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.

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.)

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

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

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

As of ~~August 10, 2018, 23,473,314~~May 8, 2019, 94,732,246 shares of the registrant’s common stock were outstanding.

This Quarterly Report on Form 10-Q contains “forward-looking statements” as defined under United States federal securities laws. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these words. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. You should also refer to the section of our Annual report on Form 10-K entitled “Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We do not undertake to update any of the forward-looking statements after the date of this Quarterly Report, except to the extent required by applicable securities laws.

							March 31, 2019			December 31, 2018
	June 30, 2018 (unaudited)			December 31, 2017
Assets

Current Assets
Cash	$	114,456		$	245,026		$	2,591,869		$	69,628
Accounts receivable		155,852			157,069			76,163			15,242
Other receivables		32,774			86,888			81,648			5,144
Inventory		293,946			294,714			129,264			—
Prepaid expenses		111,361			204,532			365,167			59,678
Short-term receivable		—			150,000
Total Current Assets		708,389			1,138,229			3,244,111			149,692
Property and Equipment, net of accumulated depreciation		73,279			87,173
Deposits		2,751			2,751

Right-of-use Asset								1,092,102			—
Property and Equipment, net								274,820			266,875
Intangibles								3,496,000			—
Goodwill								5,133,724			—
Other Assets								40,839			38,288
Total Assets	$	784,419		$	1,228,153		$	13,281,596		$	454,855
Liabilities and Stockholders’ (Deficit) Equity

Liabilities and Stockholders’ Equity (Deficit)

Current Liabilities
Interest payable	$	72,246		$	69,222		$	123,070		$	158,371
Accounts payable		492,822			196,171			941,303			851,604
Accounts payable to related parties		34,962			12,319			—			180,000
Accrued payroll								170,084			—
Accrued liabilities		189,833			64,000			272,740			183,183
Notes payable, current portion		88,170			132,294
Short-term note payable		100,000			—
Other current liabilities								227,752			463,025
Notes payable								248,155			30,852
Short-term note payable, net of debt discount								561,696			—
Dividend payable		7,707			—			76,315			—
Unearned revenue		—			1,048
Deferred revenue								395,814			322,264
Lease liability, current portion								484,087			—
Total Current Liabilities		985,740			475,054			3,501,016			2,189,299

Long-Term Liabilities
Notes payable, net of current portion		5,674			38,990
Lease liability, net of current portion								629,559			—
Convertible debt to a related party								—			4,306,300
Deferred rent		98			688			—			22,206
Total Long-Term Liabilities		5,772			39,678			629,559			4,328,506

Total Liabilities		991,512			514,732			4,130,575			6,517,805
Stockholders’ (Deficit) Equity
Series A Preferred stock - $.001 par value: 45,000 shares authorized, no shares issued and outstanding at June 30, 2018 (unaudited), 12,740 shares issued and outstanding and December 31, 2017		—			13
Series B Preferred stock - $.001 par value: 10,000 shares authorized, 9,250 shares issued and outstanding at June 30, 2018 (unaudited), no shares issued and outstanding at December 31, 2017		9			—
Common stock - $.001 par value: 49,500,000 shares authorized, 23,473,314 and 21,163,013 shares issued and outstanding at June 30, 2018 (unaudited) and December 31, 2017, respectively		23,473			21,163

Commitments and Contingentcies

Stockholders’ Equity (Deficit)
Series A Convertible Preferred Stock - $.001 par value: 500,000 shares authorized, no shares issued and outstanding at March 31, 2019 and December 31, 2018								—			—
Series B Convertible Preferred Stock - $.001 par value: 10,000 shares authorized, 7,200 and 0 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively								7			—
Series C Convertible Preferred Stock - $.001 par value: 45,000 shares authorized, no shares issued and outstanding at March 31, 2019 and December 31, 2018								—			—
Common stock - $.001 par value: 199,000,000 and 49,500,000 shares authorized as of March 31, 2019 and December 31, 2018, respectively. 94,036,746 and 33,681,388 shares issued and outstanding atMarch 31, 2019 and December 31, 2018, respectively								94,037			33,661
Additional paid-in capital		34,926,514			33,509,648			17,610,529			3,566,339
Accumulated deficit		(35,157,089	)		(32,817,403	)		(8,183,420	)		(9,292,818	)
Total Stockholders’ (Deficit) Equity		(207,093	)		713,421
Total Liabilities and Stockholders’ (Deficit) Equity	$	784,419		$	1,228,153
Non-controlling interest								(370,132	)		(370,132	)
Total Stockholders’ Equity (Deficit)								9,151,021			(6,062,950	)

Total Liabilities and Stockholders’ Equity (Deficit)							$	13,281,596		$	454,855

MedoveX Corp. (the “Company” or “MedoveX”) was incorporated in Nevada on July 30, 2013 as SpineZ Corp. (“SpineZ”) and changed its name to MedoveX Corp. on March 20, 2014. MedoveX is the parent company of Debride Inc. (“Debride”), which was incorporated under the laws of the State of Florida on October 1, 2012. The Company is in the business of designing and marketing proprietary medical devices for commercial use in the United States and Europe. The Company received CE marking in June 2017 for the DenerveX System and it is now commercially available throughout the European Union and several other countries that accept CE marking. The Company’s first sale of the DenerveX System occurred in July 2017. The Company plans to seek approval for the DenerveX System from the Food & Drug Administration (“FDA”) in the United States. The Company is presently reevaluating its approaches to revenue generation including the continuing use of distribution channels.

On October 18, 2018, MedoveX entered into an Asset Purchase Agreement with Regenerative Medicine Solutions, LLC, Lung Institute LLC (“LI”), RMS Lung Institute Management LLC (“RMS LI Management”) and Cognitive Health Institute Tampa, LLC (“CHIT”), (collectively “RMS”). On January 8, 2019, the Asset Purchase Agreement was amended and the Company acquired certain assets and assumed certain liabilities of RMS as reported in the 8-K/A filed in March of 2019. Based on the terms of the Asset Purchase Agreement and its amendment, the former RMS members had voting control of the combined company as of the closing of the RMS acquisition. For accounting purposes, the acquisition transaction has been treated as a reverse acquisition whereby the Company is deemed to have been acquired by RMS and the historical financial statements prior to the acquisition date of January 8, 2019 now reflect the historical financial statements of RMS.

RMS was incorporated in Delaware on December 26, 2012. RMS is a healthcare medical biosciences company that develops and implements advance innovative treatment options in regenerative medicine to treat an array of debilitating medical conditions. In addition, the company is the operator and manager of the various Lung Health Institute clinics. Committed to an individualized patient-centric approach, RMS consistently provides oversight and management of the highest quality care while producing positive outcomes. RMS offices are located in Tampa, Florida. The Lung Health Institute located in Tampa, Florida is a wholly owned subsidiary of RMS. RMS also provides oversight and management to the Lung Health Institutes located in Nashville, TN, Scottsdale AZ, Pittsburgh, PA, and Dallas, TX.

On May 10, 2019, the Company’s board of directors authorized a change in the Company’s name to H-Cyte, Inc. The Company is in the process of taking the necessary steps to effectuate this name change.

Based on the terms of the Asset Purchase Agreement and its amendment, the former RMS members had voting control of the combined company as of the closing of the RMS acquisition. RMS is deemed to be the acquiring company for accounting purposes and the transaction is accounted for as a reverse acquisition under the acquisition method of accounting for business combinations in accordance with accounting principles generally accepted in the United States. The assets acquired and the liabilities assumed of RMS included as part of the purchase transaction are recorded at historical cost. Accordingly, the assets and liabilities of MedoveX are recorded as of the merger closing date at their estimated fair values. See Note 3. Further, the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Consolidated Statements of Stockholders’ Equity (Deficit), and the Condensed Consolidated Statements of Cash Flow do not reflect the historical financial information related to MedoveX prior to the merger. The Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Consolidated Statements of Stockholders’ Equity (Deficit), and the Condensed Consolidated Statements of Cash Flow only reflect the historical financial information related to RMS prior to the merger. For the Consolidated Statement of Stockholders’ Equity (Deficit), the common stock, preferred stock and additional paid in capital reflect the accounting for the stock received by the RMS members as of the merger as if it was received as of the beginning of the periods presented. For the Consolidated Statement of Stockholders’ Equity (Deficit), the schedule in the Financial Statements reflects the activity from December 31, 2018 to March 31, 2019. For the comparable period from December 31, 2017 to March 31, 2018, the only activity in the Consolidated Statement of Stockholders’ Equity (Deficit) was the loss of $897,200 for the three months ended March 31, 2018.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States ~~(“U.S.”)~~ generally accepted accounting principles (“U.S. GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments which included only normal recurring adjustments, necessary to present fairly the Company’s financial position as of ~~June 30,~~March 31, 2019 and December 31, 2018 and the results of operations ~~for the three and six months ended June 30, 2018 and 2017,~~ and cash flows for the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 and ~~2017.~~ 2018.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, ~~2017,~~2018, included in the Company’s Annual Report on Form 10-K. The results for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2018~~2019 or for any other interim period or for any future year.

~~These unaudited~~Accounting principles generally accepted in the United States of America (U.S. GAAP) require that a related entity be consolidated with a company when certain conditions exist. An entity is considered to be a variable interest entity (VIE) when it has equity investors who lack the characteristics of having a controlling financial interest, or its capital is insufficient to permit it to finance its activities without additional subordinated financial support. Consolidation of a VIE by the parent would be required if it is determined that the Parent will absorb a majority of the VIE’s expected losses or residual returns if they occur, retain the power to direct or control the VIE’s activities, or both.

Prior to the merger of MedoveX and RMS on January 8, 2019, the consolidated results for MedoveX include the financial activities of Regenerative Medicine Solutions, LLC, LI, RMS Nashville, LLC (“Nashville”), RMS Pittsburgh, LLC (“Pittsburgh”), RMS Scottsdale, LLC (“Scottsdale”), RMS Dallas, LLC (“Dallas”), State, LLC (“State”), CHIT, RMS Lung Institute Management, LLC (“RMS LI MGMT”), and RMS Shareholder, LLC. Additionally, MedoveX has consolidated Lung Institute Dallas, PLLC (“LI Dallas”), Lung Institute Nashville, PLLC (“LI Nashville”), Lung Institute Pittsburgh, PLLC (“LI Pittsburgh”), and Lung Institute Scottsdale, LLC (“LI Scottsdale”), as VIEs.

As of the merger, the consolidated results for MedoveX includes the following wholly-owned subsidiaries: Debride Inc., Blue Zone Health Management, LLC (“BZHM”) and Blue Zone Lung Tampa, LLC. Additionally, MedoveX has consolidated LI Dallas, LI Nashville, LI Pittsburgh and LI Scottsdale, as VIEs.

The accompanying condensed consolidated financial statements ~~that present the Company’s results of operations for the three and six months ended June 30, 2018 and 2017, and cash flows for the six months ended June 30, 2018 and 2017,~~ include ~~Debride and~~ the accounts of the ~~Company as well as~~parent, its ~~formerly~~ wholly-owned ~~subsidiary, Streamline Inc. (“Streamline”). All intercompany accounts~~subsidiaries, and ~~transactions have been eliminated in consolidation.~~its variable interest entities.

Goodwill is recorded at fair value and not amortized, but is reviewed for impairment at least annually or more frequently if impairment indicators arise. Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value is “more likely than not” less than the carrying amount or if significant changes related to the business have occurred that could materially impact fair value, a quantitative goodwill impairment test would be required. The Company can elect to forgo the qualitative assessment and perform the quantitative test.

If the carrying amount exceeds its fair value, “Step 1” is performed to determine if goodwill is impaired and to measure the amount of impairment loss to recognize, if any. This step compares the implied fair value of goodwill with the carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

The implied fair value of goodwill is determined by assigning the fair value to all the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. The Company has elected to perform the annual impairment assessment for goodwill in the fourth quarter.

Intangibles acquired in a business combination are recorded at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over the estimated useful lives and are reviewed for impairment at least annually or more frequently if indicators of impairment arise. The Company’s intangible assets are patents and related proprietary technology for the DenerveX System.

In February 2016, the Financial Accounting Standard Board (“FASB”) established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2019-01, Codification Improvements; ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations.

The Company has not entered into significant lease agreements in which it is the lessor; however, the Company does have lease agreements in which it is the lessee. Under ASC 842, lessees are required to recognize a lease liability and right-of-use (“ROU”) asset for all leases (with the exception of short-term leases) at the lease commencement date. Effective January 1, 2019, the Company adopted this guidance, applied the modified retrospective transition method and elected the transition option to use the effective date as the date of initial application. The Company recognized the cumulative effect of the transition adjustment on the condensed consolidated balance sheet as of the effective date and did not provide any new lease disclosures for periods before the effective date. With respect to the practical expedients, the Company elected the package of transitional-related practical expedients and the practical expedient not to separate lease and non-lease components. At January 1, 2019, additional current lease liabilities of $475,000 and long-term lease liabilities of $713,000 with corresponding ROU assets of $1,167,000 were recognized based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases.

Other receivables totaling approximately $82,000 at March 31, 2019 include receivables from Lung Institute, LLC to Blue Zone Lung Tampa, LLC for approximately $75,000 and approximately $7,000 reimbursement receivable. The $75,000 receivable was a result of Lung Institute, LLC being a transitory entity for Blue Zone Lung Tampa, LLC while general liability insurance was being underwritten for Blue Zone Lung Tampa, LLC. The $75,000 receivable was paid to Blue Zone Lung Tampa in May 2019. Blue Zone Health Management other receivables totaling $7,000 are to be reimbursed on behalf of a study being completed by Cognitive Health Institute Tampa.

The company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five basic criteria be met before revenue can be recognized: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. The adoption of this standard did not have a material impact on the consolidated financial statements.

The Company sells the DenerveX System through a combination of direct sales and independent distributors in international markets. The Company recognizes revenue when title to the goods and risk of loss transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. The Company only records revenue when collectability is reasonably assured. Utilizing the five step method outlined in Topic 606 to determine when revenue should be recognized, the Company’s policy is to recognize revenue when product is shipped to the customer, whether that customer is a distributor or an end user, as is the case in Germany.

The biomedical services company (RMS) manages the Lung Health Institute (LHI). The Lung Health Institute uses a standard pricing model for the types of cellular therapy treatments that is offered to its patients. The transaction price accounts for medical, surgical, facility, and office services rendered by LHI for consented procedures and is recorded as revenue. The company recognizes revenue when the terms of a contract with a patient are satisfied.

LHI offers two types of cellular therapy treatments to their patients. The first type of treatment includes medical services rendered over typically a two-day period in which the patient receives cellular therapy. For this treatment type, revenue is recognized in full at time of service. LHI also offers a four-day treatment in which medical services are rendered over typically a two-day period and then again, approximately three months later, medical services are rendered for an additional two-days of treatment. Payment is collected in full for both service periods at the time the first treatment is rendered. LHI recognizes 62.5% of the transaction price during the first-round visit and 37.5% of transaction price during the second round visit. Transaction price is allocated pro-rata based on the related professional, facility and diagnostic services for each session of treatment. The Company has deferred recognition of revenue amounting to approximately $396,000 at March 31, 2019.

The Company expenses all advertising costs as incurred. For the three months ended March 31, 2019 and 2018, the Company had approximately $1,118,000 and $737,000, respectively, in advertising costs.

In preparing the financial statements, U.S. GAAP requires disclosure regarding estimates and assumptions used by management that affect the amounts reported in financial statements and accompanying notes. The Company’s significant estimates include deferred revenue, the deferred income tax asset and the related valuation allowance, and the fair value of its share-based payment arrangements.

For those estimates that are sensitive to the outcome of future events, actual results could differ from those estimates.

The ~~Company’s revenues and expenses transacted~~Company transacts some of its operating activities in foreign currencies, most notably the Euro. The Company also has certain assets and liabilities denominated in foreign currencies that are ~~recorded~~translated to US Dollars for reporting purposes as ~~they occur at exchange rates~~of and for the three months ended March 31, 2019. These amounts are immaterial and are included in ~~effect at the time of each transaction. Realized gains and losses on foreign currency transactions are recorded as a component of~~ other income or expense ~~net on the Company’s consolidated statements of operations. The Company recorded approximately $4,900 and $5,200, respectively, in foreign currency translation expense~~ for the three ~~and six~~ months ended ~~June 30, 2018. The~~March 31, 2019. Because of the immaterial effect noted above, the Company did not ~~incur any foreign currency transaction costs related to revenues and expenses transacted in foreign currencies for the three and six months ending June 30, 2017.~~present a separate statement of other comprehensive income.

The Company maintains a stock option incentive plan and ~~liabilities~~accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation. The Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the ~~Company are measured at~~award to employees and directors. As required by fair value provisions of share-based compensation, employee and non-employee share-based compensation expense recognized is calculated over the ~~end of each reporting~~requisite service period ~~using the exchange rate as~~ of the ~~balance sheet date~~awards and are recorded as a component of other income or expense, net on the Company’s consolidated statements of operations. As of June 30, 2018, the Company recorded a net translation loss of approximately $5,900 in foreign currency denominated monetary assets and liabilities. The Company did not incur any foreign currency translation costs related to foreign currency denominated monetary assets and liabilitiesreduced for ~~the three and six months ending June 30, 2017.~~estimated forfeitures.

The Company considers the applicability and impact of all ASUs issued, both effective and not yet effective.

In May 2014, the FASB issued ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers” (ASU 2014-09) that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. This update is effective for annual reporting periods beginning on or after December 15, 2017 and interim periods therein and requires expanded disclosures. The adoption of this standard did not have a material impact on the consolidated financial statements.

~~In February 2016, FASB~~On January 8, 2019, MedoveX Corporation completed its business combination with RMS under which MedoveX purchased certain assets and assumed certain liabilities of RMS. Pursuant to the terms of the Asset Purchase Agreement, MedoveX issued ~~ASU No. 2016-02, Leases (Topic 842).~~to the shareholders of RMS 33,661 shares plus 6,111 additional exchange shares (based on closing the sale of $2 million of new securities) for a total of 39,772 shares of Series C Preferred Stock where each share of Series C Preferred stock will, at the date of closing, automatically convert into 1,000 shares of Common Stock and represent approximately fifty-five percent (55%) of the outstanding voting shares of the Company.

Under the terms of the Asset Purchase Agreement, subsequent to the closing, the Company issued additional “Exchange Shares” to the shareholders of RMS to maintain the 55% ownership and not be diluted by the sale of convertible securities (“New Shares Sold”) until MedoveX raised an additional $5.65 million via the issuance of new securities. On the date of closing the company issued 6,111 additional Exchange Shares to RMS Shareholders as a result of the issuance of additional securities, which are included in the 39,772 shares above. Subsequent to the closing of the purchase transaction all additional Exchange Shares representing contingent consideration have been issued to the shareholders of RMS for a total of 17,264 additional Series C Preferred Stock which automatically converted to 1,000 shares of Common Stock.

Because RMS shareholders own approximately 55% of the voting stock of MedoveX after the transaction, RMS is deemed to be the acquiring company for accounting purposes (the “Acquirer”) and the transaction is accounted for as a reverse acquisition under the acquisition method of accounting for business combinations in accordance with accounting principles generally accepted in the United States. The ~~core principle~~assets acquired and the liabilities assumed of ~~Topic 842 is that a lessee should recognize~~RMS included as part of the purchase transaction are recorded at historical cost. Accordingly, the assets and liabilities of MedoveX (the “Acquiree”) are recorded as of the merger closing date at their estimated fair values.

Under the terms of the business combination with RMS, MedoveX purchased certain assets and assumed certain liabilities of RMS. The assets of RMS reported on the MedoveX balance sheet as of December 31, 2018 that ~~arise~~were excluded in the January 8, 2019 transaction were cash of approximately $70,000. The liabilities of RMS reflected on the MedoveX balance sheet as of December 31, 2018 but not assumed in the transaction included the following: convertible debt to a related party of approximately $4.3 million, interest payable of approximately $158,000, accounts payable of approximately $224,000 and other current liabilities of approximately $285,000. Additionally, there were certain on-going litigation matters that were not assumed as part of the January 9, 2019 reverse merger transaction.

The purchase price for the acquisition of the Acquiree has been allocated to the assets acquired and liabilities assumed based on their estimated relative fair values. The purchase price allocation herein is preliminary. The final purchase price allocation will be determined after completion of a thorough analysis to determine the fair value of all assets acquired and liabilities assumed but in no event later than one year following completion of the acquisition. Accordingly, the final acquisition accounting adjustments could differ materially from ~~leases. ASU 2016-02~~the allocation reflected as of March 31, 2019 presented herein. Any increase or decrease in the fair value of the assets acquired and liabilities assumed, as compared to the information shown herein, could also materially change the portion of purchase price allocated to goodwill and could materially impact the operating results of the Company following the acquisition due to differences in purchase price allocation, depreciation and amortization related to some of these assets and liabilities.

The acquisition-date fair value of the consideration transferred is ~~effective for~~as follows:

Just prior to the transaction, MedoveX had 24.5 million shares of common stock outstanding at a market capitalization of $9.8 million. The estimated fair value of the net assets of MedoveX was $8.4 million as of January 8, 2019. Measuring the fair value of the net assets to be received by RMS was readily determinable based upon the underlying nature of the net assets. The fair value of the MedoveX common stock is above the fair value of its net assets. The MedoveX net asset value is primarily comprised of definite-lived Intangibles (preliminarily estimated at $3.7 million) as of the closing and the RMS interest in the merger is significantly related to obtaining access to the public ~~companies for annual reporting periods beginning after December 15, 2018,~~market. Therefore, the fair value of the MedoveX stock price and ~~interim periods within those fiscal years. The guidance may~~market capitalization as of the closing date is considered to be ~~adopted prospectively or retrospectively~~the best indicator of the fair value and, ~~early adoption is permitted.~~therefore, the estimated purchase price consideration.

Contingent consideration was recorded as a reduction to consideration paid, in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). The Company ~~is currently~~calculated the fair value of the contingent consideration assets by assessing the ~~impact~~likelihood of issuing stock to the ~~adoption~~accounting acquirer based upon a contingent capital raise clause. For contingent consideration to be settled in common stock, the Company uses public market data to determine the fair value of the shares as of the acquisition date and on an ongoing basis. During the three months ended March 31, 2019 the Company issued 17.3 million shares of common stock representing total consideration of $6.2 million, net of a 10% marketability discount as the shares were not readily available to trade.

The calculation of contingent consideration transferred during the period is as follows:

The Acquisition was accounted for as a reverse merger under the acquisition method of accounting in accordance with ASC 805. Accordingly, the tangible assets and identifiable intangible assets acquired and liabilities assumed were recorded at fair value as of the date of acquisition, with the remaining purchase price recorded as goodwill.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition on January 8, 2019:

The purchase price allocation has been prepared on a preliminary basis and is subject to change as additional information becomes available concerning the fair value and allocation of consideration to the identifiable intangible assets acquired.

This preliminary purchase price allocation has been reflected in the March 31, 2019 balance sheet and statement of operations for the three months ended March 31, 2019. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final allocation may include (1) changes in fair values of property, plant and equipment, (2) changes in allocations to intangible assets such as trade names, technology and customer relationships as well as goodwill and (3) other changes to assets and liabilities. Intangible assets will be recorded as definite-lived assets and amortized over the estimated period of economic benefit. Goodwill is calculated as the difference between the acquisition-date fair value of the consideration transferred and the fair values of the assets acquired and liabilities assumed. Goodwill is not expected to be deductible for income tax purposes. Goodwill is recorded as an indefinite-lived asset and is not amortized but tested for impairment on an annual basis or when indications of impairment exist.

Notes payable relate to promissory notes assumed by Aquiree in a 2015 acquisition, which acquisition was later divested in 2016, with the assumed promissory notes being retained by Aquiree. Payments on both of the notes are due in aggregate monthly installments of approximately $5,700 and carry an interest rate of 5%. Both of the notes have a maturity date of August 1, 2019. The promissory notes had outstanding balances of approximately $99,000 plus accrued interest of approximately $3,000 at January 8, 2019.

Convertible notes payable represents a securities purchase agreement with select accredited investors, whereby the Acquiree offered up to $1,000,000 in units at a purchase price of $50,000 per unit. Each Unit consists of (i) a 12% senior secured convertible note, initially convertible into shares of the Company’s common stock, par value $0.001 per share, at a conversion price equal to the lesser of $0.40 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of equity and/or debt securities completed by the Company following this offering, and (ii) a three-year warrant to purchase such number of shares of the Company’s common stock equal to one hundred percent (100%) of the number of shares of common stock issuable upon conversion of the notes at $0.40. The Warrants are exercisable at a price equal to the lesser of $0.75 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of the debt and/or equity securities completed by the Company following the issuance of warrants. The notes are secured by all of the assets of the Company.

ASU ~~2016-02~~2017-11, Earnings Per Share (Topic 260), provided that when determining whether certain financial instruments should be classified as liability or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. If a down round feature on the conversion option embedded in the note is triggered, the Company will ~~have~~evaluate whether a beneficial conversion feature exists, and if one is determined to exist the Company will record the amount as a debt discount and will amortize it over the remaining term of the debt.

The down round feature embedded in the conversion option was triggered on ~~its consolidated financial statements.~~January 8, 2019, as such, the Company recognized the down round as a deemed dividend of approximately $437,000 which reduced the income available to common stockholders.

In the offering, the Acquiree sold an aggregate of 15 units and issued to investors an aggregate of $750,000 in principal amount of convertible notes and 1,875,000 warrants to purchase common stock, resulting in total gross proceeds of $750,000 to the Company. If converted at $0.40 the convertible notes sold in the offering are convertible into an aggregate of 1,875,000 shares of common stock. The Acquiree recorded the proceeds from the notes and the accompanying warrants, which accrete over the period the notes are outstanding, on a relative fair value basis of approximately $505,000 and $245,000, respectively. At acquisition date, the value of the notes was approximately $598,000.

Accounts receivable primarily represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables.

~~Other receivables include input and importation value added tax (VAT) paid by~~ Trade accounts receivable are stated net of an estimate made for doubtful accounts, if any. Management evaluates the ~~Company~~adequacy of the allowance for ~~conducting business~~doubtful accounts regularly to determine if any account balances will potentially be uncollectible. Customer account balances are considered past due or delinquent based on the contractual agreement with each customer. Accounts are written off when, in ~~the European Union (“EU”) and for importing goods from outside the EU.~~management’s judgment, they are considered uncollectible. At March 31, 2019, management believes no allowance is necessary.

~~Inventories consist~~Inventory consists only of finished goods and are valued at the lower of cost or net realizable value, using the first-in, first-out (FIFO) method. Inventories were acquired in the merger transaction from the MedoveX business and therefore there were no inventories prior to January 8, 2019.

~~Inventories~~Inventory consisted of the following items as of ~~June 30, 2018,~~March 31, 2019, and December 31, ~~2017:~~2018:

	June 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Split Return Electrodes	$	—	$	1,868
Denervex device		153,946		111,596
DenerveX device					$	3,014	$	—
Pro-40 generator		140,000		181,250		126,250		—
Total	$	293,946	$	294,714	$	129,264	$	—

In February 2016, the Financial Accounting Standard Board (“FASB”) established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company implemented the new standard effective January 1, 2019.

On adoption, additional current liabilities of approximately $475,000 and long-term liabilities of approximately $713,000 with corresponding right-of-use assets of approximately $1,167,000 were recognized, based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases.

The balance sheet at March 31, 2019 reflects current lease liabilities of approximately $484,000 and long-term liabilities of $630,000, with corresponding ROU assets of $1,092,000.

The Company leases corporate office space in Tampa, FL and Atlanta, GA. The Company also leases medical clinic space in Tampa, FL, Nashville, TN, Scottsdale, AZ, Pittsburgh, PA, and Dallas, TX. The leasing arrangements contain various renewal options that are adjusted for increases in the consumer price index or agreed upon rates.

	Useful Life	June 30, 2018			December 31, 2017			Useful Life	March 31, 2019			December 31, 2018
Furniture and fixtures	5 years	$	67,777		$	67,777		5-7 years	$	202,142		$	149,285
Computers and software	3 years		31,738			31,738
Computers, medical equipment and software								3-7 years		294,935			278,434
Leasehold improvements	5 years		35,676			35,676		15 years		154,129			154,129
			135,191			135,191				651,206			581,848
Less accumulated depreciation			(61,912	)		(48,018	)

Less accumulated depreciation and amortization										(376,386	)		(314,973	)
Total		$	73,279		$	87,173			$	274,820		$	266,875

Depreciation expense amounted to ~~$6,866~~approximately $27,000 and ~~$13,894,~~$24,000, respectively, for the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018. ~~Depreciation expense amounted~~

The Company performs a goodwill impairment analysis at least annually (in the fourth quarter of each year) unless indicators of impairment exist in interim periods. The assumptions used in the analysis are based on the Company’s internal budget. The Company projected revenue, operating margins and cash flows for a period of five years, and applied a perpetual long-term growth rate thereafter. These assumptions are reviewed annually as part of management’s budgeting and strategic planning cycles. These estimates may differ from actual results. The values assigned to ~~$6,671~~each of the key assumptions reflect management’s past experience as their assessment of future trends, and ~~$12,892, respectively, for~~are consistent with external/internal sources of information. As of March 31, 2019, no indicators of impairment existed.

The following table presents the ~~three and six months ended June 30, 2017.~~changes in intangible assets during the period:

The following is a schedule of expected future amortization of intangible assets as of March 31, 2019:

For the Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) as of December 31, 2018, the common stock, preferred stock and additional paid in capital reflect the accounting for the stock received by the RMS members as of the merger as if it was received as of the beginning of the periods presented and the historical accumulated deficit of RMS. As of the acquisition closing, before the contingent additional exchange shares impact from the sale of new securities), the stock received by RMS was 33,661 Series C Preferred Stock, converted immediately into approximately 33,661,000 shares of common stock, with common stock par value of approximately $33,700 and additional paid-in capital of approximately $3,566,000. The historical accumulated deficit of RMS as of the closing was approximately $9,293,000.

~~In November 2016,~~On January 8, 2019, the Company entered into a securities purchase agreement (the “SPA”) with four purchasers (the “Purchasers”) pursuant to which the four Purchasers invested in the Company an aggregate amount of $2,000,000, with $1,800,000 in cash and $200,000 by cancellation of debt as explained below, in exchange for forty (40) units (the “Units”), each consisting of a convertible note (the “Convertible Note”) with the principal amount of $50,000 and a warrant (the “Warrant”) to purchase common stock (the “Common Stock”) of the Company. Pursuant to this SPA, the Company initially offered a minimum of $1,000,000 and a maximum of $6,000,000, and subsequently increased to a maximum of $8,000,000 (the “Maximum Amount”) of Units at a price of $50,000 per Unit until the earlier of i) the closing of the subscription of the Maximum Amount and ii) March 31, 2019 (the “Termination Date”), subject to the Company’s earlier termination at its discretion. The SPA includes the customary representations and warranties from the Company and purchasers. Steve Gorlin, the Company’s former Chairman of the Board, ~~authorized~~converted a $200,000 promissory note owed to him by the ~~issuance~~Company in exchange for four (4) Units on the same terms as all other Purchasers. The promissory note was converted into an aggregate of 500,000 shares of common stock, eliminating the Company’s debt obligation.

Each Convertible Note offered by the Company as part of the Unit bears an interest rate of 12% per annum, has a principal amount of $50,000, shall mature in one year from the original issue date on January 8, 2019, and will be convertible into shares of Common Stock at a price of $0.40 subject to adjustment stated in the Convertible Note. Pursuant to the terms of the Convertible Note, each holder of the Convertible Notes shall not own more than 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Common Stock issuable upon exercise of such Convertible Note. Upon default, the penalty interest rate of the Convertible Note shall rise to 18% per annum. In addition, pursuant to the SPA, the Company offers, as part of the Unit, Warrants to purchase the Common Stock at a price of $0.75 per share (the “Exercise Price”), subject to adjustments stated therein. The holder of each Warrant may purchase the number of shares of Common Stock equal to the number of shares of Common Stock issuable upon conversion of each Convertible Note while the Warrant is exercisable. The Warrants have a term of three years and shall be exercised in cash or on a cashless basis as described in the Warrant.

As reported on Form 8-K filings on January 25, 2019, February 8, 2019, March 15, 2019 and April 5, 2019, the Company entered into other SPA’s with additional purchasers, which brought the aggregate amount of capital raised in all ~~Board members, both current and former, in an amount equivalent~~these offerings to ~~$240,000, representing their accrued but unpaid directors’ fees~~$7,200,000, as of ~~December 31, 2016.~~ that latest date.

On February 28, 2019, the Company’s board authorized the increase limit to the offering to $8 million dollars and with the same terms extended the termination date of the offering to April 30, 2019.

As a result of the sales of new securities of at least $5.65 million, total additional Exchange shares of approximately 17,264 Series C Preferred Stock were issued and automatically converted to 17,263,889 shares of Common Stock.

All the Convertible Notes from the SPA as well as the shares of Series C Preferred Stock issued to RMS members were automatically converted into shares of Common Stock.

The foregoing description of the, SPA, Convertible Note, and Warrant is qualified in its entirety by reference to the respective agreements.

In ~~January 2017,~~March 2019, the Company issued an aggregate of ~~173,911~~130,085 shares of common stock at $0.40 per share shares for consulting fees in an amount equivalent to $52,034.

Preferred Series B Stock holders have the right to receive notice of any meeting of holders of Common Stock or Series B Preferred Stock and to vote upon any matter submitted to a vote of the holders of Common Stock or Series B Preferred Stock. Each holder of Series B Preferred Stock shall vote on each matter submitted to them with the holders of Common Stock.

Upon the liquidation, dissolution or winding up of the business of the Company, whether voluntary or involuntary, each holder of Series B Preferred Stock shall be entitled to receive, for each share thereof, out of assets of the Company legally available therefor, a preferential amount in cash equal to the stated value plus all accrued and unpaid dividends. All preferential amounts to be paid to the holders of Series B Preferred Stock in connection with such liquidation, dissolution or winding up shall be paid before the payment or setting apart for payment of any amount for, or the distribution of any assets of the Company’s to the holders of the Company’s Common Stock.

On January 8, 2019, the Company completed the issuance of convertible debt in the SPA transaction with a conversion price of $0.40 As a result, accordingly the exercise price on all of the warrants issued with the Series B Shares were adjusted downward to 90% of that conversion price or $0.36. In conjunction with the downward adjustment, the Company recorded a deemed dividend of approximately $117,000 representing the difference in the fair value of the warrants immediately before and after the adjustment to the exercise price.

The Company recognized a beneficial conversion feature related to the Series B Shares of approximately $33,000, which was credited to additional paid-in capital, and reduced the income available to common shareholders. Because the Series B Shares can immediately be converted by the holder, the beneficial conversion feature was immediately accreted and recognized as a deemed dividend to the preferred shareholders.

During the three months ended March 31, 2019, 9,250 Series B Preferred Stock with a par value of $.001 were assumed with the merger transaction and an aggregate of 2,050 shares of Series B Preferred Stock, and accrued dividends, were subsequently converted into an aggregate of 512,500 shares of authorized common stock, par value $0.001 per share.

The $750,000 convertible notes payable assumed in the acquisition transaction, had a fair value of approximately $598,000 on the acquisition date. Subsequently, on February 6, 2019, $100,000 of the outstanding convertible notes was converted into an aggregate of 250,000 shares of common stock, eliminating $100,000 of the Company’s debt obligation. The debt was converted into shares at ~~$1.38~~$0.40 per share, which was the ~~average closing~~conversion price per the SPA.

In connection with the Asset Purchase Agreement (“APA”) and APA Amendment, on January 8, 2019, Steve Gorlin, the Company’s former Chairman of the ~~Company’s stock during 2016,~~Board, converted a $200,000 promissory note owed to ~~fulfill this obligation. The closing price~~him by the Company pursuant to the same terms of the SPA entered into by other investors to consummate the acquisition in January 8, 2019. The promissory note was converted into an aggregate of 500,000 shares of common stock, eliminating the Company’s ~~stock on January 17, 2017, the day the shares were issued, was $1.16 per share.~~debt obligation.

We utilize the Black-Scholes valuation method to recognize stock-based compensation expense over the vesting period. The expected life represents the period that our stock-based compensation awards are expected to be outstanding.

For the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, the Company recognized approximately ~~$34,000 and $85,000, respectively,~~$89,000 as compensation expense with respect to vested stock options. ~~For the three and six months ended June 30, 2017, the Company recognized approximately $135,000 and $500,000, respectively, as~~No compensation expense ~~with respect~~was recorded prior to ~~vested~~the merger transaction. Since these stock ~~options.~~options were assumed on January 8, 2019 as part of the RMS reverse merger transaction, there were no historical costs related to this prior to January 8, 2019.

As of ~~June 30, 2018,~~March 31, 2019, there were ~~179,074~~31,139 shares of ~~time-based, non-vested stock options outstanding. As of June 30, 2018, there was approximately $75,000 of total unrecognized stock-based compensation related to these non-vested~~unvested stock options. ~~That expense is expected~~Unrecognized compensation cost amounts to approximately $17,800 as of March 31, 2019 and will be recognized as an expense on a straight-line basis over a remaining weighted average service period of ~~1.52~~0.87 years.

The following is a summary of stock option activity ~~at June 30, 2018:~~for the three months ending March 31, 2019:

On February 26, 2018, the Company entered into a securities purchase agreement with selected accredited investors whereby the Company sold an aggregate of 770,000 shares of common stock and 385,000 warrants to purchase common stock. The offering resulted in $308,000 in gross proceeds to the Company. The warrants have a five-year term commencing six months from issuance with an exercise price of $0.75. The Company allocated $52,003 to the warrants and the remainder to the issuance of the common stock. The Company incurred $13,500 in legal expenses related to the offering.

On May 1, 2018, the Company entered into a securities purchase agreement with selected accredited investors whereby the Company offered up to $1,000,000 in units. Each unit had a purchase price of $100,000 and consisted of (i) 1,000 shares of the Company’s 5% Series B Convertible Preferred Stock (the “~~Series B Shares~~”) and (ii) warrants to purchase 250,000 shares of the Company’s common stock, par value $0.001 per share. Each Series B Share is convertible into 250 shares of Common Stock at a conversion price of $0.40 per share. The market value of the common stock on the date of the agreement was $0.44. The Series B Shares also entitle the holders to a 5% annual dividend. The Warrants are exercisable for a period of three (3) years from the date of issuance at an exercise price of $0.75 per share.

As a result of the offering, the Company sold an aggregate of 8.25 Units and issued to the Investors an aggregate of 8,250 Series B Shares and 2,062,500 warrants to purchase common stock, resulting in total $825,000 gross proceeds to the Company. The Company incurred $5,000 in legal fees related to the offering, which resulted in $820,000 net cash received from the offering. The 8,250 Series B Shares sold in the Offering are convertible into an aggregate of 2,062,500 shares of Common Stock.

The net proceeds of the offering of $820,000 were first allocated to the warrants issued to investors, and the Series B Shares based on their relative fair value. The Company recognized a beneficial conversion feature related to the Series B Shares of approximately $246,000, which was credited to additional paid-in capital. Because the Series B Shares can immediately be converted by the holder, the discount recognized by the allocation of proceeds to the beneficial conversion feature was immediately accreted and recognized as a dividend to the preferred shareholders.

~~On March 30, 2018, 12,740 shares of Series A Preferred Stock were converted into an aggregate of 1,274,000 restricted shares of authorized common stock, par value $0.001 per share.~~

On April 26, 2018, the Company’s $100,000 5% convertible debenture and unpaid accrued interest was converted into an aggregate of 266,301 shares of common stock, eliminating the Company’s debt obligation. The debt was converted into shares at $0.38 per share, which was 85% of the average closing price of the Company’s stock during the twenty trading days immediately preceding the delivery of the notice of conversion. The market value of the common stock on the date of the conversion was $0.40. This difference noted above lead to an immaterial amount related to a beneficial conversion feature.

On May 15, 2018, the Company entered into a modification agreement with Steve Gorlin whereby he agreed to convert $100,000 of the $200,000 outstanding promissory note into Series B Shares (Note 7). The conversion of $100,000 was converted under the terms of the May 1, 2018 securities purchase agreement. The $100,000 conversion was converted into an aggregate of 1,000 shares of the Company’s 5% Series B Shares and 250,000 warrants to purchase common stock, eliminating $100,000 of the Company’s $200,000 debt obligation. Each Series B Share is convertible into 250 shares of Common Stock at a conversion price of $0.40 per share. The Series B Shares also entitle the holders to a 5% annual dividend. The Warrants are exercisable for a period of three (3) years from the date of issuance at an exercise price of $0.75 per share.

The converted $100,000 was first allocated to the warrants issued in conjunction with the conversion, and the Series B Shares based on their relative fair value. The Company recognized a beneficial conversion feature related to the Series B Shares of approximately $14,000, which was credited to additional paid-in capital. Because the Series B Shares can immediately be converted by the holder, the discount recognized by the allocation of proceeds to the beneficial conversion feature was immediately accreted and recognized as a dividend to the preferred shareholders.

The Company pays TAG Aviation, a company owned by its Chief Executive Officer, Jarrett Gorlin (“Mr. Gorlin”) for office space that is currently being used as the Company’s principal business location plus utilities cost (see “Related-Party Transactions”) on a monthly basis. Base annual rent is $2,147 per month. Rent expense and utilities cost paid to TAG Aviation amounted to approximately $9,400 and $18,800, respectively, for the three and six months ended June 30, 2018. Rent expense and utilities cost paid to TAG Aviation amounted to approximately $6,300 and $15,700 for the three and six months ended June 30, 2017.

On July 8, 2015, the Company entered into a 3-year lease agreement for a commercial building which commenced on August 1, 2015. Base rent for the three and six months ended June 30, 2018 was $2,948 per month. Total lease expense for the three and six months ended June 30, 2018 was approximately $8,800 and $17,700, respectively related to this lease. Total lease expense for the three and six months ended June 30, 2017 was approximately $8,550 and $17,100, respectively related to this lease.

~~Future minimum lease payments under this rental agreement are approximately as follows:~~

The Company entered into a non-cancelable 36-month operating lease agreement for equipment on March 23, 2018. The agreement is renewable at the end of the term and requires the Company to maintain comprehensive liability insurance. Total lease expense was approximately $900 and $1,800, respectively, for the three and six months ended June 30, 2018. Total lease expense was approximately $700 and $1,400, respectively, for the three and six months ended June 30, 2017.

~~Future minimum lease payments under this operating lease agreement are approximately as follows:~~

The Company has an agreement with Jesse Crowne, a former Director and Co-Chairman of the Board of the Company, to provide business development consulting services for a fee of $13,333 per ~~month.~~month, which expired March 31, 2019. The Company is in the process of negotiating a new contract with Mr. Crowne. The Company incurred $39,999, ~~and $79,998, respectively,~~ for the three ~~and six~~ months ended June 30, 2018 related to this consulting agreement, of which $13,333 was included in accounts payable at June 30, 2018. The monthly consulting fee was increased from a rate of $9,167 beginning in January 2018. The Company incurred approximately $27,500 and $55,000, respectively, for the three and six months ended June 30, 2017 related to this consulting agreement.

~~The Company has a consulting agreement with a sales, marketing, and distribution consultant in Latin America at a fee of $7,000 per month through December~~March 31, ~~2018. The Company incurred $21,000 and $42,000, respectively, for the three and six months ended June 30, 2018~~2019 related to this consulting agreement. ~~The Company incurred $9,000 and $24,000, respectively, for~~Since this agreement was assumed January 8, 2019 as part of the ~~three and six months ended June 30, 2017~~RMS reverse merger transaction, there were no historical costs related to this ~~consulting agreement.~~prior to January 8, 2019.

The Company ~~has~~entered into a consulting ~~agreements~~agreement with LilyCon Investments, LLC effective February 1, 2019 and shall continue for a period of twelve (12) months in the amount of $12,500 per month with a ~~varying team~~$15,000 signing bonus which was paid in full during the quarter ending March 31, 2019. The agreement also provides LilyCon Investments with $35,000 in stock (calculated using an annual Variable Weighted Average Price from February 2019 through January 2020) to be granted upon completion of ~~sales, marketing, and distribution consultants in Europe who provide~~the consulting services ~~for aggregate compensation amounting to approximately €21,000 (approximately $25,000) per month. The consulting agreements, while subject to modifications, commenced at separate dates and will also~~first year. Either party may terminate at separate dates through April 30, 2019. The Company incurred approximately $88,000 and $160,000, respectively, for the three and six months ended June 30, 2018 related to these consulting agreements. The Company incurred approximately $34,000 and $73,000, respectively, for the three and six months ended June 30, 2017 related to these consulting agreements.

The Company was obligated to reimburse Bovie Medical Corporation (“Bovie”) up to $295,000 for the development of the Pro-40 electrocautery generator. The Company did not incur any expenses to Bovie for the three and six months ended June 30, 2018 under this agreement. The Company incurred approximately $0 and $31,000, respectively, for the three and six months ended June 30, 2017 under this agreement. with without cause upon (30) days written notice. Through ~~June 30, 2018,~~March 31, 2019, the Company has ~~paid approximately $422,000~~expensed a total of $40,000 in compensation to ~~Bovie related to this agreement.~~The original $295,000 agreement was a based number along the pathway of development. Additional requirements were added as the research and development process progressed and as a result certain prices increased and additional costs were added to further customize the DenerveX System.LilyCon Investments.

The Company ~~is currently manufacturing~~entered into an oral consulting agreement with Mr. Raymond Monteleone, Board Member and Chairman of the ~~generator~~Audit Committee, in which Mr. Monteleone received $10,000 per month for ~~sales.~~advisory services and $5,000 per quarter as Audit Committee Chair. This arrangement has no specified termination date. Through March 31, 2019, the Company has expensed $35,000 in compensation to Mr. Monteleone.

The Company entered into an oral consulting arrangement with St. Louis Family Office, LLC (Jimmy St. Louis, former CEO of RMS) in January 2019 in the amount of $10,000 per month for advisory services. This arrangement has no specified termination date. Through March 31, 2019, the Company has expensed $27,000 in consulting fees to St. Louis Family Office.

The Company has a non-exclusive distribution center agreement with a logistics service provider in Berlin, Germany pursuant to which they manage and coordinate the DenerveX System products which the Company exports to the EU through June 2019. The Company pays a fixed monthly fee of ~~€2,900~~€6,900 (approximately ~~$3,500)~~$7,900) for all accounting, customs declarations and office support, and a variable monthly fee ranging from €1,900 to €6,900 (approximately $2,300 to $8,300), based off volume of shipments, for logistics, warehousing and customer support services.

Total expenses paid for the distribution center and logistics agreement was approximately ~~$44,000 and $85,000, respectively,~~$22,500 for the three ~~and six~~ months ended ~~June 30, 2018. The Company did not incur any expenses under~~March 31, 2019. Since this agreement ~~for the three and six months ended June 30, 2017.~~

In September 2013, the Company executed a Co-Development Agreement with James R. Andrews, M.D. (“Dr. Andrews”) to further evaluate, test and advise on the development of products incorporating the usewas assumed January 8, 2019 as part of the ~~patented technology. In exchange for these services the Company is obligated~~RMS reverse merger transaction, there were no historical costs related to pay Dr. Andrews a royalty of 2% of revenues earned from applicable product sales over a period of 5 years. If Dr. Andrews is listed as inventor of any Improvement Patent on the DenerveX device during the 5-year term, he would continuethis prior to ~~receive a 1% royalty after the 2% royalty expires for the duration of the effectiveness of the Improvement Patent.~~

The Company incurred approximately $5,700 and $8,600, respectively, in royalty expense under the co-development agreement for the three and six months ended June 30, 2018, all of which was included in accounts payable at June 30, 2018. No royalties were paid to Dr. Andrews for the three and six months ended June 30, 2017.January 8, 2019.

~~On February 1, 2013, the Company issued 750,108 shares of common stock to Scott Haufe, M.D. (“Dr. Haufe”) pursuant to the~~The terms of a Contribution and Royalty Agreement dated January 31, 2013 ~~between~~with Dr. Scott Haufe, M.D was assumed in the ~~Company and Dr. Haufe.~~merger transaction as of January 8, 2019. This agreement provides for the Company to pay Dr. Haufe royalties equal to 1% of revenues earned from sales of any and all products derived from the use of the DenerveX technology. Royalties are payable to Dr. Haufe within 30 days after the close of each calendar quarter based on actual cash collected from sales of applicable products. The royalty period expires on September 6, 2030.

The Company incurred approximately ~~$2,800 and $4,300, respectively,~~$1,100, in royalty expense under the Contribution and Royalty agreement for the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, all of which was included in accounts payable at ~~June 30, 2018. No royalties were paid to Dr. Haufe for the three and six months ended June 30, 2017.~~

~~The asset sale of Streamline Inc. resulted in the immediate receipt of $500,000 in cash, and a $150,000 note receivable that~~March 31, 2019. Since this agreement was ~~due to the Company on~~assumed January ~~1, 2018. The $150,000 note receivable represents the non-contingent portion~~8, 2019 as part of the ~~receivables due from the sale. The Company received the short-term receivable on~~RMS reverse merger transaction, there were no historical costs related to this prior to January ~~2, 2018.~~8, 2019.

The terms of the sale also required that for each of the calendar years ending December 31, 2018 and December 31, 2019 (each such calendar year, a “Contingent Period”), a contingent payment in cash (each, a “Contingent Payment”) equal to five percent (5%) of the total net sales received by the acquiring party from the sale of “IV suspension system” products in excess of 100 units during each Contingent Period. Each such Contingent Payment is payable to the Company by the acquiring party by no later than March 31st of the subsequent year; provided, however, that the total aggregate amount of all Contingent Payments owed by the acquiring party to the Company for all Contingent Periods will not exceed $850,000. The Company is yet to receive any Contingent Payments and has no reason to expect it will receive any Contingent Payments.

The Company did not incur any Streamline related expenses for the three and six months ended June 30, 2018. The Company recorded a nominal amount in Streamline related expenses for the three and six months ended June 30, 2017.

The Company entered into a commercial insurance premium finance and security agreement in December 2017. The agreement finances the Company’s annual D&O insurance premium. Payments are due in quarterly installments of approximately $24,000 and carry an annual percentage interest rate of 5.98%.

~~The Company had an outstanding premium balance of approximately $22,000 at June 30, 2018 related to the agreement, which is included in~~Short-term notes payable ~~current portion~~relates to financing arrangements for Directors and Officers and general liability insurance premiums that were financed at various points throughout 2018 and first quarter 2019 and two promissory notes assumed in the consolidated balance sheets. The Company paid interest expense related to the finance agreement for the three and six months ended June 30, 2018 in the amount of approximately $700 and $1,400, respectively. The Company had paid the yearly premium in full and had no outstanding balance at June 30, 2017 related to the agreement.

OnThese insurance financing arrangements require aggregate monthly payments of approximately $ 17,000, reflect interest rates ranging from 7% to 11.5% and are to be paid in full by January 16, 2020 and had balances of approximately $145,000 at March ~~26, 2018 the Company issued a promissory note~~31, 2019 and $31,000 at December 31, 2018. Interest expense related to ~~Steve Gorlin, father of Jarrett Gorlin, the Company’s CEO,~~these insurance financing arrangements was approximately $900 and $0 for the ~~principal amount of $200,000, plus interest, at a rate of five percent per year. The outstanding principal~~three months ended March 31, 2019 and ~~all accrued but unpaid interest was originally due~~2018, respectively.

Payments on May 15, 2018. The Company issued warrants to purchase an aggregate of 133,333 shares of common stock par value $.001 per share in conjunction with the promissory note to Mr. Gorlin. Each warrant has an exercise price of $0.75 and is exercisable for a period of five years commencing from the date of issuance. The Company recorded the proceeds from the promissory note and the accompanying warrants, which accrete over the period the loan is outstanding, on a relative fair basis of approximately $174,000 and $26,000, respectively.

On May 15, 2018, the Company entered into a modification agreement with Steve Gorlin whereby he agreed to convert $100,000 of the outstanding promissory note into Series B Shares. (See Note 7). Additionally, the due date for the remaining $100,000both of the promissory note was extended to August 31, 2018. The balance of the loan at June 30, 2018 was $100,000. The Company incurred approximately $140 and $2,100, respectively, in interest expense related to the promissory note for the three and six months ended June 30, 2018, which is exclusive of the amortization expense recognized in connection with the accompanying warrants issued with the note.

~~In conjunction with the consummation of the Streamline acquisition on March 25, 2015, the Company~~notes assumed two promissory notes for approximately $135,000 and $125,000 to the Bank of North Dakota New Venture Capital Program and North Dakota Development Fund, both outside non-related parties. Payments on both notes are due in aggregate monthly installments of approximately $5,700 and carry an interest rate of 5%. Both of the notes have a maturity date of August 1, 2019. The ~~promissory notes, including interest,~~Promissory Notes had outstanding balances of approximately ~~$79,000~~$99,000 at date of merger transaction and ~~$104,000~~approximately $99,000 at ~~June 30, 2018 and December~~March 31, ~~2017, respectively.~~2019. No scheduled payments have been made on these notes since the scheduled payment for January, 2018.

The Company incurred interest expense related to the promissory notes for the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018 in the amount of approximately ~~$1,200~~$400 and ~~$2,300, respectively.~~ $0, respectively, as these notes were assumed on January 8, 2019.

The ~~Company incurred~~Company’s interest expense ~~related to the promissory notes~~of approximately $29,000 for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 was related to convertible debt not assumed in the amount of approximately $2,000 and $3,800, respectively. The Company had unpaid accrued interest in the amount of approximately $72,000 and $69,000 at June 30, 2018 and 2017, respectively, related to the promissory notes.

~~Expected future payments related to the promissory notes~~RMS acquisition as of ~~June 30, 2018, are approximately as follows:~~January 8, 2019.

~~On January 31, 2018,~~The Convertible notes payable represents a securities purchase agreement with select accredited investors, which were assumed in the ~~Company issued~~merger transaction. The debt consisted of $750,000 in units at a 5%purchase price of $50,000 per unit were assumed. Each Unit consists of (i) a 12% senior secured convertible ~~debenture in exchange for $100,000. The debenture accrued interest at 5% per annum. Principal and interest were due on January 30, 2019. The debenture was~~note, initially convertible ~~at the option of the holder~~ into shares of the Company’s common stock, par value $0.001 per share, at a conversion ~~rate equivalent~~price equal to ~~85%~~the lesser of $0.40 or ninety percent (90%) of the ~~average closing~~per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of equity and/or debt securities completed by the Company following this offering, and (ii) a three-year warrant to purchase such number of shares of the Company’s common stock equal to one hundred percent (100%) of the number of shares of common stock issuable upon conversion of the notes at $0.40. The Warrants were initially exercisable at a price equal to the lesser of $0.75 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of the debt and/or equity securities completed by the Company following the issuance of warrants. The notes are secured by all of the assets of the Company.

The Company recorded the proceeds from the notes and the accompanying warrants, which accrete over the period the notes are outstanding, on a relative fair value basis of $505,424 and $244,576, respectively. Accretion expense related to the discount on these convertible notes for the ~~20 days preceding~~three month period ending March 31, 2019 was approximately $63,600. The Company recognized approximately $21,500 in unpaid accrued interest expense related to the ~~conversion.~~notes as of March 31, 2019.

The convertible notes sold in the offering were initially convertible into an aggregate of 1,875,000 shares of common stock. The down round feature was triggered on January 8, 2019, and the conversion price of the convertible debt were adjusted to $0.36. The Company recognized the down round as a deemed dividend of approximately $288,000 which reduced the income available to common stockholders.

On ~~April 26, 2018,~~February 6, 2019, $100,000 of the Company’s $750,000 outstanding convertible ~~debenture and unpaid accrued interest~~notes was converted into an aggregate of ~~266,301~~277,778 shares of common stock, eliminating $100,000 of the Company’s debt ~~obligation (Note 7). Prior~~obligation. The debt was converted into shares at $0.36 per share, which was the conversion price per the SPA subsequent to the conversion, the Company recognized approximately $400 and $1,200, respectively, in interest expense related to the convertible debenture during the three and six months ended June 30, 2018. The market valuetrigger of the ~~common stock on the date of the conversion was $0.40. This difference lead to an immaterial amount related to a beneficial conversion~~down round feature.

Revenue recognition occurs at the time product is shipped to customers from the third-party distribution warehouse located in Berlin, Germany. Our stocking distributors, who sell the products to their customers or sub-distributors, contractually take title to the products and assume all risks of ownership at the time of shipment. Our stocking distributors are obligated to pay us the contractually agreed upon invoice price within specified terms regardless of when, if ever, they sell the products. Our direct customers do not have any contractual rights of return or exchange other than for defective product or shipping error.

Fair value measurement valuation techniques, to the extent possible, should maximize the use of observable inputs and minimize the use of unobservable inputs. The Company’s fair value measurements of all warrants are designated as Level 21 since all of the significant inputs are observable and quoted prices used for volatility were available ~~for the four comparative companies~~ in an active market.

A summary of the Company’s warrant issuance activity and related information for the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 is as follows:

The fair value of all warrants issued are determined by using the ~~Black-Scholes-Merton~~Black-Scholes valuation technique and were assigned based on the relative fair value of both the common stock and the warrants issued.

The inputs used in the ~~Black-Scholes-Merton~~Black-Scholes valuation technique to value each of the warrants issued at ~~June 30, 2018~~March 31, 2019 as of their respective issue dates are as follows:

⁽¹⁾Warrants issued with the May 2018 private placement and debt conversion had an initial exercise price of $0.75 and contain a contingent feature which would adjust the exercise price of the warrant in the event the Company issues any shares of common stock or common stock equivalents in a private placement of equity or debt securities at a price less than $0.75 per share. On August 8, 2018, the Company completed the issuance of convertible debt at an initial conversion price of $0.40. Accordingly, the exercise price on these warrants was adjusted downward to $0.40.

⁽²⁾Warrants issued with the August 8, 2018 and September 28, 2018 convertible notes had an initial exercise price of $0.75 and contain a contingent feature which would adjust the exercise price of the warrants in the event the Company issued any shares of common stock or common stock equivalents in a private placement of equity or debt securities to 90% of the issuance price if it is less than $0.75.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

~~For the period from February 1, 2013 (inception)~~Frominception to ~~June 30, 2018,~~March 31, 2019, the Company has incurred net losses and, therefore, has no current income tax liability. The net deferred tax asset generated by these losses is fully reserved as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, since it is currently more likely than not that the benefit will not be realized in future periods.

~~The~~As a result of the acquisition, the Company is required to file federal income tax returns and state income tax returns in the states of Arizona, Florida, Georgia, Minnesota, Pennsylvania, Tennessee, and ~~Minnesota.~~Texas. There are no uncertain tax positions at ~~June 30, 2018~~March 31, 2019 or December 31, ~~2017.~~2018. The Company has not undergone any tax examinations since inception.

~~The Company has a Contribution and Royalty Agreement with Dr. Haufe, a director~~Basic loss per share is computed on the basis of the ~~Company. The agreement provides~~weighted average number of shares outstanding for the ~~Company to pay Dr. Haufe royalties equal to 1% of revenues received by~~reporting period. Diluted loss per share is computed on the ~~Company from sales of all products derived from the use~~basis of the ~~DenerveX technology. The Company incurred approximately $2,800 and $4,300, respectively, in royalty expense under~~weighted average number of common shares plus dilutive potential common shares outstanding using the ~~Contribution and Royalty agreement for the three and six months ended June 30, 2018, all of which was included in accounts payable at June 30, 2018. No royalties were earned or paid~~treasury stock method. Any potentially dilutive securities are antidilutive due to ~~Dr. Haufe for the three and six months ended June 30, 2017.~~

~~The Company entered into a Co-Development Agreement with Dr. Andrews, a director of the Company, in September 2013. The agreement provides for the Company to pay Dr. Andrews a royalty of 2% of~~ the Company’s net ~~sales earned from applicable product sales for at least 5 years from~~losses. For the ~~effective date of~~periods presented, there is no difference between the ~~agreement. The Company incurred approximately $5,700~~basic and ~~$8,600 in royalty expense under the co-development agreement~~diluted net loss per share: 30,108,743 warrants and 726,557 common stock options outstanding were considered anti-dilutive and excluded for the ~~three and six months~~period ended ~~June 30,~~March 31, 2019. For the three-month period ended March 31, 2018, ~~all of which was included in accounts payable at June 30, 2018. No royalties~~there were ~~earned or paid to Dr. Andrews for~~no dilutive securities as the ~~three and six months ended June 30, 2017.~~

As described in Note 8, the Company pays TAG Aviation LLC, (“TAG”), a company owned by Mr. Gorlin, for month to month rental of office space at Dekalb-Peachtree Airport in Atlanta Georgia plus cost of utilities. Base rent payments under this arrangement is $2,147 per month. Rent expense and utilities expenses incurred by TAG Aviation amounted to approximately $9,400 and $18,800, respectively, for the three and six months ended June 30, 2018. Approximately $3,100 was included in accounts payable as of June 30, 2018. Rent expense and utilities expenses paid to TAG Aviation amounted to approximately $6,300 and $15,700, respectively, for the three and six months ended June 30, 2017.

As described in Note 8, the Company paid $39,999 and $79,998, respectively, for the three and six months ended June 30, 2018 to Jesse Crowne, a director and Co-Chairman of the Board of the Company, for business advisory services, of which $13,333 was included in accounts payable at June 30, 2018.

In November 2013, the Company accepted a proposal from Devicix, a Minneapolis, Minnesota based FDA registered contract designer and developer, to develop a commercially viable prototype of its product that could be used to receive regulatory approval from the FDA and other international agencies for use on humans to relieve pain associated with Facet Joint Syndrome. Through June 30, 2018, the Company has incurred approximately $1,905,000 in fees to Devicix, of which approximately $24,000 and $16,000, respectively, was included in accounts payable as of June 30, 2018 and 2017.

The development work commenced in December 2013. The total estimated cost of this work at contract signing was $960,000; however, the terms of the proposal allow either the Company or the designer and developer to cancel the development work with 10-days’ notice.

The Company incurred expenses of approximately $16,000 and $155,000, respectively, for the three and six months ended June 30, 2018. The Company incurred expenses of approximately $32,000 and $239,000, respectively, for the three and six months ended June 30, 2017.

The DenerveX device requires a custom electrocautery generator for power. As described in Note 8, in November 2014, the Company contracted with Bovie to customize one of their existing electrocautery generators for use with DenerveX Device, and then manufacture that unit on a commercial basis once regulatory approval for the DenerveX is obtained. The Bovie agreement required a base $295,000 development fee to customize the unit, plus additional amounts if further customization was necessary beyond predetermined estimates.

~~The Company~~accounting acquirer did not incur any expenses to Bovie for the three and six months ended June 30, 2018. The Company incurred approximately $0 and $31,000, respectively, for the three and six months ended June 30, 2017. Through June 30, 2018, the Company has incurred approximately $422,000 to Bovie related to this agreement. The manufacturing agreement is complete as of June 30, 2018, and the Company does not expect to incur any more expenses related to the agreement.historically have stock compensation programs.

In November 2014, the Company selected Nortech Systems Inc. (“Nortech”), a Minneapolis, Minnesota based FDA registered contract manufacturer, to produce 315 DenerveX devices from the prototype supplied by Devicix for use in final development and clinical trials. The agreement with Nortech includes agreed upon per unit prices for delivery of the devices. Actual work on development of the final units began in November 2014.

The Company incurred fees of approximately $4,200 and $107,000, respectively, to Nortech for the three and six months ended June 30, 2018. The Company incurred fees of approximately $6,800 and $140,000, respectively, to Nortech for the three and six months ended June 30, 2017. Through June 30, 2018, the Company has incurred expenses of approximately $997,000 to Nortech.

The Company incurred net losses of approximately ~~$2,340,000~~$3,694,000 and ~~$3,475,000~~$897,000 for the ~~six~~three months ended ~~June 30,~~March 31, 2019 and 2018, respectively.

The RMS products and ~~2017, respectively.~~services division will incur losses until sufficient revenue volume and geographical coverage is attained utilizing the infusion of capital resources to expand marketing and sales initiatives. The MedoveX operations will continue to incur losses until the plan for the DenerveX System commercialization is determined and executed (see Note 16).

To The Company through April 2019 has raised $7,000,000 (excluding $200,000 of debt conversions) year to date in additional cash to sustain the ~~Company’s primary source~~Company. Cash as of March 31, 2019 was approximately $2,592,000. The present level of cash is insufficient to satisfy our current operating requirements. The Company is finalizing a plan to seek additional sources of funds ~~has been~~ from the ~~issuance~~sale of equity or debt ~~and equity.~~

~~The~~securities or through a credit facility. There can be no assurances that the Company will ~~require~~be able to obtain additional ~~cash in 2018 and is currently exploring other fundraising options. No assurances can be provided regarding the success of such efforts. Furthermore,~~financing on commercially reasonable terms, if at all. If the Company is ~~unable to raise sufficient financing in 2018, it could be~~ required to undertake initiatives to conserve its capital resources, including delaying or suspending the launch of its product outside the United States and seeking FDA approval to sell its product in the United States. Delaying or suspending these initiativescurtail operations, there would ~~raise~~be substantial doubt about the Company’s ability to continue as a going concern.

The unaudited condensed consolidated financial statements do not include any adjustments to the carrying value of amounts of its assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

~~On August 8, 2018,~~In April, the ~~Board approved~~Company determined that their contract manufacturer was not able to meet the ~~issuance of up to $600,000 of 12% Senior Secured Convertible Notes (the “Notes”). The Notes~~quality and ~~unpaid interest mature 1 year from closing date. The Notes are convertible into~~quantity requirements for producing the ~~Company’s common stock at~~DenerveX product. As a result, the ~~option~~manufacture of the ~~holder at~~DenerveX product has been temporarily suspended while the ~~lesser of (a) $0.40, or (b) 90% of the price of the common stock~~Company sources alternative manufacturing options. Additionally, in the Company’s ~~next private placement. Each holder is also issued a warrant for number~~review and evaluation of shares equal to the number of common shares that would be received if the Notes were converted at $0.40. The warrants expire after 3 years and have an exercise price of $0.75 per share. Both the conversion price and warrant exercise price are subject to customary anti-dilution provisions.

~~The Notes also contain a registration provision that requires~~its current distribution channels, the Company ~~to file to register the underlying common stock and warrants no later than December 31, 2018, and use best efforts to have the registration statement effective by March 31, 2019. A cash penalty~~has determined that many of 1%these channels were not cost effective. As a result of the investment amount per month can be imposed by the holder if the registration statement is not filed by December 31, 2018 or declared effective by March 31, 2019, up to a maximum of 12%. As of August 10, 2018,above evaluations, certain European distributor agreements were terminated and all other representatives have been notified that the Company ~~had sold all~~is temporarily suspending the manufacture and sale of the ~~Notes.~~DenerveX product while the Company sources alternative manufacturing and distributor options as well as considers other product monetizing strategies.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report. Historical results and trends that might appear in this Quarterly Report should not be interpreted as being indicative of future operations.

MedoveX was incorporated in Nevada on July 30, 2013 as SpineZ Corp. MedoveX is the parent company of Debride Inc., (“Debride”), which was incorporated under the laws of Florida on October 1, ~~2012.~~ 2012 but did not commence operations until February 1, 2013. SpineZ Corp. changed its name to MedoveX Corp. and effected a 2-for-1 reverse split of its stock in March 2014.

The ~~Company is in the~~MedoveX business ~~of designing~~designs and ~~marketing~~markets proprietary medical devices for commercial use in the United States and Europe. The Company received CE marking in June 2017 for the DenerveX System and it is now commercially available throughout the European Union and several other countries that accept CE marking. The Company’s first sale of the DenerveX System occurred in July 2017. The Company ~~is currently seeking~~still intends to seek approval for the DenerveX System from the ~~FDA~~Food & Drug Administration (“FDA”) in the ~~US.~~United States.

~~DenerveX~~On October 18, 2018, MedoveX entered into an Asset Purchase Agreement with Regenerative Medicine Solutions, LLC, Lung Institute LLC (“LI”), RMS Lung Institute Management LLC (“RMS LI Management”) and Cognitive Health Institute Tampa, LLC (“CHIT”), (collectively “RMS”). On January 8, 2019, the Asset Purchase Agreement was amended and the Company acquired certain assets and assumed certain liabilities of RMS as reported in the 8-K/A filed in March of 2019. Based on the terms of the Asset Purchase Agreement and its amendment, the former RMS members had voting control of the combined company as of the closing of the RMS acquisition. For accounting purposes, the acquisition transaction has been treated as a reverse acquisition whereby the Company is deemed to have been acquired by RMS and the historical financial statements prior to the acquisition date of January 8, 2019 now reflect the historical financial statements of RMS.

RMS was incorporated in Delaware on December 26, 2012. RMS is a healthcare medical biosciences company that develops and implements advance innovative treatment options in regenerative medicine to treat an array of debilitating medical conditions. In addition, the company is the operator and manager of the Lung Health Institute. Committed to an individualized patient-centric approach, RMS consistently provides oversight and management of the highest quality care while producing positive outcomes. RMS offices are located in Tampa, Florida. The Lung Health Institute located in Tampa, Florida is a wholly owned subsidiary of RMS. RMS also provides oversight and management to the Lung Health Institutes located in Nashville, TN, Scottsdale AZ, Pittsburgh, PA, and Dallas, TX.

The ~~DenerveX® System consists of the DenerveX Kit~~MedoveX business designs and ~~the DenerveX Power Pro-40 generator. We believe that the DenerveX System can be developed~~markets proprietary medical devices for commercial use in the ~~future to encompass a number of medical applications in addition to the current application for facet joint syndrome, including pain relief.~~

~~The Company acquired the DenerveX patent on January 31, 2013 from Scott Haufe, M.D. (“Dr. Haufe”), a director of the Company, in exchange for 750,108 shares of common stock in the Company~~United States and ~~a 1% royalty on all sales of any product sold based on the patent.~~

In September 2013, we entered into a Co-Development Agreement with James Andrews, M.D. (“Dr. Andrews”), a director of the Company, whereby Dr. Andrews committed to further evaluate the DenerveX System and to seek to make modifications and improvements to such technology. In exchange for such services, the Company agreed to pay Dr. Andrews a royalty equal to two (2%) percent of the DenerveX net sales during the five (5) year term of the Co-Development Agreement. Upon the termination of the term of the Co-Development Agreement, which has a minimum term of five (5) years, the royalty payable to Dr. Andrews shall be reduced to one (1%) percent of DenerveX net sales after such termination of products covered by any U.S. patent on which Dr. Andrews is listed as a co-inventor; if any such patents are obtained. Such one (1%) percent royalty shall continue during the effectiveness of such patent. Pursuant to the Co-Development Agreement, Dr. Andrews agreed to assign any modifications or improvements to the DenerveX to the Company subject to the royalty rights described above.

We are marketing the product as a disposable, single-use kit which includes all components of the DenerveX device product. In addition to the DenerveX device itself, we have developed a dedicated Electro Surgical Generator, the DenerveX Pro-40, to power the DenerveX device.

~~The generator is provided to customers agreeing to purchase the DenerveX device and cannot be used for any other purpose.~~

We accepted a proposal from Devicix, a Minneapolis, Minnesota third party design and development firm, in November 2013, to develop a prototype device. This proposal included a 5-phase development plan, culminating in the production ready prototype that could be used for validation purposes. We have recently completed the final stages of the build and test phase of the device, culminating in receiving CE marking to market the product in Europe. The DenerveX Kit and Pro-40 generator is now in commercial production. We anticipate very minimal, if any, additional build and test related expenses, which consists of product design verification activities, in the future as we launch the DenerveX System in Europe. Through June 30, 2018, we have incurred approximately $1,905,000 in fees to Devicix.

In November 2014, we selected Nortech Systems Inc. (“Nortech”), a Minneapolis, Minnesota based FDA registered contract manufacturer, to produce test DenerveX devices from the prototype supplied by Devicix for use in final development and non-clinical testing. The agreement with Nortech includes agreed upon per unit prices for delivery of the devices. Actual work on development of the final units began in November 2014. Through June 30, 2018, we have incurred approximately $997,000 in fees to Nortech. We are now in commercial production, however, the Company may still incur non-recurring expenses related to the DenerveX Kit under the agreement.

Also in November 2014, we engaged Bovie Medical Corporation (“Bovie”), a Delaware Corporation, to develop the Electro Surgical Generator and provide post production support services. Per our agreement with Bovie, we are invoiced based on deliverables produced by Bovie, which was originally supposed to amount to $295,000 upon completion of all the deliverables. Through June 30, 2018, we have incurred approximately $422,000 in fees to Bovie for production services.The original $295,000 agreement was a base number along the pathway of development. Additional requirements were incurred as the research and development process progressed and as a result certain prices increased and additional costs were incurred to further customize the DenerveX System. ~~Development of the generator is now complete and it is currently in commercial production.~~

~~The Company has completed the final stages of the development and verification of the DenerveX Device and the DenerveX Pro-40 power generator as a system.~~

The Company received CE marking in June 2017 for the DenerveX ~~System. It~~System and it is now ~~being sold~~commercially available throughout the European Union and several other countries that accept CE ~~Mark.~~

~~In March 2018, the Company receivedINVIMA registration approval in Columbiafor the Denervex System which allows the company to now market the product in Columbia.~~

marking. The ~~Company is currently seeking marketing clearance from the FDA for commercialization~~Company’s first sale of the DenerveX System occurred in ~~the US.~~

~~Aside from the European Union, we may~~July 2017. The Company still intends to seek ~~regulatory~~ approval for ~~commercialization of~~ the DenerveX System from ~~Peru, Argentina, Mexico, Turkey, Israel, New Zealand, Australia and other countries. The documentation required to accompany~~ the ~~CE Mark to obtain regulatory approval~~Food & Drug Administration (“FDA”) in the ~~aforementioned countries may include copies~~United States.

In April, the Company determined that their contract manufacturer was not able to meet the quality and quantity requirements for producing the DenerveX product. As a result, the manufacture of the ~~ISO 13485 certification,~~DenerveX product has been temporarily suspended while the ~~SGS certificate~~Company sources alternative manufacturing options. Additionally, in the Company’s review and evaluation of ~~approval~~its current distribution channels, the Company has determined that many of these channels were not cost effective. As a result of the above evaluations, certain European distributor agreements were terminated and ~~a statement~~all other representatives have been notified that the Company is temporarily suspending the manufacture and sale of ~~Good Manufacturing Practices (“GMP”).~~the DenerveX product while the Company sources alternative manufacturing and distributor options as well as considers other product monetizing strategies.

Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which we have prepared in accordance with United States generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments, including those described in greater detail below.

We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in more detail in the notes to our consolidated financial statements for the fiscal year ended December 31, ~~2017,~~2018, included in the Company’s Annual Report on Form ~~10K.~~10K as well as in the notes to our unaudited condensed consolidated financial statements for the three months ended March 31, 2019 included in this Quarterly Report on Form 10-Q.

~~Factors Which May Influence Future~~ Results of ~~Operations~~Operations- Three Months Ended March 31, 2019 and 2018

~~The following is a description of factors that may influence our future results of operations, and that we believe are important to an understanding of our business and results of operations.~~

~~The Company’s first sale of the DenerveX System occurred in July 2017.~~ We recorded gross revenue for the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and March 31, 2018 of approximately ~~$252,000~~$1,324,000 and ~~$396,000,~~$2,903,000 respectively. The revenue for the three months ended March 31, 2019 is derived predominantly from the RMS business and the revenue for the three months ended March 31, 2018 is exclusively the RMS business. As a result of the reverse merger accounting, the historical financials prior to January 8, 2019 represent the RMS business only.

~~The Company sells the DenerveX System through a combination~~Revenue from sales of ~~direct~~RMS services has declined due to insufficient cash resources to fund sales and independent distributors in international markets. The Company recognizes revenue at the time product is shipped to customers from the third-party distribution warehouse in Berlin, Germany. We believe this action satisfies the performance obligation as outlined in new revenue recognition standards.

The DenerveX Device is manufactured by Nortech in Minneapolis, MN and subsequently shipped to the third-party warehouse in packages of five units per one package. Our independent distributors then order the DenerveX Devices as single units at specified prices as outlined in their distribution agreements. The international distribution agreements also specify the pricing for which the independent distributor is to sell the DenerveX Device to their end-user customers.

The Pro-40 Generator is manufactured in Bulgaria and shipped to the third-party warehouse as single units. The generators are typically provided for use to customers at no cost, however, demo units can be purchased by customers for which the Company records in revenue and cost of sales and removes the demo units from inventory.

Our independent distribution customers place initial purchase orders for minimum stocking quantities of both the DenerveX Devices and Pro-40 Generators as agreed upon per their signed international distribution agreements. Subsequent stocking orders are required to be placed initially at specified dates and quantities based upon projected end-user sales volumes. Stocking orders thereafter are required to be placed quarterly based off actual end-user sales volumes.marketing efforts.

For the ~~period ending June 30,~~three months ended March 31, 2019 and 2018, the Company incurred approximately $559,000 and $859,000, in costs of sales, respectively. The cost of sales ~~as a percentage~~for the three months ended March 31, 2019 is derived predominantly from the RMS business and the revenue for the three months ended March 31, 2018 is exclusively the RMS business. The decline in the costs of ~~revenue~~sales from the three months ended March 31, 2018 to the three months ended March 31, 2019, is attributable to the reduced costs associated with the decline in revenue.

Gross profit for the three months ended March 31, 2019 and 2018 was approximately ~~76% resulting~~$765,000 (58%) and $2,044,000 (70%). The decline was a result of the decline in ~~a gross profit margin~~revenue, net of ~~approximately 24%.~~the decline in cost of sales.

We classify our operating expenses into ~~four~~three categories: ~~research~~general and ~~development,~~administrative, sales and marketing, ~~general~~ and ~~administrative,~~depreciation and ~~depreciation.~~amortization.

Research and development costs and expenses consist primarily of fees paid to external service providers, laboratory supplies, costs for facilities and equipment, and other costs for regulatory, patent, and research and development activities. For the three and six months ended June 30, 2018, the Company incurred approximately $16,000 and $155,000, respectively, in research and development expenses. For the three and six months ended June 30, 2017, the Company incurred approximately $56,000 and $392,000, respectively, in research and development expenses. Research and development expenses are recorded in operating expenses in the period in which they are incurred.

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018, the Company incurred approximately ~~$441,000~~$3,021,000 and ~~$900,000, respectively,~~$2,150,000, in general and administrative costs, respectively. The increase is primarily attributable to the three months ended March 31, 2018 reflecting only the expenses of the RMS business and 2019 reflects the consolidated business costs for RMS and MedoveX.

Of the total general and administrative costs, approximately $1,595,000 and $1,289,000 were personnel costs. ~~For the three and six months ended June 30, 2017, the Company incurred approximately $461,000 and $917,000, respectively, in personnel costs.~~

Professional fees were approximately ~~$408,000~~$440,000 and ~~$805,000,~~$89,000, respectively, for the three ~~and six~~ months ended ~~June 30, 2018. Professional fees were approximately $359,000~~March 31, 2019 and ~~$802,000, respectively, for the three and six months ended June 30, 2017.~~2018, respectively. Professional fees consist primarily of accounting, legal, patent and public company compliance costs as well as regulatory costs incurred to maintain CE Mark in Europe.

The Company incurred additional accounting and legal fees due to the acquisition in the first quarter 2019.

General and administrative related travel expenses were approximately ~~$2,800~~$52,000 and ~~$9,800,~~$27,000, respectively, for the three ~~and six~~ months ended ~~June 30, 2018. General~~March 31, 2019 and ~~administrative related travel expenses were approximately $29,000 and $51,000, respectively, for the three and six months ended June 30, 2017.~~2019, respectively.

We anticipate that our general and administrative expenses will continue at a comparable rate in the future ~~to support clinical trials, commercialization of our product candidate~~ and include the continued costs of operating as a public company.

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018, the Company incurred approximately ~~$201,000~~$1,136,000 and ~~$451,000,~~$738,000, respectively, in sales and marketing expenses. ~~For~~Of these, advertising costs were $1,118,000 and $737,000, respectively, related to the three and six months ended June 30, 2017, the Company incurred approximately $146,000 and $228,000, respectively, in sales and marketing expenses. Sales and marketing expenses consist primarily of travel related expenses and fees paid to vendors for tradeshows and consultants in correlation with the launch and commercialization of the DenerveX System in Europe.RMS business. We expect these expenses will continue to increase as we ~~launch the product~~expand in new markets and expand penetration in existing markets.

~~Depreciation~~For the three months ended March 31, 2019 and ~~amortization expense are recorded in~~2018, the ~~period in which they are incurred. The~~ Company recognized approximately ~~$7,000~~$211,000 and ~~$14,000,~~$24,000 respectively, in depreciation and amortization ~~expense for~~expense. Of that, the ~~three and six months ended June 30, 2018. The~~ Company recognized approximately ~~$7,000~~$184,000 and ~~$13,000,~~$0, respectively, in ~~depreciation and~~ amortization expense for the three ~~and six~~ months ended ~~June 30, 2017.~~March 31, 2019 and 2018. The amortization expense is related to the technology intangibles that arose as a result of the reverse merger by RMS of MedoveX.

~~Results~~Departure of ~~Continued Operations~~Directors and Certain Officers, Election of Directors. Appointment of Certain Officer; Compensatory Agreement of Certain Officers

~~Three~~On January 8, 2019, in connection with the Asset Purchase Agreement and ~~Six Months Ended June 30, 2018 Compared~~APA Amendment, the Board of the Company appointed Michael Yurkowsky and Raymond Monteleone as additional members of the Board.

There are no arrangements or understandings between the Company and Mr. Michael Yurkowsky and any other person or persons pursuant to which Mr. Yurkowsky was appointed as a member of the Board and there is no family relationship between Mr. Yurkowsky and any other director or executive officer of the Company or any person nominated or chosen by the Company to become a director or executive officer.

There are no arrangements or understandings between the Company and Mr. Raymond Monteleone and any other person or persons pursuant to which Mr. Monteleone was appointed as a member of the Board and there is no family relationship between Mr. Monteleone and any other director or executive officer of the Company or any person nominated or chosen by the Company to become a director or executive officer.

On February 4, 2019, the board of directors of the Company accepted the resignation of Charles Farrahar as the Chief Financial Officer, effective immediately. Mr. Farrahar resigned as the Chief Financial Officer for personal reasons and not as a result of any disputes or disagreements between Mr. Farrahar and the Company on any matter relating to the ~~Three and Six Months Ended June 30, 2017.~~

~~Total operating expenses decreased approximately $143,000,~~Company’s operations, policies, accounting policies, or ~~12%, to approximately $1,092,000 for the three months ended June 30, 2018, as compared to approximately $1,235,000 for the three months ended June 30, 2017.~~practices.

~~Total operating expenses decreased approximately $696,000, or 23%, to approximately $2,385,000 for~~On February 4, 2019, the ~~six months ended June 30, 2018,~~board of directors of the Company appointed Jeremy Daniel as ~~compared to approximately $3,081,000 for~~ the ~~six months ended June 30, 2017.~~Chief Financial Officer of the Company.

~~The overall decrease in operating expenses~~There are no arrangements or understandings between the Company and Mr. Jeremy Daniel and any other person or persons pursuant to which Mr. Jeremy Daniel was appointed as the Chief Financial Officer of the Company and there is no family relationship between Mr. Daniel and any other director or executive officer of the Company or any person nominated or chosen by the Company to become a director or executive officer.

On February 15, 2019, Dennis Moon resigned from his position as the executive vice president of MedoveX Corp., a Nevada company (the “Company”), effective immediately. Mr. Moon resigned from his position at the Company for personal reasons, not as a result of ~~intentional spending cut-backs in order to preserve working capital due to low cash balances. Additionally, research~~or caused by any disagreements Mr. Moon and ~~development and regulatory expenses are lower as we completed~~ the final stages of the development and verification of the DenerveX System and have received CE Mark certification. Sales & Marketing expenses increased as we entered commercial production of the DenerveX System and launched our product in Europe. We continued to incur similar costs associated with being a public entity.

~~We did not incur~~Company on any ~~operating losses related~~matter relating to the ~~disposition of Streamline for the three and six months ended June 30, 2018. Our discontinued~~Company’s operations, ~~generated net losses of approximately $0 and $1,200, respectively for the three and six months ended June 30, 2017.~~policies, or practices.

We anticipate our cash expenditures will ~~remain relatively consistent~~increase as we continue to operate as a publicly traded entity, ~~and~~ as we move forward with increased sales and marketing initiatives for the ~~recent commercialization~~RMS services and as we incur losses associated with temporarily suspending the manufacture and sale of the DenerveX ~~System onto clinical trial studies. We expect future cash flow expenditures~~product. In addition, the Company is pursuing the acquisition of new technologies to ~~increase if~~expand the ~~FDA requires a de novo regulatory path, instead~~business lines and with the intent of ~~a 510(k) approval.~~increasing profitability.

The present level of cash is insufficient to satisfy our ~~long-term~~current operating ~~requirements, we~~requirements. We will need to seek additional sources of funds from the sale of equity or debt securities or through a credit ~~facility, or we will need to modify our current business plan.~~facility. There can be no assurances that we will be able to obtain additional financing on commercially reasonable terms, if at all.

The sale of additional equity or convertible debt securities would likely result in dilution to our current stockholders.

Our independent registered public accounting firm has included an explanatory paragraph with respect to our ability to continue as a going concern in its report on our consolidated financial statements for the ~~years~~year ended December 31, ~~2017 and 2016.~~2018. The presence of the going concern explanatory paragraph suggests that we may not have sufficient liquidity or minimum cash levels to operate the business. Since our inception, we have incurred losses and anticipate that we will continue to incur losses until our products can generate enough revenue to offset our operating expenses. The Company through April 2019 has raised $7,000,000 (excluding $200,000 of debt conversions) year to date in additional cash to sustain the Company. Cash as of March 31, 2019 was approximately $2,592,000. The present level of cash is insufficient to satisfy our current operating requirements. We ~~received $820,000~~are finalizing a plan to seek additional sources of ~~net proceeds in~~funds from the sale of equity or debt securities or through a ~~private placement of 5% Series B Preferred Convertible Stock in May 2018. We believe these funds~~credit facility. There can be no assurances that we will be ~~sufficient~~able to maintain uninterrupted operations while we pursue our near term operational plans and pursue other fund-raising initiatives that will be required in 2018. No assurances can be provided regarding the success of such efforts. Furthermore,obtain additional financing on commercially reasonable terms, if ~~the Company is unable to raise sufficient financing in 2018, it could be required to undertake initiatives to conserve its capital resources.~~at all. If we are required to ~~conserve resources or~~ curtail ~~production,~~operations, there ~~could~~would be substantial doubt about the Company’s ability to continue as a going concern.

Since our inception, we have incurred losses and anticipate that we will continue to incur losses in ~~the~~ foreseeable future.

While we expect our research and development costs for the DenerveX System to dissipate, we also anticipate increased expenditures for clinical trials to obtain FDA approval of the DenerveX System as well as expenses related to the commercial launch of the DenerveX system. We will need additional cash to fully fund these activities.

On ~~February 26, 2018,~~January 8, 2019, the Company entered into a securities purchase agreement (the “SPA”) with ~~selected accredited investors whereby~~four purchasers (the “Purchasers”) pursuant to which the four Purchasers invested in the Company ~~sold~~ an aggregate amount of ~~770,000 shares~~$2,000,000, with $1,800,000 in cash and $200,000 by cancellation of ~~common stock~~debt as explained below, in exchange for forty (40) units (the “Units”), each consisting of a convertible note (the “Convertible Note”) with the principal amount of $50,000 and ~~385,000 warrants~~a warrant (the “Warrant”) to purchase common ~~stock. The offering resulted in $308,000 in gross proceeds~~stock (the “Common Stock”) of the Company. Pursuant to this SPA, the Company initially offered a minimum of $1,000,000 and a maximum of $6,000,000, and subsequently increased to a maximum of $8,000,000 (the “Maximum Amount”) of Units at a price of $50,000 per Unit until the earlier of i) the closing of the subscription of the Maximum Amount and ii) March 31, 2019 (the “Termination Date”), subject to the ~~Company.~~Company’s earlier termination at its discretion. The ~~warrants have a five-year term commencing six months~~SPA includes the customary representations and warranties from ~~issuance with an exercise price of $0.75.~~

~~In May 2018,~~ the Company ~~entered into~~and purchasers. Steve Gorlin, the Company’s former Chairman of the Board, converted a ~~Unit Purchase Agreement with selected accredited investors whereby~~$200,000 promissory note owed to him by the Company ~~had~~in exchange for four (4) Units on the right to sell in a private placement up to $1,000,000 in units. Each unit had a purchase price of $100,000 and consisted of (i) 1,000 shares of 5% Series B Convertible Preferred Common Stock, $0.001 par value per share, and (ii) 250,000 warrants, $0.001 par value per share to purchase Common Stock at $0.75 per share for a period of three years.same terms as all other Purchasers.

Each ~~Series B Share is~~Convertible Note offered by the Company as part of the Unit bears an interest rate of 12% per annum, has a principal amount of $50,000, shall mature in one year from the original issue date on January 8, 2019, and will be convertible into ~~250~~ shares of Common Stock at a ~~conversion~~ price of $0.40 ~~per share. The Series B Shares also entitle~~subject to adjustment stated in the ~~holders~~Convertible Note. Pursuant to ~~a 5% annual dividend.~~

~~The offering resulted in net proceeds~~the terms of ~~$820,000 and resulted in~~the Convertible Note, each holder of the Convertible Notes shall not own more than 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of ~~an aggregate~~Common Stock issuable upon exercise of ~~8,250~~such Convertible Note. Upon default, the penalty interest rate of the Convertible Note shall rise to 18% per annum. In addition, pursuant to the SPA, the Company offers, as part of the Unit, Warrants to purchase the Common Stock at a price of $0.75 per share (the “Exercise Price”), subject to adjustments stated therein. The holder of each Warrant may purchase the number of shares of ~~5% Series B~~Common Stock equal to the number of shares of Common Stock issuable upon conversion of each Convertible ~~Preferred Stock~~Note while the Warrant is exercisable. The Warrants have a term of three years and ~~warrants to purchase 2,062,500 common stock shares.~~

~~Debt~~shall be exercised in cash or on a cashless basis as described in the Warrant.

The $100,000 5% convertible debenture the Company issued on January 31, 2018 was converted on April 26, 2018 into common stock at $0.38 per share, which was 85% of the average closing price of the Company’s stock during the twenty trading days immediately preceding the delivery of the notice of conversion. The market value of the common stock on the date of the conversion was $0.40 which lead to an immaterial amount related to a beneficial conversion feature.

~~On March 26, 2018 the Company issued a promissory note to~~ Steve ~~Gorlin, father of Jarrett~~ Gorlin, the Company’s ~~CEO, for~~former Chairman of the ~~principal amount of $200,000, plus interest, at~~Board, converted a rate of five percent per year. The outstanding principal and all accrued but unpaid interest was due on May 15, 2018. The Company issued warrants to purchase an aggregate of 133,333 shares of common stock in conjunction with the promissory note. Each warrant has an exercise price of $0.75 and is exercisable for a period of five years commencing from the date of issuance.

~~On May 15, 2018, $100,000 of Steve Gorlin’s~~ $200,000 promissory note ~~was converted into equity~~owed to him by the Company pursuant to the same terms of the ~~securities purchase agreement dated May 1, 2018. Accordingly, $100,000 of~~SPA entered into by other investors to consummate the acquisition in January 8, 2019. The promissory note was converted into an aggregate of ~~1,000~~500,000 shares of common stock, eliminating the Company’s ~~5% Series B Shares~~debt obligation.

The $750,000 convertible notes payable assumed in the acquisition transaction with RMS, had a fair value of approximately $598,000 on the acquisition date. Subsequently, on February 6, 2019, $100,000 of the outstanding convertible notes was converted into an aggregate of 250,000 ~~warrants to purchase~~shares of common stock, eliminating $100,000 of the Company’s debt obligation. The debt was converted into shares at $0.40 per share, which was the conversion price per the securities purchase agreement.

In connection with the Asset Purchase Agreement and APA Amendment, on January 8, 2019, Steve Gorlin, the Company’s former Chairman of the Board, converted a $200,000 promissory note owed to him by the Company pursuant to the same terms of the security purchase agreement entered into by other investors to consummate the acquisition in January 8, 2019. The promissory note was converted into an aggregate of 500,000 shares of common stock, eliminating the Company’s debt obligation.

Cash activity for the three months ended March 31, 2019 and 2018 is summarized as follows:

						March 31,			December 31,
	June 30, 2018			December 31, 2017		2019			2018
Current Assets	$	708,000		$	1,138,000	$	3,244,000		$	150,000
Current Liabilities		986,000			475,000		3,501,000			2,189,000
Working Capital (Deficit) Surplus	$	(278,000	)	$	663,000
Working Capital Deficit						$	(257,000	)	$	(2,039,000	)

Cash activity for the ~~six~~three months ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~ is summarized as follows:

As of ~~June 30, 2018,~~March 31, 2019, the Company had approximately ~~$114,000~~$2,592,000 of cash on hand.

We do not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4) during the periods presented, investments in special-purpose entities or undisclosed borrowings or debt. Additionally, we are not a party to any derivative contracts or synthetic leases.

Contractual debt obligations relate to financing arrangements for D&O and general liability insurance premiums that were financed at various points throughout 2018 and the first quarter of 2019, and two Promissory Notes and Convertible Notes assumed in the merger transaction.

These insurance financing arrangements require aggregate monthly payments of approximately $17,000, reflect interest rates ranging from 7% to 11.5% and are to be paid in full by January 16, 2020 and had balances of approximately $145,000 at March 31, 2019 and $31,000 at December 31, 2018. Interest expense related to these insurance financing arrangements were approximately $900 and $0 for the three months ended March 31, 2019 and 2018, respectively.

Payments on both of the Promissory Notes assumed are due in aggregate monthly installments of approximately $5,700 and carry an interest rate of 5%. Both of the notes have a maturity date of August 1, 2019. The Promissory Notes had outstanding balances of approximately $99,000 at date of reverse merger transaction and approximately $99,000 at March 31, 2019. No scheduled payments have been made on these notes since the scheduled payment for January 2018.

The Convertible Notes represent a securities purchase agreement with select accredited investors, which were assumed in the reverse merger transaction. The debt consisted of $750,000 in units at a purchase price of $50,000 per Unit. Each Unit consists of (i) a 12% senior secured convertible note, initially convertible into shares of the Company’s common stock, par value $0.001 per share, at a conversion price equal to the lesser of $0.40 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of equity and/or debt securities completed by the Company following this offering, and (ii) a three-year warrant to purchase such number of shares of the Company’s common stock equal to one hundred percent (100%) of the number of shares of common stock issuable upon conversion of the notes at $0.40. The Warrants were initially exercisable at a price equal to the lesser of $0.75 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of the debt and/or equity securities completed by the Company following the issuance of warrants. The notes are secured by all of the assets of the Company.

On February 6, 2019, $100,000 of the Company’s $750,000 outstanding convertible notes was converted into an aggregate of 277,778 shares of common stock, eliminating $100,000 of the Company’s debt obligation. The debt was converted into shares at $0.36 per share, which was the conversion price per the securities purchase agreement subsequent to the trigger of the down round feature.

The Company has ~~long term contractual obligations~~an agreement with Jesse Crowne, a former Director and Co-Chairman of the Board of the Company, to provide business development consulting services for a fee of $13,333 per month, which expired March 31, 2019.The Company incurred $39,999, for the ~~two promissory notes issued~~three months ended March 31, 2019 related to ~~the Bank of North Dakota New Venture Capital Program and North Dakota Development Fund. Both Notes from the Bank of North Dakota New Venture Capital Program and North Dakota Development were~~this consulting agreement. Since this agreement was assumed ~~in conjunction with the consummation~~January 8, 2019 as part of the ~~Streamline acquisition on March 25, 2015, and require combined monthly principal and interest payments of $5,661 into the third quarter of~~RMS reverse merger transaction, there were no historical costs related to this prior to January 8, 2019.

The Company ~~issued~~entered into a ~~promissory note to Steve Gorlin, father~~consulting agreement with LilyCon Investments, LLC effective February 1, 2019 and shall continue for a period of ~~Jarrett Gorlin,~~twelve (12) months in the ~~Company’s CEO, for the principal~~ amount of ~~$200,000, plus interest, at~~$12,500 per month with a ~~rate of five percent per year. $100,000~~$15,000 signing bonus which was paid in full during the quarter ending March 31, 2019. The agreement also provides LilyCon Investments with $35,000 in stock (calculated using an annual Variable Weighted Average Price from February 2019 through January 2020) to be granted upon the one year anniversary of the ~~promissory note was converted into preferred stock and warrants on May 15, 2018. The outstanding principal and all accrued but unpaid interest is due on August 31, 2018.~~

~~The Company rents commercial office space in Alpharetta, GA. Base annual rent is currently set at $2,948 per month and the lease term ends July 31, 2018.~~consulting agreement. Either party may terminate this agreement with without cause upon (30) days written notice.

The Company ~~also currently reimburses its CEO, Jarrett Gorlin, for~~entered into an oral consulting agreement with Mr. Raymond Monteleone, Board Member and Chairman of the ~~lease of executive office space at a cost of $2,147~~Audit Committee, in which Mr. Monteleone receives $10,000 per month ~~which it believes is at fair market value.~~for advisory services and $5,000 per quarter as Audit Committee Chair. This arrangement has no specified termination date.

The Company entered into an oral consulting arrangement with St. Louis Family Office, LLC (Jimmy St. Louis, former CEO of RMS) in January 2019 in the amount of $10,000 per month for advisory services. This arrangement has consulting agreements with three sales, marketing, and distribution consultants in Europe who provide consulting services for aggregate compensation amounting to approximately €27,500 (approximately $33,000) per month. The consulting agreements, while subject to modifications, commenced at separate dates and will also terminate at separate dates through April 2019.no specified termination date.

The Company has a non-exclusive distribution center agreement with a logistics service provider in Berlin, Germany pursuant to which they ~~shall~~ manage and coordinate the DenerveX System products which the Company exports to the EU through June 2019. The Company pays a fixed monthly fee of ~~€2,900~~€6,900 (approximately ~~$3,500)~~$7,900) for all accounting, customs declarations and office support, and a variable monthly fee ranging from €1,900 to €6,900 (approximately $2,300 to $8,300), based off volume of shipments, for logistics, warehousing and customer support services.

The terms of a Contribution and Royalty Agreement dated January 31, 2013 with Dr. Scott Haufe, M.D was assumed in the merger transaction as of January 8, 2019. This agreement provides for the Company to pay Dr. Haufe royalties equal to 1% of revenues earned from sales of any and all products derived from the use of the DenerveX technology. Royalties are payable to Dr. Haufe within 30 days after the close of each calendar quarter based on actual cash collected from sales of applicable products. The royalty period expires on September 6, 2030.

Our management assessed the effectiveness of our internal control over financial reporting as of ~~June 30, 2018.~~March 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) inInternal Control-Integrated Framework. Based on our assessment, management concluded that while there was sufficient segregation of routine duties, the Company lacked the internal resources with expertise to ~~retain experts who could assist in the preparation and calculation of~~determine entries and disclosures related to some of the Company’s more complex ~~equity~~ transactions. Management believes this lack of ~~expert advice amounts to a~~internal expertise has been somewhat mitigated by hiring consultants with this expertise in the quarter ended March 31, 2019. This material weakness in our financial reporting and our disclosure ~~controls.~~

During the quarter ended ~~June 30, 2018,~~March 31, 2019, there were no changes in our internal control over financial reporting that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

We are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding. None of our directors, officers or affiliates are involved in a proceeding adverse to our business or has a material interest adverse to our business.

We are a smaller reporting company as defined by 17 CFR 229.10(f)(1). Thus, we are not required to provide information under this item.

In ~~May 2018,~~the first quarter of 2019, the Company ~~sold~~issued an aggregate of ~~8.25 Units~~$7,000,000 of convertible promissory notes and ~~issued to the Investors~~ an aggregate of ~~8,250 Series B Shares and 2,062,500~~17,000,000 warrants to purchase common stock. The convertible notes convert into common stock ~~resulting in total $825,000 gross proceeds~~at $0.40 per share and the warrants are exercisable at $0.75 per share to ~~the Company. Each Unit had a purchase price of $100,000 and consisted of (i) 1,000 shares~~certain accredited investors under Regulation D. As of the ~~Company’s 5% Series B Convertible Preferred Stock (the “Series B Shares”) and (ii) warrants to purchase 250,000 shares~~date hereof, all of ~~the Company’s common stock, par value $0.001 per share. Each Series B Share is~~such convertible into 250 shares of Common Stock at a conversion price of $0.40 per share. The 8,250 Series B Shares sold in the Offering are convertible into an aggregate of 2,062,500 shares of Common Stock. The Units were sold pursuant to the exemption from securities registration provided by Section 4(a)(2) under the Securities Act for transactions not involving a public offering.

In the ~~Company’s 5% Series B Shares and 250,000 warrants to purchase~~first quarter of 2019, the Company issued RMS Shareholders, LLC an aggregate of 50,925,277 shares of common stock ~~eliminating $100,000~~upon the conversion of Series C Preferred Stock issued to RMS in the Company’s $200,000 debt obligation. Each Series B Share is convertible into 250 shares of Common Stock at a conversion price of $0.40 per share. The Series B Shares also entitle the holders to a 5% annual dividend. The Warrants are exercisable for a period of three (3) years from the date of issuance at an exercise price of $0.75 per share.merger.

The exhibits listed in the accompanying Exhibit Index are filed, furnished or incorporated by reference as part of this Quarterly Report on Form 10-Q.

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

Nevada		46-3312262
(State or Other Jurisdiction		(IRS Employer
of Incorporation or Organization)		Identification Number)

~~3060 Royal Boulevard S Ste 150~~201 East Kennedy Blvd, Suite 700
~~Alpharetta, Georgia~~Tampa, Florida		~~30022~~33602
(Address of Principal Executive Offices)		(Zip Code)

	Large accelerated filer[ ]	Accelerated filer[ ]
	Non-accelerated filer[ ]	Smaller Reporting Company [X]
	~~(Do not check if smaller reporting company)~~	Emerging ~~growth~~Growth Company [X]

		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of ~~June 30, 2018~~March 31, 2019 (unaudited) and December 31, ~~2017~~2018 (unaudited)	4
	Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~ (unaudited)	5
	Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the three months ended March 31, 2019 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~ (unaudited)	67
	~~Condensed Consolidated Statement of Stockholders’ (Deficit) Equity for the six months ended June 30, 2018 (unaudited)~~	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1822
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	2327
Item 4.	Controls and Procedures.	2327

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	2328
Item 1A.	Risk Factors.	2328
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	2328
Item 3.	Defaults Upon Senior Securities.	2328
Item 4.	Mine Safety Disclosures.	2328
Item 5.	Other Information.	2328
Item 6.	Exhibits.	2328

SIGNATURES		2429

	●	our ability to market, commercialize and achieve broader market acceptance for our products;

	●	our ability to successfully expand, and achieve full productivity from, our sales, clinical support and marketing capabilities;

	●	our ability to successfully complete the development of, and obtain regulatory clearance or approval for, our products; and

	●	the estimates regarding the sufficiency of our cash resources, our ability to obtain additional capital or our ability to maintain or grow sources of revenue.

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenues	$	252,163		$	—		$	396,345		$	—
Less: Discounts Allowed		(2,738	)		—			(3,731	)		—
Cost of Goods Sold		(204,868	)		—			(302,963	)		—
Gross Profit		44,557			—			89,651			—

Operating Expenses
General and administrative		867,863			1,025,938			1,764,224			2,448,416
Sales and marketing		200,622			145,621			451,114			227,758
Research and development		16,185			56,333			155,310			391,774
Depreciation		6,866			6,671			13,894			12,892
Total Operating Expenses		1,091,536			1,234,563			2,384,542			3,080,840

Operating Loss		(1,046,979	)		(1,234,563	)		(2,294,891	)		(3,080,840	)

Other Expenses
Foreign currency transaction loss		11,641			—			12,034			—
Interest expense		27,280			1,438			32,761			392,235
Total Other Expenses		38,921			1,438			44,795			392,235

Total Loss from Continuing Operations		(1,085,900	)		(1,236,001	)		(2,339,686	)		(3,473,075	)

Discontinued Operations
Loss from discontinued operations		—			—			—			1,163
Total Loss from Discontinued Operations		—			—			—			(1,163	)

Net Loss	$	(1,085,900	)	$	(1,236,001	)	$	(2,339,686	)	$	(3,474,238	)

Dividend on outstanding Series B Preferred stock		(7,707	)					(7,707	)
Deemed dividend on beneficial conversion features		(259,350	)		—			(259,350	)		—
Net loss attributable to common shareholders	$	(1,352,957	)	$	(1,236,001	)	$	(2,606,743	)	$	(3,474,238	)


(844) 633-6839
(Registrant’s Telephone Number, Including Area Code)

Loss per share – Basic:
Continuing Operations	$	(0.06	)	$	(0.07	)	$	(0.12	)	$	(0.20	)
Discontinued Operations		—			—			—			—
Net Loss per share	$	(0.06	)	$	(0.07	)	$	(0.12	)	$	(0.20	)

Loss per share – Diluted:
Continuing Operations	$	(0.06	)	$	(0.07	)	$	(0.12	)	$	(0.20	)
Discontinued Operations		—			—			—			—
Net Loss per share	$	(0.06	)	$	(0.07	)	$	(0.12	)	$	(0.20	)

Weighted average outstanding shares used to compute basic net loss per share		23,397,228			17,966,591			22,440,756			17,171,528
Weighted average outstanding shares used to compute diluted net loss per share		23,397,228			17,966,591			22,440,756			17,171,528

	Three Months Ended March 31,
	2019			2018

Revenues	$	1,324,240		$	2,902,797
Cost of Sales		(559,319	)		(858,855	)
Gross Profit		764,921			2,043,942

Operating Expenses
General and administrative		3,020,509			2,150,438
Sales and marketing		1,135,546			737,505
Depreciation and amortization		211,218			24,497
Total Operating Expenses		4,367,273			2,912,440

Operating Loss		(3,602,352	)		(868,498	)

Other Income (Expense)
Other income		2,152			—
Foreign currency transaction loss		(2,357	)		—
Interest expense		(92,259	)		(28,702	)
Total Other Income (Expense)		(92,464	)		(28,702	)

Net Loss	$	(3,694,816	)	$	(897,200	)

Dividend on outstanding Series B Preferred Stock		24,639			—
Deemed dividend on adjustment to exercise price on certain warrants		404,384			—
Deemed dividend on Beneficial Conversion Features		32,592			—
Net loss attributable to common stockholders	$	(4,156,431	)	$	(897,200	)

Loss per share - Basic and Diluted	$	(0.05	)	$	(0.03	)

Weighted average outstanding shares used to compute basic and diluted net loss per share		85,513,024			33,661,388

	SeriesA Preferred Stock						Series B Preferred Stock				Common Stock				Additional Paid-in			Accumulated			Total Stockholders’ (Deficit)
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance – December 31, 2017		12,740		$	13			—		—		21,163,013	$	21,163	$	33,509,648		$	(32,817,403	)	$	713,421
Issuance of common stock pursuant to a private placement completed in February 2018, net of offering costs		—			—			—		—		770,000		770		241,727			—			242,497
Issuance of warrants pursuant to a private placement completed in February 2018		—			—			—		—		—		—		52,003			—			52,003
Issuance of warrants in connection with short-term debt in March 2018		—			—			—		—		—		—		25,646			—			25,646
Issuance of common stock pursuant to preferred stock conversion in March 2018		(12,740	)		(13	)		—		—		1,274,000		1,274		(1,261	)		—			—
Issuance of common stock pursuant to conversion of convertible debt in April 2018		—			—			—		—		266,301		266		100,928			—			101,194
Issuance of preferred stock pursuant to a private placement completed in May 2018, net of offering costs		—			—			8,250		8		—		—		413,174			—			413,182
Issuance of warrants pursuant to a private placement completed in May 2018		—			—			—		—		—		—		161,206			—			161,206
Convertible preferred stock – beneficial conversion feature pursuant to a private placement completed in May 2018		—			—			—		—		—		—		245,612			—			245,612
Issuance of preferred stock pursuant to conversion of short-term debt in May 2018		—			—			1,000		1		—		—		68,773			—			68,774
Issuance of warrants pursuant to conversion of short-term debt in May 2018		—			—			—		—		—		—		17,488			—			17,488
Convertible preferred stock – beneficial conversion feature pursuant to conversion of short-term debt in May 2018		—			—			—		—		—		—		13,738			—			13,738
Dividend payable		—			—			—		—		—		—		(7,707	)		—			(7,707	)
Stock based compensation		—			—			—		—		—		—		85,539			—			85,539
Net loss		—			—			—		—		—		—		—			(2,339,686	)		(2,339,686	)
Balance – June 30, 2018		—		$	—			9,250	$	9		23,473,314	$	23,473	$	34,926,514		$	(35,157,089	)	$	(207,093	)

	Preferred Stock						Common Stock				Additional Paid-in			Accumulated			Non-controlling			Total Stockholders’ (Deficit)
	Shares			Amount			Shares		Amount		Capital			Deficit			Interest			Equity
Balances - December 31, 2018		—		$	—			33,661,388	$	33,661	$	3,566,339		$	(9,292,818	)	$	(370,132	)	$	(6,062,950	)
Purchase Accounting entries due to the purchase transaction		9,250			9			24,717,217		24,717		6,442,182			—			—			6,466,908
Adjustment for assets and liabilities not included in purchase transaction		—			—			—		—		—			5,241,190			—			5,241,190
Issuance of common stock in connection with private placement offering from January 8, 2019 through March 31, 2019		—			—			17,000,000		17,000		4,200,946			—			—			4,217,946
Issuance of warrants in connection with private placement offering from January 8, 2019 through March 31, 2019		—			—			—		—		2,565,638			—			—			2,565,638
Issuance of common stock pursuant to conversion of short-term debt in January 2019		—			—			500,000		500		125,437			—			—			125,937
Issuance of warrants pursuant to conversion of short-term debt in January 2019		—			—			—		—		74,063			—			—			74,063
Issuance of additional exchange shares - Note 3								17,263,889		17,264		(17,264	)					—			—
Issuance of common stock pursuant to conversion of short-term debt in February 2019		—			—			250,000		250		99,750			—			—			100,000
Issuance of common stock pursuant to conversion of Preferred Series B Stock conversions		(2,050	)		(2	)		512,500		513		(511	)		—			—			—
Issuance of common stock pursuant to conversion of short-term debt and accrued interest		—			—			1,667		2		665			—			—			667
Issuance of common stock in March 2019 in exchange for consulting fees incurred in Q1 2019		—			—			130,085		130		51,904			—			—			52,034
Adjustment of exercise price on certain warrants		—			—			—		—		404,384			(404,384	)		—			—
Beneficial conversion on Preferred Series B Stock		—			—			—		—		32,592			(32,592	)		—			—
Stock based compensation		—			—			—		—		89,043			—			—			89,043
Dividends payable		—			—			—		—		(24,639	)		—			—			(24,639	)
Net loss		—			—			—		—		—			(3,694,816	)		—			(3,694,816	)
Balances - March 31, 2019		7,200		$	7			94,036,746	$	94,037	$	17,610,529		$	(8,183,420	)	$	(370,132	)	$	9,151,021

Common shares issued and outstanding		24,717,271
Common shares reserved for issuance upon conversion of the outstanding Series B Preferred Stock		2,312,500
Total Common shares		27,029,771
Closing price per share of MDVX Common stock on January 8, 2019	$	0.40
		10,811,908
Fair value of Outstanding Warrants and Options		2,220,000
Cash consideration to RMS		(350,000	)
		12,681,908
Contingent consideration to RMS shareholders - Common shares		(6,215,000	)
Total consideration	$	6,466,908

Total new shares issued by MedoveX		14,125,000
MedoveX ownership %		45	%
		31,388,889
RMS ownership %		55	%
Total additional Exchange Shares		17,263,889
Closing price per share of MedoveX Common stock on January 8, 2019	$	0.40
Total contingent consideration	$	6,905,556

Discount for lack of marketability – (10%)	$	(690,556	)
Net Contingent Consideration	$	6,215,000

Cash	$	(302,710	)
Accounts receivable, net		145,757
Inventory		131,455
Prepaid expenses		46,153
Property and equipment		30,393
Other		2,751
Intangibles		3,680,000
Goodwill		5,133,724
Total assets acquired	$	8,867,523
Accounts payable and other accrued liabilities		1,645,399
Interest-bearing liabilities and other		755,216
Net assets acquired	$	6,466,908

Notes payable	$	99,017
Convertible notes payable		598,119
Dividend payable		57,813
Deferred rent		267
Total interest-bearing and other	$	755,216

Remainder of 2019	$	358,000
2020		454,000
2021		139,000
2022		94,000
2023		68,000
	$	1,114,000

	Amount
Remainder of 2019	$	552,000
2020		736,000
2021		736,000
2022		736,000
2023		736,000
Total	$	3,496,000

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Term (Years)
Outstanding at 12/31/2017		1,314,059		$	2.01		8.19

Forfeited		(136,035	)	$	1.69		—
Outstanding at 6/30/2018		1,178,024		$	2.04		7.70
Exercisable at 6/30/2018		998,950		$	2.14		7.64

Balance at December 31, 2018	$	—
Acquisition during the period		3,680,000
Balance at March 31, 2019		3,680,000
Amortization during the three months ended March 31, 2019		(184,000	)
Intangible assets, net	$	3,496,000

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Term (Years)
Outstanding at December 31, 2018		—		$	—		—

Assumed with the RMS merger transaction		557,282		$	2.78		6.99
Other activity since January 8, 2019:
Granted		250,000		$	0.40		—
Cancelled		(80,725	)	$	1.52		—
Outstanding at March 31, 2019		726,557		$	1.95		7.74
Exercisable at March 31, 2019		695,418		$	1.96		7.74

December 31, 2018	$	1,000
December 31, 2019		1,900
December 31, 2020		1,900
December 31, 2021		500
	$	5,300

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Outstanding at 12/31/2017		7,194,215	$	1.74		3.40

Issued		2,830,833	$	0.75		3.18
Outstanding and exercisable at 6/30/2018		10,025,048	$	1.46		2.95

	Shares		Weighted Average Exercise Price			Weighted Average Remaining Contractual Life
Assumed as of the January 8, 2019 merger		12,108,743	$	1.38			2.6

Issued		17,500,000	$	0.75			2.84
Outstanding and exercisable at March 31, 2019		29,608,743	$	1.00	⁽¹⁾⁽²⁾		2.63

Event Description	Date		MDVX Stock Price		Exercise Price of Warrant		Grant Date Fair Value		Life of Warrant	Risk Free Rate of Return (%)	Annualized Volatility Rate (%)
Private placement		1/8/2019	$	0.40	$	0.75	$	0.24	3 years	2.57		115.08
Private placement		1/18/2019	$	0.40	$	0.75	$	0.23	3 years	2.60		114.07
Private placement		1/25/2019	$	0.59	$	0.75	$	0.38	3 years	2.43		113.72
Private placement		1/31/2019	$	0.54	$	0.75	$	0.34	3 years	2.43		113.47
Private placement		2/7/2019	$	0.57	$	0.75	$	0.36	3 years	2.46		113.23
Private placement		2/22/2019	$	0.49	$	0.75	$	0.30	3 years	2.46		113.34
Private placement		3/1/2019	$	0.52	$	0.75	$	0.33	3 years	2.54		113.42
Private placement		3/8/2019	$	0.59	$	0.75	$	0.38	3 years	2.43		113.53
Private placement		3/11/2019	$	0.61	$	0.75	$	0.40	3 years	2.45		113.62
Private placement		3/26/2019	$	0.51	$	0.75	$	0.32	3 years	2.18		113.12
Private placement		3/28/2019	$	0.51	$	0.75	$	0.31	3 years	2.18		112.79
Private placement		3/29/2019	$	0.51	$	0.75	$	0.31	3 years	2.21		112.79

Event Description	Date	MDVX Stock Price		Exercise Price of Warrant		Grant Date Fair Value		Life of Warrant	Risk Free Rate of Return (%)		Annualized Volatility Rate (%)
Private placement	2/26/18	$	0.51	$	0.75	$	0.20	5 years		2.60		55.91
Short-term debt	3/26/18	$	0.53	$	0.75	$	0.22	5 years		2.64		56.57
Private placement	5/1/2018	$	0.44	$	0.75	$	0.11	3 years		2.66		56.92
Debt conversion	5/15/2018	$	0.39	$	0.75	$	0.08	3 years		2.75		57.03

	MEDOVEX CORP

	By:	/s/ ~~Jarrett Gorlin~~William E. Horne
		~~Jarrett Gorlin~~William E. Horne
		Chief Executive Officer (Principal Executive Officer)

	By:	/s/ ~~Charles Farrahar~~Jeremy Daniel
		~~Charles Farrahar~~Jeremy Daniel
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

31.1		Section 302 Certification of Principal Executive Officer*
31.2		Section 302 Certification of Principal Financial Officer*
32.1		Section 906 Certification of Principal Executive Officer and Principal Financial Officer***
101.INS		XBRL Instance Document **
101.SCH		XBRL Taxonomy Extension Schema Document **
101.CAL		XBRL Taxonomy Calculation Linkbase Document **
101.LAB		XBRL Taxonomy Labels Linkbase Document **
101.PRE		XBRL Taxonomy Presentation Linkbase Document **
101.DEF		XBRL Definition Linkbase Document **

*	Filed herewith.

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

***	This certification is being furnished solely to accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, and it is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.