UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: March 31, 20192020

or

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

For the transition period from __________ to __________

Commission File Number:000-56010

MESO NUMISMATICS, INC.

(Exact name of registrant as specified in its charter)

433 Plaza Real Suite 275

Boca Raton, Florida 33432

(Address of principal executive offices)

(800) 889-9509

(Registrant’s telephone number, including area code)

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

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

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

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

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

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

As of May 22, 2019,December 28, 2020, there were 4,935,44610,869,596 shares outstanding of the registrant’s common stock.

MESO NUMISMATICS, INC.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MESO NUMISMATICS INC.

(Formerly Pure Hospitality Solutions, Inc.)

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

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

MESO NUMISMATICS INC.

(Formerly Pure Hospitality Solutions, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)(Unaudited)

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

MESO NUMISMATICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

For the Three Months Ended March 31, 2020

(Unaudited)

MESO NUMISMATICS, INC.

(Formerly Pure Hospitality Solutions, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

For the Three Months Ended March 31, 2019 and the Year Ended December 31, 2018

(unaudited)(Unaudited)

The accompanying notes are an integral part of these auditedcondensed consolidated financial state.statements

MESO NUMISMATICS, INC.

(Formerly Pure Hospitality Solutions, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(Unaudited)

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

MESO NUMISMATICS, INC.

(Formerly Pure Hospitality Solutions, Inc.)

NOTES TO CONSOLIDATEDCONSOLDIATED FINANCIAL STATEMENTS

March 31, 20192020

(unaudited)(Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Nature of Business

Meso Numismatics, Inc. (the “Company”) was originally organized under the laws of the state of Washington State in 1999, as Spectrum Ventures, LLC to develop market and sell VOIP (Voice Overover Internet Protocol) services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel and& Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc.

On November 16, 2016, the Company entered into an Agreement and Plan of Merger between the Company and Meso Numismatics Corp. (“Meso”). The acquisition of Meso is to support the Company’s overall mission of specializing in ventures related to Central America and the Latin countries of the Caribbean,Caribbean; not limited to tourism. Meso is a small but scalable numismatics operation that the Company can leverage for low costlow-cost revenues and product marketing.

Meso Numismatics maintains an online store with eBay (www.mesocoins.com)(www.mesocoins.com) and participates in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions and Lyn Knight Auctions.

The acquisition was completedcomplete on August 4, 2017 following the Company issuance of 25,000 shares of Series BB preferred stock to Meso to acquire one hundred (100%) percent of Meso’s common stock. The Company accounted for the acquisition as common control, as Melvin Pereira, the CEO and principal shareholder of the Company controls, operatescontrolled, operated and ownsowned both companies. On November 16, 2016, the date of the Merger Agreement and June 30, 2017, the date of the Debt Settlement Agreement, Melvin Pereira, CEO of Pure Hospitality Solutions, owned 100% of the stock of Meso Numismatics. Pure Hospitality Solutions, Inc. and Meso Numismatics first came under common control on June 30, 2017.

On September 4, 2017, the Company decided to suspend its booking operations, Oveedia, to focus on continuing to build its numismatic business, Meso Numismatics. The Company did, however, use its footprint within the Latin American region to expand Meso Numismatics quickly.at a much quicker rate.

In September 2018, the Company changed its name to Meso Numismatics, Inc. and was approved by FINRA provided a market effective date and on September 26, 2018, the new ticker symbol MSSV became effective as ofon October 16, 2018.

On July 2, 2018, the Board of Directors authorized, and shareholders approved a 1-for-1,000 reverse stock split of its issued and outstanding shares of common stock held by the holders of record. The prior year financials have been changed to reflect the 1-for-1,000 reverse stock split.

On November 27, 2019, Meso Numismatics Inc. entered into an Assignment and Assumption Agreement with Lans Holdings Inc., whereby Lans Holdings Inc. assigned all of its rights to, obligations and interest in a Binding Letter of Intent entered into on May 23, 2019 with Global Stem Cells Group Inc. and Benito Nova, setting forth the principal terms pursuant to which the Company will acquire 50,000,000 shares of common stock of Global Stem Cells Group Inc.

In consideration for the Assignment, Meso Numismatics Inc. shall:

The consideration for the assignment of $1,163,357, consisting of an aggregate of $1,079,626 of Convertible Redeemable Notes assumed from Lans Holdings Inc and. 1,000 shares of its Series CC Convertible Preferred Stock valued at $83,731 issued to Lans Holdings Inc was recorded as compensation expense.

On November 27, 2019, and in connection with the execution of the Assignment, the Company’s Board of Directors appointed Mr. David Christensen, former director and CEO of LAHO, to serve as director and president of the Company and, as an inducement, authorized to Mr. Christensen 50,000 shares of its Series AA in connection with said appointments.

On December 23, 2019, Meso Numismatics Inc. entered into the Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., whereby the Original Agreement is amended to extend the deadline to enter into the New LOI to 120 days from the execution of the Post Closing Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 120 days from the execution of the Post Closing Amendment.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The audited consolidated financial statements include the accounts of the Company and its wholly-ownedwholly owned subsidiaries, E-Network de Costa Rica MA SAPure Hospitality Solutions, Inc. and Meso Numismatics Corp. All intercompany transactions have been eliminated.

Use of Estimates in Financial Statement Presentation

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts for the prior year have been revised or reclassified to conform to the current year presentation.

On September 26, 2018, a 1:1000 reverse stock split was approved by the Financial Industry Regulatory Authority (“FINRA”) for shareholders of record as of September 26, 2018. All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split, including the financial statements and notes thereto.

Cash and Cash Equivalents

The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents. At March 31, 20192020 and December 31, 2018,2019, all of the Company’s cash was deposited in major banking institutions. There were no cash equivalents as of March 31, 20192020 and December 31, 2018.2019.

Inventory

The Company’s inventory is comprised of roughly 50% coins and medals and 50% paper money. The Company has a meticulous process for the acquisition and sales process for each coin item. The Company specializes in coins from the Meso region, but also acquires coins and medals from elsewhere around the world

As of March 31, 2019,2020, the Company is working on an inventory tracking system by serial number. Until such time as an inventory tracking system exists, the inventory costs cannot be properly confirmed. Any inventory balances are therefore expensed during each reporting period.confirmed and written-off to cost of revenue.

Derivative Instruments

The derivative instruments are accounted for as liabilities. Theliabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Binomial option pricing model to value the derivative instruments.

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial salessale of products by applying the following steps: (1) identifyingidentify the contract with a customer; (2) identifyingidentify the performance obligations in the contract; (3) determiningdetermine the transaction price; (4) allocatingallocate the transaction price to each performance obligation in the contract; and (5) recognizingrecognize revenue when each performance obligation is satisfied. For

There was no impact on the comparative periods, revenue has not been adjustedCompany’s financial statements as a result of adopting Topic 606 for the period ended March 31 2020 and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists; delivery and acceptance has occurred; or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for sales returns, bad debts, and other allowances based on its historical experience.December 31, 2019.

The Company acquiresCompany’s revenue stream is acquiring rare coins and banknotes from Latin America at reduced costs, which it then sends to Numismatic Guaranty Corporation and Paper Money Guaranty for authentication and grading. Once graded, the inventory is transferred to Meso’s Florida-based location and then sent around the world to the Company’s many customers, with sales recorded net of fees. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company receives in exchange for those products.

Income Taxes

The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities, given the provisions of currently enacted tax laws.

The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of the tax uncertainty occurs if the recognition threshold has been met.

Net Earnings (Losses) Per Common Share

The Company computes earnings (loss) per share by dividing net earnings (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the year. Dilutive common stock equivalents may consist of shares issuable upon conversion of convertible preferred shares and the exercise of the Company’s stock optionsconvertible notes payable (calculated using the treasury stock method). Common stock issuable is considered outstanding as of the original approval date for purposes of earnings per share computations. As of March 31, 2020, the conversion of convertible notes would result in an additional 707,121,727 shares of common stock.

Fair Value of Financial Instruments

The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies is as follows:

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

At March 31, 20192020 and December 31, 2018,2019, the carrying amounts of the Company’s financial instruments, including cash, accounts payable,account payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.

At March 31, 20192020 and December 31, 2018,2019, the Company does not have any assets or liabilities except for derivative liabilities and convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.

The following presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on non-recurring basis as of March 31, 20192020 and December 31, 2018,2019:

Comprehensive Income

The Company records comprehensive income as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. As of March 31, 20192020, and December 31, 2018,2019, the Company had no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

Stock-BasedStock Based Compensation

Stock-basedStock based compensation costs are measured at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. The Company determines the fair value of awards using the Black-ScholesBlack - Scholes valuation model.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 was issued, relating tois a comprehensive revenue from contractsrecognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with customers.a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU was further amendedalso will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in August 2015, March 2016, April 2016,judgments and May 2016 byassets recognized from costs incurred to obtain or fulfill a contract. ASU 2015-14, 2016-08, 2016-102014-09 is effective for interim and 2016-12.

In August 2015, the effective date was deferred to reporting periods, including interimannual periods beginning after December 31, 2017,15, 2017. The Company follows paragraph 606 of the FASB Accounting Standards Codification for revenue recognition and will be applied retrospectively. Early adoption is not permitted.

Since ASU 2014-09, adopting the pronouncements on January 1, 2018. The company considers revenue realized or realizable and earned when the products are delivered. Since the Company was issued, several additional ASUs have been issued to clarify various elementsalready recognizing revenue in a manner consistent with paragraph 606 of the guidance. These standards provide guidanceFASB Accounting Standards Codification, there was no material impact on recognized revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Effective January 1, 2018, the Company has adopted ASU 2014-09, “Revenue from Contracts with Customers”. The results of operations for the reported periods after January 1, 2018 will be presented under this amended guidance, while prior period amounts are reported in accordance with ASC 605-Revenue Recognition.

The Company has completed its assessment of the impact of the new revenue standard on the Company’s financial position, results of operations, or cash flows and believes the new standard will not have a material impact.  The Company has adopted the standard using the modified retrospective method of adoption. The Company’s revenue arises from contracts with customers in which the sale of coins is the single performance obligation under the customer contract. Accordingly, revenue will continue to be recognized at a point in time when control of the asset is transferred to the customer, which is generally consistent with the Company’s current accounting policies. No material changes have been noted for use in implementation of this standard.

ASU 2014-09 provides presentation and disclosure requirements which are more detailed than under current GAAP.year results.

In February 2016, the FASB issued ASU 842 thatNo. 2016-02, Leases. ASU 2016-02 requires lesseesa lessee to recognize lease assetsrecord a right of use asset and a corresponding lease liabilitiesliability on the balance sheet for all leases with terms of morelonger than 12 months. The update, which supersedesASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing lease guidance, will continue to classify leases as either financeat, or operating, withentered into after, the classification determiningbeginning of the pattern of expense recognitionearliest comparative period presented in the income statement.

The ASU will be effective for annual and interim periods beginning January 1, 2019,financial statements, with early adoption permitted, and is applicable on a modified retrospective basis with various optionalcertain practical expedients.expedients available. The Company adopted thehas no physical office space only a month to month online virtual office lease that doesn’t required implementation of ASU 842 effective January 1, 2019 but had no leases that caused implementation in the period ending Marchyear ended December 31, 2019 to assets and liabilities.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The Company reviews new accounting standards as issued. No new standardshas adopted ASU 2018-07 in the first quarter of 2019. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income (loss). The ASU is effective for public entities for fiscal years beginning after December 15, 2019. The Company has not historically had any transfers between Level 1 and Level 2 or assets or liabilities measured at fair value under Level 3. The Company does not expect the adoption of this ASU to have a material effectimpact on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on theseits consolidated financial statements. Management does

Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not believe any of the subsequent pronouncements willapplicable or are not expected to have a material effectsignificant impact on thesethe Company’s consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retroactive application of any accounting pronouncements issued subsequent to March 31, 2019 through the date these financial statements were issued.

Going Concern

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $28,063,325$28,735,750 and negative working capital of $7,225,156$7,770,055 as of March 31, 20192020 and future losses are anticipated. These factors, among others, generally tend to raise substantial doubt to continue as a going concern as to its ability to obtain additional long-term debt or equity financing in order to have the necessary resources to further design, develop and launch the website and market the Company’s new service.

In order to continue as a going concern, the Company needs to develop a reliable source of revenues and achieve a profitable level of operations in the future and/or to obtain the necessary financing to meet its obligations arising from normal business operations when they come due.

Accordingly, the audited financial statements account for the Company as if it is a going concern and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or other adjustments that might be necessary should the Company be unable to continue as a going concern.

To fund basic operations for the next twelve months, the Company projects a need for $750,000 that will have to be raised through debt or equity. In addition to the estimated $300,000 for operating expenses the Company is budgeting $180,000 for advertising and marketing and $90,000 for new technology. To attract more customers to Meso Numismatics, the Company plans on hiring an advertising firm and placing more ads on sites such as those of NGC and PMG. Along with the advertising program the Company plans on investing in upgrading and expanding the Meso App. To continue expanding sales the Company plans to invest $90,000 to acquire additional inventory along with exploring possible acquisitions, which the Company estimates it will requireneed approximately $100,000.

Business CombinationsAccordingly, the audited financial statements are accounted for as if the Company is a going concern and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or other adjustments that might be necessary should be Company be unable to continue as a going concern.

In the third quarter of 2017, the Company issued 25,000 Series BB Preferred Stock per the terms of the June 30, 2017 Debt Settlement Agreement to complete the acquisition of Meso Numismatics, fully satisfying the Merger Agreement, which was first entered into on November 16, 2016. The Company accounted for the acquisition as common control, as Melvin Pereira, the CEO and principal shareholder of the Company, controls, operates and owns both companies. On November 16, 2016, the date of the Merger Agreement and June 30, 2017, the date of the Debt Settlement Agreement, Melvin Pereira, CEO of Pure Hospitality Solutions, owned 100% of the stock of Meso Numismatics. Pure Hospitality Solutions, Inc. and Meso Numismatics first came under common control on June 30, 2017.

NOTE 3 – NOTES PAYABLEREVENUE RECOGNITION

On January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”), the Company recognizes revenue from the sales of products, by applying the following steps:

(1) Identify the contract with a customer

(2) Identify the performance obligations in the contract

(3) Determine the transaction price

(4) Allocate the transaction price to each performance obligation in the contract

(5) Recognize revenue when each performance obligation is satisfied

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the period ended March 31, 2020 and December 31, 2019.

The Company’s only revenue stream is acquiring rare coins and banknotes from Latin America at reduced costs, which it then sends to Numismatic Guaranty Corporation and Paper Money Guaranty for authentication and grading. Once graded, the inventory is transferred to Meso’s Florida-based location and then sent around the world to the Company’s many customers, with sales recorded net of fees. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company receives in exchange for those products.

NOTE 4 – NOTES PAYABLE

Convertible Notes Payable

During 2003 through 2016,2015, the Company entered into Convertible Debentures with Digital Arts Media Network and Ajene Watson, LLC. The promissory note agreements bear interest from eight (8%) percent to ten (10%) and have a seriesone (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, debentures,at the investors’ sole discretion, into shares of common stock at variable conversion prices. As of March 31, 2020, and December 31, 2019, Digital Arts Media Network and Ajene Watson, LLC had an outstanding balance of $148,247.

From 2016 to 2018, the Company entered into several Convertible Debentures with a lender which bear interest at eight (8%) percent and have a rate varyingone (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the leaders’ sole discretion, into shares of common stock at variable conversion prices. The lender had an outstanding balance at March 31, 2020 and December 31, 2019 of $852,133.

During 2019, the Company entered into several Convertible Debentures with two lenders which bear interest from 0eight (8%) percent to 10fifteen (15%) percent due on an annual basis. Anyand have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. During 2019, the two lenders had advanced a total of $354,870, net of discount and attorney fees, in the amount of $33,110 to the Company.

On November 25, 2019, Meso Numismatics Inc. pursuant to the certificate of designation of the Series BB, elected to exchange the preferred shares for other indebtedness calculated at a price per share equal to $1.20. Upon the Company’s mailing of the Exchange Agreement, the shareholder shall have the option, within 30 days of such mailing date and subject to the execution of this Agreement to receive the Indebtedness in the form of a convertible note. Should the shareholder not give the Meso Numismatics Inc. notice the Indebtedness shall automatically be issued in the form of a promissory note.

The convertible note agreements bear no interest and have a four (4) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the investors’ sole discretion, into shares of common stock at conversion price equal to the lowest bid price of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange for the three prior trading days including the day upon which a Notice of Conversion is not paid when due shallreceived by the Company. As of March 31, 2020, and December 31, 2019, 81,043 Preferred Series BB shares were exchange for an aggregate of $97,252 convertible notes of which 78,620 were cancelled and 2,423 are still outstanding

On November 27, 2019, Meso Numismatics Inc. entered into an Assignment and Assumption Agreement with Lans Holdings Inc., whereby Lans Holdings Inc. assigned all of its rights to, obligations and interest in a Binding Letter of Intent entered into on May 23, 2019 with Global Stem Cells Group Inc. and Benito Nova, setting forth the principal terms pursuant to which the Company will acquire 50,000,000 shares of common stock of Global Stem Cells Group Inc. to Meso Numismatics Inc. for assumption of certain Convertible Redeemable Notes issued by Lans holdings Inc. to lenders., pursuant to a securities purchase agreement.

Pursuant to the Assignment and Assumption Agreement and subject to any pre-existing defaults under the Notes, Meso Numismatics Inc. reissued the below Notes to a lender upon the following terms:

During the period ending March 31, 2020, the Company entered into two Convertible Debentures with a lender which bear interest of eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at 0any time prior to 10 percent until paidmaturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $52,600, net of discount and attorney fees, in full.the amount of $5,810 to the Company.

Throughout 2014During the period ended March 31, 2020 and 2015, these particular convertible notes payable have been partitioned and sold in portions to multiple third parties inDecember 31, 2019, the lender converted $4,676 of principal into common stock resulting into a combined amount totaling in excessbalance of $450,000. In the majority of cases, these convertible notes payable, because they were in default, were subject to term adjustments at the note holders’ request. Thus, when the convertible notes payable were purchased, the new debt holders (generally) negotiated new terms with the Company. To this end, the Company would issue new notes, referred to as “replacement notes,” which often resulted in slightly better terms.$1,074,950 on March 31, 2020.

These debentures are convertible, at the investors’ sole option, into shares of common stockshares at the following terms:

The balance of outstanding convertible notes as of March 31, 2020 and December 31, 2019 is as follows:

During the periods ending March 31, 20192020 and December 31, 20182019 the Company received $0$52,600 and $63,000, respectively, in advances on existing convertible notes and $62,370 and $208,724,$387,980, respectively, from funding on new convertible notes.

From 2016 to present,

During 2019, the Company has enteredassumed an aggregate of $1,079,626 certain Convertible Redeemable Notes issued by Lans Holdings Inc. to lenders pursuant to the Assignment and Assumption Agreement and, pursuant to the company’s exchange of debt for Series BB Preferred Stock, exchanged 78,620 shares of the Company’s Series BB preferred stock for an aggregate of $97,252 in Convertible Notes.

During the periods ending March 31, 2020 and 2019, the Company incurred no losses on the conversion of convertible notes. In connection with the convertible notes, the Company recorded $64,806 and $20,780, respectively of interest expense and $373,876 and $77,188, respectively of debt discount amortization expense. As of March 31, 2020, and December 31, 2019, the Company had approximately $602,031 and $537,225, respectively of accrued interest.

During the periods ending March 31, 2020 and December 31, 2019, the Company made no payments on the outstanding convertible notes, and converted $2,583 and $30,251, respectively, of principal and interest into Convertible Debentures with Union Capital LLC. 410,000 and 1,893,595 shares of common stock. As of March 31, 2020, and December 31, 2019, the principal balance of outstanding convertible notes payable was $2,618,972 and $2,563,145, respectively.

Promissory Notes Payable

The promissory note agreements bear no interest at eight (8%) percent and have a one (1)four (4) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are noAs of December 31, 2019, 270,223 Preferred Series BB shares were exchange for an aggregate of $324,268 promissory notes.

On December 3, 2019, Melvin Pereira, the CEO, converted 18,500 shares of the 25,000 shares of Series BB preferred stock to acquire one hundred (100%) percent of Meso’s common stock issuable upon the executioninto 250,999 shares of the promissory notes. The notes are convertible, atCompany’s common stock and elected to exchange the investors’ sole discretion, intoremaining 6,500 shares of commonSeries BB preferred stock at variable conversion prices. Asfor a promissory note of March 31, 2019, Union Capital LLC had advanced a total of $928,144 to the Company.$7,800.

During the periods ending March 31, 2019 and December 31, 2018, the Company made no payments on the outstanding convertible notes, and converted $0 and $30,251, respectively, into 0 and 1,154,394 shares of common stock. As of March 31, 2019 and December 31, 2018, the balance of outstanding principal notes payable was $1,059,872 and $997,502, respectively.

DerivativeDerivatives Liabilities

The Company determined that the convertible notes outstanding as of March 31, 20192020 and December 31, 20182019 contained an embedded derivative instrument as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40.

The Company determined the fair values of the embedded convertible notes derivatives and tainted convertible notes using the lattice valuation model. Duringmodel with the period endedfollowing assumptions:

The balance of the fair value of the derivative liability as of March 31, 2020 and December 31, 2019 is as follows:

NOTE 5 – CONVERTIBLE PREFERRED STOCK

Designation of Series CC Convertible Preferred Stock

On November 26, 2019, the Company incurredfiled with the Secretary of State with Nevada an expenseamendment to the Company’s Articles of $2,482,993Incorporation, as amended (the “Articles of Incorporation”), authorizing one thousand (1,000) shares of a resultnew series of changespreferred stock, par value $0.001 per share, designated “Series CC Convertible Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

At any time prior to November 25, 2022 (“Automatic Conversion Date”) the Company may redeem for cash out of funds legally available therefor, any or all of the outstanding Series CC Convertible Preferred Stock at a price equal to $1,000 per share. If not converted prior, on the Automatic Conversion Date, any and all remaining issued and outstanding shares of Series CC Convertible Preferred Stock shall automatically convert at the Conversion Price, which is a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

Each holder of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert prior to the Automatic Conversion Date, convert part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

The holders of the Series CC Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

The holders of the Series CC Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.

On November 27, 2019, Meso Numismatics Inc. entered into an Assignment and Assumption Agreement with Global Stem Cells Group Inc., a corporation duly formed under the laws of the State of Florida, Benito Novas and Lans Holdings Inc. a Nevada Corporation whose securities ceased to be registered as of September 18, 2019, whereby LAHO assigned all of its rights, obligations and interest in, the fair valuesLetter of Intent it previously entered into with Global Stem Cells Group Inc. and Benito Novas.

In consideration for the Assignment, Meso Numismatics Inc. issued to Lans Holdings Inc. 1,000 shares of its Series CC Convertible Preferred Stock valued at $83,731 calculated based on conversion provision of the embedded convertible notes derivatives.Company’s Articles of Incorporation filed with the Secretary of State in Nevada on November 26, 2019. Shareholders of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

During the periods ending March 31, 2019The Convertible Series CC Preferred Stock has been classified outside of permanent equity and March 31, 2018,liabilities since it embodies a conditional obligation that the Company incurred lossesmay settle by issuing a variable number of $0equity shares and the monetary value of the obligation is based on a gain of $3,205, respectively on the conversion of convertible notes. In connection with the convertible notes, thefixed monetary amount known at inception. The Company has recorded $20,780$83,731 which represents 1,000 Series CC Convertible Preferred Stock at $83.73 per share, issued and $14,271, respectively, of interest expense and $77,188 and $83,860, respectively, of debt discount amortization expense. Asoutstanding as of March 31, 20192020 and December 31, 2018, the Company had approximately $458,2342019, outside of permanent equity and $437,458, respectively, of accrued interest.liabilities.

NOTE 46 – STOCKHOLDERS EQUITY

Shares of Common Stock Shares

The Board of Directors was required to increase the number of authorized shares of common stock from (a) 200,000,000 to 500,000,000 during June 2015, (b) 500,000,000 to 1,500,000,000 during July 2015, and (c) 1,500,000,000 to 6,500,000,000 during March 2016, to adhere to the Company’s contractual obligation to maintain the required reserve share amount for debtholders.

On July 2, 2018, the Board of Directors authorized, and shareholders approved a 1-for-1,0001 for 1,000 reverse stock splitsplits of its issued and outstanding shares of common stock held by the holders of record.record, June 30, 2018. The below transactions have been changed to reflect the 1-for-1,0001 for 1,000 reverse stock split.

2019 Transactions

On April 22, 2019, 3,010 shares of the Company’s Series BB preferred stock were converted to 34,422 shares of the Company’s common stock. The shares were converted within the terms of their original issue terms or agreement; therefore, a gain or loss was not recorded.

On August 27, 2019, the Company issued 400,731 shares of common stock in conversion of $12,443 convertible notes payable at conversion price of $0.03105: a loss of $8,099 was recorded.

On October 23, 2019, the Company issued 478,481 shares of common stock in conversion of $5,287 convertible notes payable at conversion price of $0.01105: a loss of $1,882 was recorded.

On December 2, 2019, the Company issued 299,000 shares of common stock in conversion of $2,093 convertible notes payable at conversion price of $0.007: a loss of $1,950 was recorded.

On December 3, 2019, an aggregate of 83,359 shares of the Company’s Series BB preferred stock were converted to 1,130,997 shares of the Company’s common stock. The shares were converted within the terms of their original issue terms or agreement; therefore, a gain or loss was not recorded.

On December 10, 2019, the Company issued 715,383 shares of common stock in conversion of $5,723 convertible notes payable at conversion price of $0.008: a loss of $1,262 was recorded.

The above debt conversions resulted in a total loss on conversions of $13,193, included under additional paid in capital.

2020 Transactions

On January 8, 2020, the Company issued 410,000 shares of common stock in conversion of $2,583 convertible notes payable at conversion price of $0.0063: a loss of $4,251 was recorded.

As of March 31, 20192020, and December 31, 2018,2019, the Company has 4,901,0248,370,038 and 7,960,038 common shares of common stock issued and outstanding.outstanding, respectively.

2019 Transactions

There have been no issuances of the Company’s common stock during the quarter ended March 31, 2019.

Designation of Series AA Super Voting Preferred Stock

On June 30, 2014, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing the issuance of up to eleven million (11,000,000) of preferred stock, with a par value $0.001 per share.

On May 2, 2014, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, with a par value $0.001 per share, designated “Series AA Super Voting Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

Each holder of outstanding shares of Series AA Super Voting Preferred Stock shall be entitled to ten thousand (10,000) votes for each share of Series AA Super Voting Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company.

The holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

The shares of the Series AA Super Voting Preferred Stock will not be convertible into the shares of the Company’s common stock.

During 2014, the Company and S & M Chuah Enterprises Ltd.Ltd, agreed to an exchange of 900,000,000 shares of common stockshares previously issued to S & M Chuah Enterprises Ltd., anLtd, entity controlled by Ken Chua, CEO and& board member for 500,000 shares of Series AA Preferred Stock of the Company with aCorporation, par value of $0.001 per share. The 900,000,000 shares of common stockshares were returned to the Company’s transfer agent for cancellation. The shares were valued on the date of the agreement using the par value of $0.001, since the shares were non-convertible, and non-tradable with super voting rights only.

During 2014, the Company and E-Network de Costa Rica S.A., an entity controlled by Melvin Pereira mutually agreed to issue anupon amount of 500,000 shares of Series AA Preferred Stock of the Company with aCorporation, par value $0.001 per share, as a compensation for becoming the new CEO of Pure Hospitality Solutions Inc. The shares were valued on the date of the agreement and are non-convertible, and non-tradable with super voting rights only.

On November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing the increase to 1,050,000 shares of the Series AA Super Voting Preferred Stock.

As of March 31, 20192020, and December 31, 2018,2019, the Company had 1,000,000 preferred shares of Series AA Preferred Stock issued and outstanding.

Designation of Series BB Preferred Stock

On March 29, 2017, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series BB Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert on a 1-for-11 for 1 basis into shares of the Company’s common stock, any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Company.Corporation.

The holders of the Series BB Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

The Series BB Preferred Stock has a liquidation value of $1.00. Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series BB Preferred Stock shall be entitled to share equally and ratably in proportion to the preferred stock owned by the holder to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

2019 Transactions

On April 22, 2019, 3,010 shares of the Company’s Series BB preferred stock were converted to 34,422 shares of the Company’s common stock. The shares were converted within the terms of their original issue terms or agreement; therefore, a gain or loss was not recorded.

On December 3, 2019, an aggregate of 83,359 shares of the Company’s Series BB preferred stock were converted to 1,130,997 shares of the Company’s common stock. The shares were converted within the terms of their original issue terms or agreement; therefore, a gain or loss was not recorded.

On November 25, 2019, Meso Numismatics Inc. pursuant to the certificate of designation of the Series BB, elected to exchange the preferred shares for other indebtedness calculated at a price per share equal to $1.20. Upon the Company’s mailing of the Exchange Agreement, the shareholder shall have the option, within 30 days of such mailing date and subject to the execution of this Agreement to receive the Indebtedness in the form of a convertible note. Should the shareholder not give the Meso Numismatics Inc. notice the Indebtedness shall automatically be issued in the form of a promissory note. As of December 31, 2019, an aggregate of 78,620 shares of the Company’s Series BB preferred stock were cancelled for an indebtedness of $429,241; a loss of $37,991 was recorded.

As of March 31, 2020, and December 31, 2019, the Company had 279,146 preferred shares of Series BB Preferred Stock issued and outstanding.

Designation of Series DD Convertible Preferred Stock

On November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing ten thousand (10,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series DD Convertible Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

Each holder of outstanding shares of Series DD Convertible Preferred Stock shall be entitled to its shares of Series DD Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares of common stock of the Company on the date of conversion by 3.17 conversion price.

The holders of the Series DD Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

The holders of the Series DD Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.

As of March 31, 2020, and December 31, 2019, the Company had no preferred shares of Series DD Convertible Preferred Stock issued and outstanding.

NOTE 57 – RELATED PARTY TRANSACTIONS

On March 31, 2018, the Company changed its corporate registered offices to 433 Plaza Real Suite, 275, Boca Raton, Florida 33432. The online virtual office lease is for a month-to-month term at $53.10 per month. Prior to March 31, 2018, the Company currently sharesshared its corporate registered offices with Ajene Watson LLC at 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463. The lease is for a year-to-year term. During the quarteryear ended MarchDecember 31, 2019 and the year ended December 31, 2018, the Company incurred no material rent expenses. The Company hadhas no physical office leases that required implementation of ASU 842 in the period ending Marchyear ended December 31, 2019 to assets and liabilities.

On November 27, 2019, and in connection with the execution of the Assignment and the LOI, the Company’s Board of Directors appointed Mr. David Christensen former director and CEO of Lans Holdings, Inc., to serve as director and president of the Company (see Note 1).

On December 3, 2019, Melvin Pereira, the CEO, converted 18,500 shares of the 25,000 shares of Series BB preferred stock to acquire one hundred (100%) percent of Meso’s common stock into 250,999 shares of the Company’s common stock and elected to exchange the remaining 6,500 shares of Series BB preferred stock for a promissory note of $7,800.

On June 26, 2020, due to Mr. Pereira’s resignation, Meso Numismatics Inc.’s Board of Directors appointed Mr. David Christensen, current Director and President of the Company, to serve as Chief Executive Officer, Chief Financial Officer and Secretary, effective June 27, 2020 and granted 50,000 shares of Series AA to Mr. David Christensen.

As of March 31, 2020, the Company owed David Christensen, current Director and President of the Company $10,000 in compensation and Heritage Corp. $1,670 for grading expenses paid on behalf of Meso Numismatics Inc.

NOTE 68 – COMMITMENTS AND CONTINGENCIES

On May 12, 2015, the Company issued a convertible promissory Note (the “Note”) in the principal amount of $25,000 to Tarpon Bay Partners, LLC (“Tarpon Bay”), whose principal at the time is now known as a “Bad Actor” under SEC rules. On or about January 23, 2017, Tarpon Bay elected to convert principal and interest under the Note into shares of the Company’s common stock. On or about June 6, 2017 the Note was assigned to J.P. Carey Enterprises, Inc. (“J.P.”). On or about June 7, 2017, J.P. elected to convert principal and interest under the Note into shares of the Company’s common stock. Joseph Canouse, a principal at J.P., initiated a lawsuit against the Company in Fulton County Court, in Georgia for, among other things, breach of contract. A default judgment was entered into against the Company for failure to response to these claims. The court then issued an Order of Judgement against the Company in the amount of $282,500 which was recorded in accounts payable as of December 31, 2017. The Company appealed the Courts’ decision and in November 2018, while the Court of Appeals affirmed liability under the judgment, the Court of Appeals vacated the award of the entire judgment amount and remanded the case back to the trial court with instructions.

NOTE 709 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

Depreciation expense for the three months ended March 31, 2020 and the year ended December 31, 2019 was $200 and $800, respectively.

NOTE 810 – SUBSEQUENT EVENTS

On April 22, 2019, the Company issued 34,422 shares of common stock for the conversion of 3,010 shares of Series BB Preferred Stock at the holder’s request.

OnFrom April 30, 2019,2020 to July 17, 2020, the Company entered into an aggregate of $347,116 of Convertible Debentures with a Convertible Debenture with Union Capital LLC in the amount of $31,500. This Convertible Debenture agreement bearslender which bear interest at eight (8%) percent and hashave a one (1) year maturity date. This Convertible DebentureThe notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices.

On April 22, 2020, Meso Numismatics Inc. entered into a Second Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., which Assignment was first amended pursuant to the Post Closing Amendment to the Assignment and Assumption Agreement entered into on December 23, 2019. The Original Agreement is amended to extend the deadline to enter into the New LOI to 150 days from the execution of the Second Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 150 days from the execution of the Second Amendment.

From May 4, 2020 to June 1, 2020, the Company entered into an aggregate of $146,200 of Convertible Debentures with a lender which bear interest at fifteen (15%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices.

On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041: a loss of $3,378 was recorded.

On June 25, 2020, the Company entered into a Convertible Debentures with a lender in the amount of $60,000 which bear interest at fifteen (15%) percent and have a one (1) year maturity date. The note may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory note. The note is convertible, at the investor’slenders’ sole discretion, into shares of common stock at variable conversion prices.

On June 25, 2020, Mr. Martin Chuah submitted his resignation as Director of the Company, effective June 26, 2020. There are no disagreements between Mr. Chuah and Meso Numismatics Inc. on any matter relating to its operations, policies or practices.

On June 26, 2020, Meso Numismatics Inc. completed the repurchase of 1,000,000 shares of its Series AA (“Series AA”) Super Voting Preferred Stock, representing all of the Series AA shares held by E-Network de Costa Rica S.A. and S&M Chuah Enterprises Ltd., respectively.

On June 26, 2020, Mr. Melvin Pereira submitted his resignation as Chief Executive Officer, Chief Financial Officer, Secretary and Director of Meso Numismatics Inc., effective June 26, 2020. There are no disagreements between Mr. Pereira and Meso Numismatics Inc. on any matter relating to its operations, policies or practices.

On June 26, 2020, due to Mr. Pereira’s resignation, Meso Numismatics Inc.’s Board of Directors appointed Mr. David Christensen, current Director and President of the Company, to serve as Chief Executive Officer, Chief Financial Officer and Secretary, effective June 27, 2020 and granted 50,000 shares of Series AA to Mr. David Christensen.

On July 15, 2020, the Company issued 905,929 shares of common stock in conversion of $4,122 convertible notes payable at conversion price of $0.0046: a loss was not recorded.

On September 16, 2020, Meso Numismatics Inc. entered into a Third Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., which Assignment was first amended pursuant to the Post Closing Amendment to the Assignment and Assumption Agreement entered into on December 23, 2019 and amended pursuant to a Second Post Closing Amendment to the Assignment and Assumption Agreement entered into on April 22, 2020. The Original Agreement is amended to extend the deadline to enter into the New LOI to 180 days from the execution of the Third Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 180 days from the execution of the Third Amendment.

On November 12, 2020, the Company filed with the Secretary of State in Nevada the amendment to Certificate of Designation authorizing the increase from 1,000 to 8,000,000 shares of the Series CC Convertible Preferred Stock.

On November 16, 2020, Meso Numismatics Inc. and Lans Holdings Inc. confirmed that an option has been granted to Lans Holdings Inc. to increase the Series CC Convertible Preferred Stock from 1,000 to 8,000,000 shares.

On November 30, 2020, the Company issued 791,104 shares of common stock in conversion of $4,747 convertible notes payable at conversion price of $0.0070: a loss of $2,034 was recorded.

On December 7, 2020, we signed Debt Restructure Agreements to restructure the debt obligations with three separate lenders.  The three lenders all had outstanding convertible promissory notes with our company in the aggregate principal amount plus accrued but unpaid interest of $5,379,624, and the parties have agreed to terminate the old convertible promissory notes in favor of new secured promissory notes and warrants to purchase shares of our common stock.  We agreed to the new notes and warrants over the prior convertible notes because the old notes were in default and contained unfavorable terms on conversions. The new notes extended the maturity date, are not convertible into our common shares, but instead secure the debt obligations with our assets.  The new notes have a maturity date of December 7, 2023 and an aggregate principal amount of $5,379,624 and, as an incentive; we have issued cashless warrants to purchase 15,000,000 shares of our common stock at an exercise price of $0.03 per share in connection with the restructuring.

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

Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the accompanying condensed financial statements and provides additional information on Meso Numismatics’ (“Meso” or the “Company’) business, current developments, financial condition, cash flows and results of operations.

When we say “we,” “us,” “our,” “Company,” or “Meso,” we mean Meso Numismatics, Inc.

Please see our Annual Form 10-K and Audited Financial Statements filed with SEC.GOV for the fiscal year ended December 31, 2018 for a complete description of our business and accounting practices.

General

The following is a discussion by management of its view of the Company’s business, financial condition, and corporate performance for the past year. The purpose of this information is to give management’s recap of the past year, and to give an understanding of management’s current outlook for the near future. This section is meant to be read in conjunction with the Financial Statements of this Annual Report on Form 10-K.

Overview

We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements.

The Company was originally founded in 1999 as Spectrum Ventures LLC, a private company, registered in Tacoma, WA, for the purpose of developing, marketing and selling voice over IP products and services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc. During 2014, the Board of Directors of the Company deemed it in the best interests of the Company and its shareholders to switch directions and become involved in the business of numismatics, specifically the collection and ultimately the sale of coins, paper currency, bullion and medals.

Meso Numismatics, Inc., has established a growing numismatics operation Meso Numismatics focuses on the Central American Caribbean region with a concentration of products surrounding Mesoamerica (Mexico to Panama).

Having locations in Costa Rica and Florida for the purposes of conveniently shipping products, the Company has the ability to export its inventory of coins, paper currency, bullion and medals from Costa Rica, to be sold in the U.S. and around the world. Likewise, the Company also imports such products back to Costa Rica, to be sold throughout the local markets.

The Company adheres to strict processes related to acquisition and sale of its products. It begins by selecting the best inventory, be it a rare coin from Latin America, or a banknote with an error from the United States. All inventoryInventory is carefully screened by management, is then sent to be graded by the proper grading authority. For all coins, medals and bullion, the Company’s inventory is sent to the Numismatic Guaranty Company for authentication and grading. For all banknotes, the Company utilizes the services of Paper Money Guaranty, LLC for authentication and grading, both Florida-based companies. Once graded, the inventory is sent to the Company’s Florida-based location prior to being sent to one of the Company’s many customers around the world.

We maintain an online store with eBay (www.mesocoins.com) and participate in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions, Lyn Knight Auctions and Sedwick Coins for the sale of its coins, paper currency, bullion and medals. The Company also launched a new application technology available on the Google Play Store, as well as the Apple App Store. The Application is a banknote scanner which instantly identifies key characteristics of a banknote. This includes the catalog reference number of the note, the value, which entity it was issued by the country of origin and the printer that printed the note. A picture of each note from our database of more than 61,000 banknotes from a combined 750 countries and regions will also be included with the information. For the numismatic industry in particular, this application eliminates the need for reference books, as well as the hours of time it takes to reference all the information about banknotes. With a simple snap of a picture, information is provided to the end-user almost instantaneously.

Meso continues to acquire rare inventory at market rates, from throughout the Meso Region (including Central America and the Caribbean). The inventory is then sent for authentication and grading, followed by said items being sold throughout Meso’s sales outlets. This includes an eBay store with up to, but not limited to, $50,000 in items for sale at any one time. For some of the Company’s rarer inventory, items are sent to major auction houses around the world for sale.

Results of Operations

Below is a summary of the results of operations for the three months endingended March 31, 20192020 and 2018.2019.

Results of Operations for the Three Months Ended March 31, 2020 and 2019 Compared to the Three Months Ended March 31, 2018

The relationship between gross profit and revenueRevenue is affected by the grade assigned to each coin or banknote. Once an item has been acquired it is sent for grading and authentication. Grading is the process of determining the grade or condition of the coin and banknote, which is the key factor in determining its value. Management carefully evaluates the grades assigned to each piece of merchandise and then decides which items will be sold through its eBay store, which items will be sold at live auction and which items will be traded for other items. Grade assigned will ultimately determine the sales price of the coin or banknote.

As of December 31, 2019, the Company is working on an inventory tracking system by serial number. Until such time as an inventory tracking system exists, the inventory costs cannot be properly confirmed and gross profitwritten-off to cost of revenue along with the company will record when the items are sold.cost of grading.

Gross profit

Revenue from the sale of coins, metals and paper money for the three months ended March 31, 20192020 was $11,916$11,320, compared to $17,698$11,916 of revenue for the same period in 2018.2019. As a result of the grading process, which is the key factor in determining value and ultimately gross profit on the salewrite-off of productsinventory the company generated a 71%negative 7% gross profit of $8,460($799) for the three months ended March 31, 20192020 compared to a 75%negative 32% gross profit of $13,218($3,792) for the same period in 2018.2019. The key reason for the 4% decrease in gross profit was a result of the gradeamount of the products sold inventory written-off in 2020 vs 2019.

Operating expenses

Operating expenses increaseddecreased by 129%21.38% in the amount of $55,373$21,006 for the three months ended March 31, 2019,2020, compared to the same period in 2018, listed2019. Listed below are the major changes to operating expenses:

Professional fees increaseddecreased by $27,217$40,725 for the three months ended March 31, 2019,2020, compared to the same period in 2018,2019, primarily due to audit and accounting expenses.

Officer compensation increased by $18,834$20,760 for the three months ended March31, 2020, compared to the same period in 2019, primarily due to the appointment of Mr. David Christensen as Director and President of the Company.

Investor relations expenses decreased by $10,250 for the three months ended March 31, 2019,2020, compared to the same period in 2018, primarily due to more expense reimbursements paid to Melvin Pereira, CEO of Meso Numismatics in 2018.

Investor relations expenses increased by $13,332 for the three months ended March 31, 2019, compared to the same period in 2018, primarily due to amounts associated with filings.

Other income (expense)

Other income (expense)General and administrative expenses increased by $2,482,993$9,398 for the three months ended March 31, 2019,2020, compared to the same period in 2018,2019, primarily due to expense reimbursements.

Other income (expense)

Other income (expense) decreased by $1,812,720 for the three months ended March 31, 2020, compared to the same period in 2019, primarily as a result of the change in fair market value of the convertible notes in 2019 along with increase of unamortized discount on debt.2020.

Liquidity and Capital Resources

Since inception, the Company has financed its operations through private placements and convertible notes. The following is a summary of the cash and cash equivalents as of March 31, 20192020 and 2018.December 31, 2019.

To fund basic operations for the next twelve months, the Company projects a need for $750,000 that will have to be raised through debt or equity. In addition to the estimated $300,000 for operating expenses the Company is budgeting $180,000 for advertising and marketing and $90,000 for new technology. To attract more customers to Meso Numismatics, the Company plans on hiring an advertising firm and placing more ads on sites such as NGC and PMG. Along with the advertising program the Company plans on investing in upgrading and expanding the Meso App. To continue expanding sales the Company plans to invest $90,000 to acquire additional inventory along with exploring possible acquisitions, which the Company estimates it will need approximately $100,000.

Summary of Cash Flows

Below is a summary of the Company’s cash flows for the yearsthree months ended March 31, 20192020 and 2018.2019.

Operating activities

OperatingNet cash used in operating activities was $64,682 during the three months ended March 31, 2020 and consisted of a net loss of $846,273, which was offset by a net change in operating assets and liabilities of $77,955 and non-cash items of $703,635. The primary non-cash items for the three months ended March 31, 2020, consisted of amortization of debt discount of $373,876 and by change in derivative liabilities of $325,308. The significant change in operating assets and liabilities was an increase in accounts payable and accrued liabilities. 

Net cash used in operating activities was $92,626 during the three months ended March 31, 2019 and consisted of a net loss of $2,682,992, which was offset by a net change in operating assets and liabilities of $29,985 offset byand non-cash items of $2,560,381. The primary non-cash items for the three months ended March 31, 2019, consisted of amortization of debt discount of $77,188 and change in derivative liabilities of $2,482,993. The significant change in operating assets and liabilities was an increase of $29,985 in accounts payable.

Net cash used in operating activities was $34,937 during the three months ended March 31, 2018 and consisted of a net loss of $138,171, and net change in operating assets and liabilities of $165,739 offset by non-cash items of $268,973. Non-cash items for the three months ended March 31, 2018, consisted of amortization of debt discount of $83,680 and change in derivative liabilities of $184,986 and change in accounts payable of $163,497. The significant item in the change in operating assets and liabilities was a decrease of $2,242 in prepaid expenses.

Financing activitiesaccrued liabilities. 

Financing activities

Net cash provided by financing activities was approximately $62,370 for the three months ended March 31, 2019, as compared to net cash provided by investing activities of $28,668 during the same period in 2018. In 2019, $62,370 consisted of proceeds received from the issuance of convertible notes was approximately $52,600 for the three months ended March 31, 2020, as compared to $28,668net cash provided by financing activities of $62,370 during the same period in 2018.2019.

Going Concern

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $28,735,750 and negative working capital of $7,770,055 as of March 31, 2020 and future losses are anticipated. These factors, among others, generally tend to raise substantial doubt as to its ability to obtain additional long-term debt or equity financing in order to have the necessary resources to further design, develop and launch the website and market the Company’s new service.

The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.

The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

As of March 31, 2019,2020, the Company had no off-balance sheet arrangements.

Critical Accounting Policies

Our critical accounting policies have not materially changed during the yearthree months ended DecemberMarch 31, 2018.2020. Furthermore, the preparation of our financial statements is in conformity with generally accepted accounting principles in the United States of America, or GAAP. The preparation of our financial statements requires management to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Our management believes that we consistently apply these judgments and estimates, and the financial statements fairly represent all periods presented. However, any differences between these judgments and estimates and actual results could have a material impact on our statements of income and financial position.

Derivative Instruments

The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Binomial option pricing model to value the derivative instruments.

Stock-BasedStock Based Compensation

Stock-basedStock based compensation costs are measured at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The Company determines the fair value of awards using the Black-ScholesBlack - Scholes valuation model.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 was issued related tois a comprehensive revenue from contractsrecognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with customers.a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU was further amendedalso will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in August 2015, March 2016, April 2016,judgments and May 2016 byassets recognized from costs incurred to obtain or fulfill a contract. ASU 2015-14, 2016-08, 2016-102014-09 is effective for interim and 2016-

In August 2015, the effective date was deferred to reporting periods, including interimannual periods beginning after December 31, 2017,15, 2017. The Company follows paragraph 606 of the FASB Accounting Standards Codification for revenue recognition and will be applied retrospectively. Early adoption is not permitted.

Since ASU 2014-09, adopting the pronouncements on January 1, 2018. The company considers revenue realized or realizable and earned when the products are delivered. Since the Company was issued, several additional ASUs have been issued to clarify various elementsalready recognizing revenue in a manner consistent with paragraph 606 of the guidance. These standards provide guidanceFASB Accounting Standards Codification, there was no material impact on recognized revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Effective January 1, 2018, the Company will adopt ASU 2014-09, “Revenue from Contracts with Customers”. The results of operations for the reported periods after January 1, 2018 will be presented under this amended guidance, while prior period amounts are reported in accordance with ASC 605-Revenue Recognition.

The Company has completed its assessment of the impact of the new revenue standard on the Company’s financial position, results of operations, or cash flows and believes the new standard will not have a material impact. The Company will adopt the standard using the modified retrospective method of adoption. The Company’s revenue arises from contracts with customers in which the sale of coins is the single performance obligation under the customer contract. Accordingly, revenue will continue to be recognized at a point in time when control of the asset is transferred to the customer, which is generally consistent with the Company’s current accounting policies.

ASU 2014-09 provides presentation and disclosure requirements which are more detailed than under current GAAP.year results.

In February 2016, the FASB issued ASC 842 thatASU No. 2016-02, Leases. ASU 2016-02 requires lesseesa lessee to recognize lease assetsrecord a right of use asset and a corresponding lease liabilitiesliability on the balance sheet for all leases with terms of morelonger than 12 months. The update, which supersedesASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing lease guidance, will continue to classify leases as either financeat, or operating, withentered into after, the classification determiningbeginning of the pattern of expense recognitionearliest comparative period presented in the income statement.

The ASU will be effective for annual and interim periods beginning January 1, 2019,financial statements, with early adoption permitted, and is applicable on a modified retrospective basis with various optionalcertain practical expedients.expedients available. The Company is assessinghas no physical office space only a month to month online virtual office lease that doesn’t required implementation of ASU 842 in the impact of this standard.year ended December 31, 2019 to assets and liabilities.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements.has adopted ASU 2018-07 in the first quarter of 2019. The accounting pronouncements issued subsequent to the dateadoption of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management doesASU 2018-07 did not believe any of the subsequent pronouncements will have a material effectimpact on thesethe Company’s financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income (loss). The ASU is effective for public entities for fiscal years beginning after December 15, 2019. The Company has not historically had any transfers between Level 1 and Level 2 or assets or liabilities measured at fair value under Level 3. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements as presentedstatements.

Other accounting standards and doesamendments to existing accounting standards that have been issued and have future effective dates are not anticipateapplicable or are not expected to have a significant impact on the need for any future restatement of theseCompany’s consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2018 through the date these financial statements were issued.

Revenue Recognition

EffectiveOn January 1, 2018, the Company adopted ASC 606 —ASU 2014-09 Revenue from Contracts with Customers. Under ASC 606,Customers and all subsequent amendments to the ASU (collectively, “ASC 606”), the Company recognizes revenue from the commercial sales of products, by applying the following steps: (1) identify

There was no impact on the contract withCompany’s financial statements as a customer; (2) identifyresult of adopting Topic 606 for the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract;period ended March 31, 2020 and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred, or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for sales returns, bad debts, and other allowances based on its historical experience.December 31, 2019.

The Company acquiresCompany’s only revenue stream is acquiring rare coins and banknotes from Latin America at reduced costs, andwhich it then sends them to Numismatic Guaranty CompanyCorporation and Paper Money Guaranty for authentication and grading. Once graded, the inventory is senttransferred to Meso’s Florida-based location toand then be sent around the world to the Company’s many customers, with sales recorded net of fees. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company receives in exchange for those products.

Use of Estimates

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows:

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

At March 31, 20192020 and December 31, 2018,2019, the carrying amounts of the Company’s financial instruments, including cash, accounts payableaccount payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.

At March 31, 20192020 and December 31, 2018,2019, the Company does not have any assets or convertible notes payable and liabilities except for derivative liabilities and convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We doare not hold any derivative instruments and do not engage in any hedging activities.required to provide the information required by this Item because we are a smaller reporting company.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We maintain “disclosuredisclosure controls and procedures” as such term is defined that are designed to ensure that information required to be disclosed in Rule 13a-15(e)our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as amended (the “Exchange Act”).appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating ourthe disclosure controls and procedures, our management recognized that disclosureany controls and procedures, no matter how well conceiveddesigned and operated, can provide only reasonable and not absolute assurance thatof achieving the objectivesdesired control objectives. In reaching a reasonable level of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, ourassurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. TheIn addition, the design of any disclosuresystem of controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As ofrequired by the end of the period covered by this Quarterly Report on Form 10-Q,SEC Rules 13a-15(b) and 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our Principal Executive Officerprincipal executive officer and our Principal Financial Officer,principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act.end of the period covered by this report. Based on the controls evaluation,foregoing, our Principal Executive Officerprincipal executive officer and Principal Financial Officerprincipal financial officer concluded that as of the date of their evaluation, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below. 

To address these material weaknesses, management engaged financial consultants, performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. We have not remedied the material weaknesses as of March 31, 2020. The Company plans to take remedial action to address these weaknesses during the fiscal year ended 2021.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting as discussedidentified in Item 9A. Controls and Proceduresconnection with the evaluation required by Rule 13a-15(d) of the Company’s Form 10-K for the fiscal year ended December 31, 2018, under the heading “Management’s Report on Internal Control Over Financial Reporting” and that continued to exist as of March 31, 2019 and did not provide reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported withinthat occurred during the time periods specified in the SEC’s rules and forms, and (b) such information is accumulated and communicated to our management, including our Chief Executive Officer and President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during our most recent fiscal quarter ended March 31, 2020 that havehas materially affected, or areis reasonably likely to materially affect, our internal control over financial reporting.reporting, except the implementation of the controls identified above.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Other than described below, to the Company’s knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

On May 12, 2015, the Company issued a convertible promissory Note (the “Note”) in the principal amount of $25,000 to Tarpon Bay Partners, LLC (“Tarpon Bay”), whose principal at the time, is now known as a “Bad Actor” under SEC rules. On or about January 23, 2017, Tarpon Bay elected to convert principal and interest under the Note into shares of the Company’s common stock. On or about June 6, 2017 the Note was assigned to J.P. Carey Enterprises, Inc. (“J.P.”). On or about June 7, 2017, J.P. elected to convert principal and interest under the Note into shares of the Company’s common stock. Joseph Canouse, a principal at J.P. initiated a lawsuit against the Company in Fulton County Court, in Georgia for, amongst other things, breach of contract. A default judgment was entered into against the Company for failure to response to these claims. The court then issued an Order of Judgement against the Company in the amount of $282,500 which was recorded in accounts payable as of December 31, 2017. The Company appealed the Courts’ decision and in November 2018, while the Court of Appeals affirmed liability under the judgment, the Court of Appeals vacated the award of the entire judgment amount and remanded the case back to the trial court with instructions. The case is awaiting a trial date.

Item 1A.  Risk Factors

We believe there are no changes that constitute material changes from theSee risk factors previously disclosedincluded in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on April 17, 2019.

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

There have been no unregistered salesOn January 8, 2020, the Company issued 410,000 shares of equitycommon stock in conversion of $2,583 convertible notes payable at conversion price of $0.0280.

On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041.

On July 15, 2020, the Company issued 905,929 shares of common stock in conversion of $4,122 convertible notes payable at conversion price of $0.0046: a loss was not recorded.

On November 30, 2020, the Company issued 791,104 shares of common stock in conversion of $4,747 convertible notes payable at conversion price of $0.0070: a loss of $2,034 was recorded.

These securities that havewere issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not been previously disclosedwith a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in a Current Report on Form 8-K filedany general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the Securities and Exchange Commission.  appropriate restrictive legend affixed to the restricted stock.

Item 3. Defaults uponUpon Senior Securities

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.None.

Item 4. Mine Safety Disclosures

Not Applicable.N/A

Item 5. Other Information

There is no other information required to be disclosed under this item which has not been previously reported.None.

Item 6. Exhibits

** Provided herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

2430