CONSOLIDATED
CONDENSED BALANCE SHEETS
(unaudited)
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
781,060
|
|
|
$
|
383,335
|
|
Prepaid Expenses
|
|
|
380,862
|
|
|
|
95,508
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
1,161,922
|
|
|
|
478,843
|
|
|
|
|
|
|
|
|
|
|
Property & equipment, net
|
|
|
24,172
|
|
|
|
14,092
|
|
Intangible assets, net
|
|
|
9,500
|
|
|
|
11,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
1,195,594
|
|
|
$
|
503,935
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
305,825
|
|
|
$
|
236,741
|
|
Accounts payable - related party
|
|
|
630,532
|
|
|
|
684,173
|
|
Accrued expenses - related party
|
|
|
198,241
|
|
|
|
214,076
|
|
Accrued compensation
|
|
|
776,464
|
|
|
|
1,113,470
|
|
Contingent liability
|
|
|
90,000
|
|
|
|
90,000
|
|
Convertible debt, net of discount
|
|
|
2,423,293
|
|
|
|
562,362
|
|
Derivative liability
|
|
|
1,358,964
|
|
|
|
1,584,102
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
5,783,319
|
|
|
|
4,484,924
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
5,783,319
|
|
|
|
4,484,924
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
Preferred stock, authorized, 20,000,000 shares, $.001 par value, 125,000 and
0 shares issued and outstanding, respectively
|
|
|
125
|
|
|
|
-
|
|
Common stock, authorized 1,900,000,000 shares, $.001 par value, 244,430,551
and 206,406,951 issued and outstanding, respectively outstanding, respectively
|
|
|
244,431
|
|
|
|
206,407
|
|
Shares to be issued
|
|
|
19,150
|
|
|
|
-
|
|
Additional paid in capital
|
|
|
21,173,934
|
|
|
|
17,213,838
|
|
Accumulated deficit
|
|
|
(26,025,365
|
)
|
|
|
(21,401,234
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Deficit
|
|
|
(4,587,725
|
)
|
|
|
(3,980,989
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
$
|
1,195,594
|
|
|
$
|
503,935
|
|
The
accompanying notes are an integral part of these consolidated condensed financial statements
eWELLNESS
HEALTHCARE CORPORATION
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
For
the Three and Nine Months ended September 30, 2019 and 2018
(unaudited)
|
|
Three
Months Ended
|
|
|
Nine
Months Ended
|
|
|
|
September
30, 2019
|
|
|
September
30, 2018
|
|
|
September
30, 2019
|
|
|
September
30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
compensation
|
|
|
102,000
|
|
|
|
102,000
|
|
|
|
306,000
|
|
|
|
306,000
|
|
General
and administrative
|
|
|
709,205
|
|
|
|
322,266
|
|
|
|
1,284,556
|
|
|
|
809,704
|
|
Professional
fees
|
|
|
669,261
|
|
|
|
407,355
|
|
|
|
1,918,402
|
|
|
|
1,360,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
1,480,466
|
|
|
|
831,621
|
|
|
|
3,508,958
|
|
|
|
2,475,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from Operations
|
|
|
(1,480,466
|
)
|
|
|
(831,621
|
)
|
|
|
(3,508,958
|
)
|
|
|
(2,475,910
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
13
|
|
|
|
-
|
|
|
|
29
|
|
|
|
-
|
|
Foreign
exchange rate
|
|
|
-
|
|
|
|
4,507
|
|
|
|
-
|
|
|
|
12,598
|
|
Gain
(loss) on derivative liability
|
|
|
1,331,213
|
|
|
|
(89,579
|
)
|
|
|
1,949,180
|
|
|
|
303,898
|
|
Gain
(loss) on extinguishment of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(43,131
|
)
|
Disposal
of fixed asset
|
|
|
-
|
|
|
|
(2,134
|
)
|
|
|
-
|
|
|
|
(2,134
|
)
|
Interest
expense
|
|
|
(1,369,150
|
)
|
|
|
(173,306
|
)
|
|
|
(3,062,782
|
)
|
|
|
(493,106
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss before Income Taxes
|
|
|
(1,518,750
|
)
|
|
|
(1,092,133
|
)
|
|
|
(4,622,531
|
)
|
|
|
(2,697,785
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
(1,600
|
)
|
|
|
(29
|
)
|
|
|
(1,600
|
)
|
|
|
(1,656
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(1,520,350
|
)
|
|
$
|
(1,092,162
|
)
|
|
$
|
(4,624,131
|
)
|
|
$
|
(2,699,441
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
Diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
231,454,650
|
|
|
|
174,369,861
|
|
|
|
220,916,826
|
|
|
|
158,927,170
|
|
Diluted
|
|
|
231,454,650
|
|
|
|
174,369,861
|
|
|
|
220,916,826
|
|
|
|
158,927,170
|
|
The
accompanying notes are an integral part of these consolidated condensed financial statements
eWELLNESS
HEALTHCARE CORPORATION
RECONCILIATION
OF STOCKHOLDERS’ DEFICIT
THREE
AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(unaudited)
|
|
Preferred
Shares
|
|
|
Common
Shares
|
|
|
Shares
to
be
|
|
|
Additional
Paid
in
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Issued
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at January 1, 2019
|
|
|
-
|
|
|
$
|
-
|
|
|
|
206,406,951
|
|
|
$
|
206,407
|
|
|
$
|
-
|
|
|
$
|
17,213,838
|
|
|
$
|
(21,401,234
|
)
|
|
$
|
(3,980,989
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,000
|
|
|
|
-
|
|
|
|
54,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for debt conversion
|
|
|
-
|
|
|
|
-
|
|
|
|
5,097,255
|
|
|
|
5,098
|
|
|
|
-
|
|
|
|
342,389
|
|
|
|
-
|
|
|
|
347,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shars
issued for financing costs
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
-
|
|
|
|
114,000
|
|
|
|
-
|
|
|
|
115,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for prepaid services
|
|
|
-
|
|
|
|
-
|
|
|
|
3,510,870
|
|
|
|
3,511
|
|
|
|
-
|
|
|
|
402,239
|
|
|
|
-
|
|
|
|
405,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
1,324,560
|
|
|
|
1,325
|
|
|
|
-
|
|
|
|
180,224
|
|
|
|
-
|
|
|
|
181,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liability
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
492,340
|
|
|
|
-
|
|
|
|
492,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,338,471
|
)
|
|
|
(1,338,471
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at March 31, 2019
|
|
|
-
|
|
|
$
|
-
|
|
|
|
217,339,636
|
|
|
$
|
217,341
|
|
|
$
|
-
|
|
|
$
|
18,799,030
|
|
|
$
|
(22,739,705
|
)
|
|
$
|
(3,723,334
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,000
|
|
|
|
-
|
|
|
|
54,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for debt conversion
|
|
|
-
|
|
|
|
-
|
|
|
|
1,181,433
|
|
|
|
1,181
|
|
|
|
-
|
|
|
|
52,574
|
|
|
|
-
|
|
|
|
53,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash
|
|
|
-
|
|
|
|
-
|
|
|
|
800,000
|
|
|
|
800
|
|
|
|
-
|
|
|
|
58,300
|
|
|
|
-
|
|
|
|
59,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for prepaid services
|
|
|
-
|
|
|
|
-
|
|
|
|
500,000
|
|
|
|
500
|
|
|
|
-
|
|
|
|
52,500
|
|
|
|
-
|
|
|
|
53,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
1,650,435
|
|
|
|
1,650
|
|
|
|
-
|
|
|
|
156,434
|
|
|
|
-
|
|
|
|
158,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liability
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
70,987
|
|
|
|
-
|
|
|
|
70,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,765,310
|
)
|
|
|
(1,765,310
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at June 30, 2019
|
|
|
-
|
|
|
$
|
-
|
|
|
|
221,471,504
|
|
|
$
|
221,472
|
|
|
$
|
-
|
|
|
$
|
19,243,825
|
|
|
$
|
(24,505,015
|
)
|
|
$
|
(5,039,718
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,000
|
|
|
|
-
|
|
|
|
54,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued to officers, directors and consultants
|
|
|
125,000
|
|
|
|
125
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
374,875
|
|
|
|
-
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for debt conversion
|
|
|
-
|
|
|
|
-
|
|
|
|
13,991,743
|
|
|
|
13,992
|
|
|
|
-
|
|
|
|
517,433
|
|
|
|
-
|
|
|
|
531,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for prepaid services
|
|
|
-
|
|
|
|
-
|
|
|
|
6,692,307
|
|
|
|
6,692
|
|
|
|
-
|
|
|
|
440,769
|
|
|
|
-
|
|
|
|
447,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
2,274,997
|
|
|
|
2,275
|
|
|
|
-
|
|
|
|
150,297
|
|
|
|
-
|
|
|
|
152,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
to be issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19,150
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liability
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
392,735
|
|
|
|
-
|
|
|
|
392,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,520,350
|
)
|
|
|
(1,520,350
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2019
|
|
|
125,000
|
|
|
$
|
125
|
|
|
|
244,430,551
|
|
|
$
|
244,431
|
|
|
$
|
19,150
|
|
|
$
|
21,173,934
|
|
|
$
|
(26,025,365
|
)
|
|
$
|
(4,587,725
|
)
|
|
|
Preferred
Shares
|
|
|
Common
Shares
|
|
|
Shares
to
be
|
|
|
Additional
Paid
in
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Issued
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at January 1, 2018
|
|
|
-
|
|
|
$
|
-
|
|
|
|
142,352,406
|
|
|
$
|
142,352
|
|
|
$
|
-
|
|
|
$
|
13,178,131
|
|
|
$
|
(16,949,772
|
)
|
|
$
|
(3,629,289
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
55,500
|
|
|
|
-
|
|
|
|
55,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
108,594
|
|
|
|
-
|
|
|
|
108,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for debt conversion
|
|
|
-
|
|
|
|
-
|
|
|
|
3,945,407
|
|
|
|
3,945
|
|
|
|
-
|
|
|
|
209,347
|
|
|
|
-
|
|
|
|
213,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for prepaid services
|
|
|
-
|
|
|
|
-
|
|
|
|
800,000
|
|
|
|
800
|
|
|
|
-
|
|
|
|
103,200
|
|
|
|
-
|
|
|
|
104,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
219,525
|
|
|
|
|
|
|
|
219,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
1,350,000
|
|
|
|
1,350
|
|
|
|
-
|
|
|
|
137,250
|
|
|
|
-
|
|
|
|
138,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(473,973
|
)
|
|
|
(473,973
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at March 31, 2018
|
|
|
-
|
|
|
$
|
-
|
|
|
|
148,447,813
|
|
|
$
|
148,447
|
|
|
$
|
-
|
|
|
$
|
14,011,547
|
|
|
$
|
(17,423,745
|
)
|
|
$
|
(3,263,751
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
55,500
|
|
|
|
-
|
|
|
|
55,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
108,594
|
|
|
|
-
|
|
|
|
108,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for debt conversion
|
|
|
-
|
|
|
|
-
|
|
|
|
13,708,947
|
|
|
|
13,710
|
|
|
|
|
|
|
|
622,996
|
|
|
|
-
|
|
|
|
636,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for prepaid services
|
|
|
-
|
|
|
|
-
|
|
|
|
1,500,000
|
|
|
|
1,500
|
|
|
|
|
|
|
|
103,500
|
|
|
|
-
|
|
|
|
105,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for contributions
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
|
|
|
|
69,000
|
|
|
|
|
|
|
|
70,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
154,388
|
|
|
|
|
|
|
|
154,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
1,200,000
|
|
|
|
1,200
|
|
|
|
14,800
|
|
|
|
96,100
|
|
|
|
-
|
|
|
|
112,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,133,306
|
)
|
|
|
(1,133,306
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at June 30, 2018
|
|
|
-
|
|
|
$
|
-
|
|
|
|
165,856,760
|
|
|
$
|
165,857
|
|
|
$
|
14,800
|
|
|
$
|
15,221,625
|
|
|
$
|
(18,557,051
|
)
|
|
$
|
(3,151,769
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
55,500
|
|
|
|
-
|
|
|
|
55,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
142,057
|
|
|
|
-
|
|
|
|
142,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for debt conversion
|
|
|
-
|
|
|
|
-
|
|
|
|
12,943,900
|
|
|
|
12,944
|
|
|
|
|
|
|
|
607,546
|
|
|
|
-
|
|
|
|
620,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for financing costs
|
|
|
-
|
|
|
|
-
|
|
|
|
1,590,331
|
|
|
|
1,590
|
|
|
|
|
|
|
|
70,410
|
|
|
|
-
|
|
|
|
72,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(49,741
|
)
|
|
|
|
|
|
|
(49,741
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
1,325,000
|
|
|
|
1,325
|
|
|
|
(14,800
|
)
|
|
|
92,340
|
|
|
|
-
|
|
|
|
78,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,092,162
|
)
|
|
|
(1,092,162
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2018
|
|
|
-
|
|
|
$
|
-
|
|
|
|
181,715,991
|
|
|
$
|
181,716
|
|
|
$
|
-
|
|
|
$
|
16,139,737
|
|
|
$
|
(19,649,213
|
)
|
|
$
|
(3,327,760
|
)
|
The
accompanying notes are an integral part of these consolidated condensed financial statements
eWELLNESS
HEALTHCARE CORPORATION
CONSOLIDATED
CONDENSED STATEMENT OF CASH FLOWS
For
the Nine Months Ended September 30, 2019 and 2018
(unaudited)
|
|
For
Nine Months Ended
|
|
|
|
September
30, 2019
|
|
|
September
30, 2018
|
|
|
|
|
|
|
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(4,624,131
|
)
|
|
$
|
(2,699,441
|
)
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
4,794
|
|
|
|
2,863
|
|
Contributed
services
|
|
|
162,000
|
|
|
|
166,500
|
|
Shares
issued for consulting services
|
|
|
511,355
|
|
|
|
329,565
|
|
Shares
issued for financing costs
|
|
|
115,000
|
|
|
|
72,000
|
|
Shares
issued to officers, directors and consultants
|
|
|
86,250
|
|
|
|
-
|
|
Shares
issued for contribution
|
|
|
-
|
|
|
|
70,000
|
|
Options
expense
|
|
|
-
|
|
|
|
359,245
|
|
Amortization
of debt discount to interest expense
|
|
|
2,690,435
|
|
|
|
284,392
|
|
Amortization
of prepaids
|
|
|
678,805
|
|
|
|
301,140
|
|
Foreign
currency exchange
|
|
|
-
|
|
|
|
12,598
|
|
Loss
on disposal of fixed asset
|
|
|
-
|
|
|
|
(2,134
|
)
|
Gain
on derivative liability
|
|
|
(1,949,180
|
)
|
|
|
(303,898
|
)
|
Loss
on settlement of debt
|
|
|
-
|
|
|
|
43,131
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Prepaid
expense
|
|
|
(57,948
|
)
|
|
|
(18,055
|
)
|
Accounts
payable and accrued expenses
|
|
|
111,801
|
|
|
|
194,332
|
|
Accounts
payable - related party
|
|
|
(19,891
|
)
|
|
|
287,161
|
|
Accrued
expenses - related party
|
|
|
(15,835
|
)
|
|
|
7,386
|
|
Accrued
compensation
|
|
|
(82,006
|
)
|
|
|
72,901
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in operating activities
|
|
|
(2,388,551
|
)
|
|
|
(820,315
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Purchase
of equipment
|
|
|
(13,374
|
)
|
|
|
(2,037
|
)
|
Net
cash used in investing activities
|
|
|
(13,374
|
)
|
|
|
(2,037
|
)
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of common stock
|
|
|
59,100
|
|
|
|
-
|
|
Issuance
of convertible debt
|
|
|
4,400,500
|
|
|
|
969,300
|
|
Payment
on debt
|
|
|
(1,102,450
|
)
|
|
|
(1,005
|
)
|
Debt
issuance costs
|
|
|
(577,500
|
)
|
|
|
(125,150
|
)
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
2,799,650
|
|
|
|
843,145
|
|
|
|
|
|
|
|
|
|
|
Net
increase in cash
|
|
|
397,725
|
|
|
|
20,793
|
|
|
|
|
|
|
|
|
|
|
Cash,
beginning of period
|
|
|
383,335
|
|
|
|
6,882
|
|
|
|
|
|
|
|
|
|
|
Cash,
end of period
|
|
$
|
781,060
|
|
|
$
|
27,675
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
|
Cash
paid for:
|
|
|
|
|
|
|
|
|
Taxes
|
|
$
|
1,856
|
|
|
$
|
1,267
|
|
Interest
Expense
|
|
$
|
475,519
|
|
|
$
|
-
|
|
Non
cash items:
|
|
|
|
|
|
|
|
|
Derivative
liability and debt discount issued with new notes
|
|
$
|
2,831,539
|
|
|
$
|
359,732
|
|
Shares
issued for debt conversion
|
|
$
|
932,667
|
|
|
$
|
1,190,489
|
|
Shares
issued for prepaids
|
|
$
|
906,211
|
|
|
$
|
209,000
|
|
The
accompanying notes are an integral part of these consolidated condensed financial statements
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
Note
1. The Company
The
Company and Nature of Business
eWellness
Healthcare Corporation (the “eWellness”, “Company”, “we”, “us”, “our”)
was incorporated in the State of Nevada on April 7, 2011. The Company has generated no revenues to date.
eWellness
Healthcare Corporation is the first physical therapy telehealth company to offer real-time distance monitored assessments and
treatments. Our business model is to have large-scale employers use our PHZIO platform as a fully PT monitored corporate musculoskeletal
treatment (“MSK”) wellness program. The Company’s PHZIO home physical therapy assessment and exercise platform
has been designed to disrupt the $30 billion physical therapy market, the $4 billion MSK market and the $8 billion corporate wellness
industry. PHZIO re-defines the way MSK physical therapy can be delivered. PHZIO is the first real-time remote monitored 1-to-many
MSK physical therapy platforms for home use.
We
have commenced treating patients on various commercial contracts and anticipate generating
initial revenues during the 4th quarter of 2019. Despite the lack of revenues,
we continue to train physical therapist on how to use our PHZIO treatment platform, with
many of these therapists treating various patients on our system on a complimentary basis.
Our PHZIO system has delivered over 4,000 telerehab treatments to date.
Our
latest challenges in the Workers Compensation space has been patient adoption of PHZIO, related to a patients’ choice to
choose if they are treated in-clinic or digitally. They are nearly all choosing in-clinic care. Our pivot to address this issue
was to develop and sell MSK 360 a pre-injury fitness exam and custom exercise platform that is just rolling out now. Next, we
finally are getting traction for our Per-Hab product with several large TPA’s. Lastly, multiple clients are requesting an
Rheumatoid Arthritis Exercise product (RA 360) that is currently being developed with a launch date of mid-January. With the success
of MSK 360 we expect that more Workers Comp patients will choose digital care over in-clinic care.
We
have now developed four key products with large scale users that need to turn on utilization in 2020. We have a large list of
corporate self-insured, TPA and insurance company sales book that we are actively focused on selling to them our MSK-360 and Pre-Hab
platforms. We expect good traction from many of these firms in 2020. These products are:
+ PHZIO:
Realtime PT monitored Digital PT Treatments (post-injury)
+ MSK
360: Digital “PHZIOFIT" fitness exam and customer exercise plans for employees, (pre-injury)
+ Pre-Hab:
Digital pre-surgery (non-monitored) for Total Knee, Hip and Shoulder surgery (post injury and pre-surgery)
+ RA
360: (Available January 2020) Rheumatoid Arthritis Exercise Plan
Note
2. Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting
principles for interim financial statements. Accordingly, they omit or condense notes and certain other information normally included
in financial statements prepared in accordance with U.S. generally accepted accounting principles. The accounting policies followed
for quarterly financial reporting conform with the accounting policies disclosed in Note 2 to the Notes to Financial Statements
included in our Annual Report on Form 10-K for the year ended December 31, 2018. In the opinion of management, all adjustments
necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments
are of a normal recurring nature. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative
of the results that can be expected for the fiscal year ending December 31, 2019. The unaudited condensed financial statements
should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for
the year ended December 31, 2018.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of
the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ
materially from these good faith estimates and judgments.
Going
Concern
For
the nine months ended September 30, 2019, the Company had no revenues. The Company has an accumulated loss of $26,025,365.
In view of these matters, there is substantial doubt about the Company’s ability to continue as a going concern. The
Company’s ability to continue operations is dependent upon the Company’s ability to raise additional capital and to
ultimately achieve sustainable revenues and profitable operations, of which there can be no guarantee. The Company intends to
finance its future development activities and its working capital needs largely from the sale of public equity securities with
some additional funding from other traditional financing sources, including term notes, until such time that funds provided by
operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments
relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might
be necessary should the Company be unable to continue as a going concern.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
Fair
Value of Financial Instruments
As
of September 30, 2019, the Company had the following assets and liabilities measured at fair value on a recurring basis.
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Derivative Liability
|
|
$
|
1,358,964
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,358,964
|
|
Total Liabilities measured at fair value
|
|
$
|
1,358,964
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,358,964
|
|
As
of December 31, 2018, the Company had the following assets and liabilities measured at fair value on a recurring basis.
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Derivative Liability
|
|
$
|
1,584,102
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,584,102
|
|
Total Liabilities measured at fair value
|
|
$
|
1,584,102
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,584,102
|
|
Note
3. Related Party Transactions
In November 2016, the Company
signed an agreement with a programming company (“PC”) within which one of the Company’s directors and Chief Technical
Officer is the Chief Marketing Officer. The agreement is for additional features to be programmed for the launch of the PHZIO platform.
The Company is to pay a monthly base fee of $100,000 for the development and compensation for the Company’s CEO and CTO.
Following payment of the initial $100,000, the Company is obligated to only pay $50,000 monthly until the PC has successfully signed
and collected the first monthly service fee for 100 physical therapy clinics to use the PHZIO platform. The agreement establishes
that the Company is indebted to the PC for $225,000 for past programming services. For this amount, the Company issued 25,280,899
common shares at a value of $0.0089 per share on April 1, 2017. The PC will also have the right to appoint 40% of the directors.
At the end of September 30, 2019, the Company had a payable of $627,832 due to this company.
Throughout
the nine months ended September 30, 2019, the officers and directors of the Company incurred business expenses on behalf of the
Company. The amounts payable to the officers as of September 30, 2019 and December 31, 2018 were $44,991 and $3,076, respectively.
There were no expenses due to the board members, but the Company has accrued directors’ fees of $153,250 and $211,000 at
September 30, 2019 and December 31, 2018, respectively. Because the Company is not yet profitable the officers have agreed to
defer compensation. The Company had accrued executive compensation of $776,464 and $1,113,470 at September 30, 2019 and December
31, 2018 respectively.
Note
4. Convertible Notes Payable
Nine
Months Ended September 30, 2019
On
January 29, 2019, the Company received the third tranche of $60,000 relating to a note executed on July 13, 2018. During the nine
months ending September 30, 2019, the Company accrued interest expense of $1,350. On July 12, 2019, the Company prepaid this note
of $60,000 plus accrued interest and a prepayment penalty of $30,000. At September 30, 2019, this note is fully paid.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
On
January 8, 2019, the Company executed an 8% Convertible Promissory Notes payable to an institutional investor in the principal
amount of $308,000. The note, which is due on January 8, 2020, has an original issue discount of $28,000 and transaction costs
of $10,000. The convertible note converts into common stock of the Company at a conversion price that shall be equal to the 70%
of the average of the two lowest per share trading prices for the twenty (20) trading days prior to the conversion date. During
the nine months ended September 30, 2019, the Company accrued interest expense of $17,547. During the nine months ended September
30, 2019, the investor converted $30,000 of principal and $1,687 of accrued interest for 905,333 shares of common stock at a price
of $.035. At September 30, 2019, there is $278,000 principal outstanding.
On
January 8, 2019, the Company executed an 8% Convertible Promissory Notes payable to an institutional investor in the principal
amount of $308,000 each. The note, which is due on January 8, 2020, has an original issue discount of $28,000 and transaction
costs of $10,000. The convertible note converts into common stock of the Company at a conversion price that shall be equal to
the 70% of the average of the two lowest per share trading prices for the twenty (20) trading days prior to the conversion date.
During the nine months ended September 30, 2019, the Company accrued interest expense of $17,029. During the nine months ended
September 30, 2019, the investor converted $162,000 of principal for 4,424,400 shares of common stock for prices ranging from
$.035 to $.042. At September 30, 2019, there is $146,000 principal outstanding.
On
January 9, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal
amount of $114,000. The note, which is due on October 30, 2019, has an original issue discount of $11,000 and transaction costs
of $3,000. The convertible note converts into common stock of the Company at a conversion price that shall be equal to the 70%
average of the two lowest per share trading prices for the ten (10) trading days prior to the conversion date. During the nine
months ended September 30, 2019, the Company accrued interest expense of $6,028. On July 12, 2019, the Company prepaid this note
of $114,000 plus accrued interest and a prepayment penalty of $42,010. At September 30, 2019, this note is fully paid.
On
January 29, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal
amount of $58,300. The note, which is due on November 15, 2019, has an original issue discount of $5,300 and transaction costs
of $3,000. The convertible note converts into common stock of the Company at a conversion price that shall be equal to the 70%
average of the two lowest per share trading prices for the ten (10) trading days prior to the conversion date. During the nine
months ended September 30, 2019, the Company accrued interest of $2,753. On July 12, 2019, the Company prepaid this note of $58,300
plus accrued interest and a prepayment penalty of $21,369. At September 30, 2019, this note is fully paid.
On
February 22, 2019, the Company received the fourth tranche of $30,000 relating to a note executed on July 13, 2018. During the
nine months ending September 30, 2019, the Company accrued interest of $534. On September 17, 2019, the convertible debt holder
converted $9,700 of principal for 340,000 shares of common stock at a price of $.03. At September 30, 2019, there is $20,300 principal
outstanding.
On
March 18, 2019, the Company executed a Securities Purchase Agreement for Convertible Debentures to an institutional investor in
the principal amount of $365,000 to be funded in six tranches: $65,000 at signing, $100,000 forty-five (45) days after the signing
date and $200,000 forty-five (45) days after the second closing date. The debentures, which are payable on March 18, 2022, have
a 10% original issue discount and a commitment fee of $5,000 payable with the signing debenture. The debentures convert into common
stock of the Company at a conversion price equal to the lesser of (i) $.12 or (ii) seventy percent (70%) of the lowest traded
price (as reported by Bloomberg LP) of the common stock for the ten (10) trading days prior to the conversion date. The first
tranche of $65,000 was received on March 21, 2019. On September 12, 2019, the Company prepaid this note of $65,000 and a prepayment
penalty of $19,500. At September 30, 2019, this note is fully paid.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
On
March 18, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $47,300. The note, which is payable on January 30, 2020, has an original issue discount of $4,300 and transaction costs of
$3,000. The convertible note converts into common stock of the Company at a conversion price equal to 70% of the average of the
lowest two (2) trading prices during the ten (10) trading day period ending on the last complete trading day prior to the conversion
date. During the nine months ended September 30, 2019, the Company accrued interest expense of $3,226. On September 12, 2019,
the Company prepaid this note of $47,300 plus accrued interest and a prepayment penalty of $16,555. At September 30, 2019, this
note is fully paid.
On
March 21, 2019, the Company executed a 3% Convertible Promissory Note payable to an institutional investor in the principal amount
of $360,000. The note, which is payable twelve (12) months after each tranche is funded, has an original issue discount of $60,000.
The original issue discount will be prorated with each tranche paid. The first tranche of $60,000 is due at signing date. The
convertible note converts into common stock of the Company at a conversion price that shall be equal to 65% of the lesser of (i)
lowest trading price or (ii) the lowest closing bid price on the OTCQB during the twenty-five (25) trading day period ending on
the last complete trading day prior to the conversion date. The first tranche was received on March 29, 2019. The second tranche
of $37,500 was received on July 19, 2019. During the nine months ended September 30, 2019, the Company accrued interest expense
of $2,925. On September 30, 2019, the Company prepaid the first tranche of $60,000 plus accrued interest and a prepayment penalty
of $30,000. At September 30, 2019, only the second tranche of $37,500 is outstanding.
On
March 21, 2019, the Company executed a 12% Convertible Promissory Note to an institutional investor in the principal amount of
$1,500,000 to be funded over separate tranches; the first tranche to be funded on signing. The note, which is due and payable
six (6) months after the funding date of each tranche, has an original issue discount of 10%. The Company issued 3,260,870 shares
of restricted common stock on the closing date. These are deemed returnable shares which the investor must return if the Company
repays the note prior to the maturity date. In addition, the Company issued 1,000,000 shares of restricted common stock as a commitment
fee. The convertible note converts into common stock of the Company at a conversion price that shall be equal to 65% of the lowest
trading price during the thirty (30) day trading period ending on the last complete trading day prior to the conversion date.
The first tranche of $750,000 was received on March 25, 2019. The second tranche of $350,000 was received on July 12, 2019 and
the Company issued 2,692,307 shares of restricted common stock. These shares are redeemable if the Company pays the note prior
to the maturity date of January 20, 2020. The third and final tranche was received on September 9, 2019 and the Company issued
4,000,000 shares of restricted common stock. These shares are redeemable if the Company pays the note prior to the maturity date
of March 12, 2020. During the nine months ended September 30, 2019, the Company accrued interest expense of $57,337.
On
April 1, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $58,300. The note, which is payable on February 15, 2020, has an original issue discount of $5,300 and transaction costs of
$3,000. The convertible note converts into common stock of the Company at a conversion price equal to 70% of the average of the
lowest two (2) trading prices during the ten (10) trading day period ending on the last complete trading day prior to the conversion
date. During the nine months ended September 30, 2019, the Company accrued interest of $3,811. On September 12, 2019, the Company
prepaid this note of $58,300 plus accrued interest and a prepayment penalty of $20,405. At September 30, 2019, this note is fully
paid.
On
May 6, 2019, the Company executed a convertible note conversion period extension agreement on a note dated October 28, 2018, within
which the period of conversion by note holder was extended to May 27, 2019. The Company paid $16,031 to note holder for this extension
agreement. On May 28, 2019, the Company executed a second extension agreement on this note within which the period of conversion
by note holder was extended to June 11, 2019. The Company paid $16,105 to note holder for this extension agreement. During the
nine months ended September 30, 2019, the note holder converted the $308,000 note and accrued interest of $16,337 into 8,987,253
shares of common shares at prices ranging from $.035 $.04508. At September 30, 2019, this note has been fully converted.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
On
May 13, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $110,000. The note, which is due on February 13, 2020, has an original issue discount of $10,000 and transactions costs of
$3,000. The convertible note converts into common stock of the Company at conversion price that shall be equal to the 65% of the
lowest closing price for the twenty (20) trading days prior to the conversion date. During the nine months ended September 30,
2019, the Company accrued interest expense of $5,063.
On
July 2, 2019, two Back-End notes executed in October 2018 with an institutional investor was funded for $154,000 each. Each note,
which is due on October 29, 2019, has an original issue discount of $16,500. The convertible notes convert into common stock of
the Company at conversion price that shall be equal to the 70% of the average of the two (2) lowest per share trading prices for
the prior twenty (20) trading days including the conversion date. During the nine months ended September 30, 2019, the Company
accrued interest expense of $3,038 for each note.
On
July 5, 2019, the Company signed an amendment to a convertible note issued on March 21, 2019 revising the conversion price from
75% to 65% of the lowest trading price during the thirty (30) trading days prior to the conversion date.
On
July 8, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $140,800. The note, which is payable on April 30, 2020, has an original issue discount of $12,800 and transaction costs of
$3,000. The convertible note converts into common stock of the Company at a conversion price equal to 70% of the average of the
lowest two (2) trading prices during the ten (10) trading day period ending on the last complete trading day prior to the conversion
date. During the nine months ended September 30, 2019, the Company accrued interest of $3.379.
On
July 8, 2019, the Company executed a convertible note conversion period extension agreement on a note dated January 8, 2019 within
which the period of conversion by note holder was extended to August 9, 2019. The Company paid $21,560 to note holder for this
extension agreement.
On
July 9, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $113,000. The note, which is due on July 9, 2020, has an original issue discount of $10,000 and transaction costs of $3,000.
The convertible note converts into common stock of the Company at a conversion price that shall be equal to the 65% average of
the lowest per share trading prices for the twenty (20) trading days prior to the conversion date. During the nine months ended
September 30, 2019, the Company accrued interest expense of $2,712.
On
July 9, 2019, the Company executed an 8% Convertible Promissory Note payable to an institutional investor in the principal amount
of $235,000. The note, which is due on July 11, 2020, has an original issue discount of $25,200 and transaction costs of $10,000.
The convertible note converts into common stock of the Company at a conversion price that shall be equal to the 65% average of
the lowest per share trading prices for the prior twenty (20) trading days including the conversion date. During the nine
months ended September 30, 2019, the Company accrued interest expense of $3,605.
On
July 10, 2019, the Company executed a convertible note conversion period extension agreement on a note dated January 8, 2019 within
which the period of conversion by note holder was extended to August 9, 2019. The Company paid $22,410 to note holder for this
extension agreement.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
On
July 11, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $250,000. The note, which is due on April 19, 2020, has an original issue discount of $37,500 and transaction costs of $5,000.
The convertible note converts into common stock of the Company at a conversion price that shall be equal to 65% of the
average of the lowest per share trading prices for the twenty-five (25) trading days prior to the conversion date. During the
nine months ended September 30, 2019, the Company accrued interest expense of $5,425.
On
July 30, 2019, the Company executed two 12% Convertible Promissory Notes payable to two institutional investors in the principal
amount of $38,500 each. Each note, which is due on April 30, 2020, has an original issue discount of $3,500 and transaction costs
of $1,500. The convertible notes convert into common stock of the Company at a conversion price that shall be equal to the 65%
of the lowest per share trading prices for the twenty (20) trading days prior to the conversion date. During the nine months ended
September 30, 2019, the Company accrued interest expense of $1,380 for the two notes.
On
September 4, 2019, the Company executed a 12% Convertible Promissory Note payable to an institutional investor in the principal
amount of $58,300. The note, which is payable on July 15, 2020, has an original issue discount of $5,300 and transaction costs
of $3,000. The convertible note converts into common stock of the Company at a conversion price equal to 70% of the average of
the lowest two (2) trading prices during the ten (10) trading day period ending on the last complete trading day prior to the
conversion date. During the nine months ended September 30, 2019, the Company accrued interest of $364.
On
September 9, 2019, a Back-End note executed in January 2019 with an institutional investor was funded for $154,000. The note,
which is due on January 9, 2020, has an original issue discount of $14,000 and transaction costs of $5,000. The convertible note
converts into common stock of the Company at conversion price that shall be equal to the 70% of the average of the two (2) lowest
per share trading prices for the twenty (20) trading days prior to the conversion date. During the nine months ended September
30, 2019, the Company accrued interest expense of $641.
On
September 19, 2019, two Back-End notes executed in January 2019 with an institutional investor was funded for $154,000 each. Each
note, which is due on January 8, 2020, has an original issue discount of $14,000 and transactions costs of $5,000. The convertible
notes convert into common stock of the Company at conversion price that shall be equal to the 70% of the average of the two (2)
lowest per share trading prices for the prior twenty (20) trading days including the conversion date. During the nine months ended
September 30, 2019, the Company accrued interest expense of $371 for each note.
Year
Ended December 31, 2018
In
January 2018, the Company executed an 8% Convertible Promissory Note payable to an institutional investor in the principal amount
of $110,000. During the year ended December 31, 2018, the note, which was due on October 12, 2018, and accrued interest totaling
$4,489 was fully converted into 2,412,827 shares of common stock at a price of $.04745 per share.
In
January 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $91,300. During the year ended December 31, 2018, the note, which was due on October 30, 2018, and accrued interest totaling
$4,980 was fully converted into 1,630,799 shares of common stock at prices ranging from $.0583 to $.0603.
In
February 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $63,800. During year ended December 31, 2018, the note, which was due on November 30, 2018, and accrued interest totaling $3,480
was fully converted into 1,309,799 shares of common stock at prices ranging from $.0487 to $.0532.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
In
March 2018, the Company executed an 8% Convertible Promissory Note payable to an institutional investor in the principal amount
of $77,000. As of September 30, 2018, the institutional investor exercised its MFN provision in Paragraph 4a increasing the OID
from the stated in the note from 10% to 15% thus increasing the amount owed to $80,500. During the year ended December 31, 2018,
the note, which was due on December 5, 2018, and accrued interest totaling $5,928 was fully converted into 2,402,436 shares of
common stock at a price of $.036.
In
March 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $72,450. During the year ended December 31, 2018, the note, which was due on December 30, 2018, and accrued interest totaling
$3,780 was fully converted into 1,877,796 shares of common stock at prices ranging from $.0393 to $.0437.
In
May 2018, the Company executed an 8% Convertible Promissory Note payable to an institutional investor in the principal amount
of $125,000. During the year ended December 31, 2018, the note, which is due on May 10, 2019, and accrued interest totaling $415
was fully converted into 1,626,268 shares of common stock at prices ranging from $.0628 to $.1032. At the year ended December
31, 2018, the Company is still liable for $5,288 of accrued interest that has not yet been converted.
In
May 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $51,750. During the year ended December 31, 2018, the note, which is due on March 1, 2019, and accrued interest of $2,700 was
fully converted into 658,722 shares of common stock at prices ranging from $.081 and $.085.
In
July 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $56,500. The note, which is due on April 17, 2019, has an original issue discount of $6,500. The convertible notes convert
into common stock of the Company at conversion price that shall be equal to the lesser of: (i) $0.21 or (ii) 75% of the lowest
per share trading price for the thirty (30) trading days before the issued date of this note. The Company issued 100,000 shares
of common stock valued at $8,000 upon the execution of this note. During the year ended December 31, 2018, the Company recognized
interest expense of $2,991.
In
July 2018, the Company executed an 3% Convertible Promissory Note payable to an institutional investor in the principal amount
of $180,000 for funding in six tranches. The note, which is due twelve months from the date of each individual tranche, has an
original issue discount of $10,000 per tranche. The convertible notes convert into common stock of the Company at conversion price
that shall be equal to 75% of the market price which is lowest trading price during the twenty (20) trading day period ending
on the last complete trading day prior to the conversion date. The trading price is the lesser of: (i) lowest traded price or
(ii) the lowest closing bid price on the OTCQB. The first tranche of $60,000 was received in the month of July and second tranche
of $30,000 was received in the month of August. During the year ended December 31, 2018, the Company recognized interest expense
of $1,102.
In
July 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $28,250. The note, which is due on April 17, 2019, has an original issue discount of $3,250. The convertible notes convert
into common stock of the Company at conversion price that shall be equal to the lesser of: (i) $0.21 or (ii) 75% of the lowest
per share trading price for the thirty (30) trading days before the issued date of this note. The Company issued 50,000 shares
of common stock valued at $4,000 upon the execution of this note. During the year ended December 31, 2018, the Company recognized
interest expense of $1,495.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
In
July 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $77,000. As of September 30, 2018, the institutional investor exercised its MFN provision in Paragraph 4a increasing the OID
from the stated in the note from 10% to 15% thus increasing the amount owed to $80,500. The note, which is due on April 5, 2019,
has an original issue discount of $7,000. The convertible notes convert into common stock of the Company at conversion price that
shall be equal to the lesser of: (i) $0.06 or (ii) 75% of the lowest per share trading price for the ten (10) trading days before
the conversion date. During the year ended December 31, 2018, the Company recognized interest expense of $4,870.
In
July 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $60,950. The note, which is due on April 30, 2019, has an original issue discount of $7,950. The convertible notes convert
into common stock of the Company at conversion price that shall be equal to the lesser of: (i) $.20 or (ii) variable conversion
price which is 75% of the average of the lowest (2) VWAP for the ten (10) trading day period ending on the latest compete trading
day prior to the conversion date. During the year ended December 31, 2018, the Company recognized interest expense of $3,647.
In
August 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $58,300. The note, which is due on June 15, 2019, has an original issue discount of $5,300. The convertible notes convert into
common stock of the Company at conversion price that shall be equal to the lesser of: (i) $.20 or (ii) variable conversion price
which is 75% of the average of the two (2) lowest VWAP for the ten (10) trading day period ending on the latest compete trading
day prior to the conversion date. During the year ended December 31, 2018, the Company recognized interest expense of $2,338.
In
October 2018, the Company executed an 12% Convertible Promissory Note payable to an institutional investor in the principal amount
of $47,300. The note, which is due on July 15, 2019, has an original issue discount of $7,300. The convertible notes convert into
common stock of the Company at conversion price that shall be equal to the variable conversion price which is 70% of the average
of the two (2) lowest VWAP for the ten(10) trading day period ending on the latest compete trading day prior to the conversion
date. During the year ended December 31, 2018, the Company recognized interest expense of $1,291.
In
October 2018, the Company executed an 8% Convertible Promissory Note payable to an institutional investor in the principal amount
of $165,000. The note, which is due on October 12, 2019, has an original issue discount of $15,000. The convertible notes convert
into common stock of the Company at conversion price that shall be equal to 65% of the lowest per share closing price during the
fifteen (15) trading days immediately preceding the date of the notice of conversion. The first tranche of $110,000 was received
in the month of October and the second tranche of $55,000 was received in the month of November. During the year ended December
31, 2018, the Company recognized interest expense of $2,594.
In
October 2018, the Company executed two 8% Convertible Promissory Notes payable to two institutional investors, each in the principal
amount of $308,000. Each note, which is due on October 29, 2019, has an original issue discount of $33,000. The convertible notes
convert into common stock of the Company at conversion price that shall be equal to the 70% of the average of the two (2) lowest
per share trading prices for the twenty (20) trading days prior to the conversion date. During the year ended December 31, 2018,
the Company recognized interest expense of $4,118 for each note.
In
November 2018, a Back-End note executed in May 2018 with an institutional investor was funded. The Back-End note is an 8% Convertible
Promissory Note payable in the principal amount of $125,000. The note, which is due on May 10, 2019, has an original issue discount
of $10,000. The convertible notes convert into common stock of the Company at conversion price that shall be equal to 72% of the
lowest VWAP for the ten (10) trading days prior to and including the conversion date. Conversion into shares of common stock can
commence following the 180thcalendar day after the Original Issue Date. During the year ended December 31, 2018, the
Company recognized interest expense of $1,123.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
Note
5. Equity Transactions
Preferred
Stock
The
total number of shares of preferred stock which the Company shall have authority to issue is 20,000,000 shares with a par value
of $0.001 per share. During the nine months ended September 30, 2019, the Company authorized the issuance of 1,000,000 shares
of preferred stock to officers, directors and consultants as deferred compensation and/or expense. The shares are eligible for
conversion after 24 months into 40 shares of common stock per each preferred share. The value of the issued shares was calculated
on the basis of 40 shares per preferred share at the common share value on the date of issuance. The deferred compensation value
of the shares will vest monthly at 1/24th of the calculated value of $3,000,000 and requisite expense or reduction
of accrued compensation and/or accrued directors fees will be recorded. At the recording of the requisite vested share value,
the corresponding number of preferred shares will be recorded as being issued. At the end of September 30, 2019, there were 125,000
vested preferred shares and $255,000 was recorded to reduce accrued compensation; $33,750 was recorded to reduce accrued directors’
fees, and $86,250 was recorded as expense for a total of $375,000.
Common
Stock
On
July 9, 2019, the Company filed a Definitive Information Statement on Schedule 14C for the purpose of authorizing the increase
in the number of authorized shares of Common Stock from four hundred million (400,000,000) shares of Common Stock to nine hundred
million (900,000,000) shares of Common Stock (the “Authorized Common Stock Share Increase”). On July 9, 2019, the
Company filed Articles of Amendment to the Company’s Articles of Incorporation to implement the Authorized Common Stock
Share Increase with the State of Nevada.
On October 10, 2019,
the Company filed a Definitive Information Statement on Schedule 14C for the purpose of authorizing the increase in the number
of authorized shares of Common Stock from nine hundred million (900,000,000) shares of Common Stock to one billion nine hundred
million (1,900,000,000) shares of Common Stock (the “Authorized Common Stock Share Increase”). On October 15, 2019,
the Company filed Articles of Amendment to the Company’s Articles of Incorporation to implement the Authorized Common Stock
Share Increase with the State of Nevada.
Nine
Months Ended September 30, 2019
On
February 7, 2019, the Company executed an amendment to a contract executed on April 8, 2018 for twelve months for consulting services.
The Company issued 250,000 shares of common stock at the signing of the contract valued at $30,500 that is being amortized over
the life of the contract.
On
March 22, 2019, the Company issued 3,260,870 shares of common stock to an institutional investor as part of a promissory note
for the first tranche payment. These shares are returnable if the Company repays the promissory note before the maturity date.
The value of these shares is $375,000 which was recorded as prepaid until the six-month maturity has passed. The Company also
issued 1,000,000 shares of common stock to the institutional investor as a commitment fee. The value of these shares is $115,000.
On
April 2, 2019, the Company issued 800,000 shares of common stock pursuant to a capital call notice in relation to an Equity Purchase
Agreement dated June 18, 2018. The capital call totaled $59,100.
On
May 17, 2019, the Company executed a contract for three months for consulting services. The Company issued 500,000 shares of common
stock at the signing of the contract valued at $53,000 that is being amortized over the life of the contract. The contract further
indicated that another 500,000 shares were to be issued at the end of three months. The Company issued the second 500,000 shares
of common stock on August 20, 2019. The value of the shares is $31,200 and was expensed.
On
July 10, 2019, the Company issued 2,692,307 shares of common stock to an institutional investor as part of a promissory note for
the second tranche payment. These shares are returnable if the Company repays the promissory note before the maturity date. The
value of these shares is $167,462 which was recorded as prepaid until the six-month maturity has passed.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
On
September 30, 2019, the Company issued 4,000,000 shares of common stock to an institutional investor as part of a promissory note
for the third and final tranche payment. These shares are returnable if the Company repays the promissory note before the maturity
date. The value of these shares is $280,000 which was recorded as prepaid until the six-month maturity has passed.
On
September 25, 2019, the Company executed a contract for six months for consulting services. The contract included the issuance
of 250,000 shares of common stock. The value of these shares is $13,750. The shares had not yet been issued at the nine months
ended September 30,2019, so the value was recorded as Shares to be Issued.
During
the nine months ended September 30, 2019, the Company issued 4,749,992 shares of common stock to consultants for services rendered
in accordance to consulting agreements. The value of these shares is $466,403
During
the nine months ended September 30, 2019, the Company issued 20,270,431 shares of common stock for debt conversion totaling $932,667
which includes $889,950 principal, $40,217 accrued interest and $2,500 due diligence fee.
Nine
Months Ended September 30, 2018
In
January 2018, the Board of Directors approved the extension of an Advisory Agreement dated February 15, 2015 for one year. The
Company issued 800,000 shares of common stock as compensation with a value of $104,000. This value is being amortized over the
life of the contract.
During
the nine months ended September 30, 2018, the Company issued a total of 26,598,252 shares of common stock per debt conversion
of convertible notes. The total of the debt conversion was $1,190,189 which includes $163,157 of accrued interest.
During
the nine months ended September 30, 2018, the Company issued 3,875,000 shares of common stock for marketing and consulting services
valued at $329,565.
During
the nine months ended September 30, 2018, the Company issued 4,000,000 shares of common stock for settlement of a complaint filed
in the United States Federal District Count (see Footnote 4). The debt settled totaled $236,868 which includes $56,817 of accrued
interest.
During
the nine months ended September 30, 2018, the Company issued 1,590,331 shares of common stock for financing fees for convertible
debt issued. These shares were valued at $72,000.
In
June 2018, the Company entered into a consulting agreement within which the Company agreed to issue 125,000 shares of common stock
per month beginning in July 2018 and 1,500,000 shares of common stock upon signing of the agreement. The 1,500,000 shares of common
stock were issued with a value of $105,000 which is being amortized over the life of the contract.
In
June 2018, the Company executed an Equity Purchase Agreement with an institutional investor within which the investor agrees to
purchase up to $1,500,000 of the Company’s common stock, par value $0.001. As an inducement to the investor to enter into
the agreement, the Company issued 1,000,000 restricted shares of common stock to the investor valued at $70,000.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
In
January 2018, the Board of Directors agreed to form a new eWellness Healthcare Corporation 2018 Equity Incentive Plan (“Plan”).
The Plan shall be for 20,000,000 shares of common stock that will be placed in a 10b5-1 Sales Plan that will be registered under
an S-8 Registration Statement. Under the sales plan, each recipient will open an account with Garden State Securities (“GSS”)
for management of all sales of shares issued under the Plan. Quarterly limitations are placed on the number of shares that can
be sold. The Company initially allocated 17,400,000 shares to officers, directors and consultants. As of September 30, 2018, no
shares were issued.
Stock
Options
The
following is a summary of the status of all Company’s stock options as of September 30, 2019 and changes during the nine
months ended on that date:
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Number
of Stock
|
|
|
Average
Exercise
|
|
|
Remaining
|
|
|
Intrinsic
|
|
|
|
Options
|
|
|
Price
|
|
|
Life (yrs)
|
|
|
Value
|
|
Outstanding at December 31, 2018
|
|
|
2,850,000
|
|
|
$
|
0.80
|
|
|
|
2.2
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2019
|
|
|
2,850,000
|
|
|
|
0.80
|
|
|
|
1.4
|
|
|
$
|
-
|
|
Options exercisable at September 30, 2019
|
|
|
2,850,000
|
|
|
$
|
0.80
|
|
|
|
1.4
|
|
|
$
|
-
|
|
The
Company recognized stock option expense of $0 and $217,188 for the nine months ended September 30, 2019 and 2018, respectively.
Warrants
In
March 2018, the Board of Directors, at the request and with the approval of the investors, determined that it was in the best
interests of the Company and the Investors, based upon market price and relatively limited liquidity of the shares of common stock
that the Company revised the expiration date and exercise price for 417,429 unexercised warrants granted on April 9, 2015. The
original expiration date of April 9, 2018 was extended to April 9, 2019. During the nine months ended September 30, 2019, these
warrants expired.
The
following is a summary of the status of the Company’s warrants as of September 30, 2019 and changes during the nine months
ended on that date:
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Average
Exercise
|
|
|
Remaining
|
|
|
Intrinsic
|
|
|
|
Warrants
|
|
|
Price
|
|
|
Life (yrs.)
|
|
|
Value
|
|
Outstanding at December 31, 2018
|
|
|
3,778,179
|
|
|
$
|
0.48
|
|
|
|
1.4
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled
|
|
|
477,429
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding at September 30, 2019
|
|
|
3,300,750
|
|
|
$
|
0.52
|
|
|
|
1.1
|
|
|
$
|
22.240
|
|
Warrants exercisable at September 30, 2019
|
|
|
3,300,750
|
|
|
$
|
0.52
|
|
|
|
1.1
|
|
|
$
|
22,240
|
|
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
Note
6. Commitments, Contingencies
The
Company may be subject to lawsuits, administrative proceedings, regulatory reviews or investigations associated with its business
and other matters arising in the normal conduct of its business. The following is a description of an uncertainty that is considered
other than ordinary, routine and incidental to the business.
The
closing of the Initial Exchange Agreement with Private Co. was conditioned upon certain, limited customary representations and
warranties, as well as, among other things, our compliance with Rule 419 (“Rule 419”) of Regulation C under the Securities
Act of 1933, as amended (the “Securities Act”) and the consent of our shareholders as required under Rule 419. Accordingly,
we conducted a “Blank Check” offering subject to Rule 419 (the “Rule 419 Offering”) and filed a Registration
Statement on Form S-1 to register the shares of such offering; the Registration Statement was declared effective on September
14, 2012. We used 10% of the subscription proceeds as permitted under Rule 419 and the amount remaining in the escrow trust as
of the date of the closing of the Share Exchange was $90,000 (the “Trust Account Balance”).
Rule
419 required that the Share Exchange occur on or before March 18, 2014, but due to normal negotiations regarding the transactions
and the parties’ efforts to satisfy all the closing conditions, the Share Exchange did not close on such date. Accordingly,
after numerous discussions with management of both parties, they entered into an Amended and Restated Share Exchange Agreement
(the “Share Exchange Agreement”) to reflect a revised business combination structure, pursuant to which we would:
(i) file a registration statement on Form 8-A (“Form 8A”) to register our common stock pursuant to Section 12(g) of
the Exchange Act, which we did on May 1, 2014 and (ii) seek to convert the participants of the Rule 419 Offering into participants
of a similarly termed private offering (the “Converted Offering”), to be conducted pursuant to Regulation D, as promulgated
under the Securities Act.
Fifty-two
persons participated in the Rule 419 Offering and each of them gave the Company his/her/its consent to use his/her/its escrowed
funds to purchase shares of the Company’s restricted common stock in the Converted Offering (the “Consent”)
rather than have their funds returned. To avoid further administrative work for the investors, we believe that we took reasonable
steps to inform investors of the situation and provided them with an appropriate opportunity to maintain their investment in the
Company, if they so choose, or have their funds physically returned. Management believed the steps it took constituted a constructive
return of the funds and therefore met the requirements of Rule 419.
However,
pursuant to Rule 419(e)(2)(iv), “funds held in the escrow or trust account shall be returned by first class mail or equally
prompt means to the purchaser within five business days [if the related acquisition transaction does not occur by a date that
is 18 months after the effective date of the related registration statement].” As set forth above, rather than physically
return the funds, we sought consent from the investors of the Rule 419 Offering to direct their escrowed funds to the Company
to instead purchase shares in the Converted Offering. The consent document (which was essentially a form of rescission) was given
to the investors along with a private placement memorandum describing the Converted Offering and stated that any investor who
elected not to participate in the Converted Offering would get 90% of their funds physically returned. Pursuant to Rule 419(b)(2)(vi),
a blank check company is entitled to use 10% of the proceed/escrowed funds; therefore, if a return of funds is required, only
90% of the proceed/escrowed funds need be returned. The Company received $100,000 proceeds and used $10,000 as per Rule 419(b)(2)(vi);
therefore, only $90,000 was subject to possible return.
As
disclosed therein, we filed the amendments to the initial Form 8-K in response to comments from the SEC regarding the Form 8-K
and many of those comments pertain to an alleged violation of Rule 419. The Company continued to provide the SEC with information
and analysis as to why it believes it did not violate Rule 419 but was unable to satisfy the SEC’s concerns. Comments and
communications indicate that Rule 419 requires a physical return of funds if a 419 offering cannot be completed because a business
combination was not consummated within the required time frame; constructive return is not permitted.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
Because
of these communications and past comments, we are disclosing that we did not comply with the requirements of Rule 419, which required
us to physically return the funds previously submitted to escrow pursuant to the Rule 419 Offering. Because of our failure to
comply with Rule 419, the SEC may bring an enforcement action or commence litigation against us for failure to strictly comply
with Rule 419. If any claims or actions were to be brought against us relating to our lack of compliance with Rule 419, we could
be subject to penalties (including criminal penalties), required to pay fines, make damages payments or settlement payments. In
addition, any claims or actions could force us to expend significant financial resources to defend ourselves, could divert the
attention of our management from our core business and could harm our reputation.
Ultimately,
the SEC determined to terminate its review of the Initial Form 8-K and related amendments, rather than provide us with additional
opportunities to address their concerns and therefore, we did not clear their comments. It is not possible at this time to predict
whether or when the SEC may initiate any proceedings, when this issue may be resolved or what, if any, penalties or other remedies
may be imposed, and whether any such penalties or remedies would have a material adverse effect on our consolidated financial
position, results of operations, or cash flows. Litigation and enforcement actions are inherently unpredictable, the outcome of
any potential lawsuit or action is subject to significant uncertainties and, therefore, determining currently the likelihood of
a loss, any SEC enforcement action and/or the measurement of the amount of any loss is complex. Consequently, we are unable to
estimate the range of reasonably possible loss. Our assessment is based on an estimate and assumption that has been deemed reasonable
by management, but the assessment process relies heavily on an estimate and assumption that may prove to be incomplete or inaccurate,
and unanticipated events and circumstances may occur that might cause us to change that estimate and assumption. Considering the
uncertainty of this issue and while Management evaluates the best and most appropriate way to resolve same, management determined
to create a reserve on the Company’s Balance Sheet for the $90,000 that was subject to the Consent.
From
time to time the Company may become a party to litigation matters involving claims against the Company. Except as may be outlined
above, the Company believes that there are no current matters that would have a material effect on the Company’s financial
position or results of operations.
Note
7. Derivative Valuation
The
Company evaluated the convertible debentures and associated warrants in accordance with ASC Topic 815, “Derivatives and
Hedging,” and determined that the conversion feature of the convertible promissory notes was not afforded the exemption
for conventional convertible instruments due to their variable conversion rates. The notes have no explicit limit on the number
of shares issuable, so they did not meet the conditions set forth in current accounting standards for equity classification. Therefore,
these have been characterized as derivative instruments. We elected to recognize the notes under ASU paragraph 815-15-25-4, whereby
there would be a separation into a host contract and derivative instrument. We elected to initially and subsequently measure the
notes and warrants in their entirety at fair value, with changes in fair value recognized in earnings.
The
debt discount is amortized over the life of the note and recognized as interest expense. For the nine months ended September 30,
2019 and 2018, the Company amortized the debt discount of $2,690,435 and $284,390, respectively.
eWellness
Healthcare Corporation
Notes
to Consolidated Condensed Financial Statements
September
30, 2019
(unaudited)
During
the nine months ended September 30, 2019, the Company had the following activity in the derivative liability account:
|
|
Notes
|
|
|
Warrants
|
|
|
Total
|
|
Derivative liability at December 31, 2018
|
|
$
|
1,402,721
|
|
|
$
|
181,381
|
|
|
$
|
1,584,102
|
|
Addition of new conversion option derivatives
|
|
|
3,631,177
|
|
|
|
-
|
|
|
|
3,631,177
|
|
Conversion of note derivatives
|
|
|
(1,107,498
|
)
|
|
|
-
|
|
|
|
(1,107,498
|
)
|
Change in fair value
|
|
|
(2,582,681
|
)
|
|
|
(166,137
|
)
|
|
|
(2,748,818
|
)
|
Derivative liability at September 30, 2019
|
|
$
|
1,343,719
|
|
|
$
|
15,244
|
|
|
$
|
1,358,963
|
|
For
purposes of determining the fair market value of the derivative liability, the Company used Black Scholes option valuation model.
The significant assumptions used in the Black Scholes valuation of the derivative are as follows:
Stock
price at valuation date
|
|
$
|
.03-.10
|
|
Exercise
price of warrants
|
|
$
|
.25
|
|
Conversion
rate of convertible debt
|
|
$
|
.445
|
|
Risk
free interest rate
|
|
|
1.6%-2.42
|
%
|
Stock
volatility factor
|
|
|
102.5%-190
|
%
|
Years
to Maturity
|
|
|
.06
– 2.72
|
|
Expected
dividend yield
|
|
|
None
|
|
Note
8. Subsequent Events
On
October 2, 2019, the Company executed a 10% Convertible Promissory Note payable to an institutional investor in the principal
amount of $57,750. The note, which is payable on October 2, 2020, has an original issue discount of $5,250 and transaction costs
of $2,500. The convertible note converts into common stock of the Company at a conversion price equal to 65% of the lowest trading
prices during the twenty (20) trading day period ending on the last complete trading day prior to the conversion date.
On
October 10, 2019, the Company filed a Definitive Information Statement on Schedule 14C for the purpose of authorizing the increase
in the number of authorized shares of Common Stock from nine hundred million (900,000,000) shares of Common Stock to one billion
nine hundred million (1,900,000,000) shares of Common Stock (the “Authorized Common Stock Share Increase”). On October
15, 2019, the Company filed Articles of Amendment to the Company’s Articles of Incorporation to implement the Authorized
Common Stock Share Increase with the State of Nevada.
From
October 1 until the filing of this report, the Company issued 374,999 shares of common stock per consulting agreements valued
at $12,150.
From
October 1 until the filing of this report, the Company issued 45,502,112 shares of common stock for convertible debt conversion
totaling $508,655 which includes $436,906 principal, $69,199 accrued interest and $2,550 financing costs
From
October 1 until the filing of this report, the Company issued 1,050,000 shares of common stock for prepaid services valued at
$39,750 which is being amortized over the life of the contracts.