UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 20182019

OR

☐          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 000-53601

TRUE NATURE HOLDING, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (844) 383-8689

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

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act: None.

As of November 12, 2018, 29,697,99611, 2019, 72,789,330 shares of the registrant’s common stock, $0.01 par value, were outstanding. 

Table Table of ContentsContents

PART I – FINANCIAL INFORMATION

TRUE NATURE HOLDING, INC.

Condensed Consolidated Balance Sheets

(unaudited)

The accompanying notes are an integral part of the Condensed Consolidated Financial StatementsStatements.

TRUE NATURE HOLDING, INC.

Unaudited Condensed Consolidated Statements of Operations

The accompanying notes are an integral part of the Condensed Consolidated Financial StatementsStatements.

TRUE NATURE HOLDING, INC.

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. 

TRUE NATURE HOLDING, INC.

Unaudited Condensed Consolidated Statement of Cash Flows

The accompanying notes are an integral part of the Condensed Consolidated Financial StatementsStatements.

TRUE NATURE HOLDING, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Description of Business

Company Overview

True Nature Holding, Inc. (the “Company”“Company,” “we,” “us,” or “our”), previously known as Trunity Holdings, Inc., a Delaware corporation, became a publicly-traded company through a reverse triangular merger with Brain Tree International, Inc., a Utah corporation (“BTI”). BTI was incorporated on July 26, 1983 to specialize in the development of high technology products or applications including, but not limited to, electronics, computerized technology, new technological product fields, and precious metals. Trunity Holdings, Inc. was the parent company of the priorour educational business, named Trunity, Inc., which was formed on July 28, 2009 through the acquisition of certain intellectual property byfrom its three founders. On December 9, 2015 the Company made a decision to restructure Trunity Holdings, Inc., having acquired Newco4pharmacy, LLC, a development stage business aimed at a roll-up of compounding pharmacy businesses. As a part of such restructuring, we competed a “spin out” transaction of our educational business line to our shareholders as of December 31, 2015.

True Nature Holding, Inc.Our business during 2018, which has continued into 2019 is focused in the area of software and solutions, predominantly in the healthcare sector, generally described as the healthcare information and technology (HCIT) market. We announced plans for a corporation organized underportfolio of health care technology companies focused on, but not limited to the lawsfollowing areas: population health management, POS/Data gathering solutions, electronic health records optimization, healthcare IT solutions, technology and artificial intelligence to improve outcomes, HIPAA security and augmentation using virtual care. We are developing, and seeking to acquire, integrate and deploy scalable technology solutions that reduce cost, improve care and increase efficiency. Our core product, a personal healthcare records application called SimpleHIPAA and SimpleHIPAA for Vets and Pets is in final testing with our initial client.

While this focus continues, we are also evaluating other applications, generally, but not exclusively in the healthcare area. We believe that new technologies such as voice recognition, virtual reality and robotics will all provide excellent vehicles to update traditional information management systems and will find quick acceptance in the healthcare field as well as other large and more traditional markets. We believe the need for compliance in other industries, similar to the need in healthcare for HIPAA and data security represents opportunity for growth over and above our healthcare efforts.

Within the healthcare arena one of the statemost active areas involves software that provides “interoperability”, the interfacing of Delawaresystems and data so that information may be shared effectively. We believe there will be many opportunities in this application area, as older systems are integrated with principal offices locatednewer, or more specialized systems, but we have not taken any actions in Atlanta, Georgia. On January 16, 2016, the Company changed the equity structurepursuit of these opportunities and no guarantee can be made if we enter this space, that included a reverse split of onewe will be successful. These same needs exist in other market areas and we may consider applications for 101, such that all holders of 101 shares of common stock issued and outstanding prior to the effective date of the reverse split would own 1 share of common stock upon the effect date of the reverse split. In addition, the Company amended its Articles of Incorporation  (i) to increase its authorized capital stock to 510,000,000 shares which consists of 500,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share and (ii) to change its name from Trunity Holdings, Inc. to True Nature Holding, Inc. (there was no change in the stock symbol “TNTY”).these markets as well as our healthcare efforts.

Note 2 – Summary of Significant Accounting Policies

Basis of Accounting – The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to interim financial reporting as prescribed by the Securities and Exchange Commission (the “SEC”). The results for the interim periods are not necessarily indicative of results for the entire year. These interim financial statements do not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”), and should be read in conjunction with the consolidated financial statements and notes thereto filed with the SEC in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.2018. In the opinion of management, the unaudited Condensed Consolidated Financial Statements contained in this report include all known accruals and adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods reported herein. Any such adjustments are of a normal recurring nature.

Use of Estimates - The preparation of these financial statements requires our management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment.

Comprehensive Loss – Comprehensive income (loss) as defined includes all changes in equity during a period from non-owner sources. Items included in the Company’s comprehensive loss consist of unrealized gains (losses) on securities.

Cash -All highly liquid investments with a maturity date of three months or less at the date of purchase are cash equivalents.

Revenue Recognition-The restructured entity of True Nature Holding, Inc. which is focused on acquiring a series of businesses which specialize in compounding pharmacy activities, has recognized no revenues during the three and nine months ended September 30, 2018 and September 30, 2017. In fiscal 2018, the Company will recognize revenues if all of the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured.

We generate revenue from licensing and other software services from our web-based software to individuals and retailers of services to the pet care industry. We recognize licensing fees and other software services as revenue over the period of the contract at the time that the computer software is delivered and accepted by the customer, the selling price is fixed, and collection is reasonably assured, provided no significant obligations remain. We consider authoritative guidance on multiple deliverables in determining whether each deliverable represents a separate unit of accounting.

Deferred revenues represent billingsRevenue Recognition – On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition (Topic 605). Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on January 1, 2018.

Under Topic 606, revenue is recognized when control of the promised goods or cash receivedservices is transferred to our customers, in excess ofan amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognizable on service agreements that are not accounted for as revenues.recognition through the following steps:

Stock-Based Compensation-We recognize the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options are estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

Equity instruments issued to those other than employees are recorded on the basis of the fair value of the instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant.

Convertible Instruments-The Company reviews the terms of convertible debt and equity instruments to determine whether there are conversion features or embedded derivative instruments including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where the convertible instrument contains more than one embedded derivative instrument, including conversion options that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single compound instrument. Also, in connection with the sale of convertible debt and equity instruments, the Company may issue free standing warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. When convertible debt or equity instruments contain embedded derivative instruments that are to be bifurcated and accounted for separately, the total proceeds allocated to the convertible host instruments are first allocated to the fair value of the bifurcated derivative instrument. The remaining proceeds, if any, are then allocated to the convertible instruments themselves, usually resulting in those instruments being recorded at a discount from their face amount. When the Company issues debt securities, which bear interest at rates that are lower than market rates, the Company recognizes a discount, which is offset against the carrying value of the debt. Such discount from the face value of the debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to income. In addition, certain conversion features are recognized as beneficial conversion features to the extent the conversion price as defined in the convertible note is less than the closing stock price on the issuance of the convertible notes.

Derivative Financial Instruments- Derivatives are recorded on the condensed consolidated balance sheet at fair value. The conversion features of the convertible notes are embedded derivatives and are separately valued and accounted for on the consolidated balance sheet with changes in fair value recognized during the period of change as a separate component of other income/expense. Fair values for exchange-traded securities and derivatives are based on quoted market prices. The pricing model the Company uses for determining the fair value of its derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities.

The following assumptions were used for the valuation of the derivative liability related to the convertible notes that contain a derivative component during the three months ended September 30, 2019:

Common Stock Purchase Warrants-The Company accounts for common stock purchase warrants in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Accounting for Derivative Instruments and Hedging Activities. As is consistent with its handling of stock compensation and embedded derivative instruments, the Company’s cost for stock warrants is estimated at the grant date based on each warrant’s fair-value as calculated by the BSM option-pricing model value method for valuing the impact of the expense associated with these warrants.

Stockholders’ Equity-Shares of common stock issued for other than cash have been assigned amounts equivalent to the fair value of the service or assets received in exchange. Common stock share and per share amounts in these financial statements have been adjusted for the effects of a one for 101 reverse stock split that occurred in January 2016.

Per Share Data-Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to warrants, options and convertible instruments.

The Company has excluded all common equivalent shares outstanding for warrants, options and convertible instruments to purchase common stock from the calculation of diluted net loss per share because all such securities are antidilutiveanti-dilutive for the periods presented. As of September 30, 2018 and December 31, 2017,2019, the Company had 142,653outstanding 1,425,000 warrants, 67,879 options, and 36,135,065 shares issuable pursuant to convertible debt which were excluded from the calculation of diluted net loss; as of December 31, 2018, the Company had outstanding 1,167,653 warrants and 67,879 options outstanding excluded from the calculation of diluted net loss.

Income Taxes- The Company accounts for income taxes under the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s condensed consolidated financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than possible enactments of changes in the tax laws or rates.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has determined that a valuation allowance is needed due to recent taxable net operating losses, the sale of profitable divisions and the limited taxable income in the carry back periods. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and certain tax loss carryforwards, less any valuation allowance.  The following table reflects the deferred tax asset balance at September 30, 2019:

The Company accounts for uncertain tax positions as required in that a position taken or expected to be taken in a tax return is recognized in the condensed consolidated financial statements when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company does not have any material unrecognized tax benefits. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as components of interest expense and other expense, respectively, in arriving at pretax income or loss. The Company does not have any interest and penalties accrued. The Company is generally no longer subject to U.S. federal, state, and local income tax examinations for the years before 2012.

Business Combinations- The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimates of relevant revenue or other targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the condensed consolidated financial position, statements of operations or cash flows in the period of the change in the estimate.

Impairment of Long-Lived Assets-Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed would be separately presented in the condensed consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the condensed consolidated balance sheet, if material. No impairment losses have been realized for the periods presented.

Financial Instruments and Fair Values-The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use various valuation methodologies and prioritize the use of observable inputs. We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market:

Level 1 – inputs include exchange quoted prices for identical instruments and are the most observable.

Level 2 – inputs include brokered and/or quoted prices for similar assets and observable inputs such as interest rates.

Level 3 – inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the asset or liability.

The use of observable and unobservable inputs and their significant in measuring fair value are reflected in our hierarchy assessment. The carrying amount of cash, prepaid assets, accounts payable and accrued liabilities approximates fair value due to the short-term maturities of these instruments. Because cash and cash equivalents are readily liquidated, management classifies these values as Level 1. The fair value of the debentures approximate their book value as the instruments are short-term in nature and contain market rates of interest. Because there is no ready market or observable transactions, management classifies the debentures as Level 3.

Recently Issued Accounting Standards-There are various other updates recently issued, most of which represent technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s condensed consolidated financial position, results of operations or cash flows.

NoteNote 3 – Financial Condition and Going Concern

As of September 30, 2018,2019, the Company had cash of $9,110,$851, current liabilities of $1,481,393,$2,618,732, and has incurred a loss from operations. True Nature Holding’s principal operation is the development and deployment of software and systems for the healthcare marketplace. The Company develops solutions in a) healthcare records, b) the sale of applications in the health and wellness area from 3^rd parties in addition to its own developed products. The Company is also performing consulting services to certain entities in the pharmacy, medical and veterinary services area. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to execute its business plan.

As a result of these factors, there is substantial doubt about the ability of the Company to continue as a going concern. The Company’s continuance is dependent on raising capital and generating revenues sufficient to sustain operations. The Company believes that the necessary capital will be raised and has entered into discussions to do so with certain individuals and companies. However, as of the date of these condensed consolidated financial statements, no formal agreement exists.

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions. 

Note 4 – Related Party Transactions

Nine months ended September 30, 2019:

On March 11, 2019, the Company issued 100,000 shares of common stock to its President as compensation and charged the fair value in the amount of $8,740 to operations.

On March 11, 2019, the Company issued 100,000 shares of common stock to a board member as compensation and charged the fair value in the amount of $8,740 to operations.

On July 29,2019, the Company cancelled 300,000 shares of common stock previously issued to its former President. The par value of these shares in the amount of $3,000 was charged to paid-in capital during the three months ended September 30, 2019.

On August 10, 2019, the Company issued 1,000,000 shares of common stock with a fair value of $60,000 to a board member pursuant to a director advisory agreement. The fair value of these shares will be recognized ratably over the vesting period; during the three months ended September 30, 2019, the amount of $37,054 was charged to operations in connection with these shares.

On August 10, 2019, the Company issued 775,000 shares of common stock with a fair value of $46,500 to a board member pursuant to a director advisory agreement. The fair value of these shares will be recognized ratably over the vesting period; during the three months ended September 30, 2019, the amount of $28,325 was charged to operations in connection with these shares.

On August 10, 2019, the Company issued 200,000 shares of common stock with a fair value of $12,000 to a board member pursuant to a director advisory agreement. The fair value of these shares will be recognized ratably over the vesting period; during the three months ended September 30, 2019, the amount of $12,000 was charged to operations in connection with these shares.

During the nine months ended September 30, 2019, the Company accrued the amount of $2,875 in connection with the vested portion of a common stock award granted to its President.

At September 30, 2019, the Company has the following amounts due to related parties:

Nine months ended September 30, 2018:

On January 29, 2018, the Company converted outstanding accounts payable due to an investor in the amount of $54,815 for 527,064 restricted shares of the Company’s common stock.  The cost to the Company for this issuance is $54,815, based on the closing price on the date of issuance.  As the conversion amount equals the share value, no gain or loss was recorded.

On January 29, 2018, the Company converted accrued officer compensation in the amount of $93,333 into 897,432 restricted shares of the Company’s common stock.  The cost to the Company for this issuance is $93,333, based on the closing price on the date of issuance.  As the conversion amount equals the share value, no gain or loss was recorded.

On April 23, 2018, the Company issued 600,000 shares of common stock with a value of $48,000 to an investor, and an additional 600,000 shares of common stock with a value of $48,000 to a not for profit entity at the request of the investor due to conversion of $96,000 of accounts payable, no gain or loss was recognized due to stock price matching the amount converted.

On April 23, 2018, the Company issued 500,000 shares of common stock to its President, subject to certain vesting conditions:  (i) 100,000 shares vest when the President has been employed 90 days from the effective date of the employment agreement; (ii) 100,000 shares vest when the President has been employed one year from the effective date of the employment agreement; (iii) 100,000 shares vest when the President has been employed two years from the effective date of the employment agreement; (iv) 100,000 shares vest when the Company completes a capital raise of $2,000,000; (v) 100,000 shares vest when the Company reports $20,000,000 in gross revenue.  The Company valued the shares at the fair market value of $0.10 per share, or a total value of $50,000. During the three months ended JuneSeptember 30, 2018, the total amount of $13,740 was charged to operations pursuant to the various vesting conditions. On September 18, 2018, the Company accepted the resignation of its President, and 400,000 of these shares were forfeited. 

On June 13, 2018, the Company issued 100,000 shares of common stock with a fair value of $8,380 to its President as a bonus.  

On June 14, 2018, the Company issued 100,000 shares of common stock with a fair value of $9,000 to its chairman as a bonus.  Also, on June 14, 2018, the Company issued 100,000 shares of common stock with a fair value of $9,000 to a board member as a bonus.

On June 14, 2018, the Company issued to an investor 1,100,000 restricted shares of the Company’s common stock with a fair value of $95,700 for reimbursement of $60,000 of accrued expenses paid on behalf of the Company and for services provided.  The Company recognized a loss on conversion of $35,700 due to share price exceeding the value of the stock granted.

The Company accrued officer’s compensation during the sixnine months ended JuneSeptember 30, 2018 in the amount of $50,000 and imputed interest expense of $4,500 on a note payable to a related party in the amount of $75,000 (see note 5).

On July 24, 2018, the Company issued 312,499 shares of common stock with a fair value of $25,000 to its President for salary.

On July 24, 2018, the Company issued 369,500 shares of common stock with a fair value of $29,560 to its Chief Operating Officer for accrued salary.

On August 14, 2018, the Company issued to an investor 249,902 restricted shares of the Company’s common stock with a fair value of $22,491 for reimbursement of $22,491 of accrued expenses paid on behalf of the Company and for services provided. 

On August 14, 2018, the Company issued to an investor 2,250,098 restricted shares of the Company’s common stock with a fair value of $202,509 as compensation for consulting services provided.  The Company also accrued $58,000 for additional consulting services provided by the investor.  

On September 24, 2018, the Company issued 100,000 shares of common stock with a fair value of $13,000 to each of two board members for services provided (a total of 200,000 shares of common with an aggregate fair value of $26,000).

Nine months ended September 30, 2017:

On January 24, 2017, the Board granted to a member of Board of Directors 25,000 shares of restricted common stock as consideration for services. The Member of the Board of Directors abstained from the vote as to not be voting on his own issuance. The value for the issuance was $3,500, based on the closing price on the date of the grant.

On January 25, 2017, the Board granted the newly appointed CEO and CFO 500,000 shares of restricted common shares as part of his employment compensation.  The shares are subject to reverse vesting that requires him to stay with the company for three (3) years (1/3 per year) and achieve certain management objectives to keep all of the shares.  The expense to the Company was $15,236 during the six months ended June 30, 2017.

On February 7, 2017, the Board appointed one (1) additional member to the Board of Directors. The appointed member shall receive the customary 100,000 shares of restricted common stock for their service. The cost to the Company for this issuance is $11,000, based on the closing price on the date of the grant.  The same candidate offered to buy 200,000 shares of restricted common stock at the same time. The consideration for the sale was $22,000. The transaction has no impact on earnings as the shares were priced at the same cost as the closing price on the date of the purchase.

On February 14, 2017, the Board of Directors for True Nature Holding, Inc. authorized the issuance of restricted common stock to a shareholder for consulting services.  This calculation is based on February 14, 2017 and at the market close of $0.14 per share; hereby converting the debts which are currently owed and equates to 258,637 shares, for a total cost to the Company of $36,210, based on the closing price on the date of the grant.

On February 14, 2017, the Board of Directors for True Nature Holding, Inc. authorized the issuance of restricted common stock to convert amounts owed to a vendor. This calculation is based on February 14, 2017 and at the market close of $0.14 per share; hereby converting $20,000 of debt in outstanding legal fees and expenses which are currently owed as of January 31, 2017, to 142,857 shares, for a total cost to the Company of $20,000. As the conversion amount equals the share value, no gain or loss was recorded.

On February 14, 2017, the Board authorized the issuance of restricted shares to convert the last 3 month’s salary ($4,000 per month for a total owed of $12,000) of 2016 owed to a Director serving as its Interim President. The price per share used was the closing price of $0.14 per share which equates to 85,714 shares of TNTY. This action hereby settles all outstanding past debts owed to the Director by TNTY up to February 14, 2017. As the conversion amount equals the share value, no gain or loss was recorded.

On February 14, 2017, the Board granted the newly appointed COO 500,000 shares of restricted common shares as part of his employment compensation.  The shares are subject to reverse vesting that requires him to stay with the company for three (3) years (1/3 per year) and achieve certain management objectives in order to keep all of the shares.  The expense to the Company was $11,088.

On March 8, 2017, the Board authorized the issuance of 100,000 restricted common stock to a newly appointed member of the non-executive Advisory Board. The stock was priced at the closing price of the stock at that date which was $0.30.  The expense to the Company was $30,000.

On April 28, 2017, the Board granted the newly appointed Director of Corporate Communications 500,000 shares of restricted common shares as part of his employment compensation.  The shares are subject to reverse vesting that requires him to stay with the company for three (3) years (shares vest 1/3 per year) and achieve certain management objectives to keep all of the shares.  Subsequently, the executive resigned effective August 1, 2017 and as a result 400,000 of the 500,000 shares were cancelled.  The Company charged to operations the amount of $48,000 representing the fair value of 100,000 shares of common stock during the three months ended June 30, 2017.

On July 7, 2017, the Company accepted the resignation of its CEO, who also held the positions of interim CFO and interim Secretary. At the time of his hire, the CEO  was granted 500,000 restricted shares as part of his executive compensation plan. The shares were issued subject to reverse vesting conditions. At July 7, 2017, 100,000 shares of restricted common stock have vested and the remaining 400,000 restricted shares will be canceled. The CEO  has not been paid any cash compensation. During his tenure at the Company, he accrued $33,333 in salary, which will only be paid after the Company has sufficient financing to support its operations. Dr. Jordan Balencic, the Chairman of the Board of Directors, will assume the role of interim CEO and interim CFO until a successor is appointed.

On July 10, 2017, the Company entered into an agreement with a related party whereby the amount of $75,000 in accounts payable due to the related party for services performed was converted to a note payable.  The note payable is due 90 days from the date the Company receives funding in the amount of $1,000,000.  The note is non-interest bearing unless it is not paid when due, at which time it will accrue interest at the rate of 12% per annum.

On August 10, 2017, the Company issued 500,000 shares of restricted common stock, subject to reverse vesting conditions, to the Company’s Chief Operating Officer in conjunction with his engagement effective as of February 14, 2017.

On August 10, 2017, the Company cancelled 2,150,000 shares of common stock previously held by its former Chief Executive Officer.  The par value of these shares in the amount of $21,500 was charged to additional paid-in capital on the Company's balance sheet at September 30, 2017.

On August 7, 2017, the Company committed to issue 25,000 shares of common stock to a lender for the extension of the term of a note payable. The fair value of these shares in the amount of $3,573 was charged to interest expense during the three months ended September 30, 2017, and is reported as stock payable on the Company's balance sheet at September 30, 2017.

On August 23, 2017, the Company committed to issue 30,000 shares of common stock to a consultant for services. The fair value of these shares in the amount of $2,700 was charged to operations during the three months ended September 30, 2017, and is reported as stock payable on the Company's balance sheet at September 30, 2017.

On September 26, 2017, the Company committed to issue 25,000 shares of common stock to a lender for the extension of the term of a note payable. The fair value of these shares in the amount of $1,950 was charged to interest expense during the three months ended September 30, 2017, and is reported as stock payable on the Company's balance sheet at September 30, 2017.

On September 26, 2017, the Company committed to issue 200,000 shares of common stock to an employee as compensation. The fair value of these shares in the amount of $15,600 was charged to operations during the three months ended September 30, 2017, and is reported as stock payable on the Company's balance sheet at September 30, 2017.

On September 26, 2017, the Company committed to convert accounts payable due to a consultant to the Company in the amount of $76,986 into  987,000 shares of common stock. The amount of $76,986 is reported as stock payable on the Company's balance sheet at September 30, 2017

On September 26, 2017, the Company committed to issue 200,000 shares of common stock to each of two board members, or an aggregate of 400,000 shares, for services performed.  The fair value of $31,200 was charged to operations during the three months ended September 30, 2017.

Note 5 – Debt

March 2016 Convertible Note A

On March 18, 2016, the Company issued a 12% Convertible Promissory Note (the “Convertible Note A”) in the principal amount of $60,000 to a lender. Upon issuance of the Convertible Note A, Note, the lender was awarded 15,000 restricted common stock as an origination fee which includes piggy backpiggy-back registration rights. On September 19, 2016, the Company issued the lender an additional 15,000 restricted common stock at a price of $0.30 per share to extend the term of the loan agreement indefinitely. The cost to the Company was $4,050 in interest expense.  On August 10, 2017, the Company issued 25,000 shares of common stock with a fair value of $3,750 for accrued interest through August 1, 2017 in the amount of $7,860.  In April 2018, the Company issued 75,000 shares of common stock with a value of $7,500 as consideration for an extension of the term of the loan to July 1, 2018, and on August 13, 2018, the Company issued an additional 75,000 shares of common stock with a value of $6,750 for an extension of the term of the loan to October 31, 2018. Accrued interest atDuring the nine months ended September 30, 20182019, the lender converted principal in the amount of $15,000 into 120,000 shares of common stock. The Company recorded a loss in the amount of $13,867 on this conversion. The Company accrued interest in the amount of $4,261 on this note during the nine months ended September 30, 2019. At September 30, 2019, the principal amount of the March 2016 Convertible Note A was $45,000 and December 31, 2017,accrued interest was $16,260 and $10,860, respectively.$5,740. 

Pursuant to the terms of the Convertible Note A, the Company is obligated to pay monthly installments of not less than $1,000 the first of each month commencing the month following the execution of the Convertible Note A until its maturity on September 16, 2016 at which time the Company iswas obligated to repay the full principal amount of the Convertible Note A. The Convertible Note A is convertible by the holder at any time into shares of the Company’s common stock at price of $1.00 per share, and throughout the duration of the note, the holder has the right to participate in any financing the Company may engage in upon the same terms and conditions as all other investors. The Company allocated the face value of the Convertible Note A to the shares and the note based on relative fair values, and the amount allocated to the shares of $18,750 was recorded as a discount against the note.

The beneficial conversion feature of $9,375 was recorded as a debt discount with an offsetting entry to additional paid-in capital decreasing the note payable and increasing debt discount. The debt discount is being amortized to interest expense over the term of the debt. For the year ended December 31, 2016, debt discount amortization related to the Convertible Note A was $28,125.  There was no amortization of the discount during the nine months ended September 30, 2018.2019.

May 2016 Convertible Note B

On May 19, 2016, the Company issued a 10% Convertible Promissory Note (the “Convertible Note B”) in the principal amount of $100,000 to a lender. Upon issuance of the Convertible Note B, the lender was awarded 24-month warrants to purchase up to 66,666 shares of the Company’s common stock at an exercise price of $2.50 per share. The warrants were valued at $103,086 with $100,000 as a debt discount; the additional $3,086 was expensed as additional interest expense. The debt discount was fully amortized during the year ended December 31, 2016. This obligation, including all warrants, penalties and interest due was cancelled as of September 30, 2016 in consideration of the issuance of 400,000 shares of restricted common stock valued at $120,000. At the time of conversion, the principal amount of the note was approximately $100,000 and total accrued interest thereon was $3,671. Therefore, as a result of the conversion, a loss of $16,329 recognized during the year ended December 31, 2016.

August 2014 Convertible Debentures (Series C)

As part of the restructuring all debentures issued by Trunity Holdings, Inc., to fund the former, educational business were eligible to participate in a debt conversion; however, one debenture holder that was issued a Series C Convertible Debenture (the “Series C Debenture”) in August 2014 with an aggregate face value of $100,000 in exchange for the cancellation of Series B Convertible Debentures with a carrying value of $110,833 did not convert such debenture. The Series C Debenture accrues interest at an annual rate of 10%, matured November 2015, and is convertible into our common stock at a conversion rate of $20.20 per share. The holders of the Series C Debenture also received five-year warrants to acquire up to 4,950 shares post-split of common stock for an exercise price of $20.20 per share. The former educational business allocated the face value of the Series C Debenture to the warrants and the debentures based on its relative fair values, and allocated to the warrants, which was recorded as a discount against the Series C Debenture, with an offsetting entry to additional paid-in capital. The discount was fully expensed upon execution of the new debentures as debt extinguishment costs within discontinued operations. The Company accrued interest in the amount of $8,328 on this note during the nine months ended September 30, 2019. As of September 30, 2018, and December 31, 2017,2019, the carrying value of this Series C Debenture was $110,833 and accrued interest expense of $43,816 and $35,504, respectively.was $54,915. The Series C Debenture is currently in default.

November 2014 Convertible Debentures (Series D)

As part of the restructuring all debentures issued by Trunity Holdings, Inc., to fund the former, educational business were eligible to participate in a debt conversion; however, one debenture holder that was issued a Series D Convertible Debenture (the “Series D Debenture”) in November 2014 with an aggregate face value of $10,000 in exchange for the cancellation of Series B Convertible Debenture with a carrying value of $11,333 did not participate in the debt conversion restructuring. The Series D Debenture accrues interest at an annual rate of 12%, matured November 2015, and is convertible into our common stock at a conversion rate of $16.67 per share. The holders of the Series D Debenture also received five-year warrants to acquire up to 495 shares of common stock for an exercise price of $20.20 per share on a post-split basis. The former educational business allocated the face value of the Series D Debenture to the warrants and the debentures based on their relative fair values, and allocated to the warrants, which was recorded as a discount against the Series D Debenture, with an offsetting entry to additional paid-in capital. The discount was fully expensed upon execution of the new debentures as debt extinguishment costs within discontinued operations. The Company accrued interest in the amount of $1,022 on this note during the nine months ended September 30, 2019. As of September 30, 2018, and December 31, 2017,2019, the carrying value of the Series D Debenture was $11,333 and accrued interest expense of $5,321 and $4,301, respectively.was $6,683.   The Series D Debenture is currently in default.

Short term loanTerm Loan

As a result of the acquisition of P3 Compounding of Georgia, LLC (“P3”) the Company had a short-term convertible note with a loan agency in the principal amount of $52,000 for the purchase of future sales and credit card receivables of P3. Under the terms of the receivable purchase agreement, the Company purchased an advance of $50,000 plus $2,000 for origination costs with a 10.5% daily interest rate to be repaid over 160 days at a repayment amount of $451.75 per day. As of September 30, 2018, the carrying value of this short-term loan was $74,104.  The origination fee and interest were recorded as debt discount on the date of issuance in the amount of $22,280 and $22,280 was amortized during the year ending December 31, 2016. AlthoughDuring the nine months ended September 30, 2019, principal in the amount of $74,104 was converted into 1,401,224 shares of common stock; a loss in the amount of $16,955 was recorded on this transaction. The principal balance due under this note is in default, the lender and the Company have agreed not to take any action until such time as repayment can be arranged.was $0 at September 30, 2019.

July 2017 Note

On July 10, 2017, the Company negotiated the reclassification of $75,000 in accounts payable to a loan payable (the “July 2017 Note”).  The July 2017 Note is due no later than 90 days after the receipt of a minimum of $1,000,000 of funding. The July 2017 Note bears no interest; however, if it is not paid by the due date, interest will accrue at the rate of 12% per year. During the threenine months ended September 30, 20182019, the Company imputed interest in the amount of $2,250$6,750 on the July 2017 Note.

July 2018 RU Promissory Note

On July 26, 2018, the Company entered into an agreement with Resources Unlimited NW LLC (“RU”) pursuant to which RU provides business development services to the Company for a period of six months. As compensation for these services, the Company issued RU 250,000 shares of common stock with a fair value of $20,000 and a six month note payable in the amount of $30,000 ( the(the “RU Note”). The RU Note bears interest at the rate of 12% per year; principal and interest are due on January 26, 2019. During the threenine months ended September 30, 2018,2019, the Company accrued interest in the amount of $661$1,776 on the July 2018 RU Promissory Note. During the nine months ended September 30, 2019, the Company converted principal and accrued in the amounts of $30,000 and $3,344, respectively, into an aggregate of 400,000 shares of common stock; a loss in the amount of $2,637 was recorded on this transaction. The principal balance due under this note was $0 at September 30, 2019.

Power Up Note 1

On July 5, 2018, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 1”) in the aggregate principal amount of $38,000. The Power Up Note entitles the holder to 12% interest per annum and matures on April 15, 2019.  Under the Power Up Note 1, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 1 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 1, at a price equal to 61% of the average of the lowest two trading prices during the 15 trading day period ending on the last complete trading date prior to the date of conversion, but no lower than $0.00006 (fixed price floor), provided, however, that Power Up may not convert the Power Up Note 1 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. On January 1, 2019, the Power Up Note 1 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $9,032; $9,032 of this amount was charged to interest expense during the nine months ended September 30, 2019. If the Company prepays the Power Up Note 1 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 1, then such redemption premium is 115%120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 120%125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 125%140%. After the 180th day following the issuance of the Power Up Note 1, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 1; $2,077 of this amount was credited to paid-in capital and $873 was amortizedcharged to interest expense during the threeyear ended nine months ended September 30, 2018.2019. During the year ended December 31, 2018, the Company paid principal and accrued interest in the amount of $27,764 and $2,236, respectively, on the Power Up Note 1. The Company accrued interest in the amount of $1,087$58 on Power Up Note 1this note during the threenine months ended September 30, 2018.2019. During the nine months ended September 30, 2019, the Company paid the remaining principal and accrued interest in the amount of $10,236 and $58, respectively, along with a prepayment penalty in the amount of $16,072 on the Power Up Note 1; The principal balance due under this note was $0 at September 30, 2019 as this note has been fully satisfied.

Power Up Note 2

On August 10, 2018, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 2”) in the aggregate principal amount of $33,000. The Power Up Note 2 entitles the holder to 12% interest per annum and matures on May 14, 2019. Under the Power Up Note 2, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 2 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 2, at a price equal to 61% of the average of the lowest two trading prices during the 15 trading day period ending on the last complete trading date prior to the date of conversion, but no lower than $0.00006 (fixed price floor), provided, however, that Power Up may not convert the Power Up Note 2 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. On February 5, 2019, the Power Up Note 2 became convertible; there was no discount associated with the conversion feature of Power Up Note 2. If the Company prepays the Power Up Note 2 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 2, then such redemption premium is 115%120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 120%125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 125%140%. After the 180th day following the issuance of the Power Up Note, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 2; this amount was credited to paid-in capital and $531$3,000 was amortized to interest expense during the threenine months ended September 30, 2018.2019. During the nine months ended September 30, 2019 the Company also recorded a discount to the Power Up Note 2 in the amount of $32,500 related to a beneficial conversion feature; this amount was charged to operations during the nine months ended September 30, 2019.  During the nine months ended September 30 2019, principal and accrued interest in the amount of $33,000 and $1,980, respectively, were converted into a total of 624,993 shares of the Company’s common stock. The Company recognized a loss in the amount of $34,101 on these conversions which was charged to operations during the nine months ended September 30, 2019. The Company accrued interest in the amount of $564$418 on the Power Up Note 2 during the threenine months ended September 30, 2018.2019. The principal balance due under this note was $0 at September 30, 2019 as this note has been fully satisfied.

Power Up Note 3

On September 18, 2018, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 3”) in the aggregate principal amount of $38,000. The Power Up Note 3 entitles the holder to 12% interest per annum and maturesmatured on June 30, 2019.  Under the Power Up Note 3, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 3 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 3, at a price equal to 61% of the average of the lowest two trading prices during the 1520 trading day period ending on the last complete trading date prior to the date of conversion, but no lower than $0.00006 (fixed price floor), provided, however, that Power Up may not convert the Power Up Note 3 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. On March 17, 2019, the Power Up Note 3 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $38,000; $38,000 of this amount was charged to interest expense during the nine months ended September 30, 2019. If the Company prepays the Power Up Note 3 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 3, then such redemption premium is 115%120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 120%125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 125%140%. After the 180th day following the issuance of the Power Up Note 3, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 3; this amount was credited to paid-in capital and $126$3,000 was amortized to interest expense during the threenine months ended September 30, 2018.2019. During the nine months ended September 30, 2019, principal and accrued interest in the amount of $38,000 and $2,280, respectively, were converted into a total of 1,173,632 shares of the Company’s common stock. The Company recognized a loss in the amount of $45,724 on these conversions which was charged to operations during the nine months ended September 30, 2019. The Company accrued interest in the amount of $150$1,592 on Power Up Note 3 during the threenine months ended September 30, 2018.2019. The principal balance under this note was $0 at September 30, 2019 as this note has been fully satisfied.

Power Up Note 4

On November 9, 2018, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 4”) in the aggregate principal amount of $33,000. The Power Up Note 4 entitles the holder to 12% interest per annum and matures on August 31, 2019.  Under the Power Up Note 4, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 4 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 4, at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price  shall mean 61% of the average of the lowest two trading prices during the 20 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note 4 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. On May 8, 2019, the Power Up Note 4 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $33,000; $33,000 of this amount was charged to interest expense during the nine months ended September 30, 2019. If the Company prepays the Power Up Note 3 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 3, then such redemption premium is 120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 140%. After the 180th day following the issuance of the Power Up Note 4, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 4; $3,000 was amortized to interest expense during the nine months ended September 30, 2019. The Company accrued interest in the amount of $976 on Power Up Note 4 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, principal and accrued interest in the amount of $33,000 and $1,980, respectively, were converted into a total of 1,619,444 shares of the Company’s common stock. The Company recognized a loss in the amount of $63,443 on these conversions which was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $0 at September 30, 2019 as this note has been fully satisfied.

Auctus Note

On November 26, 2018, the Company entered into a Securities Purchase Agreement with Auctus Fund, LLC (“Auctus”) pursuant to which Auctus agreed to purchase a convertible promissory note (the “Auctus Note”) in the principal amount of $125,000. The Auctus Note entitles the holder to 12% interest per annum and matures on August 26, 2019.  Pursuant to the terms of the note, the interest rate was raised to 24% effective August 27, 2019, on the portion of principal that had not been paid by the due date of the note. Under the Auctus Note, Auctus may convert all or a portion of the outstanding principal of the Auctus Note into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Auctus Note, at a price equal to the higher of the variable conversion price or $0.00003 per share.  The variable conversion price shall mean 55% of the lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Auctus may not convert the Auctus Note to the extent that such conversion would result in beneficial ownership by Auctus and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Auctus Note within 90 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 135%; if such prepayment is made between the 91st day and the 180th day after the issuance of the Auctus Note, then such redemption premium is 150%. After the 180th day following the issuance of the Auctus Note there shall be no further right of prepayment. In connection with the Auctus Note, the Company issued five-year warrants to purchase 625,000 shares of the Company’s common stock at a price of $0.10 per share. The Company valued these warrants at $39,595, and recorded this amount as a discount to the Auctus Note; $39,595 of this amount was amortized to interest expense during the nine months ended September 30, 2019. On May 25, 2019, the Auctus Note became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $93,291; $93,291 of this amount was charged to interest expense during the nine months ended September 30, 2019. The Company also recorded an original issue discount in the amount of $13,500 in connection with the Auctus Note; $13,500 was amortized to interest expense during the nine months ended September 30, 2019. The Company accrued interest in the amount of $10,685 on the Auctus Note during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability existed in connection with the variable rate conversion feature of the Auctus Note. The derivative liability related to the conversion feature was valued at $153,405, and the derivative liability related to the warrants was valued at $39,595; these amounts were charged to operations during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, principal and accrued interest in the amount of $56,587 and $11,048, respectively, along with fees in the amount of $1,000, were converted into a total of 2,600,000 shares of the Company’s common stock. The Company recognized a loss in the amount of $29,670 on these conversions which was charged to operations during the nine months ended September 30, 2019. The remaining principal balance under this note was $68,413 at September 30, 2019.

Crown Bridge Note 1

On December 19, 2018, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC (“Crown Bridge”) pursuant to which Crown Bridge agreed to purchase a convertible promissory note (the “Crown Bridge Note 1”) in the principal amount of $40,000. The Crown Bridge Note 1 entitles the holder to 12% interest per annum and matures on September 19, 2019. Pursuant to the terms of the note, the interest rate was raised to 24% effective September 20, 2019, on the portion of principal that was not paid by the due date of the note. Under the Crown Bridge Note 1, Crown Bridge may convert all or a portion of the outstanding principal of the Crown Bridge Note 1 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Crown Bridge Note 1, at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price  shall mean 55% of the lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Crown Bridge may not convert the Crown Bridge Note 1 to the extent that such conversion would result in beneficial ownership by Crown Bridge and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Crown Bridge Note 1 within 90 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 135%; if such prepayment is made between the 91st day and the 180th day after the issuance of the Crown Bridge Note 1, then such redemption premium is 140%. After the 180th day following the issuance of the Crown Bridge Note 1, there shall be no further right of prepayment. In connection with the Crown Bridge Note 1, the Company issued five-year warrants to purchase 400,000 shares of the Company’s common stock at a price of $0.10 per share. The Company valued these warrants at $34,500 and recorded this amount as a discount to the Crown Bridge Note 1; $34,500 of this amount was amortized to interest expense during the nine months ended September 30, 2019. On June 17, 2019, the Crown Bridge Note 1 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $22,039; $22,039 of this amount was charged to interest expense during the nine months ended September 30, 2019. The Company also recorded an original issue discount in the amount of $5,500 in connection with the Crown Bridge Note 1; $5,500 was amortized to interest expense during the nine months ended September 30, 2019. The Company accrued interest in the amount of $3,127 on the Crown Bridge Note 1 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, principal in the amount of $19,295 and fees in the amount of $500 were converted into a total of 700,000 shares of the Company’s common stock. The Company recognized a loss in the amount of $7,694 on this conversion which was charged to operations during the nine months ended September 30, 2019. On July 1, 2019, the Company determined that a derivative liability with a fair value of $44,325 existed in connection with the beneficial conversion feature of the Crown Bridge Note 1 and charged this amount to interest expense during the nine months ended September 30, 2019. The remaining principal balance under this note was $20,705 at September 30, 2019.

Consulting Services Note

On December 31, 2018, the Company entered into a note payable agreement with an investor for consulting services performed on behalf of the Company in the amount of $65,000 (the “Consulting Services Note”). The Consulting Services Note matures on March 21, 2020, and bears interest at the rate of 12% per annum. The Company recorded $5,834 in interest on the Consulting Services Note during the nine months ended September 30, 2019. The principal balance under this note was $65,000 at September 30, 2019.

Trade Payables Note

On December 31, 2018, the Company entered into a note payable agreement with an investor for payments of trade accounts payable made by the investor on behalf of the Company in the amount of $58,000 (the “Trade Payables Note”). The Trade Payables Note matures on March 21, 2020, and bears interest at the rate of 12% per annum. The Company recorded $5,205 in interest on the Trade Payable Note during the nine months ended September 30, 2019. The principal balance under this note was $58,000 at September 30, 2019.

Power Up Note 5

On January 2, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 5”) in the aggregate principal amount of $53,000. The Power Up Note 5 entitles the holder to 12% interest per annum and matures on October 31, 2019.  Under the Power Up Note 5, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 5 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 5, at a price equal to the higher of the variable conversion price or $0.00006 per share. The variable conversion price  shall mean 61% of the average of the lowest two trading prices during the 20 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note 5 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Power Up Note 5 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 6, then such redemption premium is 120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 140%. After the 180th day following the issuance of the Power Up Note 5, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 5; $3,000 was amortized to interest expense during the nine months ended September 30, 2019. On July 1, 2019, the Power Up Note 5 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $50,000; $50,000 of this amount was charged to interest expense during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, principal and accrued interest in the amount of $53,000 and $3,180, respectively, were converted into a total of 1,488,098 shares of the Company’s common stock. The Company recognized no gain or loss in connection with these conversions as they were made pursuant to the terms of the original agreement. The Company accrued interest in the amount of $3,289 on the Power Up Note 5 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $53,681 existed in connection with the variable rate conversion feature of the Power Up Note 5. $53,000 of this amount was charged to discount on the Power Up Note 5, and $681 was charged to interest expense. $53,000 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $0 at September 30, 2019 as this note has been fully satisfied.

Power Up Note 6

On February 11, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 6”) in the aggregate principal amount of $48,000. The Power Up Note 6 entitles the holder to 12% interest per annum and matures on November 30, 2019.  Under the Power Up Note 6, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 6 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 6, at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price shall mean 61% of the average of the lowest two trading prices during the 20 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note 6 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Power Up Note 6 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 6, then such redemption premium is 120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 140%. After the 180th day following the issuance of the Power Up Note 6, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 6; $3,000 was amortized to interest expense during the nine months ended September 30, 2019. On August 10, 2019, the Power Up Note 6 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $45,000; $45,000 of this amount was charged to interest expense during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, principal and accrued interest in the amount of $48,000 and $2,880, respectively, were converted into a total of 2,106,210 shares of the Company’s common stock. The Company recognized no gain or loss in connection with these conversions as they were made pursuant to the terms of the original agreement. The Company accrued interest on the Power Up Note 6 in the amount of $2,998 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $48,844 existed in connection with the variable rate conversion feature of the Power Up Note 6. $48,000 of this amount was charged to discount on the Power Up Note 6, and $844 was charged to interest expense. $48,000 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $0 at September 30, 2019 as this note has been fully satisfied.

Crown Bridge Note 2

On March 4, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC (“Crown Bridge”) pursuant to which Crown Bridge agreed to purchase a convertible promissory note (the “Crown Bridge Note 2”) in the principal amount of $40,000. The Crown Bridge Note 2 entitles the holder to 12% interest per annum and matures on December 4, 2019.  Under the Crown Bridge Note 2, Crown Bridge may convert all or a portion of the outstanding principal of the Crown Bridge Note 2 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Crown Bridge Note 2, at a price equal to the higher of the variable conversion price or $0.00004 per share.  The variable conversion price  shall mean 55% of the lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Crown Bridge may not convert the Crown Bridge Note 2 to the extent that such conversion would result in beneficial ownership by Crown Bridge and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Crown Bridge Note 2 within 90 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 135%; if such prepayment is made between the 91st day and the 180th day after the issuance of the Crown Bridge Note 2, then such redemption premium is 150%. After the 180th day following the issuance of the Crown Bridge Note 2, there shall be no further right of prepayment. In connection with the Crown Bridge Note 2, the Company issued five-year warrants to purchase 400,000 shares of the Company’s common stock at a price of $0.10 per share. The Company valued these warrants at $34,500 and recorded this amount as a discount to the Crown Bridge Note 2; $26,346 of this amount was amortized to interest expense during the nine months ended September 30, 2019. On August 31, 2019, the Crown Bridge Note 2 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $3,053; $960 of this amount was charged to interest expense during the nine months ended September 30, 2019. The Company also recorded an original issue discount in the amount of $5,500 in connection with the Crown Bridge Note 2; $5,500 of this amount was amortized to interest expense during the nine months ended September 30, 2019. The Company accrued interest expense in the amount of $3,971 on the Crown Bridge Note 2 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $53,681 existed in connection with the variable rate conversion feature of the Crown Bridge Note 2. $53,000 of this amount was charged to discount on the Crown Bridge Note 2, and $15,863 was charged to interest expense. $17,069 of the discount was charged to operations during the nine months ended September 30, 2019. The remaining principal balance under this note was $40,000 at September 30, 2019.

Power Up Note 7

On March 18, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 7”) in the aggregate principal amount of $43,000. The Power Up Note 7 entitles the holder to 12% interest per annum and matures on January 30, 2020.  Under the Power Up Note 7, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 7 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 7, at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price  shall mean 61% of the average of the lowest two trading prices during the 20 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note 7 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Power Up Note 7 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note , then such redemption premium is 120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 140%. After the 180th day following the issuance of the Power Up Note 7, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 7; $3,000 was amortized to interest expense during the nine months needed September 30, 2019. On September 14, 2019, the Power Up Note 7 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $40,000; $40,000 of this amount was charged to interest expense during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, principal and accrued interest in the amount of $43,000 and $2,580, respectively, were converted into a total of 3,561,625 shares of the Company’s common stock. The Company recognized a loss in the amount of $20 in connection with these conversions. The Company accrued interest in the amount of $2,675 on the Power Up Note 7 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $44,139 existed in connection with the variable rate conversion feature of the Power Up Note 7. $43,000 of this amount was charged to discount on the Power Up Note 7, and $1,139 was charged to interest expense. $43,000 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $0 at September 30, 2019 as this note has been fully satisfied.

Power Up Note 8

On April 1, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 8”) in the aggregate principal amount of $53,000. The Power Up Note 8 entitles the holder to 12% interest per annum and matures on January 30, 2020.  Under the Power Up Note 8, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 8 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 8, at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price  shall mean 61% of the average of the lowest two trading prices during the 20 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note 8 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Power Up Note 8 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 8, then such redemption premium is 120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 1405. After the 180th day following the issuance of the Power Up Note 8, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 8; $1,815 was amortized to interest expense during the nine months needed September 30, 2019. On September 23, 2019, the Power Up Note 8 became convertible, and the Company recorded a discount in connection with the beneficial conversion feature in the amount of $50,000; $2,716 of this amount was charged to interest expense during the nine months ended September 30, 2019. The Company accrued interest in the amount of $3,089 on the Power Up Note 8 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $54,404 existed in connection with the variable rate conversion feature of the Power Up Note 8. $53,000 of this amount was charged to discount on the Power Up Note 8, and $1,404 was charged to interest expense. $14,324 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $53,000 at September 30, 2019.

Power Up Note 9

On May 2, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 9”) in the aggregate principal amount of $33,000. The Power Up Note 9 entitles the holder to 12% interest per annum and matures on February 28, 2020.  Under the Power Up Note 9, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 9 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 9, at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price  shall mean 61% of the average of the lowest two trading prices during the 20 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note 9 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Power Up Note 9 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 9, then such redemption premium is 120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 140%. After the 180th day following the issuance of the Power Up Note 9, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 9; $911 was amortized to interest expense during the nine months needed September 30, 2019. The Company accrued interest in the amount of $1,660 on the Power Up Note 9 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $34,196 existed in connection with the variable rate conversion feature of the Power Up Note 9. $33,000 of this amount was charged to discount on the Power Up Note 9, and $1,196 was charged to interest expense. $7,445 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $33,000 at September 2019.

BHP Note

On June 4, 2019, the Company entered into a securities purchase agreement with BHP Capital NY, Inc., a New York corporation (“BHP”), pursuant to which BHP agreed to purchase a Convertible Promissory Note (the “BHP Note”) in the principal amount of $38,500.   The BHP Note the holder to 10% interest per annum and matures on March 4, 2020.  In the event the Company prepays the BHP Note beginning on the issuance date through the 180th day following the issuance date, the Company must pay BHP all of the outstanding principal and interest due plus a cash redemption premium ranging from 135% to 150%. After the 180th day following the issuance date, there is no further right of prepayment by the Company. BHP has no right of conversion under the BHP Note for a period of 180 days commencing on the issuance date. In the event the Company has not paid the BHP Note in full prior to 180 days from the issuance date, BHP may convert all or a portion of the outstanding principal of the BHP Note into shares of the Company’s common stock at a price per share at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price shall mean 55% of the lowest traded price of the Common Stock during the 25 trading-day period ending on the last complete trading day prior to the date of conversion. BHP may not convert the BHP Note to the extent that such conversion would result in beneficial ownership by BHP and its affiliates of more than 4.99% of the issued and outstanding Common Stock. The BHP Note contains certain representations, warranties, covenants and events of default including if the Common Stock is suspended or delisted for trading on the OTC Marketplace or if the Company is delinquent in its periodic report filings with the SEC. In the event of default, as described in the BHP Note, at the option of BHP, it may consider the BHP Note immediately due and payable. The Company recorded an original issue discount in the amount of $5,500 in connection with the BHP Note; $2,358 was amortized to interest expense during the nine months needed September 30, 2019. The Company accrued interest in the amount of $1,493 on the BHP Note during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $73,886 existed in connection with the variable rate conversion feature of the BHP Note. $38,500 of this amount was charged to discount on the BHP Note, and $35,386 was charged to interest expense. $8,440 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $38,500 at September 30, 2019.

Armada Note

On June 10, 2019, the Company entered into a securities purchase agreement with Armada Investment Fund, LLC (“Armada”) pursuant to which Armada agreed to purchase a convertible promissory note (the “Armada Note”) in the aggregate principal amount of $38,500. The Armada Note the holder to 10% interest per annum and matures on March 10, 2020.  In the event the Company prepays the Armada Note beginning on the issuance date through the 180th day following the Armada Issuance Date, the Company must pay Armada all of the outstanding principal and interest due plus a cash redemption premium ranging from 135% to 150%. After the 180th day following the Armada Issuance Date, there is no further right of prepayment by the Company. Armada has no right of conversion under the Armada Note for a period of 180 days commencing on the Armada Issuance Date. In the event the Company has not paid the Armada Note in full prior to 180 days from the Armada Issuance Date, Armada may convert all or a portion of the outstanding principal of the Armada Note into shares of the Company’s common stock at a price per share equal to the higher of the variable conversion price or $0.00006 per share. The variable conversion price shall mean 55% of the lowest traded price of the Common Stock during the 25 trading-day period ending on the last complete trading day prior to the date of conversion. Armada may not convert the Armada Note to the extent that such conversion would result in beneficial ownership by Armada and its affiliates of more than 4.99% of the issued and outstanding Common Stock. The Armada Note contains certain representations, warranties, covenants and events of default including if the Common Stock is suspended or delisted for trading on the OTC Marketplace or if the Company is delinquent in its periodic report filings with the SEC. In the event of default, as described in the Armada Note, at the option of Armada, it may consider the Armada Note immediately due and payable. The Company recorded an original issue discount in the amount of $3,000 in connection with the Armada Note; $1,007 was amortized to interest expense during the nine months needed September 30, 2019. The Company accrued interest in the amount of $1,417 on the Armada Note during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $73,256 existed in connection with the variable rate conversion feature of the Armada Note. $38,500 of this amount was charged to discount on the Armada Note, and $34,756 was charged to interest expense. $8,161 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $38,500 at September 30, 2019.

Crown Bridge Note 3

On July 2, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC (“Crown Bridge”) pursuant to which Crown Bridge agreed to purchase a convertible promissory note (the “Crown Bridge Note 3”) in the principal amount of $40,000. The Crown Bridge Note 3 entitles the holder to 12% interest per annum and matures on December 29, 2019.  Under the Crown Bridge Note 3, Crown Bridge may convert all or a portion of the outstanding principal of the Crown Bridge Note 3 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Crown Bridge Note 3, at a price equal to the 55% of the lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Crown Bridge may not convert the Crown Bridge Note 3 to the extent that such conversion would result in beneficial ownership by Crown Bridge and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Crown Bridge Note 2 within 90 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 135%; if such prepayment is made between the 91st day and the 180th day after the issuance of the Crown Bridge Note 2, then such redemption premium is 150%. After the 180th day following the issuance of the Crown Bridge Note 3, there shall be no further right of prepayment. In connection with the Crown Bridge Note 3. The Company recorded an original issue discount in the amount of $5,500 in connection with the Crown Bridge Note 3; $1,800 of this amount was amortized to interest expense during the nine months ended September 30, 2019. The Company accrued interest expense in the amount of $1,184 on the Crown Bridge Note 3 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $57,346 existed in connection with the variable rate conversion feature of the Crown Bridge Note 3. $40,000 of this amount was charged to discount on the Crown Bridge Note 3, and $17,346 was charged to interest expense. $7,367 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $40,000 at September 30, 2019.

Power Up Note 10

On July 11, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 10”) in the aggregate principal amount of $38,000. The Power Up Note 10 entitles the holder to 12% interest per annum and matures on April 30, 2020.  Under the Power Up Note 10, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 10 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 10, at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price  shall mean 55% of the lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note 10 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Power Up Note 10 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 10, then such redemption premium is 120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 140%. After the 180th day following the issuance of the Power Up Note 10, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 10; $827 was amortized to interest expense during the nine months needed September 30, 2019. The Company accrued interest in the amount of $1,012 on the Power Up Note 10 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $40,033 existed in connection with the variable rate conversion feature of the Power Up Note 10. $38,000 of this amount was charged to discount on the Power Up Note 10, and $2,033 was charged to interest expense. $4,684 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $38,000 at September 30, 2019

Power Up Note 11

On September 12, 2019, the Company entered into a Securities Purchase Agreement with Power Up pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note 11”) in the aggregate principal amount of $45,000. The Power Up Note 11 entitles the holder to 12% interest per annum and matures on July 15, 2020.  Under the Power Up Note 11, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 11 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 11, at a price equal to the higher of the variable conversion price or $0.00006 per share.  The variable conversion price  shall mean 55% of lowest trading price during the 25 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note 11 to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Power Up Note 11 within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 115%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note 11, then such redemption premium is 120%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 125%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 130%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 135%; and if such prepayment is made from the 151st to the 180th day after issuance, then such redemption premium is 140%. After the 180th day following the issuance of the Power Up Note 11, there shall be no further right of prepayment. The Company recorded an original issue discount in the amount of $3,000 in connection with the Power Up Note 11; $176 was amortized to interest expense during the nine months needed September 30, 2019. The Company accrued interest in the amount of $444 on the Power Up Note 11 during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company determined that a derivative liability in the amount of $47,187 existed in connection with the variable rate conversion feature of the Power Up Note 11. $45,000 of this amount was charged to discount on the Power Up Note 11, and $2,187 was charged to interest expense. $2,638 of the discount was charged to operations during the nine months ended September 30, 2019. The principal balance under this note was $45,000 at September 30, 2019.

Note 6 – Stockholders’ DeficitDerivative Liabilities

SaleCertain of Commonthe Company’s convertible notes contain conversion features that create derivative liabilities. The pricing model the Company uses for determining fair value of its derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income.  The derivative components of these notes are valued at issuance, at conversion, at restructure, and at each period end. 

Derivative liability activity for the nine months ended September 30, 2019 is summarized in the table below:

During the nine months ended September 30, 2019, the Company issued, in 24 transactions, a total of 14,394,002 shares in connection with the conversion of notes payable principal, accrued interest, and fees in the aggregate amounts of $368,882 and $26,330, and $1,500, respectively; a loss in the aggregate amount of $161,458 was recognized on these transactions (see note payable issuance5).

During the nine months ending September 30, 2018, the Company issued 150,000 restricted shares of common stock valued at $13,850 for an extension of the term of a note payable.  

During the nine months ending September 30, 2017, in connection with a convertible promissory note, the Company issued 15,000 shares of the Company’s common stock with a fair value of $1,500 that was valued based on the closing market price on the date of the grant.  The Company also committed to issue an additional 50,000 shares with a value of $5,523. The shares were issued in consideration of the extension of the due date of the loan.   The Company also issued 25,000 shares of common stock with a fair value of $3,750 for the conversion of accrued interest in the amount of $7,860.  The Company recorded a gain in the amount of $4,110 on this transaction.

Shares issued for conversion of accounts payable

During the nine months ended September 30, 2019, the Company did not issue any shares to settle accounts payable.

During the nine months ending September 30, 2018, the Company issued 5,817,122 shares valued at $534,767 to settle outstanding accounts payable. There was a loss on the transaction of $32,860 because the fair value of the issuance exceeded the fair value of the accounts payable settled.

Stock returned for cancellation

During the nine months ended September 30, 2019, the Company cancelled an aggregate 700,000 shares of common stock issued to former executive officers.

During the nine months endingended September 30, 2017,2018. there were no cancellations of common stock.

Shares issued for legal settlement

During the nine months ended September 30, 2019, the Company converted several accounts payable amounts to shares of common stock. The Company issued 228,5711,401,224 shares of common stock valued at $32,000 to settlein connection with the outstanding accounts payable.settlement of a note payable in the amount of $74,104. The Company also committed to issue 987,000 sharesrecorded a loss in the amount of common stock valued at $76,986 to settle additional outstanding accounts payable.$26,924 in connection with this transaction.

Stock returned for cancellationDuring the nine months ended September 30, 2018. there were no shares issued in connection with a legal settlement.

On August 10, 2017, the Company received for cancellation 2,150,000 shares held by its former Chief Executive Officer.

Note 78 – Stock Options

A summary of options issued, exercised and cancelled are as follows:

Note 89 – Stock Warrants

Subsequent to the restructuring of the Company and the spin-out, the Company had warrants to purchase common stock outstanding that were not terminated and have continued as part of the operations as detailed below. The warrants were adjusted for a one for 101 stock split due to the spin-out and restructuring plan as authorized. All warrants outstanding as of September 30, 2018 are scheduled to expire at various dates through 2019. A summary of warrants issued, exercised and expired are as follows:

Note 910 – Commitments and Contingencies

Legal

Stress Free Capital, Inc. vs. True Nature Holdings, Inc. Case No. CACE-18-0108656

Pursuant to a judgment rendered in the Seventeenth Judicial District I and for Broward County, Florida, the Company in June 2019 issued 1,401,224 shares of common stock in complete settlement of a note payable to the plaintiff in the aggregate amount of $84,073.48.

National Council for Science and the Environment, Inc. v. Trunity Holdings, Inc., Case No. 2015 CA 009726 B, Superior Court for the District of Columbia, Civil Division.

This action was filed on December 16, 2015 by the National Council for Science and the Environment, Inc. (“NCSE”) in the state court in the District of Columbia against Trunity Holdings, Inc. (“Trunity”) and alleges claims for breach of contract. Acknowledgement of indebtedness and settlement agreement and quantum meruit arising out of an agreement entered into between NCSE and Trunity in 2014. The complaint seeks damages in the amount of $177,270, inclusive of attorney’s fees, costs and accrued interest, continuing interest in the amount of 12% per annum and attorney’s fees and costs of collection relating to the case. The Company, in its answer dated January 27, 2016, denied the material allegations made by NCSE, asserted a number of affirmative defenses and filed a counterclaim alleging claims for fraud, negligent misrepresentation, breach of fiduciary duty, breach of contract and unjust enrichment. In its counterclaim, the Company sought actual and compensatory damages against NCSE that it believes exceed the amount sought by NCSE on its claims, pre-judgment interest, punitive damages and all costs and expenses, including attorney’s fees, incurred by the Company in bringing its claims against NCSE.

On September 23, 2016, the Company settled this obligation with an agreement to pay $48,500 to NCSE if paid by November 4, 2016, and $75,000 if paid later. The Company has not paid the amounts as of the date of this filing and has recorded the obligation at $75,000.

Carlton Fields Jorden Burt, P.A. vs. True Nature Holding, Inc., f/k/a/ Trunity Holdings, Inc.

This action was filed on May 18, 2017 by a law firm that represented the Company prior to the spin-out of the educational software business in 2016 with the intent of collection past due invoices in the aggregate amount of $241,828.  The Company believes it has strong defenses against any such action and anticipates a settlement upon completion of certain funding activities. The Company has recorded a liability in the amount of $241,828 on its balance sheet at June 30,December 31, 2018.

230 Commerce Way, LLC vs. Trunity, Inc.

A former landlord of the Company has filed an action in New Hampshire to collect on rent from a list that existed prior to 2013. In January 2018 this action was settled by the spin out, Trunity, Inc. for a cash payment of $65,000.

Trunity, Inc.

The spin-out that now owns the former educational software business has been informed that they owe the Company from the obligations of the NCSE settlement, and the costs of the legal action. We intend to take all actions available to us to collect on these amounts.

Randstad General Partner (US) LLC D/B/A Tatum a Randstad Company, vs. True Nature Holding, Inc.

A former service provider of the Company has filed an action in Georgia to collect the amount of $44,365 for services provided to the Company. On October 18, 2018, the Superior Court of Fulton County, State of George issued an Order & Final Judgment against the Company in the amount of $44,365 plus an additional $11,001 of accrued interest. TheOn July 3, 2019 the Company has accruedsettled this matter with a $5,000 payment made by a shareholder for the benefit of the Company, and the Company recorded a gain on settlement in the amount of $54,366 on its balance sheet at September 30. 2018 in connection with this claim.$50,366.

Note 1011 – Subsequent Events

EffectiveIssuance of Common Stock

In October 15, 2018,and November 2019, the Company appointed Mr. James Crone to the positionsissued a total of President, Interim Chief Financial Officer, Secretary, and a member of the Board of Directors. Mr. Crone was issued 600,00018,820,868 shares of common stock subjectin eleven transactions in connection with the conversion of convertible notes payable. The conversions were made pursuant to certain vesting requirements. Asthe terms of the date hereof, the Board of Directors consisted of Mr. Louis DeLuca and Mr. James Crone.original agreements.

On

In October 3, 2018,2019, the Company issued 100,000 shares of common stock with a fair value of $2,000 to a service provider.

In October 2019, the Company issued 2,000,000 shares of common stock, subject to vesting conditions, to its Chief Executive Officer. This grant consisted of 1,000,000 shares for services as compensationa member of the Board of Directors, and an additional 1,000,000 shares for services as an officer of the Company. The fair value of these shares was $60,000.

In October 2019, the Company issued 2,000,000 shares of common stock, subject to vesting conditions, to its President and Chief Operating Officer. This grant consisted of 1,000,000 shares for services as a member of the Board of Directors, and an additional 1,000,000 shares for services as an officer of the Company. The fair value of these shares was $60,000.

Appointment of Officers

On October 3, 2019 the Company announces the appointment of Ms. Julie R. Smith as a member of its advisory board.Board of Directors and President & COO. Ms. Smith, age 54, is an experienced Senior Executive and Board Member who has held multiple leadership positions for both public and private entities.  Most recently she was President and CEO at HOMEWATCH CARE GIVERS, LLC (www.homewatchcaregivers.com), a $150 million per year franchise network operating in 7 countries which provides services within the healthcare continuum. Prior to that she held senior positions in the educational arena with stints at Lincoln Education Services (www.lincolnedu.com) and The Princeton Review (www.princetonreview.com). Julie attained her MBA in International Management from the Thunderbird School of Global Management and a BA in Business from the University of Denver, Daniels College of Business.  She resides in Denver, Colorado and will operate from the Company’s new Denver office and will be focused on the acquisition and integration of new operations. Ms. Smith will receive a salary of $250,000 per annum for services as President, and $5,000 per month for services as a board member. Ms. Smith will also receive, subject to vesting provisions, an initial grant of 1,000,000 shares of the Company’s restricted stock for services as a member of the Board of Directors, and an additional 1,000,000 shares for services as an officer of the Company. NOTE: Since Ms. Smith has moved into her officer role, the Board stipend has been discontinued in favor of her compensation as an officer.

On October 7, 2019 the Company announces the appointment of Mr. Lawrence Diamond to its Board of Directors, and as CEO to its senior management team. Mr. Diamond, age 56, was most recently CEO of Intelligere Inc., a supplier of interpretation and translation for 73 languages to health care providers. Prior to that role he was COO of PointRight, Inc., a leading healthcare analytics firm specializing in long-term and post-acute care using predictive analytics for skilled nursing, home health, Medicare & Medicaid payers, hospitals, and ACOs. While VP of Insignia Health he grew their business internationally and domestically providing population health engagement via their validated program (Patient Activation Measure, PAM) and SaaS-based population health-coaching. He led strategic planning and sales at American Telecare, an innovator of telemedicine enabled clinical services and medical devices that improve cost and quality. He was VP at Ubiquio Corporation, Inc., an innovator in mobile technology and services which was acquired by Mobile Planet, after an eight-year stint at UnitedHealth Group, where he was Vice President driving their Medicare Advantage, pharmacy products, health plan operations, and M&A. He began his career at Merrill Lynch in private client banking.  He earned his M.B.A. at the University of Minnesota, and his B.S., Business Administration, at the University of Richmond. Mr. Diamond will receive a salary of $250,000 per annum for services as Chief Executive Officer, and $5,000 per month for services as a board member. Mr. Diamond will also receive, subject to vesting provisions, an initial grant of 1,000,000 shares of the Company’s restricted stock for services as a member of the Board of Directors, and an additional 1,000,000 shares for services as an officer of the Company. NOTE: Since Mr. Diamond has moved into his officer role, the Board stipend has been discontinued in favor of his compensation as an officer.

Resignation of Officer

Effective October 8, 2019 Mr. Jim Crone has resigned all positions with the Company in order to pursue other opportunities. There were no disagreements with Mr. Crone.

In October 2019, the Company received funds of approximately $53,000 pursuant to Power Up Note 12. Power Up Note 12 is a convertible promissory note in the amount of $53,000. Power Up Note 12 bears interest at the rate of 12% per year and becomes convertible at any time following the 180^th calendar day after the issue date at a price per share equal to 55% of the lowest trading price for the Company’s common stock for the twenty-five days prior to the conversion date.  The Power Up Note 12 is due August 15, 2020.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes thereto contained in Part I, Item 1 of this Quarterly Report on Form 10-Q (this “Quarterly Report”). Our condensed consolidated financial statements have been prepared and, unless otherwise stated, the information derived therefrom as presented in this discussion and analysis is presented, in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The information contained in this Quarterly Report is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this Quarterly Report and in our other reports filed with the U.S. Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended December 31, 20172018 and subsequent reports on Form 8-K, which discuss our business in greater detail. Unless the context indicates otherwise, the “Company”, “we”, “us”, and “our” in this Item 2 and elsewhere in this Quarterly Report refer to True Nature Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries.

In addition to historical information, the following discussion contains forward-looking statements regarding future events and our future performance. In some cases, you can identify forward-looking statements by terminology such as “will”, “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “forecasts”, “potential” or “continue” or the negative of these terms or other comparable terminology. All statements made in this Quarterly Report other than statements of historical fact are forward-looking statements. These forward-looking statements involve risks and uncertainties and reflect only our current views, expectations and assumptions with respect to future events and our future performance. If risks or uncertainties materialize or assumptions prove incorrect, actual results or events could differ materially from those expressed or implied by such forward-looking statements. Risks that could cause actual results to differ from those expressed or implied by the forward-looking statements we make include, among others, risks related to: our ability to successfully implement our business plan, develop and commercialize our proprietary formulationssoftware in a timely manner or at all, identify and acquire additional proprietary formulations,software products, manage our pharmacy operations, service our debt, obtain financing necessary to operate our business, recruit and retain qualified personnel, manage any growth we may experience and successfully realize the benefits of our acquisitions and collaborative arrangements we may pursue; competition from pharmaceutical companies, outsourcing facilities and pharmacies; general economic and business conditions; regulatory and legal risks and uncertainties related to our pharmacy operations and the pharmacy and pharmaceutical business in general; physician interest in and market acceptance of our current and any future formulations and compounding pharmacies generally; our limited operating history; and the other risks and uncertainties described under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K and any other reports we file with the SEC. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we undertake no obligation to revise or publicly update any forward-looking statement for any reason.

Company Overview

Our business during 2018, which has continued into 2019 is focused in the area of software and solutions, predominantly in the healthcare sector, generally described as the healthcare information and technology (HCIT) market. We announced plans for a portfolio of health care technology companies focused on, but not limited to the following areas: population health management, POS/Data gathering solutions, electronic health records optimization, healthcare IT solutions, technology and artificial intelligence to improve outcomes, HIPAA security and augmentation using virtual care. We are developing, and seeking to acquire, integrate and deploy scalable technology solutions that reduce cost, improve care and increase efficiency. Our core product, a personal healthcare records application called SimpleHIPAA and SimpleHIPAA for Vets and Pets is in final testing with our initial client.

While this focus continues, we are also evaluating other applications, generally, but not exclusively in the healthcare area. We believe that new technologies such as voice recognition, virtual reality and robotics will all provide excellent vehicles to update traditional information management systems and will find quick acceptance in the healthcare field as well as other large and more traditional markets. We believe the need for compliance in other industries, similar to the need in healthcare for HIPAA and data security represents opportunity for growth over and above our healthcare efforts.

Within the healthcare arena one of the most active areas involves software that provides “interoperability”, the interfacing of systems and data so that information may be shared effectively. We believe there will be many opportunities in this application area, as older systems are integrated with newer, or more specialized systems, but we have not taken any actions in pursuit of these opportunities and no guarantee can be made if we enter this space, that we will be successful. These same needs exist in other market areas and we may consider applications for these markets as well as our healthcare efforts.

Overview 

We are an early stage company whose operations have shifted away from compounding pharmacy operations and now are entirely focused generally on “telemedicine” related software and systems development, and some related consulting situations. Our current and near-term products include a) applications for business development and consulting for certain pharmacy, clinic and veterinary operations, b) software and systems design for healthcare such as “telemedicine” and blockchain encryption services, and c) plans to acquire a series of technology related businesses which specialize in products and services aimed at health care services, largely direct to consumers, doctors and veterinary professionals. During 2016 and 2017, the Company negotiated several agreements for the acquisition of compounding pharmacy operations and subsequently consummated one such acquisition. P3 Compounding Pharmacy, dba Integrity Compound (“P3”), of Dunwoody Georgia completed the transfer of its pharmacy license, and was acquired by us on June 29, 2016. Our management quickly determined that the Company’s financial needs and business plan was not in concert with the financial goals of the Company, and on September 30, 2016, the Company was deconsolidated. 

During the fourth quarter of 2016 and continuing through 2017 and early 2018 the Company refined its approach and expanded Its investment in software and system designed aimed at lower cost, more efficient healthcare deployment. We are delivering consulting and applications with the focus on Telemedicine - both for human and veterinarian care, block chain encryption application development services, Rx Processing Technology – for CRM as applied to both human Health Care and Veterinary Market. There are individuals both inside the Company, and outside as consultants, who work daily to complete these development objectives and, with our existing clients and prospects.

New Divisional Structure

During 2016, 2017 and going forward, and following the deconsolidation of P3, we have adjusted our approach to the business strategy. We decided to develop a library of applications for personal healthcare records management as well as potential software and systems to provide “telemedicine” functionality, including kiosk-oriented distribution at the retail level, and the potential of a “blockchain” service bureaus for encryption in various aspects of the health care industry. We have achieved immediate market acceptance in our software, systems and consulting services and we now believe the technology for both human and veterinary health care markets will provide the best growth opportunity going forward.

Off-Balance Sheet Arrangements

Since our inception, except for standard operating leases, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities. We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

For the nine months ended September 30, 2018,2019, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.2018.

Recently Issued and Adopted Accounting Pronouncements

See Note 2 to our consolidated financial statements included in this Quarterly Report.

Results of Operations

The following period-to-period comparisons of our financial results are not necessarily indicative of results for the current period or any future period. Our software, systems and consulting operations activities have become our primary focus, along with engagement with our new and potential user base. This change our operations will have and is expected to continue to have a significant impact on our financial results.

For the Three Months ended September 30, 20182019 and 20172018

Our total operating expenses for the three months period ended September 30, 20182019 were $565,259.$433,322.  For the comparable period in 2017,2018, the operating expense was $121,589.$565,259.  Operating expenses were comprised primarily of $76,708$234,741 in compensation expense,(including $111,985 in non-cash compensation), and $389,676$138,250 in consulting fees, and $47,268 in legal, accounting, and other professional fees.

InterestThere was $832,417 of interest expense was $22,739 for the three months ended September 30, 2018,2019, compared to $10,434$22,739 for the comparable period of 2018. Interest expense consisted of $460,375 of derivatives in excess of the discount on convertible debt, $344,326 in amortization of the discount on convertible debt; $21,746 of accrued interest; $3,720 of accrued interest to related parties, and $2,250 of interest imputed on related party debt.

The Company had a gain on conversion of accounts payable to common stock in the amount of $3,240 during the three months ended September 30, 2017. Interest expense consisted2018; there was no comparable transaction during the current period; there was also a loss on conversion of $7,372 accrued on notes payable; $587 of interest on a credit card; $11,001 interest on an accounts payable in connection with a court settlement; and $1,529 amortization of the discount on convertible notes payable. We also recorded $2,250 of imputed interest on a note payable to a related party.

Duringcommon stock in the amount of $2,799 during the three months ended September 30, 2018, we recorded2019; there was no such comparable transaction during the prior period.

The Company had a gain on settlement of accounts payable of $50,366 during the three months ended September 30, 2019; there was no comparable transaction during the three months ended September 30, 2018.

The Company recognized a loss on the revaluation of derivative liabilities in the amount of $3,240 related to a settlement of accounts payable. During$69,611 during the three months ended September 30, 2019; there was no comparable period oftransaction during the prior year, we recorded a similar settlement in the amount of a $4,110 gain.period.

For the three months September 30, 2018, the Company had a net loss of $584,758.  For the comparable period in 2017,reasons above, the Company had a loss in the amount of $127,913.$1,287,783 during the three months ended September 30, 2019, compared to a loss in the amount of $584,758 during the three months ended September 30, 2018.

For the Nine Months ended September 30, 20182019 and 20172018

Our total operating expenses for the nine months period ended September 30, 20182019 were $894,564, compared to $564,086 for$880,823.  For the comparable period of 2017.in 2018, the operating expenses were $894,564.  Operating expenses were comprised primarily of compensation expense of $351,952 (including non-cash compensation of $154,558, $219,108 in consulting fees, in the amountfinancial services, legal, and audit fees of $613,060; compensation expense in the amount$141,492, travel of $126,708;$42,623, and legal, accounting, and other professional fees in the amountinsurance of $94,696.$28,545.

During the nine months ended September 30, 2018, we recorded a net loss on settlement

InterestThere was $1,157,318 of interest expense was $39,405 for the nine months ended September 30, 2018,2019, compared to $20,256$39,405 for the comparable period of 2018. Interest expense consisted of $460,375 of derivatives in excess of the discount on convertible debt, $603,861 in amortization of the discount on convertible debt; $59,221 of accrued interest; $16,072 of prepayment penalties associated with convertible notes payable; $11,039 of accrued interest to related parties, and $6,750 of interest imputed on related party debt.

The Company had a loss on conversion of accounts payable of $0 during the nine months ended September 30, 2017. Interest expense consisted2019, compared to a loss on conversion of $17,194 accrued on notes payable; $2,931 of interest on a credit card; $11,001 interest on an accounts payable of $32,860 during the comparable period of 2018. 

The Company had a gain on settlement of accounts payable of $50,366 during the nine months ended September 30, 2019; there was no comparable transaction during the three months ended September 30, 2018.

The Company recognized a loss on the revaluation of derivative liabilities in connection withthe amount of $69,611 during the nine months ended September 30, 2019; there was no comparable transaction during the prior period.

The Company had a court settlement; and $1,529 amortizationloss on legal settlement in the amount of $26,924 during the discountnine months ended September 30, 2019; there was on convertiblesuch transaction during the comparable period of 2018.

The Company had a loss on conversion of notes payable. We also recorded $6,750 of imputed interest on a note payable $161,458 during the nine months ended September 30, 2019, compared to a related party.loss on conversion of notes payable of $0 during the comparable period of 2018. 

For the nine month period ended September 30, 2018, the Company had a net loss of $966,829.  For the comparable period in 2017,reasons above, the Company had a loss in the amount of $580,232.$2,245,768 during the nine months ended September 30, 2019, compared to a loss in the amount of $966,829 during the nine months ended September 30, 2018.

Liquidity and Capital Resources

We have financed our operations through the sale of equity securities. As of September 30, 2018,2019, we had a working capital deficit of $1,453,283.$2,617,881.  Our working capital deficit is attributable to the fact that we beganhave been implementing the Company’s business plan of acquiring pharmaceutical compoundingdevelopment of software, and acquisition of various software and systems businesses.

During the nine months ending September 30, 2018,2019, the Company had net cash used in operating activities of $132,484.$418,275.  This consisted of Company’s net loss of $966,829, offset by imputed interest expense of $6,750, stock-based compensation in$2,245,768 plus the amount of $359,280, lossnon-cash gain on conversionsettlement of accounts payable in the amount of $32,860,$50,366, offset by a loss on conversion of notes payable of $161,458, loss on legal settlement of $26,924, imputed interest expense of $6,750, amortization of the discount on notes payable of $603,861, derivative expense of $460,375, stock-based compensation in the amount of $1,529,$154,558, and bythe net change in the components of working capital in the net amount of $433,926368,443. 

$394,322.  The Company had cash provided by financing activities in the amount of $141,594, consisting$417,822 which consisted of $75,000 from the issuanceproceeds of notes payable (netin the amount of $25,000 paid directly to vendors), and $66,594 advances from related parties.

$428,058, less principal payments in the amount of $10,236. There werewas no cash provided by investing activities during the nine months ended September 30, 2019. The following securities are currently in default: the Company’s Series C Debenture, in the principal and accrued interest amounts of $110,833 and $54,915, respectively; and the November 2014 Convertible Debenture (Series D), in the principal and accrued interest amounts of $11,333 and $6,683, respectively.

Plan of Operations

Our business during 2018, or 2017.which has continued into 2019 is focused in the area of software and solutions, predominantly in the healthcare sector, generally described as the healthcare information and technology (HCIT) market. We announced plans for a portfolio of health care technology companies focused on, but not limited to the following areas: population health management, POS/Data gathering solutions, electronic health records optimization, healthcare IT solutions, technology and artificial intelligence to improve outcomes, HIPAA security and augmentation using virtual care. We are developing, and seeking to acquire, integrate and deploy scalable technology solutions that reduce cost, improve care and increase efficiency. Our core product, a personal healthcare records application called SimpleHIPAA and SimpleHIPAA for Vets and Pets, is in final testing with our initial client.

While this focus continues, we are also evaluating other applications, generally, but not exclusively in the healthcare area. We believe that new technologies such as voice recognition, virtual reality and robotics will all provide excellent vehicles to update traditional information management systems and will find quick acceptance in the healthcare field as well as other large and more traditional markets. We believe the need for compliance in other industries, similar to the need in healthcare for HIPAA and data security represents opportunity for growth over and above our healthcare efforts.

PlanWithin the healthcare arena one of Operations

the most active areas involves software that provides “interoperability”, the interfacing of systems and data so that information may be shared effectively. We believe there will be many opportunities in this application area, as older systems are an early stage company whose operations include a) telemedicine application developmentintegrated with newer, or more specialized systems, but we have not taken any actions in pursuit of these opportunities and consulting, b) software and systems design for healthcare such as “telemedicine” and blockchain encryption services, and c) other consulting and implementation of our solutions largely direct to consumers, doctors and veterinary professionals.  Going into 2018no guarantee can be made if we expect our highest priority to be the continued development of technology for healthcare, including telemedicine and blockchain encryption services. With the recent addition of our new President, whose background in healthcare information technology (HIT) is extensive, we believeenter this space, that we will acceleratebe successful. These same needs exist in other market areas and we may consider applications for these markets as well as our distribution plans, especially in the veterinary field.healthcare efforts.

Recent Developments 

Appointment of a President and Interim Chief Executive Officer

As of April 1, 2018, the Company Appointed Mr. Jay Morton to the positions of President and Interim Chief Executive Officer.  On September 18, 2018, the Company accepted the resignation of Mr. Morton.  Effective October 15, 2018, the Company appointed Mr. James Crone to the positions of President, Interim Chief Financial Officer, Secretary, and a member of the Board of Directors.

Resignation of Board Member and Additional Appointments to the Board

On July 5, 2018 the Company was notified by Jim Czirr, one of its Directors, that he was resigning from the Board of Directors. Mr. Czirr is very active in another company, Galectin Therapeutics Inc., and as a result of that commitment he stated he did not have sufficient time to meet the requirements ofMay 22, 2019, the Company’s Board of Directors role. There were no disagreements or conflicts betweenappointed Mr. CzirrDouglas Cole as a member of the Board, effective immediately. Mr. Cole (Doug), age 63, has served as the Chairman and CEO of American Battery Metals Corporation since August 2017. Doug has been a Partner with Objective Equity LLC since 2005, a boutique investment bank focused on the high technology, data analytics and the Company during his tenure. mining sector. Doug serves on the Board of Directors of eWellness Healthcare Corporation (OTC: EWLL). Since 1977 Mr. Cole has held various executive roles, including Chairman, Executive Vice Chairman, Chief Executive Officer and President of multiple public corporations. Currently, Doug sits on the Board of "People in Motion," a global data analytics company. He also sits on the Board of "Voise," an AI company specializing in linguistics. From 2000 to September 2005, he was the Director of Lair of the Bear, The University of California Alumni Family Camp located in Pinecrest, California. During the period between 1991 and 1996 he was the CEO of HealthSoft and he founded and operated Great Bear Technology, a global media company, which acquired Sony Image Soft and Starpress, then went public and eventually sold to Graphix Zone. In 1995, Doug was honored by NEA, a leading venture capital firm, as CEO of the year. In 1997 Doug became CEO of NetAmerica until merging in 1999. Since 1982 he has been very active with the University of California, Berkeley, mentoring early-stage technology companies.

On September 30, 2018,October 3, 2019 the Company was notified by Dr. Jordan Balencic, oneannounces the appointment of Ms. Julie R. Smith as a member of its Board of Directors and President & COO. Ms. Smith, age 54, is an experienced Senior Executive and Board Member who has held multiple leadership positions for both public and private entities.  Most recently she was President and CEO at HOMEWATCH CARE GIVERS, LLC (www.homewatchcaregivers.com), a $150 million per year franchise network operating in 7 countries which provides services within the healthcare continuum. Prior to that he was resigningshe held senior positions in the educational arena with stints at Lincoln Education Services (www.lincolnedu.com) and The Princeton Review (www.princetonreview.com). Julie attained her MBA in International Management from the BoardThunderbird School of Directors.  Dr. Balencic had recently received fundingGlobal Management and a BA in Business from the University of Denver, Daniels College of Business.  She resides in Denver, Colorado and will operate from the Company’s new Denver office and will be focused on the acquisition and integration of new operations. Ms. Smith will receive a salary of $250,000 per annum for services as President, and $5,000 per month for services as a start-up with which he was involved, with a conditionboard member. Ms. Smith . will also receive, subject to vesting provisions, an initial grant of 1,000,000 shares of the funding that Dr. Balencic focus solely on that business activity.  There were no disagreements or conflicts between Dr. Balencic and the Company during his tenure.  Effective October 15, 2018, the Company appointed Mr. James Crone to the position of President, Chief Financial Officer, Secretary, andCompany’s restricted common stock for services as a member of the Board of Directors, joiningand an additional 1,000,000 shares for services as an officer of the Company. NOTE: Since Ms. Smith has moved into her officer role, the Board stipend has been discontinued in favor of her compensation as an officer.