UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form ~~10-Q~~10-Q/A

Amendment No. 1

(Mark One)

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

For the quarterly period endedSeptember 30, ~~2016~~2019

or

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

For the transition period from__________ to _________

Commission File Number000-52534

PARALLAX HEALTH SCIENCES, INC.

(Exact name of registrant as specified in its charter)


Nevada	46-4733512
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1327 Ocean Avenue, Suite B, Santa Monica, CA	90401
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:	(310) 899-4442

Copy of all Communications to:

Peter Hogan, Esq.

Buchalter

1000 Wilshire Blvd., Suite 1500

Los Angeles, CA 90017

(213) 891-0700

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

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

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

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

o~~YES~~ x NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o~~YES~~ x NO

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


Large accelerated filer	o□	Accelerated filer	o□
Non-accelerated filer	o□	Smaller reporting company	x□
~~(Do not check if a smaller reporting company)~~				Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).	Yes☐ No☒

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

o~~YES~~ xNO

~~APPLICABLE ONLY TO CORPORATE ISSUERS~~

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

~~129,854,530~~238,579,740 common shares issued and outstanding as of ~~October 31, 2017~~ December 12, 2019

EXPLANATORY NOTE

This Amendment No. 1 (“Amendment No. 1”) to the Quarterly Report on Form 10-Q of Parallax Health Sciences, Inc. (together with its subsidiaries, the “Company,” “we,” “our” or “us”) for the quarterly period ended September 30, 2019, filed with the SEC on November 15, 2019, (the “Quarterly Report”), is being filed in response to SEC Comment Letter dated December 11, 2019 in connection with the Company’s Annual Report on Form 10-K/A filed November 26, 2019.

In addition to amending the Quarterly Report as described above, this Amendment No. 1 amends (1) Item 6 to include (i) new certifications for this Amendment No. 1 pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002; and (2) the cover page to update the number of outstanding shares of Company’s Common Stock.

Additionally, except as specifically referenced herein, this Amendment No. 1 does not affect any other portion of the Quarterly Report, nor does it reflect any event occurring after November 15, 2019, the filing date of the Quarterly Report, except as amended in the section(s) entitled, “Management’s Report on Internal Control over Financial Reporting” and “Changes to Internal Control of Financial Reporting” under Item 4: Controls and Procedures

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The Company’s unaudited interim consolidated financial statements for the ~~nine months~~nine-month period ended September 30, ~~2016,~~2019, form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles. The comparative period ended September 30, 2018, has been restated to include any applicable changes for the nine month period then ended, in connection with the restatement of the 2018 financial statements, as described below.

These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, ~~2015,~~2018, on Form 10-K, as amended and restated, filed with the Securities and Exchange Commission on ~~July 27, 2017.~~October 21, 2019.

PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

September 30, 2016

December 31, 2015

ASSETS

Current assets

Cash and cash equivalents
$
111,327

$
912,399

Accounts receivable, net

1,020,444

1,449,554

Rebates receivable

64,667

424,066

Inventories

528,207

831,156

Employee advances

6,906

21,800

Prepaid expenses

144,473

110,336

Total current assets

1,876,024

3,749,311

Loans receivable-long-term

477,271

176,884

Property and equipment, net

177,211

116,531

Intangible assets, net

2,073,972

203,756

Goodwill

4,030,235

3,887,818

Deposits

22,750

22,750

TOTAL ASSETS
$
8,657,463

$
8,157,050

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities

Accounts payable and accrued expenses
$
3,682,479

$
2,788,202

Pension plan contribution payable

6,882

Related party payables

203,450

133,610

Total current liabilities

3,892,811

2,921,812

Long-term liabilities

Royalties payable

2,000,000

––

Notes and loans payable, unsecured

95,975

95,975

Convertible notes payable

144,000

144,000

Convertible notes payable, related party

1,107,254

1,107,254

Note payable, secured, net of unamortized discount

12,281,316

7,155,000

Total long-term liabilities

15,628,545

10,332,630

Total liabilities

19,521,356

13,254,442

Stockholders' deficit

Preferred stock, $.001 par, 10,000,000 shares authorized, 823,691 issued and outstanding at September 30, 2016, and December 31, 2015

824

824

Common stock: 250,000,000 shares authorized, $.001 par, 106,066,774 and 120,566,774 issued and outstanding at September 30, 2016 and December 31, 2015, respectively

106,067

120,567

Additional paid in capital-preferred

465,843

465,843

Additional paid in capital-common

1,405,029

1,030,342

Subscriptions receivable

(592
)

(192
)
Accumulated deficit

(12,841,064
)

(6,714,776
)
Total stockholders' deficit

(10,863,893
)

(5,097,392
)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$
8,657,463

$
8,157,050

~~The accompanying notes are an integral part of these consolidated financial statements~~PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

	September 30, 2019			December 31, 2018
	Unaudited
ASSETS
Current assets
Cash and cash equivalents	$	11,973		$	262
Operating lease right of use asset		77,494			––
Total current assets		89,467			262

Investments		1,000,000			––
Property and equipment, net		2,408			––
Intangible assets, net		488,570			579,035
Deposits		7,800			––
Goodwill		785,060			785,060

TOTAL ASSETS	$	2,373,305		$	1,364,357

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	2,419,514		$	2,655,138
Operating lease liability		77,494			––
Derivative liability, short-term		53,920			23,925
Debentures, convertible		––			724,903
Debentures, convertible, related party		––			411,006
Notes payable		360,000			––
Notes payable, related party		126,152			––
Notes payable, convertible, net of unamortized discount		680,176			296,000
Notes payable, convertible, related party		20,000			––
Related party payables		1,474,436			1,004,720
Total current liabilities		5,211,692			5,115,692

Long-term liabilities
License fees payable		450,000			430,000
Royalties payable		316,258			310,000
Derivative liability, long-term		––			34,000
Debentures, convertible, net of unamortized discount		––			184,870
Notes payable, related party		633,294			––
Notes payable, convertible		576,154			720,154
Notes payable, convertible, related party		––			491,100
Notes payable, bank		21,320			28,995
Total long-term liabilities		1,997,026			2,199,119
Total liabilities		7,208,718			7,314,811

Stockholders' deficit
Preferred stock, $.001 par, 10,000,000 shares authorized,		978			1,014
977,352 and 1,013,691 issued and outstanding
at September 30, 2019, and December 31, 2018, respectively
Common stock, $.001 par, 500,000,000 shares authorized,		234,455			158,113
234,454,740 and 158,113,141 issued and outstanding
at September 30, 2019, and December 31, 2018, respectively
Additional paid in capital - preferred		1,599,036			1,699,000
Additional paid in capital - common		19,479,319			11,382,341
Subscriptions receivable		(500,000	)		––
Accumulated deficit		(25,649,201	)		(19,190,922	)
Total stockholders' deficit		(4,835,413	)		(5,950,454	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,373,305		$	1,364,357

PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended

For the nine months ended

September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015

Revenue
$
5,591,659

$
4,717,206

$
19,808,910

$
4,717,206

Cost of sales

4,738,492

3,657,829

16,914,818

3,657,829

Gross profit

853,167

1,059,377

2,894,092

1,059,377

Sales, marketing, and pharmacy expenses

472,683

425,825

1,461,576

425,825

General and administrative expenses

1,067,314

566,793

3,094,034

857,139

Operating loss

(686,830
)

66,759
)

(1,661,518
)

(223,587
)

Other income (expenses)

Dividend income

205

––

205

––

Discount amortization

(1,275,000
)

(49,276
)

(3,825,000
)

(256,676
)
Interest expense

(251,522
)

(185,871
)

(639,975
)

(229,045
)
Total other income (expenses)

(1,526,317
)

(235,147
)

(4,464,770
)

(485,721
)

Net loss
$
(2,213,147
)
$
(168,388
)
$
(6,126,288
)
$
(709,308
)

Net (loss) per common share - basic and diluted
$
(0.021
)
$
(0.001
)
$
(0.053
)
$
(0.005
)

Weighted average common shares outstanding - basic and diluted

107,392,861

132,026,053

116,143,416

131,678,248

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

4PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended


September 30, 2016

September 30, 2015

Cash flows from operating activities:

Net loss
$
(6,126,288
)
$
(709,308
)
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

157,820

12,036

Stock compensation/stock option amortization

134,687

7,014

Discount amortization

3,825,000

256,676

Allowance for doubtful collections

23,935

7,810,670

Accruals converted to convertible notes payable

––

303,750

Changes in operating assets and liabilities:

(Increase) decrease in trade and other receivables

779,468

(10,144,923
)
Decrease in inventories

302,949

––

Increase in prepaid expenses

(34,136
)

(27,259
)
Increase in loans receivable

(213,379
)

(176,334
)
Increase in accounts payable and accrued expenses

887,208

3,227,259

Increase in pension contribution payable

6,882

––

Increase in related party payables

69,940

33,646

Net cash provided by (used in) operating activities

(185,914
)

593,227

Cash flows from investing activities:

Purchase of professional equipment

(91,073
)

(2,227
)
Net cash used in investing activities

(91,073
)

(2,227
)

Cash flows from financing activities:

Proceeds from notes payable

100,000

––

Repayment of notes payable

(629,085
)

––

Proceeds from issuance of common shares

5,000

37,980

Net cash provided by (used in) financing activities

(524,085
)

37,980

Net increase (decrease) in cash

(801,072
)

628,980

Cash - beginning of period

912,399

513

Cash - end of period
$
111,327

$
629,493

NON-CASH ACTIVITIES

Note payable issued for purchase of subsidiary common stock
$
––

$
20,500,000

Discount on long-term secured note payable
$
3,825,000

$
––

Conversion of related party payable to convertible notes payable
$
––

$
201,635

Assets acquired upon acquisition of subsidiary
$
2,084,651

$
––

Liabilities assumed upon acquisition of subsidiary
$
(2,007,068
)
$
––

Cancellation of common stock
$
20,000

$
––

Subscriptions receivable
$
(592
)
$
(192
)

SUPPLEMENTAL INFORMATION

Interest paid
$
131,767

$
––

Income taxes paid
$
––

$
––

Unaudited

	For the three months ended						For the nine months ended
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
					As Restated						As Restated

Revenue	$	25,855		$	990		$	77,745		$	10,749
Cost of sales		3,899			5,230			12,871			15,507
Gross profit (loss)		21,956			(4,240	)		64,874			(4,758	)

General and administrative expenses		1,937,991			2,116,821			5,203,088			5,252,498

Operating loss		(1,916,035	)		(2,121,061	)		(5,138,214	)		(5,257,256	)

Other expenses
Gain on disposal of subsidiary		––			5,079,416			––			5,079,416
Gain (loss) on fair value adjustments		1,253			(93,700	)		105,141			(156,300	)
Gain (loss) on extinguishment of debt		(347,612	)		22,931,148			(915,615	)		22,931,148
Loss on settlement		––			––			(33,272	)		––
Discount amortization		(48,000	)		(155,000	)		(19,000	)		(2,775,000	)
Interest expense		(149,914	)		(660,518	)		(457,319	)		(1,741,726	)
Total other expenses		(544,273	)		27,101,346			(1,320,065	)		23,337,538

Net income (loss) – continuing operations		(2,460,308	)		24,980,285			(6,458,279	)		18,080,282

Net income (loss) – discontinued operations		––			93,773			––			(824,398	)

Net loss	$	(2,460,308	)	$	25,074,058		$	(6,458,279	)	$	17,255,884

Net income (loss) per common share – basic
Continuing operations	$	(0.011	)	$	0.167		$	(0.034	)	$	0.124
Discontinued operations	$	––		$	0.001		$	––		$	(0.006	)

Net income (loss) per common share – diluted
Continuing operations	$	(0.009	)	$	0.120		$	(0.028	)	$	0.088
Discontinued operations	$	––		$	––		$	––		$	(0.004	)

Weighted average common shares outstanding - basic		218,115,643			149,431,153			190,038,071			146,294,981
Weighted average common shares outstanding - diluted		262,011,413			208,254,652			233,933,841			205,118,481

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

PARALLAX HEALTH SCIENCES, INC.

STATEMENT OF STOCKHOLDERS' DEFICIT

JANUARY 1, 2018 TO SEPTEMBER 30, 2019

Unaudited

	Preferred Stock					Common Stock					Paid In Capital						Deferred			Subscriptions			Accumulated
	Shares		Amount			Shares		Amount			Preferred			Common			Compensation			Receivable			Deficit			Total

Balance, January 1, 2018	863,691		$	864		136,754,530		$	136,754		$	665,803		$	9,637,860		$	(3,188,092	)	$	(592	)	$	(33,691,386	)	$	(26,438,789	)

Issuance of common stock to officers						6,000,000			6,000						984,000						(5,000	)					985,000

Issuance of common stock for cash						1,000,000			1,000						39,000												40,000

Issuance of common stock for debt service						440,000			440						43,560			(44,000	)								––

Grant of stock options to consultant															539,200			(539,200	)								––

Grant of stock options to officers/directors															134,500			(134,500	)								––

Grant of stock awards for services						250,000			250						67,250			(67,500	)								––

Grant of stock warrants															40,263			(38,870	)								1,393

Beneficial conversion feature of debt															3,607												3,607

Amortization of stock options																		193,484									193,484

Amortization of stock awards																		150,148									150,148

Amortization of stock warrants																		21,508									21,508

Subscriptions received																					5,250						5,250

Net loss																								(3,727,134	)		(3,727,134	)

Balance, March 31, 2018	863,691		$	864		144,444,530		$	144,444		$	665,803		$	11,489,240		$	(3,647,022	)	$	(342	)	$	(37,418,520	)	$	(28,765,533	)

Issuance of common stock for cash						1,000,000			1,000						199,000												200,000

Issuance of common stock for debt service						890,000			890						88,110			(89,000	)								––

Conversion of debt for common stock						481,130			481						47,633												48,114

Exercise of stock options-employees						846,051			846						268,479												269,325

Forfeiture of stock options															(184,373	)		184,373									––

Grant of stock warrants															62,730			(62,730	)								––

Beneficial conversion feature of debt															343,850												343,850

Amortization of stock options																		38,000									38,000

Amortization of stock awards																		193,621									193,621

Amortization of stock warrants																		13,937									13,937

Net loss																								(4,091,040	)		(4,091,040	)

Balance, June 30, 2018	863,691		$	864		147,661,711		$	147,661		$	665,803		$	12,314,670		$	(3,368,821	)	$	(342	)	$	(41,509,560	)	$	(31,749,725	)

Issuance of preferred stock for cash	60,000			60								299,940															300,000

Issuance of preferred stock for related party debt	90,000			90								449,910															450,000

Issuance of common stock for debt service						740,000			740						73,260			(74,000	)								––

Conversion of debt for common stock						2,605,000			2,605						245,395												248,000

Grant of stock options to officers/directors															160,000			(160,000	)								––

Exercise of stock options-officers						1,071,430			1,071						186,429												187,500

Effects of change in warrant characteristics															750,200												750,200

Deemed dividend on preferred stock												283,347												(283,347	)		––

Amortization of stock options																		251,907									251,907

Amortization of stock awards																		630,155									630,155

Amortization of stock warrants																		14,108									14,108

Subscriptions received																					250						250

Net income													��											25,074,058			25,074,058

Balance, September 30, 2018	1,013,691		$	1,014		152,078,141		$	152,077		$	1,699,000		$	13,729,954		$	(2,706,651	)	$	(92	)	$	(16,718,849	)	$	(3,843,547	)

Issuance of common stock for debt service						740,000			740						73,260			(74,000	)								––

Conversion of debt for common stock						3,795,000			3,796						375,705												379,501

Grant of stock awards for services						1,500,000			1,500						210,110			(85,500	)								126,110

Grant of stock warrants															11,610			(11,610	)

Beneficial conversion feature of debt															(375,100	)											(375,100	)

Amortization of stock options																		89,478									89,478

Amortization of stock awards																		121,268									121,268

Amortization of stock warrants																		23,817									23,817

Subscriptions received																					92						92

Net loss																								(2,472,073	)		(2,472,073	)

Balance, December 31, 2018	1,013,691		$	1,014		158,113,141		$	158,113		$	1,699,000		$	14,025,539		$	(2,643,198	)	$	––		$	(19,190,922	)	$	(5,950,454	)

Cancellation of preferred stock to treasury	(36,339	)		(36	)							(99,964	)														(100,000	)

Issuance of common stock for cash						5,000,000			5,000						495,000												500,000

Issuance of common stock for debt service						740,000			740						73,260			(74,000	)								––

Grant of stock warrants															72,750												72,750

Conversion of debt for common stock						3,689,328			3,689						483,642												487,331

Grant of stock awards for services						2,716,667			2,717						322,283												325,000

Grant of stock options to officers/directors															96,100			(96,100	)								––

Amortization of stock options																		29,442									29,442

Amortization of stock awards																		124,357									124,357

Amortization of stock warrants																		3,225									3,225

Net loss																								(1,542,987	)		(1,542,987	)

Balance, March 31, 2019	977,352		$	978		170,259,136		$	170,259		$	1,599,036		$	15,568,574		$	(2,656,274	)	$	––		$	(20,733,909	)	$	(6,051,336	)

Dividends paid in kind on preferred stock to treasury	21,161			21								58,211															58,232

Cancellation of preferred stock to treasury	(21,161	)		(21	)							(58,211	)														(58,232	)

Sale of preferred treasury stock	57,500			57								68,943															69,000

Conversion of preferred stock to common stock	(57,500	)		(57	)	1,150,000			1,150			(68,943	)		67,850												––

Issuance of common stock for cash						14,350,000			14,350						1,220,650						(500,000	)					735,000

Issuance of common stock for services						1,550,000			1,550						134,450												136,000

Cancellation of common stock for debt service						(510,000	)		(510	)					(50,490	)		51,000									––

Issuance of common stock for warrants						2,168,146			2,168						207,605												209,773

Conversion of debt for common stock						9,240,597			9,241						597,408												606,649

Grant of stock awards for services						3,600,000			3,600						324,110			(33,050	)								294,660

Grant of stock awards for services-officer						3,000,000			3,000						198,300			(198,300	)								3,000

Grant of stock options for services															608,450			(608,450	)								––

Grant of stock options to officers/directors															195,600			(195,600	)								––

Grant of stock warrants															7,760												7,760

Amortization of stock options																		134,480									134,480

Amortization of stock awards																		47,198									47,198

Amortization of stock warrants																		3,225									3,225

Net loss																								(2,454,984	)		(2,454,984	)

Balance, June 30, 2019	977,352		$	978		204,807,879		$	204,808		$	1,599,036		$	19,080,267		$	(3,455,771	)	$	(500,000	)	$	(23,188,893	)	$	(6,259,575	)

Issuance of common stock for cash						7,737,500			7,737						346,262												353,999

Issuance of common stock for cash-related parties						4,500,000			4,500						370,500												375,000

Issuance of common stock for services						37,500			38						(38	)											––

Issuance of common stock for debt service						2,580,811			2,580						318,934												321,514

Issuance of common stock for investment						6,666,667			6,667						993,333												1,000,000

Cancellation of common stock for services						(300,000	)		(300	)					(42,450	)		28,500									(14,250	)

Cancellation of common stock for cashless warrant						(293,146	)		(293	)					(30,780	)											(31,073	)

Conversion of debt for common stock						9,055,029			9,055						846,448												855,503

Grant of stock awards for services						37,500			38						3,712												3,750

Grant of stock warrants															149,800												149,800

Cancellation of stock awards for services						(375,000	)		(375	)					(24,787	)		24,787									(375	)

Cancellation of stock options for services															(24,450	)		24,450									––

Amortization of stock options																		362,728									362,728

Amortization of stock awards																		507,874									507,874

Net income																								(2,460,308	)		(2,460,308	)

Balance, September 30, 2019	977,352		$	978		234,454,740		$	234,455		$	1,599,036		$	21,986,751		$	(2,507,432	)	$	(500,000	)	$	(25,649,201	)	$	(4,835,413	)

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

PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

	For the nine months ended
	September 30, 2019			September 30, 2018
				As Restated
Cash flows from operating activities:
Net income (loss)	$	(6,458,279	)	$	18,080,282
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		90,685			90,465
Stock compensation/stock option amortization		2,572,741			3,152,943
Discount amortization		19,000			2,775,000
Allowance for bad debt		––			236
Gain on disposal of subsidiary		––			(5,079,416	)
(Gain) loss on extinguishment of debt		915,615			(22,931,148	)
(Gain) loss on fair value adjustments		(105,141	)		156,300
Loss on settlement		33,272			––
Debt accretion		136,582			791,125
Changes in operating assets and liabilities:
Decrease in trade and other receivables		––			3,039
(Increase) in deposits		(7,800	)		––
Increase in accounts payable and accrued expenses		95,155			1,398,093
Increase in royalties payable		7,258			––
Increase in related party payables		886,383			492,356
Net cash used by operating activities		(1,814,529	)		(1,070,725	)

Cash flows from investing activities:
Purchase of professional equipment		(2,628	)		––
Net cash used by investing activities		(2,628	)		––

Cash flows from financing activities:
Proceeds from notes payable		220,000			––
Repayment of notes payable		(22,675	)		(5,451	)
Proceeds from convertible notes payable		556,780			825,000
Repayment of convertible notes payable		(65,000	)		(50,000	)
Repayment of debentures		(754,369	)		––
Proceeds from issuance of preferred shares		69,000			300,000
Proceeds from issuance of common shares		1,825,132			41,250
Net cash provided by financing activities		1,828,868			1,110,799

Net cash provided by continuing operations		11,711			40,074

Cash flows from discontinued operations:
Net cash used by operating activities		––			(39,942	)
Net cash used by discontinued operations		––			(39,942	)

Net increase in cash		11,711			132

Cash - beginning of period		262			183

Cash - end of period	$	11,973		$	315

NON-CASH ACTIVITIES
Discounts on long-term liabilities	$	19,000		$	2,775,000
Beneficial conversion feature of convertible promissory note	$	––		$	347,457
Fair value of stock warrants	$	335,310		$	810,000
Embedded conversion option of convertible promissory notes	$	9,370		$	850
Deemed dividends on preferred stock	$	––		$	283,347
Dividends paid in kind on preferred stock returned to treasury	$	58,232		$	––
Conversion of preferred stock to common stock	$	69,000		$	––
Preferred stock returned to treasury for debt settlement	$	100,000		$	––
Conversion of accounts payable to convertible note payable	$	20,000		$	37,500
Conversion of related party payables to preferred stock	$	––		$	450,000
Conversion of accounts payable to related party convertible note payable	$	20,000		$	––
Conversion of convertible notes payable to common stock	$	1,093,240		$	296,114
Conversion of related party convertible notes payable to common stock	$	1,021,057		$	––
Conversion of related party convertible notes payable to non-related party convertible notes payable	$	––		$	576,154
Conversion of related party payables to non-related party payables	$	––		$	42,356
Subscriptions receivable	$	(500,000	)	$	(92	)

SUPPLEMENTAL INFORMATION
Interest paid
Continuing operations	$	539,476		$	798
Discontinued operations	$	––		$	106
Income taxes paid	$	––		$	––

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

PARALLAX HEALTH SCIENCES, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, ~~2016~~2019

NOTE 1. OVERVIEW AND NATURE OF BUSINESS

These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, ~~2015.~~2018. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements have been omitted.

Parallax Health Sciences, Inc. (the “Company”) was incorporated in the State of Nevada on July 6, 2005. The Company’s principal focus is on personalized patient care, through the Company’s wholly owned subsidiary, RoxSan Pharmacy, Inc. ("RoxSan"), and through the Company’s wholly owned subsidiary, Parallax Diagnostics Inc., which holds the right, title, and interest in perpetuity to certain point of care diagnostic tests. The Company's diagnostic testing platform is capable of diagnosing and monitoring several health issues.

On August 13, 2015, the Company entered into an agreement with RoxSan Pharmacy, Inc., a California corporation, and its sole shareholder, Shahla Melamed, to purchase 100% of the issued and outstanding shares of RoxSan's common stock and its assets and inventory. As a result, effective August 13, 2015, RoxSan became the Company's wholly owned subsidiary (Note 12). Concurrently, Mrs. Melamed resigned from all positions within RoxSan, and Mr. J. Michael Redmond was appointed RoxSan's President and Chief Executive Officer, and Ms. Calli Bucci its Chief Financial Officer. Mr. Redmond and Ms. Bucci were also appointed as Chairman and member, respectively, of RoxSan’s board of directors.

On July 6, 2017, Mr. J. Michael Redmond was terminated as Chief Executive Officer and President of the Company and resigned as chairman and member of the board of directors, pursuant to his employment agreement. Effective July 7, 2017, Mr. Paul R. Arena was appointed as Chief Executive Officer and President of the Company and elected as a member of the board of directors.

On August 31, 2016, the Company entered into an agreement with QOLPOM, Inc., an Arizona corporation (“QOLPOM”) and its shareholders (the “Seller”) to purchase 100% of the issued and outstanding Shares of QOLPOM’s common stock and its assets, inventory and intellectual property. As a result, effective September 20, 2016, QOLPOM became the Company's wholly owned subsidiary (Note 12) in the remote healthcare monitoring industry (“RCS”). Pursuant to the QOLPOM Agreement, in exchange for 100% of the QOLPOM stock and 100% of QOLPOM’s assets, inventory and intellectual property, among other things, consideration to the Seller included:

~~5,000,000 shares of the Company’s common stock at $0.001 per share; and~~

2,500,000 options to purchase shares of the Company's common stock, vesting over three (3) years beginning August 31, 2017, of which 500,000 shares are exercisable at $0.10, 1,000,000 are exercisable at $0.15, and 1,000,000 are exercisable at $0.25; and

~~10% of revenues generated from the RCS business segment, up to $1,000,000; and 7% thereafter, up to $2,000,000; and~~

~~3% of revenues generated from the sale of QOLPOM hardware and monitoring service fees.~~

~~On January 20, 2017, the Company changed the name of its wholly owned subsidiary, QOLPOM, Inc., to Parallax Health Management, Inc (“PHM”).~~

~~The Company has the following three business segments: Retail Pharmacy Services (RPS), Remote Care Systems (RCS) and Corporate.~~

~~Retail Pharmacy Services (RPS)~~

~~The RPS provides a full range of pharmacy services including retail, compounding and fertility medications.~~

The RPS generates net revenues primarily by dispensing prescription drugs, both through local channels by direct delivery as well as mail order. The RPS also sells a wide assortment of general merchandise, including over-the-counter drugs, beauty products and cosmetics, seasonal merchandise and convenience foods, through the Company’s pharmacy.

~~The pharmacy is fully licensed and qualified to conduct business in over 40 US States.~~

~~Remote Care Systems (RCS)~~

The RCS provides the health care industry’s first comprehensive remote patient monitoring system, which utilizes proprietary software and technology to bridge clinical behavioral science with technology and logistics across a variety of wellness and clinical devices, including both fitness and clinical applications, for payers, providers and clinical professionals.

The RCS generates net revenues primarily through the licensing, installation and maintenance of its patented QOLPOM Hub, an integrated, secure and scalable platform for collecting, transmitting and analyzing biometric data, as well as the sale of wireless medical devices and home monitoring kits.

~~Corporate~~

The Corporate Segment provides management and administrative services to support the Company, and consists of certain aspects of the Company’s executive management, corporate relations, legal, compliance, human resources, and corporate information technology and finance departments. In addition, the Corporate Segment supports the costs and operating expenses related to the continued development and exploitation of the Company's proprietary medical diagnostic and monitoring platform and processes, which remains the Company's primary focus.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The unaudited interim consolidated financial statements reflect all adjustments consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. The unauditedinterim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

NOTE: The following notes and any further reference made to “the Company”, "we", "us", "our" and "Parallax" shall mean Parallax Health Sciences, Inc., and its wholly-owned subsidiaries, Parallax Diagnostics, Inc., Parallax Health Management, Inc., and Parallax Behavioral Health, Inc. unless otherwise indicated.

Business Overview

The Company’s principal focus is on personalized patient care through remote healthcare services, behavioral health systems, and Point-of-Care (“POC”) diagnostic testing. Parallax’s current family of companies that serve as the foundation for its cross-over business model of operations include:

•Parallax Diagnostics, Inc. (“Parallax Diagnostics” or “PDI”) acquired a proprietary Point-of-Care diagnostic immunoassay testing platform and 25 test cartridges for the areas of infectious diseases, cardiac markers, drugs of abuse and various other medical conditions.

•Parallax Health Management, Inc. (“PHM”) develops Remote Patient Monitoring (“RPM”) and telehealth market products and services, and commercializes them, including the Fotodigm® proprietary platform which allows for systems integration with a number of third-party services and solutions.

•Parallax Behavioral Health, Inc. (“PBH”) acquired the intellectual property known as REBOOT™, the acronym for Reliable Evidence-Based Outcomes Optimization Technologies, as well as the Intrinsic Code™technology, a software platform specifically designed to improve health treatment outcomes through cloud-based and mobile behavioral technology systems that enable its users and user groups to more effectively achieve goals within a prescribed timeline.

Parallax Care™ is the Company’s technology-enabled digital healthcare system, structured with three separate divisions that can operate independently of one another, or integrate services to meet the various needs of the Company’s clientele: Optimized Outcomes, Connected Health and Smart Data. Each of these divisions target a separate vertical market that are synergistic, compliment, and strengthen each other.

Optimized Outcomes

REBOOT™ / COMPASS™

Behavioral modification

Connected Health

Fotodigm® platform

Remote patient monitoring, telehealth, and POC diagnostic testing

Smart Data

Intrinsic Code™ technology

Actionable insights to behavior modification

Operating Segments

The Company’s operations include the following operating segments for financial statement presentation: Remote Patient Monitoring (RPM), Behavioral Health Services (BHS), and Diagnostics/Corporate.

•Remote Patient Monitoring

The Company provides a distinctive technology platform that provides for the complete remote patient care delivery system: the patent-pending Fotodigm® platform, which utilizes proprietary software and technology to bridge clinical behavioral science with technology and logistics for payers, providers and clinical professionals across a variety of wellness and clinical devices, including both fitness and clinical applications. Fotodigm® is a secure and scalable platform for collecting, transmitting and analyzing biometric, pharmaceutical, and health data to healthcare providers, primarily hospitals, accredited nursing operations, and physicians.

The RPM segment generates revenues through fees charged for the license and utilization of its proprietary system that provides software integrations of the Fotodigm® platform. Additionally, the RPM segment will generate incremental revenues through the delivery of acute, post-acute and chronic health patient management software systems that enable Parallax customers to bill for and collect payments from patients and third-party payers for telemonitoring and remote services that they deliver.

•Behavioral Health Services

The BHS segment commenced with the acquisition of the REBOOT™ and Intrinsic Code™ technologies in April 2017. The BHS segment will generate revenues primarily through licensing and subscription of software and systems. As of September 30, 2019, the BHS segment had not yet begun full operations, generating limited test market sales.

•Diagnostics/Corporate

The Diagnostics/Corporate Segment supports the costs and operating expenses related to the continued development and exploitation of the Company’s proprietary Target System POS diagnostic platform and processes. In addition, the Diagnostics/Corporate Segment provides management and administrative services to support the Company and consists of certain aspects of the Company’s executive management, corporate relations, legal, compliance, human resources, corporate information technology and finance departments.

Going Concern

The Company has incurred losses since inception resulting in an accumulated deficit of ~~$12,841,064~~$25,649,201, and a working capital deficit of ~~$2,016,787,~~$5,122,225, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms. There can be no assurance that the Company will be able to ~~generate profitable operations and/or~~ continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The Company will require additional financing in order to proceed with its plan of operations, including approximately $3,000,000 over the next 12 months to pay for its ongoing expenses. These cash requirements include working capital, general and administrative expenses, the development of the Company’s product line, and the pursuit of acquisitions. These cash requirements are in excess of the Company’s current cash and working capital resources. Accordingly, the Company will require additional financing in order to continue operations and to repay its liabilities. There is no assurance that the financing will be completed as planned or at all. If the Company is unable to secure adequate capital to continue the Company’s planned operations, the Company’s shareholders may lose some or all of their investment and the Company’s business may fail.

NOTE 2. RESTATEMENT

On October 18, 2019, the Company concluded that the previously issued audited consolidated financial statements as of and for the years ended December 31, 2018 and 2017, should no longer be relied upon. The Company reached its conclusion after consultation with its Audit Committee and a joint discussion with the Company’s independent registered public accounting firm.

The Company has restated its audited consolidated financial statements as of and for the years ended December 31, 2018 and 2017, and interim periods, to reflect ~~all~~ adjustments ~~consisting~~made in connection with the accounting treatment of ~~normal recurring~~certain convertible debt (the “Subject Debt”), warrants (the “Subject Warrants”), and convertible preferred stock (the “Subject Preferred Stock”). The adjustments resulted in material overstatements and understatements, the nature and impact of which inare further described below.

Valuation of Convertible Debt and Warrant Liabilities:

The Company reviewed the ~~opinion of management, are necessary for a fair presentation~~accounting treatment of the ~~results~~Subject Debt, Subject Warrants, and Subject Preferred Stock, and concluded that it was not in accordance with U.S. generally accepted accounting principles. Specifically, the Subject Debt, Subject Warrants and Subject Preferred Stock were not evaluated to determine the impact (if any) of 1) embedded conversion option; 2) beneficial conversion feature; 3) bifurcation; 4) derivative liability; and 5) fair value adjustments and other expenses thereto. A third-party valuation was performed on the Subject Debt, Subject Warrants and Subject Preferred Stock, and the accounting treatment was determined.

The effects of the accounting treatment, all non-cash in nature, resulted in a restatement of convertible debentures and convertible notes payable, additional paid in capital, and accumulated deficit, and the establishment of a derivative liability, resulting in changes to total liabilities and total stockholders’ deficit on the consolidated balance sheets; and a restatement of general and administrative expenses, gain on extinguishment of debt, discount amortization, and interest expense, and the establishment of a loss on fair value adjustments, resulting in changes to net income (loss), net loss per share-basic, and net loss per share-diluted on the consolidated statements of operations; and the restatement of stock compensation/stock option expense, discount amortization, gain on extinguishment of debt, loss on fair value adjustments, debt accretion, and the increase in accounts payable and accrued expenses from operating activities on the consolidated statements of cash flows. The following tables summarize the impacts on the Company’s consolidated financial statements as of and for the periods shown. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.nine months ended September 30, 2018:

	September 30, 2018
	As Previously Reported			As Restated			Increase (Decrease)
CONSOLIDATED BALANCE SHEETS
Notes payable, convertible, net of discount	$	1,241,000		$	350,081		$	(890,919	)
Total current liabilities		4,037,238			3,146,319			(890,919	)
Total liabilities		6,129,031			5,238,112			(890,919	)
Additional paid in capital - preferred		1,415,653			1,699,000			283,347
Additional paid in capital - common		9,005,599			11,023,303			2,017,704
Accumulated deficit		(15,308,717	)		(16,718,849	)		1,410,132
Total stockholders' deficit		(4,734,466	)		(3,843,547	)		(890,919	)

CONSOLIDATED STATEMENTS OF OPERATIONS
General and administrative expenses		5,202,944			5,252,498			49,554
Operating loss		(5,207,702	)		(5,257,256	)		49,554
Loss on fair value adjustments		––			(156,300	)		156,300
Interest expense, net of income		(950,601	)		(1,741,726	)		791,125
Total other income (expenses)		24,284,963			23,337,538			(947,425	)
Net income (loss) - continuing operations		19,077,261			18,080,282			(996,979	)
Net income (loss)		18,252,863			17,255,884			(996,979	)
Net income (loss) per common share - continuing operations - basic		0.125			0.124			(0.001	)
Net income (loss) per common share - continuing operations - diluted		0.089			0.088			(0.001	)

CONSOLIDATED STATEMENTS OF CASH FLOWS
Net income		19,077,261			18,080,282			(996,979	)
Stock compensation/stock option expense		3,103,390			3,152,943			49,553
Loss on fair value adjustments		––			156,300			156,300
Debt accretion		––			791,125			791,125
Increase in accounts payable and accrued expenses		2,182,548			1,398,093			(784,455	)
Net cash provided by continuing operations		824,530			40,074			(784,456	)
Net cash used by operating activities-discontinued operations		(824,398	)		(39,942	)		784,456
Non-Cash Activities:
Beneficial conversion feature of convertible promissory notes		––			347,457			347,457
Fair value of stock warrants		––			810,000			810,000
Embedded conversion option of convertible promissory notes		––			850			850
Deemed dividends on preferred stock		––			283,347			283,347

NOTE: The following notes and any further reference made to “the Company”, "we", "us", "our" and "Parallax" shall mean Parallax Health Sciences, Inc., and its wholly-owned subsidiaries, Parallax Diagnostics, Inc., Parallax Health Management, Inc. (formerly QOLPOM, Inc.) and RoxSan Pharmacy, Inc., unless otherwise indicated.

NOTE 2.3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

The Company’s fiscal year-end is December 31.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. When the Company loses control of a subsidiary, a gain or loss is recognized and is calculated as the difference between:

•the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost;

and

•the carrying amount of the net assets (liabilities) of the subsidiary and any noncontrolling interest.

Upon deconsolidation of a subsidiary, any loans to the former subsidiary made by the Company are measured at fair value at the deconsolidation date. Any difference between the carrying amount of the loan to the subsidiary and its fair value is included as part of the gain or loss calculation upon deconsolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Fair Value Hierarchy

The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2: Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3: Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of ~~three~~nine months or less at the time of issuance to be cash equivalents. As atof September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, the Company had no cash equivalents.

Fair Value of Financial Instruments

As of September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation. ~~See Note 7 and 12 for additional information about long-term debt.~~

~~There were no outstanding~~•Derivatives of financial instruments:

Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period, with changes in fair value recognized in profit or loss. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

•Embedded derivatives:

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value with changes in fair value recognized in profit or loss. An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the hybrid instrument to which the embedded derivative relates is more than 12 months and it is not expected to be realized or settled within 12 months. Other embedded derivatives are presented as current assets or current liabilities.

The following table represents the Company’s derivative financial ~~instruments~~instruments:

	September 30, 2019		December 31, 2018
Convertible debentures	$	––	$	23,925
Convertible promissory notes		––		––
Warrants		53,920		34,000
Total derivative liability	$	53,920	$	57,925

The following table represents the changes in the Company’s derivative financial instruments:

	September 30, 2019			December 31, 2018
Fair value of derivative liability, beginning	$	57,925		$	––
Increase in derivative liability-convertible promissory notes		9,370			60,350
Increase in derivative liability-warrants		105,000			623,900
Fair value adjustment-debentures		(8,296	)		(2,500	)
Fair value adjustment-convertible promissory notes		(9,370	)		––
Fair value adjustment-warrants		(87,475	)		126,375
Reclassification of warrant carrying value due to reset of exercise price		––			(750,200	)
Reclassification to gain (loss) upon extinguished debt		(13,234	)		––
Fair value of derivative liability, ending	$	53,920		$	57,925

Investments

The Company held $1 million and $0 million of equity securities without readily determinable fair value as of September 30, ~~2016,~~2019 and December 31, ~~2015.~~2018, respectively. The Company records these investments at cost, net of impairment. During the nine-month period ended September 30, 2019, there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of these investments and no impairment was recorded.

Accounts Receivable

Accounts receivable are stated net of an allowance for doubtful accounts. The accounts receivable balance primarily includes amounts due from ~~third party providers (e.g., pharmacy benefit managers, insurance companies and governmental agencies), as well as customers, vendors and manufacturers.~~customers. Charges to bad debt are based on both historical write-offs and specifically identified receivables.

~~The activity in the allowance for doubtful accounts receivable for the nine months ended September 30, 2016, and the year ended December 31, 2015, is as follows:~~

September 30, 2016

December 31, 2015

Beginning balance
$
8,412,853

$
––

Additions charged to bad debt expense for insurance claims

––

34,000

Allowance for doubtful collection of workers compensation claims

65,776

8,378,853

Collection of workers compensation claims

(41,841
)

Write-offs charged to allowance

––

––

Ending balance
$
8,436,788

$
8,412,853

Management has determined that the collection of certain revenues relating to workers compensation insurance claims, in the retail value of $8,402,788, cannot be reasonably assured. As a result, an allowance for doubtful collections of workers compensation claims in the amount of $8,402,788 has been established until such time as collection can be reasonably assured.

~~Inventory~~

Inventory is stated at the lower of cost or market. Prescription drug inventories are accounted for using the weighted average cost method. Front store inventories are accounted for on a first-in, first-out basis using the retail inventory method. Physical inventory counts are taken on a regular basis and a continuous cycle count process is the primary procedure used to validate the inventory balances on hand to ensure that the amounts reflected in the accompanying financial statements are properly stated.

Property and Equipment

Property and equipment is comprised of office and computer equipment and software, furniture and fixtures, and leasehold improvements, ~~and vehicles,~~ recorded at cost and depreciated using the double declining balance method over the estimated useful lives of 5 to 7 years. Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. ~~Application development stage costs for significant internally developed software projects are capitalized and depreciated.~~ See Note 54 for additional information about property and equipment.

Intangible Assets

Product processes, patents and customer lists are amortized on a straight-line basis over their estimated useful lives between 104 and 20 years. Application development stage costs for significant internally developed software projects are capitalized and amortized on a straight-line basis over the useful life, between 2 and 5 years. Costs to extend and maintain patents and trademarks are charged directly to expense as incurred. See Note 6 for additional information about intangible assets.

Goodwill and ~~other Indefinitely-lived assets~~Other Indefinitely-Lived Assets

Goodwill and other indefinitely-lived assets are not amortized, but are subject to impairment reviews annually, or more frequently if necessary.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

The Company ~~currently~~ believes ~~there is no impairment~~that future projected cash flows are sufficient for the recoverability of its long-lived ~~assets.~~assets, and no impairment exists. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and products under development will continue. Either of these could result in future impairment ~~of long-lived assets.~~losses.

~~Due to the Company’s recurring losses, its long-lived assets were evaluated for impairment and it was determined that future cash flows were sufficient for recoverability of the asset.~~

Convertible Debt

The Company recognizes the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert debt into common stock at a price per share that is less than the trading price to the public on the date of the debt. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debt, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the interest method.

Net ~~Income (Loss)~~Loss Per ~~Common~~ Share

~~Net~~The computation of basic earnings ~~(loss)~~ per ~~common~~ share ("EPS") is ~~computed by dividing netincome (loss) by~~based on the weighted average number of shares that were outstanding during the period, including shares of common stock ~~and~~that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common stock ~~equivalents outstanding during the period.~~equivalents. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible debt, convertible preferred shares and the exercise of the Company’s stock options and warrants.

Comprehensive Loss

As atof September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

~~Revenue Recognition~~

Revenue is recognized when: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller’s price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured.

Recognition

The ~~Retail Pharmacy~~Company recognizes revenue ~~at the time the~~when it satisfies a performance obligation by transferring control over a product or service to a customer. Revenue is measured based on a consideration specified in a contract with a customer, ~~takes possession~~and excludes any amounts collected on behalf of ~~the merchandise. Customer returns are not material. Sales taxes are not included in revenue.~~third parties.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

The Company ~~has~~may have net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that the Company will not realize a future tax benefit, a valuation allowance is established.

As of September 30, 2019, the Company has not yet filed its 2012 through 2018 annual corporate income tax returns. Due to the Company’s recurring losses, it is anticipated that no corporate income taxes are due for these periods.

Stock-Based Compensation

The Company records stock-based compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Recently Adopted Accounting Standards

The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company. The Company has recently adopted the following new accounting standards:

Adopted:

In ~~January 2015,~~July 2017, the FASB issued ASU ~~2015-01 Income Statement—Extraordinary~~No. 2017-11 (“ASU 2017-11”), Earnings Per Share (Topic 260),Distinguishing Liabilities from Equity (Topic 480), Derivatives and ~~Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation~~Hedging (Topic 815). ASU 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. ASU 2017-11 also addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification®. ASU 2017-11 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted.

In June 2018, the FASB issued ASU No. 2018-07 (“ASU 2018-07”), Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted.

In July 2018, the FASB issued ASU No. 2018-11 (“ASU 2018-11”), Leases (Topic 842), Targeted Improvements. ASU 2018-11 addresses certain issues in implementing ASU 2016-02, Leases, which was issued to increase transparency ad comparability by ~~Eliminating~~recognizing lease assets and liabilities on the ~~Concept of Extraordinary Items. This Update eliminates from GAAP~~balance sheet and disclosing key information about leasing transaction. ASU 2018-11 clarifies 1) comparative reporting requirements for initial adoption; and 2) for lessors only, separating lease and non-lease components in a contract and allocating the ~~concept of extraordinary items.~~consideration in the contract to the separate components. The amendments in this Update ~~are~~related to separating components of a contract affect the amendments in Update 2016-02, which is effective for ~~fiscal years, and interim~~the Company for annual periods ~~within those fiscal years,~~ beginning after December 15, ~~2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements.~~2018, and interim periods. Early adoption is ~~permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities.~~permitted.

Not yet adopted:

In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30: Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 is part of the Simplification Initiative, and its objective of to simplify the presentation of debt issuance costs. This Update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued.

In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 is part of the Simplification Initiative, and its objective is to simplify the measurement of inventory. This Update applies to inventory that is measured using FIFO or average cost, and requires an entity measure inventory at the lower of cost and net realizable value. The amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The amendments in this Update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period.

In September 2015, the FASB issued ASU 2015-16 Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments. ASU 2015-16 is part of the Simplification Initiative, and eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The amendments in this Update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in this Update should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this Update with earlier application permitted for financial statements that have not been issued.

~~Not Yet Adopted~~:

~~In February 2016,~~August 2018, the FASB issued ASU No. ~~2016-02, Leases. Under~~2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the ~~new guidance, lessees will be required to recognize~~Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the ~~following for all leases (with~~disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the ~~exception~~concepts in the Concepts Statement, including the consideration of ~~short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis;~~costs and ~~(b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The~~benefits. ASU 2018-13 will be effective for the Company beginning January 1, 2019 with early adoption permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

~~In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation. The new guidance simplifies several aspects of the accounting~~ for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this standard are effective for all entities for annual periods, and interim periods within those annual periods beginning after December 15, ~~2017, with early adoption permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.~~

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. ASU 2016-10 clarifies the accounting for licenses of intellectual property as well as the identification of distinct performance obligations in a contract. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. ASU 2016-12 addresses certain issues identified in the guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance on eight specific cash flow issues, for which specific guidance had not previously been provided, with the objective of reducing the existing diversity in practice. The amendments in this update are effective for fiscal years beginning after December 15, 2017,2019, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-15 (“ASU 2018-15”), Intangibles-Goodwill and Other Internal-Use Software (Subtopic 350-40). ASU 2018-15 was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

Recently Issued Accounting Standards Updates:

There were other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

NOTE ~~3. ACCOUNTS RECEIVABLE, NET~~4. PROPERTY AND EQUIPMENT

~~Accounts receivable,~~Property and equipment, net, consists of the following:

September 30, 2016

December 31, 2015

Insurance claims receivable
$
929,010

$
999,612

Workers compensation claims receivable

8,466,691

8,549,073

Customer receivables

63,392

313,722

Total accounts receivable

9,457,232

9,862,407

Allowance for doubtful accounts:

Allowance-insurance claims

(34,000
)

(34,000
)
Allowance-workers compensation claims

(8,402,788
)

(8,378,853
)
Total allowances for doubtful accounts receivable

(8,436,788
)

(8,412,853
)
Accounts receivable, net
$
1,020,444

$
1,449,554

	September 30, 2019			December 31, 2018
Computer equipment	$	6,615		$	3,987
Medical devices		45,194			45,194
Property and equipment, gross		51,809			49,181
Accumulated depreciation		(49,401	)		(49,181	)
Property and equipment, net	$	2,408		$	––

~~As of~~Depreciation expense was $132 and $0 for the three months ended September 30, ~~2016,~~2019 and ~~December 31, 2015,~~2018, respectively, ~~the Company had accounts receivable of $9,457,232~~ and ~~$9,862,407, consisting of $929,010~~was $220 and ~~$999,612 in insurance claims, $8,466,691 and $8,549,073 in workers compensation claims, and $63,392 and $313,722 in customer house account charges, for which payment has not yet received.~~

As of September 30, 2016, and December 31, 2015, respectively, $63,392 and $313,722 was owed from customers receivable, consisting of $24,430 and $33,894 in copayments, and $38,962 and $279,828 in charges for prescriptions and other retail purchases made by certain preferred customers, for which the Company provides monthly invoices to and receives regular payments on.

Management has determined that, as of September 30, 2016, and December 31, 2015, respectively, the collection of certain revenues relating to workers compensation claims, in the retail value of $8,402,788 and $8,378,853, cannot be reasonably assured. As a result, an allowance$0 for the ~~doubtful collection~~nine months then ended, respectively.

NOTE 5. OPERATING LEASES

The Company entered into a sub-lease agreement with PearTrack Security Systems, Inc. (“PearTrack”), whose principal is a related party, on December 1, 2017, for its headquarters in Santa Monica, California, with a monthly sub-lease payment of ~~workers compensation claims in~~$5,600, on a month-to-month basis, consistent with the ~~amount~~underlying lease between PearTrack and property owner. Due to the short-term nature of ~~$8,402,788 and $8,378,853 has been established until such time as collection can be reasonably assured. The collectability of workers compensation claims in~~ the ~~amount of $130,300 and $170,220 can be reasonably assured. As a result,~~sub-lease, the Company has ~~included this amount~~elected to not recognize the operating lease asset and liability, and will expense the rent as ~~revenues earned on the accompanying income statement.~~incurred.

~~An allowance~~The Company entered into a sub-lease agreement with AI Assist, Inc. (“AI Assist”) on May 1, 2019, for ~~doubtful collection~~certain office space located in New York, New York, with a monthly sub-lease payment of ~~insurance claims~~$8,900 for a term of fourteen (14) months, maturing June 30, 2020. The right-of-use present value of the sub-lease has been ~~established in~~calculated as $118,585, utilizing an implied interest rate of 8%. The operating lease asset and liability will be amortized over the ~~amount of $34,000.~~

~~As of September 30, 2016, and December 31, 2015, respectively, accounts receivable, net of allowances for doubtful accounts, was $1,020,444 and $1,449,554.~~

~~NOTE 4. LOANS RECEIVABLE~~

Loans receivable consists of $477,271 and $176,884, respectively, in monies owed to the Company from former owners of subsidiaries, including $412,948 and $176,884 from the former owner of RoxSan Pharmacy, and $64,323 and $0 from the former owner of Parallax Health Management, Inc. as of September 30, 2016, and December 31, 2015.

Included in these amounts are monies collected by the former owner of RoxSan for revenues earned subsequent to the closing date of August 13, 2015 (the “Closing Date”), less monies collected by the Company for revenues earned prior the Closing Date; and monies advanced by the Company on behalfterm of the former owner for expenses incurred prior to the Closing Date, less monies advanced by the former owner on behalf of the Company for expenses incurred subsequent to the Closing Date. The amount owed to the Company is being disputed by the former owner, and is part of the legal proceedings disclosed in Note 17. The Company is confident that it shall prevail in this matter.lease.

~~NOTE 5. PROPERTY AND EQUIPMENT~~

~~The following are the components of property and equipment:~~

September 30, 2016

December 31, 2015

Appliances
$
7,160

$
3,360

Computer and office equipment

63,875

32,718

Furniture and fixtures

38,488

23,453

Leasehold improvements

104,357

78,881

Software

6,323

873

Medical devices and instruments

45,194

45,194

Sub-total

265,397

184,479

Less: accumulated depreciation

(88,186
)

(57,793
)
Property and equipment, net, before disposals

177,211

126,686

Less: disposals, net of depreciation

––

(10,155
)
Property and equipment, net of disposals
$
177,211

$
116,531

During the ~~year ended December 31, 2015, the Company disposed of equipment valued at $0,~~three months and ~~recognized a loss in the amount of $10,155.~~

~~Depreciation expense for~~ the nine months ended September 30, ~~2016,~~2019, respectively, the Company recognized $24,819and $41,091in amortization. The present value of future lease payments at September 30, 2019, was $77,494. As of September 30, 2019, the future minimum lease payments are as follows:

	2019		2020		Total
Operating lease minimum payments	$	26,700	$	53,400	$	80,100
Less: amount treated as interest		1,382		1,224		2,606
Present value of minimum lease payments	$	25,318	$	52,176	$	77,484

The total lease costs are summarized as follows:

	September 30, 2019		December 31, 2018
Operating lease costs	$	44,500	$	––
Short-term lease costs		51,240		73,351
Total lease costs	$	95,740	$	73,351

Lease costs were $43,780 and ~~2015, was $30,393~~$16,800 for the three months ended September 30, 2019 and ~~$3,078,~~2018, respectively, and were $95,740 and $53,557 for the nine months then ended, respectively.

NOTE 6. INTANGIBLE ASSETS

The following are the components of finite-lived intangible assets:


	September 30, 2016			December 31, 2015			September 30, 2019			December 31, 2018
Products and processes	$	12,500		$	12,500		$	12,500		$	12,500
Trademarks and patents		2,010,143			12,500
Customer list		250,000			250,000
Sub-total		2,022,643			275,000
Trademarks and patents / technology								150,700			150,700
Customer lists / relationships								30,000			30,000
Non-compete agreement								30,000			30,000
Marketing related								64,000			64,000
Software								510,300			510,300
Intangible assets, gross								797,500			797,500
Accumulated amortization		(201,028	)		(71,244	)		(308,930	)		(218,465	)
Intangible assets, net	$	2,073,972		$	203,756		$	488,570		$	579,035

~~On September 20, 2016, through the acquisition of PHM (Note 12), the Company acquired certain intellectual property, valued at $1,997,643, with a useful life of 18.5 years.~~

Amortization expense for the three months ended September 30, 2019 and 2018, was $30,155 and $29,821, respectively, and for the nine months ended September 30, ~~2016,~~2019 and ~~2015,~~2018, was ~~$127,427~~$90,465 and ~~$832,~~$90,465, respectively.

NOTE 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

	September 30, 2019		December 31, 2018
Accounts payable-vendors	$	1,014,668	$	830,590
Credit cards payable		42,552		42,552
Payroll taxes payable		80,922		78,608
Accrued interest		229,316		450,187
Accrued payroll and payroll taxes		540,908		402,053
Other liabilities		426,148		601,148
		2,334,514		2,405,138
Reserve-legal fees		85,000		250,000

Total accounts payable and accrued expenses	$	2,419,514	$	2,655,138

Payroll taxes payable includes $17,475 and $17,475 in penalties, and $6,516 and $4,202 in interest, related to unpaid payroll taxes as of September 30, 2019, and December 31, 2018, respectively.

Other liabilities consists of certain payroll tax liabilities in the amount of $426,148 and $601,148 owed as of September 30, 2019, and December 31, 2018, respectively, by the bankrupt entity, RoxSan Pharmacy, Inc., that were not discharged under California bankruptcy laws. The Company has retained a tax resolution specialist to aid the Company in resolving the liability with the taxing agencies on behalf of RoxSan.

During the year ended December 31, 2018, accounts payable and accrued expenses was reduced by $341,606, resulting from the extinguishment of debt consisting of accounts payable-vendors in the amount of $284,714 and accrued interest in the amount of $56,892.

In 2018, the Company established a reserve for future legal fees to be incurred in connection with pending legal actions. As of September 30, 2019, and December 31, 2018, respectively, the reserve balance was $85,000 and $250,000.

NOTE 8. NOTES AND LOANS PAYABLE

Notes and loans payable consists of the following:

September 30, 2016

December 31, 2015

Notes and loans payable, unsecured

Loans payable
$
11,900

$
11,900

Notes payable

84,075

84,075

Total notes and loans payable, unsecured

95,975

95,975

Convertible notes payable

144,000

144,000

Notes payable, secured, net of unamortized discount

Note payable-merchant

1,201,316

1,830,401

Note payable-bank

100,000

––

Note payable

20,500,000

20,500,000

Less: unamortized discount

(9,520,000
)

(13,345,000
)
Note payable, net of unamortized discount

10,980,000

7,155,000

Total notes payable, secured, net of unamortized discount

12,281,316

8,985,401

Total notes and loans payable
$
12,521,291

$
9,225,376

	September 30, 2019		December 31, 2018
Short-term:
Debentures, convertible	$	––	$	724,903
Notes payable		360,000		––
Notes payable, convertible , net of unamortized discount		680,176		296,000
Total short-term		1,040,176		1,020,903

Long-term:
Debentures, convertible, net of unamortized discount		––		184,870
Note payable, convertible		576,154		720,154
Note payable-bank		21,320		28,995
Total long-term		597,474		934,019

Total notes and loans payable	$	1,637,650	$	1,954,922

AsNon-related party convertible debt consists of ~~September 30, 2016, and December 31, 2015, non-related party loans and~~the following convertible promissory notes in the aggregate sum of $95,975 are owed by the Company. The loans, made in previous years, were for short-term overhead requirements, and are unsecured and non-interest bearing. The notes bear interest a rate of 8% to 10% per annum, are unsecured, and are payable upon demand. As of September 30, 2016, and December 31, 2015, respectively, no demand has been made. notes:

Holder	Principal		APR	Accrued Interest		Conversion Price	Term/Due

Short-term:
Lender Group A	$	20,000	20%	$	15,840	$0.10	05/2018
Lender Group B		569,176	12%		36,217	$0.10 to $.12	09/2019-04/2020
Investor Group A		91,000	10%		18,720	$0.10	09/2018
		680,176			70,777
Long-term:
Joseph M. Redmond		576,154	5%		141,096	$0.10	07/2017

Total convertible debt	$	1,256,330		$	211,873

During the nine months ended September 30, ~~2016, and~~2019, the ~~year ended December 31, 2015, respectively, interest~~Company issued 12% convertible promissory notes in the ~~amount~~aggregate principal sum of ~~$5,480 and $7,300~~$585,000 (“Lender Group B”) for working capital, of which $556,780 in proceeds was ~~expensed. As~~disbursed to the Company after an original issue discount of September 30, 2016, and December 31, 2015, respectively, a total of $42,292 and $36,812 in interest has been accrued, and is included as an accrued expense on the accompanying consolidated balance sheet.

~~Non-related party convertible~~$28,220. The notes ~~payable consists of the following:~~

Note Holder

Principal

APR

Accrued Interest

Conversion
Price

Term/Due

The Kasper Group, Ltd.

$
144,000

7%

$
47,887

$0.25

01/01/2015

~~As of September 30, 2016, and December 31, 2015, a non-related party convertible promissory note in the amount of $144,000 is owed by the Company. The unsecured note bears~~bear interest at a rate of 7%12% per annum, ~~was due by January 1, 2015,~~mature six totwelve months from payment of disbursed proceeds, and ~~contains~~contain a repayment provision to convert the debt into shares of the Company's common stock at conversion rates equal to the lower of 1) between $0.10 to $0.12 per share; or 2) between 65% to 70% of the 2nd lowest trading prices during the twenty (20) trading days preceding the conversion date. In addition, the Company issued warrants to purchase 2,600,000 shares of the Company’s common stock at an exercise price of $0.15 per share for a ~~rate~~period of ~~$0.25~~five (5) years.The notes were discounted for embedded conversion option of $9,370 and warrant fair value of $105,000, reclassified as derivative liabilities.

On July 5, 2019, in connection with cash proceeds received in June 2019, the Company issued three (3) Senior Secured Notes (the “Notes”) in the aggregate principal of $220,000, pursuant to certain Note and Purchase Agreements (the “Purchase Agreements”) of the same date. The Notes bears interest at 8% per ~~share.~~ annum, and mature 180 days from the issuance date (“Maturity Date”). As additional consideration for entering into the Purchase Agreements, 400,000 shares of the Company’s restricted common stock is being issued to each of the note holders, for an aggregate of 1,200,000 shares, valued at $190,200.

As of September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, ~~no demand for payment or conversion has been made.~~short-term non-related party debt in the amount $1,040,176 and $1,020,903 consists of $0 and $724,903 in convertible debentures; $360,000 and $0 in notes payable; and $680,176 and $296,000 in convertible notes payable. During the nine months ~~ended September 30, 2016,~~ and the year ended September 30, 2019, and December 31, ~~2015,~~2018, respectively, notes and debentures in the principal aggregate of $585,000 and $825,000 were issued; principal in the amount of $622,369 and $50,000, along with interest in the amount of ~~$7,567~~$41,519 and ~~$10,080~~$608, was repaid in cash; principal in the amount of $395,000 and $620,000, along with interest in the amount of $2,000 and $55,613, was converted to common stock; losses on extinguishment of debt of $220,469 and $105,320 were incurred; and debt accretion in the amount of $126,766 and $1,087,974, and interest in the amount of $164,447 and $270,142 was expensed. As of September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, a total of ~~$47,887~~$75,069 and ~~$40,320~~$185,741 in accrued interest ~~has been accrued,~~remains, and is included as an accrued expense on the accompanying consolidated balance sheet.

~~On August 13, 2015, the Company issued a secured promissory note~~As of September 30, 2019, and December 31, 2018, respectively, long-term non-related party debt in the amount of ~~$20.5 million~~$597,474 and $934,019 consists of $0 and $207,500 in connection with the acquisition of RoxSan Pharmacy, Inc. (Note 11). The note bears interest at a rate of 6% per annum, and matures in three (3) years, or August 13, 2018 ("Maturity"). Management has determined that the note issued does not fairly represent the fair market value for the related acquisition at the date of purchase. As a result, aconvertible debentures, less unamortized discount of ~~$15,300,000, representing the difference between the face value~~$0 and ~~the estimated fair market value~~$22,630; $576,154 and $720,154 in convertible notes payable, of ~~the note has been recorded.~~which $576,154 and $576,154 is related to pending litigation with a former executive (see Note 18), and subject to compromise; and $21,320 and $28,995 in notes payable to banks. During the nine months ~~ended September 30, 2016,~~ and the year ended ~~December 31, 2015, the Company expensed $3,825,000 and $1,955,000, respectively, in discount amortization. As of~~ September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, ~~$9,520,000~~debentures in the principal aggregate of $0 and ~~$13,345,000~~$225,000 were issued; principal in ~~unamortized discount remains, to be amortized over~~ the ~~next 26 months, to the note's maturity. During the nine months ended September 30, 2016,~~amount of $219,675 and ~~the year ended December 31, 2015,~~$9,245, along with interest in the amount of ~~$434,917~~$1,176 and ~~$101,702, respectively, has been~~$632 was repaid in cash; principal in the amount of $95,142 and $0 was converted to common stock; losses on extinguishment of debt of $168,159 and $0 were incurred; and debt accretion in the amount of $9,816 and $2,370, and interest in the amount of $74,174 and $739,383 was expensed. As of September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, a total of ~~$536,619~~$141,603 and ~~$101,702 has been~~$190,386 in accrued interest remains, and is included as an accrued expense on the accompanying consolidated balance ~~sheets.~~sheet.

~~On October 9, 2015, the Company, through its wholly owned subsidiary, RoxSan, entered into a Business Loan and Security Agreement (the "Loan") with American Express, FSB, in the principal sum~~The future maturities of $2,000,000. The Loan includes interest in the form of a flat fee of $240,000, or 12% per annum, to be amortized over twenty-four (24) months, to the Loan's maturity. Payments of principal and interestnotes payable are made through collection of merchant funds received by the Company for customer purchases paid with the American Express credit card. During the nine months ended September 30, 2016, and the year ended December 31, 2015, respectively, payments totaling $719,084 and $193,792 have been made, representing $629,084 and $169,599 in principal and $90,000 and $24,193 in interest. As of September 30, 2016, and December 31, 2015, respectively, principal of $1,201,316 and $1,830,401 and unamortized loan fee of $125,807 and $215,806 remains.summarized as follows:

Year	2020		2021		Total

Principal	$	576,154	$	21,320	$	$597,474

During the nine months ~~ended September 30, 2016,~~ and the year ended September 30, 2019, and December 31, ~~2015,~~2018, respectively, interest expense on non-related party notes and loans payable in the amount of ~~$447,964~~$238,601 and ~~$143,275 has been~~$1,009,525 was expensed. As atof September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, a total of ~~$626,798~~$216,672 and ~~$203,027~~$376,127 in interest has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets.

NOTE 8.9. RELATED PARTY TRANSACTIONS

Related party transactions consist of the following:

					September 30, 2019		December 31, 2018
	September 30, 2016		December 31, 2015
Related party payables
Related party payables:
Accrued compensation	$	98,450	$	120,800	$	1,000,643	$	869,859
Cash advances		105,000		12,810		473,793		134,861
Total related party payables		203,450		133,610		1,474,436		1,004,720

Convertible notes payable		1,107,254		1,107,254
Debentures, convertible						––		411,006
Notes payable, related party						759,446		––
Notes payable, convertible, related party						20,000		491,100

Total related party transactions	$	1,310,704	$	1,240,864	$	2,253,882	$	1,906,826

Related party convertible debt consists of the following convertible promissory notes:

Note Holder

Principal

APR

Accrued

Interest

Conversion

Price

Term/Due

John Ogden, Director

20,000

10%

986

$0.10

12/2019

As atof September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, related parties are due a total of ~~$1,310,704~~$2,253,882 and ~~$1,240,864,~~$1,906,826, consisting of ~~$98,450~~$1,000,643 and ~~$120,800~~$869,859 in accrued ~~compensation; $105,000~~compensation owed to officers; $473,793 and ~~$12,810~~$134,861 in accrued benefits and cash advances from officers and beneficial owners to the Company for operating expenses; $759,446 and ~~$1,107,254~~$0 in promissory notes; $0 and ~~$1,107,254~~$411,006 in convertible debentures; and $20,000 and $491,100 in convertible promissory notes.

On July 25, 2019, related party convertible ~~notes payable.~~

Note Holder

Principal

APR

Accrued Interest

Conversion
Price

Term/Due

Joseph M. Redmond, President (former)

$
776,154

5%

$
76,266

$0.10

07/31/2017
Huntington Chase, Beneficial Owner

331,100

7%

55,455

$0.10

12/31/2015
Total

$
1,107,254

$
131,721

~~The Company has issued convertible promissory notes~~$411,006, plus accrued interest of $42,778, were converted to ~~its principals~~Senior Secured Promissory Notes (the “Senior Notes”) in the aggregate ~~sum~~principal of ~~$1,107,254, representing cash loans and unpaid compensation.~~$759,446. The ~~notes~~Senior Notes bear interest at a rate of ~~between 5% and 7%~~8% per annum, ~~mature between and~~with payments of $126,152 plus interest accrued thereon due December 31, ~~2015~~2019; $300,000 due December 31, 2020; and ~~July~~the remaining principal and accrued interest due December 31, ~~2017,~~2021. In connection with the exchange, the Company issued the following in favor of the lender, Jorn Gorlach, a related party: 1,380,811 shares of the Company’s restricted Common Stock, valued at $131,315; warrants, valued at $92,150, to purchase 2,528,413 shares of the Company’s Common Stock for a period of five (5) years at an exercise price of $0.10461; and ~~contain~~an increase in principal of $305,662. As a ~~repayment provision to convert~~result, the ~~debt~~Company recognized a net loss on the exchange in the amount of $526,987, net of $2,140 in derivative liability remaining from the warrants issued with the debentures.

In September 2019, $491,100 in related party convertible promissory notes, along with $98,642 in accrued interest, were converted into 5,897,419 shares of the company’s restricted common stock ~~of the Company~~ at a ~~strike~~conversion price of ~~$0.10.~~ $0.10 per share.

During the nine months ~~ended September 30, 2016,~~ and the year ended September 30, 2019, and December 31, ~~2015,~~2018, respectively, $1,003,783 and $1,371,446 in related party compensation was accrued, $573,000 and $510,500 was paid, $300,000 and $0 was converted to common stock; and $0 and $450,000 was converted to preferred stock. In June 2019, $575,132 of related party debt was purchased by non-related-parties (the “Proceeds”). The Proceeds were collected on behalf of the related parties by the Company. Of the $396,500 paid to related parties during the current period, $159,500 was Proceeds. The remaining Proceeds of $415,632 were subsequently loaned to the Company by the related parties for operating expenses.

During the nine months and the year ended September 30, 2019, and December 31, 2018, respectively, $498,870 and $121,949 in benefits were accrued and cash advances were made to the Company by related parties for overhead requirements, of which $159,938 and $115,384 was paid/repaid to related parties.

During the nine months and the year ended September 30, 2019, and December 31, 2018, respectively; interest in the amount of ~~$46,531~~$80,003 and ~~$70,646~~$66,840 was expensed, of which ~~interest payments~~$0 and $798 was paid to the note holders in ~~the amount of $27,707~~cash; and $0 ~~were made~~and $71,839 was converted to ~~note holders.~~principal. As of September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, a total of ~~$131,721~~$12,643 and ~~$107,897~~$74,060 in accrued interest ~~has been accrued, and is included as an accrued expense on the accompanying consolidated balance sheet.~~

During the nine months ended September 30, 2016, and the year ended December 31, 2015, respectively, interest on related party notes payable in the amount of $46,531 and $70,646 was expensed. As at September 30, 2016, and December 31, 2015, respectively, a total of $131,721 and $107,897 in interest has been accrued,remains and is included as part of accrued expenses on the accompanying consolidated balance sheets.

In April 2019, the Company entered into an employment agreement with Mr. David Appell to serve as the Company’s Chief Operating Officer. The agreement commenced May 15, 2019, is for an initial term of two (2) years, and provides a base compensation of $250,000 year one, and $275,000 in year two, as well as various performance bonuses, and customary employee benefits. In addition, the agreement includes a grant to purchase 3,000,000 restricted common shares, valued at $201,300, for cash in the amount of $3,000, of which 25% vest immediately, and the remainder vest when certain earnings goals are met; as well as options granted to purchase 3,000,000 shares of the Company's Common Stock at an exercise price of $0.25 per share. The options, valued at $195,600 using the Black-Scholes method, are for a period of five (5) years, and vest annually over the term of the agreement, with an initial vesting of 25%. The assumptions used in valuing the options were: expected term 4.75 years, expected volatility 2.21, risk free interest rate 2.15%, and dividend yield 0%.

NOTE 9:10. COMMITMENTS AND CONTINGENCIES

On August 13, 2015, the Company issued a secured promissory note in the amount of $20,500,000 (the “Promissory Note”) in connection with the acquisition of RoxSan Pharmacy, Inc. (“RoxSan”). The Promissory Note bore interest at a rate of 6% per annum, and matured August 13, 2018 ("Maturity"). In September 2018, as part of the deconsolidation of RoxSan resulting from its Chapter 7 petition filed on May 14, 2018, management reevaluated the characteristics of the Promissory Note. Included in the evaluation were the following considerations: 1) the related asset is no longer a part of the parent financial statements due to a loss of financial control; 2) the Company is currently in litigation as a result of material breaches by the note holder; 3) the Company has claims against the note holder for losses and damages directly related to the Promissory Note and its underlying assets; 4) there is a high likelihood that no obligation exists. After careful consideration, management has determined that the current characteristics of the liability are contingent in nature, and the debt of $20,500,000 and related $2,278,281 in accrued interest was extinguished in 2018, resulting in a gain of $22,778,281.

On August 31, 2016, as part of the Company’s acquisition of 100% of the issued and outstanding shares of Qolpom®’s common stock and its assets, inventory and intellectual property, the agreement provides for, among other things, the seller to receive up to $2,000,000 through a percentage of revenue generated from RPM business segment (“Revenue Share”), as well as a royalty of 3% (“Royalties”) of certain revenues generated from the Qolpom® intellectual property, as defined in the agreement. As of September 30, 2019, and December 31, 2018, respectively, the present value of future Revenue Share was $450,000 and $430,000; and the present value of future Royalties was $309,000 and $310,000; and are included as part of long-term liabilities on the accompanying consolidated balance sheets.

On April 26, 2017, as part of the Company’s acquisition of certain intellectual property (“Intellectual Property”) from ProEventa, Inc (“ProEventa”), the agreement provides for, among other things, ProEventa to receive a revenue sharing cash earn-out of up to $3,000,000 to be derived from certain net revenue generated by the Company; as well as Royalties of 3% of certain revenues generated from the Intellectual Property, ending at such time as the Company has paid ProEventa $25,000,000, as defined in the agreement. As of September 30, 2019, and December 31, 2018, respectively, the present value of future Revenue Share was $1,189,000 and $1,270,000; the present value of future Royalties was $845,000 and $690,000, and $7,258 and $0 in Royalties payable on earned revenues was accrued.

NOTE 11. CONVERTIBLE PREFERRED STOCK

The total number of authorized shares of preferred stock that may be issued by the Company is 10,000,000 with a par value of $0.001 per share.

~~All preferred~~On March 31, 2019, in connection with the settlement agreement with Mr. Dave Engert, 36,339 shares ~~are convertible into~~of the Company’s Series A preferred stock held by Mr. Engert, with a book value of $100,000, were returned to treasury. As a result, preferred paid in capital was reduced by $99,964. On April 1, 2019, dividends owed on the Series A preferred stock were paid in kind with the issuance and immediate return to treasury of 21,121 shares of Series A preferred stock, resulting in a total of 57,500 shares of Series A preferred stock held in treasury (the “Treasury Shares”).

On May 15, 2019, the 57,500 Treasury Shares were reissued for cash in the amount of $69,000. Subsequently, the 57,500 shares of Series A preferred stock were converted into 1,150,000 shares of common stock at a ~~rate~~ratio of 20 shares of common stock for each share of preferred ~~share held, and were issued with 100% warrant coverage (Note 11). The number of shares of common~~ stock ~~underlying the warrants and the exercise price are subject to adjustment upon certain events.~~held.

As of September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, the Company had ~~823,691~~977,352 and 1,013,691 shares of preferred stock issued and outstanding.

NOTE ~~10.~~12. COMMON STOCK

~~The total number of~~Effective December 24, 2018, pursuant to a majority shareholder consent, the Company increased its authorized ~~shares of~~ common stock ~~that may be issued by the Company is~~from 250,000,000 shares to 500,000,000 shares, with a par value of $0.001 per share. On January 28, 2019, the amended articles of incorporation were filed with the state of Nevada.

~~On July 28, 2016, 20,000,000~~During the nine months ended September 30, 2019, 1,150,000 shares of the ~~Company's~~Company’s restricted common stock ~~held by three (3) shareholders~~ were ~~cancelled and returned to treasury.~~issued in connection with the conversion of 57,500 shares of Series A preferred stock, valued at $69,000. As a result, ~~$20,000~~$67,850 was recorded ~~as additional~~to paid in capital.

During the nine months ended September 30, 2019, 21,987,535 shares of the Company’s restricted common stock were issued in connection with the conversion of non-related party debt in the amount of $1,713,740. As a result, $1,691,753 was recorded to paid in capital.

~~On July~~During the nine months ended September 30, ~~2016,~~2019, 5,897,419 shares of the Company’srestricted common stock were issued in connection with ~~certain consulting agreements,~~ the ~~Company issued 250,000~~conversion of related party debt in the amount of $589,742. As a result, $583,845 was recorded to paid in capital.

During the nine months ended September 30, 2019, 5,679,167 shares of ~~its~~the Company’s restricted common stock ~~for $0.001 per share. The~~were issued in connection with stock awards to non-related parties, valued at $588,548, including 125,000 shares valued at ~~$7,500,~~$8,388 for cash in the amount of $125. As a result, $582,868 was recorded to paid in capital.

During the nine months ended September 30, 2019, 3,000,000 shares of the Company’s restricted common stock were issued in connection with a stock award to David Appell, the company’s Chief Operating Officer, valued at $201,300 for cash in the amount of $3,000, of which 25% vests immediately, and the remainder vest when certain earnings goals are met. As a result, $198,300 was deferred, to be amortized over the vesting terms, and $198,300 was recorded to paid in capital.

During the nine months ended September 30, 2019, 13,875,000 shares of the Company’s restricted common stock were issued in connection with a Simple Agreement Future Equity (“SAFE”) offering, including 4,500,000 issued to related parties, for cash in the amount of $735,000, services valued at $15,000, and $375,000 in related party accrued compensation. As a result, $1,111,124 was recorded to paid in capital.

During the nine months ended September 30, 2019, 1,875,000 shares of the Company’s restricted common stock were issued, valued at $178,700, in connection with the retirement of 4,550,000 warrants. As a result, $176,825 was recorded to paid in capital.

During the nine months ended September 30, 2019, 1,400,000 shares of the Company’s restricted common stock were issued in connection with services valued at $121,000. As a result, $119,600 was recorded to paid in capital.

During the nine months ended September 30, 2019, 2,810,811 shares of the Company’s common stock were issued in connection with debt and debt service valued at $344,514. As a result, $341,704 was recorded to paid in capital.

During the nine months ended September 30, 2019, in connection with an equity funding, 12,000,000 shares of the Company’s restricted common stock were issued for cash in the amount of ~~$250.~~$1,000,000, of which $500,000 was recorded to subscription receivable. As a result, ~~$6,500~~$988,000 was recorded to ~~additional~~ paid in capital.

OnDuring the nine months ended September ~~23, 2016,~~30, 2019, in connection with ~~the acquisition of PHM (Note 12), the Company issued 5,000,000~~an investment in securities, 6,666,667 shares of ~~its~~the Company’s restricted common stock ~~for $0.001 per share. The shares, valued at $225,000,~~ were issued for ~~cash in the amount of $5,000.~~$0.15 per share, valued at $1,000,000. As a result, ~~$220,000~~$993,333 was recorded to ~~additional~~ paid in capital.

OnDuring the nine months and the year ended September ~~25, 2016, in connection with~~30, 2019, and December 31, 2018, respectively, a ~~certain consulting agreement (Note 13),~~total of 76,341,599 and 21,358,611 shares of the Company’s common stock were issued. As of September 30, 2019 and December 31, 2018, respectively, the Company had 234,454,740 and 158,113,141 common shares issued ~~250,000 shares of its~~and outstanding.

Restricted Stock Awards

During the nine months and the year ended September 30, 2019, and December 31, 2018, respectively, 3,730,000 and 3,660,000 restricted ~~common~~ stock ~~for $0.001 per share. The shares,~~awards were granted, valued at ~~$16,000, were issued~~$254,350 and $434,000; and 1,654,270 and 6,827,368 restricted stock awards vested, for ~~cash~~which $171,555 and $1,095,193 in deferred stock compensation was expensed. As of September 30, 2019 and December 31, 2018, respectively, there remains 7,963,925 and 5,888,195 shares to be vested, and $1,231,604 and $1,148,809 in deferred stock compensation to be expensed over the ~~amount of $250. As a result, $15,750 was recorded to additional paid in capital.~~next eighteen (18) months.

Restricted Stock Awards Activity	Number of		Deferred
	Shares		Compensation
Outstanding at December 31, 2017	9,055,563		$	1,810,002
Granted	3,660,000			434,000
Vested	(6,827,368	)		(1,095,193	)
Outstanding at December 31, 2018	5,888,195			1,148,809
Granted	3,730,000			254,350
Vested	(4,095,932	)		(665,179	)
Forfeited	(675,000	)		(67,537	)
Outstanding at September 30, 2019	5,522,263		$	670,443

NOTE 13. WARRANTS AND OPTIONS

As of September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, the Company had ~~106,066,774~~49,435,913 and ~~120,566,774 common shares issued and outstanding.~~

~~NOTE 11. WARRANTS AND OPTIONS~~

~~As of September 30, 2016, and December 31, 2015, respectively, the Company had 15,262,491 and 15,989,276~~21,232,500 warrants, and ~~11,135,000~~26,685,000 and ~~9,200,000~~18,060,000 options, issued and outstanding.

Warrants Outstanding

Number of

Remaining

Exercise Price

Weighted

Common

Contractual Life

times Number

Average

Exercise Price

Shares

(in years)

of Shares

Exercise Price

$0.27518

14,535,706

0.69

$
4,000,000

$0.27518

$0.41278

726,785

0.98

300,000

$0.41278

15,262,491

$
4,300,000

$0.41278

Warrant Activity

Number of

Weighted Average

Shares

Exercise Price

Outstanding at December 31, 2015
15,989.276

$0.41278

Issued
––

––

Exercised
––

––

Expired / Cancelled
(484,125
)
$0.41278

Outstanding at September 30, 2016
15,262,491

$0.41278

~~On January 12, 2016,~~During the ~~Company~~nine months and the year ended September 30, 2019 and December 31, 2018, respectively, 33,353,413 and 14,077,500 warrants were granted, 4,850,000 and 0 were retired, and 300,000 and 100,000 expired. The warrants carry an exercise price of between $0.001 to $0.60 per share, expire between 2020 to 2024, and were valued at $335,310 and $851,610, using the Black-Scholes method. The assumptions used in valuing the warrants were: expected term between 2 to 5 years; expected volatility 40% to 45%; risk free interest rate between 1.16% to 2.91%; and a ~~key employee 60,000~~dividend yield of 0%. A total of $0 and $113,210 in deferred stock warrant compensation was recorded, and $144.610 and $73,370 was expensed during the nine months and the year ended September 30, 2019, and December 31, 2018, respectively. There remains $92,470 and $98,920 in deferred compensation as of September 30, 2019, and December 31, 2018, respectively, to be expensed over the next twelve (12) months.

Warrants Outstanding
	Number of	Remaining	Exercise Price		Weighted
	Common	Contractual Life	Times Number		Average
Exercise Price	Shares	(in years)	Of Shares		Exercise Price

$0.001	300,000	3.75	$	300	$0.17
$0.01	75,000	1.25		750	$0.18
$0.10	2,528,413	5.00		252,841	$0.21
$0.10	62,500	3.50		6,250	$0.29
$0.10	250,000	1.75		25,000	$0.19
$0.10	4,877,500	1.50		487,750	$0.21
$0.10	250,000	1.00		25,000	$0.32
$0.15	600,000	4.50		90,000	$0.19
$0.15	1,000,000	1.25		150,000	$0.28
$0.17	62,500	3.50		10,625	$0.29
$0.18	62,500	3.50		11,250	$0.29
$0.20	2,600,000	4.50		520,000	$0.19
$0.21	62,500	3.50		13,125	$0.29
$0.21	100,000	1.00		21,000	$0.34
$0.25	5,625,000	4.50		1,406,250	$0.19
$0.25	4,500,000	3.00		1,125,000	$0.22
$0.25	250,000	2.75		62,500	$0.22
$0.25	3,250,000	2.00		812,500	$0.18
$0.25	3,750,000	1.75		937,500	$0.19
$0.25	13,500,000	1.50		3,375,000	$0.21
$0.25	475,000	1.25		118,750	$0.27
$0.25	3,255,000	1.00		813,750	$0.32
$0.25	1,500,000	0.75		375,000	$0.39
$0.35	250,000	1.00		87,500	$0.32
$0.60	250,000	1.00		150,000	$0.34
	49,435,913		$	10,877,641	$0.22

				Weighted
Warrant Activity	Number of			Average
	Shares			Exercise Price
Outstanding at December 31, 2018		21,232,500		$0.18
Issued		33,353,413		$0.20
Exercised		––		––
Retired / Cancelled		(4,850,000	)	$0.22
Expired / Forfeited		(300,000	)	$0.18
Outstanding at September 30, 2019		49,435,913		$0.22

During the nine months and the year ended September 30, 2019, and December 31, 2018, respectively, 10,000,000 and 6,000,000 stock options ~~to purchase common shares at $0.05~~were granted, which vest periodically over a two (2) year period, are exercisable for a period of between 3 to 5 ~~years. The options vest quarterly over a three (3) year period,~~years at an exercise price of between $0.05 to $0.60 per share, and were valued at ~~$1,610,~~$900,150 and $833,700 using the Black-Scholes method. The assumptions used in valuing the options were: expected term ~~5.75 years,~~between 3.00 to 4.75 years; expected volatility ~~1.42,~~between 1.78 to 2.29; risk free interest rate ~~1.55%,~~of between 1.69% to 2.78%; and a dividend yield of 0%.

On July 30, 2016, in connection with certain consulting agreements, the Company granted the consultants 1,000,000 options to purchase common shares for a period of 5 years, of which 250,000 each have a strike price of $0.10, $0.25, $0.35 and $0.60. The options vest quarterly over a one (1) year period, and were valued at $17,260, using the Black-Scholes method. The assumptions used in valuing the options were: expected term 3.75 years, expected volatility 1.52, risk free interest rate 1.13%, and dividend yield 0%.

Options Outstanding
		Remaining	Exercise Price		Weighted
	Number of	Contractual Life	times Number		Average
Exercise Price	Shares	(in years)	of Shares		Exercise Price

$0.05	90,000	3.00	$	4,500	$0.14
$0.05	1,140,000	2.75		57,000	$0.09
$0.05	100,000	2.25		5,000	$0.08
$0.05	60,000	1.50		3,000	$0.06
$0.05	170,000	1.25		8,500	$0.12
$0.09	5,500,000	3.00		467,500	$0.20
$0.10	500,000	1.25		50,000	$0.14
$0.15	1,000,000	1.25		150,000	$0.14
$0.25	3,125,000	4.75		781,250	$0.22
$0.25	1,000,000	4.50		250,000	$0.20
$0.25	5,000,000	3.75		1,250,000	$0.16
$0.25	7,000,000	3.00		1,750,000	$0.16
$0.25	1,000,000	1.25		250,000	$0.15
$0.25	1,000,000	0.75		250,000	$0.10
	26,685,000		$	5,276,750	$0.20

				Weighted
Options Activity	Number of			Average
	Shares			Exercise Price
Outstanding at December 31, 2018		18,060,000		$0.23
Issued		10,000,000		$0.22
Exercised		––		––
Expired / Forfeited		(1,375,000	)	––
Outstanding at September 30, 2019		26,685,000		$0.20

On August 30, 2016, the Company granted a key employee 100,000 options to purchase common shares at $0.05 for a period of 5 years. The options vest quarterly over a three (3) year period, and were valued at $5,970, using the Black-Scholes method. The assumptions used in valuing the options were: expected term 5.75 years, expected volatility 1.69, risk free interest rate 1.18%, and dividend yield 0%.

On September 20, 2016, in connection with a certain consulting agreement, the Company granted the consultant 1,000,000 options to purchase common shares at $0.05 for a period of 2 years. The options vest quarterly over a two (2) year period, and were valued at $40,200, using the Black-Scholes method. The assumptions used in valuing the options were: expected term 3.25 years, expected volatility 1.81, risk free interest rate 1.19%, and dividend yield 0%.

Options Outstanding

Remaining

Exercise Price

Weighted

Number of

Contractual Life

times Number

Average

Exercise Price

Shares

(in years)

of Shares

Exercise Price

$0.60

250,000

3.00

$
150,000

$0.08

$0.35

250,000

3.00

87,500

$0.08

$0.25

250,000

3.00

62,500

$0.08

$0.10

1,375,000

4.25

137,500

$0.10

$0.10

250,000

3.00

25,000

$0.08

$0.05

60,000

4.50

3,000

$0.05

$0.05

7,600,000

4.00

380,000

$0.05

$0.05

100,000

3.00

5,000

$0.08

$0.05

1,000,000

2.00

50,000

$0.08

11,135,000

$
900,500

$0.07

Options Activity

Number of

Weighted Average

Shares

Exercise Price

Outstanding at December 31, 2015
9,200,000

$0.05

Issued
2,160,000

$0.05

Exercised
––

––

Expired / Cancelled
(225,000
)
$0.25

Outstanding at September 30, 2016
11,135,000

$0.07

During the nine months ~~ended September 30, 2016,~~ and the year ended September 30, 2019, and December 31, ~~2015,~~2018, respectively, a10,000,000 and 6,000,000 options were issued, 0 and 1,973,189 options were exercised,1,000,000 and 1,000,000 options expired, and 375,000 and 5,641,811 options were forfeited. A total of ~~$65,040~~$875,700 and ~~$379,910~~$649,327 in deferred ~~compensation was recorded, and $112,437 and $58,024 in~~ stock option compensation was ~~expensed.~~recorded, net of forfeitures, and $526,650 and $572,870 was expensed during the nine months and the year ended September 30, 2019, and December 31, 2018, respectively. There remains ~~$274,489~~$1,744,518 and ~~$321,886~~$1,395,466 in deferred compensation as of September 30, ~~2016,~~2019, and December 31, ~~2015,~~2018, respectively, to be expensed over the next 2415 months.

~~NOTE 12: BUSINESS ACQUISITIONS~~

~~RoxSan Pharmacy, Inc.~~

On August 13, 2015, the Company purchased 100% of the issued and outstanding shares of RoxSan Pharmacy, Inc. common stock and its assets and inventory in exchange for a secured promissory note in the principal sum of $20.5 million (the "Acquisition Agreement"). As part of the Acquisition Agreement, all existing cash and trade receivables, and all existing debt as of August 12, 2015, remained the property/obligation of the seller.

The negotiated purchase price was based upon, among other things, the guarantee of certain revenues being collectible and contracts being in place after closing. It was discovered after closing that, among other things, the revenues were not collectible, and the contracts were not in place. The improper disclosures by the seller during negotiations significantly affected the purchase price and related note payable, and management has determined that the purchase price and related promissory note do not fairly represent the fair market value at the date of purchase. As a result, the company has discounted the promissory note to its estimated fair market value of $5.2 million (Note 7).

~~The following represent the fair values of the assets acquired by the Company on August 13, 2015:~~

Inventory
$
913,835

Prepaid insurance

3,108

Property and equipment

105,368

Identifiable intangibles

250,000

Goodwill

3,887,818

Security deposits

22,000

Fair market value of assets acquired
$
5,200,000

~~The fair market value established at August 13, 2015 does not include the effects of any liabilities the seller omitted or caused the Company to incur as a result of the seller and its associates.~~

The goodwill represents future economic benefits expected to arise from the Company’s expanded presence in the specialty pharmaceuticals market, the assembled workforce acquired, and the expected synergies from combining operations with RoxSan. The goodwill is nondeductible for income tax purposes.

RoxSan’s results of operations are included in the Company’s statements of operations beginning on August 13, 2015 (Note 16). During the year ended December 31, 2015, acquisition costs of $110,000 were expensed and incurred within general and administrative expenses.

~~Parallax Health Management, Inc. (“PHM”) (formerly QOLPOM, Inc.)~~

~~5,000,000 shares of the Company’s common stock at $0.001 per share; and~~

~~10% of revenues generated from the RCS business segment, up to $1,000,000; and 7% thereafter, up to $2,000,000; and~~

~~3% of revenues generated from the sale of QOLPOM hardware and monitoring service fees.~~

~~The following represent the fair values of the assets acquired and liabilities assumed by the Company on the Closing Date of September 20, 2016:~~

Assets:

Intellectual property
$
1,997,643

Loans receivable

87,008

Total assets

2,084,651

Liabilities:

Accounts payable

7,068

License fee payable

2,000,000

Total liabilities

2,007,068

Goodwill

142,417

Fair market value of assets acquired
$
220,000

The goodwill represents future economic benefits expected to arise from the Company’s expanded presence in the remote healthcare monitoring market, the assembled workforce acquired, and the expected synergies from combining operations with PHM. The goodwill is nondeductible for income tax purposes.

PHM’s results of operations are included in the Company’s statements of operations beginning on September 20, 2016 (Note 16). During the year ended December 31, 2016, acquisition costs of $10,000 were expensed and incurred within general and administrative expenses.

~~NOTE 13. COMMITMENTS AND CONTINGENCIES~~

On August 31, 2016, the Company entered into an agreement with QOLPOM, Inc., an Arizona corporation (“QOLPOM”) and its shareholders (the “Seller”) to purchase 100% of the issued and outstanding Shares of QOLPOM’s common stock and its assets, inventory and intellectual property in exchange for, among other things, 5,000,000 shares of the Company’s restricted common stock, and options to purchase 2,500,000 shares at an exercise price of $0.05 (Note 12). In addition, the agreement provides for, among other thing the Seller to receive up to $2,000,000 through a percentage of revenue generated from the RCS business segment, as well as a 3% royalty on certain revenues generated from the intellectual property, as defined in the agreement.

On September 25, 2016, pursuant to a resolution of the board of directors, the Company entered into an executive agreement for Dr. Robert Burns Arnot to join the Company as its Chief Medical Officer, for an initial term of three (3) years. The executive agreement includes compensation in the amount of $10,000 per month, to be deferred until certain funding goals are met. In addition, Dr. Arnot was granted the right to purchase 250,000 shares of the Company’s restricted common stock at $0.001 per share, and options to purchase 1,000,000 shares of common stock at a strike price of $0.05 per share, of which 250,000 vest immediately, and the remaining vest quarterly over a two (2) year period. Concurrently, the Company entered into a revenue sharing agreement for a term of three (3) years, that provides for Dr. Arnot to receive 10% of Adjusted Gross Revenue (AGR) from certain sales generated by the Company up to $125 million in revenues for any given year, and 5% of AGR thereafter, as defined in the agreement, subject to certain performance criteria.

NOTE 14. ~~LEASES~~INCOME TAXES

~~The Company leases office space~~A reconciliation of the expected statutory federal and commercial facilities in Beverly Hills, California. The lease agreement for the office space renews annually at a base rent of $92,880. The commercial facilities are leased under agreements with original terms of twelve (12) years, with one (1) renewal option of twelve (12) years, and contain base monthly rent for premises plus a proportionate share of common area maintenance cost (CAM). The company also sub-leases office space for its administrative offices in Santa Monica, California, for $5,600 per month, on a month-to-month basis.

~~The future minimum rental payments required under the lease agreements are summarized as follows:~~

Year

Base

CAM

Total
2016

$
153,262

$
14,604

$
167,866
2017

391,556

58,417

449,973
2018

400,037

58,417

458,455
2019

330,525

42,298

372,822

$
1,275,379

$
173,737

$
1,449,116

~~Rent expense for the nine months ended September 30, 2016,~~state taxes and the ~~year ended December 31, 2015, was $325,747 and $155,713, respectively, including $43,813 and $22,456, respectively, of common area maintenance cost.~~

~~NOTE 15. INCOME TAXES~~

~~The components of the cumulative net deferred~~total income tax ~~asset~~expense (benefit) at September 30, ~~2016,~~2019, and December 31, ~~2015, the statutory tax rate, the effective tax rate and the amount of the valuation allowance are indicated below:~~2018, was as follows:

September 30, 2016

December 31, 2015

Income (loss) before taxes
$
(6,126,288
)
$
(3,719,898
)
Statutory rate

34%

34%

Computed expected tax payable (recovery)
$
(2,082,900
)
$
(1,264,800
)
Non-deductible expenses

11,200

4,500

Change in valuation allowance

2,071,700

1,260,300

Reported income taxes
$
––

$
––

	September 30, 2019			December 31, 2018

Income (loss) before taxes	$	(6,458,278	)	$	15,608,209
Statutory rate (Fed & State(s))		30%			30%

Computed expected tax payable (recovery)		(1,797,800	)		4,781,700

Effect of release of net operating loss carryforwards		(927,100	)		(2,417,700	)

Tax effect of non-deductible expenses:
Gain on extinguishment of debt-principal		––			(6,124,000	)
Stock compensation/amortization of stock options		767,700			1,048,500
Discount amortization		5,600			837,000
Other		1,700			1,500
Total tax effect of non-deductible expenses		775,000			(4,237,000	)

Change in valuation allowance		1,949,900			(1,873,000	)

Income tax expense	$	––		$	––

Reported income taxes:
Federal	$	––		$	––
State		––			––
Total	$	––		$	––

The significant components of deferred income tax assets and liabilities at September 30, ~~2016,~~2019, and December 31, ~~2015~~2018, are as follows:


	September 30, 2016			December 31, 2015			September 30, 2019			December 31, 2018

Net operating loss carried forward	$	4,349,000		$	2,227,300		$	1,930,500		$	––

Bad debt allowance								––			––
Officers’ accrued compensation								280,000			243,400
Accrued related party interest								3,500			20,700
Valuation allowance		(4,349,000	)		(2,227,300	)		(2,214,000	)		(264,100	)

Net deferred income tax asset	$	––		$	––		$	––		$	––

During the year ended December 31, 2018, the company realized extinguishment of debt principal in the amount of $20,880,688. Per Internal Revenue Code (“IRC”) Section 108(a) (1) (A) the extinguishment of debt principal is excluded from taxable income for the Company. However, any available tax attributes must be released up and to the amount of the extinguishment. Therefore, net operating loss carryforwards were released for the amount of income excluded from taxable income. The remaining net operating losses available to use toward future taxable income are as follows:

Tax Year	Net Operating Loss		Expires

2016	$	442,900	2036
2017		2,115,400	2037
2018		548,900	No Expiration
2019 to date		3,791,500	No Expiration

Total	$	6,898,700

As at September 30, ~~2016, and December 31, 2015, respectively,~~2019, the Company had approximately ~~$12,791,000 and $6,698,000~~$6,898,700 of federal net operating losses, of which ~~expire commencing~~$4,340,400 have no expiration date. The Company is open to examinations for the tax year 2011 through the current tax year.

NOTE 15. DISCONTINUED OPERATIONS

In December 2017, the Company discontinued all operations related to the Retail Pharmacy Segment (RPS) involving the Company’s wholly-owned subsidiary, RoxSan Pharmacy, Inc. (“RoxSan”). On May 14, 2018, pursuant to a unanimous resolution of the Boards of Directors of RoxSan and Parallax Health Sciences, Inc., RoxSan filed a Chapter 7 petition in the ~~year 2026.~~United States Bankruptcy Court for the Central District of California. Mr. Timothy Yoo was appointed trustee on May 15, 2018. In connection with the filing, RoxSan sought to discharge approximately $5 million of liabilities owed to various parties, and intercompany loans in excess of $1 million owed to the Company. The Chapter 7 bankruptcy proceeding by was fully discharged and the case was closed on March 13, 2019.

Due to, among other things, the reduction in RoxSan’s cash flows during 2016 and 2017, RoxSan became delinquent in its payroll tax depository obligations, resulting in a liability owed to federal and state taxing agencies in the aggregate of $1,148,811, which includes $601,148 in taxes withheld from employees (“Trust Fund Taxes”), employer taxes of $183,172, and penalties and interest of $364,491 through December 31, 2018. The liability was included as part of the Chapter 7 bankruptcy petition, and certain portions of the liability may be discharged. However, in accordance with California bankruptcy laws, federal and state Trust Fund Taxes are not dischargeable. During the nine months ended September 30, 2019, the company has made payments on behalf of RoxSan to the taxing agencies in the amount of $175,000. As of September 30, 2019, $426,148 in Trust Fund Taxes remains outstanding. The Company has retained a tax resolution specialist and is in communications with the taxing agencies in order to resolve RoxSan’s liability (Note 7).

As a result of the loss of financial control of RoxSan, the Company derecognized the subsidiary effective May 14, 2018. The derecognition resulted in a gain of $4,478,268. The Company also extinguished $22,778,281 in debt and accrued interest related to the acquisition of RoxSan.

The results of the discontinued operations of RoxSan Pharmacy, Inc. for the three and nine months ending September 30, 2018, are summarized as follows:

	September 30, 2018
	Three months ended			Nine months ended

Revenue	$	––		$	––
Cost of sales		––			––
Gross profit		––			––
Sales, marketing and pharmacy expenses		(24,260	)		170,630
General and administrative expenses		(79,006	)		586,993
Operating income (loss)		103,266			(757,623	)
Loss on disposal of assets		––			(10,000	)
Interest expense		(9,493	)		(56,775	)
Net income (loss) from discontinued operations	$	93,773		$	(824,398	)

NOTE 16. SEGMENT REPORTING

The Company has the following ~~three~~ business segments: ~~Retail Pharmacy Services,~~ Remote Care ~~Systems~~Services (RCS), Behavioral Health Services (BHS), and ~~Corporate.~~Diagnostics/Corporate (DCS). See Note 1 and 2 for a description of each segment and related significant accounting policies.

The following table is a reconciliation of the Company’s business segments to the consolidated financial statements:

	Remote Care Segment			Behavioral Health Segment			Diagnostics/ Corporate Segment			Discontinued Operations		Consolidated Totals

September 30, 2019
Revenue	$	1,395		$	76,350		$	––		$	––	$	77,745
Gross profit (loss)		75			64,800			––			––		64,875
Operating loss		(204,145	)		(97,700	)		(4,836,369	)		––		(5,138,214	)
Depreciation and amortization		6,897			82,320			1,468			––		90,685
Interest expense		2,315			––			455,004			––		457,319
Gain on fair value adjustments		––			––			105,141			––		105,141
Loss on extinguishment of debt		––			––			(915,615	)		––		(915,615	)
Loss on settlement		––			––			(33,272	)		––		(33,272	)
Discount amortization		19,000			––			––			––		19,000
Total assets		906,466			357,247			1,109,592			––		2,373,305
Goodwill		785,060			––			––			––		785,060
Additions to property and equipment		––			––			2,628			––		2,628


September 30, 2018
Revenue	9,399		1,350		––		––		10,749
Gross profit (loss)	(6,108	)	1,350		––		––		(4,758	)
Operating loss	(277,261	)	(144,218	)	(4,835,777	)	––		(5,257,256	)
Depreciation and amortization	6,897		82,320		1,248		––		90,465
Interest expense	2,206		––		1,739,520		––		1,741,726
Gain on disposal of subsidiary	––		––		5,079,416		––		5,079,416
Gain on extinguishment of debt	––		––		22,931,148		––		22,931,148
Loss on fair value adjustments	––		––		(156,300	)	––		(156,300	)
Discount amortization	(370,000	)	––		3,145,000		––		2,775,000
Discontinued operations	––		––		––		(824,398	)	(824,398	)
Total assets	915,652		467,007		11,906		––		1,394,565
Goodwill	785,060		––		––		––		785,060
Additions to property and equipment	––		––		––		––		––

Pharmacy
Segment⁽¹⁾

Remote Care
Segment(2)

Corporate
Segment

Consolidated
Totals

September 30, 2016(2)

Revenue
$
19,808,910

$
––

$
––

$
19,808,910

Gross profit

2,894,092

––

––

2,894,092

Operating income (loss)

(743,437
)

(23,865
)

(894,216
)

(1,661,518
)
Depreciation and amortization

4,152,022

1,179

4,619

157,820

Discount amortization

––

––

3,825,000

3,825,000

Interest expense

145,481

––

494,494

639,975

Total assets

6,434,763

2,203,203

19,496

8,657,463

Goodwill

3,887,818

142,417

––

4,030,235

Additions to property and equipment

91,073

––

––

91,073

September 30, 2015(1)

Revenue

4,717,206

––

––

––

Gross profit

1,059,377

––

––

––

Operating income (loss)

216,288

––

(439,875
)

(223,587
)
Depreciation and amortization

6,171

––

5,865

12,036

Discount amortization

––

––

256,676

256,676

Interest expense

––

––

229,045

229,045

Total assets

8,104,577

––

22,536

8,127,113

Goodwill

3,887,818

––

––

3,887,818

Additions to property and equipment

––

––

––

––

(1)
Pharmacy Segment commenced August 13, 2015

(2)
Remote Care Segment commenced September 20, 2016

NOTE 17. ~~SUBSEQUENT EVENTS~~LEGAL MATTERS

The Company ~~has evaluated the events and transactions for recognition or disclosure subsequent to September 30, 2016, and has determined that there have been~~knows of no ~~events that would require disclosure, except for the following:~~

~~On December 2, 2016, the Company issued 1,000,000 shares of its restricted common stock~~material developments to its ~~attorneys as partial payment for services rendered. The shares, valued at $190,000, were issued for cash in the amount~~legal matters other than those disclosed below:

Dispute with Former Owner of ~~$1,000. As a result, $189,000 was recorded to paid in capital.~~RoxSan

On December 2, 2016, in connection with a certain subscription agreement, the Company issued 10,000 shares of its Series B Preferred Stock at $5.00 per share, for cash in the amount of $50,000. Each Preferred share is convertible into twenty (20) common shares at a price of $0.25 per share, for a total of 200,000 common shares, if converted. The subscription includes 50% warrant coverage for a period of two (2) years, to purchase 100,000 shares of the Company's common stock at a price of $0.75 per share. Dividends are payable semi-annually at a rate of 10% per annum, to be paid in cash or in kind, at the option of the Company.

On December 13, 2016, the Company issued a convertible promissory note to a related party for cash proceeds in the amount of $250,000. The note bears interest at a rate of 12.5% per annum, matures June 13, 2017, and contains a repayment provision to convert the debt into the Company’s common stock at a strike price based upon a thirty (30) day average market price on the date of conversion.

On January 23, 2017, in connection with a certain subscription agreement, the Company issued 30,000 shares of its Series B Preferred Stock at $5.00 per share to a related party, for cash in the amount of $150,000. Each Preferred share is convertible into twenty (20) common shares at a price of $0.25 per share, for a total of 600,000 common shares, if converted. The subscription includes 50% warrant coverage for a period of two (2) years, to purchase 300,000 shares of the Company's common stock at a price of $0.75 per share. Dividends are payable semi-annually at a rate of 10% per annum, to be paid in cash or in kind, at the option of the Company.

On March 16, 2017, in connection with a certain related party convertible debt in the amount of $250,000 and accrued interest of $7,953, the Company issued 1,228,346 shares of its restricted common stock at a conversion rate of $0.21 per share. As a result, $256,724 was recorded to paid in capital.

~~On March 22, 2017, the Company formed a wholly owned subsidiary, Parallax Behavioral Health, Inc. (“PBH”), a Delaware corporation.~~

On May 1, 2017, pursuant to a resolution of the board of directors, the Company and its wholly-owned subsidiary, Parallax Behavioral Health, Inc., completed the acquisition of 100% of certain intellectual property from ProEventa Inc., a Virginia Corporation (“ProEventa”), in accordance with the Intellectual Property Purchase Agreement between the Company, PBH and ProEventa (the “ProEventa Agreement”). ProEventa has an expertise in the development of behavioral health technologies, and is the wholly owned subsidiary of Grafton Integrated Health Network, Inc., a non-profit Virginia corporation (“Grafton”), Pursuant to the ProEventa Agreement, in exchange for 100% of that certain intellectual property, among other things, consideration to ProEventa included:

~~a stock purchase agreement to purchase 2,500,000 shares of the Company’s common stock at $0.001 per share; and~~

a revenue sharing agreement, providing for a cash earn-out to be paid to the ProEventa shareholders of up to $3,000,000, to be derived from certain net revenue generated by the Company, as defined in the agreement; and

~~a royalty agreement, providing for a royalty of 3% of the revenues be paid to ProEventa, up to $25,000,000 in revenues, generated from the intellectual property, and~~

~~a limited license to ProEventa for the use of certain of the Intellectual Property's technology at Grafton Schools.~~

On May 1, 2017, in conjunction with the ProEventa Agreement, the Company entered into a consulting agreement with James Gaynor that, among other things, provides for consideration to Mr. Gaynor as follows:

~~a stock purchase agreement to purchase 500,000 shares of the Company’s common stock at $0.001 per share; and~~

~~a grant of options to purchase 1,000,000 shares of the Company's common stock at a price of $0.25 per share, vesting annually over a three (3) year period beginning September 1, 2017.~~

On May 17, 2017, in connection with the ProEventa Agreement, and related consulting agreement, the Company issued 3,000,000 shares of its restricted common stock. The shares, valued at $720,000, were issued for cash in the amount of $3,000. As a result, $717,000 was recorded to paid in capital.

On May 18, 2017, in connection with a certain related party convertible debt in the amount of $200,000 and accrued interest of $27,781, the Company issued 2,277,808 shares of its restricted common stock at a conversion rate of $0.10 per share. As a result, $225,503 was recorded to paid in capital.

On June 2, 2017, in connection with the exercise of certain employee stock options, the Company issued 237,500 shares of its restricted common stock at a conversion rate of $0.05 per share. The shares were issued on a cashless basis, resulting in a net value of $57,000. As a result, $56,763 was recorded to paid in capital.

On July 1, 2017, in connection with a certain consulting agreement, the Company granted 1,500,000 shares of its restricted common stock to the consultant for services to be provided over a twelve (12) month period. The shares were valued at of $315,000, of which $78,750 was expensed, and $236,250 was deferred, to be amortized over the next twelve (12) months. As a result, $313,500 was recorded to paid in capital,

On July 6, 2017, the Board of the Company caused the departure of Mr. Redmond from his position as President and Chief Executive Officer of the Company and its wholly-owned subsidiary, RoxSan Pharmacy, Inc. Pursuant to the Employment Agreement dated August 1, 2015, Mr. Redmond resigned from the Board of the Company and its wholly-owned subsidiary, RoxSan Pharmacy, Inc.

On July 7, 2017, pursuant to a unanimous Board resolution, Mr. Paul Arena was appointed as the Company’s President and Chief Executive Officer, and the Board caused Mr. Arena's election to the Company's Board and the Board of its wholly-owned subsidiary, RoxSan Pharmacy, Inc.

On July 7, 2017, in connection with Mr. Arena’s appointment, the Company entered into an Executive Employment Agreement (the “Agreement”) with Mr. Arena dated July 7, 2017, wherein Mr. Arena’s will serve as President and Chief Executive Officer for a period of three (3) years. As compensation for his services, Mr. Arena will receive a base compensation of $350,000 in year one, of which 30% shall be deferred until certain funding goals are met, $425,000 in year two, and $550,000 in year three, as well as annual bonus compensation equal to 2x base when certain Company earnings are reached. In addition, the Agreement includes a restricted stock award of 10,000,000 common shares, of which 25% vests immediately; 25% vests in one year; 25% vests after two years; and 25% vests when certain funding goals have been met. The Agreement also includes the grant of 5,000,000 stock options at an exercise price of $0.25 per share. The options are for a period of five years, and vest when certain market share prices of the Company’s common stock are met

On July 7, 2017, in connection with the Agreement, Mr. Arena was awarded 10,000,000 shares of the Company’s restricted common stock for services to be provided over a thirty-six (36) month period. The shares were valued at $2,000,000, of which $500,000 was expensed, and $1,500,000 was deferred, to be amortized over the next thirty-six (36) months. As a result, $1,990,000 was recorded to paid in capital,

On July 21, 2017, in connection with a certain consulting agreement, the Company granted 4,000,000 shares of its restricted common stock to the consultant for services to be provided over a twelve (12) month period. The shares were valued at $1,080,000, of which $270,000 was expensed, and $810,000 was deferred, to be amortized over the next twelve (12) months. As a result, $1,076,000 was recorded to paid in capital,

On August 3, 2017, in connection with the exercise of certain employee stock options, the Company issued 44,102 shares of its restricted common stock at a conversion rate of $0.05 per share. The shares were issued on a cashless basis, resulting in a net value of $10,584. As a result, $10,540 was recorded to paid in capital.

On August 9, 2017, in connection with a certain debt settlement, the Company issued 100,000 shares of its restricted common stock to a consultant as partial payment for services rendered. The shares were valued at $15,000. As a result, $14,900 was recorded to paid in capital.

On September 11, 2017, in connection with a certain related party convertible debt in the amount of $40,000, the Company issued 400,000 shares of its restricted common stock at a conversion rate of $0.10 per share. As a result, $39,600 was recorded to paid in capital.

~~Legal Matters:~~Action No. SC125702:

Following the Company’s acquisition of RoxSan Pharmacy (the “Pharmacy”), the former owner (“Melamed”) initiated two (2) legal actions against the Companyin the Superior Court of the State of California, County of Los Angeles, West District,~~Shahla Melamed v. Parallax Health Sciences, Inc., action numbers SC 124873 and SC 125702 (the “Matter”).~~

In the Matter, action No. SC124873, Melamed sought rescission of the August 13, 2015, Agreement, whereby the Company acquired 100% of the issued and outstanding shares of the Pharmacy and its assets and inventory (the “Purchase Agreement”). Rescission was sought on the basis that, allegedly, in order to acquire the Pharmacy, the Company and its principals had allegedly defrauded Melamed, there had allegedly been a complete failure of consideration, and a unilateral mistake was allegedly made on the part of Melamed.

On March 17, 2017, in the Matter, action No. SC124873, the Court ruled in favor of the Company, and issued that Melamed is not entitled to rescission of the Purchase Agreement. The ruling of the Court stated that no fraud on the part of the Company or its principals had been demonstrated. The Court further ruled that there had been no failure of consideration, and that Melamed’s entry into the Agreement was not a result of a unilateral mistake on the part of Melamed. The Minutes of the Ruling were entered by the County Clerk on March 17, 2017.

~~The Company has likewise initiated legal action against Melamed and filed an action~~SC125702, in the Superior Court of the State of California, County of Los Angeles, West District,~~Parallax Health Sciences, et al. v. Shahla Melamed, et al., case number SC 124898. The Complaint in that action alleges that Melamed has breached several obligations under~~ the ~~Purchase Agreement, and the Company seeks to reduce the Secured Note due to undisclosed material changes in the business.~~

~~Subsequently filed pleadings by the Company and RoxSan in case number SC 124873 allege, among other things, that Melamed misrepresented the true earnings and source~~former owner of ~~income for the pharmacy business and had engaged in a fraudulent and illegal scheme to ship medications to states where her pharmacy was not licensed prior to the sale of the Pharmacy.~~

~~Purchase Price Dispute~~: ~~Included in the Acquisition Agreement for~~ RoxSan Pharmacy, Inc., and as part of the negotiated purchase price, were representations and warranties made by the former owner involving certain primary revenue streams and related contracts. Shortly after the closing, however, management discovered that these representations were substantially inaccurate and/or completely false. These inaccuracies, and the improper disclosures and/or omissions made by the former owner during negotiations, would have significantly affected the purchase price and related note payable. As a result, among other things, management has initiated legal action against the former owner to seek a reduction in the purchase price.

In addition, management engaged a third-party to perform a valuation of the Pharmacy, utilizing revised inputs that more accurately reflected the Pharmacy's revenue streams as of the date of Acquisition. The valuation performed resulted in a fair market value of $4.7 to $5.2 million. After careful consideration, and based upon these significant differences, management has determined that the purchase price and related promissory note of $20.5 million does not fairly represent the fair market value at the date of purchase. The Company has, therefore, applied a discount to the note of $15.3 million, to reduce the purchase price and related note to its estimated fair market value of $5.2 million, utilizing the higher value on the range as a conservative measure.

The valuation performed does not include the effects of any liabilities the former owner omitted or damages caused to the Company as a result of the former owner and her immediate family members connected to the Pharmacy.

~~Control of Funds Dispute~~: For a period of time immediately after the closing of the Acquisition, the former owner would not relinquish control of the Pharmacy's bank accounts, and collected the Pharmacy's incoming cash revenues, refusing to transfer the funds to the new ownership. Furthermore, when the Company attempted to change the corporate records and signatories on the existing bank accounts, the former owner disputed the changes, resulting in approximately $180,000 in corporate funds being frozen and held for adjudication. During this period, the Company was forced to request that the former owner pay the Pharmacy's operating expenses. At no time after the Company opened new accounts did the former owner cooperate with the transference or willingly relinquish control of the Pharmacy's operating cash flow or incoming cash revenues. As a result, an extensive reconciliation was performed to determine what amounts were collected and paid by the former owner, and what amounts were due to the Company. The reconciliation resulted in over $412,000 owed to the Company from the former owner. The reconciliation and underlying documentation went under judicial review, and on July 24, 2017, the Company was notified that the results of the review were in favor of the Company in the amount of $412,948. A judgment is pending for the order of $412,948 owed to the Company from the former owner (See Note 4).

~~In the Matter, action No. SC125702,~~Shahla Melamed (“Melamed”), alleges that the Company is in default under the terms of the Purchase Agreement and Secured Note, ~~(Note 7),~~ and the Company’s termination of Melamed’s employment agreement. The Company firmly believes that it had adequate grounds to justify the termination of the employment, that it acted within its rights, and shall prevail in these proceedings. A trial date, previously set for December 2018, is currently set for January 2020.

~~All above~~Action No. SC 124898:

The Company initiated legal ~~matters are~~action against Melamed and filed a complaint, action number SC 124898, in the Superior Court of the State of California, County of Los Angeles, West District, Parallax Health Sciences, et al. v. Shahla Melamed, et al. The Complaint in that action alleges that Melamed has breached several obligations under the Purchase Agreement, and the Company is seeking to reduce the Secured Note due to undisclosed material changes in the business. A trial date, previously set for December 2018, is currently ~~pending.~~set for January 2020.

Disputes with Former Executives

Action No. CV2017-052804

On ~~or about May 5,~~March 9, 2017, ~~David~~Dave Engert former Executive Chairman and director of the Company filed a lawsuit in Arizona and then on or about May 5, 2017, Mr. Engert, changed the venue and filed suit against the Company and RoxSan Pharmacy, Inc. in the United States District Court, Central District of California for an amount exceeding $75,000. ~~The Company intends to vigorously defend against this action, and on~~On October 23, 2017, the Company filed an answer and counterclaims against Mr. Engert for an amount exceeding $100,000. The counterclaims include possible fraud and negligence committed by Mr. Engert and Mr. J. Michael Redmond, former successor Chairman of Mr. Engert, director, President and Chief Executive Officer of the Company and former President, Chief Executive Officer, Chairman and director of RoxSan Pharmacy, Inc.

On ~~or about June 20, 2017, American Express Bank, FSB filed suit against RoxSan Pharmacy, Inc.~~October 8, 2018, a settlement was reached between Mr. Engert and the Company (the “Settlement”). The Settlement includes, among other things, a cash payment to Mr. Engert in ~~Superior Court of California, County of Los Angeles for an~~the amount of ~~$1,015,052. On or about June 27, 2017, American Express Travel Related Services Company, Inc. filed suit against RoxSan Pharmacy, Inc. in Supreme Court~~$139,000, and the cancellation of ~~New York, County~~all of ~~New York~~Mr. Engert’s equity holdings in the ~~amounts of $153,500 and $273,500. On July 31, 2017 and August 16, 2017 respectively,~~Company, including preferred shares (see Note 11). The Settlement resulted in a net loss to the Company ~~entered into~~of $33,272. On April 10, 2019, a stipulation for dismissal was filed, and ~~settlement agreements~~the matter has been fully resolved.

NOTE 18. SUBSEQUENT EVENTS

The Company has evaluated the events and transactions for recognition or disclosure subsequent to September 30, 2019, through the date of ~~these matters to make payments in lieu~~the issuance of ~~further litigation at this time.~~the financial statements, and has determined that there have been no events that would require disclosure.

* * * * *

ITEM 2. ~~MANAGEMENT’S~~MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This quarterly report contains forward-looking statements. These statements relate to future events or the Company’s future financial performance. In some cases, ~~you~~forward-looking statements can ~~identify forward-looking statements~~be identified by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors ~~including the risks in the section entitled "Risk Factors”~~ that may cause the ~~Company~~Company’s or the Company’s industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

The Company’s unaudited interim consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to "common shares" refer to the common shares in the Company’s capital stock. The following discussion should be read in conjunction with the Company’s financial statements and the related notes that appear elsewhere in this quarterly report.

InNOTE: The following sections of this quarterly report ~~unless otherwise specified, all dollar amounts are expressed in United States dollars. All references~~and any further reference made to ~~"common shares" refer to the common shares in the Company’s capital stock.~~

~~As used in this quarterly report, the terms~~“the Company”, "we", "us", "our" and ~~"Parallax" means~~"Parallax " shall mean Parallax Health Sciences, Inc., and its wholly-owned subsidiaries, Parallax Diagnostics, Inc.,Parallax Health Management, Inc. ~~(formerly QOLPOM, Inc.)~~, and ~~RoxSan Pharmacy,~~Parallax Behavioral Health, Inc., unless otherwise indicated.

~~Corporate History and Overview~~Description of Business

~~The Company was~~Parallax Health Sciences, Inc. (“Parallax”), incorporated in the State of Nevada on July 6, ~~2005. On November 1, 2012, the Company, formerly Endeavor Power Corporation, and its wholly owned subsidiary Endeavor Holdings, Inc., a Nevada corporation, entered into~~2005, is an Agreement and Plan of Merger with Parallax Diagnostics, Inc., a Nevada corporation ("Parallax Diagnostics"), whereby Parallax Diagnostics became a wholly owned subsidiary. On January 9, 2014, the Company changed its name to Parallax Health Sciences, Inc. (“Parallax”). (OTC:PRLX).innovative digital healthcare company headquartered in Santa Monica, California. The Company’s principal focus is to build and expand an integrated digital healthcare network with products and services that can provide remote communication, diagnosis, treatment, and monitoring of patients on ~~personalized patient care.~~a single proprietary platform. The Parallax Care™ system being developed provides scalable connected products, services and actionable data integrated on a single interoperable platform. The Company’s principal mission is to deliver solutions that empower patients, reduce costs and improve the quality of care through patented leading-edge technologies.

The Parallax Care™ technology-enabled digital healthcare system is structured with three separate divisions that can operate independently of one another, or integrate services to meet the various needs of the Company’s clientele: Optimized Outcomes, Connected Health and Smart Data. Each of these divisions target a separate vertical market that are synergistic, compliment, and strengthen each other and the Company value proposition as a whole.

Optimized Outcomes

REBOOT™ / COMPASS™

Behavioral modification

Connected Health

Fotodigm® platform

Remote patient monitoring, telehealth, and POC diagnostic testing

Smart Data

Intrinsic Code™ technology

Actionable insights to behavior modification

Operating Segments

The Company’s ~~subsidiary, Parallax Diagnostics, was founded in 2010,~~current operations include the following business segments for financial statement presentation: Remote Patient Monitoring (RPM), Behavioral Health Services (BHS), and holds the right, title, and interest in perpetuity to certain Target System Immunoassay point-of-care diagnostic testing system and related FDA-cleared tests in the area of infectious disease. Its primary focus was to commercialize the proprietary testing system and test in a worldwide domain.Corporate.

~~Parallax Diagnostics is currently pre-revenue, and continues to pursue viable opportunities~~•Remote Patient Monitoring

The RPM segment generates revenues through fees charged for the ~~commercialization~~license and utilization of its ~~product.~~ proprietary system that provides software integrations of the Fotodigm® platform. Additionally, the RPM segment generates incremental revenues through the delivery of acute, post-acute and chronic health patient management software systems that enable Parallax customers to bill for and collect payments from patients and third-party payers for telemonitoring and remote services that they deliver.

•Behavioral Health Services

The Company has sought to identify strategies that would make its proposition more valuable and competitive. To this end, the Company has pursued the creation of patents around its foundational technology, and developed a novel immune status test targeting the HIV/AIDS and TB markets. Since the inception of Parallax Diagnostics, the novel CD4-CD8 immune status test has been developed, and the Company has been issued patents on elements of its core technology and testing system.

~~Acquisition of RoxSan Pharmacy, Inc:~~

In 2013, Parallax identified an opportunity to acquire RoxSan Pharmacy, Inc. ("RoxSan"), a California corporation, and began the due diligence process. The Company's initial interest centered on utilizingBHS segment commenced with the acquisition ~~as a means of accelerating the commercialization~~ of the ~~Parallax Target System~~REBOOT™ and ~~diagnostic platform, as RoxSan~~Intrinsic Code™ technologies. The BHS segment will generate revenues primarily through licensing and subscription of software and systems. As of September 30, 2019, the BHS segment had ~~access to a nationwide network of doctors~~not yet begun full operations, generating limited test market sales.

•Diagnostics/Corporate

The Diagnostics/Corporate Segment supports the costs and ~~sales representatives. During the due diligence process, the Company became aware of the numerous opportunities that RoxSan and its markets represented.~~

~~On March 21, 2013, the Company entered into a Letter of Intent with Shahla Melamed, RoxSan's sole Shareholder, to acquire RoxSan. Between 2013 and 2015, four (4) amendments were also executed.~~

As part of the acquisition, the Company was required to obtain licensure from the State of California, and on July 31, 2015, the Company received notice that its pharmacy and sterile compounding licenses were issued by the California State Board of Pharmacy.

On August 13, 2015 (the "Closing Date"), pursuant to a resolution of the board of directors, the Company entered into an Agreement to Purchase and Sell One Hundred Percent of the Issued and Outstanding Shares of RoxSan Pharmacy, Inc. ("RoxSan" or the "Pharmacy"), and its Assets and Inventory (the “Purchase Agreement”). Pursuantoperating expenses related to the ~~Purchase Agreement between the Company, RoxSan~~continued development and its sole shareholder (the “Seller”), in exchange for 100% of RoxSan's common stock, and its assets and inventory, the Company, among other things, issued the Seller a Secured Promissory Note (the "Note") dated August 13, 2015 in the amount of $20.5 million (the "Acquisition"). The Note bears interest at a rate of 6% per annum, and matures in three (3) years, or August 13, 2018 ("Maturity"). As a result of the Acquisition, effective August 13, 2015, RoxSan Pharmacy, Inc., a California corporation, became the Company's wholly owned subsidiary.

~~Dispute with former owner of RoxSan~~

Included in the false representations made by the former owner were prescription revenues in excess of $8 million (and $16 million prior to the change in ownership) related to workers compensation claims that the former owner warranted as collectible. The insurance claims related to these prescriptions, which originated from and were provided to the pharmacy by the former owner's direct family members, were investigated by a third-party expert retained by the Company, and the claims were substantially identified as fraudulent. The former owner's family member has been indicted by the Department of Justice for among other things, insurance fraud.

~~Acquisition of Parallax Health Management, Inc. (formerly QOLPOM, Inc.)~~

On August 31, 2016, the Company entered into an agreement with QOLPOM, Inc., an Arizona corporation (“QOLPOM”) and its shareholders (the “Seller”) to purchase 100% of the issued and outstanding Shares of QOLPOM’s common stock and its assets, inventory and intellectual property. As a result, effective September 20, 2016, QOLPOM became the Company's wholly owned subsidiary in the remote healthcare monitoring industry (“RCS”). Pursuant to the QOLPOM Agreement, in exchange for 100% of the QOLPOM stock and 100% of QOLPOM’s assets, inventory and intellectual property, among other things, consideration to the Seller included:

~~5,000,000 shares~~exploitation of the Company’s ~~common stock at $0.001 per share; and~~

~~10% of revenues generated from the RCS business segment, up to $1,000,000; and 7% thereafter, up to $2,000,000; and~~

~~3% of revenues generated from the sale of QOLPOM hardware~~proprietary Target System POS medical diagnostic and monitoring ~~service fees.~~

~~On January 20, 2017,~~platform andprocesses. In addition, the ~~Company changed the name of its wholly owned subsidiary, QOLPOM, Inc., to Parallax Health Management, Inc (“PHM”).~~

~~On March 22, 2017, the Company formed a wholly owned subsidiary, Parallax Behavioral Health, Inc. (“PBH”), a Delaware corporation.~~

~~a stock purchase agreement to purchase 2,500,000 shares of the Company’s common stock at $0.001 per share; and~~

~~a royalty agreement, providing for a royalty of 3% of the revenues be paid to ProEventa, up to $25,000,000 in revenues, generated from the intellectual property, and~~

~~a limited license to ProEventa for the use of certain of the Intellectual Property's technology at Grafton Schools.~~

~~Operating Segments~~

~~The Company currently has the following three (3) business segments: Retail Pharmacy Services (RPS), Remote Care Systems (RCS) and Corporate.~~

~~Retail Pharmacy Services (RPS)~~

~~The RPS provides a full range of pharmacy services including retail, compounding and fertility medications.~~

~~The pharmacy is fully licensed and qualified to conduct business in over 40 US States.~~

~~Remote Care Systems (RCS)~~

~~Corporate~~

~~The~~ Diagnostics/Corporate Segment provides management and administrative services to support the Company and consists of certain aspects of the Company’s executive management, corporate relations, legal, compliance, human resources, and corporate information technology and finance departments.

Recent Developments

Effective December 24, 2018, pursuant to a majority shareholder consent, the Company increased its authorized common stock from 250,000,000 shares to 500,000,000 shares, with a par value of $0.001 per share. On January 28, 2019, the amended articles of incorporation were filed with the state of Nevada.

In April 2019, the Company entered into an employment agreement with Mr. David Appell to serve as the Company’s Chief Operating Officer. The agreement commenced May 15, 2019, is for an initial term of two (2) years, and provides a base compensation of $250,000 year one, and $275,000 in year two, as well as various performance bonuses, and customary employee benefits. In addition, the ~~Corporate Segment supports~~agreement includes a grant to purchase 3,000,000 restricted common shares, valued at $201,300, for cash in the ~~costs~~amount of $3,000, of which 25% vest immediately, and ~~operating expenses related~~the remainder vest when certain earnings goals are met; as well as options granted to ~~the continued development and exploitation~~purchase 3,000,000 shares of the Company's ~~proprietary medical diagnostic~~Common Stock at an exercise price of $0.25 per share. The options, valued at $195,600 using the Black-Scholes method, are for a period of five (5) years, and ~~monitoring platform~~vest annually over the term of the agreement, with an initial vesting of 25%. The assumptions used in valuing the options were: expected term 4.75 years, expected volatility 2.21, risk free interest rate 2.15%, and ~~processes, which remains~~dividend yield 0%.

In May 2019, the ~~Company's primary focus.~~ Company established a second location at 28 West 36th Street, 8th Floor, New York, NY 10018.

In June 2019, the Company filed a Registration Statement on form S-1 for the registration of 33,361,321 shares of common stock. The ~~following summary~~Company received comments and questions from the SEC in relation to the filing, and on November 13, 2019, the Company filed an amended S-1 and responses to the SEC inquiries. If no further comments are received from the SEC, the Company anticipates receiving an effective date for its registration statement by December 2019.

In June 2019, pursuant to a resolution of the board of directors, the Company adopted the 2019 Stock Incentive Plan (the “2019 Plan”), wherein forty million (40,000,000) shares of the Company’s ~~financial condition should~~restricted Common Stock were reserved for issuance. The 2019 Plan was intended to assist the Company in securing and retaining key employees, directors and consultants by allowing them to participate in the Company's ownership and growth through the grant of incentive and non-qualified options. The 2019 Plan is currently administered by the Company's Board. Subject to the provisions of the plan, the board will determine who shall receive options, the number of shares of Common Stock that may be ~~read in conjunction with~~purchased under the ~~consolidated financial statements~~options. On June 17, 2019, the Company filed a Registration Statement on form S-1 for the ~~quarter ended September 30, 2016, which are included herein.~~

~~Balance Sheet~~registration of shares reserved under the 2019 Plan.

~~As at September 30, 2016,~~In August 2019, the Company ~~had~~amended the private placement equity offering (the “Offering”) previously established in March 2019. The revised Offering is for the purchase of the 31.875,000 shares, or a maximum of $3,000,000, in Common Stock, plus equal Warrants at an exercise price of $0.25 per share for a term of three (3) years (the Common Stock and the Warrants together, the “Units”). The Offering provides for, among other thing, the purchase of the Units at a price of $0.10 per share, with a minimum total ~~assets~~Offering of ~~$8,657,463, compared with total assets~~$2,000,000, and a minimum investment of $8,157,050 at December 31, 2015. The decrease in total assets of $500,413 is attributable to a decrease in cash of $801,072, a decrease in trade and other receivables, net of allowance for doubtful accounts of $429,110, a decrease in rebates receivable of $359,399, a decrease in inventories of $302,949, a decrease in employee advances of $14,894, an increase in prepaid expenses of $34,137, an increase in loans receivable of $300,387, an increase in property and equipment of $91,073, $30,393 of depreciation related to equipment, an increase in intangible assets of $1,997,643, $127,427 of amortization related200,000 shares, or $20,000. Prior to the ~~intangible assets,~~Offering, the Company sold $1,125,000 in Units through a Simple Agreement Future Equity (“SAFE”) offering, which included an aggregate of $375,000 in SAFE shares to be issued to three of the Company’s executive officers for the reduction of accrued officer compensation. The SAFE Units were sold at a 20% discount of the offering Unit price of $0.10, and ~~an increase~~are not a part of, nor reduce, the $2,000,000 minimum. The initial closing will occur on a date set by the Company in ~~goodwill of $142,417.~~ its discretion. The Company may sell Units in one or more closings.

As at September 30, 2016, the Company had total liabilities of $19,521,356, compared with total liabilities of $13,254,442 at December 31, 2015. The increase in total liabilities of $6,266,914 is attributable to an increase in accounts payable and accrued expenses of $894,277, an increase in pension contribution payable of $6,882, an increase in related party payables of $69,840, an increase in license fees payable of $2,000,000, a decrease in secured notes payable of $529,085, and a decrease in unamortized discount of $3,825,000.

~~Results of Operations~~NOTE

~~Three and nine months ended September 30, 2016, compared to three and nine months ended September 30, 2015~~

: The financial information ~~provided includes the accounts~~ of ~~the Company~~Parallax Health Sciences, Inc., and its ~~wholly owned~~wholly-owned subsidiaries, Parallax Diagnostics, Inc.,Parallax Health Management, Inc. ~~(formerly QOLPOM,~~, and Parallax Behavioral Health, Inc.~~) and RoxSan Pharmacy, Inc.~~, is provided below on a consolidated ~~basis.~~basis, unless otherwise indicated. All significant intercompany accounts and transactions have been eliminated.

For the three months ended

For the nine months ended

September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015

Revenue
$
5,591,659

$
4,717,206

$
19,808,910

$
4,717,206

Cost of sales
$
4,738,492

$
3,657,829

$
16,914,818

$
3,657,829

Gross profit (loss)
$
853,167

$
1,059,377

$
2,894,092

$
1,059,377

Sales, marketing, and pharmacy expenses
$
472,683

$
425,825

$
1,461,576

$
425,825

General and administrative expenses
$
1,067,314

$
566,793

$
3,094,034

$
857,139

Operating income (loss)
$
(686,830
)
$
66,759

$
(1,661,518
)
$
(223,587
)
Dividend income
$
205

$
––

$
205

––

Discount amortization
$
(1,275,000
)
$
(49,276
)
$
(3,825,000
)
$
(256,676
)
Interest expense
$
(251,522
)
$
(185,871
)
$
(639,975
)
$
(229,045
)
Net loss
$
(2,213,147
)
$
(168,388
)
$
(6,126,288
)
$
(709,038
)

~~Revenue~~Balance Sheet

As of September 30, 2019, the Company had total assets of $2,373,305 compared with total assets of $1,364,357 at December 31, 2018. The increase in total assets of $1,008,948 is attributable to an increase in cash of $11,711, an increase in operating lease asset of $77,494, an increase in property and equipment of $2,628, an increase in investments in securities of $1,000,000, $220 of depreciation related to property and equipment, $90,465 of amortization related to intangible assets, and an increase in deposits of $7,800.

As of September 30, 2019, the Company had total liabilities of $7,208,718 compared with total liabilities of $7,314,811 at December 31, 2018. The decrease in total liabilities of $106,093 is attributable to a decrease in accounts payable and accrued expenses of $235,624, an increase in operating lease liability of $77,494, an increase in short-term derivative liability of $29,995, a decrease in short-term debentures of $724,903, a decrease in short-term related party convertible debentures of $411,006, an increase in notes payable of $360,000, an increase in short-term related party notes payable of $126,152,an increase in short-term convertible notes payable,net of unamortized discount, of $384,176, an increase in short-term related party convertible notes payable of $20,000, an increase in related party payables of $469,716, an increase in license fees payable of $20,000, an increase in royalties payable of $6,258, a decrease in long-term derivative liability of $34,000, a decrease in long-term debentures, net of unamortized discount, of $184,870, an increase in long-term related party notes payable of $633,294, and a decrease in long-term convertible notes payable of $144,000, a decrease in long-term related party convertible notes payable of $491,100, and a decrease in notes payable to bank of $7,675.

Results of Operations

The three and nine months ended September 30, 2019, compared to the three and nine months ended September 30, 2018.

	For the three months ended						For the nine months ended
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Revenue	$	25,855		$	990		$	77,745		$	10,749
Cost of sales	$	3,899		$	5,230		$	12,871		$	15,507
Gross profit (loss)	$	21,956		$	(4,240	)	$	64,874		$	(4,758	)
General and administrative expenses	$	1,937,991		$	2,116,821		$	5,203,088		$	5,252,498
Operating loss	$	(1,916,035	)	$	(2,121,061	)	$	(5,138,214	)	$	(5,257,256	)
Gain on disposal of subsidiary	$	––		$	5,079,416		$	––		$	5,079,416
Gain (loss) on fair value adjustments	$	1,253		$	(93,700	)	$	105,141		$	(156,300	)
Gain (loss) on extinguishment of debt	$	(347,612	)	$	22,931,148		$	(915,615	)	$	22,931,148
Loss on settlement	$	––		$	––		$	(33,272	)	$	––
Discount amortization	$	(48,000	)	$	(155,000	)	$	(19,000	)	$	(2,775,000	)
Interest expense	$	(149,914	)	$	(660,518	)	$	(457,319	)	$	(1,741,726	)
Net income (loss) – continuing operations	$	(2,460,308	)	$	24,980,285		$	(6,458,279	)	$	18,080,282
Net income (loss) – discontinued operations	$	––		$	93,773		$	––		$	(824,398	)
Net income (loss)	$	(2,460,308	)	$	25,074,058		$	(6,458,279	)	$	17,255,884

Revenue

Revenue in the amount of $25,855 for the three months ended September 30, ~~2016,~~2019, consists of fees of $25,000 for sub-licensing related to behavioral health software; and subscription fees related to its behavioral health services in the amount of ~~$5,591,659~~$855.

Revenue in the amount of $990 for the three months ended September 30, 2018, consists ~~primarily~~ of ~~pharmaceutical sales~~contract fees related to the ~~Company's pharmacy operations.~~Company’s remote health care systems in the amount of $990.

Revenue in the amount of $77,745 for the nine months ended September 30, ~~2016,~~2019, consists of fees of $75,000 for sub-licensing related to behavioral health software, contract fees related to the Company’s remote health care systems in the amount of ~~$19,808,910~~$1,890, and subscription fees related to its behavioral health services in the amount of $855.

Revenue in the amount of $10,749 for the nine months ended September 30, 2018, consists ~~primarily of pharmaceutical~~contract fees and equipment sales related to the ~~Company's pharmacy operations.~~Company’s remote health care systems in the amount of $8,859, and subscription fees related to its behavioral health services in the amount of $1,890.

The Company has not yet fully launched ~~its major business activity, which is~~the medical diagnostics and ~~testing.~~testing activities of the Company’s Connected Health division.

Cost of sales

Costs of sales in the amount of $3,899 for the three months ended September 30, ~~2016,~~2019, consists of equipment and other costs related to the Company’s remote health care systems.

Costs of sales in the amount of ~~$4,738,492~~$5,230 for three months ended September 30, 2018, consists ~~primarily~~ of ~~pharmaceutical drug purchases, direct labor,~~equipment and ~~indirect pharmacy~~other costs related to the ~~Company's pharmacy operations.~~ Company’s remote health care systems.

Costs of sales in the amount of $12,871 for the nine months ended September 30, ~~2016,~~2019, consists of equipment and other costs related to the Company’s remote health care systems.

Costs of sales in the amount of ~~$16,94,818~~$15,507 for nine months ended September 30, 2018, consists ~~primarily~~ of ~~pharmaceutical drug purchases, direct labor,~~equipment and ~~indirect pharmacy~~other costs related to the ~~Company's pharmacy operations.~~Company’s remote health care systems.

The Company has not yet fully launched ~~its major business activity, which is~~the medical diagnostics and ~~testing.~~testing activities of the Company’s Connected Health division.

General and Administrative Expenses


	For the three months ended				For the nine months ended				Variance				For the three months ended				For the nine months ended				Variances
	September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015		3-month		9-month		September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018		3-month			6-month
Legal, accounting, and management services	$	349,155	$	227,628	$	1,037,233	$	384,464	$	121,527	$	652,769	$	485,365	$	785,766	$	1,560,770	$	1,543,900	$	(300,401	)	$	16,870
Stock compensation/stock option amortization		68,703		7,014		134,687		7,014		61,689		127,673		1,151,504		1,083,669		2,572,741		3,152,943		67,835			(580,202	)
Salaries and fees, and related taxes and benefits		281,615		143,291		711,856		259,626		138,324		452,228
Salaries, fees, taxes and benefits														113,603		137,056		406,535		224,581		(23,453	)		181,954
Depreciation and amortization		54,641		8,126		157,820		12,036		46,515		145,784		30,287		29,821		90,685		90,465		466			220
Rent expense-office		40,020		12,484		120,060		12,484		27,536		107,576		43,780		16,800		95,740		53,557		26,980			42,183
Travel, meals and entertainment		44,591		14,593		177,304		16,040		29,998		161,266		1,243		15,237		37,433		42,243		(13,994	)		(4,810	)
Publicity and promotion		47,185		25,863		242,807		26,162		21,322		216,645
Office supplies and miscellaneous expenses		181,404		127,794		512,267		139,313		53,610		372,954		112,209		48,472		439,184		144,809		63,737			294,375
Total general and administrative expenses	$	1,067,314	$	566,793	$	3,094,034	$	857,139	$	500,521	$	2,236,895	$	1,937,991	$	2,116,821	$	5,203,088	$	5,252,498	$	(178,830	)	$	(49,410	)

~~During~~General and administrative expenses in the ~~three months ended September 30, 2016, the Company incurred operating expenses totaling $1,067,314, compared with $566,793~~amount of $1,937,991 for the three months ended September 30, ~~2015.~~2019, were comprised of $485,365 in legal, accounting and management fees, $1,151,504 in stock compensation/stock option amortization, $113,603 in salaries, fees and related taxes and benefits, $30,287 in depreciation and amortization, $43,780 in rent expense, $1,243 in travel, meals and entertainment, and $112,209 in office overhead and other general and administrative expenses.

General and administrative expenses in the amount of $2,116,821 for the three months ended September 30, 2018, were comprised of $785,766 in legal, accounting and management fees, $1,083,669 in stock compensation/stock option amortization, $137,056 in salaries, fees and related taxes and benefits, $29,821 in depreciation and amortization, $16,800 in rent expense, $15,237 in travel, meals and entertainment, and $48,472 in office overhead and other general and administrative expenses.

General and administrative expenses of $1,937,991 for the three months ended September 30, 2019 as compared to $2,116,821 for the three months ended September 30, 2018, resulted in a decrease in general and administrative expenses of $178,830. The decrease in in general and administrative expenses of $178,830 was attributable to the following items:

•a decrease in legal, accounting and management fees of $300,401, due to a decrease in legal fees of $327,392; an increase in accounting and audit fees of $29,750; and an increase in management fees of $17,633 primarily resulting from the addition of Chief Operating Officer, as well as director compensation effective January 2019; and a decrease in professional fees of $20,392; and

•an increase in stock compensation/stock option amortization of $67,835 primarily due to a decrease in amortization expense of $75,506 resulting from stock options granted in prior years; amortization expense of $168,327 resulting from stock options granted in the current period; a decrease in deferred stock compensation amortization of $122,280 resulting from stock awards granted in prior years; and a decrease in stock compensation amortization of $14,625 resulting from stock awards granted in the current period; and a decrease in stock compensation expense of $214,823 resulting from stock awards granted in prior years; stock compensation expense of $265,200 for stock awards granted in the current period, and an increase in warrant expense of $43,542; and

•a decrease in salaries and fees, and related taxes and benefits of $23,453, primarily due to a decrease in accrued staff salaries of $65,729, an increase in accrued payroll taxes of $2,776; a decrease in accrued benefits of $18,000; and an increase in miscellaneous fees for outside services in the amount of $57,500 resulting from additional contracted services; and

•an increase in depreciation and amortization of $466, primarily due to additional assets acquired; and

•an increase in rent expense of $26,980 primarily due to additional office space leased in the current period; and

•a decrease in travel, meals and entertainment of $13,994, primarily due to a decrease in travel costs of $8,802; and a decrease in meals and entertainment of $5,192; and

•an increase in office supplies and miscellaneous expenses of $63,737, due to increases in automobile expenses and allowances of $3,374, transfer agent fees of $6,498, insurance expense and allowances of $28,666, marketing and publicity of $29,747, and telephone of $2,680; and decreases in computer and internet expenses of $3,002, and other general office expenses of $4,226.

General and administrative expenses in the amount of $5,203,088 for the nine months ended September 30, 2019, were comprised of $1,560,770 in legal, accounting and management fees, $2,572,741 in stock compensation/stock option amortization, $406,535 in salaries, fees and related taxes and benefits, $90,685 in depreciation and amortization, $95,740 in rent expense, $37,433 in travel, meals and entertainment, and $439,184 in office overhead and other general and administrative expenses.

General and administrative expenses in the amount of $5,252,498 for the nine months ended September 30, 2018, were comprised of $1,543,900 in legal, accounting and management fees, $3,152,943 in stock compensation/stock option amortization, $224,581 in salaries, fees and related taxes and benefits, $90,465 in depreciation and amortization, $53,557 in rent expense, $42,243 in travel, meals and entertainment, and $144,809 in office overhead and other general and administrative expenses.

General and administrative expenses of $5,203,088 for the nine months ended September 30, 2019 as compared to $5,252,498 for the nine months ended September 30, 2018, resulted in a decrease in general and administrative expenses for the current period of $49,410. The increase in ~~operating~~in general and administrative expenses of ~~$500,521 is~~$49,410 was attributable ~~to:~~to the following items:

•an increase in legal, accounting and management fees of ~~121,527,~~$16,870, due to ~~an increase~~a decrease in legal fees of ~~$110,559 primarily related to the RoxSan Pharmacy acquisition; a decrease~~$267,306; an increase in accounting and audit fees of ~~$79,000 in audit related costs resulting from prior year audit expenses incurred in prior period compared to none in the current period;~~$24,643; and an increase in ~~outside consulting~~management fees of ~~$83,968~~$105,735 primarily resulting from the ~~engagement~~addition of ~~additional management support;~~Chief Operating Officer, as well as director compensation effective January 2019; and

an increase in professional fees of $153,798 primarily related to investor relations and private placement due diligence; and

•a decrease in stock compensation/stock option amortization of ~~$61,689,~~$580,202 primarily due ~~tostock~~to a decrease in amortization expense of $296,156 resulting from stock options granted in prior years; amortization expense of $339,415 resulting from stock options granted in the current period; a decrease in deferred stock compensation amortization of $395,083 resulting from stock awards granted in prior years; and stock compensation amortization of $85,963 resulting from stock awards granted in the current period; and a decrease in stock compensation expense of ~~$22,250 incurred~~$1,571,075 resulting from stock awards granted in prior years; stock compensation expense of $1,161,677 for stock awards granted in the current ~~period compared to none~~period;and an increase in ~~the prior period; and stock option amortization~~warrant expense of ~~$46,453, compared to $7,014 for the same period in the prior year;~~$95,057; and

•an increase in salaries and fees, and related taxes and benefits of ~~$138,324,~~$181,954, primarily due to a decrease in accrued staff salaries of $57,654, an increase in ~~salaries of $53,347 and related~~accrued payroll taxes of ~~$11,860~~$65,428; a decrease in accrued benefits of $39,070 resulting ~~primarily~~ from ~~an increase~~changes in ~~officer compensation;~~benefits; and an increase in miscellaneous fees for outside services ~~of $44,271 compared to none for the same period~~ in the ~~prior year;~~amount of $213,250 resulting from additional contracted services; and ~~an increase employee benefits of $26,846 resulting primarily from an increase in health insurance premiums; and~~

•an increase in depreciation and amortization of ~~$46,515,~~$220, primarily due to ~~professional equipment purchased in the current period resulting in an increase in depreciation expense of $3,670;~~additional assets acquired; and ~~an increase in intangible assets resulting in an increase in amortization expense of $42,845; and~~

•an increase in rent expense of ~~$27,536~~$42,183 primarily due to additional office space ~~leased;~~leased in the current period; and

~~an increase~~•a decrease in travel, meals and entertainment of ~~$29,998,~~$4,810, primarily due to an increase in travel ~~expenses~~costs of ~~$14,381~~$5,632; and an increase meals and entertainment of ~~$15,617;~~$822; and

~~an increase in publicity and promotion of $21,322, due to an increase in promotion of $14,728, and an increase in fertility video production support of $6,594; and~~

•an increase in office supplies and miscellaneous expenses of ~~$53,610,~~$294,375, due to an increase in automobile expenses and allowances of ~~$15,974,~~$62,630, computer and internet expenses of ~~$14,996,~~$3,651, transfer agent costs of $12,724, insurance expense of ~~$19,026,~~$50,679, marketing and publicity of $165,269, office ~~supplies and expenses of $6,827, parking~~ expense of ~~$6,812, pension plan administrative costs~~$4,685, repairs and maintenance of ~~$16,580, pension plan contributions~~$7,769, royalties of ~~$20,071,~~$7,258, taxes, licenses and permits of ~~$3,185,~~$5,976, and telephone expense of $6,725; and decreases in product development and patent costs of ~~$6,111,~~$4,859, storage and moving of $23,585, and other general ~~and administrative~~office expenses of ~~$29,706; and a decrease in bad debt expense of $85,678.~~$4,547.

Net Loss

During the nine months ended September 30, ~~2016,~~2019, the Company ~~incurred operating expenses totaling $3,094,034,~~generated a net loss from continuing operations of $6,458,279, compared with ~~$857,139~~net income from continuing operations of $18,080,282 for the nine months ended September 30, ~~2015.~~2018. The ~~increase in operating expenses of $2,236,895 is attributable to:~~

an increase in legal, accounting and management fees of $652,769, due to an increase in legal fees of $453,531 primarily related to the RoxSan Pharmacy acquisition; a decrease of $67,760 in audit related costs primarily resulting from prior year audit expenses incurred in prior period compared to none in the current period; and an increase in outside consulting fees of $266,999 resulting from the engagement of additional management support; and

an increase in stock compensation/stock option amortization of $127,673, primarily due to stock compensation expense of $22,250 incurred in the current period compared to none in the prior period; and stock option amortization expense of $112,437, compared to $7,014 for the same period in the prior year; and

an increase in salaries and fees, and related taxes and benefits, of $452,228, due to an increase in salaries of $212,592 and related payroll taxes of $29,593 resulting primarily from an increase in officer compensation; and an increase in outside services of $78,325 compared to none for the same period in the prior year; and an increase in employee benefits of $131,718, resulting primarily from an increase in health insurance premiums; and

an increase in depreciation and amortization of $145,784, due to professional equipment purchased in the current period resulting in an increase in depreciation expense of $19,605; and an increase in intangible assets resulting in an increase in amortization expense of $126,179; and

~~an increase in rent expense of $107,576 due to additional office space leased; and~~

~~an increase in travel, meals and entertainment of $161,266, due to an increase in travel expenses of $97,994 and meals and entertainment of $63,271; and~~

~~an increase in publicity and promotion of $216,645, due to an increase in promotion of $57,287 and an increase in fertility video production support of $159,358; and~~

an increase in office supplies and miscellaneous expenses of $372,954, due to an increase in automobile expenses of $49,931, computer and internet expenses of $44,345, insurance expense of $61,996, office supplies and expenses of $43,629, parking expense of $34,392, pension plan administrative costs of $53,105, pension plan contributions of $20,071, taxes, licenses and permits of $38,521, telephone costs of $32,341, and other general and administrative expenses of $80,301; and a decrease in ~~bad debt expense~~net income from continuing operations of ~~$85,678.~~

~~Net Loss~~

During the three months ended September 30, 2016, the Company incurred a net loss of $2,213,147, compared with a net loss of $168,388 for the three months ended September 30, 2015. The increase in net loss of $2,044,759$24,538,561 is primarily attributable to an increase in revenue of ~~$874,453, an increase~~$66,996, a decrease in cost of goods sold of ~~$1,080,663, an increase in sales, marketing and pharmacy expenses of $46,858, an increase~~$2,636, a decrease in general and administrative expenses of ~~$500,521,~~$49,410, a decrease in the gain from disposal of subsidiary of $5,079,416, an increase in ~~dividend income~~the gain on fair value adjustments of ~~$205,~~$261,441, a decrease in the gain from extinguished debt of $23,846,763, an increase in the loss on settlement of $33,272, a decrease in discount amortization of ~~$1,225,724,~~$2,756,000, and an increase in interest expense of ~~$65,651.~~$1,284,407.

During the nine months ended September 30, 2016, the Company incurred a net loss of $6,126,288, compared with a net loss of $709,308 for the nine months ended September 30, 2015. The increase in net loss of $5,416,980 is primarily attributable to an increase revenue of $15,091,704, an increase in cost of goods sold of $13,256,989, an increase in sales, marketing and pharmacy expenses of $1,035,751, an increase in general and administrative expenses of $2,236,895, an increase in discount amortization of $3,568,324, and an increase in interest expense of $410,930.

Liquidity and Capital Resources


Working Capital						Increase									Increase
	At September 30, 2016			At December 31, 2015		(Decrease)			At September 30, 2019			At December 31, 2018			(Decrease)
Current Assets	$	1,876,024		$	3,749,311	$	(1,873,287	)	$	89,467		$	262		$	89,205
Current Liabilities		2,016,787			2,921,812		970,999			5,211,692			5,115,692			96,000
Working Capital (Deficit)	$	(2,016,787	)	$	827,499	$	(2,844,286	)	$	(5,122,225	)	$	(5,115,430	)	$	(6,795	)

As atof September 30, ~~2016,~~2019, the Company had cash in the amount of ~~$111,327~~$11,973 compared to ~~$912,399~~$262 as of December 31, ~~2015.~~2018.

The Company had a working capital deficit of ~~$2,016,787~~$5,122,225 as of September 30, ~~2016,~~2019, compared to a working capital deficit of ~~$827,499~~$5,115,430 as of December 31, ~~2015.~~2018. The ~~decrease~~increase in working capital deficit of ~~$2,844,286~~$6,795 is primarily attributable to ~~a decrease~~an increase in cash of $801,072, a decrease in trade and other receivables, net of allowance, of $429,110, a decrease in rebates receivable of $359,399, a decrease in inventory of $302,949, a decrease in employee advances of $14,894,$11,711, an increase in ~~prepaid expenses~~operating lease asset of ~~$34,137, an increase~~$77,494, a decrease in accounts payable and accruedexpenses of ~~$894,277,~~$235,624, an increase in ~~pension contribution payable~~operating lease liability of ~~$6,882, and~~$77,494, an increase in short-term derivative liability of $29,995, a decrease in convertible debentures of $724,903, a decrease in related party convertible debentures of $411,006, an increase in notes payable of $360,000, an increase in related party notes payable of $126,152, an increase in convertible notes payable, net of unamortized discount, of $384,176, an increase in related party convertible notes payable of $20,000, and an increase in related party payables of ~~$69,840.~~$469,716.

Cash Flows	For the nine months ended						Increase
	September 30, 2019			September 30, 2018			(Decrease)
Net cash used by operating activities	$	(1,814,529	)	$	(1,070,725	)	$	(743,084	)
Net cash used by investing activities		(2,628	)		––			(2,628	)
Net cash provided by financing activities		1,828,868			1,110,799			718,069
Net cash provided by continuing operations		11,711			40,074			(28,363	)
Net cash used by discontinued operations		––			(39,942	)		39,942
Increase (decrease) in cash	$	11,711		$	132		$	11,579

Cash Flows
For the nine months ended

Increase


September 30, 2016

September 30, 2015

(Decrease)

Net cash provided by (used in) operating activities
$
(185,914
)
$
593,227

$
(779,141
)
Net cash used in investing activities

(91,073
)

(2,227
)

(88,846
)
Net cash provided by (used in) financing activities

(524,085
)

37,980


(562,065
)
Increase (decrease) in cash
$
(524,085
)
$
628,980

$
(1,430,052
)

Cash Flows from Operating Activities

During the nine months ended September 30, ~~2016,~~2019, the Company used ~~$185,914~~$1,814.529 of cash ~~flow~~ for operating activities compared with ~~$593,227 provided by operating activities~~$1,070,725 for the nine months ended September 30, ~~2015.~~2018. The ~~decrease~~increase in cash ~~provided~~used by operating activities of ~~$779,141~~$743,084 is primarily attributable ~~an increase~~to a decrease in net ~~loss~~income of ~~$5,416,980, an increase~~$24,538,561; increases in depreciation and amortization ~~expense~~ of ~~$145,784, an increase~~$220, losses on fair value adjustments of $261,441, a loss on settlement of $33,272, deposits of $7,800, royalties payable of $7,258, and related party payables of $394,027; and decreases in stock compensation/stock option amortization of ~~$127,673, an increase in~~$580,202, discount amortization of ~~$3,569,324, a decrease in~~$2,756,000, allowance for bad debt ~~allowance~~ of ~~$7,786,735, a decrease in accruals converted to related party loans~~$236, gain on disposal of ~~$303,750, a decrease in trade and other receivables~~subsidiary of ~~$10,924,391, a decrease in inventories~~$5,079,416, gain on extinguishment of ~~$302,949, an increase in prepaid expenses~~debt of ~~$6,877, an increase in loans~~$23,846,763, debt accretion of $654,543, accounts receivable of ~~$37,045, a decrease in~~$3,039, and accounts payable and accrued expenses of ~~$2,340,051, an increase in pension contribution payable of $6,882, and an increase in related party payables of $36,294.~~$1,302,938.

Cash Flows from Investing Activities

During the nine months ended September 30, ~~2016,~~2019, the Company used ~~$91,073~~$2,628 of cash flow ~~for~~from investing activities compared ~~with $2,227~~to $0 for the nine months ended September 30, ~~2015.~~2018. The increase in cash used ~~for~~by investing activities ~~of $88,846~~ is attributable to the purchase of ~~professional equipment.~~computer equipment in the current period.

Cash Flows from Financing Activities

During the nine months ended September 30, ~~2016,~~2019, the Company ~~used $562,065~~was provided with $1,828,868 of cash flow from financing activities, compared with ~~$37,980 provided by financing activities~~$1,110,799 for the nine months ended September 30, ~~2015.~~2018. The ~~decrease~~increase in cash flows provided by financing activities of $718,069 is attributable to an increase in proceeds from notes payable of ~~$100,000,~~$220,000, an increase in ~~repayment~~repayments of notes payable of ~~$629,085, and~~$17,224, a decrease in proceeds from convertible notes payable of ~~$37,980~~$268,220, an increase in repayments of convertible notes payable of $15,000, an increase in repayments of debentures of $754,369, a decrease in proceeds from the issuance of preferred shares of $231,000, and an increase in proceeds from the issuance of common stock of $1,783,882.

The Company’s principal sources of funds have been from the Company’s sales of its preferred and common stock, loans from related parties and third-party lenders, and net revenues generated from the sale and licensing of ~~common stock.~~its remote healthcare products and services.

During the nine months ended September 30, ~~2016,~~2019, the Company received ~~$5,000~~$1,825,132 and $69,000 in funds from the issuance of common shares ~~or other equity instruments,~~and preferred shares, respectively, compared to ~~$37,980 in proceeds~~$41,250 and $300,000 during the nine months ended September 30, ~~2015.~~2018.

As of September 30, 2019, related parties are due a total of $2,253,882 consisting of $1,000,643 in accrued compensation owed to officers and directors; $473,793 in accrued benefits and cash advances from officers and beneficial owners to the Company for operating expenses; $759,446 in promissory notes; and $20,000 in convertible promissory notes.

During the nine months ended September 30, 2019, $1,003,783 in related party compensation was accrued, and $573,000 was paid, and $300,000 was used for the subscription of $3,600,000 shares of the Company’s restricted common stock. In June 2019, $575,132 of related party debt was purchased by non-related-parties (the “Proceeds”). The Proceeds were collected on behalf of the related parties by the Company. Of the $396,500 paid to related parties during the current period, $159,500 was Proceeds. The remaining Proceeds of $415,632 were subsequently loaned to the Company by the related parties for operating expenses.

During the nine months ended September 30, 2019, $498,870 in benefits were accrued and cash advances were made to the Company by related parties for overhead requirements, of which $159,938 was paid/repaid to related parties.

During the nine months ended September 30, 2019, interest on related party debt in the amount of $80,003 was expensed. As of September 30, 2019, a total of $12,643 in accrued interest remains.

Future Financings

The Company has suffered recurring losses from operations. The continuation of the Company’s operations is dependent upon the Company’s attaining and maintaining profitable operations and raising additional capital as needed. The Company anticipates that it will have to raise additional funds through private placements of the Company’s equity securities and/or debt financing to complete its business plan.

The Company will require additional financing in order to proceed with its plan of operations, including approximately ~~$2,000,000~~$3,000,000 over the next 12 months to pay for its ongoing ~~expenses.~~expenses. These cash requirements include working capital, general and administrative expenses, the development of the Company’s product line, and the pursuit of acquisitions. These cash requirements are in excess of the Company’s current cash and working capital resources. Accordingly, the Company will require additional financing in order to continue operations and to repay its liabilities.There is no assurance that the financing will be completed as planned or at all. If the Company is unable to secure adequate capital to continue the Company’s planned operations, the Company’s shareholders may lose some or all of their investment and the Company’s business may fail.

In August 2019, the Company amended the private placement equity offering (the “Offering”) previously established in March 2019. The revised Offering is for the purchase of the 31,875,000 shares, or a maximum of $3,000,000, in Common Stock, plus equal Warrants at an exercise price of $0.25 per share for a term of three (3) years (the Common Stock and the Warrants together, the “Units”). The Offering provides for, among other thing, the purchase of the Units at a price of $0.10 per share, with a minimum total Offering of $2,000,000, and a minimum investment of 200,000 shares, or $20,000. Prior to the Offering, the Company sold $1,125,000 in Units through a Simple Agreement Future Equity (“SAFE”) offering, which included an aggregate of $375,000 in SAFE shares to be issued to three of the Company’s executive officers for the reduction of accrued officer compensation. The SAFE Units were sold at a 20% discount of the offering Unit price of $0.10, and are not a part of, nor reduce, the $2,000,000 minimum. The initial closing will occur on a date set by the Company in its discretion. The Company may sell Units in one or more closings.

The Company anticipates continuing to rely on equity sales of its common stock and preferred stock in order to continue to fund its business operations. Issuances of additional shares will result in dilution to the Company’s existing stockholders. There is no assurance that the Company will achieve any additional sales of its equity securities or arrange for debt or other financing to fund its planned business activities.

Contractual Obligations

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

Going Concern

The Company has incurred losses since inception resulting in an accumulated deficit of ~~$12,841,064,~~$25,649,201, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The unaudited interim consolidated ~~unaudited~~ financial statements included with this ~~annual~~quarterly report have been prepared on the going concern basis which assumes that adequate sources of financing will be obtained as required and that the Company’s assets will be realized and liabilities settled in the ordinary course of business. Accordingly, the unaudited interim consolidated ~~unaudited~~ financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s unaudited interim consolidated ~~unaudited~~ financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. The Company believes that understanding the basis and nature of the estimates and assumptions ~~involved with~~provided within the ~~following aspects of~~notes to the Company’s financial statements ~~is critical~~are sufficient to an understanding of its consolidated financial statements.

Included in the Acquisition Agreement for RoxSan Pharmacy, Inc., and as part of the negotiated purchase price, were representations and warranties made by the former owner involving certain primary revenue streams and related contracts. Shortly after the closing, however, management discovered that these representations were substantially inaccurate and/or completely false. These inaccuracies, and the improper disclosures and/or omissions made by the former owner during negotiations, would have significantly affected the purchase price and related note payable issued under the Acquisition Agreement. Management engaged a third-party to perform a valuation of the Pharmacy, utilizing revised inputs that more accurately reflected the Pharmacy's revenue streams as of the date of Acquisition. The valuation performed resulted in a fair market value of $4.7 to $5.2 million. After careful consideration, and based upon these significant differences, management has determined that the purchase price and related promissory note of $20,500,000 does not fairly represent the fair market value at the date of purchase. The Company has, therefore, applied a discount to the note of $15.3 million, to reduce the purchase price and related note to its estimated fair market value of $5.2 million, utilizing the higher value on the range as a conservative measure. The discount is being amortized over thirty-six (36) months.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed under theSecurities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s president, chief executive officer and chief financial officer to allow for timely decisions regarding required disclosure. In designing and evaluating the Company’s disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company’s management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of September 30, ~~2016,~~2019, the end of the ~~Company’s~~ period covered by this quarterly report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s president, chief executive officer and chief financial officer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s president, chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this quarterly ~~report.~~report , to provide reasonable assurance that the information required to be disclosed by the Company is recorded, processed, summarized and reported within the time periods specified, and that such information is accumulated and communicated to the Company’s management, including the Company’s president, chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the nine months ended September 30, 2019, the Company instituted changes in its internal control over financial reporting. The changes were made as a result of a material weakness identified at December 31, 2018, relating to the lack of controls over the period-end financial reporting process, and the lack of accounting and financial reporting personnel able to implement formal accounting policies with an appropriate level of accounting knowledge to identify and value complex debt and equity instruments. As a result of the weakness, a misstatement was made of the Company’s financial statements for the years ended December 31, 2018 and 2017.

In response to the material weaknesses described above, during the nine months ended September 30, 2019, the Company implemented and evaluated new internal controls over financial reporting. The new controls include, among other things, engaging qualified third-party service providers to assist with the financial reporting issues related to accounting for derivatives, and establishing internal processes to ensure the appropriate identification and analysis of derivative instruments. In addition, training was conducted related to analysis of debt and equity instruments, effective internal controls, and key accounting policies for derivative instruments.

As of September 30, 2019, the end of the period covered by this quarterly report, management believes that the improved processes remediate the material weaknesses, and has concluded that they are sufficient and operating effectively. Management has and will continue to enhance the risk assessment process, and the design and implementation of internal controls over financial reporting.

There have been no other changes in the Company’s internal controls over financial reporting that occurred during the ~~three-month~~nine-month period ended September 30, ~~2016,~~2019, that have materially ~~affected,~~ or are reasonably likely to materially affect, the Company’s internal controls over financial ~~reporting.~~reporting , except those disclosed above .

Audit Committee

The Company established an audit committee of the board of directors comprised of John L. Ogden (Chair) and E. William “Bill” Withrow Jr. The audit committee’s duties are to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.

Compensation Committee

The Company established a compensation committee of the Board comprised of John L. Ogden and E. William “Bill” Withrow Jr (Chair). The compensation committee oversees and determines the compensation of Parallax’s Chief Executive Officer and other executive officers, including salaries, bonuses, grants of stock options and other forms of equity-based compensation, approves all employment and severance agreements for executive officers, approves significant changes to benefit plans and performs such other functions as the Board may direct. The compensation committee also approves all other agreements containing compensation and services rendered, such as consulting and other compensatory agreements, and administers the Company’s stock incentive plans and make recommendations to the Board concerning any director compensation plan.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~In October 2015, shortly following~~

From time to time, the ~~Company's acquisition~~Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. The Company knows of no material, existing or pending legal proceedings against it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation, beyond those defined in the Company’s Annual Report on Form 10-K filed April 1, 2019, with the exception of those updates disclosed below:

Dispute with Former Owner of RoxSan ~~Melamed initiated two (2) legal actions against the Companyin the Superior Court of the State of California, County of Los Angeles, West District,Shahla Melamed v. Parallax Health Sciences, Inc.,~~ ~~action numbers SC 124873 and SC 125702 (the “Matter”).~~

Action No. SC125702:

In the Matter, action No. SC124873, Melamed sought rescission of the August 13, 2015 Purchase Agreement. Rescission was sought on the basis that, allegedly, in order to acquire the Pharmacy, the Company and its principals had allegedly defrauded Melamed, there had allegedly been a complete failure of consideration, and a unilateral mistake was allegedly made on the part of Melamed.

On March 17, 2017, the Court ruled in favor of the Company, and issued that Melamed is not entitled to rescission of the Purchase Agreement. The ruling of the Court stated that no fraud on the part of the Company or its principals had been demonstrated. The Court further ruled that there had been no failure of consideration, and that Melamed’s entry into the Agreement was not a result of a unilateral mistake on the part of Melamed. The Minutes of the Ruling were entered by the County Clerk on March 17, 2017.

~~The Company has likewise initiated legal action against Melamed and filed an action~~SC125702, in the Superior Court of the State of California, County of Los Angeles, West District,~~Parallax Health Sciences, et al. v. Shahla Melamed, et al.,~~case number SC 124898. The Complaint in that action alleges that Melamed has breached several obligations under the Purchase Agreement, and the Company is seeking to reduce the Secured Note due to undisclosed material changes in the business.

Subsequently filed pleadings by the Company and RoxSan in case number SC 124873 allege, among other things, that Melamed misrepresented the true earnings and source of income for the pharmacy business and had engaged in a fraudulent and illegal scheme to ship medications to states where her pharmacy was not licensed prior to the sale of the Pharmacy.

~~Purchase Price Dispute~~

~~Included in the Acquisition Agreement, and as part of the negotiated purchase price, were representations and warranties made by~~ the former owner involving certain primary revenue streams and related contracts. Shortly after the closing, however, management discovered that these representations were substantially inaccurate and/or completely false. These inaccuracies, and the improper disclosures and/or omissions made by the former owner during negotiations, would have significantly affected the purchase price and related note payable. As a result, among other things, management has initiated legal action against the former owner to seek a reduction in the purchase price.

~~Included in the false representations made by the former owner were prescription revenues in excess~~ of $8 million (and $16 million prior to the change in ownership) related to workers compensation claims that the former owner warranted as collectible. The insurance claims related to these prescriptions, which originated from and were provided to the pharmacy by the former owner's direct family members, were investigated by a third-party expert retained by the Company, and the claims were substantially identified as fraudulent. The former owner's family member has been indicted by the Department of Justice for among other things, insurance fraud.

~~In addition, management engaged a third-party to perform a valuation of the~~RoxSan Pharmacy, utilizing revised inputs that more accurately reflected the Pharmacy's revenue streams as of the date of Acquisition. The valuation performed resulted in a fair market value of $4.7 to $5.2 million. After careful consideration, and based upon these significant differences, management has determined that the purchase price and related promissory note of $20.5 million does not fairly represent the fair market value at the date of purchase. The Company has, therefore, applied a discount to the note of $15.3 million, to reduce the purchase price and related note to its estimated fair market value of $5.2 million, utilizing the higher value on the range as a conservative measure.

~~Control of Funds Dispute~~

For a period of time immediately after the closing of the Acquisition, the former owner would not relinquish control of the Pharmacy's bank accounts, and collected the Pharmacy's incoming cash revenues, refusing to transfer the funds to the new ownership. Furthermore, when the Company attempted to change the corporate records and signatories on the existing bank accounts, the former owner disputed the changes, resulting in approximately $180,000 in corporate funds being frozen and held for adjudication. During this period, the Company was forced to request that the former owner pay the Pharmacy's operating expenses. At no time after the Company opened new accounts did the former owner cooperate with the transference or willingly relinquish control of the Pharmacy's operating cash flow or incoming cash revenues. As a result, an extensive reconciliation was performed to determine what amounts were collected and paid by the former owner, and what amounts were due to the Company. The reconciliation resulted in over $412,000 owed to the Company from the former owner. The reconciliation and underlying documentation went under judicial review, and on July 24, 2017, the Company was notified that the results of the review were in favor of the Company in the amount of $412,948. A judgment is pending for the order of $412,948 owed to the Company from the former owner.

~~In the Matter, action No. SC125702,~~Inc., Shahla Melamed (“Melamed”), alleges that the Company is in default under the terms of the Purchase Agreement and Secured Note, and the Company’s termination of Melamed’s employment agreement. The Company firmly believes that it had adequate grounds to justify the termination of the employment, that it acted within its rights, and shall prevail in these proceedings. A trial date, previously set for December 2018, is currently set for January 2020.

~~All above~~Action No. SC 124898:

The Company has initiated legal ~~matters are currently pending.~~

~~On September 14, 2015, the US Securities~~action against Melamed and ~~Exchange Commission and the Justice Department~~ filed a complaint, ~~and an indictment~~action number SC 124898, in the ~~Massachusetts District~~Superior Court of the ~~United States~~State of California, County of Los Angeles, West District, ~~Court (the "Cases") against, among others, Edward W. Withrow III,~~Parallax Health Sciences, et al. v. Shahla Melamed, et al. The Complaint in that action alleges that Melamed has breached several obligations under the ~~co-founder of~~Purchase Agreement, and the Company ~~co-inventor of~~is seeking to reduce the ~~Company's foundational patents, and one of~~Secured Note due to undisclosed material changes in the Company's beneficial shareholders. The Cases allege that the individuals named within the SEC complaint engaged in activities involving the Company's securities to obtain financial benefit, and made false statements during SEC examination. The criminal casebusiness. A trial date, previously set for December 2018, is currently ~~pending and~~ set for ~~trial on December 2, 2017. Mr. Withrow has consistently denied all allegations of wrongdoing against him and he intends to continue to defend the case vigorously.~~January 2020.

Disputes with Former Executives

Action No. CV2017-052804

On ~~or about June 20, 2017, American Express Bank, FSB filed suit against RoxSan Pharmacy, Inc.~~October 8, 2018, a settlement was reached between Mr. Engert and the Company (the “Settlement”). The Settlement includes, among other things, a cash payment to Mr. Engert in ~~Superior Court of California, County of Los Angeles for an~~the amount of ~~$1,015,052. On or about June 27, 2017, American Express Travel Related Services Company, Inc. filed suit against RoxSan Pharmacy, Inc. in Supreme Court~~$139,000, and the cancellation of ~~New York, County~~all of ~~New York~~Mr. Engert’s equity holdings in the ~~amounts of $153,500 and $273,500. On July 31, 2017 and August 16, 2017 respectively,~~Company. The Settlement resulted in a net loss to the Company ~~entered into~~of $33,272. On April 10, 2019, a stipulation for dismissal was filed, and ~~settlement agreements of these matters to make payments in lieu of further litigation at this time.~~the matter has been fully resolved.

The Company knows of no other material existing or pending legal proceedings against it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to the Company.

ITEM 1A. RISK FACTORS

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

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

~~The following represents~~all unregistered securities issued by the registrant during the current period, including sales of reacquired securities, as well as new issues, securities issued in exchange for property, services, or other securities, and new securities resulting from the modification of outstanding securities:

On ~~July 28, 2016, 20,000,000 shares of the Company's common stock held by three (3) shareholders were cancelled and returned to treasury.~~

~~On July 30, 2016,~~January 24, 2019, in connection with a certain ~~consulting agreements,~~senior secured promissory note, the Company issued ~~250,000~~150,000 shares of its restricted common stock ~~for $0.001 per share.~~to the note holders as a form of interest. The shares were valued at ~~$7,500, were issued for cash in the amount of $250.~~ $15,000.

On ~~September 23, 2016,~~January 30, 2019, in connection with a certain convertible debenture, the ~~acquisition of Parallax Health Management, Inc. (formerly QOLPOM, Inc.), the Company issued 5,000,000~~holder elected to convert $175,000 into 1,750,000 shares of its restricted common stock ~~for $0.001~~at a conversion rate of $0.10 per share. ~~The shares, valued at $225,000, were issued for cash in the amount of $5,000.~~

On ~~September 25, 2016,~~January 31, 2019, in connection with a certain consulting agreement, the Company issued ~~250,000~~1,666,667 shares of its restricted common stock to the consultant for services valued at $200,000.

On January 31, 2019, in connection with a Simple Agreement Future Equity (“SAFE”) offering, the Company issued 500,000 shares of its restricted common stock at $0.10 per share for $50,000 cash.

On February 6, 2019, in connection with certain convertible debt in the amount of $20,000 and accrued interest in the amount of $2,000, the Company issued 220,000 shares of its restricted common stock at a conversion rate of $0.10 per share.

On February 12, 2019, in connection with a certain senior secured promissory note, the Company issued 40,000 shares of its restricted common stock to the note holders as a form of interest. The shares were valued at $4,000.

On February 25, 2019, in connection with a SAFE offering, the Company issued 3,750,000 shares of its restricted common stock at $0.10 per share for $375,000 cash.

On February 25, 2019, in connection with a certain consulting agreement, the Company issued 25,000 shares of its restricted common stock to the consultant for services valued at $2,500.

On February 27, 2019, in connection with a certain consulting agreement, the Company issued 1,000,000 shares of its restricted common stock to the consultant for services valued at $120,000.

In March 2019, in connection with a certain convertible debenture, the holder elected to convert $95,000 into 1,719,328 shares of the Company’s restricted common stock.

On March 25, 2019, in connection with a certain consulting agreement, the Company issued 25,000 shares of its restricted common stock to the consultant for services valued at $2,500.

On March 25, 2019, in connection with a SAFE offering, the Company issued 750,000 shares of its restricted common stock at $0.10 per share for $75,000 cash.

In April 2019, in connection with a certain convertible debenture, the holder elected to convert $105,000 into 2,340,410 shares of the Company’s restricted common stock.

On April 5, 2019, in connection with a certain services agreement, the Company issued 600,000 shares of its restricted common stock for ~~$0.001 per share. The shares,~~services valued at ~~$16,000, were~~$44,160.

On April 15, 2019, the Company issued 400,000 shares of its restricted common stock for services valued at $50,000.

On April 25, 2019, in connection with a certain consulting agreement, the Company issued 25,000 shares of its restricted common stock to the consultant for services valued at $2,500.

On April 25, 2019, in connection with a SAFE offering, the Company issued 2,000,000 shares of its restricted common stock at $0.10 per share for $200,000 cash.

On April 26, 2019, in connection with a certain stock purchase agreement, the Company issued 400,000 shares of its restricted common stock, valued at $28,000, for cash in the amount of ~~$250.~~$400.

~~Exemption From Registration~~.On April 29, 2019, in connection with a certain private placement agent agreement, the Company issued 1,000,000 shares of its restricted common stock to the consultant for services valued at $71,000.

On May 2, 2019, in connection with a SAFE offering, the Company issued 500,000 shares of its restricted common stock at $0.10 per share for $50,000 cash.

On May 6, 2019, in connection with an equity funding, the Company issued 12,000,000 shares of its restricted common stock for cash in the amount of $1,000,000, of which $500,000 is receivable.

On May 8, 2019, in connection with a certain convertible promissory note in the principal sum of $20,000, the Company issued 289,017 shares of its restricted common stock.

On May 12, 2019, in connection with a certain senior secured promissory note, the Company issued 40,000 shares of its restricted common stock to the note holders as a form of interest. The shares were valued at $4,000.

On May 15 2019, in connection with the conversion of 57,500 Series A preferred stock valued at $69,000, the Company issued 1,150,000 shares of its restricted common stock at a conversion ratio of 20 shares of common stock ~~referenced herein~~for each share of Series A preferred stock held.

On May 15, 2019, in connection with the executive employment agreement, the Company issued David Appell, the Chief Operating Officer, 3,000,000 shares of the Company’s restricted common stock for cash in the amount of $3,000. The shares were valued at $201,300, of which 25% vest immediately, and the remaining vest when the Company achieves certain earnings goals.

On May 15, 2019, in connection with an employment agreement, the Company issued 125,000 shares of the Company’s restricted common stock,valued at $8,388, for cash in the amount of $125.

On May 25, 2019, in connection with a certain consulting agreement, the Company issued 37,500 shares of its restricted common stock to the consultant for services valued at $3,750.

In May 2019, in connection with a certain convertible debenture, the holder elected to convert $15,000 into 378,310 shares of the Company’s restricted common stock.

On June 11, 2019, in connection with a settlement for the retirement of 3,666,670 warrants (4,401,760 warrants, as adjusted under anti-dilution provisions) , the Company issued 1,000,000 shares of the Company’s restricted common stock, valued at $71,000.

On June 20, 2019, in connection with the cashless exercise of certain warrants, the Company issued 600,000 shares of the Company’s restricted common stock, valued at $63,600.

On June 20, 2019, in connection with a certain consulting agreement, the Company issued 2,000,000 shares of its restricted common stock to the consultant for services valued at $212,000.

On June 25, 2019, in connection with a certain consulting agreement, the Company issued 37,500 shares of its restricted common stock to the consultant for services valued at $3,750.

In June 2019, in connection with certain convertible debentures, the holders elected to convert $80,142 into 2,605,660 shares of the Company’s restricted common stock.

In June 2019, in connection with certain convertible debt in the amount of $256,232, the Company issued 3,902,200 shares of its restricted common stock.

In July 2019, in connection with certain convertible debt in the amount of $354,000, the Company issued 5,900,000 shares of its restricted common stock.

In July 2019, in connection with certain promissory notes in the amount of $220,000, the Company issued 1,200,000 shares of its restricted common stock, valued at $190,200.

In July 2019, in connection with the settlement of certain related party convertible debentures, the Company issued 1,380,811 shares of its restricted common stock, valued at $131,315.

In July 2019, in connection with a certain consulting agreement, the Company issued 37,500 shares of its restricted common stock to the consultant for services valued at $3,750.

In August 2019, in connection with an investment in Global Career Network, Inc., the Company issued 6,666,667 shares of its restricted common stock for $0.15 per share, valued at $1,000,000.

In August 2019, in connection with the SAFE offering, the Company issued 6,375,000 shares of its restricted common stock, including 1,875,000 shares issued to accredited investors, valued at $156,250, and 4,500,000 shares issued to four officers/directors in exchange for the reduction of accrued compensation in the amount of $375,000.

In September 2019, in connection with the conversion of certain convertible debt in the amount of $855,503, the Company issued 8,555,029 shares of its restricted common stock, including 5,897,419 shares issued to Huntington Chase, LLC, a beneficial owner, for convertible debt in the amount of $589,742.

Exemption From Registration. None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. Unless otherwise stated, the sales of the above securities re deemed to be exempt from registration under the Securities Act in reliance ~~upon an exemption from registration afforded either under~~on Section ~~4(2)~~4(a)(2) of the Securities Act ~~for~~(and Regulation D or Regulation S promulgated thereunder) or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving aany public offering or ~~Regulation D promulgated thereunder,~~pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to, or ~~Regulation S~~ for ~~offers~~sale in connection with, any distribution thereof, and appropriate legends were placed on the share certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities ~~outside the U.S.~~were made without any general solicitation or advertising.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY STANDARDS

Not Applicable.

ITEM 5. OTHER INFORMATION

The following financial information is provided in reference to the Registrant’s merger (the “Merger”) that took place on September 20, 2016, as disclosed in the Registrant’s Current Report filed on Form 8-K September 23, 2016 herewith incorporated by reference.None.


~~(a)~~	*~~Financial Statements of Business Acquired.~~*

~~The audit on the financial statements of Qolpom, Inc. as of December 31, 2015 is currently being performed. The audited financial statements will be filed upon completion of the audit.~~

The following financial statements reflect the unaudited balance sheet of Qolpom, Inc. (“Qolpom”) as of June 30, 2016 and December 31, 2015, before the Merger occurred on September 20, 2016, and also reflect the unaudited statements of income, stockholders’ equity, and cash flows of Qolpom for the six months ended June 30, 2016 and the four months ended December 31, 2015, before the Merger occurred on September 20, 2016.

QOLPOM, INC.
BALANCE SHEET
(unaudited)

June 30, 2016

December 31, 2015

ASSETS

Current assets

Due from affiliates
$
64,492

$
24,915

TOTAL ASSETS
$
64,492

$
24,915

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable
$
5,576

$
––

Total current liabilities

5,576

––

Total liabilities

5,576

––

Stockholders' equity

Common stock: 1,000,000 shares authorized, $1 par, 150 issued and outstanding as of June 30, 2016 and December 31, 2015

150

150

Retained earnings

58,766

24,765

Total stockholders' equity

58,916

24,915

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
64,492

$
24,915

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

QOLPOM, INC.
STATEMENT OF OPERATIONS
(unaudited)

For the six months ended

For the four months ended

June 30, 2016

December 31, 2015

Revenue
$
180,000

$
24,930

Cost of sales

5,576

––

Gross profit

174,424

24,930

General and administrative expenses

140,423

165

Net income
$
34,001

$
24,765

Net (loss) per common share - basic and diluted
$
226.67

$
165.10

Weighted average common shares outstanding - basic and diluted

150

150

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

QOLPOM, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD FROM SEPTEMBER 16, 2015 TO JUNE 30, 2016
(unaudited)

COMMON STOCK

RETAINED

SHARES

AMOUNT

EARNINGS

TOTAL

Balance, September 16, 2015 (date of inception)
––

$
––

$
––

$
––

Issuance of common stock to officers
150

150

150

Net income

24,765

24,765

Balance, December 31, 2015
150

$
150

24,765

24,765

Net income

34,001

34,001

Balance, June 30, 2016
150

$
150

$
58,766

$
58,766

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

QOLPOM, INC.
STATEMENT OF CASH FLOWS
(unaudited)

For the six months ended

For the four months ended

June 30, 2016

December 31, 2015

Cash flows from operations:

Net loss
$
34,001

$
24,765

Adjustments to reconcile net loss to net cash used in operating activities:

Increase in affiliate receivables

(39,577
)

(24,915
)
Increase in accounts payable

5,576

––

Net cash used in operating activities

––

(150
)

Cash flows from financing activities:

Proceeds from issuance of common shares

––

150

Net cash provided by financing activities

––

150

Net increase (decrease) in cash

––

––

Cash - beginning of period

––

––

Cash - end of period
$
––

$
––

NON-CASH ACTIVITIES:
$
––

$
––

SUPPLEMENTAL INFORMATION

Interest paid
$
––

$
––

Income taxes paid
$
––

$
––

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

~~QOLPOM, INC.~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~JUNE 30, 2016 AND DECEMBER 31, 2015~~

~~NOTE 1. OVERVIEW AND NATURE OF BUSINESS~~

~~The Company was founded in Arizona in September 2015, and on June 20, 2016, QOLPOM, Inc. filed its articles of incorporation with the Secretary of the state of Arizona.~~

The Company’s primary focus is creating a home health hub to support remote patient monitoring, medication adherence and tele-medicine. The Company’s patent-pending QOLPOM product line includes a personal medication dispensing and remote monitoring system that can capture (through external sensors), monitor, and store patient vital signs along with electronic patient records that gives users access to digital health care and telemedicine.

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

~~Basis of Presentation~~

~~The Company’s fiscal year-end is December 31.~~

~~Use of Estimates~~

~~Fair Value Hierarchy~~

~~Level 1: Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.~~

Level 2: Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3: Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk.

~~Cash and Cash Equivalents~~

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of June 30, 2016, and December 31, 2015, the Company had no cash equivalents.

~~Fair Value of Financial Instruments~~

As of June 30, 2016, and December 31, 2015, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation.

~~There were no outstanding derivative financial instruments as of June 30, 2016 and December 31, 2015.~~

~~Net Income (Loss) Per Common Share~~

Net earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible preferred shares and the exercise of the Company’s stock options and warrants. As of June 30, 2016, and December 31, 2015, the Company had no dilutive common stock equivalents.

~~Comprehensive Loss~~

~~As of June 30, 2016, and December 31, 2015, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.~~

~~Revenue Recognition~~

~~Recently Adopted Accounting Standards~~

~~Not yet adopted:~~

In February 2016, the FASB issued ASU No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU will be effective for the Company beginning January 1, 2019 with early adoption permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation. The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this standard are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

~~any other Topic amended by Update 2014-09). The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.~~

~~Recently Issued Accounting Standards Updates:~~

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

~~NOTE 3. COMMON STOCK~~

~~The total number of authorized shares of common stock that may be issued by the Company is 1,000,000 with a par value of $1.00 per share.~~

~~The Company issued 150 shares of the Company's common stock to its founders at $1.00 per share, for cash in the amount of $150.~~

~~As of June 30, 2016, and December 31, 2015, the Company had 150 common shares issued and outstanding.~~

~~NOTE 4. SUBSEQUENT EVENTS~~

The Company has evaluated the events and transactions for recognition or disclosure subsequent to December 31, 2015, and has determined that there have been no events that would require disclosure, except for the following:

On August 25, 2016, the Company entered into an Assignment Agreement with La Frontera Community Solutions Inc., an Arizona nonprofit corporation (the “Assignor”), for all rights, title and interest in certain intellectual property, including the QOLPOM patents and trademarks. Consideration for the assignment of rights includes:

~~a royalty fee of $2,000,000, to be paid through revenues generated by the Company from the QOLPOM hardware and monitoring service, payable in full by August 25, 2021; and~~

~~a royalty of 3% of the revenue generated from the QOLPOM hardware and monitoring service, in perpetuity.~~

On August 29, 2016, the Company entered into a License Agreement with La Frontera Community Solutions Inc., (the “Assignor”), for the license of certain intellectual property for a term of twenty (20) years. Consideration for the assignment of rights includes:

~~a royalty fee of $1,500; and~~

~~a royalty of 3% of the revenue generated from the licensed property, in perpetuity.~~

On September 20, 2016 (the “Closing”), the Company and its shareholders (the “Seller"), entered into an Agreement to Purchase/Sell One Hundred Percent of the Issued and Outstanding Shares of QOLPOM, Inc. and its Assets, Inventory and Intellectual Property (the “Purchase Agreement”) with Parallax Health Sciences, Inc., a Nevada corporation (“PRLX”). Pursuant to the Purchase Agreement, in exchange for 100% of the QOLPOM stock and 100% of QOLPOM’s assets, inventory and intellectual property, among other things, consideration to the Seller includes:

~~stock purchase agreements for the Seller to purchase an aggregate of 5,000,000 shares of PRLX common stock at $0.001 per share; and~~

~~a cash earn-out of $2,000,000, to be paid through revenues generated from the QOLPOM business segment; and~~

~~a royalty of 3% of the revenue generated by QOLPOM from its technology to a third-party non-profit organization located in Arizona; and~~

~~options granted to the Sellers to purchase 2,500,000 shares of PRLX common stock, to vest quarterly over three (3) years beginning one (1) year after Closing, with the following terms:~~

~~500,000 common stock options priced at $0.10.~~

~~1,000,000 common stock options priced at $0.15.~~

~~1,000,000 common stock options priced at $0.25.~~

On September 23, 2016, pursuant to the terms and conditions of the Purchase Agreement, 5,000,000 shares of PRLX restricted common stock were issued to the Seller. The shares, valued at $225,000, were issued for cash in the amount of $5,000.

~~On January 20, 2017, the Company changed its name of its wholly owned subsidiary, QOLPOM, Inc., to Parallax Health Management, Inc.~~

~~* * * * *~~


~~(b)~~	*~~Pro Forma Financial Information.~~*

The following financial information reflects the unaudited condensed consolidated pro forma income statement of Parallax Health Sciences, Inc. ("Parallax") for the nine months ended September 30, 2016, as if the Merger had occurred on January 1, 2016, and the unaudited condensed consolidated pro forma income statement of Parallax for the year ended December 31, 2015, as if the Merger had occurred on January 1, 2015.

The pro forma adjustments are preliminary and have been made solely for purposes of developing the pro forma financial information for illustrative purposes necessary to comply with the requirements of the SEC. The actual results reported in periods following the transactions may differ significantly from that reflected in these pro forma consolidated income statements for a number of reasons, including differences between the assumptions used to prepare these pro forma consolidated income statements and actual amounts and cost savings from operating efficiencies. In addition, no adjustments have been made to the unaudited pro forma consolidated income statements for non-recurring items related to the transactions. As a result, the pro forma financial information does not purport to be indicative of what the results of operations would have been had the transactions been completed on the applicable dates of this pro forma financial information. The pro forma consolidated income statements are based upon the historical financial statements of Parallax and do not purport to project future results of operations after giving effect to the transactions.

PARALLAX HEALTH SCIENCES INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
As of and for the nine months ended September 30, 2016 **
(unaudited)

Parallax

Qolpom



Pro Forma

Historical

Consolidation

Pro Forma

Consolidated


9/30/2016

9/30/2016

Adjustments

9/30/2016



Revenue
$
19,808,910

$
292,821

$
––

$
20,101,731

Cost of revenues

16,914,818

16,931

––

16,931,749

Gross profit

2,894,092

275,890

––

3,169,982

Sales, marketing, and pharmacy expenses

1,461,576

––

––

1,461,576

General and administrative expenses

3,070,169

249,196

––

3,319,365

Operating loss

(1,637,653
)

26,694

––

(1,610,959
)

Other income (expense)

(4,464,770
)

––

––

(4,464,770
)

Net income (loss)
$
(6,102,423
)
$
26,694

$
––

$
(6,075,729
)

Net (loss) per common share - basic and diluted
$
(0.05
)

$
(0.05
)

Weighted average common shares outstanding - basic and diluted

116,143,416

116,143,416

**
As if the transaction took place January 1, 2016

PARALLAX HEALTH SCIENCES INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
As of and for the year ended December 31, 2015 **
(unaudited)

Parallax

Qolpom



Pro Forma

Historical

Consolidation

Pro Forma

Consolidated


12/31/2015

12/31/2015

Adjustments

12/31/2015



Revenue
$
11,579,720

$
24,930

$
––

$
11,604,650

Cost of revenues

9,874,244

––

––

9,874,244

Gross profit

1,705,476

24,930

––

1,730,406

Sales, marketing, and pharmacy expenses

1,061,069

––

––

1,061,069

General and administrative expenses

1,906,488

165

––

1,906,653

Operating loss

(1,262,081
)

24,765

––

(1,237,316
)

Other income (expense)

(2,457,817
)

––

––

(2,457,817
)

Net income (loss)
$
(3,719,898
)
$
24,765

$
––

$
(3,695,133
)

Net (loss) per common share - basic and diluted
$
(0.03
)

$
(0.03
)

Weighted average common shares outstanding - basic and diluted

131,734,518

131,734,518

**
As if the transaction took place January 1, 2015

ITEM 6. EXHIBITS

Exhibits required by Item 601 of Regulation S-B


Exhibit Number	Description of Exhibit	Filing Reference
~~(2)~~	~~Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession~~
~~2.1~~	~~Share Exchange Agreement between Endeavor Power Corporation, Endeavor Holdings, Inc. and Parallax Diagnostics, Inc. and the Parallax Shareholders dated October 1, 2012~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~2.2~~	~~Letter of Intent between Parallax Diagnostics, Inc. and Endeavor Power Corporation dated August 15, 2012~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~2.3~~	~~Agreement to Purchase and Sell 100% of RoxSan Pharmacy, and Its Assets and Inventory~~	~~Filed with the SEC on August 18, 2015 as part of the Company's Current Report on Form 8-K.~~
~~2.4~~	~~Agreement to Purchase and Sell 100% of Qolpom, Inc, and Its Assets, Intellectual Property and Inventory dated August 31, 2016~~	~~Filed with the SEC on September 23, 2016, as part of the Company's Current Report on Form 8-K~~
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation	Filed with the SEC on March 5, 2007 as part of the Company’s Registration Statement on Form SB-2.
3.1(a)	Amended and Restated Articles of Incorporation	Filed with the SEC on May 17, 2010 as part of the Company’s Annual Report on Form 10-K.
3.1(b)	Amended and Restated Articles of Incorporation	Filed with the SEC on April 1, 2019, as part of the Company's Annual Report on Form 10-K.
3.2	Bylaws	Filed with the SEC on March 5, 2007 as part of the Company’s Registration Statement on Form SB-2.
3.2(a)	Amended Bylaws	Filed with the SEC on May 17, 2010 as part of the Company’s Annual Report on Form 10-K.
3.3	Articles of Merger between Endeavor Power Corporation and Parallax Diagnostics, Inc. filed with Secretary of State of Nevada on November 6, 2012	Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.
3.4	Certificate of Amendment filed with the Secretary of State of Nevada on January 9, 2014	Filed with the SEC on April ~~14,~~15, 2014 as part of the Company’s Annual Report on Form 10-K.
3.5	Certificate of Designation effective June 17, 2011-Series A Preferred Stock	Filed with the SEC on March 19, 2019 as part of the Company's Current Report on Form 8-K
3.6	Certificate of Designation effective December 2, 2016-Series B Preferred Stock	Filed with the SEC on March 19, 2019 as part of the Company's Current Report on Form 8-K
3.7	Certificate of Designation effective August 10, 2018-Series C Preferred Stock	Filed with the SEC on March 19, 2019 as part of the Company's Current Report on Form 8-K
(4)	Instruments Defining the Rights of Security Holders, Including Indentures
~~4.1~~4.10	~~2011 Equity Incentive Plan~~12% Convertible Promissory Note dated ~~March 26, 2011~~April 2, 2019	Filed with the SEC on ~~March 31, 2011~~April 9, 2019 as part of the Company’s Current Report on Form ~~8-K.~~8-K
~~4.2~~4.11	~~Sample Stock Option~~Securities Purchase Agreement dated April 2, 2019	Filed with the SEC on ~~March 31, 2011~~April 9, 2019 as part of the Company’s Current Report on Form ~~8-K.~~8-K
~~4.3~~4.12	~~Sample Stock Award Agreement for Stock Units~~12% Convertible Promissory Note dated April 8, 2019	Filed with the SEC on ~~March 31, 2011~~April 19, 2019 as part of the ~~Company’s~~Company's Current Report on Form ~~8-K.~~8-K
~~4.4~~4.13	~~Sample Stock Award Agreement for Restricted Stock~~Warrant dated April 8, 2019	Filed with the SEC on ~~March 31, 2011~~April 19, 2019 as part of the ~~Company’s~~Company's Current Report on Form ~~8-K.~~8-K
~~4.5~~4.14	~~2010 Employee Stock Option Plan of Parallax Diagnostics, Inc,~~Securities Purchase Agreement dated ~~October 1, 2010~~May 6, 2019	Filed with the SEC on ~~November 15, 2012~~May 7, 2019 as part of the ~~Company’s~~Company's Current Report on Form ~~8-K.~~8-K
~~4.6~~4.15	~~Sample Stock Option~~Registration Rights Agreement dated May 6, 2019	Filed with the SEC on ~~November 15, 2012~~May 7, 2019 as part of the ~~Company’s~~Company's Current Report on Form ~~8-K.~~8-K
~~(10)~~4.16	~~Material Contracts~~
~~10.1~~Warrant dated May 6, 2019	~~Second Amendment to Joint Venture Agreement between the Company and Federated Energy Corporation dated September 15, 2009~~	Filed with the SEC on ~~September 19, 2009~~May 7, 2019 as part of the ~~Company’s~~Company's Current Report on Form ~~8-K.~~8-K
~~10.2~~4.17	~~Farmount Agreement between the Company~~Debt Settlement and ~~Togs Energy, Inc. and M-C Production & Drilling Co, Inc.~~Warrant Retirement dated ~~July 21, 2009~~June 4, 2019	Filed with the SEC on ~~July 23, 2009~~June 11, 2019 as part of the ~~Company’s~~Company's Current Report on Form ~~8-K.~~8-K
~~10.3~~4.18	~~Convertible Promissory~~Senior Secured Note ~~to Regal Capital Development, Inc.~~ dated ~~August 25, 2009~~July 3, 2019	~~Filed with the SEC on September 4, 2009 as part of the Company’s Current Report on Form 8-K.~~
~~10.4~~	~~Common Stock Purchase Warrant to Regal Capital Development, Inc. dated August 25, 2009~~	~~Filed with the SEC on September 4, 2009 as part of the Company’s Current Report on Form 8-K.~~
~~10.5~~	~~Settlement Agreement between the Company and Regal Capital Development, Inc. dated September 11, 2010~~	Filed with the SEC on July 12, ~~2010~~2019 as part of the ~~Company’s~~Company's Current Report on Form ~~8-K.~~8-K
~~10.6~~4.19	~~Promissory~~ Note ~~to Regal Capital Development, Inc.~~and Purchase Agreement dated ~~September 11, 2010~~July 3, 2019	Filed with the SEC on July 12, ~~2010~~2019 as part of the ~~Company’s~~Company's Current Report on Form ~~8-K.~~8-K
~~10.7~~4.19	~~Amended~~12% Fixed Convertible Promissory Note ~~to Regal Capital Development, Inc.~~ dated ~~September 11, 2010~~October 23, 2019	Filed with the SEC on ~~April 14, 2011~~October 16, 2019 as part of the ~~Company’s Annual~~Company's Current Report on Form ~~10-K.~~8-K
~~10.8~~4.20	~~Settlement Agreement between the Company and Andrew I. Telsey, P.C.,~~10% Convertible Promissory Note dated ~~August 3, 2010~~October 30, 2019	Filed with the SEC on ~~August 22, 2011~~October 16, 2019 as part of the Company's Current Report on Form 8-K
(10)	Material Contracts
10.1	Employment Agreement between Parallax Health Sciences, Inc. and David Appell dated April 19, 2019	Filed with the SEC on October 23, 2019, as part of the Company’s Quarterly Report on Form 10-Q.
~~10.9~~10.2	~~Settlement~~Purchase Agreement between ~~the Company~~Parallax Health Sciences, Inc. and ~~Regal Capital Development, Inc.~~Global Center Networks dated ~~September 17, 2010~~August 28, 2019	Filed with the SEC on October ~~21, 2010 as part of the Company’s Current Report on Form 8-K.~~
~~10.10~~	~~Promissory Note to Regal Capital Development, Inc. dated September 17, 2010~~	~~Filed with the SEC on October 21, 2010 as part of the Company’s Current Report on Form 8-K.~~
~~10.11~~	~~Employment Agreement between the Company and Alfonso Knoll dated November 8, 2010~~	~~Filed with the SEC on November 12, 2010 as part of the Company’s Current Report on Form 8-K.~~
~~10.12~~	~~Promissory Note to Regal Capital Development, Inc. dated November 23, 2010~~	~~Filed with the SEC on November 30, 2010 as part of the Company’s Current Report on Form 8-K.~~
~~10.13~~	~~Amendment to Employment Agreement between the Company and Alfonso Knoll dated November 17, 2010~~	~~Filed with the SEC on November 30, 2010 as part of the Company’s Current Report on Form 8-K.~~
~~10.14~~	~~Consulting Agreement between the Company and The Musser Group, LLC dated February 21, 2011~~	~~Filed with the SEC on February 25, 2011 as part of the Company’s Current Report on Form 8-K.~~
~~10.15~~	~~Promissory Note to Marans Invest & Finance S.A. dated April 8, 2011~~	~~Filed with the SEC on August 22, 2011 as part of the Company’s Quarterly Report on Form 10-Q.~~
~~10.16~~	~~Promissory Note to Rast Trade Corp. dated April 21, 2011~~	~~Filed with the SEC on August 22, 2011 as part of the Company’s Quarterly Report on Form 10-Q.~~
~~10.17~~	~~Settlement Agreement between the Company and Mr. Alfonso Knoll dated June 8, 2011~~	~~Filed with the SEC on June~~ 16, ~~2011 as part of the Company’s Current Report on Form 8-K.~~
~~10.18~~	~~Settlement Agreement between the Company and The Musser Group, LLC dated July 19, 2011~~	~~Filed with the SEC on August 22, 2011 as part of the Company’s Quarterly Report on Form 10-Q.~~
~~10.19~~	~~Assignment of Intellectual Property between Roth Kline, Inc. and Montecito BioSciences, Ltd. dated September 10, 2010~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.20~~	~~License of Intellectual Property between Roth Kline Inc. and Montecito BioSciences, Ltd. dated September 10, 2010~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.21~~	~~Modification to the Assignment of Intellectual Property between Roth Kline, Inc. and Montecito BioSciences, Ltd.~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.22~~	~~Modification to the License of Intellectual Property between Roth Kline Inc. and Montecito BioSciences, Ltd. dated September 10, 2010~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.23~~	~~Employment Agreement between Roth Kline, Inc. and Michael Redmond dated November 15, 2010~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.24~~	~~Development and Supply Agreement between Parallax Diagnostics, Inc. and Corder Engineering, LLC dated July 1, 2011~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.25~~	~~Supply Agreement between Parallax Diagnostics, Inc. and Meyer Stevens Group, Inc. dated July 1, 2011~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.26~~	~~Consulting Agreement between Parallax Diagnostics, Inc. and Huntington Chase Financial Group, LLC dated January 2, 2012~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.27~~	~~Consulting Agreement between Parallax Diagnostics, Inc. and Greg Suess dated July 11, 2012~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.28~~	~~Convertible Preferred Purchase Agreement between Parallax Diagnostics, Inc. and Hamburg Investment Company, LLC, dated June 17, 2011~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.29~~	~~Convertible Preferred Purchase Agreement between Parallax Diagnostics, Inc. and Huntington Chase Financial Group, LLC, dated June 17, 2011~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.30~~	~~Convertible Preferred Purchase Agreement between Parallax Diagnostics, Inc. and Huntington Chase Financial Group, LLC, dated September 30, 2011~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~10.31~~	~~Consulting Agreement between Endeavor Power Corporation and Capital Group Communications, Inc. dated January 10, 2013~~	~~Filed with the SEC on May 15, 2013 as part of the Company’s Quarterly Report on Form 10-Q.~~
~~10.32~~	~~Employment Agreement between Parallax Health Sciences, Inc., RoxSan Pharmacy, and Shahla Melamed dated August 13, 2015~~	~~Filed with the SEC on August 18, 2015~~2019 as part of the Company's Current Report on Form ~~8-K.~~8-K
~~10.33~~(22)	~~Assignment Agreement between La Frontera Community Solutions, Inc. and QOLPOM Inc. dated August 25, 2016~~List of Subsidiaries
	Parallax Health Management, Inc.
	Parallax Behavioral Health, Inc.
	Parallax Diagnostics, Inc.
	Parallax Communications, Inc.
(31)	Section 302 Certifications
31.1*	Section 302 Certification of Paul R. Arena	Filed herewith.
31.2*	Section 302 Certification of Calli R. Bucci	Filed herewith.
(32)	Section 906 Certifications
32.1*	Section 906 Certification of Paul R. Arena	Filed herewith.
32.2*	Section 906 Certification of Calli R. Bucci	Filed herewith.
(99)	Additional Exhibits
99.1	Parallax Health Sciences, Inc. Investor Presentation dated March 29, 2019	Filed with the SEC on ~~September 23, 2016,~~April 1, 2019 as part of the Company's Current Report on Form ~~8-K.~~8-K
~~10.34~~99.2	~~License Royalty Agreement between La Frontera Community Solutions,~~Press release dated September 19, 2019 – Global Career Networks, Inc. ~~and QOLPOM Inc. dated August 29, 2016~~	Filed with the SEC on ~~September 23, 2016,~~October 16, 2019 as part of the Company's Current Report on Form ~~8-K.~~
~~10.35~~	~~Intellectual Property Purchase Agreement between Parallax Health Sciences, Inc., Parallax Behavioral Health, Inc., and ProEventa Inc. dated April 27, 2017~~	~~Filed with the SEC on September 23, 2016, as part of the Company's Current Report on Form 8-K.~~
~~10.36~~	~~Consulting Agreement between Parallax Health Sciences, Inc., and James Gaynor dated April 27, 2017~~	~~Filed with the SEC on May 3, 2017 as part of the Company's Current Report on Form 8-K.~~
~~10.37~~	~~Employment Agreement between Parallax Health Sciences, Inc., and Paul R. Arena dated July 1, 2017~~	~~Filed with the SEC on July 24, 2017 as part of the Company’s Annual Report on Form 10-K.~~
~~(14)~~	~~Code of Ethics~~
~~14.1~~	~~Code of Ethics~~	~~Filed with the SEC on April 14, 2011 as part of the Company’s Annual Report on Form 10-K.~~
~~(16)~~	~~Letter Re Change in Certifying Accountant~~
~~16.1~~	~~Letter from Moore and Associates, Chartered dated August 13, 2009~~	~~Filed with the SEC on August 13, 2009 as part of the Company’s Current Report on Form 8-K.~~
~~16.2~~	~~Letter from Seale & Beers, CPAs dated August 26, 2009~~	~~Filed with the SEC on August 27, 2009 as part of the Company’s Current Report on Form 8-K.~~
~~16.3~~	~~Letter from M&K CPAs, PLLC dated March 12, 2010~~	~~Filed with the SEC on March 12, 2010 as part of the Company’s Current Report on Form 8-K.~~
~~16.4~~	~~Letter from Ron Chadwick, P.C. dated August 3, 2010~~	~~Filed with the SEC on August 4, 2010 as part of the Company’s Current Report on Form 8-K.~~
~~16.5~~	~~Letter from Davis Accounting Group, P.C. dated November 29, 2010~~	~~Filed with the SEC on November 30, 2010 as part of the Company’s Current Report on Form 8-K.~~
~~16.6~~	~~Letter from M&K CPAs, PLLC dated October 23, 2012~~	~~Filed with the SEC on October 25, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~16.7~~	~~Letter from Seale & Beers, CPAs dated November 18, 2015~~	~~Filed with the SEC on November 18, 2015 as part of the Company’s Current Report on Form 8-K.~~
~~(23)~~	~~Consent Letters~~
~~23.1~~	~~Letter from Seale & Beers, CPAs dated April 14, 2014~~	~~Filed with the SEC on April 14, 2014 as part of the Company’s Annual Report on Form 10-K.~~
~~23.2~~	~~Letter from Seale & Beers, CPA's dated March 31, 2015~~	~~Filed with the SEC on March 31, 2015 as part of the Company’s Annual Report on Form 10-K.~~
~~23.3~~	~~Letter from Seale & Beers, CPA's dated July 20, 2017~~	~~Filed with the SEC on July 24, 2017 as part of the Company’s Annual Report on Form 10-K.~~
~~23.4~~	~~Letter from Dave Banerjee, CPA's dated July 25, 2017~~	~~Filed with the SEC on July 24, 2017 as part of the Company’s Annual Report on Form 10-K.~~
~~(31)~~	~~Section 302 Certifications~~
31.1*8-K	~~Section 302 Certification of Paul R. Arena~~	~~Filed herewith~~.
31.2*	~~Section 302 Certification of Calli R. Bucci~~	~~Filed herewith~~.
~~(32)~~	~~Section 906 Certifications~~
32.1*	~~Section 906 Certification of Paul R. Arena~~	~~Filed herewith~~.
32.2*	~~Section 906 Certification of Calli R. Bucci~~	~~Filed herewith~~.
~~(99)~~	~~Other Documents~~
~~99.1~~	~~Confidential Private Placement Memorandum for Parallax Diagnostics dated July 1, 2012~~	~~Filed with the SEC on November 15, 2012 as part of the Company’s Current Report on Form 8-K.~~
~~99.2~~	~~Patent Report issued by Marathon Patent Group on April 1, 2013~~	~~Filed with the SEC on April 16, 2013 as part of the Company’s Annual Report on Form 10-K.~~
(100)	XBRL Related Documents
101.INS**	XBRL Instance Document	Filed herewith.
101.SCH**	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.LAB**	XBRL Taxonomy Extension Labels Linkbase Document	Filed herewith.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

*

Filed herewith.

**

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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


	PARALLAX HEALTH SCIENCES, INC.

	��
~~Dated: November 29, 2017~~	~~/s/ Paul R. Arena~~
	~~Paul R. Arena~~
	~~President and Chief Executive Officer~~



	Dated: ~~November 29, 2017~~December 12, 2019	/s/ Paul R. Arena
		Paul R. Arena
		Chief Executive Officer



	Dated: December 12, 2019	/s/ Calli R. Bucci
		Calli R. Bucci
		Chief Financial Officer


	September 30, 2016			December 31, 2015
Beginning balance	$	8,412,853		$	––
Additions charged to bad debt expense for insurance claims		––			34,000
Allowance for doubtful collection of workers compensation claims		65,776			8,378,853
Collection of workers compensation claims		(41,841	)
Write-offs charged to allowance		––			––
Ending balance	$	8,436,788		$	8,412,853


	September 30, 2016			December 31, 2015
Insurance claims receivable	$	929,010		$	999,612
Workers compensation claims receivable		8,466,691			8,549,073
Customer receivables		63,392			313,722
Total accounts receivable		9,457,232			9,862,407

Allowance for doubtful accounts:
Allowance-insurance claims		(34,000	)		(34,000	)
Allowance-workers compensation claims		(8,402,788	)		(8,378,853	)
Total allowances for doubtful accounts receivable		(8,436,788	)		(8,412,853	)
Accounts receivable, net	$	1,020,444		$	1,449,554


	September 30, 2016			December 31, 2015
Appliances	$	7,160		$	3,360
Computer and office equipment		63,875			32,718
Furniture and fixtures		38,488			23,453
Leasehold improvements		104,357			78,881
Software		6,323			873
Medical devices and instruments		45,194			45,194
Sub-total		265,397			184,479
Less: accumulated depreciation		(88,186	)		(57,793	)
Property and equipment, net, before disposals		177,211			126,686
Less: disposals, net of depreciation		––			(10,155	)
Property and equipment, net of disposals	$	177,211		$	116,531


	September 30, 2016			December 31, 2015
Notes and loans payable, unsecured
Loans payable	$	11,900		$	11,900
Notes payable		84,075			84,075
Total notes and loans payable, unsecured		95,975			95,975

Convertible notes payable		144,000			144,000

Notes payable, secured, net of unamortized discount
Note payable-merchant		1,201,316			1,830,401

Note payable-bank		100,000			––

Note payable		20,500,000			20,500,000
Less: unamortized discount		(9,520,000	)		(13,345,000	)
Note payable, net of unamortized discount		10,980,000			7,155,000
Total notes payable, secured, net of unamortized discount		12,281,316			8,985,401

Total notes and loans payable	$	12,521,291		$	9,225,376


Warrant Activity
	Number of		Weighted Average
	Shares		Exercise Price
Outstanding at December 31, 2015	15,989.276		$0.41278
Issued	––		––
Exercised	––		––
Expired / Cancelled	(484,125	)	$0.41278
Outstanding at September 30, 2016	15,262,491		$0.41278


Inventory	$	913,835
Prepaid insurance		3,108
Property and equipment		105,368
Identifiable intangibles		250,000
Goodwill		3,887,818
Security deposits		22,000
Fair market value of assets acquired	$	5,200,000


Assets:
Intellectual property	$	1,997,643
Loans receivable		87,008
Total assets		2,084,651

Liabilities:
Accounts payable		7,068
License fee payable		2,000,000
Total liabilities		2,007,068

Goodwill		142,417

Fair market value of assets acquired	$	220,000


Year	Base		CAM		Total
2016	$	153,262	$	14,604	$	167,866
2017		391,556		58,417		449,973
2018		400,037		58,417		458,455
2019		330,525		42,298		372,822
	$	1,275,379	$	173,737	$	1,449,116


		Pharmacy Segment⁽¹⁾			Remote Care Segment(2)			Corporate Segment			Consolidated Totals
September 30, 2016(2)
Revenue		$	19,808,910		$	––		$	––		$	19,808,910
Gross profit			2,894,092			––			––			2,894,092
Operating income (loss)			(743,437	)		(23,865	)		(894,216	)		(1,661,518	)
Depreciation and amortization			4,152,022			1,179			4,619			157,820
Discount amortization			––			––			3,825,000			3,825,000
Interest expense			145,481			––			494,494			639,975
Total assets			6,434,763			2,203,203			19,496			8,657,463
Goodwill			3,887,818			142,417			––			4,030,235
Additions to property and equipment			91,073			––			––			91,073

September 30, 2015(1)
Revenue			4,717,206			––			––			––
Gross profit			1,059,377			––			––			––
Operating income (loss)			216,288			––			(439,875	)		(223,587	)
Depreciation and amortization			6,171			––			5,865			12,036
Discount amortization			––			––			256,676			256,676
Interest expense			––			––			229,045			229,045
Total assets			8,104,577			––			22,536			8,127,113
Goodwill			3,887,818			––			––			3,887,818
Additions to property and equipment			––			––			––			––

(1)	Pharmacy Segment commenced August 13, 2015
(2)	Remote Care Segment commenced September 20, 2016


QOLPOM, INC.
BALANCE SHEET
(unaudited)

	June 30, 2016		December 31, 2015
ASSETS
Current assets
Due from affiliates	$	64,492	$	24,915

TOTAL ASSETS	$	64,492	$	24,915

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	5,576	$	––
Total current liabilities		5,576		––
Total liabilities		5,576		––

Stockholders' equity
Common stock: 1,000,000 shares authorized, $1 par, 150 issued and outstanding as of June 30, 2016 and December 31, 2015		150		150
Retained earnings		58,766		24,765
Total stockholders' equity		58,916		24,915

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	64,492	$	24,915


QOLPOM, INC.
STATEMENT OF OPERATIONS
(unaudited)


	For the six months ended		For the four months ended
	June 30, 2016		December 31, 2015

Revenue	$	180,000	$	24,930
Cost of sales		5,576		––
Gross profit		174,424		24,930

General and administrative expenses		140,423		165

Net income	$	34,001	$	24,765

Net (loss) per common share - basic and diluted	$	226.67	$	165.10

Weighted average common shares outstanding - basic and diluted		150		150


QOLPOM, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD FROM SEPTEMBER 16, 2015 TO JUNE 30, 2016
(unaudited)

	COMMON STOCK			RETAINED
	SHARES	AMOUNT		EARNINGS		TOTAL

Balance, September 16, 2015 (date of inception)	––	$	––	$	––	$	––

Issuance of common stock to officers	150		150				150

Net income					24,765		24,765

Balance, December 31, 2015	150	$	150		24,765		24,765

Net income					34,001		34,001

Balance, June 30, 2016	150	$	150	$	58,766	$	58,766


QOLPOM, INC.
STATEMENT OF CASH FLOWS
(unaudited)
	For the six months ended			For the four months ended
	June 30, 2016			December 31, 2015
Cash flows from operations:
Net loss	$	34,001		$	24,765
Adjustments to reconcile net loss to net cash used in operating activities:
Increase in affiliate receivables		(39,577	)		(24,915	)
Increase in accounts payable		5,576			––
Net cash used in operating activities		––			(150	)

Cash flows from financing activities:
Proceeds from issuance of common shares		––			150
Net cash provided by financing activities		––			150

Net increase (decrease) in cash		––			––
Cash - beginning of period		––			––

Cash - end of period	$	––		$	––

NON-CASH ACTIVITIES:	$	––		$	––

SUPPLEMENTAL INFORMATION
Interest paid	$	––		$	––
Income taxes paid	$	––		$	––


PARALLAX HEALTH SCIENCES INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
As of and for the nine months ended September 30, 2016 **
(unaudited)

		Parallax			Qolpom				Pro Forma
		Historical			Consolidation		Pro Forma		Consolidated
		9/30/2016			9/30/2016		Adjustments		9/30/2016

Revenue		$	19,808,910		$	292,821	$	––	$	20,101,731
Cost of revenues			16,914,818			16,931		––		16,931,749

Gross profit			2,894,092			275,890		––		3,169,982

Sales, marketing, and pharmacy expenses			1,461,576			––		––		1,461,576
General and administrative expenses			3,070,169			249,196		––		3,319,365

Operating loss			(1,637,653	)		26,694		––		(1,610,959	)

Other income (expense)			(4,464,770	)		––		––		(4,464,770	)

	Net income (loss)	$	(6,102,423	)	$	26,694	$	––	$	(6,075,729	)

Net (loss) per common share - basic and diluted		$	(0.05	)					$	(0.05	)

Weighted average common shares outstanding - basic and diluted			116,143,416							116,143,416



**	As if the transaction took place January 1, 2016


PARALLAX HEALTH SCIENCES INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
As of and for the year ended December 31, 2015 **
(unaudited)

		Parallax			Qolpom				Pro Forma
		Historical			Consolidation		Pro Forma		Consolidated
		12/31/2015			12/31/2015		Adjustments		12/31/2015

Revenue		$	11,579,720		$	24,930	$	––	$	11,604,650
Cost of revenues			9,874,244			––		––		9,874,244

Gross profit			1,705,476			24,930		––		1,730,406

Sales, marketing, and pharmacy expenses			1,061,069			––		––		1,061,069
General and administrative expenses			1,906,488			165		––		1,906,653

Operating loss			(1,262,081	)		24,765		––		(1,237,316	)

Other income (expense)			(2,457,817	)		––		––		(2,457,817	)

	Net income (loss)	$	(3,719,898	)	$	24,765	$	––	$	(3,695,133	)

Net (loss) per common share - basic and diluted		$	(0.03	)					$	(0.03	)

Weighted average common shares outstanding - basic and diluted			131,734,518							131,734,518



**	As if the transaction took place January 1, 2015