Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2017

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

For the transition period from _______________ to _______________.

Commission File Number: 000-54563

PREMIER BIOMEDICAL, INC.

(Exact name of registrant as specified in its charter)

Nevada		27-2635666
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

P.O. Box 25 Jackson Center, PA		16133
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (814) 786-8849

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. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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). Yes x No ¨

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.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

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

As of May 16, 2017, there were 491,852,004 shares of common stock, $0.00001 par value, issued and outstanding.

PREMIER BIOMEDICAL, INC.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION.

ITEM 1	Financial Statements.	4

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	23

ITEM 3	Quantitative and Qualitative Disclosures About Market Risk.	29

ITEM 4	Controls and Procedures.	29

PART II – OTHER INFORMATION.

ITEM 1	Legal Proceedings.	30

ITEM 1A	Risk Factors.	30

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds.	30

ITEM 3	Defaults Upon Senior Securities.	30

ITEM 4	Mine Safety Disclosures.	30

ITEM 5	Other Information.	30

ITEM 6	Exhibits.	31

PART I – FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading: “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

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ITEM 1 FINANCIAL STATEMENTS

PREMIER BIOMEDICAL, INC.
CONDENSED BALANCE SHEETS

	March 31,			December 31,
	2017			2016
	(Unaudited)
ASSETS

Current assets:
Cash	$	209,885		$	22,437
Prepaid expenses		9,508			11,430
Total current assets		219,393			33,867

Property and equipment, net		4,572			5,100

Total assets	$	223,965		$	38,967

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	178,443		$	220,740
Accounts payable, related parties		52,725			52,489
Accrued interest		-			18,026
Accrued interest, related parties		4,170			3,570
Convertible notes payable, net of discounts of $-0- and $149,456
at March 31, 2017 and December 31, 2016, respectively		-			153,024
Notes payable, related parties		30,000			30,000
Derivative liabilities		5,092,870			221,822
Total current liabilities		5,358,208			699,671

Total liabilities		5,358,208			699,671

Commitments and contingencies		-			-

Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, 2,000,000 and -0- shares issued and outstanding
at March 31, 2017 and December 31, 2016, respectively		2,000			2,000
Common stock, $0.00001 par value, 1,000,000,000 shares
authorized, 491,852,004 and 304,556,650 shares issued and
outstanding at March 31, 2017 and December 31, 2016, respectively		4,919			3,046
Additional paid in capital		12,753,194			11,899,504
Accumulated deficit		(17,894,356	)		(12,565,254	)
Total stockholders' equity (deficit)		(5,134,243	)		(660,704	)

Total liabilities and stockholders' equity (deficit)	$	223,965		$	38,967

See accompanying notes to financial statements.

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PREMIER BIOMEDICAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

	For the Three Months
	Ended March 31,
	2017			2016
				(Restated)
Revenue	$	-		$	-

Operating expenses:
Research and development		-			10,141
General and administrative		33,059			49,485
Professional fees		41,147			138,448
Total operating expenses		74,206			198,074

Net operating loss		(74,206	)		(198,074	)

Other income (expense):
Interest expense		(152,747	)		(173,287	)
Change in derivative liabilities		(5,100,091	)		101,329
Equity in losses of investment in joint venture		(2,058	)		-
Total other income (expense)		(5,254,896	)		(71,958	)

Net loss	$	(5,329,102	)	$	(270,032	)

Weighted average number of common shares outstanding - basic and fully diluted		401,283,532			86,773,285

Net loss per share - basic and fully diluted	$	(0.01	)	$	(0.00	)

See accompanying notes to financial statements.

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PREMIER BIOMEDICAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Three Months
	Ended March 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES				(Restated)
Net loss	$	(5,329,102	)	$	(270,032	)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation		528			498
Equity in profit of joint venture investment		2,058			-
Change in fair market value of derivative liabilities		5,100,091			(101,329	)
Amortization of debt discounts		149,456			151,385
Stock based compensation, related parties		-			6,507
Stock based compensation		-			54,211
Decrease (increase) in assets:
Prepaid expenses		1,922			(6,610	)
Increase (decrease) in liabilities:
Accounts payable		(42,297	)		(104,843	)
Accounts payable, related parties		236			9,642
Accrued interest		2,691			21,301
Accrued interest, related parties		600			600
Net cash used in operating activities		(113,817	)		(238,670	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		-			(3,536	)
Investment in joint venture		(2,058	)		-
Net cash used in investing activities		(2,058	)		(3,536	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock, net of offering costs		285,000			-
Proceeds from sale of stock on equity line of credit		18,323			-
Proceeds from exercise of warrants, related party		-			2,000
Proceeds from convertible notes payable		-			332,500
Repayments of convertible notes payable		-			(89,039	)
Net cash provided by financing activities		303,323			245,461

NET CHANGE IN CASH		187,448			3,255
CASH AT BEGINNING OF PERIOD		22,437			35,414

CASH AT END OF PERIOD	$	209,885		$	38,669

SUPPLEMENTAL INFORMATION:
Interest paid	$	-		$	13,539
Income taxes paid	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Value of debt discounts	$	-		$	306,827
Value of derivative adjustment due to debt conversions	$	229,043		$	-
Value of shares issued for conversion of debt	$	323,197		$	42,240
Common stock issued for settlement of accounts payable, related party	$	-		$	13,765
Cashless exercise of common stock warrants, 2,250,000 warrants exercised	$	-		$	22

See accompanying notes to financial statements.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 1 – Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, condensed financial statements of Premier Biomedical, Inc. (“the Company”) have been prepared pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and footnote disclosures normally included in audited financial statements. However, these statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein. It is suggested that these statements be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Equity Method

Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several factors including, among others, representation on the Investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company. Under the equity method of accounting, an Investee company’s accounts are not reflected within the Company’s Balance Sheets and Statements of Operations; however, the Company’s share of the earnings or losses of the Investee company is reflected in the caption “Equity in losses of unconsolidated entity” in the Statements of Operations. The Company’s carrying value in an equity method Investee company is typically reflected in the caption “Investment in Joint Venture.” in the Company’s Balance Sheets. As of March 31, 2017, our share of losses from the investee company exceeded our basis, therefore the investment is not currently presented on the balance sheet.

U.S. GAAP considers a change in reporting entity to include “changing specific subsidiaries that make up the group of entities for which consolidated financial statements are presented.” Circumstances may arise where a parent’s controlling financial interest (e.g., generally an ownership interest in excess of 50 percent of the outstanding voting stock) is reduced to a noncontrolling investment that still enables it to exercise significant influence over the operating and financial policies of the investee. A change that results from changed facts and circumstances (such as a partial sale of a subsidiary), where there was only one acceptable method of accounting prior to the change in circumstances (consolidation) and only one acceptable method of accounting after the change (equity method accounting), is not a change in reporting entity and is not be accounted for retrospectively. Accordingly, a change from a controlling interest to a noncontrolling investment accounted for under the equity method is accounted for prospectively from the date of change in control. When the Company’s carrying value in an equity method Investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the Investee company or has committed additional funding. When the Investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management 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, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

Patent Rights and Applications

Patent rights and applications costs include the acquisition costs and costs incurred for the filing of patents. Patent rights and applications are amortized on a straight-line basis over the legal life of the patent rights beginning at the time the patents are approved. Patent costs for unsuccessful patent applications are expensed when the application is terminated.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Fair Value of Financial Instruments

Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, prepaid expenses and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments.

Basic and Diluted Loss Per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Stock-Based Compensation

Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The Company’s stock based compensation consisted of the following during the three months ended March 31, 2017 and 2016, respectively:

	March 31,		March 31,
	2017		2016

Common stock issued for services	$	-	$	58,800
Warrants issued for services, related parties		-		6,507
Warrants issued for services		-		(4,589	)
Total stock based compensation	$	-	$	60,718

Revenue Recognition

Sales on fixed price contracts are recorded when services are earned, the earnings process is complete or substantially complete, and the revenue is measurable and collectability is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue from sales in which payment has been received, but the earnings process has not occurred. Sales have not yet commenced, other than sales through our joint venture, which our recognized by our joint venture upon shipment of goods, which are paid for at the time of order.

Advertising and Promotion

All costs associated with advertising and promoting products are expensed as incurred. These expenses were $67,216 and $9,504 for the three months ended March 31, 2017 and 2016, respectively.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Uncertain Tax Positions

In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.

The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350) . ASU 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company intends to early adopt the ASU in 2017.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for the Company in the first quarter of 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

No other new accounting pronouncements, issued or effective during the three months ended March 31, 2017, have had or are expected to have a significant impact on the Company’s financial statements.

Note 2 – Going Concern

As shown in the accompanying financial statements, the Company has no revenues, incurred net losses from operations resulting in an accumulated deficit of $17,894,356, and had negative working capital of ($5,138,815) at March 31, 2017. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 3 – Restatement

The Company is restated its December 31, 2015 financial statements and is restating the interim financial statements for the three months ended March 31, 2016, the six months ended June 30, 2016 and nine months ended September 30, 2016 in order to account for embedded derivatives within the Redwood Notes, rather than beneficial conversion feature discounts. The financial statements will be restated prospectively during 2017.

The Company determined that it had not properly recognized embedded derivative liabilities within the Redwood Notes that originated on various dates between December 28, 2015 and May 27, 2016. The Company has recognized a derivative liability in lieu of the previously recognized beneficial conversion feature and the related change in derivative liabilities and amortization of the debt discount expenses have been adjusted to correct this error.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

The following adjustments were made to the March 31, 2016 Restated Balance Sheet:

PREMIER BIOMEDICAL, INC.
BALANCE SHEET

	As Originally
	Reported						As Restated
	March 31,						March 31,
	2016			Adjustments			2016
ASSETS
Current assets:
Cash	$	38,669		$	-		$	38,669
Prepaid expenses		15,776			-			15,776
Total current assets		54,445			-			54,445

Property and equipment, net		6,685			-			6,685

Total assets	$	61,130		$	-		$	61,130

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	83,422		$	-		$	83,422
Accounts payable, related parties		50,545			-			50,545
Accrued interest		15,554			-			15,554
Accrued interest, related parties		1,770			-			1,770
Convertible notes payable, net of discounts of $462,877		178,368			(77,235	)		101,133
Notes payable, related parties		30,000			-			30,000
Derivative liabilities		-			355,574			355,574
Total current liabilities		359,659			278,339			637,998

Total liabilities		359,659			278,339			637,998

Commitments and contingencies		-			-			-

Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, 2,000,000 shares issued and outstanding		2,000			-			2,000
Common stock, $0.00001 par value, 1,000,000,000 shares
authorized, 95,179,908 shares issued and outstanding		952			-			952
Additional paid in capital		10,891,465			(404,220	)		10,487,245
Accumulated deficit		(11,192,946	)		125,881			(11,067,065	)
Total stockholders' equity (deficit)		(298,529	)		(278,339	)		(576,868	)

Total liabilities and stockholders' equity (deficit)	$	61,130		$	-		$	61,130

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

The following adjustments were made to the March 31, 2016 Restated Statement of Operations:

PREMIER BIOMEDICAL, INC.
STATEMENT OF OPERATIONS

	As Originally
	Reported					As Restated
	March 31,					March 31,
	2016			Adjustments		2016

Revenue	$	-		$	-	$	-

Operating expenses:
Research and development		10,141			-		10,141
General and administrative		494,485			-		494,485
Professional fees		138,448			-		138,448
Total operating expenses		198,074			-		198,074

Net operating loss		(198,074	)		-		(198,074	)

Other expense:
Interest expense		(217,075	)		43,788		(173,287	)
Change in derivative liabilities		-			101,329		(205,498	)
Total other expenses		(217,075	)		145,117		(217,075	)

Net loss	$	(415,149	)	$	145,117	$	(270,032	)

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

The following adjustments were made to the March 31, 2016 Restated Statement of Cash Flows:

PREMIER BIOMEDICAL, INC.
STATEMENT OF CASH FLOWS

	As Originally
	Reported						As Restated
	March 31,						March 31,
	2016			Adjustments			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(415,149	)	$	145,117		$	(270,032	)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation		498			-			498
Change in fair market value of derivative liabilities		-			(101,329	)		(101,329	)
Amortization of debt discounts		195,173			(43,788	)		151,385
Stock based compensation, related parties		6,507			-			6,507
Stock based compensation		54,211			-			54,211
Decrease (increase) in assets:
Prepaid expenses		(6,610	)		-			(6,610	)
Increase (decrease) in liabilities:
Accounts payable		(104,843	)		-			(104,843	)
Accounts payable, related parties		9,642			-			9,642
Accrued interest		21,301			-			21,301
Accrued interest, related parties		600			-			600
Net cash used in operating activities		(238,670	)		-			(238,670	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(3,536	)		-			(3,536	)
Net cash used in investing activities		(3,536	)		-			(3,536	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of warrants, related party		2,000			-			2,000
Proceeds from convertible notes payable		332,500			-			332,500
Repayments from convertible notes payable		(89,039	)		-			(89,039	)
Net cash provided by financing activities		245,461			-			245,461

NET CHANGE IN CASH		3,255			-			3,255
CASH AT BEGINNING OF PERIOD		35,414			-			35,414

CASH AT END OF PERIOD	$	38,669		$	-		$	38,669

SUPPLEMENTAL INFORMATION:
Interest paid	$	13,539		$	-		$	13,539
Income taxes paid	$	-		$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Discount on beneficial conversion feature on convertible note	$	274,220		$	(274,220	)	$	-
Value of debt discounts	$	-		$	306,827		$	306,827
Value of shares issued for conversion of debt	$	42,240		$	-		$	42,240
Cashless exercise of common stock warrants	$	22		$	-		$	22
Common stock issued for settlement of accounts payable	$	13,765		$	-		$	13,765

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 4 – Related Parties

Accounts Payable

The Company owed $46,016 and $46,016 as of March 31, 2017 and December 31, 2016, respectively, to entities owned by the Chairman of the Board of Directors. The amounts are related to patent costs and reimbursable expenses paid by the Chairman on behalf of the Company.

The Company owed $481 and $306 as of March 31, 2017 and December 31, 2016, respectively, to the Company’s CEO for reimbursable expenses.

The Company owed $6,228 and $6,167 as of March 31, 2017 and December 31, 2016, respectively, amongst members of the Company’s Board of Directors for reimbursable expenses.

Notes Payable

On July 6, 2015, the Company received an unsecured loan in the amount of $10,000, due on demand, bearing interest at a simple interest rate of 8%, from the Company’s CEO.

On July 6, 2015, the Company received an unsecured loan in the amount of $10,000, due on demand, bearing interest at a simple interest rate of 8%, from the Company’s Chairman of the Board.

On July 6, 2015, the Company received an unsecured loan in the amount of $10,000, due on demand, bearing interest at a simple interest rate of 8%, from one of the Company’s Directors.

Accrued interest of $4,170 was outstanding on these notes as of March 31, 2017.

Note 5 – Patent Rights and Applications

The Company amortizes its patent rights and applications on a straight line basis over the expected useful technological or economic life of the patents, which is typically 17 years from the legal approval of the patent applications when there is probable future economic benefits associated with the patent. The Company has elected to expense all of their patent rights and application costs due to difficulties associated with having to prove the value of their future economic benefits. All patent applications are currently pending and the Company has no patents that have yet been approved. It is the Company’s policy that it performs reviews of the carrying value of its patent rights and applications on an annual basis.

On March 4, 2015, we entered into a Patent License Agreement (“PLA”) with the University of Texas at El Paso (“UTEP”) regarding our joint research and development of CTLA-4 Blockade with Metronomic Chemotherapy for the Treatment of Breast Cancer. This is the first PLA with UTEP following our Collaborative Agreement with them dated May 9, 2012, and memorializes the joint ownership of the applicable patent and the financial and other terms related thereto.

On June 19, 2015, we entered into Amendment No. 1 to this Agreement, pursuant to which we explicitly included Provisional Patent Application No. 62/161,116 entitled, “Anti-CTLA-4 Blockade” (the “Application”) under the definition of “Patent Rights” as set forth in the PLA. The Application was filed with the United States Patent and Trademarks Office on May 13, 2015; the underlying technology was invented by Robert Kirken and Georgialina Rodriguez, and is solely-owned by The Board of Regents of The University of Texas System.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 6 – Fair Value of Financial Instruments

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

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

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of March 31, 2017 and December 31, 2016, respectively:

	Fair Value Measurements at March 31, 2017
	Level 1		Level 2			Level 3
Assets
Cash	$	209,885	$	-		$	-
Total assets		209,885		-			-
Liabilities
Notes payable, related parties		-		30,000			-
Derivative liabilities		-		-			5,092,870
Total liabilities		-		30,000			5,092,870
	$	209,885	$	(30,000	)	$	(5,092,870	)

	Fair Value Measurements at December 31, 2016
	Level 1		Level 2			Level 3
Assets
Cash	$	22,437	$	-		$	-
Total assets		22,437		-			-
Liabilities
Convertible note payable, net of discounts		-		153,024			-
Notes payable, related parties				30,000			-
Derivative liabilities		-		-			221,822
Total liabilities		-		183,024			221,822
	$	22,437	$	(183,024	)	$	(221,822	)

The fair values of our related party debts are deemed to approximate book value, and are considered Level 2 inputs as defined by ASC Topic 820-10-35.

There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the three months ended March 31, 2017 or the year ended December 31, 2016.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 7 – Joint Venture

On September 13, 2016, we entered into an operating agreement to form a pain management joint venture company with Advanced Technologies Solutions (ATS), a company based in San Diego, California and owned by Ronald T. LaBorde, a member of our Board of Directors. The joint venture company, Premier Biomedical Pain Management Solutions, LLC, a Nevada limited liability company (PBPMS), will develop and market natural and cannabis-based generalized, neuropathic, and localized pain relief treatment products. We own 50% of PBPMS and ATS owns the other 50%, with 89% of the profits allocated to us and the remaining 11% of profits allocated to ATS. As part of the agreement with ATS, Mr. LaBorde was appointed a member of our Board of Directors.

PBPMS must enter into separate license agreements with us and ATS for the use of technology previously developed by both companies. Intellectual property developed jointly by the parties will be the property of PBPMS. However, ATS and Mr. LaBorde may develop inventions and intellectual property independently from PBPMS, and such inventions and intellectual property will be the sole property of ATS or Mr. LaBorde. Pursuant to the terms of the PBPMS operating agreement, we will tender 1,250,000 warrants, for the purchase of an equal number of shares of our common stock at a strike price of $0.05, pursuant to the license agreement between ATS and PBPMS. As of Marchr 31, 2017, we had not yet executed the license agreement or issued these warrants.

Our initial capital contribution to PBPMS was $25,000. ATS will contribute (i) technical, labor, manufacturing information and know-how required to produce the initial product, an extended duration topical pain relief patch; (ii) $5,000 worth of primary ingredients; and (iii) $5,000 worth of other materials to produce the initial prototype pain relief patches.

PBPMS is managed by a board of managers (PBPMS Board). Initially, the PBPMS Board consists of William A. Hartman, our President and Chief Executive Officer and member of our Board of Directors, Ronald T. LaBorde, the Founder of ATS and member of our Board of Directors, Dr. Patricio Reyes, our Chief Technology Officer and member of our Board of Directors, and John Borza, our Vice-President and member of our Board of Directors. Decisions of the PBPMS Board require unanimous approval.

The PBPMS operating agreement is subject to other common terms and ownership transfer restrictions, including a right of first refusal; however, we anticipate signing a more detailed and complete operating agreement to better clarify the terms of the joint venture as summarized above. During the three months ending March 31, 2017, we recognized $2,058 of equity in losses from our investment in the joint venture, and our share of the joint venture’s losses have exceeded our investment.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 8 – Convertible Notes Payable

Convertible notes payable consist of the following at March 31, 2017 and December 31, 2016, respectively:

	March 31,		December 31,
	2017		2016

On October 10, 2016, the Company issued a 10% interest bearing; unsecured convertible promissory note with a face value of $300,000 (“Seventh Redwood Note”), which matures on October 10, 2017, pursuant to a Warrant Purchase Agreement by and among Redwood Management, LLC, the Company and Typenex. Pursuant to this agreement, Redwood purchased the warrants from Typenex, and Typenex provided a Satisfaction of Judgment and Release of Garnishment to release the Writ of Garnishment Typenex had placed on our transfer agent. Redwood paid installment payments to Typenex in the aggregate amount of $300,000, which were completed on, or about November 10, 2016. The principal and interest of the Seventh Redwood Note is convertible into shares of common stock at the discretion of the note holder at a price equal to the greater of (i) 60% of the lowest traded price over the 15 days prior to conversion or (ii) a fixed $0.00005 per share. The note carries liquidated damages of $1,000 per day for failure to provide certificates, and compensation for Buy-In on failure to timely deliver certificates. Principal and interest is due upon default at 50% of the lowest traded price over the previous fifteen (15) days, and an additional interest rate equal to the lesser of 2% per month (24% per annum) or the maximum rate per applicable law. This settled the dispute with Typenex. A total of $308,750, consisting of $300,000 of principal and $8,750 of interest, was converted into 135,596,882 shares of common stock on various dates between November 21, 2016 and February 24, 2017.	$	-	$	275,000

On March 11, 2016, the Company received net proceeds of $90,000 in exchange for a 10% interest bearing; unsecured convertible promissory note with a face value of $105,000 (“Fifth Redwood Note”), which matures on December 11, 2016. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to the greater of (i) 60% of the lowest traded price over the 15 days prior to conversion or (ii) a fixed $0.00005 per share. The note carries liquidated damages of $1,000 per day for failure to provide certificates, and compensation for Buy-In on failure to timely deliver certificates. Principal and interest is due upon default at 50% of the lowest traded price over the previous fifteen (15) days, and an additional interest rate equal to the lesser of 2% per month (24% per annum) or the maximum rate per applicable law. A total of $120,517, consisting of $105,000 of principal and $15,517 of interest, was converted into an aggregate of 47,820,025 shares of common stock at various dates between November 8, 2016 and March 13, 2017.		-		27,480

Total convertible notes payable		-		302,480
Less unamortized derivative discounts:		-		149,456
Convertible notes payable		-		153,024
Less: current portion		-		153,024
Convertible notes payable, less current portion	$	-	$	-

The Company recognized interest expense for the three months ended March 31, 2017 and 2016, respectively, as follows:

	March 31,		March 31,
	2017		2016

Interest on convertible notes	$	2,691	$	21,302
Interest on related party loans		600		600
Amortization of beneficial conversion feature		-		76,754
Amortization of OID		-		10,832
Amortization of loan origination costs		-		16,512
Derivative discounts		149,456		47,287
Total interest expense	$	152,747	$	173,287

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 9 – Notes Payable, Related Parties

Notes payable, related parties consist of the following at March 31, 2017 and December 31, 2016, respectively:

	March 31,		December 31,
	2017		2016

On July 6, 2015, the Company received an unsecured loan in the amount of $10,000, due on demand, bearing interest at a simple interest rate of 8%, from the Company’s CEO.	$	10,000	$	10,000

On July 6, 2015, the Company received an unsecured loan in the amount of $10,000, due on demand, bearing interest at a simple interest rate of 8%, from the Company’s Chairman of the Board.		10,000		10,000

On July 6, 2015, the Company received an unsecured loan in the amount of $10,000, due on demand, bearing interest at a simple interest rate of 8%, from one of the Company’s Directors.		10,000		10,000

Total notes payable, related parties		30,000		30,000
Less: current portion		30,000		30,000
Notes payable, related parties, less current portion	$	-	$	-

The Company recorded interest expense in the amount of $600 and $600 for the three months ended March 31, 2017 and 2016, respectively related to notes payable, related parties.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 1 0 – Derivative Liabilities

As discussed in Note 8 under Convertible Notes Payable, the Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted and all additional convertible debentures and warrants are included in the value of the derivative. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date.

The fair values of the Company’s derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date, using a lattice model. The Company recognized current derivative liabilities of $5,092,870 and $221,822 at March 31, 2017 and December 31, 2016, respectively. The change in fair value of the derivative liabilities resulted in a loss of $5,100,091 and a gain of $101,329 for the three months ended March 31, 2017 and 2016, respectively, which has been reported within other expense in the statements of operations. The loss of $5,100,091 for the three months ended March 31, 2017 consisted of a loss of $4,945,782 due to the value attributable to the warrants, a loss of $147,088 in market value of the warrants and a net loss in market value of $7,221 on the convertible notes. The gain of $101,329 for the three months ended March 31, 2016 consisted of a loss of $12,232 due to the value in excess of the face value of the convertible notes and a net gain in market value of $113,561 on the convertible notes.

The following is a summary of changes in the fair market value of the derivative liability during the three months ended March 31, 2017 and the year ended December 31, 2016, respectively:

	Derivative
	Liability
	Total
Balance, December 31, 2015	$	150,076
Increase in derivative value due to issuances of convertible promissory notes		583,415
Change in fair market value of derivative liabilities due to the mark to market adjustment		13,816
Debt conversions		(525,485	)
Balance, December 31, 2016	$	221,822
Increase in derivative value due to issuances of warrants		4,945,782
Change in fair market value of derivative liabilities due to the mark to market adjustment		154,309
Debt conversions		(229,043	)
Balance, March 31, 2017	$	5,092,870

Key inputs and assumptions used to value the convertible debentures and warrants issued during the three months ended March 31, 2017:

	·	Stock price ranging from $0.0435 to $0.0050 during these periods would fluctuate with projected volatility.
	·	The notes convert with variable conversion prices and fixed conversion prices (tainted notes).
	·	An event of default would occur -0-% of the time, increasing 1% per month to a maximum of 20%.
	·	The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range of 145% - 385%.
	·	The Company would redeem the notes -0-% of the time, increasing 1% per month to a maximum of 5%.
	·	All notes are assumed to be extended at maturity by 2 years – the time required to convert out this volume of stock.
	·	The holders of the securities would automatically convert midway through to maturity on a monthly basis based on ownership and trading volume limitations.
	·	A change of control and fundamental transaction would occur initially -0-% of the time and increase monthly by -0-% to a maximum of -0-%.
	·	The monthly trading volume would average $556,020 to $911,155 and would increase at 1% per month.
	·	The stock price would fluctuate with the Company projected volatility using a random sampling (450,000 iterations for each valuation) from a normal distribution. The stock price of the underlying instrument is modelled such that it follows a geometric Brownian motion with constant drift and volatility.
	·	The Holder would exercise the warrants after 1 trading day as they become exercisable (at issuance) at target prices of 3 times the projected reset price or higher.
	·	Reset events were projected to occur by 12/31/17 and 12/31/18 – the reset provision ends 3/30/19 and the option expires 3/30/20.
	·	The stock price would fluctuate with an annual volatility. The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company and the term remaining in the range 261.86% - 261.99%.
	·	The Holder would exercise the warrant at maturity 3/30/20 if the stock price was above the reset exercise price.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 11 – Commitments and Contingencies

Collaborative Patent License Agreements

On May 9, 2012, the Company entered into a Collaborative Agreement with the University of Texas at El Paso. Pursuant to the terms of the Agreement, the Company will work jointly with the University to develop a series of research and development programs around its sequential-dialysis technology in the areas of Alzheimer's Disease, Traumatic Brain Injury (TBI), Chronic Pain Syndrome, Fibromyalgia, Multiple Sclerosis, Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig's disease), Blood Sepsis, Cancer, Heart Attacks and Strokes. The programs will utilize the facilities at one or more of the University of Texas’ campuses. The Company will pay the University’s actual overhead for the projects, plus a negotiated facility and administration overhead expense, and 10% of all gross revenues associated with the sale, license and/or royalties of all products and treatment procedures directly affiliated with programs. Intellectual property jointly invented and developed as a result of the projects will be owned jointly by the University and the Company. The Agreement has an initial term of five (5) years, and is renewable upon mutual agreement of the parties.

On March 4, 2015, we entered into a Patent License Agreement (PLA) with the University of Texas at El Paso (UTEP) regarding our joint research and development of CTLA-4 Blockade with Metronomic Chemotherapy for the Treatment of Breast Cancer. This is the first PLA with UTEP following our Collaborative Agreement with them dated May 9, 2012, and memorializes the joint ownership of the applicable patent and the financial and other terms related thereto.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 12 – Changes in Stockholders ’ Equity (Deficit)

Convertible Preferred Stock, Series A

The Company has 10,000,000 authorized shares of Preferred Stock, of which 2,000,000 shares of $0.001 par value Series A Convertible Preferred Stock (“Series A Preferred Stock”) have been designated. Each share of Series A Preferred Stock is convertible, at the option of the holder thereof, at any time after the issuance of such share into one (1) fully paid and non-assessable share of Common Stock. Each outstanding share of Series A Preferred Stock is entitled to one hundred (100) votes per share on all matters to which the shareholders of the Corporation are entitled or required to vote. The Company shall reserve and keep available out of its authorized but unissued shares of Common Stock such number of shares sufficient to effect the conversions.

Common Stock

The Company has one billion authorized shares of $0.00001 par value Common Stock, as increased pursuant to an amendment to the articles of incorporation on February 9, 2016.

Securities Purchase Agreement

On March 30, 2017, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) by and between the Company and each of The Special Equities Group, LLC, RDW Capital LLC, and DiamondRock, LLC (each a “Purchaser” and collectively, the “Purchasers”) to sell our common stock and warrants at a fixed price. Pursuant to the Purchase Agreement, we received from the Purchasers an aggregate of $300,000, net of $15,000 of offering costs, in exchange for 40,000,002 shares of our common stock, warrants to purchase up to 40,000,002 shares of our common stock at an exercise price of $0.03 (“Series A Warrants”) and warrants to purchase up to 40,000,002 shares or our common stock at an exercise price of $0.05 (“Series B Warrants”). Both the Series A Warrants and Series B Warrants issued pursuant to the Purchase Agreement are exercisable immediately upon receipt and have a term of three years. In addition, the Purchaser is entitled to a one-time price reset on the purchase price of the common stock of each tranche to the lower of (i) $0.02 or (ii) a 50% discount to the average of the three lowest closing prices in the 20 trading days prior to the reset date, which is the earlier of (i) the 7 month anniversary of the closing of each tranche of this transaction or (ii) 20 trading days after the effectiveness of each tranche. The embedded value in this reset provision is disclosed further in Note 10.

The Purchasers will buy additional shares of our common stock and warrants for $150,000 within five trading days of our filing a registration statement to cover the Purchasers’ shares of common stock purchased pursuant to the Purchase Agreement, including shares of common stock issued or issuable upon exercise of the warrants (the “Second Closing”). Within five trading days of the registration statement being declared effective, we will receive another $150,000 from the Purchasers in exchange for shares or our common stock and warrants (the “Third Closing”).

The per share purchase price of the Second Closing and Third Closing will be the lesser of (i) $0.02, subject to certain adjustments for stock splits and other similar transactions, or (ii) 50% of the closing price on the trading day immediately prior to the date of sale. The total number of shares to be sold in the Second Closing and Third Closing will be determined by dividing the total purchase amount of each closing (i.e., $150,000) by the per share purchase price.

In each of the Second Closing and Third Closing, Series A Warrants and Series B Warrants will be issued to the Purchasers, both in an amount equal to the number of shares of common stock issued in the closing.

The Purchase Agreement limits each Purchaser to beneficial ownership of our common stock of no more than 9.99%. The Purchasers also have certain anti-dilution rights in the Purchase Agreement for a period of 12 months. These rights allow the Purchasers to exchange their shares of common stock received pursuant to the Purchase Agreement for additional shares on the same terms and conditions of a subsequent financing.

Registration Rights Agreement

On March 30, 2017, we entered into a Registration Rights Agreement with the Purchasers in connection with the Purchase Agreement. In the Registration Rights Agreement, we agreed to prepare and file a registration statement with the Securities and Exchange Commission covering the resale of all of the shares of common stock sold to the Purchasers and the shares issuable upon exercise of the Series A Warrants and Series B Warrants. We agreed to file an initial registration statement as promptly as possible and have it declared effective no later than June 28, 2017 (or July 28, 2017 if the registration statement is reviewed by the Securities and Exchange Commission) and keep it continuously effective until the securities are sold or may be sold under Rule 144 of the Securities Act without volume or manner-of-sale restrictions. If all of the securities cannot be registered on one registration statement, we agreed to file subsequent registration statements to register the remaining securities as promptly as allowed.

Common Stock Issuances for Debt Conversions

On various dates between January 10, 2017 and March 13, 2017, the Company issued a total of 142,148,242 shares of common stock pursuant to the conversion of an aggregate of $323,197, consisting of $302,480 of principal and $20,717 of interest, among the Second, Fifth and Seventh Redwood Notes. The notes were converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

Common Stock Issuances on Stock Purchase Agreement

On February 13, 2017, the Company drew down $8,000 on their Stock Purchase Agreement entered into on May 27, 2016, with Redwood and issued 2,000,000 shares of common stock pursuant to the Seventh Put Notice.

On January 10, 2017, the Company drew down $10,323 on their Stock Purchase Agreement entered into on May 27, 2016, with Redwood and issued 3,147,110 shares of common stock pursuant to the Sixth Put Notice.

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Premier Biomedical, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 13 – Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

For the three months ended March 31, 2017, and the year ended December 31, 2016, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At March 31, 2017, and December 31, 2016, the Company had approximately $4,716,000 and $4,334,000 of federal net operating losses, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2031.

The components of the Company’s deferred tax asset are as follows:

	March 31,			December 31,
	2017			2016
Deferred tax assets:
Net operating loss carry forwards	$	1,650,600		$	1,516,900

Net deferred tax assets before valuation allowance	$	1,650,600		$	1,516,900
Less: Valuation allowance		(1,650,600	)		(1,516,900	)
Net deferred tax assets	$	-		$	-

Based on the available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at March 31, 2017, and December 31, 2016, respectively.

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and state statutory income tax rate to pre-tax loss is as follows:

	March 31,		December 31,
	2017		2016

Federal and state statutory rate		35%		35%
Change in valuation allowance on deferred tax assets	(35%)		(35%)

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

Note 14 – Subsequent Events

There were no subsequent events to report through the date of filing.

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

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Statement reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

The following discussion and analysis of financial condition and results of operations of the Company is based upon, and should be read in conjunction with, its unaudited financial statements and related notes elsewhere in this Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States.

Summary Overview

We are a research-based company that intends to discover and develop medical treatments for humans. We have a three-fold corporate focus: (i) develop and market pain management products, (ii) develop our proprietary Sequential-Dialysis Technique to target cancer, Alzheimer’s disease, ALS, blood sepsis, leukemia and other life-threatening cancers, and (iii) develop our proprietary drug candidate Feldetrex™ , a potential treatment for Multiple Sclerosis, Fibromyalgia, Neuropathic Pain and Traumatic Brain Injury.

We have partnered with Advanced Technologies Solutions (ATS) to develop and market natural and cannabis-based generalized, neuropathic and localized pain relief treatment products through a joint venture, Premier Biomedical Pain Management Solutions (PBPMS). We have seen great success in the early stages of this partnership. PBPMS has developed two new products that are now on the market as of February 1, 2017, and PBPMS, has made initial sales of these products. In addition to online sales, we have also established a distribution network consisting of three pharmacies and three chiropractic clinics. We expect distribution of these products to grow rapidly as we find other local pharmacies and clinics to distribute our products. With proof of marketability from the growing sales of PBPMS products, we are seeking to enter into distribution arrangements with several large pharmacy chains that operate in multiple states, and we believe we are close to coming to an agreement with these pharmacy chains.

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In addition, we are in the process of negotiating potential partnerships outside the United States to manufacture and market our products worldwide. We expect that these partnerships will make new markets available to us and allow us to rapidly increase our revenues profitability. We hope that through these partnerships our sales will grow rapidly and we will be able to see considerable cost-savings through favorable manufacturing arrangements. In addition to growing the sales of our existing products, we plan to launch at least three new products into the market in 2017.

In the past as we worked through the development of these products, we have relied heavily on financing through various issuances of common stock, warrants and convertible debt. We appreciate the patience of our faithful shareholders during this period as we were determined to develop and market new, ground-breaking products. As we begin to turn the corner and see the first sales being made, we expect to find stockholder-friendly financing solutions in the future that help us expand our operations, avoid dilution of our shareholders and raise our stock prices. For example, new opportunities have allowed us to cancel the equity line financing we had with Redwood Management, LLC, and we have closed a financing that will give us the capital we need to grow our business in the near future. On March 30, 2017, we raised $300,000 from the Selling Shareholders in a sale of stock and warrants. The Selling Shareholders have also committed to purchase up to another $300,000 upon the registration of the stock and warrants purchased by the investors.

As of the date hereof, we have repaid our convertible debt, and we expect to move forward with financing that will be more favorable to investors as we begin to grow our revenues. While we have begun to generate revenues with the products we have launched in the first quarter of 2017, the cash generated by these new products is not yet sufficient to finance our volume ramp-up and planned product introductions. Therefore, we expect to finance the company through the issuance of securities that are more favorable to our current investors, such as issuing warrants with fixed exercise prices above the market price on the date of issuance.

Through 2017, we will continue to market our pain management products and seek a wider distribution network through the negotiation of distribution agreements with large pharmacy chains and international partners.

Going Concern

As a result of our current financial condition, we have received a report from our independent registered public accounting firm for our financial statements for the years ended December 31, 2016 and 2015 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern. In order to continue as a going concern we must effectively balance many factors and generate more revenue so that we can fund our operations from our sales and revenues. If we are not able to do this we may not be able to continue as an operating company unless we raise capital by issuing debt or through the sale of our stock. There is no assurance that our cash flow will be adequate to satisfy our operating expenses and capital requirements.

Restatement

The Company restated its December 31, 2015 financial statements and is restating the interim financial statements for the three months ended March 31, 2016, the six months ended June 30, 2016 and nine months ended September 30, 2016 in order to account for embedded derivatives within convertible notes issued to Redwood Management, LLC (the “Redwood Notes”), rather than beneficial conversion feature discounts. The financial statements will be restated prospectively during 2017.

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Results of Operations for the Three Months Ended March 31, 2017 and 2016:

Introduction

We had no revenues for the three months ended March 31, 2017. Our operating expenses were $74,206 for the three months ended March 31, 2017, compared to $198,074 for the three months ended March 31, 2016, a decrease of $123,868, or 62.5%. Our operating expenses consisted mostly of professional fees, and to a lesser extent general and administrative expenses.

Revenues and Net Operating Loss

Our revenue, operating expenses, net operating loss, and net loss for the three months ended March 31, 2017 and 2016 were as follows:

	Three Months			Three Months
	March 31,			March 31,
	2017			2016
				(Restated)
Revenue	$	-		$	-

Operating expenses:
Research and development		-			10,141
General and administrative		33,059			49,485
Professional fees		41,147			138,448
Total operating expenses		74,206			198,074

Net operating loss		(74,206	)		(198,074	)
Other expense		(5,254,896	)		(71,958	)

Net loss	$	(5,329,102	)	$	(270,032	)

Revenues

The Company was established on May 10, 2010, and has no revenues through March 31, 2017 other than initial sales through PBPMS, our joint venture.

Research and Development

Research and development expenses were $-0- for the three months ended March 31, 2017 compared to $10,141 for the three months ended March 31, 2016, a decrease of $10,141, or 100%. The expenses decreased as we cut back on our research efforts with the University of Texas and looked for more sustainable research options. We are currently focused on developing our pain management products through PBPMS.

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General and Administrative

General and administrative expenses were $33,059 for the three months ended March 31, 2017, compared to $49,485 for the three months ended March 31, 2016, a decrease of $16,426, or 33.2%. The decrease was primarily due to decreased investor relations expenses.

Professional Fees

Professional fees expense was $41,147 for the three months ended March 31, 2017, compared to $138,448 for the three months ended March 31, 2016, an increase of $97,301, or 70.3%. Amounts for the three months ended March 31, 2017 consist of legal and, accounting and auditing services. For the three months ended March 31, 2017. Comparably, for the three months ended March 31, 2016, legal, consulting and accounting and auditing services totaled $77,730, in addition to $60,718 of stock based compensation issued for consulting services, consisting of $6,507 of amortization expense on warrants issued to officers and directors, ($4,589) of amortization expense on warrants issued to consultants and $58,800 of common stock issued for services rendered.

Net Operating Loss

Net operating loss was $74,206 for the three months ended March 31, 2017, compared to $198,074 for the three months ended March 31, 2016, a decrease of $123,868, or 62.5%. Net operating loss decreased for the three month period, as set forth above, primarily due to a decrease in research and development, investor relations expenses and compensation related to stock-based issuances for professional fees.

Other Expense

Other expense was $5,254,896 for the three months ended March 31, 2017, compared to $71,958 for the three months ended March 31, 2016, an increase of $5,182,938, or 7,203%. Other expense consisted primarily of interest expense of $152,747, a loss of $4,945,782 due to the value attributable to the warrants, a loss of $147,088 in market value of the warrants and a net loss in market value of $7,221 on the convertible notes, as well as $2,058 of losses in our investment in the PBPMS joint venture for the three months ended March 31, 2017. The other expense of $71,958 for the three months ended March 31, 2016 consisted of $173,287 of interest expense and a loss of $12,232 due to the value in excess of the face value of the convertible notes, as offset by a net gain in market value of $113,561 on the convertible notes.

Net Loss

Net loss for the three months ended March 31, 2017, was $5,329,102 or ($0.01) per share, compared to $270,032 or ($0.00) per share for the three months ended March 31, 2016. Net loss increased for the three month period, as set forth above, primarily due to increased costs on our derivative liabilities of $5,201,420 on a net basis against the related gain in the comparative period, offset by a decrease in the issuance of stock based compensation and a decrease in research and development expenses.

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Liquidity and Capital Resources

Introduction

During the three months ended March 31, 2017, we had negative operating cash flows. Our cash on hand as of March 31, 2017 was $209,885, which was derived from the sale of stock and warrants to three investors. Our monthly cash flow burn rate for 2016 was approximately $40,500, and our monthly burn rate through the three months ended March 31, 2016 was approximately $38,000. Although we have moderate short term cash needs, as our operating expenses increase we will face strong medium to long term cash needs. We anticipate that these needs will be satisfied through the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs.

On March 30, 2017, we entered into a Securities Purchase Agreement with three investors and raised $300,000 through the sale of stock and warrants. These same investors have also committed to purchase up to another $150,000 of common stock and warrants within five days of the filing of a registration statement to register their shares of common stock. This registration statement was filed on May 18, 2017 and we expect to close this second tranche shortly. The investors will purchase another $150,000 of common stock and warrants within seven days of the effective date of the registration statement. We expect these sales of common stock and warrants to finance our operations for the next several months as we seek to recognize revenues from our new pain management products.

Our cash, current assets, total assets, current liabilities, and total liabilities as of March 31, 2017 and December 31, 2016, respectively, are as follows:

	March 31,		December 31,
	2017		2016		Change

Cash	$	209,885	$	22,437	$	187,448
Total Current Assets		219,393		33,867		185,526
Total Assets		223,965		38,967		184,998
Total Current Liabilities		5,358,208		699,671		4,658,537
Total Liabilities	$	5,358,208	$	699,671	$	4,358,537

Our cash and total current assets increased because of our recently completed sale of stock and warrants to three investors. Our total current liabilities increased primarily due to the recognition of derivative liabilities related to these investments at March 31, 2017. Our working capital deficit increased from $665,804 to $5,138,815, and our stockholders’ deficit increased by $4,473,539 to $5,134,243.

In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.

Cash Requirements

Our cash on hand as of March 31, 2017 was $209,885. Based on our lack of revenues and current monthly burn rate of approximately $38,000 per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.

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Sources and Uses of Cash

Operations

We had net cash used in operating activities of $(113,817) for the three months ended March 31, 2017, compared to $(238,670) for the three months ended March 31, 2016. For the three months ended March 31, 2017, the net cash consisted primarily of our net loss of $(5,329,102), offset primarily by change in fair market of derivative liabilities of $5,100,091 and amortization of debt discount of $149,456. Our accounts payable decreased by $42,297. For the three months ended March 31, 2016, the net cash used in operating activities consisted primarily of our net loss of $(270,032) and change in fair market of derivative liabilities of ($101,329), offset primarily by amortization of debt discount of $151,385, stock based compensation of $60,718, and an increase in accrued interest of $21,301. Our accounts payable decreased by $104,843 during the three months ended March 31, 2016.

Investments

We had $2,058 net cash used in investing activities for the three months ended March 31, 2017, related to our investment in PBPMS, and $3,536 net cash used in investing activities for the three months ended March 31, 2016, related to purchases of property and equipment.

Financing

Our net cash provided by financing activities for the three months ended March 31, 2017 was $303,323, compared to $245,461 for the three months ended March 31, 2016, which consisted primarily of proceeds from the sale of stock of $285,000 and proceeds of $18,323 from sales of stock pursuant to our equity line of credit with Redwood Management, LLC.

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ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 4 CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of March 31, 2017, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2017, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described in our Annual Report on Internal Control Over Financial Reporting filed in our Annual Report on Form 10-K.

Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

(b) Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, the three month period ended March 31, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1 LEGAL PROCEEDINGS

We are not a party to or otherwise involved in any legal proceedings.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

ITEM 1A RISK FACTORS

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Except as listed below or previously reported on a Current Report on Form 8-K, we had no unregistered sales of equity securities during the three month period ended March 31, 2017.

On May 27, 2016 we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Redwood Management, LLC (“Redwood”), which provides that upon the terms and subject to the conditions set forth therein, Redwood is committed to purchase up to an aggregate of $2.0 million of our shares of common stock over the 36-month term of the Purchase Agreement.

On January 4, 2017, we issued 3,147,110 shares of common stock to Redwood for $10,323 pursuant to the Purchase Agreement.

On March 28, 2017, we agreed with Redwood to terminate the Purchase Agreement.

The issuance of the shares was exempt from registration pursuant to Rule 506 of Regulation D and Section 4(a)(2) under the Securities Act of 1933, as amended. The purchaser was an accredited and sophisticated investor, familiar with our operations, and there was no solicitation.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

There have been no events which are required to be reported under this Item.

ITEM 4 MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 OTHER INFORMATION

None.

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ITEM 6 EXHIBITS

(a) Exhibits

Exhibit No.		Description of Exhibits

4.1 (1)		Form of Series A Common Stock Purchase Warrant

4.2 (1)		Form of Series B Common Stock Purchase Warrant

10.1 (1)		Form of Securities Purchase Agreement

10.2 (1)		Form of Registration Rights Agreement

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1		Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

_____________

(1) Incorporated by reference from our Registration Statement on Form S-1 dated May 18, 2017, filed with the Commission on May 18, 2017.

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SIGNATURES

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.