Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED September 30, 2020

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

FOR THE TRANSITION PERIOD FROM ________TO ________

Commission File Number: 000-54554

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada

45-1226465

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

4093 Oceanside Boulevard, Suite B

Oceanside, California 92056

(Address of principal executive offices, including zip code)

(760) 295-7208

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

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

Large Accelerated Filer	[ ]	Non-Accelerated Filer	[X]
Accelerated Filer	[ ]	Smaller reporting company	[X]
		Emerging growth company	[ ]

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

As of November 16, 2020, the Registrant had 2,200,024,150 outstanding shares of Common Stock with a par value of $0.001 per share.

IMPORTANT PREFATORY NOTE

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this report and the information incorporated by reference herein may contain “forward-looking statements” (as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements, which involve risks and uncertainties, reflect our current expectations, intentions, or strategies regarding our possible future results of operations, performance, and achievements. Forward-looking statements include, without limitation: statements regarding future products or product development; statements regarding future selling, general and administrative costs and research and development spending; statements regarding our product development strategy; and statements regarding future financial performance, results of operations, capital expenditures and sufficiency of capital resources to fund our operating requirements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and applicable rules of the Securities and Exchange Commission and common law.

These forward-looking statements may be identified in this report and the information incorporated by reference by words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “plan”, “predict”, “project”, “should” and similar terms and expressions, including references to assumptions and strategies. These statements reflect our current beliefs and are based on information currently available to us. Accordingly, these statements are subject to certain risks, uncertainties, and contingencies, which could cause our actual results, performance, or achievements to differ materially from those expressed in, or implied by, such statements.

The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

·Need for additional capital;

·Limited operating history in our new business model;

·Limited experience introducing new products;

·Our ability to successfully expand our operations and manage our future growth;

·Difficulty in managing our growth and expansion;

·Dilutive effects of any raising of additional capital;

·The deterioration of global economic conditions and the decline of consumer confidence and spending;

·Material weaknesses reported in our internal control over financial reporting;

·Our ability to protect intellectual property rights and the value of our products;

·The potential for product liability claims against us;

·Our dependence on third party manufacturers to manufacture our products;

·Our common stock is currently classified as a penny stock;

·Our stock price may experience future volatility;

·The illiquidity of our common stock; and

·Substantial sales of shares of our common stock.

·Other factors not specifically described above, including the other risks, uncertainties, and contingencies described under “Description of Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Items 1 and 7 of our Annual Report on Form 10-K for the year ended December 31, 2019.

When considering these forward-looking statements, you should keep in mind the cautionary statements in this report and the documents incorporated by reference. We have no obligation and do not undertake to update or revise any such forward-looking statements to reflect events or circumstances after the date of this report.

Actual results may vary materially from those in such forward-looking statements as a result of various factors. No assurance can be given that the risk factors described in this Quarterly Report on Form 10-Q are all of the factors that could cause actual results to vary materially from the forward-looking statements. References in this Quarterly Report on Form 10-Q to the “Company,” “TSOI,” “we,” “our,” and “us” refer to Therapeutic Solutions International, Inc.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

INDEX

	PART 1. Financial Information	PAGE
Item 1.	Financial Statements (Unaudited)	4

	Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	4

	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019	5

	Condensed Consolidated Statement of Changes in Shareholders’ Deficit for the Period from January 1, 2020 to September 30, 2020 and January 1, 2019 to September 30, 2019	6

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Item 3. Quantitative and Qualitative Disclosures about Market Risk	27
Item 4.	Item 4. Controls and Procedures	27

	PART II. Other Information
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
	Signatures	31

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

Condensed Consolidated Balance Sheets

		September 30, 2020		December 31, 2019
ASSETS		(Unaudited)
Current assets:
Cash and cash equivalents	$	284,329	$	26,410
Restricted cash		10,202		10,187
Accounts receivable		2,585		2,904
Inventory		4,667		5,180
Prepaid expenses and other current assets		69,535		89,379
Right-of-use asset		60,940		5,619
Total current assets		432,258		139,679

Property and equipment, net		5,253		-
Other assets		180,162		171,322

Total assets	$	617,673	$	311,001

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Accounts payable	$	324,228	$	324,936
Accounts payable-related parties		7,200		12,715
Accrued expenses and other current liabilities		544,416		505,072
Lease liability		20,240		5,619
Convertible notes payable, net of discount of $45,248 and $105,525, at September 30, 2020 and December 31, 2019, respectively		25,752		38,475
Notes payable-related parties, net		940,386		937,528
Derivative liabilities		103,604		521,700
Total current liabilities		1,965,826		2,346,045

LONG TERM LIABILITIES
Notes payable, net of current portion		7,145		-
Lease liability, net of current portion		40,700		-
TOTAL LIABILITIES		2,013,671		2,346,045

Commitments and contingencies		-		-

Shareholders' Deficit:
Preferred stock, $ 0.001 par value; 5,000,000 shares authorized		-		-
Common stock, $ 0.001 par value; 2,500,000,000 shares authorized; 2,167,604,150 and 1,614,627,811 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively.		2,167,604		1,614,628
Additional paid-in capital		6,647,162		5,183,228
Subscription receivable		(21,000)		-
Accumulated deficit		(10,189,764)		(8,832,900)
Total shareholders' deficit		(1,395,998)		(2,035,044)

Total liabilities and shareholders' deficit	$	617,673	$	311,001

See accompanying notes to condensed consolidated financial statements.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

		For the Three Months Ended September 30, 2020		For the Three Months Ended September 30, 2019		For the Nine Months Ended September 30, 2020		For the Nine Months Ended September 30, 2019

Net sales	$	11,351	$	11,278	$	44,886	$	22,673
Cost of goods sold		2,724		1,278		8,677		2,459

Gross profit		8,627		10,000		36,209		20,214

Operating expenses:
General and administrative		27,994		18,269		62,197		51,890
Salaries, wages, and related costs		75,077		105,539		183,490		310,927
Officer's & director's bonuses		140,400		-		291,900		225,000
Consulting fees		48,751		34,635		120,011		118,986
Legal and professional fees		72,891		26,372		199,899		108,816
Research and development		133,921		24,812		463,693		31,044
Total operating expenses		499,034		209,627		1,321,190		846,663

Loss from operations		(490,407)		(199,627)		(1,284,981)		(826,449)

Other income (expense):
Loss on derivatives liabilities		-		(31,396)		(103,248)		(258,456)
Change in fair value of derivative liabilities		37,972		(117,615)		256,248		323,276
Interest expense		(47,561)		(97,598)		(203,683)		(287,773)
Other income/(expenses)		-		-		(21,200)		-
Total other income (expense)		(9,589)		(246,609)		(71,883)		(222,953)

Net loss	$	(499,996)	$	(446,236)	$	(1,356,864)	$	(1,049,402)

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

Weighted average shares outstanding – basic and diluted		2,092,537,522		1,395,862,362		1,813,912,043		1,211,360,944

See accompanying notes to condensed consolidated financial statements.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

Condensed Consolidated Statements of Changes in Shareholders' Deficit

(Unaudited)

	Common Stock
	Shares		Amount		Additional Paid-in Capital		Subscription Receivable		Accumulated Deficit		Total Stockholders' Deficit
December 31, 2018	1,011,063,182	$	1,011,063	$	4,314,047	$	-	$	(7,135,578)	$	(1,810,468)

Common stock issued for services	70,000,000		70,000		229,000		-		-		299,000
Common stock issued upon conversion of convertible notes payable	189,971,132		189,971		496,053		-		-		686,024
Common stock issued for a license	95,970,000		95,970		57,582		-		-		153,552
Common stock issued	72,033,333		72,033		4,397		-		-		76,430
Beneficial conversion feature on note payable	-		-		12,500		-		-		12,500
Net loss	-		-		-		-		(1,049,402)		(1,049,402)
September 30, 2019	1,439,037,647	$	1,439,037	$	5,113,579	$	-	$	(8,184,980)	$	(1,632,364)

	Common Stock
	Shares		Amount		Additional Paid-in Capital		Subscription Receivable		Accumulated Deficit		Total Stockholders' Deficit
June 30, 2019	1,295,013,587	$	1,295,013	$	4,959,735	$	-	$	(7,738,744)	$	(1,483,996)

Common stock issued upon conversion of convertible notes payable	83,990,727		83,991		155,447		-		-		239,438
Common stock issued for a license	-		-		-		-		-		-
Common stock issued	60,033,333		60,033		(1,603)		-		-		58,430
Net loss	-		-		-		-		(446,236)		(446,236)
September 30, 2019	1,439,037,647	$	1,439,037	$	5,113,579	$	-	$	(8,184,980)	$	(1,632,364)

	Common Stock
	Shares		Amount		Additional Paid-in Capital		Subscription Receivable		Accumulated Deficit		Total Stockholders' Deficit
December 31, 2019	1,614,627,811	$	1,614,628	$	5,183,228	$	-	$	(8,832,900)	$	(2,035,044)

Common stock issued for services	163,500,000		163,500		473,050		-		-		636,550
Common stock issued for salaries	37,681,818		37,682		162,718		-		-		200,400
Common stock issued for cash	200,375,737		200,375		451,324		(21,000)		-		630,699
Offering costs	-		-		(19,456)		-		-		(19,456)
Common stock issued for conversion of convertible notes, accrued interest and derivative liabilities	151,418,784		151,419		36,202		-		-		187,621
Relief of derivative liabilities	-		-		360,096		-		-		360,096
Net loss	-		-		-		-		(1,356,864)		(1,356,864)
September 30, 2020	2,167,604,150	$	2,167,604	$	6,647,162	$	(21,000)	$	(10,189,764)	$	(1,395,998)

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

Condensed Consolidated Statements of Changes in Shareholders' Deficit

(Unaudited)

	Common Stock
	Shares		Amount		Additional Paid-in Capital		Subscription Receivable		Accumulated Deficit		Total Stockholders' Deficit
June 30, 2020	1,947,438,492	$	1,947,439	$	6,003,461	$	-	$	(9,689,768)	$	(1,738,868)

Common stock issued for services	15,500,000		15,500		74,550		-		-		90,050
Common stock issued for salaries	19,500,000		19,500		120,900		-		-		140,400
Common stock issued for cash	176,196,428		176,196		395,304		(21,000)		-		550,500
Offering costs					(19,456)						(19,456)
Common stock issued for conversion of convertible notes, accrued interest and derivative liabilities	8,969,230		8,969		26,011		-		-		34,980
Relief of derivative liabilities	-		-		46,392		-		-		46,392
Net loss	-		-		-		-		(499,996)		(499,996)
September 30, 2020	2,167,604,150	$	2,167,604	$	6,647,162	$	(21,000)	$	(10,189,764)	$	(1,395,998)

See accompanying notes to condensed consolidated financial statements.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

		For the Nine Months Ended September 30, 2020		For the Nine Months Ended September 30, 2019
Cash flows from operating activities
Net loss	$	(1,356,864)	$	(1,049,402)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation to consultants		100,200		74,000
Stock-based compensation to related parties		736,750		225,000
Loss on derivative liabilities		103,248		258,456
Change in fair value of derivatives liabilities		(256,248)		(323,276)
Amortization of debt discount		169,215		224,918
Patent amortization		4,943		-
Depreciation		195		-
Changes in operating assets and liabilities:
Accounts receivable		319		(2,544)
Inventory		513		(1,050)
Prepaid expenses and other current assets		6,061		45,720
Right-of-use asset		(55,321)		(11,909)
Accounts payable		(707)		3,147
Accounts payable - related parties		(5,515)		-
Accrued expenses and other current liabilities		63,028		287,108
Lease liability		55,320		11,909
Net cash used in operating activities		(434,863)		(257,923)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(5,448)		-
Net cash used in investing activities		(5,448)		-

Cash flows from financing activities
Payments on notes payable to related party		(22,478)		(2,889)
Proceeds from notes payable to related party		-		25,000
Payments on convertible notes payable		-		(33,000)
Proceeds from convertible notes payable		95,000		190,000
Proceeds from notes payable		14,479		-
Proceeds from sale of common stock		611,243		76,430
Net cash provided by financing activities		698,244		255,541

Net decrease in cash, cash equivalents and restricted cash		257,934		(2,382)
Cash, cash equivalents and restricted cash at beginning of period		36,597		32,570
Cash, cash equivalents and restricted cash at end of period	$	294,531	$	30,188

Supplemental cash flow information:
Cash paid for interest	$	4,030	$	20,465
Cash paid for income taxes	$	800	$	-

Non-cash investing and financing transactions:
Original issuance discount on convertible notes payable	$	9,000	$	15,000
Debt discount recorded in connection with derivative liability	$	95,000	$	190,000
Common stock issued in conversion of convertible notes payable and interest	$	547,716	$	705,098
Beneficial conversion feature on convertible note	$	-	$	12,500
Common stock issued in payment of license agreement	$	-	$	153,552
Formalization of accrued salary into related party note	$	-	$	-
Accrued interest added to principal	$	20,398	$	-

Reconciliation of cash, cash equivalents and restricted cash to the
consolidated balance sheets:
Cash and cash equivalents	$	284,329	$	20,015
Restricted cash		10,202		10,173
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows:	$	294,531	$	30,188

See accompanying notes to condensed consolidated financial statements.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 1 – Organization and Business Description

Therapeutic Solutions International, Inc. (“TSOI” or the “Company”) was organized August 6, 2007 under the name Friendly Auto Dealers, Inc., under the laws of the State of Nevada. In the first quarter of 2011, the Company changed its name from Friendly Auto Dealers, Inc. to Therapeutic Solutions International, Inc., and acquired Splint Decisions, Inc., a California corporation.

Currently, the Company is focused on immune modulation for the treatment of several specific diseases. Immune modulation refers to the ability to upregulate (make more active) or downregulate (make less active) one’s immune system.

Activating one’s immune system is now an accepted method to cure certain cancers, reduce recovery time from viral or bacterial infections and to prevent illness. Additionally, inhibiting one’s immune system is vital for reducing inflammation, autoimmune disorders, and allergic reactions.

TSI is developing a range of immune-modulatory agents to target certain cancers and diseases, and for daily health.

Nutraceutical Division – TSOI has been producing high quality nutraceuticals. Our most recent product, QuadraMune™, is a blend of four powerful anti-inflammatory, antioxidant, compounds. Those four ingredients are pterostilbene, epigallocatechingallate, sulforaphane, and thymoquinone.

Cellular Division – TSOI recently obtained exclusive rights to a patented adult stem cell for development of therapeutics in the areas of chronic traumatic encephalopathy (CTE) and traumatic brain injury (TBI).

The stem cell licensed, termed “JadiCell” is unique in that it possesses features of mesenchymal stem cells, however, outperforms these cells in terms of a) enhanced growth factor production; b) augmented ability to secrete exosomes; and c) superior angiogenic and neurogenic ability.

Chronic Traumatic Encephalopathy (CTE) is caused by repetitive concussive/sub-concussive hits to the head sustained over a period of years and is often found in football players. The condition is characterized by memory loss, impulsive/erratic behavior, impaired judgment, aggression, depression, and dementia. In many patients with CTE, it is anatomically characterized by brain atrophy, reduced mass of frontal and temporal cortices, and medial temporal lobe. TSOI has previously filed several patents in the area of CTE based on modulating the brain microenvironment to enhance receptivity of regenerative cells such as stem cells.

The Company announced recently submission of a publication providing preclinical data which supports repositioning of its Cancer Immunotherapy StemVacs™ as a candidate for treatment of COVID-19. StemVacs™ is based on activating universal donor immune system cells called dendritic cells in a manner so that upon injection they reprogram the body’s “Natural Killer” cells.

Natural killer cells are the most potent cell type in the body in terms of killing viruses. Unfortunately, natural killer cells also produce chemicals called cytokines which at high concentrations can be lethal. The current data suggests that StemVacs™ can activate natural killer cells while at the same time suppressing lung inflammation. This dual mechanism of action makes StemVacs™ a promising candidate for treatment of coronavirus.

Management does not expect existing cash as of September 30, 2020 to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these financial statements. These financial statements have been prepared on a going concern basis which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of September 30, 2020, the Company has incurred losses totaling $10.2 million since inception, has not yet generated material revenue from operations, and will require additional funds to maintain its operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the consolidated financial statements are issued. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months through its existing financial resources and we may also raise additional capital through equity offerings, debt financings, collaborations and/or licensing arrangements. If adequate funds are not available on acceptable terms, we may be required to delay, reduce the scope of, or curtail, our operations. The accompanying consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of the Securities and Exchange Commission (SEC) Regulation S-X, and should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on May 21, 2020. The accompanying unaudited condensed consolidated financial statements include the accounts of TSOI and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. The unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the balances and results for the interim period included herein. The results of operations for the three and nine months ended September 30, 2020 and 2019 are not necessarily indicative of the results to be expected for the full year or any future interim periods. The accompanying condensed consolidated balance sheet at December 31, 2019 has been derived from the audited consolidated balance sheet at December 31, 2019, contained in the above referenced Form 10-K.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Therapeutic Solutions International, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). In accordance with ASC 606, the Company applies the following methodology to recognize revenue:

1)Identify the contract with a customer.

2)Identify the performance obligations in the contract.

3)Determine the transaction price.

4)Allocate the transaction price to the performance obligations in the contract.

5)Recognize revenue when (or as) the entity satisfies a performance obligation.

ASC 606 provides that sales revenue is recognized when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company generally satisfies performance obligations upon shipment of the product or service to the customer. This is consistent with the time in which the customer obtains control of the product or service.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Derivative Liabilities

A derivative is an instrument whose value is “derived” from an underlying instrument or index such as a future, forward, swap, option contract, or other financial instrument with similar characteristics, including certain derivative instruments embedded in other contracts and for hedging activities.

As a matter of policy, the Company does not invest in separable financial derivatives or engage in hedging transactions. However, the Company entered into certain debt financing transactions in fiscal 2020 and 2019 as disclosed in Note 5, containing certain conversion features that have resulted in the instruments being deemed derivatives. We evaluate such derivative instruments to properly classify such instruments within equity or as liabilities in our financial statements. Our policy is to settle instruments indexed to our common shares on a first-in-first-out basis.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 2 – Summary of Significant Accounting Policies (Continued)

The classification of a derivative instrument is reassessed at each reporting date. If the classification changes as a result of events during a reporting period, the instrument is reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified.

Instruments classified as derivative liabilities are remeasured using the Black-Scholes model at each reporting period (or upon reclassification) and the change in fair value is recorded on our consolidated statement of operations. We recorded derivative liabilities of $103,604 and $521,700 at September 30, 2020 and December 31, 2019, respectively.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, prepaids, convertible notes, and payables. The carrying amount of cash and cash equivalents and payables approximates fair value because of the short-term nature of these items.

Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements are required to be disclosed by level within the following fair value hierarchy:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 – Inputs lack observable market data to corroborate management’s estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

When determining fair value, whenever possible the Company uses observable market data, and relies on unobservable inputs only when observable market data is not available. As of September 30, 2020, the Company has level 3 fair value calculations on derivative liabilities. The table below reflects the results of our Level 3 fair value calculations:

The following is the change in derivative liability for the nine months ended September 30, 2020:

Balance- December 31, 2019	$	521,700
Issuance of new derivative liabilities		198,248
Conversions to paid-in capital		(360,096)
Change in fair market value of derivative liabilities		(256,248)
Balance- September 30, 2020	$	103,604

Use of Estimates

The preparation of the 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 and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Estimates were made relating to valuation allowances, impairment of assets, share-based compensation expense and accruals. Actual results could differ materially from those estimates.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 2 – Summary of Significant Accounting Policies (Continued)

Net Income (Loss) Per Share

Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if potential common shares had been issued, if such additional common shares were dilutive. In periods in which a net loss is incurred, basic and diluted loss per share are the same, and additional potential common shares are excluded as their effect would be antidilutive.

For the periods ended September 30, 2020 and 2019, a total of 409,527,991 and 876,393,993, respectively, potential common shares, consisting of shares underlying outstanding convertible notes payable were excluded as their inclusion would be antidilutive due to the net loss during the period.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is calculated using the straight-line method over the term of the agreement. Depreciation expense for the nine months ended September 30, 2020 and 2019 was $195 and $0, respectively.

Intangible Assets

Intangible assets consisted primarily of intellectual properties such as proprietary nutraceutical formulations. Intellectual assets are capitalized in accordance with ASC Topic 350 “Intangibles – Goodwill and Other.” Intangible assets with finite lives are amortized over their respective estimated lives and reviewed for impairment whenever events or other changes in circumstances indicate that the carrying amount may not be recoverable. Amortization expense for the nine months ended September 30, 2020 and 2019 was $11,534 and $0, respectively.

Long-lived Assets

In accordance with ASC 360, Property, Plant and Equipment, the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

Research and Development

Research and Development costs are expensed as incurred. Research and Development expenses were $463,693 and $31,044 for the nine months ended September 30, 2020 and 2019, respectively.

Income Taxes

The Company accounts for income taxes under ASC 740 "Income Taxes," which codified SFAS 109, "Accounting for Income Taxes" and FIN 48 “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 2 – Summary of Significant Accounting Policies (Continued)

Stock-Based Compensation

Compensation expense for stock issued to employees is determined as the fair value of consideration or services received or the fair value of the equity instruments issued, whichever is more reliably measured. The Financial Accounting Standards Board (FASB) issued ASU 2018-07 to expand the scope of Topic 718 to include share-based payments issued to nonemployees.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets and eliminates certain real estate-specific provisions. The Company recorded a Right-of-use asset of $60,940 and a Lease Liability of $60,940 as of September 30, 2020.

Recent Accounting Pronouncements

In December 2019, the FASB issued guidance that simplifies the accounting for income taxes by removing certain exceptions in existing guidance and improves consistency in application by clarifying and amending existing guidance. This guidance is effective for annual periods beginning after December 15, 2020, and interim periods within those annual periods, where the transition method varies depending upon the specific amendment. Early adoption is permitted, including adoption in any interim period. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period, and all amendments must be adopted in the same period. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company.

In January 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-01, "Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815", which clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting under Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. This guidance is effective for the Company for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company.

In August 2020, the FASB issued Accounting Standards (“ASU”) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which clarifies if an entity must determine whether a contract qualifies for a scope exception from derivative accounting. This guidance must be applied to freestanding financial instruments and embedded features that have all the characteristics of a derivative instrument and freestanding financial instruments that potentially are settled in an entity’s own stock, regardless of whether the instrument has all the characteristics of a derivative instrument. The analysis to determine whether a contract meets this scope exception includes two criteria: (1) the contract is indexed to an entity’s own stock and (2) the contract is equity classified. If both of those criteria are not met, the contract must be recognized as an asset or a liability. Under Section 815-40-25 on recognition, an entity must determine whether a contract meets specific conditions to be classified as equity (referred to as the settlement criterion). This guidance is effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company has reviewed the provisions of the new standard, but it is not expected to have a significant impact on the Company.

Note 3 - Restricted Cash

Included in cash and non-cash equivalents is a $10,000 certificate of deposit with an annual interest rate of 0.6%. This certificate matures on June 17, 2021 and is used as collateral for a Company credit card, pursuant to a security agreement dated June 20, 2011.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 4 – Property and Equipment

Fixed assets consisted of the following:

		September 30, 2020		December 31, 2019
Computer hardware	$	10,747	$	10,747
Office furniture and equipment		9,087		3,639
Shipping and other equipment		1,575		1,575
Total		21,409		15,961
Accumulated depreciation		(16,156)		(15,961)
Property and equipment, net	$	5,253	$	-

Depreciation expense for the nine months ended September 30, 2020 and 2019 was $195 and $0, respectively.

Note 5 – Other Assets

Other assets consist of the following:

		September 30, 2020		December 31, 2019
Prepaid consulting	$	34,021	$	20,238
Deposit		4,123		4,123
Licenses, net		142,018		146,961
Total	$	180,162	$	171,322

Prepaid consulting agreements are for one to two years and are expensed monthly over the term of the agreement. The net licenses amount consists of the following:

		September 30, 2020		December 31, 2019
License	$	153,552	$	153,552
Accumulated amortization		(11,534)		(6,591)
Licenses, net	$	142,018	$	146,961

Note 6 - Notes Payable-Related Party

At September 30, 2020 and December 31, 2019, the Company has unsecured interest-bearing demand notes outstanding to certain officers and directors amounting to $940,386 and $937,528, respectively. Interest accrued on these notes during the nine months ended September 30, 2020 and 2019 was $20,398 and $7,936, respectively. Of these, $251,000 are convertible into common stock at prices ranging from $0.004 and $0.005.

Note 7 – Convertible Notes Payable

On February 4, 2020, April 27, 2020, and June 5, 2020, the Company entered into one $33,000, one $28,000, and one $43,000 convertible promissory notes with a third party for which the proceeds were used for operations. The Company received net proceeds of $95,000, and a $9,000 original issuance discount was recorded. The convertible promissory notes incur interest at 12% per annum and mature on dates ranging from February 3, 2021 to June 5, 2021. The convertible promissory notes are convertible to shares of the Company's common stock 180 days after issuance. The conversion price per share is equal to 61% of the average of the three (3) lowest trading prices of the Company's common stock during the fifteen (15) trading days immediately preceding the applicable conversion date. The trading price is defined within the agreement as the closing bid price on the applicable trading market. The Company has the option to prepay the convertible notes in the first 180 days from closing subject to prepayment penalties ranging from 120% to 145% of principal balance plus interest, depending upon the date of prepayment. The convertible promissory notes include various default provisions for which the default interest rate increases to 22% per annum with the outstanding principal and accrued interest increasing by 150%. The Company was required to reserve at September 30, 2020 a total of 409,527,991 common shares in connection with these promissory notes.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 7 – Convertible Notes Payable (Continued)

Derivative liabilities

These convertible promissory notes are convertible into a variable number of shares of common stock for which there is not a floor to the number of common stock shares we might be required to issue. Based on the requirements of ASC 815 Derivatives and Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separate derivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at each conversion event and reporting period. Changes in the derivative liability fair value are reported in operating results each reporting period. The company uses the Black-Scholes option pricing model for the valuation of its derivative liabilities as further discussed below. There are no material differences between using the Black-Scholes option pricing model for these estimates as compared to the Binomial Lattice model.

For the three notes issued during the nine months ended September 30, 2020, the Company valued the conversion features on the date of issuance resulting in initial liabilities totaling $198,248. Since the fair value of the derivative was in excess of the proceeds received, a full discount to convertible notes payable and a day one loss on derivative liabilities of $103,248 was recorded during the nine months ended September 30, 2020. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0008 to $0.0012, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.0023 to $0.0033, an expected dividend yield of 0%, expected volatilities ranging from 239%-255%, risk-free interest rate ranging from 0.17% to 1.48%, and an expected term of one year.

At December 31, 2019, the Company had existing derivative liabilities of $521,700 related to three convertible notes totaling $144,000. During the nine months ended September 30, 2020, these convertible notes plus their accrued interest along with the February 4, 2020 note and its accrued interest were fully converted into 151,418,784 shares of common stock. At each conversion date, the Company recalculated the value of the derivative liability associated with the convertible note recording a gain (loss) in connection with the change in fair market value. In addition, the pro-rata portion of the derivative liability as compared to the portion of the convertible note converted was reclassed to additional paid-in capital. During the nine months ended September 30, 2020, the Company recorded $360,096 to additional paid-in capital. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.00055 to $0.0039, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.001 to $0.010, an expected dividend yield of 0%, expected volatility ranging from 197% to 305%, risk-free interest rates ranging from 0.13% to 0.89%, and expected terms ranging from 0.07 to 0.50 years.

On September 30, 2020, the derivative liabilities on the remaining two convertible notes were revalued at $103,604 resulting in a gain of $256,248 for the nine months ended September 30, 2020 related to the change in fair value of the derivative liabilities. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: exercise price of $0.0041, the closing stock price of the Company's common stock on the date of valuation of $0.0071, an expected dividend yield of 0%, expected volatility ranging from 274% to 293%, risk-free interest rate of 0.12%, and an expected term ranging from 0.57 to 0.68 years.

The Company amortizes the discounts over the term of the convertible promissory notes using the straight-line method which is similar to the effective interest method. During the nine months ended September 30, 2020 and 2019, the Company amortized $169,215 and $224,918 to interest expense, respectively. As of September 30, 2020, discounts of $45,248 remained for which will be amortized through June 4, 2021.

Note 8 – Equity

Our authorized capital stock consists of an aggregate of 2,505,000,000 shares, comprised of 2,500,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, which may be issued in various series from time to time and the rights, preferences, privileges and restrictions of which shall be established by our board of directors. As of September 30, 2020, we have 2,167,604,150 shares of common stock and no preferred shares issued and outstanding.

On March 2, 2020, we issued 8,333,333 shares of common stock for the partial conversion of $10,000 for a convertible note dated August 28, 2019.

On March 12, 2020, we issued 11,764,706 shares of common stock for the partial conversion of $10,000 for convertible note dated August 28, 2019.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 8 – Equity (Continued)

On March 26, 2020, we issued 21,818,182 shares of common stock for the partial conversion of $12,000 for convertible note dated August 28, 2019.

On May 29, 2020, we issued 10,000,000 shares of common stock for the partial conversion of $12,000 for convertible note dated August 28, 2019.

On June 2, 2020, we issued 12,500,000 shares of common stock for the partial conversion of $15,000 for convertible note dated August 28, 2019.

On June 3, 2020, we issued 19,733,333 shares of common stock for the partial conversion of $23,680 for convertible note dated August 28, 2019.

On June 4, 2020, we issued 24,733,333 shares of common stock for the complete conversion of $29,680 for convertible note dated October 30, 2019.

On June 4, 2020, we issued 5,000,000 shares of common stock, valued at $0.0023 per share, for consulting services.

On June 4, 2020 we issued 70,000,000 shares of common stock, valued at $0.023 each to three officers and one director of the Company under a Restricted Stock Award.

On June 8, 2020, we issued 10,000,000 shares of common stock, valued at $0.0033 per share, for consulting services.

On June 9, 2020, the Company settled an accrual of wages with Timothy G. Dixon with a convertible note payable of $60,000 with interest at 5% per annum. On June 9, 2020, we issued 18,181,818 shares of common stock for the complete conversion of $60,000 for convertible note dated June 9, 2020.

On June 11, 2020 we issued 40,000,000 shares of common stock, valued at $0.0046 each to three officers and one director of the Company under a Restricted Stock Award.

On June 15, 2020 we issued 3,000,000 shares of common stock, valued at $0.0017 each to one officer and one director of the Company under a Restricted Stock Award.

On June 15, 2020, we issued 10,000,000 shares of common stock, valued at $0.0023 per share, to the medical officer for consulting services.

On June 16, 2020, we issued 33,566,667 shares of common stock for the complete conversion of $40,280 for convertible note dated December 12, 2019.

On June 22, 2020, we issued 13,634,482 shares of common stock, valued at $0.005 per share, for an investment in the Company’s Private Placement.

On June 22, 2020, we issued 8,000,000 shares of common stock, valued at $0.0029 per share, for financing fees dated January 24, 2020.

On June 25, 2020, we issued 10,000,000 shares of common stock, valued at $0.0083 per share, to the medical officer for consulting services.

On June 29, 2020, we issued 344,827 shares of common stock, valued at $0.0029 per share, for an investment in the Company’s Private Placement.

On June 29, 2020, we issued 2,200,000 shares of common stock, valued at $0.005 per share, for an investment in the Company’s Private Placement.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 8 – Equity (Continued)

On July 7, 2020, we issued 2,000,000 shares of common stock, valued at $0.0035 per share, for an investment in the Company’s Private Placement.

On July 14, 2020, we issued 4,000,000 shares of common stock, valued at $0.005 per share, for an investment in the Company’s Private Placement.

On July 17, 2020 we issued 7,500,000 shares of common stock, valued at $0.0064 each to two officers, and one director of the Company under a Restricted Stock Award.

On July 17, 2020, we issued 2,000,000 shares of common stock, valued at $0.0064 per share, for consulting services.

On July 23, 2020, we issued 3,448,275 shares of common stock, valued at $0.0029 per share, for an investment in the Company’s Private Placement.

On July 29, 2020, we issued 159,848,153 shares of common stock, valued at $0.03127269 per share, for cash.

On July 31, 2020 we issued 12,000,000 shares of common stock, valued at .0077 each to three officers, and one director of the Company under a Restricted Stock Award.

On August 4, 2020, we issued 8,969,230 shares of common stock for the complete conversion of $34,980 for convertible note dated February 4, 2020.

On August 21, 2020, we issued 400,000 shares of common stock, valued at $0.005 per share, for an investment in the Company’s Private Placement.

On August 26, 2020, we issued 6,500,000 shares of common stock, valued at $0.005 per share, for an investment in the Company’s Private Placement.

On August 26, 2020, we issued 10,000,000 shares of common stock, valued at $0.005 per share, for consulting services.

On September 23, 2020, we issued 1,000,000 shares of common stock, valued at $0.0085 per share, for consulting services.

On September 29, 2020, we issued 2,500,000 shares of common stock, valued at $0.0075 per share, for consulting services.

Note 9– Subsequent Events

On October 1, 2020 we issued 15,000,000 shares of common stock, valued at $0.0071 each to two officers, and one director of the Company under a Restricted Stock Award.

On October 5, 2020 we issued 10,000,000 shares of common stock, valued at $0.0086 each to one officer, and one director of the Company under a Restricted Stock Award.

On October 28, 2020, we issued 7,420,000 shares of common stock for the complete conversion of $29,680 for convertible note dated February 4, 2020.

In accordance with ASC 855, the Company has analyzed its operations subsequent to September 30, 2020 through the date these financial statements were issued, and has determined that it does not have any other material subsequent events to disclose in these financial statements.

THERAPEUTIC SOLUTIONS INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

Note 10 – Commitments and Contingencies

Effective May 1, 2017, the Company entered into a fourth amendment to a Lease Agreement for property located in Oceanside, CA. On March 1, 2020, the Company entered into a fifth amendment to the lease agreement for property located in Oceanside, CA. The amendment extends the expiration date to April 20, 2023 with escalating monthly payments ranging from $2,024 to $2,153. The lease consists of approximately 1,700 square feet. Total rent expense for the six months.

Future minimum lease payments as of September 30, 2020 are as follows:

For the quarter ending September 30,

2020	$	6,072
2021		24,792
2022		25,572
2023		8,612
	$	65,048

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

The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws. The safe harbor provided in section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 (“statutory safe harbors”) shall apply to forward-looking information provided pursuant to the statements made in this filing by the Company. We urge you to carefully review our description and examples of forward-looking statements included in the section entitled “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report. Forward-looking statements speak only as of the date of this report and we undertake no obligation to publicly update any forward-looking statements to reflect new information, events or circumstances after the date of this report. Actual events or results may differ materially from such statements. In evaluating such statements, we urge you to specifically consider various factors identified in this report, any of which could cause actual results to differ materially from those indicated by such forward-looking statements. The following discussion and analysis should be read in conjunction with the accompanying financial statements and related notes, as well as the Financial Statements and related notes in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and the risk factors discussed therein.

General

Our principal executive office is located at 4093 Oceanside Blvd., Suite B, Oceanside, California 92056, our telephone number is (760) 295-7208 and our website is www.therapeuticsolutionsint.com. The reference to our website does not constitute incorporation by reference of the information contained on our website.

We file our quarterly and annual reports with the Securities and Exchange Commission (SEC), which the public may view and copy at the SEC’s Public Reference Room at 100 F Street, N.E. Washington D.C. 20549, on official business days during the hours of 10 a.m. to 3 p.m. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC at 1–800–SEC–0330. The SEC also maintains an Internet site, the address of which is www.sec.gov, which contains reports, proxy and information statements, and other information regarding issuers which file electronically with the SEC. The periodic and current reports that we file with the SEC can also be obtained from us free of charge by directing a request to Therapeutic Solutions International, Inc., 4093 Oceanside Blvd, Suite B, Oceanside, California 92056, Attn: Corporate Secretary.

DESCRIPTION OF BUSINESS

CURRENT BUSINESS DESCRIPTION

Activating one’s immune system is now an accepted method to treat certain cancers, reduce recovery time from viral or bacterial infections and to prevent illness. Additionally, inhibiting one’s immune system is vital for reducing inflammation, autoimmune disorders and allergic reactions.

TSOI is developing a range of immune-modulatory agents to target certain cancers, fight disease, and for daily health.

TSI is developing a range of immune-modulatory agents to target certain cancers and diseases, and for daily health.

Campbell Neurosciences Division – In August 2020, the Company launched this new division to approaching suicide as a biological disorder and developing science-based diagnostic tools and interventions.

SandBox Dental Labs, Inc. – is a wholly-owned subsidiary of TSOI consisting of a future dental laboratory to manufacture and fill prescriptions from dentists who will use our proprietary Sleep Appliance to treat their patients with mild to moderate obstructive sleep apnea. The Company needs to seek regulatory approval for its device to treat sleep apnea. As of September 30, 2020, formal operations have not commenced.

Nutraceutical Division (TSOI)

ProJuvenol^® is a patented, (US No.: 9,682,047) and powerful synergistic blend of complex anti-aging ingredients in capsules.

NanoStilbene™ is an easily absorbed nanoemulsion of nanoparticle pterostilbene derived from the ‘047 patent.

DermalStilbene is a topical form of pterostilbene delivered via spray application onto skin, derived from the ‘047 patent.

IsoStilbene an injectable formulation of pterostilbene is available by prescription only, derived from the ‘047 patent.

NeuroStilbene™ is an intranasal form of pterostilbene delivered via spray application inside the nostril, derived from the ‘047 patent.

NanoPlus is a blend of NanoStilbene and NanoCannabidiol which are an easily absorbed Nanoparticles formulation of Pterostilbene and Cannabidiol.

NanoCannabidiol is an easily absorbed Nanoparticle formulation of Cannabidiol Isolate in the range of 75-90 nanometers. This product is built on the same nano platform as NanoStilbene and is delivered at a concentration of 200mg per milliliter.

NanoPSA is a blend of NanoStilbene™ and Broccoli Sprout Extract (BSE) providing 74mg of BSE and 125mg of our patented NanoStilbene, a proprietary formulation of nanoparticle pterostilbene.

NLRP3 Trifecta is a two-product combo and consists of one bottle of NanoPSA and one bottle of GTE-50 green tea extract.

QuadraMune™ is a synergistic blend of pterostilbene, sulforaphane, epigallocatechingallate, and thymoquinone.

Patents and Applications filed by date

07-08-15 Augmentation of Oncology Immunotherapies by Pterostilbene Containing Compositions

09-02-15 Preventative Methods and Therapeutic or Pharmaceutical Compositions for the Treatment or Prevention of Pregnancy Complications

09-15-15 Diagnostic Methods For The Assessment Of Pregnancy Complications

09-25-15 A Medical Device For Reducing The Risk Of Preterm-Labor And Preterm-Birth

04-27-16 Augmentation Of Stem Cell Activity Using Pterostilbene And Compositions Containing Pterostilbene

03-29-17 Stimulation of Immunity to Tumor Stem Cell Specific Proteins by Peptide Immunization

03-29-17 Targeting the Tumor Microenvironment through Nutraceutical Based Immunoadjuvants

03-29-17 Activated Leukocyte Extract for Repair of Innate Immunity in Cancer Patients

03-29-17 Augmentation of Anti-Tumor Immunity by Mifepristone and Analogues Thereof

03-29-17 Methods of Re-Activating Dormant Memory Cells with Anticancer Activity

10-08-17 Synergistic Inhibition of Glioma Using Pterostilbene and Analogues Thereof

08-13-18 Enhancement of Ozone Therapy using Pterostilbene

09-17-18 Pterostilbene and Compositions Thereof for Prevention and Treatment of Chronic Traumatic Encephalopathy

09-25-18 Pterostilbene and Formulations Thereof for Treatment of Pathological Immune Activation

12-05-18 Treatment of Chronic Traumatic Encephalopathy via RNA Administration

01-09-19 Autologous Neurogenic Cells and Uses Thereof for Professional Athletes at Risk of Chronic Traumatic Encephalopathy

01-21-19 Prevention and Reversion of Chronic Traumatic Encephalopathy through Administration of “Educated” Monocytes and Progenitors Thereof

09-09-19 Pterostilbene and Formulations Thereof for Protection of Hematopoiesis from Chemotherapy and Radiation

11-04-19 Cellular, Organ, and Whole-Body Rejuvenation Utilizing Cord Blood Plasma and Pterostilbene

05-04-2020 Nutraceuticals for the Prevention, Inhibition and Treatment of SARS-Cov-2 and Associated COVID-19

05-11-2020 Treatment of COVID-19 Lung Injury Using Umbilical Cord Plasma Based Compositions

06-11-2020 Nutraceuticals for Reducing Myeloid Suppressor Cells

06-15-2020 Nutraceuticals for Suppressing Indolamine 2,3 Deoxygenase

06-22-2020 Treatment of SARS-CoV-2 with Dendritic Cells for Innate and/or Adaptive Immunity

06-30-2020 Augmentation of Natural Killer Cell Activity and Induction of Cytotoxic Immunity Using Leukocyte Lysate Activated Allogeneic Dendritic Cells: StemVacs™

07-13-2020 Prevention of Pathological Coagulation in COVID-19 and other Inflammatory Conditions

07-22-2020 Additive and/or Synergistic Combinations of Metformin with Nutraceuticals for the Prevention, Inhibition and Treatment of SARS-Cov-2 and Associated COVID-19

07-28-2020 Neuroprotection and Neuroregeneration by Pterostilbene and Compositions Thereof

08-05-2020 Prevention of Neuroinflammation associated Memory Loss Using Nutraceutical Compositions

08-21-2020 Methods of Determining Risk of Suicide and/or Suicidal Ideation by Immunological Assessment

08-28-2020 Upregulation of Therapeutic T Regulatory Cells and Suppression of Suicidal Ideations in Response to Inflammation by Administration of Nutraceutical Compositions Alone or Combined with Minocycline

09-14-2020 Immunotherapy of Schizophrenia and Schizophrenia Associated Suicidal Ideation/Suicide

09-24-2020 Personalized Immunotherapies for Reduction of Brain Inflammation and Suicide Prevention

10-18-2020 Nutraceutical Reduction Prevention and/or Reversion of Multiple Sclerosis

*The data provided here is partial and does not contain all materials submitted for publication and is preliminary until peer review is complete. These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease.

Dental

Immune-Oncology – Right To Try

In May of 2018 President Donald J. Trump signed into the law, the Right To Try bill. In 2015/2016 TSOI began and completed a 10-patient clinical trial of advanced cancer patients in Mexico at the Pan Am Cancer Treatment Center located in Tijuana Mexico using our dendritic cell vaccine code named StemVacs. TSOI has since generated GCP documentation for the previously treated 10 patients into a Phase I trial, which will be presented to the FDA by TSOI as part of an Ex-US trial compliant with 21 CFR 312.120 Foreign clinical studies not conducted under an IND. This is a required step to conform to the new Right To Try law.

StemVacs1: is an autologous subcutaneously administered vaccine comprised of immune stimulatory peptides resembling cancer stem cell specific proteins.

StemVacs1 is an autologous immunotherapy platform that consists of 5 components. The overarching approach to the StemVacs1 Immunotherapy Platform is as follows:

10-27-2020 Protection/Regeneration of Neurological Function by Endothelial Protection/Rejuvenation using Stem Cells for Treatment of Conditions such as Chronic Traumatic Encephalopathy and Schizophrenia

1.Treat innate immune suppression: Administration of oral apigenin/NanoStilbene (Cancer DeTox Product) to decrease immune suppressive toxic molecules made by tumor and tumor microenvironment.

2.Treat adaptive immune suppression: Administration of MemoryMune to activate dormant memory cells recognizing the tumor. Administration of LymphoBoost to repair deficient IL-12 production.

3.Stimulation of immune response to cancer stem cells (StemVacs).

4.Consolidation and maintenance of immunity: Cycles of StemVacs, supported by innaMune and LymphoBoost

StemVacs2: is an allogeneic immunotherapy for prophylaxis and/or treatment of SARS-CoV-2 by administration of dendritic cells in a manner and frequency sufficient to induce activation of innate and/or adaptive immune responses. In one embodiment the invention teaches administration of dendritic cells pulsed with one or more innate immune stimulants in a manner endowing said dendritic cell with ability to induce augmentation of natural killer (NK) cell number and/or activity. In another embodiment the invention teaches the use of dendritic cells stimulated with innate immune activators in a manner to allow for uptake of viral particles and presentation of viral epitopes to T cells in order to stimulate immunological activation and/or memory responses.

Chronic Traumatic Encephalopathy (CTE), and Traumatic Brain Injury (TBI) – Right To Try

On December 10, 2018, Therapeutic Solutions International, Inc., announced the signing of an agreement between TSOI and Jadi Cell LLC for licensing of the Jadi Cell universal donor adult stem cell, as covered in US Patent No.: 9,803,176 B2 for use in Chronic Traumatic Encephalopathy (CTE), and Traumatic Brain Injury (TBI).

The Jadi Cell product, which belongs to the mesenchymal stem cell (MSC) family of cells, is a unique adult stem cell, which produces higher levels of therapeutic factors compared to other stem cells. The cells have demonstrated safety in animal models and pilot human trials. The Jadi Cell product is generated from umbilical cords, which are a source of medical waste and available in large quantities at inexpensive prices.

Traumatic brain injury (TBI) is an insult to the brain, not of a degenerative or congenital nature, but caused by external physical force that may produce a diminished or altered state of consciousness, which results in an impairment of cognitive abilities or physical functioning.

CTE represents a significant unmet medical need which we believe is amenable to stem cell intervention. We are eager to accelerate treatments and potential cures for debilitating conditions such as CTE and traumatic brain injury and plan to leverage New regulatory pathways such as the recently approved “Right to Try” Law to deliver these medicines as soon as possible to patients which currently have no other options.

The Jadi Cell product because of its advanced stage of development in contrast to other stem cell types, which require years, if not decades of development before entry into American patients, will allow us we believe to be treating patients within 12 months. Currently means of isolating, producing, scaling up, and delivery of the cells has all been worked out by Jadi Cell and Collaborators.

Schizophrenia and Suicide Prevention

Suicide is a Major Problem: In 2017, in the USA, suicide was the second leading cause of death among individuals between the ages of 10 and 34, with twice as many suicides as there were homicides. Suicide is significantly more prevalent in veterans, in which approximately 20 deaths per day occur.

New Approaches are Needed: Psychotherapy and current drug interventions have not significantly reduced the rate of suicide. In fact, suicide rates have increased approximately 60% since 1981.

Suicide is not only Mental: Suicidal ideation and suicide have been associated with inborn genetic components as well as various forms of inflammation that occur as a result of brain injury. In some situations, depression or other pathological mental states have been shown to induce inflammation, which is subsequently associated with suicidal ideation and suicide.

Inflammation is Major Cause of Suicide: Molecular signals which in healthy individuals are associated with the body fighting disease, such as TNF-alpha, are turned by the brain when they are needed, and turned off when the disease has been defeated. In patients with suicidal ideation, these signals are turned on at a low level without being turned off. It is known that these “inflammatory signals”, otherwise known as “inflammatory cytokines” are associated with depression based human studies in which inflammatory signals were artificially manufactured and administered in patients to fight cancer and treated patients became depressed. Additionally, studies show that patients who are successfully treated for depression have a reduction in inflammatory signals in the blood.

Furthermore, various cofactors known to increase suicide rates such as drug abuse, alcoholism, and brain injury, have been shown to increase inflammatory signaling.

Diagnosis

1.Analysis of what is happening in blood. Proprietary algorithm utilizing already available blood tests to establish patients at risk of suicide (Doctor or rehab facility sends to us lab results from Quest and we plug into our computer and give risk score)

2.Analysis of what is happening in brain. Brain produces very small particles called exosomes that we can isolate, and they tell us how much inflammation is happening specifically in brain. Additionally, when appropriate, imaging studies using fMRI and various dyes to detect specific areas of brain atrophy and/or inflammation

3.Analysis of what is happening in the gut. Analysis of the microbiome in gut suggests overall inflammation in body

4.Analysis of suicide associated gene. Several gene polymorphisms have been shown to be associated with suicide.

The above physical findings are utilized to develop a suicide risk score, as well as to establish a baseline for intervention. In some situations, physicians will only be interested in attaining our suicide risk score and they will perform their own interventions. We are the only group to have developed a suicide risk score based on medical and not psychological findings.

Intervention

1.Clinical trial of QuadraMune™, clinically validated to reduces biomarkers associated with suicide risk

2.Broad acting anti-inflammatory natural interventions. Intravenous vitamin C, vitamin D, fish oil, quercetin, micronutrients.

3.Specific anti-inflammatory antibodies. Anti-TNF, anti-IL-17, anti-IL21

4.Microbiome modulators. Probiotics, prebiotics, fecal transplants

5.Cell based therapies. Autologous bone marrow

6.Transcranial Magnetic Stimulation. Various studies have shown ability to reduce neural inflammation and augment brain regeneration using this approach.

Action Plan

1.Understanding intellectual property landscape around our broad ideas of diagnosis and treatment. Filing new patents and/or licensing.

2.Creation of a “Central Core” which analyzes data and provides patient specific recommendations together with the input from the health care professional

3.Selling subscriptions to medical professionals, drug rehab clinics, etc.

GOVERNMENT REGULATION

The Company’s business is subject to varying degrees of regulation by a number of government authorities in the United States, including the United States Food and Drug Administration (FDA), the Federal Trade Commission (FTC), and the Consumer Product Safety Commission. The Company will be subject to additional agencies and regulations if it enters the manufacturing business. Various agencies of the state and localities in which we operate and in which our products are sold also regulate our business, such as the California Department of Health Services, Food and Drug Branch. The areas of our business that these and other authorities regulate include, among others:

·product claims and advertising;

·product labels;

·product ingredients; and

·how we package, distribute, import, export, sell and store our products.

The FDA, in particular, regulates the formulation, manufacturing, packaging, storage, labeling, promotion, distribution and sale of vitamins and other nutritional supplements in the United States, while the FTC regulates marketing and advertising claims. The FDA issued a final rule called “Statements Made for Dietary Supplements Concerning the Effect of the Product on the Structure or Function of the Body,” which includes regulations requiring companies, their suppliers and manufacturers to meet Good Manufacturing Practices in the preparation, packaging, storage and shipment of their products. Management is committed to meeting or exceeding the standards set by the FDA.

The FDA has also issued regulations governing the labeling and marketing of dietary and nutritional supplement products. They include:

·the identification of dietary or nutritional supplements and their nutrition and ingredient labeling;

·requirements related to the wording used for claims about nutrients, health claims, and statements of nutritional support;

·labeling requirements for dietary or nutritional supplements for which “high potency” and “antioxidant” claims are made;

·notification procedures for statements on dietary and nutritional supplements; and

·pre-market notification procedures for new dietary ingredients in nutritional supplements.

The Dietary Supplement Health and Education Act of 1994 (DSHEA) revised the existing provisions of the Federal Food, Drug and Cosmetic Act concerning the composition and labeling of dietary supplements and defined dietary supplements to include vitamins, minerals, herbs, amino acids and other dietary substances used to supplement diets. DSHEA generally provides a regulatory framework to help ensure safe, quality dietary supplements and the dissemination of accurate information about such products. The FDA is generally prohibited from regulating active ingredients in dietary supplements as drugs unless product claims, such as claims that a product may heal, mitigate, cure or prevent an illness, disease or malady, trigger drug status.

The Company is also subject to a variety of other regulations in the United States, including those relating to taxes, labor and employment, import and export, and intellectual property.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that re not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Recent Accounting Pronouncements

Recent accounting pronouncements are disclosed in Note 2 to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on form 10-Q.

Results of Operations

You should read the following discussion of our financial condition and results of operations together with the unaudited financial statements and the notes to the unaudited financial statements included in this quarterly report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

Nutraceutical Division – TSOI has been producing high quality nutraceuticals. Its current flagship product, NanoStilbene™ PKE, is prepared by low-energy emulsification which allows for better solubility, stability, and the release performance of pterostilbene nanoparticles. The pterostilbene placed in a nanoemulsion droplet is free from air, light, and hard environment; therefore, as a delivery system, nanoemulsion’s improve the bioavailability of pterostilbene but also protect it from oxidation and hydrolysis, while it possesses an ability of sustained release at the same time.

Cellular Division – TSOI recently obtained exclusive rights to a patented adult stem cell for development of therapeutics in the area of chronic traumatic encephalopathy (CTE) and traumatic brain injury (TBI).

For the three and nine months ended September 30, 2020 and 2019

We had net loss of $499,996 for the three months ended September 30, 2020, compared to a net loss of $446,236 for the three months ended September 30, 2019, an increase of $53,760. This increase was mainly due to increases in research and development and professional fees. We had net loss of $1,356,864 for the nine months ended September 30, 2020, compared to a net loss of $1,049,402 for the nine months ended September 30, 2019, an increase of $307,462. This increase was mainly due to increases in research and development and professional fees.

Net sales increased $73, from $11,278 to $11,351, for the three months ended September 30, 2019 and September 30, 2020, respectively. Net sales increased $22,213, from $22,673 to $44,886, for the nine months ended September 30, 2019 and September 30, 2020, respectively.

Cost of goods sold increased $1,446, from $1,278 to $2,724, for the three months ended September 30, 2019 and September 30, 2020, respectively. Cost of goods sold increased $6,218, from $2,459 to $8,677, for the nine months ended September 30, 2019 and September 30, 2020, respectively. These increases were mainly a result of the increases in net sales for products in 2020 and 2019.

Operating expenses for the three-month periods ended September 30, 2020 and 2019 were $518,490 and $209,627, an increase of $308,863. Operating expenses for the nine-month periods ended September 30, 2020 and 2019 were $1,321,390 and $846,663, an increase of $474,727. This increase was mainly due to a significant increase in research and development and increases in legal and professional fees.

General and administrative expenses increased $14,525, from $18,269 to $47,450 for the three months ended September 30, 2019 and 2020, respectively. General and administrative expenses increased $10,307 from $51,890 to $62,197 for the nine months ended September 30, 2019 and 2020, respectively. This increase was mainly attributable to more expenses such as marketing and selling expenses during the three and nine months ended September 30, 2020.

Salaries, wages, and related expenses decreased $30,462, from $105,539 to $75,077 for the three months ended September 30, 2019 and 2020, respectively. Salaries, wages, and related expenses decreased $127,437, from $310,927 to $183,490 for the nine months ended September 30, 2019 and 2020, respectively. This decrease was mainly due to a decrease in wage related expenses for the three and nine months ended September 30, 2020.

Officer’s and director’s compensation increased from $0 to $140,400, for the three months ended September 30, 2019 and 2020, respectively. Officer’s and director’s compensation increased from $225,000 to $291,900, for the nine months ended September 30, 2019 and 2020, respectively. This was mainly due an issuance to Restricted Stock Awards to three officers and one director for the nine months ended September 30, 2020.

Consulting fees increased $14,116 from $34,635 to $48,751 for the three months ended September 30, 2019 and 2020, respectively, due to an increase in overall consulting services. Consulting fees increased $1,025 from $118,986 to $120,011 for the nine months ended September 30, 2019 and 2020, respectively, due to an increase in overall consulting services.

Legal and professional fees increased $91,083, from $26,372 to $72,891 for the three months ended September 30, 2019 and 2020, respectively. Legal and professional fees increased $44,565, from $108,816 to $199,899 for the nine months ended September 30, 2019 and 2020. These increases were mainly related to shares issued for legal and accounting services during period ended September 30, 2020.

Research and development increased $109,109, from $24,812 to $133,921 for the three months ended September 30, 2019 and 2020, respectively. Research and development increased $432,649, from $31,044 to $463,693 for the nine months ended September 30, 2019 and 2020. These increases were mainly related to shares issued for research and development during the three and nine months ended September 30, 2020. No such issuances occurred during the three or nine months ended September 30, 2019.

Loss on derivatives liability decreased $31,396, from $31,396 to $0, for the three months ended September 30, 2019 and 2020, respectively. This decrease was mainly due to a decrease to a reduction in the amount of new convertible notes issued during the current three-month period. Loss on derivatives liability decreased approximately $155,208, from $258,456 to $103,248, for the nine months ended September 30, 2019 and 2020, respectively This decrease was mainly due to a reduction in the amount of new convertible notes being issued during the current nine-month period.

Change in fair derivatives liabilities gains decreased $155,587 from a loss of ($117,615) to a gain of $37,972 for the three months ended September 30, 2019 and 2020, respectively. This change was mainly due to the difference in the spread between the closing stock price and respective exercise prices at each period end upon which the derivative liability values are based upon. Change in fair derivatives liabilities losses decreased $67,028 from $323,276 to $256,248 for the nine months ended September 30, 2019 and 2020, respectively. This decrease was largely due to a reduction in the balance of convertible notes outstanding upon which the derivative liability is recorded.

Net interest expense decreased $50,037 from $97,598 to $47,561 for the three months ended September 30, 2019 and 2020, respectively. Net interest expense decreased $84,090 from $287,773 to $203,683 for the nine months ended September 30, 2019 and 2020, respectively. This decrease was mainly due to decreased debt balances.

Liquidity and Capital Resources

We have experienced recurring losses over the past years which have resulted in accumulated deficits of approximately $10.2 million and a working capital deficit of approximately $1.4 million at September 30, 2020. These conditions raise significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, increase sales of its products and attain profitable operations. It is the intent of management to continue to raise additional capital. However, there can be no assurance that the Company will be able to secure such additional funds or obtain such on terms satisfactory to the Company, if at all.

There is no guarantee we will receive the required financing to complete our business strategies, and it is uncertain whether future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.

Off Balance Sheet Arrangements

We currently do not have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide this information requested by this item.

Item 4. Controls and Procedures

A. Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, or Exchange Act, our principal executive officer and principal financial officer evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of March 31, 2020. Based on this evaluation, these officers concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, these disclosure controls and procedures were not operating effectively to ensure that the information required to be disclosed by the Company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and include controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our principal executive officer, to allow timely decisions regarding required disclosure.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

B. Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended September 30, 2020 that materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

Our management, including the Chief Executive Officer assessed the effectiveness of our internal control over financial reporting as of September 30, 2020. In making our assessment, we used the framework and criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013). Based on that assessment, our management has identified certain material weaknesses in our internal control over financial reporting.

Our management concluded that as of September 30, 2020, our internal control over financial reporting was not effective, and that material weaknesses existed in the following areas as of September 30, 2020.

(1)we do not employ full time in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With respect to material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;

(2)we have inadequate segregation of duties consistent with the control objectives including but not limited to the disbursement process, transaction or account changes, and the performance of account reconciliations and approval;

(3)we have ineffective controls over the period end financial disclosure and reporting process caused by insufficient accounting staff.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods.

However, as of the date of this report, management believes the outcome of currently identified potential claims and lawsuits will not have a material adverse effect on our financial condition or results of operations.

Item 1A. Risk Factors

No material changes to risk factors have occurred as previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on May 21, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 2, 2020 we issued 8,333,333 shares of common stock for the partial conversion of $10,000 for a convertible note dated August 28, 2019.

On March 12, 2020 we issued 11,764,706 shares of common stock for the partial conversion of $10,000 for convertible note dated August 28, 2019.

On March 26, 2020 we issued 21,818,182 shares of common stock for the partial conversion of $12,000 for convertible note dated August 28, 2019.

On June 4, 2020, we issued 24,733,333 shares of common stock for the complete conversion of $29,680 for convertible note dated October 30, 2019.

On June 4, 2020, we issued 5,000,000 shares of common stock, valued at $0.0023 per share, for consulting services.

On June 4, 2020 we issued 70,000,000 shares of common stock, valued at $0.023 each to three officers and one director of the Company under a Restricted Stock Award.

On June 8, 2020, we issued 10,000,000 shares of common stock, valued at $0.0033 per share, for consulting services.

On June 9, 2020, we issued 18,292,818 shares of common stock for the complete conversion of $60,000 for convertible note dated June 9, 2020.

On June 11, 2020 we issued 40,000,000 shares of common stock, valued at $0.0046 each to three officers and one director of the Company under a Restricted Stock Award.

On June 15, 2020 we issued 3,000,000 shares of common stock, valued at $0.0017 each to one officer and one director of the Company under a Restricted Stock Award.

On June 15, 2020, we issued 10,000,000 shares of common stock, valued at $0.0023 per share, to the medical officer for consulting services.

On June 16, 2020, we issued 33,566,667 shares of common stock for the complete conversion of $40,280 for convertible note dated December 12, 2019.

On June 22, 2020, we issued 8,000,000 shares of common stock, valued at $0.0029 per share, for a donation in Triton Funds LP pursuant to the Donation Agreement (“DA”) and Registration Rights Agreement (“RRA”) dated January 24, 2020.