UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON, D.C.~~Washington, DC 20549

FORM 10-Q

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

For the ~~quarterly period~~quarter ended ~~September 30, 2020~~March 31, 2021

☐ 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

MITESCO, INC.

(Exact ~~name~~Name of ~~registrant~~Registrant as ~~specified~~Specified in its ~~charter)~~Charter)

Delaware		87-0496850
(State Other Jurisdiction of Incorporation or ~~other jurisdiction of~~Organization)		(I.R.S. Employer
~~incorporation or organization)~~		Identification ~~No.)~~

~~7535 East Hampden Avenue, Ste. 400~~ ~~Denver, Colorado~~		~~80231~~
~~(Address of principal executive offices)~~		~~(Zip Code)~~Number)

601 Carlson Parkway, Suite 1050

Minnetonka, MN 55305

(Address of principal executive offices) (Zip code)

844-383-8689

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

~~N/A~~

~~(Former name, former address and former fiscal year, if changed since last report)~~code)

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

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐

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

Table of Contents

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

Large, accelerated filer	☐		Accelerated filer	☐

Non-accelerated filer	☐	☒	Smaller reporting company	☑ ☒

Emerging growth company	☑			☐

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

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

As of ~~November 11, 2020, there were 136,209,054~~May 13, 2021, the registrant had outstanding 198,542,046 shares of ~~the registrant’s~~ common ~~stock, $0.01 par value outstanding.~~ stock.

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1.	~~CONDENSED CONSOLIDATED~~ FINANCIAL ~~STATEMENTS.~~STATEMENTS (UNAUDITED)	1 3
	Condensed Consolidated Balance Sheet	3
	Condensed Consolidated Statement of Operations	4
	Condensed Consolidated Stockholder’s Deficit	5
	Condensed Consolidated Statement of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	27 20

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	31 22

ITEM 4.	CONTROLS AND PROCEDURES.	31 22

PART II – OTHER INFORMATION
~~PART II – OTHER INFORMATION~~

ITEM 1.	LEGAL PROCEEDINGS.	32 23

ITEM 1A.	RISK FACTORS.	32 23

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	45 25

ITEM 3.	DEFAULTS ~~UPON~~ON SENIOR ~~SECURITIES.~~SECURED SECURITIES	46 27

ITEM 4.	MINE SAFETY DISCLOSURES.	46 27

ITEM 5.	OTHER INFORMATION.	46 27

ITEM 6.	EXHIBITS.	47 27

SIGNATURES		48 30

~~Table of Contents~~

PART I ~~– FINANCIAL INFORMATION~~

~~ITEM~~

Item 1. Financial Statements

~~FINANCIAL STATEMENTS.~~

MITESCO, INC.

~~Condensed Consolidated Balance Sheets~~CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2020			2019			Unaudited
	(unaudited)						March 31,			December 31,
ASSETS							2021			2020
Current assets
Cash and cash equivalents	$	101,660		$	83,245		$	2,755,566		$	64,789
Inventory								1,480
Prepaid expenses		3,784			9,721			14,618			-
Total current assets		105,444			92,966			2,771,664			64,789

Fixed assets, net of accumulated depreciation of $786 and $0		6,675			7,854
Right to use operating leases, net								304,124			310,361
Construction in progress								-			417,082
Property Plant & Equipment, net of accumulated depreciation of $19,590 and $1,572								898,108			6,282

Total Assets	$	112,119		$	100,820		$	3,973,896		$	798,514

LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' (EQUITY)
LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities		501,312			648,714			702,693			1,069,331
Accrued interest		135,529			82,870			4,175			137,522
Derivative liabilities		1,124,852			1,488,423			-			807,682
Convertible notes payable, net of discount of $864,964 and $646,888		225,836			77,112
Lease liability - operating leases, current								25,284			8,905
Convertible notes payable, net of discount of $0 and $756,795								-			317,405
Convertible note payable, in default		122,166			122,166			-			122,166
SBA Loan Payable		460,406			-			460,406			460,406
Other current liabilities		94,402			-			96,136			95,256
Preferred stock dividends payable		56,143			-			30,466			9,967
Total current liabilities		2,720,646			2,419,285			1,319,160			3,028,640

Lease Liability- operating leases, non-current								305,446			312,099

Total Liabilities	$	2,720,646		$	2,419,285		$	1,624,606		$	3,340,739

Commitments and contingencies		-			-			-			-

Stockholders' (equity)
Stockholders' equity (deficit)

Preferred stock, $0.01 par value, 100,000,000 shares authorized; 500,000 shares designated Series A; 27,324 shares designated Series X:
Preferred stock, Series A, $0.01 par value, 4,800 and 0 shares issued and outstanding as of September 30, 2020 and December 31, 2019		48			-
Preferred stock, Series X, $0.01 par value, 26,227 shares issued and outstanding as of September 30, 2020 and December 31, 2019		262			262
Common stock, $0.01 par value, 500,000,000 shares authorized, 121,452,914 and 81,268,443 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		1,214,529			812,684
Preferred stock, $0.01 par value, 100,000,000 shares authorized; 500,000 shares designated Series A; 3,000,000 shares designated Series C; and 400,000 shares designated Series X:								-
Preferred stock, Series A, $0.01 par value, 0 and 4,800 shares issued and outstanding as of March 31, 2021 and December 31, 2020								-			48
Preferred stock, Series C, $0.01 par value, 3,000,000 and 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively								30,000			-
Preferred stock, Series X, $0.01 par value, 26,227 shares issued and outstanding as of March 31, 2021 and December 31, 2020								262			262
Common stock, $0.01 par value, 500,000,000 shares authorized, 197,694,698 and 155,381,183 shares issued and outstanding as of March 31, 2021 and December 31, 2020 and 2019, respectively								1,976,965			1,553,812
Additional paid-in capital		9,664,232			8,407,977			17,513,684			10,340,821
Stock payable		37,186			37,186
Accumulated deficit		(13,524,784	)		(11,576,574	)		(17,171,621	)		(14,437,168	)
Total (deficiency in) stockholders' (equity)		(2,608,527	)		(2,318,465	)
Total stockholders' equity (deficit)								2,349,290			(2,542,225	)

Total liabilities and stockholders' (equity)	$	112,119		$	100,820
Total liabilities and stockholders' equity (deficit)							$	3,973,896		$	798,514

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

Table of Contents

MITESCO, INC.

~~Unaudited Condensed Consolidated Statements of Operations~~UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

	For the Three			For the Three			For the Nine			For the Nine			For the Three			For the Three
	Months Ended			Months Ended			Months Ended			Months Ended			Months Ended			Months Ended
	September 30,			September 30,			September 30,			September 30,			March 31,			March 31,
	2020			2019			2020			2019			2021			2020

Revenue	$	-		$	-		$	-		$	-		$	2,972		$	-

Cost of goods sold														1,713			-
Gross Profit (loss)														1,259			-

Operating expenses:
General and administrative		607,704			433,322			1,730,036			880,823			952,908			496,494

Total operating expenses		607,704			433,322			1,730,036			880,823			952,908			496,494

Net Operating Loss		(607,704	)		(433,322	)		(1,730,036	)		(880,823	)		(951,649	)		(496,494	)

Other income (expense):
Grant income		-			-			3,000			-
Interest expense		(537,184	)		(832,417	)		(1,124,219	)		(1,157,318	)		(964,988	)		(190,128	)
Gain on settlement of accounts payable		49,351			50,366			397,962			50,366			6,045			42,292
Gain on settlement of accrued salary		6,988			-			6,988			-
(Loss) Gain on derivative liabilities		51,940			(69,611	)		498,095			(69,611	)
Loss on legal settlement		-			-						(26,924	)
Loss on conversion of notes		-			(2,799	)		-			(161,458	)
Gain on settlement of notes payable														1,836			-
(Loss) Gain on revaluation of derivative liabilities														(493,455	)		496,369
Total other expense		(428,905	)		(854,461	)		(218,174	)		(1,364,945	)		(1,450,562	)		348,533

Loss before provision for income taxes		(1,036,609	)		(1,287,783	)		(1,948,210	)		(2,245,768	)		(2,402,211	)		(147,961	)

Provision for income taxes		-			-			-			-			-			-

Net loss	$	(1,036,609	)	$	(1,287,783	)	$	(1,948,210	)	$	(2,245,768	)	$	(2,402,211	)	$	(147,961	)

Preferred stock dividend		(19,392	)		-			(56,143	)		-
Preferred stock dividends														(20,499	)		(17,359	)
Preferred stock deemed dividends														(332,242	)		-

Net loss available to common shareholders	$	(1,056,001	)	$	(1,287,783	)	$	(2,004,353	)	$	(2,245,768	)	$	(2,754,952	)	$	(165,320	)

Net loss per share - basic and diluted	$	(0.01	)	$	(0.03	)	$	(0.02	)	$	(0.06	)	$	(0.01	)	$	(0.00	)

Weighted average shares outstanding - basic and diluted		100,262,378			43,360,914			94,154,754			36,446,415			187,152,300			83,983,177

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

Table of Contents

MITESCO, INC.

~~Condensed Consolidated Statements of Changes in Stockholders’ (Equity)~~CONDENSED CONSOLIDATED UNAUDITED STATEMENT OF STOCKHOLDER'S DEFICIT

FOR THE THREE MONTHS ENDED SEPTEMBER 30

Preferred Stock Series A

Preferred Stock Series X

Common Stock

Additional
Paid-in

Stock

Accumulated

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Payable

Deficit

Total

Balance, June 30, 2019
- - - - 39,077,529 390,774 6,370,513 37,186 (8,649,297
)
(1,850,824
)
Stock issued to employees subject to vesting
- - - - 1,975,000 19,750 (7,520
)
- - 12,230
Stock issued for conversion of notes payable
- - - - 9,115,933 91,160 111,601 - - 202,761
Shares issued for legal settlement
- - - - - - - - - -
Discount on notes payable due to conversion feature
- - - - - - - - - -
Vesting of shares issued to employees
- - - - - - 104,465 - - 104,465
Settlement of derivative liabilities
203,730 203,730
Cancellation
(300,000
)
(3,000
)
3,000 -
Imputed interest
- - - - - - 2,250 - - 2,250
Net loss for the period
- - - - - - - - (1,287,783
)
(1,287,783
)
Balance, September 30, 2019 (unaudited)
- - - - 49,868,462 $ 498,684 $ 6,783,329 $ 37,186 $ (9,937,080
)
$ (2,617,881
)

Balance, June 30, 2020
4,800 $ 48 26,227 $ 262 98,796,144 $ 987,962 $ 9,058,332 $ 37,186 $ (12,488,175
)
$ (2,404,385
)
Vesting of common stock issued to employees
- - - - - - 7,792 - - 7,792
Vesting of stock options issued to employees
- - - - - - 91,647 - - 91,647
Common stock issued for services
- - - - 386,985 3,869 17,787 - - 21,656
Settlement of derivative liabilities
- - - - - - - - - -
Common stock issued in warrant settlement agreement
- - - - - - - - - -
Common stock issued for conversion of notes payable and accrued interest
- - - - 22,269,785 222,698 508,066 - - 730,764
Preferred stock dividends, $3.62 per share (10% of stated value per year)
- - - - - - (19,392
)
- - (19,392
)
Loss for the period ended September 30, 2020
- - - - - - - - (1,036,609
)
(1,036,609
)
Balance, September 30, 2020 (unaudited)
4,800 $ 48 26,227 $ 262 121,452,914 $ 1,214,529 $ 9,664,232 $ 37,186 $ (13,524,784
)
$ (2,608,527
)
3
~~Table of Contents~~
FOR THE NINE MONTHS ENDED SEPTEMBER 30

Preferred Stock Series A

Preferred Stock Series X

Common Stock

Additional
Paid-in

Stock

Accumulated

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Payable

Deficit

Total

Balance, December 31, 2018
- - - - 31,598,236 $ 315,982 $ 5,684,208 $ 37,186 $ (7,691,312
)
$ (1,653,936
)
Stock issued for services
- - - - 200,000 2,000 15,480 - - 17,480
Stock issued to employees subject to vesting
- - - - 2,975,000 29,750 (17,520
)
- - 12,230
Stock issued for conversion of notes payable
- - - - 14,394,002 143,940 414,230 - - 558,170
Stock issued for legal settlement
- - - - 1,401,224 14,012 87,016 - - 101,028
Discount on notes payable due to conversion feature
- - - - - - 223,087 - - 223,087
Settlement of derivative liabilities
203,730 203,730
Discount on notes payable due to warrants
- - - - - - 34,500 - - 34,500
Cancellation of shares
- - - - (700,000
)
(7,000
)
7,000 - - -
Vesting of shares issued to employees
- - - - - - 124,848 - - 124,848
Imputed interest
- - - - - - 6,750 - - 6,750
Net loss for the period
- - - - - - - - (2,245,768
)
(2,245,768
)
Balance, September 30, 2019 (unaudited)
- - - - 49,868,462 $ 498,684 $ 6,783,329 $ 37,186 $ (9,937,080
)
$ (2,617,881
)

Balance, December 31, 2019
- $ - 26,227 $ 262 81,268,443 $ 812,684 $ 8,407,977 $ 37,186 $ (11,576,574
)
$ (2,318,465
)
Vesting of common stock issued to employees
- - - - - - 60,842 - - 60,842
Vesting of stock options issued to employees
- - - - - - 119,227 - - 119,227
Common stock issued for services
- - - - 586,985 5,869 23,467 - - 29,336
Settlement of derivative liabilities
- - - - - - 528,995 - - 528,995
Common stock issued in warrant settlement agreement
- - - - 7,999,996 80,000 291 - - 80,291
Common stock issued for conversion of notes payable and accrued interest
- - - - 31,597,490 315,976 508,066 - - 824,042
Issuance of Preferred A stock to consultants
4,800 48 - - - - 71,510 - - 71,558
Preferred stock dividends, $3.62 per share (10% of stated value per year)
- - - - - - (56,143
)
- - (56,143
)
Loss for the period ended September 30, 2020
- - - - - - - - (1,948,210
)
(1,948,210
)
Balance, September 30, 2020 (unaudited)
4,800 $ 48 26,227 $ 262 121,452,914 $ 1,214,529 $ 9,664,232 $ 37,186 $ (13,524,784
)
$ (2,608,527
)

Preferred Stock Series A

Preferred Stock Series C

Preferred Stock Series X

Common Stock

Additional
Paid-in

Stock

Accumulated

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

capital

Payable

Deficit

Total

Balance, December 31, 2019
- $ - - $ - 26,227 $ 262 81,268,443 $ 812,684 $ 8,407,977 $ 37,186 $ (11,576,574
)
$ (2,318,465
)
Vesting of common stock issued to employees
- - - - - - - - 33,676 - - 33,676
Vesting of stock options issued to employees
- - - - - - - - 7,072 - - 7,072
Common stock issued for services
- - - - - - 200,000 2,000 5,680 - - 7,680
Settlement of derivative liabilities
- - - - - - - - 231,323 - - 231,323
Common stock issued in warrant settlement agreement
- - - - - - 5,098,556 50,986 (50,986
)
- - -
Issuance of Preferred A stock to consultants
4,800 48 - - - - - - 71,510 - - 71,558
Preferred stock dividends
- - - - - - - - (17,359
)
- - (17,359
)
Loss for the period ended March 31, 2020
- - - - - - - - - - (147,961
)
(147,961
)
Balance, March 31, 2020
4,800 $ 48 - $ - 26,227 $ 262 86,566,999 $ 865,670 $ 8,688,893 $ 37,186 $ (11,724,535
)
$ (2,132,476
)

Balance, December 31, 2020
4,800 $ 48 - $ - 26,227 $ 262 155,381,183 $ 1,553,812 �� $ 10,340,821 $ - $ (14,437,168
)
$ (2,542,225
)
Vesting of common stock issued to employees
- - - - - - - - 4,008 - - 4,008
Vesting of stock options issued to employees
- - - - - - - - 5,942 - - 5,942
Common stock issued for services
- - - - - - 1,097,358 10,961 211,519 - - 222,480
Common stock issued for conversion of notes payable and accrued interest
- - - - - - 33,944,157 339,442 2,314,353 - - 2,653,795
Sale of common stock in private placement
- - - - - - 6,672,000 66,750 1,601,250 - - 1,668,000
Sales of Preferred Stock Series C and warrants, net of costs
- - 3,000,000 30,000 - - - - 2,730,000 - - 2,760,000
Conversion of Preferred Stock Series A to common stock
(4,800
)
(48
)
- - - - 600,000 6,000 (5,952
)
- - -
Deemed dividend on conversion of Preferred Stock Series A to common stock
- - - - - - - 206,242 - (206,242
)
-
Deemed dividend on Preferred Stock Series C
- - - - - - - - 126,000 - (126,000
)
-
Preferred stock dividends
- - - - - - - - (20,499
)
- - (20,499
)
Loss for the period ended March 31, 2021
- - - - - - - - - - (2,402,211
)
(2,402,211
)
Balance, March 31, 2021
- $ - 3,000,000 $ 30,000 26,227 $ 262 197,694,698 $ 1,976,965 $ 17,513,684 $ - $ (17,171,621
)
$ 2,349,290

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

4
5
Table of Contents

MITESCO, INC.
~~Unaudited Condensed Consolidated Statement~~s ~~of Cash Flows~~UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the Nine

For the Nine

For the Three

For the Three

Months Ended

Months Ended

Months Ended

Months Ended

September 30,

September 30,

March 31,

March 31,

2020

2019

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$
(1,948,210
)

$
(2,245,768
)
$ (2,402,211
)
$ (147,961
)
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation

1,179

-

20,616 393
Loss on conversion of notes payable to common stock

-

161,458

Loss on legal settlement

-

26,924

Preferred A stock issued to consultants
71,558
Amortization of right-to-use asset
6,237 -
Gain on settlement of notes payable
(1,836
)
-
Gain on settlement of accounts payable

(397,962
)

(50,366
)
- (42,292
)
Gain on conversion of accrued salary

(6,988
)

-

Gain on derivative liabilities

(498,095
)

69,611

Gain (Loss) on revaluation of derivative liabilities
493,455 (496,369
)
Derivative expense

125,869

460,375

- 36,433
Amortization of discount on notes payable

785,724

603,861

756,795 98,278
Amortization of loan fees

18,000

-

Share-based compensation

259,307

154,558

232,430 48,428
Imputed interest

-

6,750

Changes in assets and liabilities:

Prepaid expenses

5,937

2,500

(14,618
)
-
Inventory
(1,480
)
-
Accounts payable and accrued liabilities

371,972

184,398

(366,636
)
879
Operating lease liability
9,726 -
Due to related parties

-

150,407

- 2,000
Other current liabilities

1,634

-

880 -
Accrued interest

89,642

57,017

202,313 26,278

Net cash used in operating activities

(1,191,991
)

(418,275
)
(1,064,329
)
(402,375
)

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for acquisition of fixed assets
(495,360
)
-

Net cash used in investing activities
(495,360
)
-

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from private placement of common stock
1,668,000 -
Proceeds from sales of Series C Preferred Stock, net of fees
2,760,000 -
Proceeds from notes payable, net of discount

1,381,406

428,058

- 375,000
Principal payments on notes payable

(171,000
)

(10,236
)
(177,534
)
(45,000
)

Net cash provided by financing activities

1,210,406

417,822

4,250,466 330,000

Net increase (decrease) in cash and cash equivalents

18,415

(453
)
2,690,777 (72,375
)

Cash and cash equivalents at beginning of period

83,245

1,304

64,789 83,245

Cash and cash equivalents at end of period

$
101,660

$
851

$ 2,755,566 $ 10,870

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid

$
2,680

$
2,236

$ 2,680 $ 2,680
Income taxes paid

$
-

$
-

$ - $ -

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Par value of shares returned for cancellation

$
-

$
7,000

Shares issued for debt conversion

$
617,000

$
363,285

Shares issued for accrued salary conversion

$
17,787

$
-

Stock issued for legal settlement

$
-

$
101,028

Discount due to warrants

$
-

$
34,500

Beneficial conversion feature

$
-

$
223,087

Debt issued to related party for settlement of accounts payable

$
-

$
5,000

Stock issued for conversion of debt and accrued interest
$ 2,653,795 $ -
Settlement of derivative liabilities

$
1,020,449

$
203,730

$ (1,301,137
)
$ 231,323
Issuance of Series A Preferred Stock to consultants

$
71,558

$
-

Preferred stock dividends payable

$
56,143

$
-

Exercise of cashless warrants

$
50,986

$
-

Cashless exercise of warrants
$ - $ 50,986
Issued of Series A Preferred Stock to consultants
$ - $ 71,558
Preferred stock dividend
$ 20,499 $ 17,359
Derivative discounts

$
999,800

$
470,000

$ - $ 375,000
Accrued interest converted to equity

$
36,983

$
26,330

Conversion of Series A Preferred Stock to common stock
$ 6,000 $ -
Deemed dividends on Preferred Stock
$ 332,242 $ -

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

5
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MITESCO, INC.
Notes to ~~Unaudited~~ Condensed Consolidated Financial Statements
~~(Unaudited)~~March 31, 2021 and 2020

Note 1 – Description of Business

Company Overview
Mitesco, Inc. (the “Company,” “we,” “us,” or “our”) was formed in the state of Delaware on January 18, 2012. On December 9, 2015, we restructured our operations and acquired Newco4pharmacy, LLC, a development stage company which sought to acquire compounding pharmacy businesses. As a part of the restructuring, we completed a “spin out” of our former business line. On April 24, 2020, we changed our name to Mitesco, Inc.

During 2020, our operations have focused on establishing medical clinics utilizing nurse practitioners under The Good Clinic name and development and acquisition of telemedicine technology. In March of 2020, we formed a wholly owned subsidiary, The Good Clinic LLC, a Colorado limited liability company for our clinic business. We entered into an agreement with four senior executives from Minute Clinic James Woodburn, Kevin Lee Smith, Michael Howe and Rebecca Hafner-Fogarty ( the “Sellers”) with the skills and know-how to assist the Company in the establishment of a series of clinics utilizing nurse practitioners and telemedicine technology in States where full practice authority for nurse practitioners is supported. We issued 4,800 shares of our Series A Preferred Stock to these individuals as compensation. We valued the 4,800 shares of the Series A Preferred Stock at $71,558 or approximately $14.91 per share based upon an analysis performed by an independent valuation consultant.

We ~~plan to open~~opened our first The Good Clinic in Minneapolis, MNMinnesota in the first quarter of 2021.
Note 2 - Financial Condition, Going Concern and Management Plans
As of March 31, 2021, the Company had cash of $2,756,000, current liabilities of $1,319,000, and has incurred a loss from operations and has generated minimal revenue. The Company’s principal operation is the development and operation of primary care health and wellness clinics operated by nurse practitioners. In addition, the Company develops and deploys software and systems for the healthcare marketplace. The Company intends to a) develop and acquire telemedical technologies, and b) evaluate other healthcare related opportunities both domestically and on an international basis. 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 for one year from the date the financial statements are issued. The Company’s continuance is dependent on raising capital and generating revenues sufficient to sustain operations. During the three months ended March 31, 2021, the Company closed on a $3,000,000 series C Preferred Stock and warrants offering and $1,668,000 restricted common stock offering. In order to continue its expansion plans the Company believes that additional capital will need to be raised and has entered discussions to do so with certain companies. However, as of the date of these 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.
During March 2020, in response to the COVID-19 crisis, the federal government announced plans to offer loans to small businesses in various forms, including the Payroll Protection Program, or "PPP", established as part of the Corona Virus Aid, Relief and Economic Security Act (“CARES Act”) and administered by the U.S. Small Business Administration. On April 18, 2020, the Company’s former President and COO completed and submitted an application on behalf of the Company to Bank of America, NA (“Bank of America”) for a PPP loan, which was subsequently approved. On April 25, 2020, the Company entered into an unsecured Promissory Note (the “Note”) with Bank of America for a loan in the original principal amount of approximately $460,000, and the Company received the full amount of the loan proceeds on May 4, 2020.
On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds disbursed under the Note. The Company investigated the terms of the application and discovered its former President had erroneously represented it was refinancing an Economic Injury Disaster Loan when no such loan had been received. Bank of America requested that the Company remit the funds received back to Bank of America. The Company is currently working with Bank of America on a repayment plan. If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.
During management's review of the loan application after the loan had been disbursed to the Company, it was determined that the information provided by its former President and COO in the application was not representative of the Company’s situation. After consulting with legal counsel and conferring with the Board of Directors, the Board of Directors, in executive session, voted to remove the Company’s former President and Chief Operating Officer (“COO”) from its Board of Directors, and all operating roles due to the inaccuracy of the loan application. After that decision, the former President & COO submitted a resignation from all positions with the Company, which was accepted by the Board and management.
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In August 2020, the former President and COO filed a complaint alleging discrimination under certain provisions of the anti-discrimination laws of that state. The Company believes that the action is without merit and intends to vigorously defend itself. The Company does not believe it the action will have a material impact on the Company. As of the date of this filing the Company has been advised by the convening judicial organization that it has dismissed this matter, and as such the individual who initiated this action is open to pursue litigation in other venues if they desire.
The Company has had some impact on its operations as a result of the effects of the COVID-19 pandemic, primarily with accessibility to staffing, consultants and in the capital markets, and it is adjusting as needed within its available resources. The Company will continue to assess the effect of the pandemic on its operations. The extent to which the COVID-19 pandemic will continue to impact the Company’s business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the duration and effect of possible business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect the Company’s business and the value of its securities.

Note 2 3 – Summary of Significant Accounting Policies

~~Basis~~Principles of ~~Accounting~~Consolidation –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 include the accounts of Mitesco, Inc., and ~~notes thereto filed with~~its wholly owned subsidiaries MitescoNA, LLC, The Good Clinic, LLC, and Acelerar Healthcare Holdings, LTD. In addition, we anticipate that we will rely on the ~~SEC~~operating activities of certain legal entities in ~~our Annual Report on Form 10-K for~~which we will not maintain a controlling ownership interest but over which we will have indirect influence and of which we will be considered the ~~fiscal year ended December 31, 2019. In~~primary beneficiary. We expect that these entities will typically be subject to nominee ownership and transfer restriction agreements that effectively transfer 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~~majority of the economic risks and rewards of their ownership to the Company. The Company’s management, restriction and other agreements concerning such nominee-owned entities typically includes both financial ~~position, results~~terms and protective and participating rights to the entities’ operating, strategic and non-clinical governance decisions which transfer substantial powers over and economic responsibility for these entities to the Company. As such, the Company applies the guidance of ~~operations,~~the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 – Consolidation (“ASC 810”), to determine when an entity that is insufficiently capitalized or not controlled through its voting interests, referred to as a variable interest entity should be consolidated. All intercompany balances and ~~cash flows for the periods reported herein. Any such adjustments are of a normal recurring nature.~~transactions have been eliminated.

Use of Estimates -The preparation of these ~~unaudited condensed~~ 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. These estimates include the value of stock-based compensation, derivative liabilities. External factors may affect the amount of these estimates and cause actual results to differ from estimated amounts, Future events and their effects cannot be determined with ~~any~~absolute certainty. Therefore, the determination of estimates requires the exercise of judgment.

~~Other Comprehensive Loss~~Cash - The Company ~~does not have any items of other comprehensive loss and therefore its other comprehensive loss is the same as its net loss in its condensed consolidated statements of operations.~~
~~Cash -~~~~All~~considers all highly liquid investments with ~~a maturity date~~maturities of three months or less to be cash equivalents. The Company had cash and cash equivalents of approximately $2,756,000 and $65,000 as of March 31, 2021 and 2020, respectively .
Property, Plant, and Equipment - Property and equipment is recorded at the ~~date~~lower of ~~purchase~~cost or estimated net recoverable amount and is depreciated using the straight-line method over its estimated useful life. Property acquired in a business combination is recorded at estimated initial fair value. Property, plant, and equipment are ~~cash equivalents.~~depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based upon the following life expectancy:
Years
Office equipment
3 to 5
Furniture & fixtures
3 to 7
Machinery & equipment
3 to 10
Leasehold improvements
Term of lease
In 2020, the Company entered into a lease for a clinic facility in Minneapolis, Minnesota. In connection with the facility, the Company incurred costs to design, engineer, build and install furniture and equipment in the facility. $417,000 was recorded in construction in progress on the balance sheet as of December 31, 2020. The facility was completed, and the Company received its certificate of occupancy, in the first quarter of 2021. During the three months ended March 31, 2021, the costs previously recorded as construction in progress were recorded to fixed assets and are being depreciated over their useful lives or lease term as appropriate.
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Revenue 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 services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
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~~Table of Contents~~
We determine revenue recognition through the following steps:

●
identification of the contract, or contracts, with a customer;
●
identification of the performance obligations in the contract;
●
determination of the transaction price;
●
allocation of the transaction price to the performance obligations in the contract; and
●
recognition of revenue when, or as, we satisfy a performance obligation.

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~~is 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.
~~The following assumptions were used for the valuation of the Series A Preferred Stock as of March 2, 2020:~~
An Option Pricing Methodology (“OPM”) was utilized to allocate the enterprise value to the various equity linked instruments. The assumptions utilized in the OPM included a term of 5 years as the term for liquidity, a corresponding risk–free rate based on the term, 10% dividends, and a volatility based on the remaining term (based on comparable company volatility analysis):
Market Cap (fully diluted basis)
3,749,829
Volatility (12 Months)
78.6 %
Years to Liquidity
5.00
Continuous Risk Free Rate
0.88 %
Stock Price
$ 0.0419

Equity instruments issued to those other than employees are recognized pursuant to FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This ASU relates to the accounting for non-employee share-based payments. The amendment in this update expands the scope of Topic 718 to include all share-based payment transactions in which a grantor acquired goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The ASU excludes share-based payment awards that relate to: (1) financing to the issuer; or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts from Customers. The share-based payments are to be measured at grant-date fair value of the equity instruments that the entity is obligated to issue when the goods or service has been delivered or rendered and all other conditions necessary to earn the right to benefit from the equity instruments have been satisfied. This standard ~~will be~~became effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. We adopted the provisions of this ASU on January 1, 2019. The adoption had no impact on our results of operations, cash flows, or financial condition.

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.

Beneficial Conversion Features and Deemed Dividends-The Company records a deemed dividend on Preferred Stock when, on the date of issuance, the conversion rate is less than the Company’s stock price. The Company also records, when necessary, deemed dividends for the exchange of Preferred Stock for common stock, based on the market price of common stock in excess of the carrying value of the Preferred Stock.
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Derivative Financial Instruments- Derivatives are recorded on the consolidated balance sheet at fair value. The ~~following assumptions were used for the valuation~~conversion features of ~~the derivative liability related to~~ the convertible notes ~~that contain a derivative component during the three months ended September 30, 2020:~~
~~- The stock prices of $0.0296 to $0.079 in these periods would fluctuate with the Company projected volatility;~~
~~- The projected volatility curve from an annualized analysis~~are embedded derivatives and are separately valued and accounted for ~~each valuation period was based~~ on the historical volatility of the Company and the term remaining for each note or warrant ranged from 135.6% through 198.5% at derivative treatment, issuance, conversion, exercise, and quarters ends. The Company continues to tradeconsolidated balance sheet with ~~high volatility;~~
~~- The Holder would automatically convert the note at the maximum of 2 times the conversion price if the company was not~~changes in ~~default.~~
- The Holder would automatically convert the note before maturity if the registration was effective and the company was not in default. The Holder would automatically convert the note early based on ownership or trading volume limitations and the Company would redeem the unconverted balances at maturity.
- A change of control and fundamental transaction would occur initially 0% of the time and increase monthly by 0% to a maximum of 0% – based on management being in control and no desire to sell the Company.
- A reset event would adjust the Notes conversion price triggered by either a capital raise; stock issuance; settlement; or conversion/exercise (a reset occurred in this period on 11/7/19 – Auctus Conversion triggered a reset to $0.00858). The reset events are projected to occur annually starting 3 months following the date of valuation 9/30/20.
~~- For the variable rate Notes (39% or 45% discount), the Holder would convert with effective discount rates of 50.28% to 55.17% (based on the lookback terms).~~
~~- The Company would redeem the notes at maturity if the conversion~~fair value ~~was less than the payment with penalties. For the majority of the notes~~recognized during the period ~~redemption is projected 0%~~ of ~~the time, increasing 0% per month to~~change as a ~~maximum~~separate component of ~~0%.~~
~~- The cash flows~~other income/expense. Fair values for exchange-traded securities and derivatives are ~~discounted to net present values using risk free rates. Discount rates were~~ based on ~~risk free~~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 ~~in effect based on~~and stock price volatilities. As of March 31, 2021 the ~~remaining term.~~
~~- An event of default would occur 10% of the time, increasing 0% per month to a maximum of 10%.~~Company had retired all derivative instruments.

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~~Black Sholes option-pricing model value method for valuing the impact of the expense associated with these warrants.

~~Stockholders’~~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 1 for 101 reverse stock split that occurred in January of 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 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 antidilutive for the periods presented. As of September 30, 2020, there were 9,767,879 options and 63,188,385 shares issuable in connection with convertible debt excluded from calculation of diluted net loss; as of September 30, 2019, the Company had outstanding 1,425,000 warrants, 67,879 options, and 36,135,065 shares issuable in connection with convertible debt which were excluded from the calculation of diluted net loss. The Company, at its discretion, may satisfy the accrued interest on its Series A and Series X Preferred Stock via the issuance of shares of common stock; at September 30, 2020 and December 31, 2019, there were 1,731,740 and 0 shares, respectively, potentially issuable in connection with such issuance.
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~~Table of Contents~~
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 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 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.~~2018.

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:

●
future expected cash flows from product sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies and patents; and
●
discount rates utilized in valuation estimates.

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.
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Table of Contents

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. The Company had no impairment charges.

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.

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The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our hierarchy assessment. The carrying amount of cash, prepaid assets, accounts payable and accrued liabilities ~~approximates~~approximate 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 derivative liabilities ~~approximate~~approximates 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 derivative liabilities as Level 3.

Recently Issued Accounting ~~Standards-~~Standards
In June 2018, the FASB issued ASU 2018-07 “Improvements to Non-employee Share-Based Payment Accounting”, which simplifies the accounting for share-based payments granted to non-employees for goods and services. Under the ASU, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company does not anticipate that the adoption of this standard will have a material impact on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements and related disclosures.
In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible Preferred Stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on January 1, 2022, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. We are currently assessing the impact the new guidance will have on our consolidated financial statements.
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.

N~~ote 3 – Financial Condition and Going Concern~~
As of September 30, 2020, the Company had cash of $101,660, current liabilities of $2,720,646, and has incurred a loss from operations. The Company’s principal operation is the development and deployment of software and systems for the healthcare marketplace. The Company intends to: a) develop and own primary care clinics operated by nurse practitioners, b) develop and acquire telemedical technologies, and c) other healthcare related opportunities both domestically and on an international basis. 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 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.
During March 2020, in response to the COVID-19 crisis, the federal government announced plans to offer loans to small businesses in various forms, including the Payroll Protection Program, or "PPP", established as part of the Corona Virus Aid, Relief and Economic Security Act (“CARES Act”) and administered by the U.S. Small Business Administration. On April 18, 2020, the Company’s former President and COO completed and submitted an application on behalf of the Company to Bank of America, NA (“Bank of America”) for a PPP loan, which was subsequently approved. On April 25, 2020 the Company entered into an unsecured Promissory Note (the “Note”) with Bank of America for a loan in the original principal amount of $460,406, and the Company received the full amount of the loan proceeds on May 4, 2020.
On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds disbursed under the Note. The Company investigated the terms of the application and discovered its former President had erroneously represented it was refinancing an Economic Injury Disaster Loan when no such loan had been received. Bank of America has requested that the Company remit the funds received back to Bank of America. The Company is currently working with Bank of America on a repayment plan. If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.
During management's review of the loan application after the loan had been disbursed to the Company, it was determined that the information provided by its former President and COO in the application was not representative of the Company’s situation. After consulting with legal counsel and conferring with the Board of Directors, the Board of Directors, in executive session, voted to remove the Company’s former President and Chief Operating Officer (“COO”) from its Board of Directors, and all operating roles due to the inaccuracy of the loan application. Subsequent to that decision, the former President & COO submitted a resignation from all positions with the Company, which was accepted by the Board and management.
In August 2020, the former President and COO filed a complaint alleging discrimination under certain provisions of the anti-discrimination laws of that state. The Company believes that the action is without merit and it intends to vigorously defend itself. The Company does not believe it the action will have a material impact on the Company.
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~~We have had some impact on our operations as a result~~Note 4 – Net Loss Per Share Applicable to Common Shareholders
Net Loss per Share Applicable to Common Stockholders
Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the ~~effect~~reporting period. Diluted loss per common share is computed similarly to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.
The following table sets forth the computation of loss per share for the ~~pandemic, primarily with accessibility to staffing, consultants~~three months ended March 31, 2021 and ~~in the capital markets, and we are adjusting as needed within our available resources.~~ 2020, respectively:

March 31,

2021

2020

Numerator:

Net loss applicable to common shareholders
$ (2,754,952
)
$ (165,320
)

Denominator:

Weighted average common shares outstanding
187,152,300 83,983,177

Net loss per share data:

Basic and diluted
$ (0.01
)
$ (0.00
)
The Company ~~will continue~~excluded all common equivalent shares outstanding for warrants, options and convertible instruments to assess the effect of the pandemic on its operations. The extent to which the COVID-19 pandemic will impact the Company’s business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the duration and effect of possible business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity. In addition, a recession or market correction resultingpurchase common stock from the ~~spread~~calculation of ~~COVID-19 could materially affect~~diluted net loss per share because all such securities are antidilutive for the ~~Company’s business~~periods presented. As of March 31, 2021 and 2020, the ~~value~~following shares were issuable and excluded from the calculation of ~~its securities.~~ diluted loss:

March 31,

2021

2020

Options
10,967,879 67,879
Warrants
12,600,000 2,901,444
Convertible Preferred Stock Series C
12,600,000 -
Accrued interest on Preferred Stock
72,657 709,692
Total
36,240,536 3,679,015

Note 4 5 – Related Party Transactions

~~Related party transactions for~~For the ~~nine~~three months ended ~~September 30, 2020 were~~March 31, 2021:
On March 17, 2021, the Company issued 1,000,000 ten-year options with an exercise price of $0.31 to its Chief Financial Officer. These options had a fair value at issuance of $301,910. The Company valued these options using the Black-Scholes valuation model. The options vest as follows: 250,000 options vest 90 days from issuance: 250,000 options vest one year from issuance; and 500,000 options vest based upon the Company’s achieving certain performance targets.
During the three months ended March 31, 2021, the Company accrued dividends on its Series X Preferred Stock in the total amount of $16,000. Of this amount, a total of $2,000 was payable to officers and directors, $8,000 was payable to a related party shareholder, and $6,000 was payable to non-related parties.
For the three months ended March 31, 2020:

On February 27, 2020, the Company agreed to issue 1,000,000 ten-year options to its two non-management directors (a total of 2,000,000 options). These options have a fair value at issuance of ~~$39,162~~$39,000 per director (a total of ~~$78,324)~~$78,000), an exercise price of $0.05 per share, and vest over a three-year period. The Company valued these options using the Black-Scholes valuation model. ~~During the nine- months ended September 30,~~On December 14, 2020, the ~~amount~~exercise price of ~~$12,876~~these options was ~~charged~~rest to ~~operations in connection with each 1,000,000-option grant (a total~~$0.03 per share reflecting the market price at the time (see note 10).
12
Table of ~~$25,7522 for all 2,000,000 options).~~
Contents

On March 2, 2020, the Company agreed to issue 1,500,000 ten-year options to each of its Chief Executive Officer, its President, and a consultant (a total of 4,500,000 options). These options had a total fair value at issuance of ~~$58,743 per individual (a total of $176,229),~~$176,000, an exercise price of $0.05 per share, and vest over a three-year period. The Company valued these options using the Black-Scholes valuation model. Julie R. Smith, the Company’s former President, Chief Operating Officer, and a Board member resigned effective June 30, 2020; the 1,500,000 options that the Company agreed to issue to Ms. Smith were cancelled; a total of $1,632 was charged to operations representing the fair value of these options through Ms. Smith’s resignation date. ~~During the nine months ended September 30,~~On December 14, 2020, the ~~amount~~exercise price of ~~$39,432 was charged~~the 1,500,000 options granted to ~~operations in connection with~~ each of its Chief Executive Officer and a consultant was changed to $0.03 per share reflecting the ~~remaining 1,500,000 option grants (a total of $78,864 for all 3,000,000 remaining options)~~market price at the time (see Note 9).

~~On June 1, 2020, the Company agreed~~Note 6 - Right to ~~issue 1,000,000 ten-year options to a non-management director. These options have a fair value of $28,460, an exercise price of $0.03 per share,~~Use Assets and vest over a three-year period. The Company valued these options using the Black-Scholes valuation model. During the nine months ended September 30, 2020, the amount of $9,487 was charged to operations in connection these options.Lease Liabilities – Operating Leases

On August 1, 2020, the Company agreed to issue 1,000,000 ten-year options to a non-management director. These options have a fair value of $56,037, an exercise price of $0.05 per share, and vest over a three-year period. The Company ~~valued these options using~~has an operating lease for its clinic with a remaining lease term of approximately 7.5 years. The Company’s lease expense was entirely comprised of operating leases. Lease expense for the ~~Black-Scholes valuation model. During the nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 amounted to $16,000 and $0, respectively. The Company’s ROU asset amortization for the ~~amount~~three months ended March 31, 2021 and 2020 was $6,000 and $0, respectively. The difference between the lease expense and the associated ROU asset amortization consists of ~~$11,595 was charged to operations in connection these options.~~ interest at a rate of 12% per annum.

Right to use assets – operating leases are summarized below:

March 31,
2021

December 31,
2020

Clinic
$ 304,124 $ 310,361
Right to use assets, net
$ 304,124 $ 310,361
During the nine months ended September 30, 2020, the Company charged the amount of $69,342 to operations in connection with the vesting of restricted common stock as follows: $27,196 for shares issued to management; $26,511 for shares issued to board members; and $15,635 related to shares issued to an employee. Julie Smith, our former President, Chief Operating Officer, and a Board member, resigned effective June 30, 2020; at the time of her resignation, a total of 1,000,000 shares of the Company’s common stock issued to Ms. Smith for compensation as a board member were vested, and remain outstanding; an additional 250,000 shares of common stock issued to Ms. Smith for compensation as an officer were vested, and also remain outstanding; 750,000 shares of common stock to be issued to Ms. Smith for compensation as an officer had not vested, and these shares were cancelled.
Operating lease liabilities are summarized below:

March 31,
2020

December 31,
2019

Clinic
$ 330,730 $ 321,004
Lease liability
$ 330,730 $ 321,004
Less: current portion
(25,284 ) (8,905 )
Lease liability, non-current
$ 305,446 $ 312,099

During the nine months ended September 30, 2020, the Company accrued dividends on its Series X Preferred stock in the total amount of $49,176. Of this amount, a total of $9,750 was payable to officers and directors,$23,443 was payable to a related party shareholder, and $15,983 was payable to non-related parties.
~~Related party transactions for the nine months ended September 30, 2019 were~~Maturity analysis under these lease agreements are as follows:

~~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.~~
For the twelve months ended March 31, 2022
$ 63,621
For the twelve months ended March 31, 2023
63,798
For the twelve months ended March 31, 2024
65,317
For the twelve months ended March 31, 2025
66,836
For the twelve months ended March 31, 2026
68,355
Thereafter
182,913
Total
$ 510,840
Less: Present value discount
(180,110
)
Lease liability
$ 330,730

~~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.~~
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~~Table of Contents~~
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:~~
-
~~Due to shareholders for consulting services, accounts payable paid on behalf of the Company, and accrued interest: $169,355~~
-
~~Note payable in the amount of $75,000 related to reclassification of accounts payable (see note 5, “July 2017 Note”)~~
-
~~Note payable in the amounts of $65,000 related to consulting services provided (see note 5, “Consulting Services Note”)~~
-
~~Note payable in the amounts of $58,000 related to accounts payable paid on behalf of the Company (see note 5, “Trade Payables Note”)~~
Note 5 7 – Debt

August 2014 Series C and D Convertible ~~Debenture~~Debentures

~~As part~~On March 30, 2021, the Company issued 272,837 shares of common stock and paid cash in the ~~restructuring, all debentures issued by Trunity Holdings, Inc., to fund~~amount of $122,166 as settlement of principal and accrued interest in 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 valueamounts of $110,833 ~~did not convert such debenture. The Series C Convertible 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~~$71,526, respectively, due under the Series C Debenture ~~also received five-year warrants to acquire up to 4,950 shares post-split~~and principal and accrued interest in the amounts of ~~common stock for an exercise price of $20.20 per share. The former educational business allocated the face value of~~$11,333 and $8,722 due under the Series C ~~Debenture to~~Debenture. The Company recognized a gain in the ~~warrants~~amount of $3,035 on this transaction. This obligation has been fully satisfied as of the date of this filing and the ~~debentures based on its relative fair values, and allocated~~Company has no further requirements related 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 Series C Debenture is currently in default. Details of activity for the three months ended September 30, 2020 are presented in Notes Payable Table 1, below.
~~November 2014 Series D Convertible Debenture~~
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 Series D Debenture is currently in default. Details of activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below.this matter.

12
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Table of Contents

March 2016 Convertible Note A

On March ~~18, 2016,~~24, 2021, the Company ~~issued a 12% Convertible Promissory Note (the “Convertible Note A”)~~paid cash in the ~~principal~~ amount of ~~$60,000 to a lender. Pursuant to~~$55,368 as settlement of principal and accrued interest in 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 was obligated to repay the full principal amount of $41,000 and $13,167, respectively, due under the March 2016 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 was amortized to interest expense during the year ended December 31, 2016.
Upon issuance of the Convertible Note A, the lender was awarded 15,000 restricted common stock as an origination fee which includes piggy-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. During the year ended December 31, 2019, the lender converted principal in the amount of $15,000 into 120,000 shares of common stock. The Company recordedrecognized a loss in the amount of ~~$13,867~~$1,201 on this conversion. Also, during the year ended December 31, 2019, the Company made a principal payment in the amount of $4,000 on this note. Details of activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below.
~~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; $3,000 was amortized to interest expense during the year ended December 31, 2019. The Company accrued interest in the amount of $1,642 on the Power Up Note 11 during the year ended December 31, 2019. During the year ended December 31, 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.
During the nine months ended September 30, 2020, the Company made a cash payment in the amount of $74,195 on the Power Up Note 11 which fully satisfied this obligation. This amount consisted of $45,000 of principal, $2,680 of accrued interest, and $23,815 of prepayment penalty. The Company revalued the derivative liability associated with the Power Up Note 11 at the time of payment, and recorded a gain on revaluation in the amount of $35,420. The Company credited the fair value of the derivative liability at the time of payment in the amount of $21,266 to additional paid-in capital. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below.transaction. This obligation has been fully satisfied ~~and the Company has no further requirements related to this matter.~~
13
~~Table~~as of ~~Contents~~
~~Power Up Note 12~~
On October 7, 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 12”) in the aggregate principal amount of $53,000 and an original issue discount of $3,000. The Power Up Note 12 entitles the holder to 12% interest per annum and matures on August 15, 2020. Under the Power Up Note 12, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 12 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 12, 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 12 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 12 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 12, 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 12, there shall be no further right of prepayment. The Company accrued interest in the amount of $1,499 on the Power Up Note 12 during the year ended December 31, 2019. During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $54,969 existed in connection with the variable rate conversion feature of the Power Up Note 12. $53,000 of this ~~amount was charged to discount on the Power Up Note 12, and $2,187 was charged to interest expense. $6,502 of the discount was charged to operations during the year ended December 31, 2019.~~
During the three months ended September 30, 2020, the Company made a cash payment in the amount of $84,231 on the Power Up Note 12 which fully satisfied this obligation. This amount consisted of $53,000 of principal, $3,312 of accrued interest, and $27,919 of prepayment penalty. The Company revalued the derivative liability associated with the Power Up Note 12 at the time of payment, and recorded a gain on revaluation in the amount of $4,247. The Company credited the fair value of the derivative liability at the time of payment in the amount of $62,569 to additional paid-in capital. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below. This obligation has been fully satisfied and the Company has no further requirements related to this matter.
~~Power Up Note 13~~
On November 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 13”) in the aggregate principal amount of $73,000 and an original issue discount of $3,000. The Power Up Note 13 entitles the holder to 12% interest per annum and matures on August 30, 2020. Under the Power Up Note 13, Power Up may convert all or a portion of the outstanding principal of the Power Up Note 13 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note 12, 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 13 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 13 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 13, 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 13, there shall be no further right of prepayment. The Company accrued interest in the amount of $1,414 on the Power Up Note 13 during the year ended December 31, 2019. During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $73,529 existed in connection with the variable rate conversion feature of the Power Up Note 13. $73,000 of this amount was charged to discount on the Power Up Note 13, and $529 was charged to interest expense. $6,091 of the discount was charged to operations during the year ended December 31, 2019.
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~~Table of Contents~~
During the three months ended June 30, 2020, the Company made a cash payment in the amount of $115,980 on the Power Up Note 13 which fully satisfied this obligation. This amount consisted of $73,000 of principal, $4,728 of accrued interest, and $38,252 of prepayment penalty. The Company revalued the derivative liability associated with the Power Up Note 13 at the time of payment, and recorded a gain on revaluation in the amount of $4,882. The Company credited the fair value of the derivative liability at the time of payment in the amount of $86,380 to additional paid-in capital. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below. This obligation has been fully satisfiedfiling and the Company has no further requirements related to this matter.

Eagle Equities Note 14

On ~~November 22, 2019,~~January 4, 2021, the Company entered into a Securities Purchase Agreement with Eagle Equities, LLC (“Eagle Equities”) pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 1”) in the aggregate principal amount of $256,000 and an original issue discount of $6,000. The Eagle Equities Note 1 entitles the holder to 12% interest per annum and matures on November 22, 2020. Under the Eagle Equities Note 1, Eagle Equities may convert all or a portion of the outstanding principal of the Eagle Equities Note 1 intoissued 4,123,750 shares of Common Stock beginning on the date which is 180 days from the issuance date of the Eagle Equities Note 1, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 1 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Eagle Equities Note 1 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 1, then such redemption premium is 116%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 122%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 128%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 134%; 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 Eagle Equities Note 1, there shall be no further right of prepayment. The Company accrued interest in the amount of $3,367 on the Eagle Equities Note 1 during the year ended December 31, 2019. During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $271,694 existed in connection with the variable rate conversion feature of the Eagle Equities Note 1. $256,000 of this amount was charged to discount on the Eagle Equities Note 1, and $15,694 was charged to interest expense. $7,784 of the discount was charged to operations during the year ended December 31, 2019.
~~During the nine months ended September 30, 2020, the holder of the Eagle Equities Note 1 converted the following amounts of principal and accrued interest to~~ common ~~stock: On June 5, 2020, principal of $25,000 and accrued interest of $1,608 were converted~~stock at a price of ~~$0.0132~~$0.012 per share ~~into 2,015,783~~pursuant to the conversion of $45,000 of principal and $4,485 of accrued interest in Eagle Equities Note 4. On January 6, 2021, the Company issued 3,505,964 shares of common ~~stock; On June 17, 2020, principal of $25,000 and accrued interest of $1,708 were converted~~stock at a price of ~~$0.0132~~$0.01224 per share into 2,023,358 shares of common stock; On June 23, 2020, principal of $40,000 and accrued interest of $2,813 were converted at a price of $0.0132 per share into 3,243,434 shares of common stock; on June 26, 2020, principal of $26,000 and accrued interest of $1,855 were converted at a price of $0.01362 per share into 2,045,130 shares of common stock; on July 9, 2020, principal of $45,000 and accrued interest of $3,405 were converted at a price of $0.01518 per share into 3,188,735 shares of common stock; on July 17, 2020, principal of $50,000 and accrued interest of $3,917 were converted at a price of $0.01572 per share into 3,429,814 shares of common stock; and on July 30, 2020, principal of $45,000 and accrued interest of $3,720 were converted at a price of $0.021 per share into 2,320,000 shares of common stock. There were no gains or losses recorded, as these conversions were made pursuant to the ~~terms~~conversion of ~~the agreement. Details~~$39,000 of ~~activity for the three~~principal and ~~nine months ended September 30, 2020 are presented~~$3,913 of accrued interest in ~~Notes Payable Table 1, below.~~Eagle Equities Note 4. This obligation has been fully satisfied ~~and the Company has no further requirements related to this matter.~~
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~~Table of Contents~~
~~Eagle Equities Note 2~~
On December 19, 2019, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 2”) in the aggregate principal amount of $256,000 and an original issue discount of $6,000. The Eagle Equities Note 2 entitles the holder to 12% interest per annum and matures on December 19, 2020. Under the Eagle Equities Note 2, Eagle Equities may convert all or a portionas of the ~~outstanding principal of the Eagle Equities Note 2 into shares of Common Stock beginning on the date which is 180 days from the issuance~~ date of the Eagle Equities Note 2, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 2 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Eagle Equities Note 2 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 2, then such redemption premium is 116%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 122%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 128%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 134%; 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 Eagle Equities Note 2, there shall be no further right of prepayment. The Company accrued interest in the amount of $1,094 on the Eagle Equities Note 2 during the year ended December 31, 2019. During the year ended December 31, 2019, the Company determined that a derivative liability in the amount of $277,476 existed in connection with the variable rate conversion feature of the Eagle Equities Note 2. $256,000 of this ~~amount was charged to discount on the Eagle Equities Note 2, and $21,476 was charged to interest expense. $8,393 of the discount was charged to operations during the year ended December 31, 2019.~~
During the nine months ended September 30, 2020, the holder of the Eagle Equities Note 2 converted the following amounts of principal and accrued interest to common stock: On August 20, 2020, principal of $56,000 and accrued interest of $4,573 were converted at a price of $0.01896 per share into 3,194,796 shares of common stock; On September 1, 2020, principal of $50,000 and accrued interest of $4,283 were converted at a price of $0.01806 per share into 3,005,721 shares of common stock; On September 9, 2020, principal of $50,000 and accrued interest of $4,417 were converted at a price of $0.0153 per share into 3,556,645 shares of common stock; and on September 25, 2020, principal of $50,000 and accrued interest of $4,683 were converted at a price of $0.0153 per share into 3,574,074 shares of common stock. Details of activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below. This obligation has been fully satisfiedfiling and the Company has no further requirements related to this matter.

Eagle Equities Note 35
On January ~~24, 2020,~~11, 2021, the Company issued 4,463,507 shares of common stock at a price of $0.01224 per share pursuant to the conversion of $50,000 of principal and $4,633 of accrued interest in Eagle Equities Note 5. On January 14, 2021, the Company issued 4,319,378 shares of common stock at a price of $0.01266 per share pursuant to the conversion of $50,000 of principal and $4,683 of accrued interest in Eagle Equities Note 5. This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.
Eagle Equities Note 6
On January 21, 2021, the Company issued 6,449,610 shares of common stock at a price of $0.0154 per share pursuant to the conversion of $93,000 of principal and $6,324 of accrued interest in Eagle Equities Note 6. On January 28, 2021, the Company issued 7,285,062 shares of common stock at a price of $0.01575 per share pursuant to the conversion of $107,200 of principal and $7,540 of accrued interest in Eagle Equities Note 6. This obligation has been fully satisfied as of the date of this filing and the Company has no further requirements related to this matter.
Eagle Equities Note 7
On February 5, 2021, the Company entered into a ~~Securities Purchase Agreement~~settlement agreement with ~~Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 3”) in~~ the aggregate principal amount of $256,000 and an original issue discount of $6,000. The Eagle Equities Note 3 entitles the holder to 12% interest per annum and matures on January 24, 2021. Under the Eagle Equities Note 3, Eagle Equities may convert all or a portion of the outstanding principalholders of the Eagle Equities Note ~~3 into~~7 whereby the Company issued 1,184,148 shares of ~~Common Stock beginning on~~common stock at a price of $0.24984 per share in satisfaction of $200,200 of principal and all accrued interest and prepayment penalties due under this note. This obligation has been fully satisfied as of the date ~~which is 180 days from~~of this filing and the ~~issuance date~~Company has no further requirements related to this matter.
Eagle Equities Note 8
On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note 3,8 whereby the Company issued 639,593 shares of common stock at a price ~~equal to 60%~~ of ~~lowest traded price during~~$0.23851 per share in satisfaction of $114,400 of principal and all accrued interest and prepayment penalties due under this note. This obligation has been fully satisfied as of the ~~20 day trading period ending on the day the conversion notice is received by~~date of this filing and the Company ~~provided, however, that Eagle Equities may not convert the~~ has no further requirements related to this matter.
Eagle Equities Note ~~3 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If~~9
On February 5, 2021, the Company ~~prepays~~entered into a settlement agreement with the Eagle Equities Note 3 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuanceholders of the Eagle Equities Note ~~3, then such redemption premium is 116%; if such~~9 whereby the Company issued 605,177 shares of common stock at a price of $0.24984 per share in satisfaction of $114,400 of principal and all accrued interest and prepayment ~~is made from~~penalties due under this note. This obligation has been fully satisfied as of the ~~sixty first 61st~~date of this filing and the Company has no further requirements related to this matter.
Eagle Equities Note 10
On February 5, 2021, the ~~90th day after issuance, then such redemption premium is 122%; and if such prepayment is made from~~Company entered into a settlement agreement with the 91st to the 120th day after issuance, then such redemption premium is 128%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 134%; 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 issuanceholders of the Eagle Equities Note ~~3, there shall be~~10 whereby the Company issued 1,095,131 shares of common stock at a price of $0.23748 per share in satisfaction of $200,200 of principal and all accrued interest and prepayment penalties due under this note. This obligation has been fully satisfied as of the date of this filing and the Company has no further right of prepayment. During the three months ended March 31, 2020, the Company determined that a derivative liability in the amount of $272,412 existed in connection with the variable rate conversion feature of the Eagle Equities Note 3. $250,000 ofrequirements related to this amount was charged to discount on the Eagle Equities Note 3, and $22,412 was charged to interest expense. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below.matter.

16
14
Table of Contents
~~Eagle Equities Note 4~~
On March 10, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 4”) in the aggregate principal amount of $129,000 and an original issue discount of $4,000. The Eagle Equities Note 4 entitles the holder to 12% interest per annum and matures on March 10, 2021. Under the Eagle Equities Note 4, Eagle Equities may convert all or a portion of the outstanding principal of the Eagle Equities Note 4 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Eagle Equities Note 4, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 4 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Eagle Equities Note 4 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 4, then such redemption premium is 116%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 122%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 128%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 134%; 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 Eagle Equities Note 4, there shall be no further right of prepayment. During the three months ended March 31, 2020, the Company determined that a derivative liability in the amount of $139,021 existed in connection with the variable rate conversion feature of the Eagle Equities Note 4. $125,000 of this amount was charged to discount on the Eagle Equities Note 4, and $14,021 was charged to interest expense. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below. As of the November 5, 2020, the remaining principal balance on this note was $156,000 and accrued interest was $14,643.
~~Eagle Equities Note 5~~
On April 8, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 5”) in the aggregate principal amount of $100,000 and an original issue discount of $4,000. The Eagle Equities Note 5 entitles the holder to 12% interest per annum and matures on April 8, 2021. Under the Eagle Equities Note 5, Eagle Equities may convert all or a portion of the outstanding principal of the Eagle Equities Note 5 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Eagle Equities Note 5, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 5 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Eagle Equities Note 5 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 5, then such redemption premium is 116%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 122%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 128%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 134%; 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 Eagle Equities Note 5, there shall be no further right of prepayment. During the three months ended June 30, 2020, the Company determined that a derivative liability in the amount of $106,576 existed in connection with the variable rate conversion feature of the Eagle Equities Note 5. $100,000 of this amount was charged to discount on the Eagle Equities Note 5, and $6,576 was charged to interest expense. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below.
17
~~Table of Contents~~
~~Eagle Equities Note 6~~
On July 1, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 6”) in the aggregate principal amount of $200,200 with an original issue discount of $18,200. The amount received was also net of fees in the amount of $7,000, which were charged to interest expense during the period. The Eagle Equities Note 6 entitles the holder to 12% interest per annum and matures on July 1, 2021. Under the Eagle Equities Note 6, Eagle Equities may convert all or a portion of the outstanding principal of the Eagle Equities Note 6 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Eagle Equities Note 6, at a price equal to 60% of lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 6 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Eagle Equities Note 6 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 6, then such redemption premium is 116%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 122%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 128%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 134%; 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 Eagle Equities Note 6, there shall be no further right of prepayment. The Company determined that a derivative liability in the amount of $218,148 existed in connection with the variable rate conversion feature of the Eagle Equities Note 6. $200,200 of this amount was charged to discount on the Eagle Equities Note 6, and $17,948 was charged to interest expense. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below.
~~Eagle Equities Note 7~~
On August 20, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 7”) in the aggregate principal amount of $200,200 with an original issue discount of $18,200. The amount received was also net of fees in the amount of $7,000, which were charged to interest expense during the period. The Eagle Equities Note 7 entitles the holder to 12% interest per annum and matures on August 20, 2021. Under the Eagle Equities Note 7, Eagle Equities may convert all or a portion of the outstanding principal of the Eagle Equities Note 7 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Eagle Equities Note 7, at a price equal to 70% of lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 7 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Eagle Equities Note 7 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 7, then such redemption premium is 116%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 122%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 128%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 134%; 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 Eagle Equities Note 7, there shall be no further right of prepayment. The Company determined that a derivative liability in the amount of $215,403 existed in connection with the variable rate conversion feature of the Eagle Equities Note 7. $200,200 of this amount was charged to discount on the Eagle Equities Note 7, and $15,203 was charged to interest expense. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below.
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~~Table of Contents~~
~~Eagle Equities Note 8~~
On September 30, 2020, the Company entered into a Securities Purchase Agreement with Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 8”) in the aggregate principal amount of $114,400 with an original issue discount of $10,400. The amount received was also net of fees in the amount of $4,000, which were charged to interest expense during the period. The Eagle Equities Note 8 entitles the holder to 12% interest per annum and matures on September 30, 2021. Under the Eagle Equities Note 8, Eagle Equities may convert all or a portion of the outstanding principal of the Eagle Equities Note 8 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Eagle Equities Note 8, at a price equal to 70% of lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company, provided, however, that Eagle Equities may not convert the Eagle Equities Note 8 to the extent that such conversion would result in beneficial ownership by Eagle Equities and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. If the Company prepays the Eagle Equities Note 8 during the 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Eagle Equities Note 8, then such redemption premium is 116%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 122%; and if such prepayment is made from the 91st to the 120th day after issuance, then such redemption premium is 128%; and if such prepayment is made from the 121st to the 150th day after issuance, then such redemption premium is 134%; 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 Eagle Equities Note 8, there shall be no further right of prepayment. The Company determined that a derivative liability in the amount of $117,309 existed in connection with the variable rate conversion feature of the Eagle Equities Note 8. $114,400 of this amount was charged to discount on the Eagle Equities Note 8, and $2,909 was charged to interest expense. Details of additional activity for the three and nine months ended September 30, 2020 are presented in Notes Payable Table 1, below.

PPP Loan

On May 4, 2020, the Company received loan proceeds from Bank of America in the amount of $460,406 under the Paycheck Protection Program (the “PPP Loan”).

On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds disbursed under the Note. The Company investigated the terms of the application and discovered its former President had erroneously represented it was refinancing an Economic Injury Disaster Loan when the Company never applied for or received such a loan. Bank of America ~~has~~ requested that the Company return the funds it received back to Bank of America. The Company is currently negotiating a repayment plan with Bank of America. If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.
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~~Table of Contents~~
Details of additional activity for the ~~three and nine months~~quarter ended ~~September 30, 2020~~March 31, 2021 are presented in Notes Payable Table 1, below.

Notes Payable Table 1:

Interest

Amortization

Interest

Amortization

Expense

of Discount

Expense

of Discount

3 months

3 months

9 months

9 months

Discount

Principal Balance

Accrued Interest

ended

ended

ended

ended

Balance

9/30/2020

12/31/2019

9/30/2020

12/31/2019

9/30/2020

9/30/2020

9/30/2020

9/30/2020

9/30/2020

Series C Convertible Debenture
$ 110,833 $ 110,833 $ 66,029 $ 57,709 $ 2,794 $ - $ 8,320 $ - $ -

Series D Convertible Debenture
11,333 11,333 8,047 7,026 343 - 1,021 - -

Convertible Note A
41,000 41,000 10,795 7,101 1,240 - 3,694 - -

Power Up Note 11
- 45,000 - 1,805 - - 875 38,498 -

Power Up Note 12
- 53,000 - 1,499 - - 1,813 46,014 -

Power Up Note 13
- 73,000 - 1,488 - - 3,240 66,554 -

Eagle Equity Note 1
- 256,000 - 3,367 781 109,019 15,735 248,215 -

Eagle Equity Note 2*
50,000 256,000 4,538 1,010 6,166 181,521 21,484 221,800 25,807

Eagle Equity Note 3**
256,000 - 21,041 - 7,743 45,409 21,041 71,312 184,688

Eagle Equity Note 4
129,000 - 8,652 - 3,902 18,083 8,652 33,883 95,117

Eagle Equity Note 5
100,000 - 5,754 - 3,025 11,149 5,754 25,080 78,920

Eagle Equity Note 6
200,200 - 6,057 - 6,057 25,932 6,057 25,932 174,268

Eagle Equity Note 7
200,200 - 2,699 - 2,699 8,123 2,699 8,123 192,077

Eagle Equity Note 8
114,400 - 38 - 38 313 38 313 114,087

PPP Loan
460,406 - 1,879 - 1,160 - 1,879 - -

Other
- - - 1,865 - - - - -

Total
$ 1,673,372 $ 846,166 $ 135,529 $ 82,870 $ 35,948 $ 399,549 $ 102,305 $ 785,724 $ 864,964
* Subsequent to September 30, 2020, $50,000 of principal and $4,867 of accrued interest of this note were converted to a total of 3,586,057 shares of the Company’s common stock. As of the date of this filing this note is fully satisfied and there are no further obligations.
** Subsequent to September 30, 2020, $133,000 of principal and $12,146 of accrued interest of this note were converted to a total of 11,170,083 shares of the Company’s common stock.
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~~Table of Contents~~
~~The total amount of notes payable at September 30, 2020 and December 31, 2019 is presented in Notes Payable Table 2 below:~~
~~Notes Payable Table 2:~~

September 30,
2020

December 31,
2019

March 31,
2021

December 31,
2020

Total notes payable
$ 1,673,372 $ 846,166 $ 460,406 $ 1,656,772
Less: Discount
(864,964
)
(646,888
)
- (756,795
)
Notes payable - net of discount
$ 808,408 $ 199,278 $ 460,406 $ 899,977

Current Portion, net of discount
$ 808,408 $ 199,278 $ 460,406 $ 899,977
Long-term portion, net of discount
$ - $ - $ - $ -

Note 6 8 – Derivative Liabilities

Certain of the Company’s convertible notes and warrants contain 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 ~~year ended December 31, 2019 and the nine~~three months ended ~~September 30, 2020 is~~March 31, 2021 are summarized in the table below:

December 31, 2018
$ -
Conversion features issued
1,472,320
Warrants issued
187,968
Settled upon conversion or exercise
(689,469
)
Settled upon payment of note
(191,827
)
Loss on revaluation
709,431
December 31, 2019
$ 1,488,423
Conversion features issued
1,068,870
Settled upon conversion or exercise
(1,020,450
)
Settled upon payment of note
(148,949
)
Gain on revaluation
(263,042
)
September 30, 2020
$ 1,124,852
December 31, 2020
$ 807,682
Settled upon conversion or exercise
(1,301,137
)
Gain on revaluation
493,455
March 31, 2021
$ -

Note 7 9 – ~~Stockholders’ (Equity)~~ Stockholders’ Equity (Deficit)

Common Stock

The Company has authorized 500,000,000 shares of common stock, par value $0.01; ~~121,452,914 and 81,268,443~~197,694,698 shares were issued and outstanding ~~at September 30, 2020 and December~~on March 31, ~~2019, respectively.~~2021.

Common Stock Transactions During the ~~Nine Months~~three months Ended ~~September 30, 2020~~March 31, 2021

On ~~May 27, 2020,~~January 4, 2021, the Company issued ~~2,901,440~~4,123,750 shares of common stock ~~for the cashless exercise~~at a price of ~~warrants. These warrants were issued~~$0.012 per share pursuant to ~~a settlement agreement with a note holder regarding~~ the ~~effective~~conversion of $45,000 of principal and $4,485 of accrued interest in Eagle Equities Note 4.
On January 6, 2021, the Company issued 3,505,964 shares of common stock at a price of ~~warrants issued with regard to a variable conversion price feature which resulted in the issuance of 1,011,967 more shares than would have been issued prior~~$0.01224 per share pursuant to the ~~settlement agreement. The~~conversion of $39,000 of principal and $3,913 of accrued interest in Eagle Equities Note 4.
On January 11, 2021, the Company ~~recorded~~issued 4,463,507 shares of common stock at a ~~loss in the amount of $24,894 on this transaction based upon the additional shares issued at the market~~ price of $0.01224 per share pursuant to the ~~Company’s common stock.~~conversion of $50,000 of principal and $4,633 of accrued interest in Eagle Equities Note 5.

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15
Table of Contents

~~The holder~~On January 14, 2021, the Company issued 4,319,378 shares of common stock at a price of $0.01266 per share pursuant to the conversion of $50,000 of principal and $4,683 of accrued interest in Eagle Equities Note 5.
On January 21, 2021, the Company issued 6,449,610 shares of common stock at a price of $0.0154 per share pursuant to the conversion of $93,000 of principal and $6,324 of accrued interest in Eagle Equities Note 6.
On January 28, 2021, the Company issued 7,285,062 shares of common stock at a price of $0.01575 per share pursuant to the conversion of $107,200 of principal and $7,540 of accrued interest in Eagle Equities Note 6.
On February 1, 2021, the Company issued 6,672,000 shares of common stock in a private placement (the “2021 Private Placement”) at a price of $0.25 per share for cash proceeds of $1,668,000.
On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note ~~1 converted~~7 whereby the ~~following amounts~~Company issued 1,184,148 shares of ~~principal and accrued interest to~~ common ~~stock: On June 5, 2020, principal of $25,000 and accrued interest of $1,608 were converted~~stock at a price of ~~$0.0132~~$0.24984 per share ~~into 2,015,783 shares~~in satisfaction of ~~common stock; On June 17, 2020,~~$200,200 of principal ~~of $25,000~~ and all accrued interest ~~of $1,708 were converted at a price of $0.0132 per share into 2,023,358 shares of common stock; On June 23, 2020, principal of $40,000~~ and accrued interest of $2,813 were converted at a price of $0.0132 per share into 3,243,434 shares of common stock; on June 26, 2020, principal of $26,000 and accrued interest of $1,855 were converted at a price of $0.01362 per share into 2,045,130 shares of common stock; on July 9, 2020, principal of $45,000 and accrued interest of $3,405 were converted at a price of $0.01518 per share into 3,188,735 shares of common stock; on July 17, 2020, principal of $50,000 and accrued interest of $3,917 were converted at a price of $0.01572 per share into 3,429,814 shares of common stock; and on July 30, 2020, principal of $45,000 and accrued interest of $3,720 were converted at a price of $0.021 per share into 2,320,000 shares of common stock. There were no gains or losses recorded, as these conversions were made pursuant to the terms of the agreement.prepayment penalties due under this note.

~~The holder~~On February 5, 2021, the Company entered into a settlement agreement with the holders of the Eagle Equities Note ~~2 converted~~8 whereby the ~~following amounts~~Company issued 639,593 shares of ~~principal and accrued interest to~~ common ~~stock: On August 20, 2020, principal of $56,000 and accrued interest of $4,573 were converted~~stock at a price of ~~$0.01896~~$0.23851 per share in satisfaction of $114,400 of principal and all accrued interest and prepayment penalties due under this note.
On February 5, 2021, the Company entered into ~~3,194,796~~a settlement agreement with the holders of the Eagle Equities Note 9 whereby the Company issued 605,177 shares of common ~~stock; On September 1, 2020, principal of $50,000 and accrued interest of $4,283 were converted~~stock at a price of ~~$0.01806~~$0.24984 per share in satisfaction of $114,400 of principal and all accrued interest and prepayment penalties due under this note.
On February 5, 2021, the Company entered into ~~3,005,721~~a settlement agreement with the holders of the Eagle Equities Note 10 whereby the Company issued 1,095,131 shares of common ~~stock; On September 9, 2020, principal of $50,000 and accrued interest of $4,417 were converted~~stock at a price of ~~$0.0153~~$0.23748 per share ~~into 3,556,645~~in satisfaction of $200,200 of principal and all accrued interest and prepayment penalties due under this note.
On February 22, 2021, the Company issued 336,000 shares of common ~~stock; and on September 25, 2020, principal~~stock for the exercise of ~~$50,000 and accrued interest of $4,683 were converted~~options at a price of ~~$0.0153~~$0.03 per ~~share into 3,574,074~~share.
On March 11, 2021, the Company issued 600,000 shares of common ~~stock.~~stock to four officers of The Good Clinic in exchange for 4,800 shares of Series A Preferred Stock. The 4,800 shares of Series A Preferred Stock were cancelled.

On ~~January 2,~~March 17, 2021, the Company issued 300,000 shares of common stock at a price of $0.31 per share to a service provider.
On March 23, 2021, the Company issued 461,358 shares of common stock at a price of $0.26 per share to the underwriters of the 2021 Private Placement.
Common StockTransactions During the Three Months Ended March 31, 2020
During the three months ending March 31, 2020, the Company issued 200,000 restricted shares of the Company’s common stock at valued $7,680 in exchange for services conducted on behalf of the Company. The value of these shares was based on the closing market price on the respective date of grant.

~~The~~Also, during the three months ended March 31, 2020, the Company charged the amount of ~~$69,342~~$33,676 to operations in connection with the vesting of stock granted to its officers and board members; the Company also charged the amount of ~~$128,714~~$7,072 to operations in connection with the vesting of options granted to officers and board ~~members and employees.~~members.

OnAlso, during the three months ended March 2,31, 2020, the Company entered into agreements to issue 500,000 options to each of four consultants (a total of 2,000,000 options). The options have a fair value of $20,930 per consultant (a total of $83,720). These agreements will become effective April 6, 2020, at which time the Company will begin to charge the value of these options to operations. The Company valued these options using the Black-Scholes valuation model.

The Company entered into agreements with two note holders regarding the exercise price of warrants held by the note holders. These agreements resulted in the following: (i) on January 29, 2020, the Company issued 1,000,000 shares of common stock, and the note holders agreed to cancel 2,769,482 warrants; the Company recorded a gain in the amount of $77,652 on this transaction; (ii) on February 19, 2020, the Company issued 4,098,556 shares of common stock for the exercise of 4,480,938 warrants in a cashless transaction; the Company recorded a gain in the amount of $259,947 on this transaction, which is included in gain on derivative liabilities.
On August 27, 2020, the Company issued 386,985 shares of common stock at a price of $0.034 per share to an ex-employee for accrued compensation. A gain in the amount of $6,988 was recognized on this transaction.
~~Common Stock Transactions During the Nine Months Ended September 30, 2019~~
The Company issued 200,000 restricted shares of the Company’s common stock at valued $17,480 in exchange for services conducted on behalf of the Company. The value of these shares was based on the closing market price on the respective date of grant.
The Company issued 2,975,000 shares of common stock to employees, subject to vesting provisions, pursuant to employment agreements. The par value of these shares in the amount of $29,750 was credited to paid-in capital.
~~The Company charged the amount of $2,875 to additional paid-in capital in connection with the vesting of stock granted to its President.~~
The Company issued, in twenty-four 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, $26,330, and $1,500, respectively; a loss in the aggregate amount of $161,458 was recognized on these transactions.
~~The Company cancelled an aggregate 700,000 shares of common stock issued to former executive officers.~~
22
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Table of Contents

The Company issued 1,401,224 shares of common stock in connection with the settlement of a note payable in the amount of $74,104. The Company recorded a loss in the amount of $26,924 in connection with this transaction.
Preferred Stock

~~We are authorized to issue:~~
●
500,000,000 shares of Common Stock of which 121,452,914 shares are outstanding, and 9,917,879 common shares which are issuable upon exercise of warrants and options. We are also obligated to issue Common Stock upon conversion of certain promissory notes of approximately $1.3 million, or $1.5 million if held for an extended period of time. Most have a conversion feature that could allow the holder to convert to Common Stock at a 40% discount to the market price.
●
~~100,000,000 shares of Preferred Stock with such rights designations and preferences as determined by our board of directors. We have designated:~~
o
~~27,324 shares as Series X Preferred Stock, and~~
o
~~3,000,000 shares as Series A Preferred Stock,~~
~~Series A Preferred Stock~~
We issued 4,800 and 0 shares of our 12% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) as of September 30, 2020 and December 31, 2019, respectively. The Series A Preferred Stock has a par value of $0.01 per share, no stated maturity, a liquidation preference of $25.00 per share, and is not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase the Series A Preferred Stock. The Series A Preferred Stock is not redeemable prior to December 31, 2022. The Series A Preferred Stock will accrue dividends at the rate of 12% on $25.00 per share.
~~The designation includes, among other terms, that:~~
■
~~The Series A Preferred Stock ranks junior to our Series X Preferred Stock;~~
■
The Series A Preferred Stock has limited voting rights only on matters impacting certain of our securities that are senior to the Series A and in transactions involving mergers or similar transactions that adversely affects and deprives holders of the Series A Preferred Stock;
■
The Series A Preferred Stock is on a parity with all equity securities issued by us with terms specifically providing that those equity securities rank on a parity with the Series A Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up;
■
The Series A Preferred Stock is junior to all equity securities issued by us with terms specifically providing that those equity securities rank senior to the Series A Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up;
■
~~The Series A Preferred Stock is effectively junior to all of our existing and future indebtedness;~~
■
~~The Series A Preferred Stock will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase it at our option;~~
■
The Series A Preferred Stock will accrue cumulative cash dividends at the rate of 10% of the $25.00 per share liquidation preference per annum which will accrue if we do not have funds to pay the dividend;
■
~~We have not yet generated revenues from our current business plan and we do not presently have a reserve to pay dividends that will be due in the future on the Series A Preferred Stock;~~
■
~~No dividends will be paid or set apart for payment by us at any time if it would violate the terms of any agreement in which we are a party to or that we may enter into in the future;~~
■
~~2,395,200 additional shares of the Series A Preferred Stock may be issued by us without the approval of shareholders;~~
■
~~The Series A Preferred Stock may be redeemed by us on or after December 31, 2022, for a cash redemption price of $25.00 per share if certain requirements are met;~~
■
~~The Series A Preferred Stock is not convertible into our Common Stock; and~~
■
~~If we fail to pay a dividend on the Series A Preferred, holders will not receive additional interest or fees in respect to such dividend.~~
23
~~Table of Contents~~
Series A Preferred Stock Transactions During the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2021
During the three months ended March 31, 2020, the Company accrued dividends in the amount of $1,000 on the Series A Preferred Stock. On March 11, 2021, the Company issued 600,000 shares of common stock to the four officers of The Good Clinic in exchange for the previously issued Series A Preferred Stock and accrued dividends. The Series A preferred stock was canceled. The Preferred Stock was valued at cost of $71,558, and the common stock was valued at the market price of $0.463 per share or a total value of $277,800. This transaction resulted in a deemed dividend to the Preferred A shareholders in the amount of $206,242.
Series A Preferred Stock Transactions During the Three Months Ended March 31, 2020

On March 2, 2020, the Company issued 4,800 shares of its Series A Preferred Stock to four individuals with certain skills and know-how to assist the Company in the development of its ~~newly-formed~~newly formed subsidiary ~~The Good Clinic,~~My Care, LLC. The Company ~~has~~had valued these shares at $71,558 or approximately $14.91 per share based upon an analysis performed by an independent valuation consultant. During the ~~nine~~three months ended ~~September 30,~~March 31, 2020, the Company accrued dividends in the amount of ~~$6,967~~$967 on the Series A Preferred Stock. ~~At September 30,~~On March 31, 2020, dividend payable on the Series A Preferred Stock was ~~$6,967. At September 30,~~$967. On March 31, 2020, if management determined to pay these dividends in shares of the Company’s common stock, this would result in the issuance of ~~214,898~~39,534 shares of common stock based upon the average price of ~~$0.03242~~$0.02446 per share for the ~~five day~~five-day period ended ~~September 30,~~March 31, 2020.
Series C Preferred Stock
Series C Preferred Stock Transactions During the Three Months Ended March 31, 2021
On March 25, 2021, the Company entered into Securities Purchase Agreements (the “SPAs”) with four institutional investors (the “Investors” and each an “Investor”) pursuant to which the Company sold to the Investors in a private placement an aggregate of 3,000,000 units (the “Units” and each a “Unit”) with a purchase price of $1.00 per Unit, with each Unit consisting of (a) one share of a newly formed Series C Convertible Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), (b) one warrant (the “Series A Warrants”) to purchase 2.1 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) at a purchase price of $0.50 per whole share of Common Stock, and (c) one warrant (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase 2.1 shares of Common Stock at a purchase price of $0.75 per whole share. The aggregate gross proceeds to the Company were $3,000,000 and the number of shares of Common Stock initially issuable upon conversion of the Series C Preferred Stock is 12,600,000 shares of Common stock and the aggregate number of shares of Common Stock initially issuable upon exercise of the Warrants is 12,600,000 shares of Common Stock. The Company allocated the aggregate purchase price of the units in the amount of $3,000,000 as follows: $608,519 was allocated to the Series C Preferred Stock, and $2,391,481 was allocated to the warrants. The Company also recorded a deemed dividend to the Series C Preferred Stock shareholders in the amount of $126,000 based upon the difference between the conversion price of $0.25 per share and the market price of $0.26 per share on the date of issuance.
Series C Preferred Stock Transactions During the Three Months Ended March 31, 2020
None.

Series X Preferred Stock

~~The Company has 26,227 shares of its 10% Series X Cumulative Redeemable Perpetual Preferred Stock (the “Series X Preferred Stock”) outstanding as of September 30, 2020 and December 31, 2019.~~ The Series X Preferred Stock has a par value of $0.01 per share, no stated maturity, a liquidation preference of $25.00 per share, and will not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase the Series X Preferred Stock; the Series X Preferred Stock is not redeemable prior to November 4, 2020. The Series X Preferred Stock will rank senior to all classes of the Company’s common and preferred stock and accrues dividends at the rate of 10% on $25.00 per share. The Company reserves the right to pay the dividends in shares of the Company’s common stock at a price equal to the average closing price over the five days prior to the date of the dividend declaration. Each one share of the Series X Preferred Stock is entitled to 20,000 votes on all matters submitted to a vote of our shareholders.

Series X Preferred Stock Transactions During the ~~Nine~~Three Months Ended ~~September 30, 2020~~March 31, 2021

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company accrued dividends in the amount of ~~$49,176~~approximately $16,392 on the Series X Preferred Stock. ~~At September 30, 2020,~~On March 31, 2021, dividend payable on the Series X Preferred Stock was ~~$49,176. At September 30, 2020, if management determined to pay these dividends in shares~~$16,392.
17
Table of ~~the Company’s common stock, this would result in the issuance of 1,516,841 shares of common stock based upon the average price of $0.03242 per share for the five day period ended September 30, 2020.~~
Contents

Stock Options

The following table summarizes the options outstanding ~~at September 30,~~on December 31, 2020 and the related prices for the options to purchase shares of the Company’s common stock:

Weighted

Weighted

Weighted

average

average

average

exercise

exercise

Range of

Number of

remaining

price of

Number of

price of

exercise

options

contractual

outstanding

options

exercisable

prices

outstanding

life (years)

options

exercisable

options

$
0.03

1,250,000

9.67

$
0.03

250,000

$
0.03

$
0.05

7,450,000

9.44

$
0.05

983,334

$
0.05

$
0.06

1,000,000

9.84

$
0.06

-

$
-

$
21.40

67,879

2.41

$
21.40

67,879

$
1.16

9,767,879

9.46

$
0.20

1,301,213

$
1.16

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Weighted

Weighted

Weighted

average

average

average

exercise

exercise

Range of

Number of

remaining

price of

Number of

price of

exercise

options

contractual

outstanding

options

exercisable

Prices

outstanding

life (years)

options

exercisable

options

$0.03-$0.39
14,312,879 9.23 $ 0.04 10,967,879 $ 0.04

Transactions involving stock options are summarized as follows:

Shares

Weighted- Average
Exercise Price ($)

Shares

Weighted- Average
Exercise Price ($)

Outstanding at December 31, 2018
67,879 $ 21.40
Outstanding on December 31, 2020
13,453,879 $ 0.03
Granted
- - 1,195,000 0.19
Cancelled
- - (336,000 ) 0.03

Outstanding at December 31, 2019
67,879 $ 21.40

Granted
11,200,000 $ 0.05
Cancelled
(1,500,000
)
0.05
Outstanding at September 30, 2020
9,767,879 $ 0.20

Exercisable at September 30, 2020
1,301,213 $ 1.16
Outstanding on March 31, 2021
14,312,879 $ 0.04

~~At September 30, 2020,~~On March 31, 2021, the total stock-based compensation cost related to unvested awards not yet recognized was ~~$253,582.~~ $431,078.

The ~~Company valued warrants and~~Black-Scholes option pricing model is used to estimate the fair value of stock options ~~during~~granted under the ~~nine months ended September 30, 2020 and 2019 using~~Company’s share-based compensation plans. The weighted average assumptions used in calculating the ~~Black-Scholes valuation model utilizing the following variables:~~ fair values of stock options as of March 31, 2021 was as follows:

September 30,

September 30,

2020

2019

Volatility
201.9% to 209.6
%
228.0% to 229.4
%
Dividends
$ - $ -
Risk-free interest rates
0.55% to 1.30
%
1.75% to 2.53
%
Term (years)
6.0 to 10.00 5.00
March 31,
2021
Volatility
169.3% to 183.5 %
Dividends
$ -
Risk-free interest rates
0.82 % to 1.69 %
Term (years)
2.50 to 10.00

Warrants

The following table summarizes the warrants outstanding ~~at September 30, 2020~~on March 31, 2021 and the related prices for the warrants to purchase shares of the Company’s common stock:

Shares

Weighted- Average
Exercise Price ($)

Outstanding at December 31, 2018
1,167,653 $ 2.18

Granted
400,000 $ 0.00858
Additional warrants due to trigger of ratchet feature
6,659,382 $ 0.00858
Exercised – cashless conversion
(3,514,900
)
$ 0.00858
Forfeited
(2,769,482
)
$ 0.00858
Expired
(142,653
)
17.42
Outstanding at December 31, 2019
1,800,000 $ 0.00858

Granted
6,582,382 $ 0.00858
Exercised
(8,382,382
)
$ 0.0561
Outstanding at September 30, 2020
- $ -

Shares

Weighted- Average
Exercise Price ($)

Outstanding on December 31, 2020
- $ -
Granted
12,600,000 $ 0.63
Exercised
- $ -
Outstanding on March 31, 2021
12,600,000 $ 0.63

25
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Table of Contents
Note 10 – Fair Value of Financial Instruments
The following summarizes the Company’s derivative financial liabilities that are recorded at fair value on a recurring basis on March 31, 2021 and December 31, 2020.
March 31, 2021
Level 1
Level 2
Level 3
Total
Liabilities
Derivative liabilities
$ - $ - $ - $ -

December 31, 2020

Level 1

Level 2

Level 3

Total

Liabilities

Derivative liabilities
$ - $ - $ 807,682 $ 807,682

Note 8 11 – Commitments and Contingencies

Legal
There ~~are~~is no pending or anticipated legal actions at this time except as noted below in “Other”.

Other
On May 4, 2020, we received a loan in the amount of $460,406 from the United States Small Business Administration under the Payroll Protection Program. Subsequent to June 30, 2020, we determined that errors had been made in the application submitted to obtain the loan. On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds, representing an amount for the refinancing of an Economic Injury Disaster Loan which we did receive. Bank of America has requested that we remit such funds back to Bank of America. We are presently attempting to negotiate repayment of the loan. If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.

During management's review of the Company’s recent PPP loan application after the loan had been disbursed to the Company, it was determined that the information provided by Ms. Julie R. Smith, the Company’s former President and COO, was not representative of the Company’s situation. After consulting with legal counsel, the Board of Directors voted to remove Ms. Smith from its Board of Directors, and all other capacities due to the misstatements she made in the loan application. Subsequent to that decision, effective July 1, 2020, Ms. Smith submitted a resignation from all positions with the Company, which was accepted by the Board and management. Ms. Smith subsequently retained counsel and has indicated her intent to file an administrative charge of discrimination in Colorado under certain provisions of the anti-discrimination laws of that state.

On August 18, 2020, the Company received formal notice that a complaint has been filed with the Colorado Civil Rights Division by Ms. Smith naming the Company as the Respondent. The Company believes the claims are frivolous and intends to vigorously defend against the allegations. As of the date of this filing the Company has been advised that the Colorado Civil Rights Division has dismissed this matter effective March 1, 2021. Ms. Smith requested a “Right-to-Sue” letter, which she received, giving her a right to sue in District Court for 90 days from the date of the dismissed action.

Note 9 12 – Subsequent Events
~~Lease Agreement~~
Effective October 19, 2020, the Company entered into an agreement to lease approximately 3,038 square feet of retail space from LMC NE Minneapolis Holdings, Inc. for purposes of operating its first medical clinic (the “LMC Lease”).   The lease has an initial term of 90 months at the following rates: Months 1 to 24 - $5,317 per month; months 25 to 36 - $5,443 per month; months 37 to 48 - $5,570 per month; months 49 to 60 - $5,696 per month; months 61 to 72 - $5,823 per month; months 73 to 90 - $5,949 per month. The LMC Lease also provides the Company with renewal options for months 91 through 150.
~~Convertible Note Agreement~~

On ~~October 29, 2020,~~April 12, 2021, the ~~Company entered into a convertible redeemable note agreement with Eagle Equities, LLC in the amount~~Board of $114,400 (the “Eagle Equities Note 9). The Eagle Equities Note 9 bears interest at the rate of 12% per annum, is convertible into the Company’s common stock at any time after 180 days from the date of the note, and is due October 29, 2021.
~~Common Stock Issued for Conversion of Notes Payable~~Directors appointed Ingrid Jenny Lindstrom its Chief Legal Officer.

On ~~October 6, 2020,~~April 12, 2021, the Company issued ~~3,586,057~~1,000,000 ten-year options with an exercise price of $0.31 to its Chief Legal Officer. These options had a fair value at issuance of $301,480. The Company valued these options using the Black-Scholes valuation model. The options vest as follows: 250,000 options vest 90 days from issuance: 250,000 options vest one year from issuance; and 500,000 options vest based upon the Company’s achieving certain performance targets.
On April 20, 2021, the Company issued 1,962 shares of common stock ~~at a price~~due to the underwriters of ~~$0.0153 per share~~the 2021 Private Placement.
On May 4, 2021, the Company issued 845,386 shares of common stock pursuant to the conversion of ~~$50,000 of principal and $4,867 of accrued interest in Eagle Equities Note 2.~~201,282 shares Series C Preferred Stock.

On ~~October 15, 2020,~~May 13, 2021, the Company ~~issued 3,471,690 shares of common stock at a price of $0.01566 per share pursuant~~announced that it had appointed Mr. Tom Brodmerkel to the ~~conversion~~position of ~~$50,000~~Chairman of ~~principal and $4,367~~the Board of ~~accrued interest in Eagle Equities Note 3.~~
~~On October 29, 2020,~~Directors. Mr. Ronald Riewold, the ~~Company issued 4,439,024 shares of common stock at~~Company’s former Chairman, has asked to retire from his Board position when a ~~price of $0.0123 per share pursuant~~replacement is identified. Mr. Riewold will continue as a strategic advisor to the ~~conversion of $50,000 of principal and $4,600 of accrued interest in Eagle Equities Note 3.~~
On November 11, 2020, the Company issued 3,259,369 shares of common stock at a price of $0.0111 per share pursuant to the conversion of $33,000 of principal and $3,179 of accrued interest in Eagle Equities Note 3.
~~Amendment of Bylaws~~
~~On November 10, the Company amended its bylaws to increase the number of members of its Board of Directors to up to 10 members and eliminate cumulative voting for the election of directors.~~Company.

26
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Table of Contents

~~ITEM 2.~~
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~
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 condensedconsolidated 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, 2019 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 Mitesco, 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. Such risks and uncertainties may be amplified by the COVID-19 pandemic and its potential impact on our business and the global economy. 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 formulations in a timely manner or at all, identify and acquire additional proprietary formulations, 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.

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto appearing elsewhere ~~in this Form 10-Q.~~herein.

~~Mitesco, Inc. (the “Company,” “we,” “us,” or “our”) was formed~~We are working to open primary care clinics around the US that are in residential centers and leverage the expertise, training and license of Nurse Practitioners. We are focusing on wellness as a core of the practice. Mitesco’s mission is to increase convenience and access to care, improve the quality of care, and reduce its cost. Technology is a key part to our approach to deliver on these three goals. We recognize the essential nature of the clinician client relationship and its importance to achieving these superior outcomes. Our view is that technology must enhance these human interactions, not operate independently. As such, we are seeking innovative technologies that enable both consumers and clinicians to achieve more convenient and better outcomes with greater efficiency.
We have opened our flagship primary care clinic “The Good Clinic” in North East Minneapolis, Minnesota. We plan to open an additional 5 to 7 clinics in the ~~state~~Twin Cities area of ~~Delaware on January 18, 2012. On December 9, 2015, we restructured our operations~~Minnesota and ~~acquired Newco4pharmacy, LLC,~~then continue expansion in the Denver, Colorado area. We target to open clinics in residential concentrations of population to enhance the convenience, especially timely due to the changes in community travel patterns resulting from the pandemic. Our clinicians use both telehealth (virtual) and in-person visits to treat and coach the clients along their journey to better health and quality of life. Our clinics are led by Nurse Practitioners that use their license, extensive training, expertise and empathy to help people remain stable or improve their health. We emphasize wellness, beginning with a ~~development stage company seeking~~client‘s co-developed plan that identifies from where a person is starting and constructs a plan for how they can achieve their goals. The practice uses an integrated health approach that includes an assessment of both the individual’s behavioral and physical health and combines this with their activation level and their goals. The clinic offers wellness coaching, behavioral health care, episodic care, dermatologic services, and supplements. We seek to ~~acquire compounding pharmacy businesses. As a part of such restructuring, we completed a “spin out” transaction of our former business. On April 24, 2020, we changed our name to Mitesco, Inc.~~care for the whole person’s needs.

~~During 2020,~~Like the first clinic, we seek to locate clinics convenient to residential centers. In pursuit of this approach, we intend to continue to expand our ~~operations~~relationship with Lennar Corporation and other developers. Already, our clinic is being viewed as an amenity for the high-rise development in which we are located. We plan to mirror this approach within the two Lennar locations with which we have ~~focused on establishing medical~~signed letters of intent to build clinics ~~utilizing nurse practitioners under~~in these residential developments in Denver.
Additionally, we have implemented a corporate structure that we believe allows us to expand into international markets. We have a wholly owned subsidiary in Dublin, Ireland, Acelerar Healthcare Holdings, Ltd. We intend to use this location as a base for European operations. In the European community the investment in healthcare technology has been significant. In many cases, even more robust than in the North American markets. We believe that as a result of expected low economic growth in the European community, several technology businesses based there may become our targets for acquisition at attractive valuations. We believe that these businesses may benefit from the larger markets found in North America and elsewhere in the world.
We also see the European community as an opportunity for capital as we expand our business. The ~~Good Clinic name~~interest rates in this area of the world are currently very low or even at zero. As such, raising funds in the European market may prove attractive when compared to local alternatives. Further, there are equity and ~~development~~debt markets based in Europe that may provide liquidity to our investors, should we be able to list and ~~acquisition of telemedicine technology. In March of 2020, we formed The Good Clinic LLC,~~trade our financial instruments in those marketplaces. We may seek a ~~Colorado limited liability company~~dual listing for our ~~clinic business.~~common stock to trade there. We ~~entered into an agreement with four senior executives from Minute Clinic James Woodburn, Kevin Lee Smith, Michael Howe~~believe this avenue may increase both the size and Rebecca Hafner-Fogarty ( the “Sellers”) with the skills and know-how to assist the Company in the establishment of a series of clinics utilizing nurse practitioners and telemedicine technology in States where full practice authority for nurse practitioners is supported. We issued 4,800 shares of our Series A Preferred Stock to these individuals as compensation. We valued the 4,800 sharesliquidity of the ~~Series A Preferred Stock at $71,558 or approximately $14.91 per share based upon an analysis performed by an independent valuation consultant.~~shareholder base.

~~At September 30, 2020 and November 2, 2020, we had cash on hand for our operations of $101,660 and $104,725. We will seek to fund our operations by offering debt and equity securities.~~
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~~Table of Contents~~
All of our future plans are contingent on recruiting sufficient capital to provide for both our public company overhead, and to fund the acquisitions and growth needs of the target acquisitions. If we are unsuccessful in our funding efforts, the plans may stall, and even the limited overhead of the Company may require reductions.
~~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 three months ended September 30, 2020, 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, 2019.
~~Recently Issued and Adopted Accounting Pronouncements~~
~~See Note 2 to our condensed 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 orof any future ~~period. Our software, systems~~periods. Further, as a result of any acquisitions of other businesses, and consulting operations activities have become our primary focus, along with engagement with our new and potential user base. This change in our operations will have and is expected to continue to have a significant impact on our financial results.
~~In this discussion of our results of operations and financial condition, amounts,~~any additional pharmacy acquisitions or other ~~than per-share amounts, have been rounded~~such transactions we may pursue, we may experience large expenditures specific to the ~~nearest thousand dollars.~~transactions that are not incident to our operations.

~~For~~Periods ended March 31, 2021 and 2020
Revenue
The Company recognized revenue of approximately $3,000 for the ~~Three Months~~three months ended ~~September 30, 2020 and 2019~~March 31, 2021, compared to $0 for the three months ended March 31, 2020. The increase in revenue is the result of the opening of The Good Clinic’s first location.
Cost of Sales
The Company incurred approximately $2,000 of cost of goods sold for the three months ended March 31, 2021, compared to $0 for the three months ended March 31, 2020. The increase in cost of goods sold is the result of the opening of The Good Clinic’s first location.
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Gross Profit
Our gross profit was approximately $1,000 for the three months ended March 31, 2021, compared to $0 for the three months ended March 31, 2020.
Operating Expenses

Our total operating expenses for the three months ended ~~September 30, 2020~~March 31, 2021 were ~~$608,000.~~approximately $953,000. For the comparable period in ~~2019,~~2020, the operating expenses were ~~$433,000.~~  approximately $496,000.
Operating expenses for the three months ended ~~September 30, 2020~~March 31, 2021 were ~~composed~~comprised primarily of ~~$183,000 in~~$118,000 payroll and payroll ~~taxes, including $99,000 in non-cash compensation; $139,000~~taxes; $382,000 in legal and professional fees; ~~$123,000~~$137,000 in consulting ~~fees, $40,000 in board of director fees; $81,000 in marketing and public relations; 31,000 in office and facilities costs; and $10,000 in insurance costs.~~fees. Operating expenses for the three months ended ~~September 30, 2019~~March 31, 2020 were comprised primarily of ~~$237,000~~$193,000 in payroll, including ~~$112,000~~$120,000 in non-cash compensation; ~~$135,000 in consulting fees, $30,000~~$90,000 in legal and professional ~~fees; $7,000~~fees and $64,000 in ~~office~~consulting fees.
Other Income and ~~facilities costs; $5,000 in marketing and public relations; $17,000 in travel; and $2,000 of insurance costs.~~Expenses

Interest expense was ~~$537,000~~approximately $965,000 for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$832,000~~approximately $190,000 for the three months ended ~~September 30, 2019.~~March 31, 2020. Interest expense consisted primarily of $757,000 amortization of the discount on convertible notes payable and $187,000 prepayment penalty. Interest expense for the three months ended ~~September 30,~~March 31, 2020 consisted primarily of ~~$36,000 accrued on notes payable; $1,000~~$98,000 of ~~interest on a credit card; $399,000~~ amortization of the discount on convertible debt, $31,000 accrued on notes ~~payable; and $83,000~~payable, $36,000 of excess value of derivative, and $18,000 of financing costs. Interest expense for the three months ended September 30, 2019 consisted of $344,000 in amortization of the discount on convertible debt; $460,000 of excess value of derivative; $22,000 of accrued interest; $4,000 of accruedprepayment interest ~~to related parties, and $2,000 of interest imputed on related party debt.~~expense.

During the three months ended ~~September 30, 2020,~~March 31, 2021, we recorded a gain on settlement of accounts payable ~~in the amount~~ of ~~$49,000, compared to $50,000 in the prior period.~~
During the three months ended September 30, 2020, we recorded a gain on revaluation of derivative liabilities in the amount of $52,000, compared to a loss on revaluation of derivative liabilities of $69,000 in the prior period.
During the three months ended September 30, 2020, we did not recognize any gains or losses on the conversion of notes payable, compared to a loss on conversion of notes payable of $3,000 in the prior period.
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~~During the three months ended September 30, 2020, we recognized a gain on the conversion of accrued salary in the amount of $7,000; there was no comparable transaction in the prior period.~~
For the three months ended September 30, 2020, the Company had a net loss of $1,037,000, or a net loss per share, basic and diluted of ($0.01), compared to a net loss of $1,288,000, or a net loss per share, basic and diluted of ($0.03), for the three months ended September 30, 2019.
~~For the Nine Months ended September 30, 2020 and 2019~~
Our total operating expenses for the nine months ended September 30, 2020 were $1,730,000. For the comparable period in 2019, the operating expenses were $881,000.  Operating expenses for the nine months ended September 30, 2020 were composed primarily of $648,000 in payroll and payroll taxes, including $259,000 in non-cash compensation; $373,000 in legal and professional fees; $309,000 in consulting fees, $85,000 in board of director and advisory board fees; $218,000 in marketing and public relations; $42,000 in insurance costs; $40,000 in office and facilities costs; and $15,000 in travel costs.
Our total operating expenses for the nine months period ended September 30, 2019 comprised primarily of compensation expense of $365,000 in payroll and payroll taxes, including $155,000 of non-cash compensation; consulting fees of $281,000, legal and professional fees of $114,000, travel of $54,000, insurance costs of $28,000; marketing and public relations of $24,000, and office and facilities costs of $15,000.
~~Grant income was $3,000 for the nine months ended September 30, 2020; there was no comparable transaction during the prior period.~~
Interest expense was $1,124,000 for the nine months ended September 30, 2020, compared to $1,157,000 for the nine months ended September 30, 2019. Interest expense consisted of $102,000 accrued on notes payable; $3,000 of interest on a credit card; $781,000 amortization of the discount on convertible notes payable; and $130,000 of excess value of derivative, and $18,000 in financing costs. We also recognized $90,000 of interest expense in connection with a prepayment penalty on a note payable. Interest expense for the nine months ended September 30, 2019 consisted of $604,000 of amortization of the discount on convertible debt, $460,000 of excess value of derivative, $56,000 of accrued interest, $3,000 of credit card interest; $7,000 of interest imputed on related party debt, $16,000 of prepayment penalties on notes payable, and $11,000 of interest accrued on related party debt.
~~During the nine months ended September 30, 2020, we recorded a gain on settlement of accounts payable in the amount of $398,000,~~approximately $6,000, compared to a gain on settlement of accounts payable in the amount of ~~$50,000 in the prior period.~~
During the nine months ended September 30, 2020, we recorded a gain on revaluation of derivative liabilities in the amount of $498,000, compared to a loss on revaluation of derivative liabilities in the amount of $70,000 in the prior period.
~~During the nine months ended September 30, 2020, we did not recognize any gains or losses on legal settlements, compared to a loss on legal settlement of $27,000 in the prior period.~~
During the nine months ended September 30, 2020, we did not recognize any gains or losses on the conversion of notes payable, compared to a loss on conversion of notes payable of $161,000 in the prior period.
~~During the nine months ended September 30, 2020, we recognized a gain on settlement of warrants in the amount of $235,000; there were no comparable transactions~~$42,000 in the prior period.

During the three months ended ~~September 30, 2020,~~March 31, 2021, we ~~recognized~~recorded a gain on the ~~conversion~~settlement of ~~accrued salary~~notes payable of approximately $2,000. There was not an equivalent gain or loss in the ~~amount~~comparable prior period.
During the three months ended March 31, 2021, the Company declared Preferred Stock dividends of ~~$7,000; there was no comparable transaction in~~approximately $20,000 compared to approximately $17,000 for the ~~prior period.~~ three months ended March 31, 2020.

For the ~~nine~~three months ended ~~September 30, 2020, the Company~~March 31, 2021, we had a net loss available to common shareholders of ~~$1,948,000,~~approximately $2,755,000, or a net loss per share, basic and diluted of ($~~0.02)~~0.01) compared to a net loss available to common shareholders of ~~$2,246,000,~~approximately $165,000, or a net loss per share, basic and diluted of ($~~0.06)~~0.00), for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020.

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Liquidity and Capital Resources

To date, we have not generated sufficient revenue from operations to support our operations. We have financed our operations through the sale of ~~convertible debt~~equity securities and ~~equity securities.~~short-term borrowings. As of ~~September 30, 2020,~~March 31, 2021, we had ~~a working capital deficit~~cash of ~~$2,615,000.~~approximately $2,756,000 compared to cash of approximately $65,000 as of March 31, 2020.

~~During the nine months ending September 30, 2020, the Company had net~~Net cash used in operating activities was approximately $1,064,000 for the three months ended March 31, 2021. This is the result of ~~$1,192,000. This consisted~~our business development efforts pertaining to the start-up of ~~Company’s net loss~~the first clinic. Cash used in operations for the three months ended March 31, 2020 was approximately $402,000.
Net cash used in investing activities was approximately $495,000 for the three months ended March 31, 2021. The amounts relate to the purchase of ~~$1,948,000, offset by depreciation expense of $1,000, derivative expense of $126,000, amortization of discount~~fixed assets and leasehold improvement on ~~notes payable of $786,000, amortization of loan fees in~~our first clinic. No cash was used for investing activities for the amount of $18,000, and non-cash compensation in the amount of $259,000; and increased by a gain on settlement of accounts payable of $399,000, gain on revaluation of derivative liabilities of $498,000, and gain on conversion of accrued salary of $7,000. The Company’s cash position was also increased by a net change in the components of working capital in the amount of $470,000. The Company hadthree months ended March 31, 2020.
Net cash provided by financing activities infor the ~~amount~~three months ended March 31, 2021 was approximately $4,250,000, consisting of ~~$1,192,000,~~proceeds from a private placement offering of common stock of $1,668,000 and $2,760,000 from the sale of Series C Preferred Stock and warrants. Partially offsetting the proceeds was approximately $178,000 of payment on notes payable. Net cash provided by financing activities for the three months ended March 31, 2020 was approximately $330,000 consisting of approximately $475,000 of proceeds from notes payable ~~in the amount of $1,381,000,~~ offset by ~~principal~~ payments on notes payable ~~in the amount~~ of ~~$171,000.~~
During the nine months ending September 30, 2019, the Company had net cash used in operating activities of $418,000. This consisted of Company’s net loss of $2,246,000, offset by a loss on conversion of notes payable of $161,000, loss on legal settlement of $27,000, imputed interest expense of $7,000, amortization of the discount on notes payable of $604,000, stock-based compensation in the amount of $155,000, derivative expense of $460,000, and loss on revaluation of derivative liabilities in the amount of $70,000, offset by a gain on settlement of accounts payable of $50,000. The Company’s cash position was also increased by the net change in the components of working capital in the net amount of $394,000. The Company had cash provided by financing activities in the amount of $418,000 which consisted of the proceeds of notes payable in the amount of $428,000, less principal payments in the amount of $10,000.
The following securities are currently in default: the Company’s Series C Debenture, in the principal and accrued interest amounts of $111,000 and $66,000, respectively; and the November 2014 Convertible Debenture (Series D), in the principal and accrued interest amounts of $11,000 and $8,000, respectively.
~~There were no investing activities during the nine months ended September 30, 2020 or 2019.~~
On May 4, 2020, the Company received a loan in the amount of $460,406 from the United States Small Business Administration under the Payroll Protection Program. Subsequent to June 30, 2020, the Company determined that errors had been made in the application submitted to obtain this loan. On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds, representing an amount for the refinancing of an Economic Injury Disaster Loan; the Company never applied for and never received an Economic Injury Disaster Loan. Bank of America has required that the Company remit such funds back to Bank of America. The Company is currently attempting to negotiate repayment of the loan. If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.
Based on our current assessment, we do not expect any material impact on our long-term liquidity due to the COVID-19 pandemic. However, we will continue to assess the effect of the pandemic on our operations. The extent to which the COVID-19 pandemic will impact our business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, the duration and effect of possible business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.
~~Going Concern~~
The factors discussed above raise substantial doubt regarding our ability to continue as a going concern. Our condensed consolidated financial statements have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. Our financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.approximately $45,000.

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~~Recent Developments~~
~~On October 19, 2020, we signed a lease with Lennar Corp. for the location of our first The Good Clinic which is expected to open the clinic in the first quarter of 2021 in Minneapolis, MN.~~
~~In January 2020, the Company incorporated Mitesco N.A., LLC, for its planned North American operations and Acelerar Healthcare Holdings, LTD., for its planned European operations.~~
In August of 2020, we engaged a Placement Agent to raise on a best efforts basis up to $25 million from the sale of our securities (the “Offering”). We agreed to pay the Placement Agent a fee of $5,000, commissions equal to 7% of the aggregate proceeds of the Offering, a 3% non-accountable expense allowance and warrants (“Warrants”) to purchase for an aggregate consideration of $1.00, such amount of Common Stock and Series A Preferred Stock equal to 3% of the aggregate number of shares, respectively, sold in the Offering.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~

Not applicable.
~~ITEM 4.~~
~~CONTROLS AND PROCEDURES.~~

ITEM 4. CONTROLS AND PROCEDURES.
(a)         Evaluation of Disclosure Controls and Procedures

AsOur management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report (the "Evaluation Date"), we carried out an evaluation regarding the three months ended September 30, 2020, under the supervision and with the participation of our management, including our Chief Executive Officer and Interim Chief Financial Officer who is also serving as our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer, of the effectiveness of the design and operation of our disclosurereport. Disclosure controls and procedures ~~pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based upon this evaluation, our management concluded that, as of the Evaluation Date, our disclosure~~include, without limitation, controls and procedures ~~were not effective~~designed to ~~provide reasonable assurance~~ensure that ~~(i)~~ information required to be disclosed in the reports ~~that are filed~~we file or ~~submitted~~submit under the Exchange Act is ~~recorded, processed, summarized,~~accumulated and ~~reported within~~communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on such evaluation, the ~~time periods specified by~~Company’s management has identified what it believes are material weaknesses in the ~~SEC's rules~~Company’s disclosure controls and ~~forms,~~procedures and concluded that we did not have effective disclosure controls and procedures.
The deficiencies in our disclosure controls and procedures included (i) lack of segregation of duties and (ii) lack of sufficient resources to ensure that information required to be disclosed by the Company in the reports that itthe Company files or submits ~~under~~to the ~~Exchange Act~~SEC are recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms, and (iii) lack of formal Control procedures related to the approval of related party transactions.
The Company intends to take corrective action to ensure that information required to be disclosed by the Company pursuant to the reports that the Company files or submits to the SEC is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management believes the Company's disclosure controls and procedures are not effective because of the small size of the Company's accounting staff which may prevent adequate controls, such as segregation of duties, which is due to the cost/benefit associated with such remediation. To address the material weaknesses, the Company performed additional analysis and other procedures in an effort to ensure our condensed consolidated financial statements included in this Quarterly Report have been prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

~~Limitations on Internal Controls~~
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that the Company’s disclosure controls and procedures will detect or uncover every situation involving the failure of persons within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.
(b)         Changes in Internal Control Over Financial Reporting

~~The Company’s management is also responsible for establishing and maintaining adequate~~There have been no changes in our internal control over financial reporting ~~to provide reasonable assurance regarding the reliability of financial reporting~~(as defined in Rules 13a-15(f) and ~~the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. As~~15d-15(f) of the ~~Evaluation Date, no changes in the Company’s internal control over financial reporting~~Exchange Act) that occurred during our first quarter ended March 31, 2021 that ~~have~~has materially affected, or ~~are reasonably likely to materially affect, the Company’s internal control over financial reporting.~~
~~During the three months ended September 30, 2020, there were no changes that materially affected, or are~~is reasonably likely to materially affect, our internal control over financial reporting.

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PART II ~~– OTHER INFORMATION~~
ITEM 1. LEGAL PROCEEDINGS
~~LEGAL PROCEEDINGS.~~

On May 4, 2020, we received a loan in the amount of $460,406 from the United States Small Business Administration under the Payroll Protection Program. Subsequent to June 30, 2020, we determined that errors had been made in the application submitted to obtain the loan. On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds, representing an amount for the refinancing of an Economic Injury Disaster Loan which we did receive. Bank of America has requested that we remit such funds back to Bank of America. We are presently attempting to negotiate repayment of the loan. If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.

During management's review of the Company’s recent PPP loan application after the loan had been disbursed to the Company, it was determined that the information provided by Ms. Julie R. Smith, the Company’s former President and COO, was not representative of the Company’s situation. After consulting with legal counsel, the Board of Directors voted to remove Ms. Smith from its Board of Directors, and all other capacities due to the misstatements she made in the loan application. Subsequent to that decision, effective July 1, 2020, Ms. Smith submitted a resignation from all positions with the Company, which was accepted by the Board and management. Ms. Smith subsequently retained counsel and indicated her intent to file an administrative charge of discrimination in Colorado under certain provisions of the anti-discrimination laws of that state.
On August 18, 2020, the Company received formal notice that a complaint has been filed with the Colorado Civil Rights Division by Ms. Smith naming the Company as the Respondent. The Company believes the claims are frivolous and intends to vigorously defend against the allegations. As of the date of this filing, we have been advised that the Colorado Civil Rights Division has dismissed this matter effective March 1, 2021. Ms. Smith requested a “Right-to-Sue” letter, which she received, giving her a right to sue in District Court for 90 days from the date of the dismissed action.
On May 4, 2021, Mitesco, Inc. was served with a Statement of Nature of Dispute, Claims and Issues to be Arbitrated in which Claimant TerraNova Capital Equities, Inc. (TerraNova) makes claims related to alleged breach of an agreement between the Parties dated August 17, 2020. TerraNova claims damages in the amount of $385,000. Mitesco, Inc. intends to vigorously defend against the claims. Prior to initiating the claims, TerraNova had offered to settle the dispute for an amount of $30,000.
~~ITEM 1A.~~
~~RISK FACTORS.~~

In addition to the risk factors set forth in this report on Form 10-Q Part I- Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “10-K”), investors should consider the following risk factors:ITEM 1A.RISK FACTORS

~~Risks Related to COVID-19 Pandemic~~Special Notice Regarding the Worldwide Covid-19 Crisis

The world economy is facing significant uncertainties as a result of the worldwide COVID-19 crisis. While we are a small company and have a limited workforce, it is likely we will face increased risk in the case that our financing needs are delayed; our ~~future~~ acquisition targets face liquidity issues; or if our professional relationships are challenged from limited staff availability or access. We cannot predict with any certainty whether and to what degree the disruption caused by the COVID-19 pandemic and reactions thereto will continue and expect to face difficulty in developing our business and building our planned clinics. It is not possible for us to accurately predict the duration or magnitude of the adverse results of the outbreak and its effects on our business, results of operations or financial condition at this time, but such effects may be material. The COVID-19 pandemic may also have the effect of heightening many of the other risks identified elsewhere in this section.

~~Risks Related to~~Investing in our ~~Financial Condition~~
~~We are~~common stock involves a high degree of risk You should consider carefully the following risks, together with all the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and notes thereto. If any of the ~~early stages~~following risks actually materializes, our operating results, financial condition and liquidity could be materially adversely affected. As a result, the trading price of our ~~present business plan~~common stock could decline and you could lose part or all of your investment. The following information updates, and should be read in conjunction with, the information disclosed in Part I, Item1A, “Risk Factors,” contained in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 25, 2021 . Except as disclosed below, there have ~~a limited or~~been no ~~historical performance~~material changes from the risk factors disclosed in our Annual Report on Form 10-K for ~~you to base~~ ~~an investment decision upon,~~the year ended December 31, 2020 filed with the Securities and ~~we may never become profitable.~~Exchange Commission on March 25, 2021 .

~~We have only a limited history and a new business plan upon which an evaluation~~
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Table of our prospects and future performance can be made. Our planned operations are subject to all business risks associated with new companies. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the establishment of a new business, operation in a competitive industry. There is a possibility that we could sustain losses in the future. There can be no assurances that we will ever operate profitably.
Contents

There is substantial doubt about our ability to continue as a going concern as a result of our limited operating history, history of losses and financial resources, and if we are unable to generate significant revenue or secure financing, we may be required to cease or curtail our operations.

We have a long history of losses and incurred net losses of ~~$1.9~~approximately $2.9 million ~~$3,885,662~~ and ~~$1,415,153~~$3.9 million for the ~~9 months ended September 30, 2020 and~~ years ended December 31, 2020 and 2019, respectively and ~~2018,~~net losses of approximately $2.4 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively. We have nominal revenues from our operations. The Report of our Independent Registered Public Accounting Firm issued in connection with our audited financial statements for the calendar year ended December 31, ~~2019~~2020 expressed substantial doubt about our ability to continue as a going concern, due to the fact that we have recurring operating losses and our lack of liquidity and working capital. The Company’s continuance is dependent on raising capital and generating revenues sufficient to sustain operations. We have not generated revenues from our present business plan. If we generate revenue more slowly than we anticipate, or if our operating expenses are higher than we expect, we may not be able to pay our operating expenses or achieve profitability and our financial condition could suffer. Whether we can achieve cash flow levels sufficient to support our operations cannot be accurately predicted. Unless such cash flow levels are achieved, we will need to borrow additional funds or sell debt or equity securities, or some combination thereof, to obtain funding for our operations. Such additional funding may not be available on commercially reasonable terms, or at all.

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The issuance of ~~Contents~~
~~We are dependent upon the sale~~additional shares of our common stock, convertible notes, convertible Preferred Stock and other convertible securities may dilute the percentage ownership of the then-existing stockholders and may make it more difficult to ~~implement the initial stages of our business plan.~~raise additional equity capital.

WeAs of March 22, 2021, there are outstanding options, warrants to purchase 23,567,879 and 0 shares of common stock, respectively. In addition, we have ~~nominal revenues from operations. We require capital to implement~~outstanding Series C Preferred Stock that converts into 12,600,000 shares of common stock, notes that convert into 54,127 shares of common stock, and ~~finance our plan~~dividends on the Preferred X stock is convertible into an additional 32,477 shares of ~~operations, which includes~~common stock. The exercise of such options and warrants and conversion of convertible securities would dilute the establishment and operation of care clinics. We have no definitive agreements obligating any party to provide financing to us. If we receive only a fraction of the funding needed, or if certain assumptionsthen-existing stockholders’ percentage ownership of our ~~management prove to be incorrect,~~stock, and any sales in the public market of common stock underlying such securities could adversely affect prevailing market prices for the common stock. Moreover, the terms upon which we ~~may have inadequate funds to fully implement our business and may need additional equity or debt financing or other capital investments to fully implement our business plans.~~
~~We need additional capital to fund our operations and cannot assure you that we will~~would be able to obtain ~~sufficient~~additional equity capital ~~on reasonable terms or at all, and we may~~could be ~~forced to limit~~adversely affected because the ~~scope~~holders of our ~~operations.~~
~~We need additional capital~~options and warrants can be expected to ~~implement and fund our operations. We will require approximate net proceeds of $650,000 to open one clinic and an additional $200,000 to $250,000 to operate the clinic for~~exercise them at a ~~period of one year. If we are not able to obtain adequate financing on reasonable terms or if it is not available at all, we will be unable to open and acquire medical clinics and~~time when we would, have to modify our business plans accordingly. The extent of our capital needs will depend on numerous factors, including (i) the availability and terms of any financing available to us; (ii) the opening of medical clinics by our competitors in the geographic areas where we plan to operate; (iii) the level of our investment in research and development; (iv) the amount of our capital expenditures, including acquisitions; and (v) regulations applicable to our operations. We cannot assure you that we willall likelihood, be able to obtain any needed capital ~~in the future to meet our needs. Even if we do find a source of additional capital, we may not be able to negotiate~~on terms and conditions for receiving the additional capital that are acceptable to us. Any future capital investments could dilute or otherwise materially and adversely affect the holdings or rights of our existing stockholders. In addition, new equity or convertible debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our Common Stock. We cannot give you any assurance that any additional financing will be availablemore favorable to us ~~or if available, will be on terms favorable to us.~~than those provided by such securities.

~~We do not have cash flow to support our future operations and capital requirements.~~
We have no cash flow from operations. Whether we can achieve cash flow to support our operations in the future cannot be accurately predicted. Unless such cash flow levels are achieved, we may need to borrow additional funds or sell debt or equity securities, or some combination thereof, to provide funding for our operations. Such additional funding may not be available on commercially reasonable terms, or at all. If adequate funds are not available when needed, our financial condition and operating results would be materially and adversely affected and we may not be able to operate our business without significant changes in our operations, or at all.
~~We will incur costs of servicing our present and future debt.~~
We have debt obligations in the amount of approximately $2.6 million as of September 30, 2020, including certain convertible notes that mature between October 2020 and February 2021 of approximate $900,000 face value. Further we may incur additional debt obligations in the future without notice to our shareholders or investors. A portion of our present and any future indebtedness will have to be dedicated to the payment of principal and interest on such indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair our operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to the rights of our other stockholders. A judgment creditor would have the right to foreclose on any of our assets which would have a material adverse effect on our business, operating results and financial condition.
~~We may incur additional debt in the future which may contain restrictive covenants and impair our operating flexibility.~~
If we incur additional indebtedness in the future, a portion of the cash flow we generate, if any, will be dedicated to the payment of principal and interest on outstanding indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair our operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to the rights of our stockholders. A judgment creditor would have the right to foreclose on our limited assets resulting in a material adverse effect on our business, operating results and financial condition.
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~~Risks Related to our Business.~~
We may become involved in legal proceedings that could have a material adverse impact on our business, results of operations and financial condition.

By operating in the health care industry, we will face an inherent business risk of exposure to personal injury claims. We plan to obtain liability insurance in the future; however, we do not have liability insurance coverage to protect us from such claims. A successful personally liability claim, or series of claims brought against us, in excess of our insurance coverage, would negatively impact our financial condition.
From time to time and in the ordinary course of our business, we and certain of our subsidiaries may become involved in various legal proceedings and claims, including for example, employment disputes and litigation; client disputes and litigation alleging solution and implementation defects, personal injury, intellectual property infringement, violations of law and breaches of contract and warranties; and other third party disputes and litigation alleging personal injury, intellectual property infringement, violations of law, and breaches of contracts and warranties.
During March 2020, in response to the COVID-19 crisis, the federal government announced plans to offer loans to small businesses in various forms, including the Payroll Protection Program, or "PPP", established as part of the Corona Virus Aid, Relief and Economic Security Act (“CARES Act”) and administered by the U.S. Small Business Administration. On April 18, 2020, the Company’s former President and COO completed and submitted an application on behalf of the Company to Bank of America, NA (“Bank of America”) for a PPP loan, which was subsequently approved. On April 25, 2020 the Company entered into an unsecured Promissory Note (the “Note”) with Bank of America for a loan in the original principal amount of $460,000, and the Company received the full amount of the loan proceeds on May 4, 2020.
On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds disbursed under the Note. The Company investigated the terms of the application and discovered its former President had erroneously represented it was refinancing an Economic Injury Disaster Loan when no such loan had been received. Bank of America has requested that the Company remit the funds received back to Bank of America. The Company is attempting to negotiate a payment plan with Bank of America plan. If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.
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During management's review of the Company’s recent PPP loan application after the loan had been disbursed to the Company, it was determined that the information provided by Ms. Julie R. Smith, the Company’s former President and COO, was not accurate. After consulting with legal counsel, the Board of Directors voted to remove Ms. Smith from its Board of Directors, and all other capacities due to the misstatements she made in the loan application. Subsequent to that decision, effective July 1, 2020, Ms. Smith submitted a resignation from all positions with the Company, which was accepted by the Board and management. Ms. Smith subsequently retained counsel and has indicated her intent to file an administrative charge of discrimination in Colorado under certain provisions of the anti-discrimination laws of that state. On August 18, 2020, the Company received formal notice that a complaint has been filed with the Colorado Civil Rights Division by Ms. Smith naming the Company as the Respondent. The Company believes the claims are frivolous and intends to vigorously defend against the allegations. As of the date of this filing the Company has been advised that the Colorado Civil Rights Division has dismissed this matter effective March 1, 2021. Ms. Smith requested a “Right-to-Sue” letter, which she received, giving her a right to sue in District Court for 90 days from the date of the dismissed action.
On May 4, 2021, we were served with a Statement of Nature of Dispute, Claims and Issues to be Arbitrated in which Claimant TerraNova makes claims related to alleged breach of an agreement between the Parties dated August 17, 2020. TerraNova claims damages in the amount of $385,000. Although we intend to vigorously defend against the claims, there can be no assurance that we will be successful.
All such legal proceedings are inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming and disruptive to our operations and distracting to management. If resolved against us, such legal proceedings could result in excessive verdicts, injunctive relief or other equitable relief that may affect how we operate our business. Similarly, if we settle such legal proceedings, it may affect how we operate our business. Future court decisions, alternative dispute resolution awards, business expansion or legislative activity may increase our exposure to litigation and regulatory investigations. In some cases, substantial non-economic remedies or punitive damages may be sought. Although we maintain liability insurance coverage, there can be no assurance that such coverage will cover any particular verdict, judgment or settlement that may be entered against us, that such coverage will prove to be adequate or that such coverage will continue to remain available on acceptable terms, if at all. If we incur liability that exceeds our insurance coverage or that is not within the scope of the coverage in legal proceedings brought against us, it could have a material adverse effect on our business, results of operations and financial condition.

~~We are in an intensely competitive industry and there is no assurance we will be able to complete with~~The terms of our ~~competitors who have greater resources than us.~~
While the telehealth market is in an early stage of development, it is competitive and we expect it to attract increased competition, which could make it difficult for us to succeed. We also expect to face competition for our planned medical clinics using nurse practitioners. We currently face competition in the telehealth industry from a range of companies, including specialized software and solution providers that offer similar solutions, often at substantially lower prices, and that are continuing to develop additional products and becoming more sophisticated and effective. In addition, large, well-financed health systems have in some cases developed their own telehealth tools andoutstanding Series C Preferred Stock may provide these solutions to their customers and patients at discounted prices. The surge in interest in telehealth, and in particular the relaxation of HIPAA privacy and security requirements, has also attracted new competition from providers who utilize consumer-grade video conferencing platforms such as Zoom and Twilio. Competition from large software companies or other specialized solution providers, communication tools and other parties could result in continued pricing pressures, which is likely to lead to price declines in certain product segments, which could negatively impact our sales, profitability and market share. The market for healthcare solutions including walk-in clinics and services is intensely competitive. We compete in a highly fragmented primary care market with direct and indirect competitors that offer varying levels of impact to key stakeholders such as patients and employers. Our competitive success is contingent onlimit our ability to ~~simultaneously address~~raise additional equity capital or pursue acquisitions, which may impact funding of our ongoing operations and cause significant dilution to existing stockholders.
On March 25, 2021, we entered into Securities Purchase Agreements with four institutional pursuant to which the needs of key stakeholders efficiently and with superior outcomes at scale compared with competitors. We compete with walk-in clinics, traditional healthcare providers and medical practices, technology platforms, care management and coordination, digital health, telehealth and telemedicine and health information exchange. Competition in our market involves rapidly changing technologies, evolving regulatory requirements and industry expectations, frequent new product and service introductions and changes in customer and patient requirements. If we are unableCompany sold to ~~keep pace with~~ the ~~evolving needs of patients and continue to develop and introduce new applications and services~~Investors in a ~~timely~~private placement an aggregate of 3,000,000 units (the “Units” and ~~efficient manner, demand for our solutions and services may be reduced and our business and results~~each a “Unit”) with a purchase price of ~~operations would be harmed.~~
Because we are a new business, our competitors may have greater name recognition, longer operating histories and significantly greater resources than we do. Further, our current or potential competitors may be acquired by third parties$1.00 per Unit, with greater available resources. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer and patient requirements and may have the ability to initiate or withstand substantial price competition. In addition, current and potential competitors have established, and may in the future establish, cooperative relationships with vendorseach Unit consisting of ~~complementary services, technologies or services to increase the availability of their solutions in the marketplace. Accordingly, new competitors or alliances may emerge that have greater market~~(a) one share a larger customer base, more widely adopted proprietary technologies, greater marketing expertise, greater financial resources and larger sales forces than we have, which could put us at a competitive disadvantage.
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Our competitors could also be better positioned to serve certain segments of the telehealth market and medical clinic markets, which could create additional price pressure. In addition, many healthcare provider organizations are consolidating to create integrated healthcare delivery systems with greater market power. As provider networks and managed care organizations consolidate, thus decreasing the number of market participants, competition to provide products and services like ours could become more intense, and the importance of establishing and maintaining relationships with key industry participants could increase. These industry participants may try to use their market power to negotiate price reductions for our products and services. In light of these factors, even if our solution is more effective than those of our competitors, current or potential clients may accept competitive solutions in lieu of purchasing our solution. If we are unable to successfully compete in the telehealth market, our business, financial condition and results of operations could be materially adversely affected.
Our business and future growth are highly dependent on completing our clinics and gaining patients in our target markets. However, the healthcare market is competitive, which could make it difficult for us to succeed. We will face competition in the healthcare industry for our solutions and services from a range of companies and providers, including traditional healthcare providers and medical practices that offer similar services. These competitors primarily include primary care providers who are employed by or affiliated with health networks. Our indirect competitors also include episodic consumer-driven point solutions such as telemedicine as well as urgent care providers. Generally, urgent care providers in the local communities we will serve provide services similar to those we intend to offer, and, our competitors (1) are more established than we are, (2) may offer a broader array of services or more desirable facilities to patients and providers than ours, and (3) may have larger or more specialized medical staffs to admit and refer patients, among other things. In the future, we expect to encounter increased competition from system-affiliated hospitals and healthcare companies, as well as health insurers and private equity companies seeking to acquire providers, in specific geographic markets. We also face competition from specialty hospitals (some of which are physician-owned), primary care providers and outpatient centers for market share in high margin services and for quality providers and personnel. Furthermore, some of the clinics and medical offices that compete with us may browned by government agencies or not-for-profit organizations supported by endowments and charitable contributions and can finance capital expenditures and operations on a tax-exempt basis. Competitors may also be better positioned to contract with leading health network partners in our target markets. If our competitors are better able to attract patients, contract with health network partners, recruit providers, expand services or obtain favorable managed care contracts at their facilities than we are, we may experience an overall decline in member volumes and net revenue. There is no assurance we will be able to successful compete in the markets in which we plan to operate which could cause you to lose your investment.
~~Our lack of registered trademarks and trade names could potentially harm our business.~~
We have applied for trademark protection of “The Good Clinic” name but such protection is pending and not yet granted. Trademarks and trade names distinguish the various companies from each other. If our potential future customers are unable to distinguish our future clinics and telehealth services from those of other companies, we could lose sales and distributors to our competitors. We do not have any registered trademarks and trade names, so we only have common law rights with respect to infractions or infringements on our products. Many subtleties exist in product descriptions, offering and names that can easily confuse distributors and customers. This presents a risk of losing potential customers looking for our products and buying someone else’s because they cannot differentiate between them.
~~The success of our planned business depends on our ability to develop, market and advertise our clinics and telehealth services.~~
~~We have not yet completed a clinic or developed our telemedicine services, and we may not be successful in doing so.~~Our ability to establish effective marketing and advertising campaigns for any clinics and telemarketing services we develop is important to our success. If we are unable to establish awareness of our brands and services, we may not be able to attract customers and generate revenue which could cause you to lose your investment in the Units.
The telehealth market is immature and volatile, and if it does not develop, if it develops more slowly than we expect, if it encounters negative publicity or if our services are not competitive, the growth of our business will be harmed.
We plan to enter the telehealth market and there is no assurance we will successfully do this. The telehealth market is relatively new and unproven, and it is uncertain whether it will achieve and sustain high levels of demand, consumer acceptance and market adoption. Our success will depend to a substantial extent on the willingness of patients to use, and to increase the frequency and extent of their utilization of, our services, as well as on our ability to demonstrate the value of telehealth to employers, health plans, government agencies and other purchasers of healthcare for beneficiaries. Negative publicity concerning us, or the telehealth market as a whole could limit market acceptance of our services. If our patients do not perceive the benefits of our services, or if our services are not competitive, then our business may not develop at all and we may not generate revenue, or it may develop more slowly than we expect. Similarly, individual and healthcare industry concerns or negative publicity regarding patient confidentiality and privacy in the context of telehealth could limit market acceptance of our healthcare services. If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations.
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~~Rapid technological change in our industry presents us with significant risks and challenges.~~
The telehealth market is characterized by rapid technological change, changing consumer requirements, short product lifecycles and evolving industry standards. Our success will depend on our ability to enhance our solution with next-generation technologies and to develop or to acquire and market new services to access new consumer populations. There is no guarantee that we will possess the resources, either financial or personnel, for the research, design and development of new applications or services, or that we will be able to utilize these resources successfully and avoid technological or market obsolescence. Further, there can be no assurance that technological advances by one or more of our competitors or future competitors will not result in our present or future software-based products and services becoming uncompetitive or obsolete.
~~Failure to attract and retain sufficient numbers of qualified personnel could also impede our future plans.~~
If we are unable to implement our plan of operations effectively, it will have a material adverse effect on our ability to generate revenue. The evolving nature of our business and rapid changes in the healthcare industry make it difficult to anticipate the nature and amount of medical reimbursements, third-party private payments, and participation in certain government programs and thus to reliably predict our operating results. Our strategy may incur significant costs, which could adversely affect our financial condition. Our plan to enter into strategic transactions involves significant costs, including financial advisory, legal and accounting fees, and may include additional costs for items such as fairness opinions and severance payments. We do not have revenue to pay these costs which could adversely affect our overall financial condition.
The telehealth market is immature and volatile, and if it does not develop, if it develops more slowly than we expect, if it encounters negative publicity or if our services are not competitive, our business will be harmed.
The telehealth market is relatively new and unproven, and it is uncertain whether it will achieve and sustain high levels of demand, consumer acceptance and market adoption. Our success will depend to a substantial extent on the willingness of our future clients’ members or patients to use, and to increase the frequency and extent of their utilization of, our services, as well as on our ability to demonstrate the value of telehealth to employers, health plans, government agencies and other purchasers of healthcare for beneficiaries. Negative publicity concerning our services, or the telehealth market as a whole could limit market acceptance of our services. If our future clients, or their members or patients, do not perceive the benefits of our services, or if our services are not competitive, then our market may not develop at all, or it may develop more slowly than we expect. Similarly, individual and healthcare industry concerns or negative publicity regarding patient confidentiality and privacy in the context of telehealth could limit market acceptance of our healthcare services. If any of these events occurs, it could have a material adverse effect on our business, financial condition or results of operations.
~~Rapid technological change in our industry presents us with significant risks and challenges.~~
The telehealth market is characterized by rapid technological change, changing consumer requirements, short product lifecycles and evolving industry standards. Our success will depend on our ability to enhance our solution with next-generation technologies and to develop or to acquire and market new services to access new consumer populations. There is no guarantee that we will possess the resources, either financial or personnel, for the research, design and development of new applications or services, or that we will be able to utilize these resources successfully and avoid technological or market obsolescence. Further, there can be no assurance that technological advances by one or more of our competitors or future competitors will not result in our present or future software-based products and services becoming uncompetitive or obsolete.
~~If we do not manage our strategy effectively, our revenue, business and operating results may be harmed.~~
We have not yet generated revenues from our present operations and may not do so for an indefinite period of time. Our strategy is to operate walk-in clinics, provide telemedicine and acquire complimentary business in the future. Acquisitions may require greater than anticipated investment of operational and financial resources. Acquisitions may also require the integration of different services, assimilation of new employees, diversion of management and IT resources, increases in administrative costs and other additional costs associated with any debt or equity financings undertaken in connection with such acquisitions. We cannot assure you that any acquisition we undertake will be successful. Future growth will also place additional demands on our resources and may require us to hire and train additional employees. We will need to expand and acquire systems and infrastructure to accommodate our planned operations. The failure to implement our plan of operations and manage any future growth effectively will materially and adversely affect our business.
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~~Risks Related to Government Regulation~~
~~If the statutes and regulations in our industry change, our business could be adversely affected.~~
The U.S. healthcare industry has undergone significant changes designed to improve patient safety, improve clinical outcomes, and increase access to medical care. These changes include enactments and repeals of various healthcare related laws and regulation. Our operations and economic viability may be adversely affected by the changes in such regulations, including: (i) federal and state fraud and abuse laws; (ii) federal and state anti-kickback statutes; (iii) federal and state false claims laws; (iv) federal and state self-referral laws; (v) state restrictions on fee splitting; (vi) laws regarding the privacy and confidentiality of patient information; and (vii) other laws and government regulations. If there are changes in laws, regulations, or administrative or judicial interpretations, we may have to change our future business practices, or our business practices could be challenged as unlawful, which could have a material adverse effect on our business, financial condition, and results of operations.
The impact on our planned operations of recent healthcare legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations.
The impact on us of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations. Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending, reimbursement and policy. The healthcare industry is subject to changing political, regulatory and other influences. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (the “Affordable Care Act” or the “ACA”) in 2010 made major changes in how healthcare is delivered and reimbursed, and increased access to health insurance benefits to the uninsured and underinsured population of the United States. Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA as well as recent efforts by the Trump administration to repeal or replace certain aspects of the ACA. For example, the Tax Cuts and Jobs Act of 2017 was enacted, which includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a ~~year that is commonly referred~~newly formed Series C Convertible Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), (b) one warrant (the “Series A Warrants”) to as the “individual mandate.” Since the enactment of the Tax Cuts and Jobs Act of 2017, there have been additional amendments to certain provisions of the ACA, and we expect the current Trump administration and Congress will likely continue to seek to modify all, or certain provisions of, the ACA. It is uncertain the extent to which any such changes may impact our business or financial condition. Congress may consider other legislation to repeal and replace elements of the ACA. In December 2019, a federal appeals court held that the individual mandate portion of the ACA was unconstitutional and left open the question whether the remaining provisions of the ACA would be valid without the individual mandate. On March 2, 2020, the Supreme Court agreed to hear the case during its term that begins in October 2020. We continue to evaluate the effect that the ACA and its possible modification or repeal and replacement has on our business. It is uncertain the extent to which any such changes may impact our business or financial condition.
Other legislative changes have been proposed and adopted since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011 and subsequent laws, which began in 2013 and will remain in effect through 2029 unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect customer demand and affordability for our products and services and, accordingly, the results of our financial operations. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) which first affected physician payment in 2019. At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement. Such changes in the regulatory environment may also result in changes to our payer mix that may affect our operations and revenue. In addition, certain provisions of the ACA authorize voluntary demonstration projects, which include the development of bundling payments for acute, inpatient hospital services, physician services and post-acute services for episodes of hospital care. Further, the ACA may adversely affect payers by increasing medical costs generally, which could have an effect on the industry and potentially impact our business and revenue as payers seek to offset these increases by reducing costs in other areas. Certain of these provisions are still being implemented and the full impact of these changes on us cannot be determined at this time.
Uncertainty regarding future amendments to the ACA as well as new legislative proposals to reform healthcare and government insurance programs, along with the trend toward managed healthcare in the United States, could result in reduced demand and prices for our services. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments and other third party payers will pay for healthcare products and services, which could adversely affect our business, financial condition and results of operations.
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~~We are regulated by federal Anti-Kickback Statutes.~~
The federal Anti-Kickback Statute is a provision of the Social Security Act of 1972 that prohibits as a felony offense the knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (1) the referral of a patient for items or services for which payment may be made in whole or part under Medicare, Medicaid, or other federal healthcare programs, (2) the furnishing or arranging for the furnishing of items or services reimbursable under Medicare, Medicaid, or other federal healthcare programs or (3) the purchase lease, or order or arranging or recommending the purchasing, leasing or ordering of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The Patient Protection and Affordable Care Act (“ACA”) amended section 1128B of the Social Security Act to make it clear that a person need not have actual knowledge of the statute, or specific intent to violate the statute, as a predicate for a violation. The OIG, which has the authority to impose administrative sanctions for violation of the statute, has adopted as its standard for review a judicial interpretation which concludes that the statute prohibits any arrangement where even one purpose of the remuneration is to induce or reward referrals. A violation of the Anti-Kickback Statute is a felony punishable by imprisonment, criminal fines of up to $25,000, civil fines of up to $50,000 per violation, and three times the amount of the unlawful remuneration. A violation also can result in exclusion from Medicare, Medicaid or other federal healthcare programs. In addition, pursuant to the changes of the ACA, a claim that includes items or services resulting from a violation of the Anti-Kickback Statute is a false claim for purposes of the False Claims Act.
We cannot assure that the applicable regulatory authorities will not determine that some of our arrangements with physicians violate the federal Anti-Kickback Statute or other applicable laws. An adverse determination could subject us to different liabilities, including criminal penalties, civil monetary penalties and exclusion from participation in Medicare, Medicaid or other health care programs, any of which could have a material adverse effect on our business, financial condition or results of operations.
~~We are regulated by the federal Stark Law.~~
The federal Stark Law, 42 U.S.C. 1395nn, also known as the physician self-referral law, generally prohibits a provider from referring Medicare and Medicaid patients to an entity (including hospitals) providing ‘‘designated health services,’’ if the physician or a member of the physician’s immediate family has a ‘‘financial relationship’’ with the entity, unless a specific exception applies. Designated health services include, among other services, inpatient hospital services, outpatient prescription drug services, clinical laboratory services, certain imaging services (e.g., MRI, CT, ultrasound), and other services that our affiliated physicians may order for their patients. The prohibition applies regardless of the reasons for the financial relationship and the referral; and therefore, unlike the federal Anti-Kickback Statute, intent to violate the law is not required. Like the Anti-Kickback Statute, the Stark Law contains statutory and regulatory exceptions intended to protect certain types of transactions and arrangements. Unlike safe harbors under the Anti-Kickback Statute with which compliance is voluntary, an arrangement must comply with every requirement of a Stark Law exception or the arrangement is in violation of the Stark Law.
Because the Stark Law and implementing regulations continue to evolve and are detailed and complex, while we attempt to structure our relationships to meet an exception to the Stark Law, there can be no assurance that the arrangements entered into by us with affiliated physicians and facilities will be found to be in compliance with the Stark Law, as it ultimately may be implemented or interpreted. The penalties for violating the Stark Law can include the denial of payment for services ordered in violation of the statute, mandatory refunds of any sums paid for such services, and civil penalties of up to $15,000 for each violation, double damages, and possible exclusion from future participation in the governmental healthcare programs. A person who engages in a scheme to circumvent the Stark Law’s prohibitions may be fined up to $100,000 for each applicable arrangement or scheme.
Some states have enacted statutes and regulations against self-referral arrangements similar to the federal Stark Law, but which may be applicable to the referral of patients regardless of their payor source and which may apply to different types of services. These state laws may contain statutory and regulatory exceptions that are different from those of the federal law and that may vary from state to state. An adverse determination under these state laws and/or the federal Stark Law could subject us to different liabilities, including criminal penalties, civil monetary penalties and exclusion from participation in Medicare, Medicaid or other health care programs, any of which could have a material adverse effect on our business, financial condition or results of operations.
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~~We must comply with Health Information Privacy and Security Standards.~~
The privacy regulations Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended, contain detailed requirements concerning the use and disclosure of individually identifiable patient health information (“PHI”) by various healthcare providers, such as medical groups. HIPAA covered entities must implement certain administrative, physical, and technical security standards to protect the integrity, confidentiality and availability of certain electronic health information received, maintained, or transmitted. HIPAA also implemented standard transaction code sets and standard identifiers that covered entities must use when submitting or receiving certain electronic healthcare transactions, including billing and claim collection activities. Violations of the HIPAA privacy and security rules may result in civil and criminal penalties, including a tiered system of civil money penalties that range from $100 to $50,000 per violation, with a cap of $1.5 million per year for identical violations. A HIPAA covered entity must also promptly notify affected individuals where a breach affects more than 500 individuals and report breaches affecting fewer than 500 individuals annually. State attorneys general may bring civil actions on behalf of state residents for violations of the HIPAA privacy and security rules, obtain damages on behalf of state residents, and enjoin further violations.
Many states also have laws that protect the privacy and security of confidential, personal information, which may be similar to or even more stringent than HIPAA. Some of these state laws may impose fines and penalties on violators and may afford private rights of action to individuals who believe their personal information has been misused. We expect increased federal and state privacy and security enforcement efforts.
~~A cyber security incident could cause a violation of HIPAA, breach of customer and patient privacy, or other negative impacts.~~
We will rely extensively on our information technology (or IT) systems to manage scheduling and financial data, communicate with our future customers and their patients, vendors, and other third parties, and summarize and analyze operating results. In addition, we have made significant investments in technology, including the engagement of a third-party IT provider. A cyber-attack that bypasses our IT security systems could cause an IT security breach, a loss of protected health information, or other data subject to privacy laws, a loss of proprietary business information, or a material disruption of our IT business systems. This in turn could have a material adverse impact on our business and result of operations. In addition, our future results of operations, as well as our reputation, could be adversely impacted by theft, destruction, loss, or misappropriation of public health information, other confidential data, or proprietary business information.
Computer malware, viruses, and hacking and phishing attacks by third parties have become more prevalent in our industry, have occurred on our systems in the past, and may occur on our systems in the future. Because techniques used to obtain unauthorized access to or sabotage systems change frequently and generally are not recognized until successfully launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. As cyber-security threats develop and grow, it may be necessary to make significant further investments to protect data and infrastructure. If an actual or perceived breach of our security occurs, (i) we could suffer severe reputational damage adversely affecting customer or investor confidence, (ii) the market perception of the effectiveness of our security measures could be harmed, (iii) we could lose potential sales, our ability to deliver our services or operate our business may be impaired, (iv) we may be subject to litigation or regulatory investigations or orders, and (v) we may incur significant liabilities. Our insurance coverage may not be adequate to cover the potentially significant losses that may result from security breaches. We are currently reviewing our needs for cybersecurity policy as we continue our research and development on L-CYTE-01 and medical services for COPD patients.
~~We must comply with Environmental and Occupational Safety and Health Administration Regulations.~~
We are subject to federal, state and local regulations governing the storage, use and disposal of waste materials and products. Although we believe that our safety procedures for storing, handling and disposing of these materials and products comply with the standards prescribed by law and regulation, we cannot eliminate the risk of accidental contamination or injury from those hazardous materials. In the event of an accident, we could be held liable for any damages that result and any liability could exceed the limits or fall outside the coverage of our insurance coverage, which we may not be able to maintain on acceptable terms, or at all. We could incur significant costs and attention of our management could be diverted to comply with current or future environmental laws and regulations. Federal regulations promulgated by the Occupational Safety and Health Administration impose additional requirements on us, including those protecting employees from exposure to elements such as blood-borne pathogens. We cannot predict the frequency of compliance, monitoring, or enforcement actions to which we may be subject as those regulations are being implemented, which could adversely affect our operations.
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~~We must comply with a range of other Federal and State Healthcare Laws.~~
We are subject to other federal and state healthcare laws that could have a material adverse effect on our business, financial condition or results of operations. The Health Care Fraud Statute prohibits any person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, which can be either a government or private payor plan. Violation of this statute, even in the absence of actual knowledge of or specific intent to violate the statute, may be charged as a felony offense and may result in fines, imprisonment, or both. The Health Care False Statement Statute prohibits, in any matter involving a federal health care program, anyone from knowingly and willfully falsifying, concealing or covering up, by any trick, scheme or device, a material fact, or making any materially false, fictitious or fraudulent statement or representation, or making or using any materially false writing or document knowing that it contains a materially false or fraudulent statement. A violation of this statute may be charged as a felony offense and may result in fines, imprisonment or both. Under the Civil Monetary Penalties Law of the Social Security Act, a person (including an organization) is prohibited from knowingly presenting or causing to be presented to any United States officer, employee, agent, or department, or any state agency, a claim for payment for medical or other items or services where the person knows or should know (a) the items or services were not provided as described in the coding of the claim, (b) the claim is a false or fraudulent claim, (c) the claim is for a service furnished by an unlicensed physician, (d) the claim is for medical or other items or service furnished by a person or an entity that is in a period of exclusion from the program, or (e) the items or services are medically unnecessary items or services. Violations of the law may result in penalties of up to $10,000 per claim, treble damages, and exclusion from federal healthcare programs.
In addition, the office of inspector general (“OIG”) may impose civil monetary penalties against any physician who knowingly accepts payment from a hospital (as well as against the hospital making the payment) as an inducement to reduce or limit medically necessary services provided to Medicare or Medicaid program beneficiaries. Further, except as permitted under the Civil Monetary Penalties Law, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider of Medicare or Medicaid payable items or services may be liable for civil money penalties of up to $10,000 for each wrongful act.
In addition to the state laws previously described, we may also be subject to other state fraud and abuse statutes and regulations if we expand our operations nationally. Many states have adopted a form of anti-kickback law, self-referral prohibition, and false claims and insurance fraud prohibition. The scope of these laws and the interpretations of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion. Generally, state laws reach to all healthcare services and not just those covered under a governmental healthcare program. A determination of liability under any of these laws could result in fines and penalties and restrictions on our ability to operate in these states. We cannot assure that our arrangements or business practices will not be subject to government scrutiny or be found to violate applicable fraud and abuse laws.
~~Changes in healthcare laws could create an uncertain environment and materially impact us.~~
We cannot predict the effect that the ACA (also known as Obamacare) and its implementation, amendment, or repeal and replacement, may have on our business, results of operations or financial condition. Any changes in healthcare laws or regulations that reduce, curtail or eliminate payments, government-subsidized programs, government-sponsored programs, and/or the expansion of Medicare or Medicaid, among other actions, could have a material adverse effect on our business, results of operations and financial condition. For example, the ACA dramatically changed how healthcare services are covered, delivered, and reimbursed. The ACA requires insurers to accept all applicants, regardless of pre-existing conditions, cover an extensive list of conditions and treatments, and charge the same rates, regardless of pre-existing condition or gender.
The ACA and the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Care Reform Acts”) also mandated changes specific to home health and hospice benefits under Medicare. In 2012, the U.S. Supreme Court upheld the constitutionality of the ACA, including the “individual mandate” provisions of the ACA that generally require all individuals to obtain healthcare insurance or pay a penalty. However, the U.S. Supreme Court also held that the provision of the ACA that authorized the Secretary of the U.S. Department of Health and Human Services to penalize states that choose not to participate in the expansion of the Medicaid program by removing all of its existing Medicaid funding was unconstitutional. In response to the ruling, a number of state governors opposed its state’s participation in the expanded Medicaid program, which resulted in the ACA not providing coverage to some low-income persons in those states. In addition, several bills have been, and are continuing to be, introduced in U.S. Congress to amend all or significant provisions of the ACA, or repeal and replace the ACA with another law. In December 2017, the individual mandate was repealed via the Tax Cuts and Jobs Act of 2017. Afterwards, legal and political challenges as to the constitutionality of the remaining provisions of the ACA resumed.
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~~Our operations are subject to the nation~~’~~s healthcare laws, as amended, repealed, or replaced from time to time.~~
The net effect of the ACA on our business is subject to numerous variables, including the law’s complexity, lack of complete implementing regulations and interpretive guidance, gradual and potentially delayed implementation or possible amendment, as well as the uncertainty as to the extent to which states will choose to participate in the expanded Medicaid program. The continued implementation of provisions of the ACA, the adoption of new regulations thereunder and ongoing challenges thereto, also added uncertainty about the current state of U.S. healthcare laws and could negatively impact our business, results of operations and financial condition. Healthcare providers could be subject to federal and state investigations and payor audits.
Due to our participation in government and private healthcare programs, we are from time to time involved in inquiries, reviews, audits, and investigations by governmental agencies and private payors of our business practices, including assessments of our compliance with coding, billing and documentation requirements. Federal and state government agencies have active civil and criminal enforcement efforts against healthcare companies, and their executives and managers. The Deficit Reduction Act, which provides a financial incentive to states to enact their own false claims acts, and similar laws encourage investigations against healthcare companies by different agencies. These investigations could also be initiated by private whistleblowers. Responding to audit and investigative activities are costly and disruptive to our business operations, even when the allegations are without merit. If we are subject to an audit or investigation, a finding could be made that we or our affiliates erroneously billed or were incorrectly reimbursed, and we may be required to repay such agencies or payors, may be subjected to pre-payment reviews, which can be time-consuming and result in non-payment or delayed payments for the services we or our affiliates provide, and may be subject to financial sanctions or required to modify our operations.
~~Our revenues may depend on our patients’ receipt of adequate reimbursement from private insurers and government sponsored healthcare programs.~~
Political, economic, and regulatory influences continue to change the healthcare industry in the United States. If and when we start receiving reimbursements from third parties, the ability of hospitals to pay fees for our products will partially depend on the extent to which reimbursement for the costs of such materials and related treatments will continue to be available from private health coverage insurers and other similar organizations. We may have difficulty gaining market acceptance for the products we sell if third-party payors do not provide adequate coverage and reimbursement to hospitals. Major third-party payors of hospitals, such as private healthcare insurers, periodically revise their payment methodologies based, in part, upon changes in government sponsored healthcare programs. We cannot predict these periodic revisions with certainty, and such revisions may result in stricter standards for reimbursement of hospital charges for certain specified products, potentially adversely impacting our business, results of operations, and financial conditions when we start receiving reimbursement from third party payors. When we start receiving reimbursement from third party payors, the sales of our therapies will depend in part on the availability of reimbursement by third-party payors, such as government health administration authorities, private health insurers and other organizations. Third-party payors often challenge the price and cost-effectiveness of medical treatments and services. Governmental approval of health care products does not guarantee that these third-party payers will pay for the products. Even if third-party payers do accept our therapeutic treatments, the amounts they pay may not be adequate to enable us to realize a profit. Legislation and regulations affecting the pricing of therapies may change before our products and services are approved for marketing, and any such changes could further limit reimbursement, if any.
~~Future regulatory action remains uncertain.~~
We operate in a highly regulated and evolving environment with rigorous regulatory enforcement. Any legal or regulatory action could be time-consuming and costly. If we or the manufacturers or distributors that supply our products fail to comply with all applicable laws, standards, and regulations, action by the FDA or other regulatory agencies could result in significant restrictions, including restrictions on the marketing or use of the products we sell or the withdrawal of the products we sell from the market. Any such restrictions or withdrawals could materially affect our reputation, business and operations.
~~Risks Related to Acquisitions~~
~~Acquisitions may subject us to liability with regard to the creditors, customers, and shareholders of the sellers.~~
While our acquisitions are typically structured as asset purchase agreements in which we attempt to limit our risk and exposure relative to the respective sellers’ liabilities, we cannot guarantee that we will be successful in avoiding all liability. Creditors may seek to hold us accountable for seller debt and customers and for seller breaches of contract prior to our transactions. Occasionally, disaffected shareholders may attempt to interfere with our business acquisitions. We attempt to minimize all of these risks through thorough due diligence, negotiating indemnities and holdbacks, obtaining relevant representations from sellers, and leveraging experienced professionals when appropriate.
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~~We may be unable to implement our strategy of acquiring companies.~~
We had no unconditional commitments with respect to any acquisition as of September 30, 2019. Although we expect that one or more acquisition opportunities will become available in the future, we may not be able to acquire companies at all or on terms favorable to us. We will likely need additional financing for such acquisitions, but there is no assurance that we will be able to borrow funds or raise capital through the issuance of our equity on favorable terms. Certain of our larger, better capitalized competitors may seek to acquire some of the companies we may be interested in. Competition for acquisitions would likely increase acquisition prices and result in us having fewer acquisition opportunities. Depending on the type of businesses we acquire, we may have varying cost saving and/or cross-selling opportunities with the acquired business. However, there is no assurance that we will achieve anticipated cost savings and cross-selling on our acquisitions, and failure to do so may mean we overpaid for such acquisitions. In completing any acquisitions, we will rely upon the representations and warranties and indemnities made by the sellers with respect to each acquisition as well as our own due diligence investigation. We cannot be assured that such representations and warranties will be true and correct or that our due diligence will uncover all materially adverse facts relating to the operations and financial condition of the acquired companies or their customers. To the extent that we are required to pay for obligations of an acquired company, or if material misrepresentations exist, we may not realize the expected benefit from such acquisition, and we will have overpaid in cash, stock, assumed debt, seller notes, and/or earnouts for the value received in that acquisition.
~~Future acquisitions may result in potentially dilutive issuances of equity securities, the incurrence of indebtedness and increased amortization expense.~~
Future acquisitions may result in dilutive issuances of equity securities, the incurrence of debt, the assumption of known and unknown liabilities, the write-off of software development costs and the amortization of expenses related to intangible assets, all of which could have an adverse effect on our business, financial condition and results of operations.
~~We face risks arising from acquisitions that week pursue in the future.~~
We may pursue strategic acquisitions in the future. Risks in acquisition transactions include difficulties in the integration of acquired businesses into our operations and control environment, difficulties in assimilating and retaining employees and intermediaries, difficulties in retaining the existing clients of the acquired entities, assumed or unforeseen liabilities that arise in connection with the acquired businesses, the failure of counter parties to satisfy any obligations to indemnify us against liabilities arising from the acquired businesses, and unfavorable market conditions that could negatively impact our growth expectations for the acquired businesses. Fully integrating an acquired company or business into our operations may take a significant amount of time. We cannot assure you that we will be successful in overcoming these risks or any other problems encountered with acquisitions and other strategic transactions. These risks may prevent us from realizing the expected benefits from acquisitions and could result in the failure to realize the full economic value of a strategic transaction or the impairment of goodwill and/or intangible assets recognized at the time of an acquisition. These risks could be heightened if we complete a large acquisition or multiple acquisitions within a short period of time.
~~Risks Related to Our Management~~
~~Certain of our officers and directors devote limited time to our business, which may negatively impact our plan of operations, the implementation of our business plan, and our potential profitability.~~
While Lawrence Diamond, our Chief Executive Officer and director, dedicates full time to us, our other directors dedicate part time service to us which could negatively impact our plan of operations, implementation of our business plan, and our potential profitability.
~~Because we do not have an audit or compensation committee, shareholders will be required to rely on the members of our board of directors, who are not all independent, to perform these functions.~~
We do not have an audit or compensation committee or board of directors as a whole that is composed of independent directors. There is a potential conflict between their or our interests and our shareholders’ interests. Until we have an audit committee or independent directors, there may be less oversight of management decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.
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~~Our future success depends, in part, on the performance and continued service of our Officers and Directors~~
We presently depend to a great extent upon the experience, abilities and continued services of our management team. The loss of our management team’s services could have a material adverse effect on our business, financial condition or results of operation. Failure to maintain our management team could prove disruptive to our daily operations, require a disproportionate amount of resources and management attention and could have a material adverse effect on our business, financial condition and results of operations. We do maintain key man insurance on any member of our management team.
~~Our executive officers and certain key stockholders own and control a significant number of voting securities and so long as they do, they are able to control the outcome of stockholder voting.~~
~~Our President and Chief Executive Officer as well as certain other key shareholders are the owners of approximately 88% of the voting~~2.1 shares of the Company’s common stock, at a purchase price of $0.50 per whole share of common stock, and (c) one warrant (the “Series B Warrants”) to purchase 2.1 shares of common stock at a purchase price of $0.75 per whole share. The aggregate gross proceeds to the Company ~~as a result~~were $3,000,000 and the number of ~~their ownership of our Series X Preferred Stock, and Common Stock. The Series X Preferred stock votes with our outstanding~~ shares of Common Stock atinitially issuable upon conversion of the ~~rate~~Series C Preferred Stock is 12,600,000 shares of ~~20,000 votes for each share owned, one (1) vote for each~~Common stock and the aggregate number of shares of common ~~holder. As such, our management has~~stock initially issuable upon exercise of the ~~ability to determine the outcome~~warrants is 12,600,000 shares of all matters submitted to our stockholders for approval, including the election of directors. Our management’s control of our voting securities may make it impossible to complete some corporate transactions without management’s support and may prevent a change in our control. In addition, this ownership could discourage the acquisition of our Common Stock by potential investors and could have an anti-takeover effect, possibly depressing the trading price of our Common Stock.

~~Risks Related to our Securities~~
~~Our Common Stock is a penny stock and as such, trading~~Holders of the ~~Common~~Series C Preferred Stock ~~may be restricted by~~were provided price protections for the ~~Securities and Exchange Commission~~’~~s (~~“~~SEC”~~$0.25 conversion price (the “Conversion Price”) ~~penny stock regulations~~, pursuant to which, ~~may limit a stockholder~~’~~s ability to buy and sell our stock.~~
~~The Common Stock is a penny stock. The Securities and Exchange Commission (“SEC”) has adopted Rule 15g-9 which generally defines “penny stock” to be~~in the event the company issues or sells any ~~equity security that has a market~~securities, including options or convertible securities, or amends outstanding securities, at an effective price, ~~(as defined) less than $5.00 per share or~~with an exercise price ofor at a conversion price less than ~~$5.00 per share, subject~~the Conversion Price, then the Conversion Price shall be reduced to ~~certain exceptions. Our securities are covered by the penny stock rules,~~such lower price, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our Common Stock.
~~As an issuer of~~ “~~penny stock” the protection provided by the federal securities laws relating to forward looking statements does~~shall not apply to ~~us.~~
~~Although~~any Exempt Issuance (as defined in the ~~federal securities law provides a safe harbor for forward-looking statements made by a public company that files reports under~~Certificate of Designations of the ~~federal securities laws, this safe harbor is not available to issuers~~Series C Preferred Stock (the “COD”)). Further, holders of ~~penny stocks. As a result, if we are an issuer of a penny stock we will not~~the Series C Preferred Stock shall have the ~~benefit of this safe harbor protection in the event of any claim that the material provided by us contained a material misstatement of fact or was misleading~~right to participate in any ~~material respect because~~offering by the Company of ~~our failure to include any statements necessary to make the statements not misleading.~~
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Asits Common Stock or Common Stock Equivalents in a ~~public company with a class of securities registered~~transaction exempt from registration under the Securities ~~Exchange~~ Act of ~~1934,~~1933, as amended, ~~we are subject~~in an amount equal to ~~ongoing SEC reporting requirements~~an aggregate of 30% of the financing on the same terms, conditions and price provided to investors in such an offering, such right shall expire on the 15 month anniversary of the issuance date of the Series C Preferred Stock by the Company and shall not apply to any ~~deficiencies in our financial reporting~~Exempt Issuance or ~~internal controls could adversely affect us.~~a public offering.

~~As a public company with a class of securities registered under the Securities Exchange Act of 1934, as amended,~~ITEM 2. SALE OF UNREGISTERED SECURITIESwe are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal control over financial reporting. In the future, if we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. In addition, our internal control over financial reporting would not prevent or detect all errors and fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If there are material weaknesses or failures in our ability to meet any of the requirements related to the maintenance and reporting of our internal controls, investors may lose confidence in the accuracy and completeness of our financial reports, which in turn could cause the price of our Common Stock to decline. Moreover, effective internal controls are necessary to produce reliable financial reports and to prevent fraud. If we have deficiencies in our internal controls, it may negatively impact our business, results of operations and reputation. In addition, we could become subject to investigations by OTC Markets, Nasdaq, the SEC or other regulatory authorities, which could require additional management attention, and which could adversely affect our business.
~~There is a limited market for our Common Stock which may make it difficult for investors to sell the Common Stock.~~
There is a limited trading market for the Common Stock. Any trading market for the Common Stock may never develop in the foreseeable future, if ever. If no market develops, it may be difficult or impossible for you to sell your shares if you should desire to do so. The Common Stock is currently quoted on the OTCQB Market. There is extremely limited and sporadic trading of our Common Stock and no assurance can be given, when, if ever, an active trading market will develop or, if developed, that it will be sustained. Unless the Common Stock is registered with the Securities and Exchange Commission and any required state authorities, or an appropriate exemption from registration is available, investors may not be able to sell the Common Stock, even though his or her personal financial condition may dictate such a liquidation. In addition, the Common Stock will not likely be acceptable as collateral for loans. Therefore, prospective investors who require liquidity in their investments should not purchase the Units.
~~The number of Common Stock shares outstanding could increase as a result of convertible debt.~~
We have convertible debt outstanding at this time of approximately $1 million, or $1.6 million if held for an extended period of time which have a conversion feature allowing the holder to convert to Common Stock at a 40% discount to the market price of $.03 as of November 2, 2020. If our Common Stock price materially declines, we will be obligated to issue a large number of shares to the holder of these notes upon conversion. This will likely materially dilute existing holders of our Common Stock. The potential for such dilutive issuances upon conversion of outstanding notes may depress the price of Common Stock regardless of our business performance, and could encourage short selling by market participants, especially if the trading price of our Common Stock begins to decrease. If the holder were to convert the debt into Common Stock the number of Common Stock shares outstanding would expand and would be dilutive to the existing common stockholders. The impact to the holders of our common stock could be a reduced price, or liquidity, in the marketplace for the Common Stock.
~~The Common Stock is thinly traded, so you may be unable to sell at or near asking prices, or at all.~~
Our Common Stock is quoted on the OTC Markets OTCQB with the symbol “MITI”. Shares of our Common Stock are thinly- traded, meaning that the number of persons interested in purchasing our common shares at or near asking prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors. We are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume; and stock analysts, stock brokers and institutional investors may be risk-averse and be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase of our shares until such time as we become more seasoned and viable As a result, our stock price may not reflect an actual or perceived value. Also, there may be periods of several days or more when trading activity in our shares is minimal, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. A broader or more active public trading market for our Common Stock may not develop or if developed, may not be sustained. Due to these conditions, you may not be able to sell your shares at or near asking prices or at all should you attempt to sell your common shares.
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~~Because we do not intend to pay any cash dividends on the Common Stock in the near future.~~
For the foreseeable future, proceeds from any financings earnings generated from our operations will be retained for use in our planned business and not to pay dividends, subject to our obligations to the holders of our preferred stock. Additionally, we have no funds available for dividends and have debt obligations that are senior to our obligation to pay dividends. We do not anticipate paying any cash dividends on our Common Stock in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the Board of Directors, and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors as the Board of Directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. For the foreseeable future, earnings generated from our operations will be retained for use in implementing our business plan and not to pay dividends.
~~Financial Industry Regulatory Authority (~~“~~FINRA”) sales practice requirements may also limit a stockholder~~’~~s ability to buy and sell the Common Stock if it is successful in being quoted on the OTC Markets.~~
FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may limit your ability to buy and sell the Common Stock.
Our officers and directors have voting control over all matters submitted to a vote of our common stockholders, which will prevent our minority shareholders from having the ability to control any of our corporate actions.
Our officers and directors control approximately 82% of the votes on all matters submitted to a vote of our stockholders. As such, they have ability to determine the outcome of all matters submitted to our stockholders for approval, including the election of directors, amendment of our Certificate of Incorporation or By-laws; to effect or prevent a merger, sale of assets or other corporate transaction; and to control the outcome of any other matter submitted to our stockholders for vote. Their control of our voting securities may make it impossible to complete some corporate transactions without their support and may prevent a change in our control. In addition, this ownership could discourage the acquisition of our Common Stock by potential investors and could have an anti-takeover effect, possibly depressing the trading price of our Common Stock.
~~ITEM 2.~~
~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.~~
InDuring the quarter ended ~~September 30, 2020,~~March 31, 2021, we offered and sold securities below. None of the issuances involved underwriters, underwriting discounts or commissions. We relied upon Sections 4(2) of the Securities Act, for the offer and sale of the securities.  We believed Section 4(2) was available because:
●
~~We are not a blank check company;~~
●
~~Sales were not made by general solicitation or advertising; and~~
●
~~All certificates representing the securities had restrictive legends.~~

On ~~July 1, 2020, the Company entered into~~January 4, 2021, we issued 4,123,750 shares of common stock at a ~~Securities Purchase Agreement with Eagle Equities~~price of $0.012 per share pursuant to ~~which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 6”)~~the conversion of $45,000 of principal and $4,485 of accrued interest in ~~the aggregate principal amount of $200,200 an original issue discount of $18,200. The~~ Eagle Equities Note 4.
On January 6, ~~entitles~~2021, we issued 3,505,964 shares of common stock at a price of $0.01224 per share pursuant to the ~~holder to 12%~~conversion of $39,000 of principal and $3,913 of accrued interest ~~per annum and matures on July 1, 2021. Under the~~in Eagle Equities Note 6, Eagle Equities may convert all or a portion of the outstanding principal of the Eagle Equities Note 6 into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Eagle Equities Note 7, at a price equal to 70% of lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company.4.

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On ~~August 20, 2020,~~January 11, 2021, we issued 4,463,507 shares of common stock at a price of $0.01224 per share pursuant to the ~~Company~~conversion of $50,000 of principal and $4,633 of accrued interest in Eagle Equities Note 5.
On January 14, 2021, we issued 4,319,378 shares of common stock at a price of $0.01266 per share pursuant to the conversion of $50,000 of principal and $4,683 of accrued interest in Eagle Equities Note 5.
On January 21, 2021, we issued 6,449,610 shares of common stock at a price of $0.0154 per share pursuant to the conversion of $93,000 of principal and $6,324 of accrued interest in Eagle Equities Note 6.
On January 28, 2021, we issued 7,285,062 shares of common stock at a price of $0.01575 per share pursuant to the conversion of $107,200 of principal and $7,540 of accrued interest in Eagle Equities Note 6.
On February 1, 2021, we issued 6,672,000 shares of common stock in a private placement (the “2021 Private Placement”) at a price of $0.25 per share for cash proceeds of $1,668,000.
On February 5, 2021, we entered into a ~~Securities Purchase Agreement~~settlement agreement with ~~Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 7”) in~~ the aggregate principal amount of $200,200 an original issue discount of $18,200. The Eagle Equities Note 7 entitles the holder to 12% interest per annum and matures on August 20, 2021. Under the Eagle Equities Note 7, Eagle Equities may convert all or a portion of the outstanding principalholders of the Eagle Equities Note 7 ~~into~~whereby we issued 1,184,148 shares of ~~Common Stock beginning on the date which is 180 days from the issuance date of the Eagle Equities Note 7,~~common stock at a price ~~equal to 70%~~ of ~~lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company.~~$0.24984 per share in satisfaction of $200,200 of principal and all accrued interest and prepayment penalties due under this note.

On ~~September 30, 2020, the Company~~February 5, 2021, we entered into a ~~Securities Purchase Agreement~~settlement agreement with ~~Eagle Equities pursuant to which Eagle Equities agreed to purchase a convertible promissory note (the “Eagle Equities Note 8”) in~~ the aggregate principal amount of $114,400 an original issue discount of $10,400. The Eagle Equities Note 8 entitles the holder to 12% interest per annum and matures on September 30, 2021. Under the Eagle Equities Note 8, Eagle Equities may convert all or a portion of the outstanding principalholders of the Eagle Equities Note 8 ~~into~~whereby we issued 639,593 shares of ~~Common Stock beginning on~~common stock at a price of $0.23851 per share in satisfaction of $114,400 of principal and all accrued interest and prepayment penalties due under this note.
On February 5, 2021, the ~~date which is 180 days from~~Company entered into a settlement agreement with the ~~issuance date~~holders of the Eagle Equities Note 8,9 whereby the Company issued 605,177 shares of common stock at a price ~~equal to 70%~~ of ~~lowest traded price during the 20 day trading period ending on the day the conversion notice is received by the Company.~~$0.24984 per share in satisfaction of $114,400 of principal and all accrued interest and prepayment penalties due under this note.

~~ITEM 3.~~
On February 5, 2021, we entered into a settlement agreement with the holders of the Eagle Equities Note 10 whereby we issued 1,095,131 shares of common stock at a price of $0.23748 per share in satisfaction of $200,200 of principal and all accrued interest and prepayment penalties due under this note.
~~DEFAULTS UPON SENIOR SECURITIES.~~

~~None.~~On February 22, 2021, we issued 336,000 shares of common stock for the exercise of options at a price of $0.03 per share.

On March 11, 2021, was issued 600,000 shares of common stock to four officers of The Good Clinic in exchange for 4,800 shares of Series A Preferred Stock.
On March 17, 2021, we issued 300,000 shares of common stock at a price of $0.31 per share to a service provider.
On March 23, 2021, we issued 461,358 shares of common stock at a price of $0.26 per share to the underwriters of the 2021 Private Placement.
On March 25, 2021, we entered into Securities Purchase Agreements (the “SPAs”) with four institutional investors (the “Investors” and each an “Investor”) pursuant to which we sold to the Investors in a private placement an aggregate of 3,000,000 units (the “Units” and each a “Unit”) with a purchase price of $1.00 per Unit, with each Unit consisting of (a) one share of a newly formed Series C Convertible Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), (b) one warrant (the “Series A Warrants”) to purchase 2.1 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) at a purchase price of $0.50 per whole share of Common Stock, and (c) one warrant (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase 2.1 shares of Common Stock at a purchase price of $0.75 per whole share. The aggregate gross proceeds to the Company were $3,000,000 and the number of shares of Common Stock initially issuable upon conversion of the Series C Preferred Stock is 12,600,000 shares of Common stock and the aggregate number of shares of Common Stock initially issuable upon exercise of the Warrants is 12,600,000 shares of Common Stock. We also issued to the placement agent and its designee 463,320 shares of Common Stock.
In addition, on March 29, 2021, we issued 300,000 shares of common stock as payment for services to be rendered for investor relations services having a value of $.2830 per share.
On March 30, 2021, we issued 272,837 shares of common stock as settlement for amount sowed under the Series D Convertible Note share to the underwriters of the 2021 Private Placement.
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On March 31, 2021, we completed the private offering previously reported on February 10, 2021 by issuing an aggregate of 6,672,000 shares of our restricted common stock to investors for $1,668,000 in proceeds pursuant to a Securities Purchase Agreement (“SPA”). The transaction was executed directly with us and no brokers, dealers or representatives were involved
Except for the issuances of common stock upon conversion of notes or the exchange of Common Stock for Series A Preferred Stock or notes which were effected relying on Section 3(a)(9) of the Securities Act as the common stock was exchanged by us with our existing security holders exclusively and no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange, the securities issued in each of the transactions described above were issued relying on Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder. The recipients of the securities in each of these transactions relying on Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate access, through their employment or other relationship with us or through other access to information provided by us, to information about us. The sales of these securities were made without any general solicitation or advertising.
The shares of common stock issued pursuant to the SPA and to the investor relations services were issued in a transaction exempt from registration under the Securities Act of 1933 , as amended (the “Securities Act”) in reliance on Section 4(a)(2) thereof. Accordingly, the shares of common stock have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.
ITEM 3. DEFAULTS ON SENIOR SECURED SECURITIES
Not Applicable.
~~ITEM 4.~~
ITEM 4.MINE SAFETY DISCLOSURES
~~MINE SAFETY DISCLOSURES.~~

Not ~~applicable to the Company’s operations.~~Applicable.
~~ITEM 5.~~
~~OTHER INFORMATION.~~

~~None.~~ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following exhibits are included with this Quarterly Report on Form 10Q
3.1

Certificate of Incorporation of Trunity Holdings, Inc., dated January 18, 2012.

8-K

10.1

1/31/2012

3.2

Bylaws of Trunity Holdings, Inc., dated January 18, 2012.

8-K

10.2

1/31/2012

3.3

Certificate of Ownership Merging between Trunity Holdings, Inc. and Brain Tree International, Inc. dated January 24, 2012.

10-K

3.3

4/16/2013

3.4

Certificate of Amendment to the Certificate of Incorporation of Trunity Holdings, Inc., dated December 24, 2015.

8-K

3.1(i)

1/06/2016

3.5

Certificate of Designations of Series X Preferred Stock of True Nature Holding, Inc.

8-K

3.6

1/06/2020

3.6

Form of Amended and Restated Certificate of Designations of Series A Preferred Stock of True Nature Holding, Inc.

8-K

3.07

3/13/2020

3.7

Certificate of Amendment of the Certificate of Incorporation of True Nature Holding, Inc. dated April 21, 2020.

10-Q

3.7

8/14/2020

27
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3.8

Certificate of Amendment of Certificate of Incorporation, dated as of November 5, 2020, correcting December 24, 2015 Certificate of Amendment.

10-Q

3.8

11/13/2020

3.9

Bylaws of Mitesco, Inc., as amended, dated November 10, 2020

10-Q

3.9

11/13/2020

3.10

Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of Mitesco, Inc.

8-K

3.1

03/26/2021

3.11

Certificate of Correction to the Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of Mitesco, Inc.

8-K

3.2

03/26/2021

4.1#

Mitesco, Inc. 2021 Omnibus Securities and Incentive Plan (File No. 333-252293)

8-K

10.1

01/27/2021

4.2

Form of Series A Warrant

8-K

4.1

03/26/2021

4.3

Form of Series B Warrant

8-K

4.2

03/26/2021

10.1

Form of Securities Purchase Agreement used for private placement of restricted common stock

8-K

10.01

02/10/2021

10.2

Agreement to exchange amounts due under convertible note dated August 20, 2020 for restricted common stock

8-K

10.02

02/10/2021

10.3

Agreement to exchange amounts due under convertible note dated September 20, 2020 for restricted common stock

8-K

10.03

02/10/2021

10.4

Agreement to exchange amounts due under convertible note dated October 30, 2020 for restricted common stock

8-K

10.04

02/10/2021

10.5

Agreement to exchange amounts due under convertible note dated December 9, 2020 for restricted common stock

8-K

10.05

02/10/2021

10.6

Form of Exchange Agreement for Restricted Common Stock with Four (4) Parties Regarding Clinic Assets

8-K

10.06

02/10/2021

10.7#

Employment Agreement by and between Phillip Keller and Mitesco, Inc., effective as of March 17, 2021.

8-K

10.1

03/17/2021

10.8

Form of Securities Purchase Agreement, dated March 25, 2021

8-K

10.1

03/26/2021

10.9

Form of Registration Rights Agreement, dated March 25, 2021

8-K

10.2

03/26/2021

10.10

Engagement Letter, by and between Carter, Terry & Company and Mitesco, Inc., dated January 6, 2021

8-K

10.3

03/26/2021

10.11

Debt Settlement Agreement, dated March 24, 2021

8-K

10.4

03/26/2021

10.12#

Employment Agreement by and between Jenny Lindstrom and Mitesco, Inc., dated as of April 6, 2021

8-K

10.1

04/12/2021

28
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~~ITEM 6.~~ 31.1
~~EXHIBITS.~~
~~Exhibit~~
~~Number~~
~~Description~~
~~3.1~~
Certificate of Incorporation of Trunity Holdings, Inc. (n/k/a Mitesco, Inc.) dated January 18, 2012 (incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed with the SEC on January 31, 2012).
~~3.2~~
Certificate of Ownership Merging Brain Tree International, Inc. into Trunity Holdings, Inc. (n/k/a Mitesco, Inc.) dated January 24, 2012 (incorporated by reference to Exhibit 3.3 of the registrant’s Annual Report on Form 10-K filed with the SEC on April 16, 2013).
~~3.3~~
Certificate of Designation of Series X Preferred Stock of Trunity Holdings, Inc. (n/k/a Mitesco, Inc.) dated December 9, 2015 (incorporated by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K filed with the SEC on December 15, 2015).
~~3.4~~
Certificate of Amendment to the Certificate of Incorporation of Trunity Holdings, Inc. (n/k/a Mitesco, Inc.) dated December 24, 2015 (incorporated by reference to Exhibit 3.1(i) of the registrant’s Current Report on Form 8-K filed with the SEC on January 6, 2016).
~~3.5~~
Certificate of Designations, Preferences and Rights of 10% Series X Cumulative Redeemable Perpetual Preferred Stock dated December 31, 2019 (incorporated by reference to Exhibit 3.6 of the registrant’s Current Report on Form 8-K filed with the SEC on January 6, 2020).
~~3.6~~
Amended and Restated Certificate of Designations, Preferences and Rights of 10% Series A Cumulative Redeemable Perpetual Preferred Stock dated March 2020 (incorporated by reference to Exhibit 3.07 of the registrant’s Current Report on Form 8-K filed with the SEC on March 13, 2020).
~~3.7~~
Certificate of Amendment of Certificate of Incorporation of True Nature Holding, Inc. dated April 21, 2020 (incorporated by reference to Exhibit 3.7 of the registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2020).
3.8* ~~Certificate of Amendment of Certificate of Incorporation, dated as of November 5, 2020, correcting December 24, 2015 Certificate of Amendment.~~
3.9* ~~Bylaws of Mitesco, Inc., as amended, dated November 10, 2020~~
~~4.1~~
12% Convertible Redeemable Promissory Note, dated April 8, 2020, with Eagle Equities, Inc. (incorporated by reference to Exhibit 4.01 of the registrant’s Current Report on Form 8-K filed with the SEC on April 17, 2020).
~~4.2~~
Securities Purchase Agreement dated April 8, 2020, with Eagle Equities, Inc. (incorporated by reference to Exhibit 4.02 of the registrant’s Current Report on Form 8-K filed with the SEC on April 17, 2020).
~~10.1~~
Promissory Note between Mitesco, Inc. and Bank of America dated April 25, 2020 (incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed with the SEC on May 11, 2020).
~~10.2~~
Advisor Agreement between Mitesco, Inc. and Michael Loiacono dated July 8, 2020 (incorporated by reference to Exhibit 10.01 of the registrant’s Current Report on Form 8-K filed with the SEC on July 8, 2020).
~~10.3~~
Board of Directors Advisory Agreement between Mitesco, Inc. and Faraz Paqvi dated June 1, 2020 (incorporated by reference to Exhibit 5.01 of the registrant’s Current Report on Form 8-K filed with the SEC on July 13, 2020).
10.4* ~~Form of lease agreement between The Good Clinic, LLC, and LMC NE Minneapolis Holdings, LLC, dated October 19, 2020.~~
31.1*
Certification ~~of Chief~~by the Principal Executive Officer ~~Pursuant~~of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002
X
31.2*31.2
Certification ~~of Chief~~by the Principal Financial Officer ~~Pursuant~~of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~
X
32.1*32.1
Certification ~~of Chief~~by the Principal Executive Officer and ~~Chief~~Principal Financial Officer ~~Pursuant~~of the Registrant pursuant to 18 U.S.C. Section 1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
101.INS **32.2
Certification by the Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~XBRL INSTANCE DOCUMENT~~X
101.SCH **#
Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this report.
~~XBRL TAXONOMY EXTENSION SCHEMA~~
101.CAL **
~~XBRL TAXONOMY EXTENSION CALCULATION LINKBASE~~
101.DEF **
~~XBRL TAXONOMY EXTENSION DEFINITION LINKBASE~~
101.LAB **
~~XBRL TAXONOMY EXTENSION LABEL LINKBASE~~
101.PRE **
~~XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE~~

* Filed herewith.
** Furnished herewith.
47
29
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~~SIGNATURES~~SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q for the three months ended March 31, 2021 to be signed on its behalf by the undersigned, thereunto duly authorized.

MITESCO, INC.

~~Dated: November 13, 2020~~
~~By:~~
~~/s/ Larry Diamond~~

~~Larry Diamond~~
~~Chief Executive Officer and~~
~~Interim Chief Financial Officer~~

Dated: May 14, 2021
By:
/s/ Phillip J. Keller

Phillip J. Keller
Chief Financial Officer and Principal Financial Officer

4830

FOR THE THREE MONTHS ENDED SEPTEMBER 30

	Preferred Stock Series A				Preferred Stock Series X				Common Stock						Additional Paid-in			Stock		Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Payable		Deficit			Total
Balance, June 30, 2019		-		-		-		-		39,077,529			390,774			6,370,513			37,186		(8,649,297	)		(1,850,824	)
Stock issued to employees subject to vesting		-		-		-		-		1,975,000			19,750			(7,520	)		-		-			12,230
Stock issued for conversion of notes payable		-		-		-		-		9,115,933			91,160			111,601			-		-			202,761
Shares issued for legal settlement		-		-		-		-		-			-			-			-		-			-
Discount on notes payable due to conversion feature		-		-		-		-		-			-			-			-		-			-
Vesting of shares issued to employees		-		-		-		-		-			-			104,465			-		-			104,465
Settlement of derivative liabilities																203,730								203,730
Cancellation										(300,000	)		(3,000	)		3,000								-
Imputed interest		-		-		-		-		-			-			2,250			-		-			2,250
Net loss for the period		-		-		-		-		-			-			-			-		(1,287,783	)		(1,287,783	)
Balance, September 30, 2019 (unaudited)		-		-		-		-		49,868,462		$	498,684		$	6,783,329		$	37,186	$	(9,937,080	)	$	(2,617,881	)

Balance, June 30, 2020		4,800	$	48		26,227	$	262		98,796,144		$	987,962		$	9,058,332		$	37,186	$	(12,488,175	)	$	(2,404,385	)
Vesting of common stock issued to employees		-		-		-		-		-			-			7,792			-		-			7,792
Vesting of stock options issued to employees		-		-		-		-		-			-			91,647			-		-			91,647
Common stock issued for services		-		-		-		-		386,985			3,869			17,787			-		-			21,656
Settlement of derivative liabilities		-		-		-		-		-			-			-			-		-			-
Common stock issued in warrant settlement agreement		-		-		-		-		-			-			-			-		-			-
Common stock issued for conversion of notes payable and accrued interest		-		-		-		-		22,269,785			222,698			508,066			-		-			730,764
Preferred stock dividends, $3.62 per share (10% of stated value per year)		-		-		-		-		-			-			(19,392	)		-		-			(19,392	)
Loss for the period ended September 30, 2020		-		-		-		-		-			-			-			-		(1,036,609	)		(1,036,609	)
Balance, September 30, 2020 (unaudited)		4,800	$	48		26,227	$	262		121,452,914		$	1,214,529		$	9,664,232		$	37,186	$	(13,524,784	)	$	(2,608,527	)

FOR THE NINE MONTHS ENDED SEPTEMBER 30

	Preferred Stock Series A				Preferred Stock Series X				Common Stock						Additional Paid-in			Stock		Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Payable		Deficit			Total
Balance, December 31, 2018		-		-		-		-		31,598,236		$	315,982		$	5,684,208		$	37,186	$	(7,691,312	)	$	(1,653,936	)
Stock issued for services		-		-		-		-		200,000			2,000			15,480			-		-			17,480
Stock issued to employees subject to vesting		-		-		-		-		2,975,000			29,750			(17,520	)		-		-			12,230
Stock issued for conversion of notes payable		-		-		-		-		14,394,002			143,940			414,230			-		-			558,170
Stock issued for legal settlement		-		-		-		-		1,401,224			14,012			87,016			-		-			101,028
Discount on notes payable due to conversion feature		-		-		-		-		-			-			223,087			-		-			223,087
Settlement of derivative liabilities																203,730								203,730
Discount on notes payable due to warrants		-		-		-		-		-			-			34,500			-		-			34,500
Cancellation of shares		-		-		-		-		(700,000	)		(7,000	)		7,000			-		-			-
Vesting of shares issued to employees		-		-		-		-		-			-			124,848			-		-			124,848
Imputed interest		-		-		-		-		-			-			6,750			-		-			6,750
Net loss for the period		-		-		-		-		-			-			-			-		(2,245,768	)		(2,245,768	)
Balance, September 30, 2019 (unaudited)		-		-		-		-		49,868,462		$	498,684		$	6,783,329		$	37,186	$	(9,937,080	)	$	(2,617,881	)

Balance, December 31, 2019		-	$	-		26,227	$	262		81,268,443		$	812,684		$	8,407,977		$	37,186	$	(11,576,574	)	$	(2,318,465	)
Vesting of common stock issued to employees		-		-		-		-		-			-			60,842			-		-			60,842
Vesting of stock options issued to employees		-		-		-		-		-			-			119,227			-		-			119,227
Common stock issued for services		-		-		-		-		586,985			5,869			23,467			-		-			29,336
Settlement of derivative liabilities		-		-		-		-		-			-			528,995			-		-			528,995
Common stock issued in warrant settlement agreement		-		-		-		-		7,999,996			80,000			291			-		-			80,291
Common stock issued for conversion of notes payable and accrued interest		-		-		-		-		31,597,490			315,976			508,066			-		-			824,042
Issuance of Preferred A stock to consultants		4,800		48		-		-		-			-			71,510			-		-			71,558
Preferred stock dividends, $3.62 per share (10% of stated value per year)		-		-		-		-		-			-			(56,143	)		-		-			(56,143	)
Loss for the period ended September 30, 2020		-		-		-		-		-			-			-			-		(1,948,210	)		(1,948,210	)
Balance, September 30, 2020 (unaudited)		4,800	$	48		26,227	$	262		121,452,914		$	1,214,529		$	9,664,232		$	37,186	$	(13,524,784	)	$	(2,608,527	)

	Preferred Stock Series A						Preferred Stock Series C				Preferred Stock Series X				Common Stock					Additional Paid-in			Stock		Accumulated
	Shares			Amount			Shares		Amount		Shares		Amount		Shares		Amount			capital			Payable		Deficit			Total

Balance, December 31, 2019		-		$	-			-	$	-		26,227	$	262		81,268,443	$	812,684		$	8,407,977		$	37,186	$	(11,576,574	)	$	(2,318,465	)
Vesting of common stock issued to employees		-			-			-		-		-		-		-		-			33,676			-		-			33,676
Vesting of stock options issued to employees		-			-			-		-		-		-		-		-			7,072			-		-			7,072
Common stock issued for services		-			-			-		-		-		-		200,000		2,000			5,680			-		-			7,680
Settlement of derivative liabilities		-			-			-		-		-		-		-		-			231,323			-		-			231,323
Common stock issued in warrant settlement agreement		-			-			-		-		-		-		5,098,556		50,986			(50,986	)		-		-			-
Issuance of Preferred A stock to consultants		4,800			48			-		-		-		-		-		-			71,510			-		-			71,558
Preferred stock dividends		-			-			-		-		-		-		-		-			(17,359	)		-		-			(17,359	)
Loss for the period ended March 31, 2020		-			-			-		-		-		-		-		-			-			-		(147,961	)		(147,961	)
Balance, March 31, 2020		4,800		$	48			-	$	-		26,227	$	262		86,566,999	$	865,670		$	8,688,893		$	37,186	$	(11,724,535	)	$	(2,132,476	)


Balance, December 31, 2020		4,800		$	48			-	$	-		26,227	$	262		155,381,183	$	1,553,812	��	$	10,340,821		$	-	$	(14,437,168	)	$	(2,542,225	)
Vesting of common stock issued to employees		-			-			-		-		-		-		-		-			4,008			-		-			4,008
Vesting of stock options issued to employees		-			-			-		-		-		-		-		-			5,942			-		-			5,942
Common stock issued for services		-			-			-		-		-		-		1,097,358		10,961			211,519			-		-			222,480
Common stock issued for conversion of notes payable and accrued interest		-			-			-		-		-		-		33,944,157		339,442			2,314,353			-		-			2,653,795
Sale of common stock in private placement		-			-			-		-		-		-		6,672,000		66,750			1,601,250			-		-			1,668,000
Sales of Preferred Stock Series C and warrants, net of costs		-			-			3,000,000		30,000		-		-		-		-			2,730,000			-		-			2,760,000
Conversion of Preferred Stock Series A to common stock		(4,800	)		(48	)		-		-		-		-		600,000		6,000			(5,952	)		-		-			-
Deemed dividend on conversion of Preferred Stock Series A to common stock		-			-			-		-				-		-		-			206,242			-		(206,242	)		-
Deemed dividend on Preferred Stock Series C		-			-			-		-		-		-		-		-			126,000			-		(126,000	)		-
Preferred stock dividends		-			-			-		-		-		-		-		-			(20,499	)		-		-			(20,499	)
Loss for the period ended March 31, 2021		-			-			-		-		-		-		-		-			-			-		(2,402,211	)		(2,402,211	)
Balance, March 31, 2021		-		$	-			3,000,000	$	30,000		26,227	$	262		197,694,698	$	1,976,965		$	17,513,684		$	-	$	(17,171,621	)	$	2,349,290

	For the Nine			For the Nine			For the Three			For the Three
	Months Ended			Months Ended			Months Ended			Months Ended
	September 30,			September 30,			March 31,			March 31,
	2020			2019			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,948,210	)	$	(2,245,768	)	$	(2,402,211	)	$	(147,961	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,179			-			20,616			393
Loss on conversion of notes payable to common stock		-			161,458
Loss on legal settlement		-			26,924
Preferred A stock issued to consultants											71,558
Amortization of right-to-use asset								6,237			-
Gain on settlement of notes payable								(1,836	)		-
Gain on settlement of accounts payable		(397,962	)		(50,366	)		-			(42,292	)
Gain on conversion of accrued salary		(6,988	)		-
Gain on derivative liabilities		(498,095	)		69,611
Gain (Loss) on revaluation of derivative liabilities								493,455			(496,369	)
Derivative expense		125,869			460,375			-			36,433
Amortization of discount on notes payable		785,724			603,861			756,795			98,278
Amortization of loan fees		18,000			-
Share-based compensation		259,307			154,558			232,430			48,428
Imputed interest		-			6,750

Changes in assets and liabilities:
Prepaid expenses		5,937			2,500			(14,618	)		-
Inventory								(1,480	)		-
Accounts payable and accrued liabilities		371,972			184,398			(366,636	)		879
Operating lease liability								9,726			-
Due to related parties		-			150,407			-			2,000
Other current liabilities		1,634			-			880			-
Accrued interest		89,642			57,017			202,313			26,278

Net cash used in operating activities		(1,191,991	)		(418,275	)		(1,064,329	)		(402,375	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquisition of fixed assets								(495,360	)		-

Net cash used in investing activities								(495,360	)		-

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from private placement of common stock								1,668,000			-
Proceeds from sales of Series C Preferred Stock, net of fees								2,760,000			-
Proceeds from notes payable, net of discount		1,381,406			428,058			-			375,000
Principal payments on notes payable		(171,000	)		(10,236	)		(177,534	)		(45,000	)

Net cash provided by financing activities		1,210,406			417,822			4,250,466			330,000

Net increase (decrease) in cash and cash equivalents		18,415			(453	)		2,690,777			(72,375	)

Cash and cash equivalents at beginning of period		83,245			1,304			64,789			83,245

Cash and cash equivalents at end of period	$	101,660		$	851		$	2,755,566		$	10,870

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	2,680		$	2,236		$	2,680		$	2,680
Income taxes paid	$	-		$	-		$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Par value of shares returned for cancellation	$	-		$	7,000
Shares issued for debt conversion	$	617,000		$	363,285
Shares issued for accrued salary conversion	$	17,787		$	-
Stock issued for legal settlement	$	-		$	101,028
Discount due to warrants	$	-		$	34,500
Beneficial conversion feature	$	-		$	223,087
Debt issued to related party for settlement of accounts payable	$	-		$	5,000
Stock issued for conversion of debt and accrued interest							$	2,653,795		$	-
Settlement of derivative liabilities	$	1,020,449		$	203,730		$	(1,301,137	)	$	231,323
Issuance of Series A Preferred Stock to consultants	$	71,558		$	-
Preferred stock dividends payable	$	56,143		$	-
Exercise of cashless warrants	$	50,986		$	-
Cashless exercise of warrants							$	-		$	50,986
Issued of Series A Preferred Stock to consultants							$	-		$	71,558
Preferred stock dividend							$	20,499		$	17,359
Derivative discounts	$	999,800		$	470,000		$	-		$	375,000
Accrued interest converted to equity	$	36,983		$	26,330
Conversion of Series A Preferred Stock to common stock							$	6,000		$	-
Deemed dividends on Preferred Stock							$	332,242		$	-

	Years
Office equipment		3 to 5
Furniture & fixtures		3 to 7
Machinery & equipment		3 to 10
Leasehold improvements		Term of lease

●	identification of the contract, or contracts, with a customer;
●	identification of the performance obligations in the contract;
●	determination of the transaction price;
●	allocation of the transaction price to the performance obligations in the contract; and
●	recognition of revenue when, or as, we satisfy a performance obligation.

Market Cap (fully diluted basis)		3,749,829
Volatility (12 Months)		78.6	%
Years to Liquidity		5.00
Continuous Risk Free Rate		0.88	%
Stock Price	$	0.0419

Operating lease liabilities are summarized below:	March 31, 2020			December 31, 2019
Clinic	$	330,730		$	321,004
Lease liability	$	330,730		$	321,004
Less: current portion		(25,284	)		(8,905	)
Lease liability, non-current	$	305,446		$	312,099

For the twelve months ended March 31, 2022	$	63,621
For the twelve months ended March 31, 2023		63,798
For the twelve months ended March 31, 2024		65,317
For the twelve months ended March 31, 2025		66,836
For the twelve months ended March 31, 2026		68,355
Thereafter		182,913
Total	$	510,840
Less: Present value discount		(180,110	)
Lease liability	$	330,730

									Interest		Amortization		Interest		Amortization
									Expense		of Discount		Expense		of Discount
									3 months		3 months		9 months		9 months		Discount
	Principal Balance				Accrued Interest				ended		ended		ended		ended		Balance
	9/30/2020		12/31/2019		9/30/2020		12/31/2019		9/30/2020		9/30/2020		9/30/2020		9/30/2020		9/30/2020
Series C Convertible Debenture	$	110,833	$	110,833	$	66,029	$	57,709	$	2,794	$	-	$	8,320	$	-	$	-

Series D Convertible Debenture		11,333		11,333		8,047		7,026		343		-		1,021		-		-

Convertible Note A		41,000		41,000		10,795		7,101		1,240		-		3,694		-		-

Power Up Note 11		-		45,000		-		1,805		-		-		875		38,498		-

Power Up Note 12		-		53,000		-		1,499		-		-		1,813		46,014		-

Power Up Note 13		-		73,000		-		1,488		-		-		3,240		66,554		-

Eagle Equity Note 1		-		256,000		-		3,367		781		109,019		15,735		248,215		-

Eagle Equity Note 2*		50,000		256,000		4,538		1,010		6,166		181,521		21,484		221,800		25,807

Eagle Equity Note 3**		256,000		-		21,041		-		7,743		45,409		21,041		71,312		184,688

Eagle Equity Note 4		129,000		-		8,652		-		3,902		18,083		8,652		33,883		95,117

Eagle Equity Note 5		100,000		-		5,754		-		3,025		11,149		5,754		25,080		78,920

Eagle Equity Note 6		200,200		-		6,057		-		6,057		25,932		6,057		25,932		174,268

Eagle Equity Note 7		200,200		-		2,699		-		2,699		8,123		2,699		8,123		192,077

Eagle Equity Note 8		114,400		-		38		-		38		313		38		313		114,087

PPP Loan		460,406		-		1,879		-		1,160		-		1,879		-		-

Other		-		-		-		1,865		-		-		-		-		-

Total	$	1,673,372	$	846,166	$	135,529	$	82,870	$	35,948	$	399,549	$	102,305	$	785,724	$	864,964

	September 30, 2020			December 31, 2019			March 31, 2021		December 31, 2020
Total notes payable	$	1,673,372		$	846,166		$	460,406	$	1,656,772
Less: Discount		(864,964	)		(646,888	)		-		(756,795	)
Notes payable - net of discount	$	808,408		$	199,278		$	460,406	$	899,977

Current Portion, net of discount	$	808,408		$	199,278		$	460,406	$	899,977
Long-term portion, net of discount	$	-		$	-		$	-	$	-

December 31, 2018	$	-
Conversion features issued		1,472,320
Warrants issued		187,968
Settled upon conversion or exercise		(689,469	)
Settled upon payment of note		(191,827	)
Loss on revaluation		709,431
December 31, 2019	$	1,488,423

Conversion features issued		1,068,870
Settled upon conversion or exercise		(1,020,450	)
Settled upon payment of note		(148,949	)
Gain on revaluation		(263,042	)
September 30, 2020	$	1,124,852

December 31, 2020	$	807,682
Settled upon conversion or exercise		(1,301,137	)
Gain on revaluation		493,455
March 31, 2021	$	-

						Weighted				Weighted
				Weighted		average				average
				average		exercise				exercise
Range of		Number of		remaining		price of		Number of		price of
exercise		options		contractual		outstanding		options		exercisable
prices		outstanding		life (years)		options		exercisable		options
$	0.03		1,250,000		9.67	$	0.03		250,000	$	0.03
$	0.05		7,450,000		9.44	$	0.05		983,334	$	0.05
$	0.06		1,000,000		9.84	$	0.06		-	$	-
$	21.40		67,879		2.41	$	21.40		67,879	$	1.16
			9,767,879		9.46	$	0.20		1,301,213	$	1.16

	Shares			Weighted- Average Exercise Price ($)		Shares			Weighted- Average Exercise Price ($)
Outstanding at December 31, 2018		67,879		$	21.40
Outstanding on December 31, 2020							13,453,879		$	0.03
Granted		-			-		1,195,000			0.19
Cancelled		-			-		(336,000	)		0.03

Outstanding at December 31, 2019		67,879		$	21.40

Granted		11,200,000		$	0.05
Cancelled		(1,500,000	)		0.05
Outstanding at September 30, 2020		9,767,879		$	0.20

Exercisable at September 30, 2020		1,301,213		$	1.16
Outstanding on March 31, 2021							14,312,879		$	0.04

	March 31,
	2021
Volatility		169.3% to 183.5	%
Dividends	$	-
Risk-free interest rates		0.82 % to 1.69	%
Term (years)		2.50 to 10.00

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Liabilities
Derivative liabilities	$	-	$	-	$	807,682	$	807,682

3.1	Certificate of Incorporation of Trunity Holdings, Inc., dated January 18, 2012.	8-K	10.1	1/31/2012

3.2	Bylaws of Trunity Holdings, Inc., dated January 18, 2012.	8-K	10.2	1/31/2012

3.3	Certificate of Ownership Merging between Trunity Holdings, Inc. and Brain Tree International, Inc. dated January 24, 2012.	10-K	3.3	4/16/2013

3.4	Certificate of Amendment to the Certificate of Incorporation of Trunity Holdings, Inc., dated December 24, 2015.	8-K	3.1(i)	1/06/2016

3.5	Certificate of Designations of Series X Preferred Stock of True Nature Holding, Inc.	8-K	3.6	1/06/2020

3.6	Form of Amended and Restated Certificate of Designations of Series A Preferred Stock of True Nature Holding, Inc.	8-K	3.07	3/13/2020

3.7	Certificate of Amendment of the Certificate of Incorporation of True Nature Holding, Inc. dated April 21, 2020.	10-Q	3.7	8/14/2020

3.8	Certificate of Amendment of Certificate of Incorporation, dated as of November 5, 2020, correcting December 24, 2015 Certificate of Amendment.	10-Q	3.8	11/13/2020

3.9	Bylaws of Mitesco, Inc., as amended, dated November 10, 2020	10-Q	3.9	11/13/2020

3.10	Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of Mitesco, Inc.	8-K	3.1	03/26/2021

3.11	Certificate of Correction to the Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of Mitesco, Inc.	8-K	3.2	03/26/2021

4.1#	Mitesco, Inc. 2021 Omnibus Securities and Incentive Plan (File No. 333-252293)	8-K	10.1	01/27/2021

4.2	Form of Series A Warrant	8-K	4.1	03/26/2021

4.3	Form of Series B Warrant	8-K	4.2	03/26/2021

10.1	Form of Securities Purchase Agreement used for private placement of restricted common stock	8-K	10.01	02/10/2021

10.2	Agreement to exchange amounts due under convertible note dated August 20, 2020 for restricted common stock	8-K	10.02	02/10/2021

10.3	Agreement to exchange amounts due under convertible note dated September 20, 2020 for restricted common stock	8-K	10.03	02/10/2021

10.4	Agreement to exchange amounts due under convertible note dated October 30, 2020 for restricted common stock	8-K	10.04	02/10/2021

10.5	Agreement to exchange amounts due under convertible note dated December 9, 2020 for restricted common stock	8-K	10.05	02/10/2021

10.6	Form of Exchange Agreement for Restricted Common Stock with Four (4) Parties Regarding Clinic Assets	8-K	10.06	02/10/2021

10.7#	Employment Agreement by and between Phillip Keller and Mitesco, Inc., effective as of March 17, 2021.	8-K	10.1	03/17/2021

10.8	Form of Securities Purchase Agreement, dated March 25, 2021	8-K	10.1	03/26/2021

10.9	Form of Registration Rights Agreement, dated March 25, 2021	8-K	10.2	03/26/2021

10.10	Engagement Letter, by and between Carter, Terry & Company and Mitesco, Inc., dated January 6, 2021	8-K	10.3	03/26/2021

10.11	Debt Settlement Agreement, dated March 24, 2021	8-K	10.4	03/26/2021

10.12#	Employment Agreement by and between Jenny Lindstrom and Mitesco, Inc., dated as of April 6, 2021	8-K	10.1	04/12/2021

~~Exhibit~~ ~~Number~~	~~Description~~

~~3.1~~	Certificate of Incorporation of Trunity Holdings, Inc. (n/k/a Mitesco, Inc.) dated January 18, 2012 (incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed with the SEC on January 31, 2012).

~~3.2~~	Certificate of Ownership Merging Brain Tree International, Inc. into Trunity Holdings, Inc. (n/k/a Mitesco, Inc.) dated January 24, 2012 (incorporated by reference to Exhibit 3.3 of the registrant’s Annual Report on Form 10-K filed with the SEC on April 16, 2013).

~~3.3~~	Certificate of Designation of Series X Preferred Stock of Trunity Holdings, Inc. (n/k/a Mitesco, Inc.) dated December 9, 2015 (incorporated by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K filed with the SEC on December 15, 2015).

~~3.4~~	Certificate of Amendment to the Certificate of Incorporation of Trunity Holdings, Inc. (n/k/a Mitesco, Inc.) dated December 24, 2015 (incorporated by reference to Exhibit 3.1(i) of the registrant’s Current Report on Form 8-K filed with the SEC on January 6, 2016).

~~3.5~~	Certificate of Designations, Preferences and Rights of 10% Series X Cumulative Redeemable Perpetual Preferred Stock dated December 31, 2019 (incorporated by reference to Exhibit 3.6 of the registrant’s Current Report on Form 8-K filed with the SEC on January 6, 2020).

~~3.6~~	Amended and Restated Certificate of Designations, Preferences and Rights of 10% Series A Cumulative Redeemable Perpetual Preferred Stock dated March 2020 (incorporated by reference to Exhibit 3.07 of the registrant’s Current Report on Form 8-K filed with the SEC on March 13, 2020).

~~3.7~~	Certificate of Amendment of Certificate of Incorporation of True Nature Holding, Inc. dated April 21, 2020 (incorporated by reference to Exhibit 3.7 of the registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2020).

3.8*	~~Certificate of Amendment of Certificate of Incorporation, dated as of November 5, 2020, correcting December 24, 2015 Certificate of Amendment.~~

3.9*	~~Bylaws of Mitesco, Inc., as amended, dated November 10, 2020~~

~~4.1~~	12% Convertible Redeemable Promissory Note, dated April 8, 2020, with Eagle Equities, Inc. (incorporated by reference to Exhibit 4.01 of the registrant’s Current Report on Form 8-K filed with the SEC on April 17, 2020).

~~4.2~~	Securities Purchase Agreement dated April 8, 2020, with Eagle Equities, Inc. (incorporated by reference to Exhibit 4.02 of the registrant’s Current Report on Form 8-K filed with the SEC on April 17, 2020).

~~10.1~~	Promissory Note between Mitesco, Inc. and Bank of America dated April 25, 2020 (incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed with the SEC on May 11, 2020).

~~10.2~~	Advisor Agreement between Mitesco, Inc. and Michael Loiacono dated July 8, 2020 (incorporated by reference to Exhibit 10.01 of the registrant’s Current Report on Form 8-K filed with the SEC on July 8, 2020).

~~10.3~~	Board of Directors Advisory Agreement between Mitesco, Inc. and Faraz Paqvi dated June 1, 2020 (incorporated by reference to Exhibit 5.01 of the registrant’s Current Report on Form 8-K filed with the SEC on July 13, 2020).

10.4*	~~Form of lease agreement between The Good Clinic, LLC, and LMC NE Minneapolis Holdings, LLC, dated October 19, 2020.~~

31.1*	Certification ~~of Chief~~by the Principal Executive Officer ~~Pursuant~~of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002			X

31.2*31.2	Certification ~~of Chief~~by the Principal Financial Officer ~~Pursuant~~of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~			X

32.1*32.1	Certification ~~of Chief~~by the Principal Executive Officer and ~~Chief~~Principal Financial Officer ~~Pursuant~~of the Registrant pursuant to 18 U.S.C. Section 1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			X

101.INS **32.2	Certification by the Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.			~~XBRL INSTANCE DOCUMENT~~X

101.SCH **#	Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this report.	~~XBRL TAXONOMY EXTENSION SCHEMA~~

101.CAL **	~~XBRL TAXONOMY EXTENSION CALCULATION LINKBASE~~

101.DEF **	~~XBRL TAXONOMY EXTENSION DEFINITION LINKBASE~~

101.LAB **	~~XBRL TAXONOMY EXTENSION LABEL LINKBASE~~

101.PRE **	~~XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE~~

	MITESCO, INC.


~~Dated: November 13, 2020~~	~~By:~~	~~/s/ Larry Diamond~~
		~~Larry Diamond~~
		~~Chief Executive Officer and~~
		~~Interim Chief Financial Officer~~

Dated: May 14, 2021	By:	/s/ Phillip J. Keller
		Phillip J. Keller Chief Financial Officer and Principal Financial Officer