture is convertible into shares of common stock at the option of the holder upon an event of default.   As a result of these issuances, the total number of common shares outstanding is 10,503,151, Preferred B shares outstanding is 600, Preferred C shares outstanding is 720 and Preferred D shares outstanding is 305.   On May 17, 2020, the Company received a letter (the “Letter”) from an attorney representing Auctus Fund, LLC (“Auctus”), a lender to the Company, which claimed that a convertible promissory note in the original principal amount of $275,250 (the “Note”) was “in default”. The Letter, among other things, threatened litigation against the Company and its officers for damages and liquidated damages. To the Company’s knowledge no action has been initiated in any court with respect to the Note. In the event Auctus were to commence litigation, the Company would defend the same vigorously and believes it has both valid defenses to any claims by and substantial counter-claims against Auctus.   In order to encourage the holders of its Series C Preferred Stock to affect conversions into common stock, the Company has issued a “bonus” of 20% of the shares issued upon conversion to converting shareholders. Management views these shares as newly issued and not issued upon conversion of the Series C Preferred Stock. Accordingly, such shares are subject to a standard legend regarding lack of registration under the Securities Act of 1933, as amended.   On June 11, 2020, the Company granted options for the purchase of an aggregate of 74,668,000 shares at $0.1401, the then price of the Company’s common stock on the OTCQB, to 13 consultants to the Company. The options are of three year’s duration, are not immediately exercisable and prohibit any exercise which would cause the holder to become a more than 4.99% holder of the Company’s common stock. The Company is obligated to file a registration statement with respect to the shares issuable upon exercise of the options.   On June 8, 2020, the Company entered into a twelve-month consulting agreement for corporate awareness services providing for the payment cash fees of $5,000 per month and the issuance of 25,000 shares of common stock per month. 25,000 shares have been issued.

The condensed consolidated financial statements have been retroactively restated to reflect the 1,000-for-1-reverse stock split that occurred in December 20, 2019.

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1,000,000 authorized and 25,000 issued and outstanding at March 31, 2020 and December 31, 2019 Convertible preferred stock Common stock, $0.0001 par value; 2,500,000,000 shares authorized; 7,213,661 and 1,189,204 shares issued and outstanding as of March 31, 2020 and December 31, 2019 Additional paid-in capital Stock subscriptions Accumulated deficit Total shareholders' deficit Total liabilities and shareholders' deficit Allowance for doubtful accounts receivable Discounts on notes payable current Series C preferred stock liability, discounts Super AA super voting preferred stock, par value Super AA super voting preferred stock, shares authorized Super AA super voting preferred stock, shares issued Super AA super voting preferred stock, shares outstanding Convertible preferred stock, par value Convertible preferred stock, shares authorized Convertible preferred stock, shares issued Convertible preferred stock, shares outstanding Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Revenue Cost of revenue Gross profit Operating expenses Loss from operations Other income (expense) Change in fair value of derivative liability Gain (loss) on settlement of debt Interest expense, net Other income (expense) Income (Loss) before income taxes Provision for income taxes Net Income (Loss) Basic Income (Loss) per share Diluted Income (Loss) per share Weighted average common share outstanding: Basic Diluted Reverse stock split Statement of Cash Flows [Abstract] Operating activities: Net Income (Loss) Adjustments to reconcile net income (loss) to cash used in operating activities: Depreciation and amortization expense Fair value of equity issued for services Loss (gain) on extinguishment of debt Amortization of note discount and original issue discount Amortization of discount on Series C Preferred stock liability Non-cash interest expense Non-cash value of stock, options and warrants issued for services and notes Change in fair value of derivative liability EX-101.PRE 9 endv-20200331_pre.xml XBRL PRESENTATION FILE XML 10 R26.htm IDEA: XBRL DOCUMENT

Notes Payable (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of Notes Payable

As of March 31, 2020, fixed rate notes payable outstanding totaled $1,335,903, of which $724,903 is past maturity.

	March 31, 2020			December 31, 2019

Notes payable at beginning of period	$	6,874,795		$	8,158,198
Notes payable issued		236,500			2,101,000
Loan fees added to note payable		38,500			91,250
Settlements on note payable		-			-
Repayments of notes payable in cash		(8,000	)		(235,000	)
Less amounts converted to redeemable notes		-			(67,500	)
Less amounts converted to stock		(929,916	)		(3,173,153	)
Notes payable at end of period		6,211,879			6,874,795
Less debt discount		(31,510	)		(12,649	)
	$	6,180,369		$	6,862,146

Notes payable issued to related parties	$	157,000		$	165,000
Notes payable issued to non-related party	$	6,023,369		$	6,697,146

Schedule of Maturity Dates of Notes Payable

The maturity dates on the notes-payable are as follows:

	Notes to
12 months ending,	Related parties		Non-related parties		Total

Past due	$		$	5,443,879	$	5,443,879
March 31, 2021		-		611,000		611,000
	$		$	6,054,879	$	6,054,879

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Organization and Nature of Business (Tables)

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Earnings (Loss) Per Share

The components of basic and diluted earnings per share for the three months ended March 31, 2020 and 2019 were as follows:

	Three months ended March 31,
	2020			2019
Numerator:
Net income attributable to common shareholders	$	4,338,418		$	(2,406,225	)

Effect of dilutive securities
Convertible notes		(6,035,559	)		-
Net loss for diluted earnings per share		(1,697,141	)		-
Denominator:
Weighted-average number of common shares outstanding during the period		2,952,171			481,827
Dilutive effect of convertible notes payable		8,973,616			-
Common stock and common stock equivalents used for diluted earnings per share		11,925,787			481,827

XML 12 R43.htm IDEA: XBRL DOCUMENT

Shareholders' Deficit - Schedule of Warrants Outstanding (Details) - Warrant [Member]	3 Months Ended
	Mar. 31, 2020 $ / shares shares
Shares Outstanding, Beginning Balance \| shares	73,486
Shares, Granted \| shares
Shares, Cancelled \| shares	(271)
Shares, Exercised \| shares
Shares Outstanding, Ending Balance \| shares	73,215
Shares Exercisable, Ending Balance \| shares	73,215
Weighted-Average Exercise Price, Outstanding Beginning Balance \| $ / shares	$ 306.28
Weighted-Average Exercise Price, Granted \| $ / shares
Weighted average Exercise price, Cancelled \| $ / shares	44.35
Weighted-Average Exercise Price, Exercised \| $ / shares
Weighted-Average Exercise Price, Outstanding Ending Balance \| $ / shares	307.25
Weighted-Average Exercise Price, Exercisable Ending Balance \| $ / shares	$ 307.25
Weighted Average Remaining Contractual Term (years), Outstanding Beginning	1 year 4 months 13 days
Weighted Average Remaining Contractual Term (years), Outstanding Ending	1 year 1 month 16 days
Weighted Average Remaining Contractual Term (years), Exercisable Ending	1 year 1 month 16 days

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Fair Value Measurements - Schedule of Fair Value of Derivative Liability (Details) - Significant Unobservable Inputs (Level 3) [Member]	3 Months Ended
	Mar. 31, 2020 USD ($)
Derivative Liability, beginning	$ 10,599,690
Issuance of convertible debt	524,742
Settlements by debt settlement	(1,490,765)
Change in estimated fair value	(6,461,402)
Derivative Liability, ending	$ 3,172,265

XML 14 R7.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical)	Dec. 20, 2019
Statement of Cash Flows [Abstract]
Reverse stock split	1,000-for-1-reverse stock split

XML 15 R3.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Allowance for doubtful accounts receivable	$ 0	$ 0
Discounts on notes payable current	31,510	12,649
Series C preferred stock liability, discounts		$ 766
Super AA super voting preferred stock, par value	$ 0.001	$ 0.001
Super AA super voting preferred stock, shares authorized	1,000,000	1,000,000
Super AA super voting preferred stock, shares issued	25,000	25,000
Super AA super voting preferred stock, shares outstanding	25,000	25,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	2,500,000,000	2,500,000,000
Common stock, shares issued	7,213,661	1,189,204
Common stock, shares outstanding	7,213,661	1,189,204
Series B Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized	50,000	50,000
Convertible preferred stock, shares issued	600	600
Convertible preferred stock, shares outstanding	600	600
Series C Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized	8,000	8,000
Convertible preferred stock, shares issued	878	1,814
Convertible preferred stock, shares outstanding	878	1,814
Series D Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized	20,000	20,000
Convertible preferred stock, shares issued	305	255
Convertible preferred stock, shares outstanding	305	255

XML 17 R14.htm IDEA: XBRL DOCUMENT

Notes Payable

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Notes Payable

Note 5 - Notes Payable

Notes Payable

The gross amount of all convertible notes with variable conversion rates outstanding at March 31, 2020 is $4,718,976 of which $2,333,576 is past maturity.

As of March 31, 2020, fixed rate notes payable outstanding totaled $1,335,903, of which $724,903 is past maturity.

	March 31, 2020			December 31, 2019

Notes payable at beginning of period	$	6,874,795		$	8,158,198
Notes payable issued		236,500			2,101,000
Loan fees added to note payable		38,500			91,250
Settlements on note payable		-			-
Repayments of notes payable in cash		(8,000	)		(235,000	)
Less amounts converted to redeemable notes		-			(67,500	)
Less amounts converted to stock		(929,916	)		(3,173,153	)
Notes payable at end of period		6,211,879			6,874,795
Less debt discount		(31,510	)		(12,649	)
	$	6,180,369		$	6,862,146

Notes payable issued to related parties	$	157,000		$	165,000
Notes payable issued to non-related party	$	6,023,369		$	6,697,146

The maturity dates on the notes-payable are as follows:

	Notes to
12 months ending,	Related parties		Non-related parties		Total

Past due	$		$	5,443,879	$	5,443,879
March 31, 2021		-		611,000		611,000
	$		$	6,054,879	$	6,054,879

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Organization and Nature of Business

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Business

Note 1 - Organization and Nature of Business

Basis of Presentation and Principles of Consolidation

Going Concern

Reverse Split

Use of Estimates

Earnings (Loss) Per Share

	Three months ended March 31,
	2020			2019
Numerator:
Net income attributable to common shareholders	$	4,338,418		$	(2,406,225	)

Effect of dilutive securities
Convertible notes		(6,035,559	)		-
Net loss for diluted earnings per share		(1,697,141	)		-
Denominator:
Weighted-average number of common shares outstanding during the period		2,952,171			481,827
Dilutive effect of convertible notes payable		8,973,616			-
Common stock and common stock equivalents used for diluted earnings per share		11,925,787			481,827

Accounts Receivable

Research and Development

Recently Issued Accounting Pronouncements

XML 19 R18.htm IDEA: XBRL DOCUMENT

Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 9 – Commitments and Contingencies

Legal Matters

The Company may become involved in various legal proceedings in the normal course of business.

XML 20 R33.htm IDEA: XBRL DOCUMENT

Property, Plant and Equipment - Summary of Property and Equipment (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment, gross	$ 89,794	$ 89,794
Less accumulated depreciation	85,505	83,879
Property, Plant and Equipment, net	4,289	5,915
Autos [Member]
Property, Plant and Equipment, gross	64,458	64,458
Medical Equipment [Member]
Property, Plant and Equipment, gross	13,969	13,969
Other Equipment [Member]
Property, Plant and Equipment, gross	$ 11,367	$ 11,367

XML 21 R37.htm IDEA: XBRL DOCUMENT

Notes Payable (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

Oct. 31, 2019

Mar. 31, 2020

Mar. 31, 2019

^[1]

Dec. 31, 2019

Dec. 31, 2018

Proceeds from note payable

$ 236,500

$ 320,000

Debt instrument, interest rate

8.00%

Debt instrument face amount

$ 352,500

Note payable related parties

157,000

$ 165,000

Conversion price per share

$ 9.00

Debt conversion description

Four Promissory Notes [Member]

Promissory notes

275,000

Proceeds from note payable

$ 236,500

Debt instrument description

Debt instrument, interest rate

8.00%

Four Promissory Notes [Member] | Minimum [Member]

Debt instrument term

6 months

Four Promissory Notes [Member] | Maximum [Member]

Debt instrument term

12 months

Two Promissory Notes [Member]

Debt default interest rate

22.00%

Other Two Promissory Notes [Member]

Debt default interest rate

24.00%

Two Fixed Rate Notes [Member] | Note Holder [Member]

Debt instrument face amount

$ 558,250

Two Fixed Rate Notes [Member] | Minimum [Member] | Note Holder [Member]

Debt instrument, interest rate

70.00%

Two Fixed Rate Notes [Member] | Maximum [Member] | Note Holder [Member]

Debt instrument, interest rate

75.00%

Convertible Debentures One [Member]

Convertible debentures outstanding amount

$ 4,718,976

Convertible Debentures One [Member] | Past Maturity [Member]

Convertible debentures outstanding amount

2,333,576

Notes Payable [Member]

Promissory notes

$ 6,211,879

$ 6,874,795

$ 8,158,198

Notes Payable [Member] | Related Party [Member]

Debt instrument, interest rate

12.00%

Note payable related parties

$ 157,000

Principal payment of debt

8,000

Notes Payable One [Member]

Promissory notes

1,335,903

Notes Payable Two [Member]

Promissory notes

$ 724,903

[1]	The condensed consolidated financial statements have been retroactively restated to reflect the 1,000-for-1-reverse stock split that occurred in December 20, 2019.

XML 22 R19.htm IDEA: XBRL DOCUMENT

Concentrations

3 Months Ended

Mar. 31, 2020

Risks and Uncertainties [Abstract]

Concentrations

Note 10 – Concentrations

Sales

During the three months ended March 31, 2020, we had two significant customers which accounted for 28% and 9% of sales.

Supplier

Accounts Receivable

At March 31, 2020, we had one customer which accounted for 100% of our account receivable balances.

XML 23 R15.htm IDEA: XBRL DOCUMENT

Shareholders' Deficit

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Shareholders' Deficit

Note 6 - Shareholders’ Deficit

Preferred Stock

The Company has authorized 5,000,000 shares of preferred stock which have been designated as follows:

	Number of Shares		Number of Shares Outstanding		Par		Liquidation
	Authorized		at March 31, 2020		Value		Value
Series AA		1,000,000		25,000	$	0.0010	$	-
Preferred Series B		50,000		600	$	0.0001	$	100
Preferred Series C		8,000		878	$	0.0001	$	1,000
Preferred Series D		20,000		305	$	0.0001	$	1,000
Undesignated		3,922,000		-		-		-