With the exception of the matter set forth below, all of the legal
proceedings for the nine-month period ended September 30, 2020, are disclosed in our annual report on Form 10-K filed on April
9, 2020. On September 4, 2020, in a matter entitled Dr. Jerry Katzman v. Comprehensive Care Corporation n/k/a/ Advanzeon Solutions,
Inc. a receiver was appointed for Advanzeon Solution, Inc. ( the “Company”). The order granting the Plaintiff’s
motion for appointment of a receiver was issued in the Circuit Court of the 13th Judicial Circuit in and for Hillsborough
County Florida, Case number 12-002570-Division L. The name of the receiver is Burton W. Wiand.
On September 7, 2020, the Company filed a voluntary petition for
relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida,
Tampa Division, Case number 8:20-bk-6764. Also, on September 7, 2020, the Company filed a Notice of Case Under Chapter 11 of the
United States Bankruptcy Code and Notice of Automatic Stay with the Circuit Court of the 13th Judicial District in and
for Hillsborough County, Florida.
The Company will continue to operate its business
as “debtor-in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions
of the Bankruptcy Code and the orders of the Bankruptcy Court.
Subject to certain exceptions under the Bankruptcy
Code, the filing of the Company’s Chapter 11 petition automatically stayed the continuation of most legal proceedings or
filing of other actions against the Company or on behalf of the Company for their property to recover, collect, or secure a claim
arising prior to the Petition Date or to exercise control over property of the Company, unless or until the Bankruptcy Court modifies
or lifts the automatic stay as to any such claim. Notwithstanding the general application of the automatic stay described above,
government authorities may determine to continue actions brought under their regulatory or [policy] powers.
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds
With the exception of the matter set forth
below, the sale of unregistered securities for the nine-month period ended September 30, 2020 were disclosed in our annual report
on Form 10-K filed on April 9, 2020.
On April 15, 2020, we issued a convertible
promissory note (the “Note”) in the principle amount of $109,180 with an original issue discount of $6,180. The Note
matures on October 15, 2021, and the interest rate is 10%. This Note may not be prepaid in whole or in part except as follows.
Should the Note be prepaid within the first ninety days from the date of issuance, the prepayment percentage is one hundred and
twenty-five (125%) per cent of the outstanding principal and any accrued and unpaid interest. For the next ninety days the Note
may be prepaid and the prepayment percentage is one hundred thirty (130%) per cent of the outstanding principal and any accrued
and unpaid interest. Thereafter, the Note may not be prepaid.
On April 21, 2020, we issued a total of 14,584,350
shares of our common stock in exchange for $2,916,869 of our Senior Debt and accrued interest to seven holders of the Debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On April 21, 2020, we issued a total of 1,327,252
shares of our common stock in exchange for $265,450 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On April 21, 2020, we issued a total of 2,156,515
shares of our common stock in exchange for $431,303 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 13, 2020, we issued a convertible promissory
note in the principle amount of $50,000 to an accredited investor. The interest rate was 12%. The Holder of the note has the right
to convert all or a portion of the principle and any accrued interest into shares of our common stock at a per share price equal
to the lesser of (i) 15% below the average daily closing price of our common stock for the immediately preceding twenty (20) business
days or (ii) $0.11. The principal amount and any accrued but unpaid interest under the note shall be due and payable on the earliest
to occur (i) the date which is twelve months from the effective date of the note or (ii) the receipt by the Company of payment
on its account receivable owed to it by Universal Health Care, Inc. and Universal Health Care Insurance Company, which accounts
receivable is currently being processed in the matter of The Receivership of Universal Health Care, Inc., a Florida corporation
and The Receivership of Universal Health Care Insurance Company, Inc., a Florida corporation under case numbers 2013-CA and 2013-CA,
respectively. The Company also granted to the purchaser a five-year warrant to purchase 100,000 shares of the Company’s common
stock at an exercise price of $0.15 per share.
On May 15, 2020, we issued a total 1,263,745
shares of our common stock in exchange for $139,012 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 15, 2020, we issued a total 4,284,565
shares of our common stock in exchange for $471,302 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 15, 2020, we issued a total 7,210,168
shares of our common stock in exchange for $793,118 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 18, 2020, we issued a total 700,751
shares of our common stock in exchange for $77,083 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 21, 2020, we issued a total 502,434
shares of our common stock in exchange for $55,268 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 22, 2020, we issued a convertible promissory
note in the principle amount of $25,000 to an accredited investor. The interest rate was 12%. The Holder of the note has the right
to convert all or a portion of the principle and any accrued interest into shares of our common stock at a per share price equal
to the lesser of (i) 15% below the average daily closing price of our common stock for the immediately preceding twenty (20) business
days or (ii) $0.11. The principal amount and any accrued but unpaid interest under the note shall be due and payable on the earliest
to occur (i) the date which is twelve months from the effective date of the note or (ii) the receipt by the Company of payment
on its account receivable owed to it by Universal Health Care, Inc. and Universal Health Care Insurance Company, which accounts
receivable is currently being processed in the matter of The Receivership of Universal Health Care, Inc., a Florida corporation
and The Receivership of Universal Health Care Insurance Company, Inc., a Florida corporation under case numbers 2013-CA and 2013-CA,
respectively. The Company also granted to the purchaser a five-year warrant to purchase 50,000 shares of the Company’s common
stock at an exercise price of $0.15 per share.
On May 25, 2020, we issued a total 319,627
shares of our common stock in exchange for $35,159 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 25, 2020, we issued a total 333,824
shares of our common stock in exchange for $36,721 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 26, 2020, we issued a convertible promissory
note in the principle amount of $100,000 to an accredited investor. The interest rate was 12%. The Holder of the note has the right
to convert all or a portion of the principle and any accrued interest into shares of our common stock at a per share price equal
to the lesser of (i) 15% below the average daily closing price of our common stock for the immediately preceding twenty (20) business
days or (ii) $0.11. The principal amount and any accrued but unpaid interest under the note shall be due and payable on the earliest
to occur (i) the date which is twelve months from the effective date of the note or (ii) the receipt by the Company of payment
on its account receivable owed to it by Universal Health Care, Inc. and Universal Health Care Insurance Company, which accounts
receivable is currently being processed in the matter of The Receivership of Universal Health Care, Inc., a Florida corporation
and The Receivership of Universal Health Care Insurance Company, Inc., a Florida corporation under case numbers 2013-CA and 2013-CA,
respectively. The Company also granted to the purchaser a five-year warrant to purchase 200,000 shares of the Company’s common
stock at an exercise price of $0.15 per share.
On May 26, 2020, we issued a total 781,206
shares of our common stock in exchange for $85,933 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 28, 2020, we issued a total 884,555
shares of our common stock in exchange for $97,301 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On May 29, 2020, we issued a total 937,116
shares of our common stock in exchange for $103,083 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On June 1, 2020, we issued a convertible promissory
note (the “Note”)in the principle amount of $56,180 with an original issue discount of $3,180. The Note matures on
June 1, 2021, and the interest rate is 10%. This Note may not be prepaid in whole or in part except as follows. Should the Note
be prepaid within the first ninety days from the date of issuance, the prepayment percentage is one hundred and twenty-five (125%)
per cent of the outstanding principal and any accrued and unpaid interest. For the next ninety days the Note may be prepaid and
the prepayment percentage is one hundred thirty (130%) per cent of the outstanding principal and any accrued and unpaid interest.
Thereafter, the Note may not be prepaid.
On June 1, 2020, we issued a total 1,024,189
shares of our common stock in exchange for $112,661 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On June 5, 2020, we issued a total 668,797
shares of our common stock in exchange for $73,568 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On June 5, 2020, we issued a total 603,987
shares of our common stock in exchange for $66,438 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On June 12, 2020, we issued a total 1,564,245
shares of our common stock in exchange for $172,067 of our convertible debt and accrued interest to the holder of the debt. We
relied on Section 3(a) (9) of the Securities Act of 1933, as amended.
On June 18, 2020, we issued a total 504,957
shares of our common stock in exchange for $55,545 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On June 21, 2020, we issued a convertible promissory
note in the principle amount of $25,000 to an accredited investor. The interest rate was 12%. The Holder of the note has the right
to convert all or a portion of the principle and any accrued interest into shares of our common stock at a per share price equal
to the lesser of (i) 15% below the average daily closing price of our common stock for the immediately preceding twenty (20) business
days or (ii) $0.11. The principal amount and any accrued but unpaid interest under the note shall be due and payable on the earliest
to occur (i) the date which is twelve months from the effective date of the note or (ii) the receipt by the Company of payment
on its account receivable owed to it by Universal Health Care, Inc. and Universal Health Care Insurance Company, which accounts
receivable is currently being processed in the matter of The Receivership of Universal Health Care, Inc., a Florida corporation
and The Receivership of Universal Health Care Insurance Company, Inc., a Florida corporation under case numbers 2013-CA and 2013-CA,
respectively. The Company also granted to the purchaser a five-year warrant to purchase 50,000 shares of the Company’s common
stock at an exercise price of $0.15 per share.
On July 02, 2020, we issued a total 765,399
shares of our common stock in exchange for $84,194 of our convertible debt and accrued interest to the holder of the debt. We relied
on Section 3(a) (9) of the Securities Act of 1933, as amended.
On July 22, 2020, we issued a convertible promissory
note (the “Note”)in the principle amount of $56,180 with an original issue discount of $3,180. The Note matures on
July 1, 2021, and the interest rate is 22 %. This Note may not be prepaid in whole or in part except as follows. Should the Note
be prepaid within the first ninety days from the date of issuance, the prepayment percentage is one hundred and twenty-five (125%)
per cent of the outstanding principal and any accrued and unpaid interest. For the next ninety days the Note may be prepaid and
the prepayment percentage is one hundred thirty (130%) per cent of the outstanding principal and any accrued and unpaid interest.
Thereafter, the Note may not be prepaid.
On September 30, 2020, we issued a convertible
promissory note in the principle amount of $25,000 to an accredited investor. The interest rate was 12%. The Holder of the note
has the right to convert all or a portion of the principle and any accrued interest into shares of our common stock at a per share
price equal to the lesser of (i) 15% below the average daily closing price of our common stock for the immediately preceding twenty
(20) business days or (ii) $0.04. The principal amount and any accrued but unpaid interest under the note shall be due and payable
on the earliest to occur (i) the date which is twelve months from the effective date of the note or (ii) the receipt by the Company
of payment on its account receivable owed to it by Universal Health Care, Inc. and Universal Health Care Insurance Company, which
accounts receivable is currently being processed in the matter of The Receivership of Universal Health Care, Inc., a Florida corporation
and The Receivership of Universal Health Care Insurance Company, Inc., a Florida corporation under case numbers 2013-CA and 2013-CA,
respectively. The Company also granted to the purchaser a five-year warrant to purchase 50,000 shares of the Company’s common
stock at an exercise price of $0.04 per share.
All of the convertible promissory notes listed
above were issued to accredited investors, as that term is defined under the Section 501 of Regulation D, promulgated under the
Securities Act of 1933, as amended. The warrants issued in connection with the promissory notes all have a cashless exercise feature.
On March 22, 2020, we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On March 31, 2020, we issued 169,551 warrants
to our Chief Executive Officer in lieu of 2020 first quarter salary. The warrants have a term of five years and an exercise price
of $0.39 per warrant.
On April 14, 2020, we issued 96,058 warrants
to a promissory note holder, an accredited investor, in lieu of interest. The warrants have a term of five years and an exercise
price of $0.19 per warrant. The warrant has a cashless feature.
On April 19, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On April 21, 2020, we issued 101,599 warrants
to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a
term of five years and an exercise price of $0.25 per warrant.
On April 21, 2020, we issued 230,630 warrants
to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a
term of five years and an exercise price of $0.25 per warrant.
On April 21, 2020, we issued 146,811 warrants
to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a
term of five years and an exercise price of $0.25 per warrant.
On April 21, 2020, we issued 1,589,044 warrants
to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a
term of five years and an exercise price of $0.25 per warrant.
On April 21, 2020, we issued 368,804 warrants
to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a
term of five years and an exercise price of $0.25 per warrant.
On April 21, 2020, we issued 1,589,044 warrants
to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a
term of five years and an exercise price of $0.25 per warrant.
On April 21, 2020, we issued 1,095,253 warrants
to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a
term of five years and an exercise price of $0.25 per warrant.
On April 25, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On May 1, 2020 we issued 50,000 warrants to
a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On May 1, 2020 we issued 50,000 warrants to
a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On May 10, 2020 we issued 50,000 warrants to
a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On May 11, 2020 we issued 50,000 warrants to a
member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On May 19, 2020 we issued 50,000 warrants to
a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On June 3, 2020 we issued 50,000 warrants to
a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On June 6, 2020 we issued 50,000 warrants to
a member of our Dental Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On June 8, 2020 we issued 50,000 warrants to
a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On June 8, 2020 we issued 50,000 warrants to
a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of
$0.25 per warrant.
On June 10, 2020, we issued 200,000 warrants
to our consultant. The warrants have a term of three years and an exercise price of $0.35 per warrant.
On June 11, 2020 we issued 50,000 warrants
to a member of our Dental Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On June 14, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On June 20, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On June 22, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On June 24, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On June 24, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On June 27, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On June 30, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On June 30, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On July 01, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On July 01, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On July 01, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On July 01, 2020 we issued 50,000 warrants
to a member of our Dental Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On July 06, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On July 25, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On August 19, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On August 31, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
On September 25, 2020 we issued 50,000 warrants
to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price
of $0.25 per warrant.
We relied on Section 4 (2) of the Securities
Act of 1933, as amended and or Section 501 of Regulation D promulgated under said Act as the exemption from registration under
the Act.