As filed with the Securities and Exchange Commission on December 9, 2019
 
Registration No.
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
Premier Biomedical, Inc.
(Exact name of registrant as specified in its charter)
 
Nevada
2836
27-2635666
(State or other jurisdiction of incorporation or organization
(Primary Standard Industrial Classification Code Number)
(I.R.S. Employer Identification No.)
 
 
P.O. Box 25
Jackson Center, PA 16133
 
(814) 786-8849
(Address, including zip code, of registrant’s principal executive offices)
(Telephone number, including area code)
 
William A. Hartman
Chief Executive Officer
Premier Biomedical, Inc.
P.O. Box 25
Jackson Center, PA 16133
(814) 786-8849
(Name, address, including zip code, and telephone number, including area code, of agent for service)
  
COPIES TO:
 
Brian A. Lebrecht, Esq.
Clyde Snow & Sessions, PC
201 S. Main Street, 13th Floor
Salt Lake City, UT 84111
(801) 322-2516
 
Approximate date of commencement of proposed sale to the public:
 
From time to time after this registration statement becomes effective.
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [ X ]
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
(Do not check if a smaller reporting company)
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. [ ]
 

 
 
 
CALCULATION OF REGISTRATION FEE
 
Title of Each Class of Securities to be Registered
 
  Amount to be Registered (1)
 
 
Proposed Maximum Offering Price Per Share (2)
 
 
Proposed Maximum Aggregate Offering Price
 
 
  Amount of Registration Fee (3)
 
Shares of Common Stock, par value $0.00001 per share
  1,000,000,000 
 $0.0006 
 $600,000 
 $77.88
 
(1) 
We are registering 1,000,000,000 shares of our common stock that we will sell to Green Coast Capital International SA pursuant to an Equity Purchase Agreement dated October 3, 2019, which together shall have an aggregate initial offering price not to exceed $5,000,000. In the event the maximum aggregate offering price is reached, any remaining unsold shares shall be removed from registration.  The proposed maximum offering price per share will be determined by the registrant in connection with the issuance by the registrant of the securities registered hereunder.
(2) 
Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended. Price per share is based on the average of the high and low prices per share of our common stock reported in the consolidated reporting system as reported on the Pink Sheets Current Marketplace maintained by OTC Markets, Inc. on December 3, 2019.
(3) 
Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.
 
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
 
 
 
 
The information in this Prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the SEC is effective. This Prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
 
Preliminary Prospectus
Subject to Completion
Dated [], 2019
 
PROSPECTUS
 
Up to 1,000,000,000 shares of common stock
 
We are hereby registering 1,000,000,000 shares, representing 50% of our authorized common stock1, for sale by Green Coast Capital International SA, a Panama corporation and an underwriter in this offering, pursuant to an Equity Purchase Agreement. The agreement allows us to require Green Coast to purchase up to $5,000,000 of our common stock.
 
We are not selling any shares of common stock in the resale offering.  We, therefore, will not receive any proceeds from the sale of the shares by the selling shareholder.  We will, however, receive proceeds from the sale of securities to Green Coast pursuant to Put Notice(s) under the Equity Purchase Agreement.
 
This offering will terminate on the earlier of (i) when all 1,000,000,000 shares are sold, (ii) when the maximum offering amount of $5,000,000 has been achieved, or (iii) on January [], 2022, unless we terminate it earlier.
 
Investing in the common stock involves risks. Premier Biomedical, Inc. has limited operations, limited income, and limited assets, and you should not invest unless you can afford to lose your entire investment. See “Risk Factors” beginning on page 5. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Our common stock is governed under The Securities Enforcement and Penny Stock Reform Act of 1990, and as a result you may be limited in your ability to sell our stock.
 
Our common stock is registered under Section 12(g) of the Securities Exchange Act of 1934 and is quoted on the Pink Sheets Current Marketplace maintained by OTC Markets, Inc. under the symbol “BIEI.” The closing price of our common stock as reported on the Pink Sheets Current on December 3, 2019 was $0.0006.
 
 
 
i
 
 
These shares will be sold by Green Coast from time to time whenever the person or persons who exercise voting control over Green Coast deem it appropriate and for whatever reason the person or persons who exercise voting control over Green Coast deem it appropriate in the over-the-counter market or other national securities exchange or automated interdealer quotation system on which our common stock is then listed or quoted, through negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices. We provide more information about how the Selling Shareholders may sell their shares of common stock in the section of this prospectus entitled “Plan of Distribution” beginning on page 25.
 
We will bear all costs associated with this registration statement.
 
Green Coast, and any participating broker-dealers, will be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended, or the “Securities Act,” and any commissions or discounts given to any such broker-dealer may be regarded as underwriting commissions or discounts under the Securities Act. Green Coast will purchase the shares of our common stock for ninety percent (90%) of the lowest closing trade price of the common stock during the five (5) trading days immediately following the date Green Coast receives shares of our common stock pursuant to a put notice issued under the Equity Purchase Agreement. Green Coast has informed us that they do not have any agreement or understanding, directly or indirectly, with any person to distribute their common stock.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Our common stock is governed under The Securities Enforcement and Penny Stock Reform Act of 1990, and as a result you may be limited in your ability to sell our stock.
 
The date of this Prospectus is [], 2019.
 
 
ii
 
 
Table of Contents
 
 
 
Page
Part I
Prospectus Summary
 
1
Risk Factors
 
4
Use of Proceeds
 
20
Determination of Offering Price
 
 
Dilution
 
 
Selling Security Holders
 
21
Plan of Distribution
 
22
Description of Securities to be Registered
 
24
Interests of Named Experts and Counsel
 
25
Description of Business
 
26
Description of Property
 
35
Legal Proceedings
 
35
Selected Financial Data
 
36
Management’s Discussion and Analysis
 
37
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
48
Directors, Executive Officers, Promoters, and Control Persons
 
49
Executive Compensation
 
52
Security Ownership of Certain Beneficial Owners and Management
 
55
Certain Relationships and Related Transactions
 
56
Disclosure of Commission Position on Indemnification for Securities Act Liabilities
 
58
Where You Can Find More Information
 
59
Experts
 
60
Index to Financial Statements
 
F-1
 
 
iii
 
 
ABOUT THIS PROSPECTUS
 
This prospectus is part of a registration statement that we filed on behalf of the Selling Shareholders with the Securities and Exchange Commission (the “Commission”) to permit the Selling Shareholders to sell the shares described in this prospectus in one or more transactions. The Selling Shareholders and the plan of distribution of the shares being offered by them are described in this prospectus under the headings “Selling Shareholders” and “Plan of Distribution.”
 
You should rely only on the information that is contained in this prospectus. We and the Selling Shareholders have not authorized anyone to provide you with information that is in addition to or different from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it.
 
The shares of common stock offered by this prospectus are not being offered in any jurisdiction where the offer or sale of such common stock is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date of this prospectus regardless of the date of delivery of this prospectus or any sale of the common stock offered by this prospectus. Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates. The rules of the Commission may require us to update this prospectus in the future.
  
 


 
iv
 
 
PROSPECTUS SUMMARY
 
PREMIER BIOMEDICAL, INC.
 
This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary does not contain all the information you should consider before investing in our common stock. You should read the entire prospectus, including our financial statements and related notes and the information set forth under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before investing in our common stock. In this prospectus, the “Company,” “we,” “us,” and “our” refer to Premier Biomedical, Inc.
 
We were strictly a research-based company that intended to discover cures for PTSD, cancer and various other diseases. In order to fund on-going research and development in these areas, we developed a line of topical hemp oil pain relief products. We began selling these pain relief products in January of 2017 with a single product and currently have eight topical pain relief products.
 
Through our continued development and expansion of proprietary drugs and treatments, we have reorganized the company into six technology centers: (1) extra-corporeal treatment of disease, (2) PTSD treatment, (3) anti-breast cancer drugs, (4) hemp oil/CBD pain relief products, (5) anti-aging treatments, and (6) chemical and alcohol addiction treatment.
 
Pain Management Products
 
We have developed and are now marketing all-natural, hemp-oil based products that are pesticide and solvent free. These products provide generalized, neuropathic and localized topical pain relief.
 
We offer alternatives to dangerous and addictive opioid pain killers, which are currently the principal contributors to roughly 200 drug overdose deaths per day in the United States. In the past year we have rapidly expanded our product offerings, and we now offer eight pain relief products that are leaders in the pain-relief field:
 
1.
96-hour pain relief patch with 50 mg of hemp oil extract, the highest level of pain relief ingredient available in the industry;
 
2.
120 mg/ 10 ml water-based roll-on applicator;
 
3.
150 mg/ 10 ml oil-based roll-on applicator;
 
4.
150 mg/ 30 ml oil-based pump spray applicator;
 
5.
150 mg/ 2 oz. ointment;
 
6.
200 mg/10 ml oil-based roll-on applicator;
 
7.
500 mg/ 30 ml oil-based pump spray applicator; and
 
8.
500 mg/ 1 oz. ointment.
 
 
1
 
 
We believe that this eight-product array positions us favorably in the topical pain relief marketplace. The topical pain relief market is expected to grow rapidly in the next few years, due to the focus on reduction of opioid pain medication use, and we intend to be a major player in that expanding market.
 
Now that we have completed the product design and development phase, we are aggressively embarking on the product distribution and sales phase by:
 
1.
Expanding our online sales beyond our web site at: www.painreliefmeds.com;
 
2.
Securing the services of a social media coordinator to ensure that we optimize that promotional tool;
 
3.
Recruiting a National Sales Director to coordinate our growing field of sales representatives and distributors;
 
4.
Securing the services of a sales organization with expertise in marketing to the government and senior care facilities;
 
5.
Engaging an investor relations firm to facilitate television appearances designed to gain optimum exposure for our company and its products;
 
6.
Appearing in radio and television broadcasts, and podcasts, via Uptick Newswire periodically to ensure that our story gets out to the public; and
 
7.
Retaining the services of marketing firms to promote the Company and its products through social media.
 
8.
Establishing relationships with major distributors who will blanket specialized sales outlets such as pharmacies, doctors’ offices, convenience stores, long-term care facilities, large retail facilities, etc.
 
In addition, we are in the process of seeking potential partnerships outside the United States to manufacture and market our products worldwide. We anticipate that these partnerships will make new markets available to us and allow us to rapidly increase our sales and profitability through favorable manufacturing arrangements.
 
Customers indicate that they were able to achieve pain relief from our products and stop the use of opioid painkillers. Public awareness of the harmful side effects of opioid painkillers has grown significantly, and many states have initiated litigation against drug makers claiming they misrepresented the risks of opioid painkillers.2 As patients seek to cut back their use of opioid painkillers and look for alternatives, we believe demand for our products will see a significant increase. We intend to petition national insurance agencies to urge them to consider covering the use of our all-natural pain relief products as a safe alternative to opioid painkillers.
 
Corporate Information
 
We were incorporated on May 10, 2010 in the State of Nevada. We have two wholly-owned subsidiaries, Premier Biomedical Pain Relief Meds, LLC, a Nevada limited liability company organized on September 14, 2017, and Health Stations, LLC, a Nevada limited liability company organized on August 28, 2019.
 
Our corporate headquarters are located in Jackson Center, PA. Our mailing address is P.O. Box 25, Jackson Center, PA 16133, and our telephone number is (724) 633-7033. We have offices virtually in the homes of our management team who reside in Pennsylvania, Michigan and various other states. Our websites are www.premierbiomedical.com and www.painreliefmeds.com. Information contained on our website is not incorporated into, and does not constitute any part of, this Prospectus.
 
 
2
 
 
The Offering
 
We are registering up to 1,000,000,000 shares of our common stock for resale by Green Coast Capital International SA, a Panama corporation and an underwriter in this offering, pursuant to an Equity Purchase Agreement. The agreement allows us to require Green Coast to purchase up to $5,000,000 of our common stock.
 
These shares will be sold by Green Coast from time to time whenever and for whatever reason the person or persons who exercise voting control over Green Coast deem it appropriate in the over-the-counter market or other national securities exchange or automated interdealer quotation system on which our common stock is then listed or quoted, through negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices.
 
Green Coast will purchase the shares of our common stock for ninety percent (90%) of the lowest closing bid price of the common stock during the five consecutive trading days immediately following following the Clearing Date associated with our Put Notice. Green Coast received a convertible promissory note in the principal amount of $150,000, for which they paid $25,000 cash, as a commitment for the investment. The shares of our common stock issuable upon conversion of the note are not included in this registration statement. Green Coast has informed us that they do not have any agreement or understanding, directly or indirectly, with any person to distribute our common stock.
 
We will not be permitted to submit a Put Notice to Green Coast, or draw down any funds from the financing arrangement, if the shares issued to Green Coast would cause them to beneficially own more than 4.99% of our outstanding common stock on the date of the issuance of the shares. The 1,000,000,000 shares being registered represent a good faith estimate of the number of shares of common stock that will be issuable pursuant to the agreement.
 
On any Closing Date, we shall deliver to Green Coast the number of shares of the Common Stock registered in the name of Green Coast as specified in the Put Notice. In addition, we must deliver the other required documents, instruments and writings required. Green Coast is not required to purchase the shares unless:
 
Our Registration Statement with respect to the resale of the shares of Common Stock delivered in connection with the applicable put shall have been declared effective;
We shall have obtained all material permits and qualifications required by any applicable state for the offer and sale of the Registrable Securities; and
We shall have filed with the SEC in a timely manner all reports, notices and other documents required.
 
Green Coast has agreed that neither it nor its affiliates will engage in any short selling of the common stock.
 
All of the common stock registered by this Prospectus will be sold by Green Coast at the prevailing market prices at the time they are sold. We currently have 186,961,480 shares of common stock outstanding, and if all of the shares included in the registration statement of which this Prospectus is a part are issued, and all outstanding warrants are exercised, we will have over 1.2 billion shares of common stock outstanding.
 
 
 
3
 
 
RISK FACTORS
 
Any investment in our common stock involves a high degree of risk. You should consider carefully the following information, together with the other information contained in this Annual Report, before you decide to buy our common stock. If one or more of the following events actually occurs, our business will suffer, and as a result our financial condition or results of operations will be adversely affected. In this case, the market price, if any, of our common stock could decline, and you could lose all or part of your investment in our common stock.
 
Currently, our focus is on the development and distribution of our pain products. We are also developing medical treatments for Alzheimer’s disease, multiple sclerosis, amyotrophic lateral sclerosis, fibromyalgia, traumatic brain injury, blood sepsis and viremia, and cancer. We face risks in developing our product candidates and services and eventually bringing them to market. We also face risks that our business model may become obsolete. The following risks are material risks that we face. If any of these risks occur, our business, our ability to achieve revenues, our operating results and our financial condition could be seriously harmed.
 
Risk Factors Related to the Offering
 
Existing stockholders may experience significant dilution from the sale of our common stock pursuant to the Green Coast Equity Purchase Agreement.
 
The sale of our common stock to Green Coast Capital International SA in accordance with the Equity Purchase Agreement may have a dilutive impact on our shareholders. As a result, our net income per share could decrease in future periods and the market price of our common stock could decline. In addition, the lower our stock price is at the time we exercise our put options, the more shares of our common stock we will have to issue to Green Coast in order to exercise a put under the Equity Purchase Agreement. If our stock price decreases, then our existing shareholders would experience greater dilution for any given dollar amount raised through the Offering.
 
The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our common stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors to engage in short sales of our common stock. By increasing the number of shares offered for sale, material amounts of short selling could further contribute to progressive price declines in our common stock.
 
The issuance of shares pursuant to the Green Coast Equity Purchase Agreement may have a significant dilutive effect.
 
Depending on the number of shares we issue pursuant to the Green Coast Equity Purchase Agreement, it could have a significant dilutive effect upon our existing shareholders. Although the number of shares that we may issue pursuant to the Equity Purchase Agreement will vary based on our stock price (the higher our stock price, the less shares we have to issue) the information set out below indicates the potential dilutive effect to our shareholders, based on different potential future stock prices, if the full amount of the Equity Purchase Agreement is realized.
 
Dilution based upon common stock put to Green Coast and the stock price discounted to Green Coast’s purchase price of 90% of the lowest closing bid price of the common stock during the five consecutive trading days immediately following the Clearing Date associated with our Put Notice. The example below illustrates dilution based upon a $0.0006 market price/$0.00054 purchase price and other increased/decreased prices (without regard to Green Coast’s 4.99% ownership limit):
 
 
4
 
 
$5,000,000 Put
 
Stock Price (Green Coast Purchase Price)
 
Shares Issued
 
 
Percentage of Outstanding Shares (1)
 
$0.00075 ($0.000675) +25%
  7.4 billion
 
  97%
$0.0006 ($0.00054)
  9.3 billion
 
  98%
$0.00045 ($0.000405) -25%
  12.3 billion
 
  99%
 
(1)
Based on 200,000,000 shares outstanding before the first Put, as of December 3, 2019.
 
Green Coast Capital Group, LLC will pay less than the then-prevailing market price of our common stock which could cause the price of our common stock to decline.
 
Our common stock to be issued to Green Coast under the Equity Purchase Agreement will be purchased at a ten percent (10%) discount or ninety percent (90%) of the lowest closing bid price of the common stock during the five consecutive trading days immediately following the Clearing Date associated with our Put Notice.
 
Green Coast has a financial incentive to sell our shares immediately upon receiving the shares to realize the profit between the discounted price and the market price. If Green Coast sells our shares, the price of our common stock may decrease. If our stock price decreases, Green Coast may have a further incentive to sell such shares. Accordingly, the discounted sales price in the Equity Purchase Agreements may cause the price of our common stock to decline.
 
Green Coast Capital International SA has entered into similar agreements with other public companies and may not have sufficient capital to meet our put notices.
 
Green Coast has entered into similar investment agreements with other public companies, and some of those companies have filed registration statements with the intent of registering shares to be sold to Green Coast pursuant to investment agreements. We do not know if management at any of the companies who have or will have effective registration statements intend to raise funds now or in the future, what the size or frequency of each put request would be, if floors will be used to restrict the amount of shares sold, or if the investment agreement will ultimately be cancelled or expire before the entire amount of shares are put to Green Coast. Since we do not have any control over the requests of these other companies, if Green Coast receives significant requests, it may not have the financial ability to meet our requests. If so, the amount of available funds may be significantly less than we anticipate.
 
We are registering an aggregate of 1,000,000,000 shares of common stock to be issued under the Green Coast Equity Purchase Agreement. The sale of such shares could depress the market price of our common stock.
 
We are registering an aggregate of 1,000,000,000 shares of common stock under the registration statement of which this Prospectus forms a part for issuance pursuant to the Green Coast Equity Purchase Agreement. The sale of these shares into the public market by Green Coast could depress the market price of our common stock.
 
 
5
 
 
Risk Factors Related to the Business of the Company
 
We have a limited operating history and our financial results are uncertain.
 
We have a limited history and face many of the risks inherent to a new business. As a result of our limited operating history, it is difficult to accurately forecast our potential revenue. We were incorporated in Nevada in 2010. Our revenue and income potential is unproven and our business model is still emerging. Therefore,there can be no assurance that we will provide a return on investment in the future. An investor in our common stock must consider the challenges, risks and uncertainties frequently encountered in the establishment of new technologies, products and processes in emerging markets and evolving industries. These challenges include our ability to:
 
execute our business model;
create brand recognition;
manage growth in our operations;
create a customer base in a cost-effective manner;
retain customers;
access additional capital when required; and
attract and retain key personnel.
 
There can be no assurance that our business model will be successful or that it will successfully address these and other challenges, risks and uncertainties.
 
We will need additional funding in the future, and if we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate our product candidate development programs, commercial efforts, or sales efforts.
 
Developing products and methods and procedures of treatment and marketing developed products is costly. We will need to raise substantial additional capital in the future in order to execute our business plan and help us and our collaboration partners fund the development and commercialization of our product candidates.
 
In 2014 and through 2019, we raised funds through public and private equity offerings. We may need to finance future cash needs through public or private equity offerings, debt financings or strategic collaboration and licensing arrangements. To the extent that we raise additional funds by issuing equity securities, our shareholders may experience additional dilution, and debt financing, if available, may involve restrictive covenants and may result in high interest expense. If we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our product candidates, processes and technologies or our development projects or to grant licenses on terms that are not favorable to us. We cannot be certain that additional funding will be available on acceptable terms, or at all. If adequate funds are not available from the foregoing sources, we may consider additional strategic financing options, including sales of assets, or we may be requiredto delay, reduce the scope of, or eliminate one or more of our research or development programs or curtail some of our commercialization efforts of our operations. We may seek to access the public or private equity markets whenever conditions are favorable, even if we do not have an immediate need for additional capital.
 
 
6
 
 
Negative public perception of hemp and cannabis-related businesses, misconceptions about the nature of our business and regulatory uncertainties could have a material adverse effect on our business, financial condition, and results of operations.
 
The hemp plant and the cannabis/marijuana plant are both part of the same cannabis sativa genus species of plant, except that hemp, by definition, has less than 0.3% tetrahydrocannabinol (“THC”) content and is legal under federal and state laws, but the same plant with a higher THC content is cannabis/marijuana, which is legal under certain state laws, but which is not legal under federal law. The similarities between these plants can cause confusion, and our activities with legal hemp may be incorrectly perceived as us being involved in federally illegal cannabis/marijuana. Also, despite growing support for the cannabis/marijuana industry and legalization of cannabis/marijuana in certain U.S. states, many individuals and businesses remain opposed to the cannabis/marijuana industry. Any negative press resulting from any incorrect perception that we have entered into the cannabis/marijuana space could result in a loss of current or future business. It could also adversely affect the public’s perception of us and lead to reluctance by new parties to do business with us or to own our common stock.
 
Certain retailers, like Amazon, do not allow the sale of products containing CBD. Other platforms such as Facebook and Google have policies that restrict advertising of CBD products. Until regulators provide more definitive and consistent rules for CBD products, many retailers, distributors and business partners tend to avoid getting involved in CBD businesses because of the uncertainty of what regulators may do. Misunderstandings about the legal nature of our business and the difference between CBD and marijuana may also discourage some business partners and customers from working with us or purchasing our products.
 
We cannot assure you that additional business partners, including but not limited to online retailers, distributors, financial institutions and customers, will not attempt to end or curtail their relationships with us. Any such negative press or cessation of business could have a material adverse effect on our business, financial condition, and results of operations.
 
U.S. federal, state and foreign regulation and enforcement of laws relating to cannabis and its derivatives may adversely affect our ability to sell our products and our revenue.
 
There are (i) thirty-three (33) states in the United States, the District of Columbia, Guam and Puerto Rico have approved comprehensive public medical marijuana/cannabis programs. Approved Efforts in another thirteen (13) states allow use of low THC, high CBD products for medical reasons in limited situations or as a legal defense. Ten (10) of these states and the District of Columbia have legalized cannabis/marijuana for adult recreational use. This leaves only four states (Idaho, Kansas, Conversely, under the federal Controlled Substances Act (the “CSA”), the policies and regulations of the federal government and its agencies are that cannabis/marijuana has no medical benefit and a range of activities are prohibited, including cultivation, possession, personal use, and interstate distribution of cannabis/marijuana. In the event the U.S. Department of Justice (the “DOJ”) begins strict enforcement of the CSA in states that have laws legalizing medical and/or adult recreational cannabis/marijuana, there may be a direct and adverse impact to any future business or prospects that we may have in the cannabis/marijuana business. Even in those jurisdictions in which the manufacture and useof medical cannabis/marijuana has been legalized at the state level, the possession, use, and cultivation of cannabis/marijuana all remain violations of federal law that are punishable by imprisonment and substantial fines. Moreover, individuals and entities may violate federal law if they intentionally aid and abet another in violating these federal controlled substance laws, or conspire with another to violate them.
 
 
7
 
 
For example, the California Bureau of Cannabis Control sent nine hundred (900) warning letters to marijuana shops suspected of operating without a state license. The Bureau also issued a cease-and-desist letter to the operator of an online directory of marijuana dispensaries, products, and delivery services. The letter threatened fines and criminal penalties if the company did not remove the listings for unlicensed marijuana businesses. Likewise, if we unknowingly do business with unlicensed entities or list them on our website, we may be subject to similar regulatory action that would halt our operations and affect our financial performance.
 
Local, state, federal, and international hemp and cannabis/marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance requirements. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our operations. In addition, it is possible that cannabinoid-related regulations may be enacted in the future that will be directly applicable to our business. It is also possible that the federal government will begin strictly enforcing existing laws, which may limit the legal uses of the hemp plant and its derivatives and extracts, such as cannabinoids. However, our work in hemp would continue since hemp research, development, and commercialization activities are permitted under applicable federal and state laws, rules, and regulations. Until Congress amends the CSA or the executive branch deschedules or reschedules cannabis under it, there is a risk that federal authorities may enforce current federal law. Enforcement of the CSA by federal authorities could impair the Company’s revenue and profit, and it could even force the Company to cease manufacturing its products. The risk of strict federal enforcement of the CSA in light of congressional activity, judicial holdings, and stated federal policy, including enforcement priorities, remains uncertain.
 
Until such time as the federal government reclassifies marijuana from a Schedule 1 narcotic, we do not intend to pursue any involvement in the marijuana business. At this time, we intend to continue only in the federally legal hemp product business. When Congress approved the 2018 Farm Bill, it defined hemp as an agricultural product and differentiated it from marijuana. This means hemp is not a controlled substance, and may be more broadly cultivated. Hemp-derived products may now be transferred across state lines for commercial purposes. The new law also allows for the sale, transport, or possession of hemp-derived products, so long as those items are produced in a manner consistent with the law. There are several restrictions that apply to those who cultivate hemp and produce hemp-derived products. Key among these restrictions is that hemp cannot contain more than 0.3 percent THC.
 
While the 2018 Farm Bill legalized the cultivation of hemp and removed hemp-derived substances from Schedule 1 of the CSA, it does not legalize CBD generally. The FDA and DOJ continue to exercise control over CBD and there is still some lack of clarity as to exactly how CBD will be regulated going forward.
 
CBD has been deemed relatively safe and, from now on, should not be subject to international illicit drug scheduling according to a World Health Organization (“WHO”) comprehensive review published in July 2018. The WHO has formally submitted its conclusion to United Nations Secretary-General António Guterres, a prelude to this officially becoming the case.
 
On June 25, 2018, the U.S. Food and Drug Administration (“FDA”) approved CBD-based Epidiolex to treat severe forms of epilepsy. This marked the groundbreaking admission by the FDA that cannabis has medical value. On October 1, 2018, the DOJ placed “FDA-approved drugs that contain CBD derived from cannabis and no more than 0.1 percent THC” to Schedule 5 of the CSA. This action is narrowly tailored to reschedule Epidiolex off of Schedule 1 because the DOJ’s ability to remove all restrictions from cannabis extracts, including CDB, is restricted by the Single Convention on Narcotic Drugs, 1961.
 
 
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Our product candidates are not approved by the FDA or other regulatory authority, and we face risks of unforeseen medical problems, and up to a complete ban on the sale of our product candidates.
 
The efficacy and safety of pharmaceutical products is established through a process of clinical testing under FDA oversight. Our products have not gone through this process because we believe that the topical products we sell are not subject to this process. However, if an individual were to use one of our products in an improper manner, we cannot predict the potential medical harm to that individual. If such an event were to occur, the FDA or similar regulatory agency might impose a complete ban on the sale or use of our products.
 
The FDA might not approve our product candidates for marketing and sale.
 
We intend to enter into agreements with larger pharmaceutical companies as collaboration partners, in part to help cover the cost of seeking regulatory approvals for our pharmaceutical and medical product candidates. We believe that FDA approval of some of our product candidates will need to undergo a full investigational new drug (IND) application with the FDA, including clinical trials. There can be no assurance that the FDA will approve our IND application or any other applications. Failure to obtain the necessary FDA approval will have a material negative affect on our operations. While we intend to license our Feldetrex® product to a larger pharmaceutical company, they in turn, may not be able to obtain the necessary approval to market and sale the product.
 
New regulations governing the introduction, marketing and sale of our products to consumers could harm our business.
 
Our pain management products have not been approved by the FDA or any other regulatory agency, and the FDA does not have a pre-market approval system for our pain management products. However, our operations could be harmed if new laws or regulations are enacted that restrict our ability to market or distribute our products or impose additional burdens or requirements on us in order to continue selling our products. In addition, the adoption of new regulations or changes in the interpretations of existing regulations may result in significant compliance costs or discontinuation of product sales and may impair the marketability of our products, resulting in significant loss of net sales.
 
We have observed a general increase in regulatory activity and activism in the United States and the regulatory landscape is becoming more complex with increasingly strict requirements. If this trend continues, we may find it necessary to alter some of the ways we have traditionally marketed our products in order to stay in compliance with a changing regulatory landscape and this could add to the costs of our operations and/or have an adverse impact on our business.
 
We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business. Future changes could include requirements to make certain changes to our products to meet new standards, the recall or discontinuation of certain products that cannot be changed, additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, and additional scientific substantiation. Any or all of these requirements could have a material adverse effect on our business, financial condition, and operating results.
 
 
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We may fail to deliver commercially successful new product candidates, methods and procedures of treatment, and treatments.
 
Our technology is at an early stage of research and development. We are also actively engaged in research and development of new products.
 
The development of commercially viable new products and methods and procedures of treatment, as well as the development of additional uses for existing products and methods and procedures of treatment, is critical to our ability to generate sales and/or sell the rights to manufacture and distribute our product and process candidates to another firm. Developing new products and methods and procedures of treatment is a costly, lengthy and uncertain process. A new product or process candidate can fail at any stage of the development or commercialization, and one or more late-stage product or process candidates could fail to receive regulatory approval.
 
New product and process candidates may appear promising in development, but after significant investment, fail to reach the market or have only limited commercial success. This, for example, could be as a result of efficacy or safety concerns, inability to obtain necessary regulatory approvals, difficulty or excessive costs to manufacture, erosion of patent term as a result of a lengthy development period, infringement of third-party patents or other intellectual property rights of others or inability to differentiate the product or process adequately from those with which it competes.
 
The commercialization of product and process candidates under development may not be profitable.
 
In order for the commercialization of our product candidates to be profitable, our product and process candidates must be cost-effective and economical to manufacture on a commercial scale. Furthermore, if our product candidates and methods and procedures of treatment do not achieve market acceptance, we may not be profitable. Subject to regulatory approval, we expect to incur significant development, sales and marketing expenses in connection with the commercialization of our new product and process candidates. Even if we receive additional financing, we may not be able to complete planned development and marketing of any or all of our product or process candidates. Our future profitability may depend on many factors, including, but not limited to:
 
the terms and timing of any collaborative, licensing and other arrangements that we may establish;
the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;
the costs of establishing manufacturing and production, sales, marketing and distribution capabilities; and
the effect of competing technological and market developments.
 
Even if our collaboration partners receive regulatory approval for our product and process candidates, we may not earn significant revenues from such product or process candidates. With respect to the product and methods and procedures of treatment candidates in our development pipeline that are being developed by or in close conjunction with third parties, our ability to generate revenues from such product and process candidates will depend in large part on the efforts of such third parties. To the extent that our collaboration partners are not successful in commercializing our product or process candidates, our revenues will suffer, we will incur significant additional losses and the price of our common stock will be negatively affected.
 
 
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We may engage in strategic transactions that fail to enhance shareholder value.
 
From time to time, we may consider possible strategic transactions, including the potential acquisitions or licensing of products or technologies or acquisition of companies, and other alternatives with the goal of maximizing shareholder value. We may never complete a strategic transaction, and in the event that we do complete a strategic transaction, implementation of such transactions may impair shareholder value or otherwise adversely affect our business. Any such transaction may require us to incur non-recurring or other charges and may pose significant integration challenges and/or management and business disruptions, any of which could harm our results of operation and business prospects.
 
Our business is heavily regulated by governmental authorities, and failure to comply with such regulation or changes in such regulations could negatively impact our financial results.
 
We must comply with a broad range of regulatory controls on the testing, approval, manufacturing and marketing of our product candidates, procedures and other treatments, particularly in the United States and countries of the European Union, that affect not only the cost of product development but also the time required to reach the market and the uncertainty of successfully doing so. Health authorities have increased their focus on safety when assessing the benefit risk/balance of drugs in the context of not only initial product approval but also in the context of approval of additional indications and review of information regarding marketed products. Stricter regulatory controls also heighten the risk of changes in product profile or withdrawal by regulators on the basis of post-approval concerns over product safety, which could reduce revenues and can result in product recalls and product liability lawsuits. There is also greater regulatory scrutiny, especially in the United States, on advertising and promotion and in particular on direct-to-consumer advertising.
 
The regulatory process is uncertain, can take many years, and requires the expenditure of substantial resources. In particular, proposed human pharmaceutical therapeutic product requirements set by the FDA in the United States, and similar health authorities in other countries, require substantial time and resources to satisfy. We may never obtain regulatory approval for our product and process candidates.
 
We may not be able to gain or sustain market acceptance for our services and product candidates.
 
Failure to establish a brand and presence in the marketplace on a timely basis could adversely affect our financial condition and results of operations. Moreover, there can be no assurance that we will successfully complete our development and introduction of new products or product enhancements, or methods and procedures of treatment or that any such product candidates or methods and procedures of treatment will achieve acceptance in the marketplace. We may also fail to develop and deploy new products and product enhancements on a timely basis.
 
The market for pain management products is highly competitive, and we may not be able to compete successfully.
 
We intend to operate in highly competitive markets. We will likely face competition both from proprietary products of large international manufacturers and producers of generic pain management products. Most of the competitors in the industry have longer operating histories and significantly greater financial, technical, marketing and other resources than us, and may be able to respond more quickly than we can to new or changing opportunities and customer requirements. Also, many competitors have greater name recognition and more extensive customer bases that they can leverage to gain market share. Such competitors are able to undertake more extensive promotional activities, adopt more aggressive pricing policies and offer more attractive terms to purchasers than we can.
 
 
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Significant product innovations, technical advances or the intensification of price competition by competitors could adversely affect our operating results. We cannot predict the timing or impact of competitive products or their potential impact on sales of our products under development.
 
If any of our major pain management products were to become subject to a problem such as unplanned loss of patent protection, unexpected side effects, regulatory proceedings, publicity affecting doctor or consumer confidence or pressure from competitive products, or if a new, more effective alternative should be introduced, the adverse impact on our revenues and operating results could be significant.
 
The market for products, methods and procedures of treatment and services in the pharmaceuticals industry is highly competitive, and we may not be able to compete successfully.
 
We intend to operate in highly competitive markets. We will likely face competition both from proprietary products of large international manufacturers and producers of generic pharmaceuticals. Most of the competitors in the industry have longer operating histories and significantly greater financial, technical, marketing and other resources than us, and may be able to respond more quickly than we can to new or changingopportunities and customer requirements. Also, many competitors have greater name recognition and more extensive customer bases that they can leverage to gain market share. Such competitors are able to undertake more extensive promotional activities, adopt more aggressive pricing policies and offer more attractive terms to purchasers than we can.
 
Significant product innovations, technical advances or the intensification of price competition by competitors could adversely affect our operating results. We cannot predict the timing or impact of competitive products or their potential impact on sales of our product candidates.
 
If any of our major product candidates or methods and procedures of treatment were to become subject to a problem such as unplanned loss of patent protection, unexpected side effects, regulatory proceedings, publicity affecting doctor or patient confidence or pressure from competitive products and methods and procedures of treatment, or if a new, more effective treatment should be introduced, the adverse impact on our revenues and operating results could be significant.
 
We are dependent on the services of key personnel and failure to attract qualified management could limit our growth and negatively impact our results of operations.
 
We are highly dependent on the principal members of our management and scientific staff and certain key consultants, including our Chief Executive Officer and the Chairman of our Board of Directors. We will continue to depend on operations management personnel with pharmaceutical and scientific industry experience. At this time, we do not know of the availability of such experienced management personnel or how much it may cost to attract and retain such personnel. The loss of the services of any member of senior management or the inability to hire experienced operations management personnel could have a material adverse effect on our financial condition and results of operations.
 
 
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If physicians and patients do not accept our current or future product candidates or methods and procedures of treatment, we may be unable to generate significant additional revenue, if any.
 
The products and methods and procedures of treatment that we may develop or acquire in the future may fail to gain market acceptance among physicians, health care payors, patients and the medical community. Physicians may elect not to recommend these treatments for a variety of reasons, including:
 
timing of market introduction of competitive drugs;
lower demonstrated clinical safety and efficacy compared to other drugs or treatments;
lack of cost-effectiveness;
lack of availability of reimbursement from managed care plans and other third-party payors;
lack of convenience or ease of administration;
prevalence and severity of adverse side effects;
other potential advantages of alternative treatment methods; and
ineffective marketing and distribution support.
 
If our product candidates and processes fail to achieve market acceptance, we would not be able to generate significant revenue.
 
We are exposed to the risk of liability claims, for which we may not have adequate insurance.
 
Since we participate in the CBD, pain management and pharmaceutical industries, we may be subject to liability claims by employees, customers, end users and third parties. We do not currently have product liability insurance. We intend to have proper insurance in place; however, there can be no assurance that any liability insurance we purchase will be adequate to cover claims asserted against us or that we will be able to maintain such insurance in the future. We intend to adopt prudent risk management programs to reduce these risks and potential liabilities; however, we have not taken any steps to create these programs and have no estimate as to the cost or time required to do so and there can be no assurance that such programs, if and when adopted, will fully protect us. We may not be able to put risk management programs in place, or obtain insurance, if we are unable to retain the necessary expertise and/or are unsuccessful in raising necessary capital in the future. Adverse rulings in any legal matters, proceedings and other matters could have a material adverse effect on our business.
 
Pre-clinical and clinical trials are conducted during the development of potential products and other treatments to determine their safety and efficacy for use by humans. Notwithstanding these efforts, when our treatments are introduced into the marketplace, unanticipated side effects may become evident. Manufacturing, marketing, selling and testing our product candidates under development or to be acquired or licensed, entails a risk of product liability claims. We could be subject to product liability claims in the event that our product candidates, processes, or products under development fail to perform as intended. Even unsuccessful claims could result in the expenditure of funds in litigation and the diversion of management time and resources, and could damage our reputation and impair the marketability of our product candidates and processes. While we plan to maintain liability insurance for product liability claims, we may not be able to obtain or maintain such insurance at a commercially reasonable cost. If a successful claim were made against us, and we don’t have insurance or the amount of insurance was inadequate to cover the costs of defending against or paying such a claim or the damages payable by us, we would experience a material adverse effect on our business, financial condition and results of operations.
 
 
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Other companies may claim that we have infringed upon their intellectual property or proprietary rights.
 
We do not believe that our product candidates and methods and procedures violate third-party intellectual property rights; however, we have not had an independent party conduct a study of possible patent infringements. Nevertheless, we cannot guarantee that claims relating to violation of such rights will not be asserted by third parties. If any of our product candidates or methods and procedures of treatment are found to violate third-party intellectual property rights, we may be required to expend significant funds to re-engineer or cause to be re-engineered one or more of those product candidates or methods and procedures of treatment to avoid infringement, or seek to obtain licenses from third parties to continue offering our product candidates or methods and procedures of treatment without substantial re-engineering, and such efforts may not be successful.
 
In addition, future patents may be issued to third parties upon which our product candidates and methods and procedures of treatment may infringe. We may incur substantial costs in defending against claims under any such patents. Furthermore, parties making such claims may be able to obtain injunctive or other equitable relief, which effectively could block our ability to further develop or commercialize some or all of our products or methods and procedures of treatment in the United States or abroad, and could result in the award of substantial damages against us. In the event of a claim of infringement, we may be required to obtain one or more licenses from third parties. There can be no assurance that we will be able to obtain such licenses at a reasonable cost, if at all. Defense of any lawsuit or failure to obtain any such license could be costly and have a material adverse effect on our business.
 
Our success depends on our ability to protect our proprietary technology.
 
Our success depends, to a significant degree, upon the protection of our proprietary technology, and that of any licensors. Legal fees and other expenses necessary to obtain and maintain appropriate patent protection could be material. Insufficient funding may inhibit our ability to obtain and maintain such protection. Additionally, if we must resort to legal proceedings to enforce our intellectual property rights, the proceedings could be burdensome and expensive, and could involve a high degree of risk to our proprietary rights if we are unsuccessful in, or cannot afford to pursue, such proceedings.
 
Our licensors have been granted three U.S. patents: Sequential Extracorporeal Treatment of Bodily Fluids, U.S. Patent No. 9,216,386; Utilization of Stents for the Treatment of Blood Borne Carcinomas, U.S. Patent No. 8,758,287; and Medication and Treatmentfor Disease, U.S. Patent No. 8,865,733, in the areas of cancer, sepsis, and multiple sclerosis. We expect these patents to cover the medical treatments for multiple sclerosis, blood sepsis, and cancer and be effective until 2029. Our licensors have licensed these technologies to us pursuant to the terms of the license agreements. We anticipate that other technologies that derive from these patents will also belong to us and are covered by the license agreements. However, we have not conducted thorough prior art or novelty studies, but we are not aware of existing prior art that would prevent us from obtaining patents on our product candidates or methods and procedures of treatment. Prior art preventing us from obtaining broad patent protection is a possibility. Inability to obtain valid and enforceable patent protection would have a material negative impact on our business opportunities and success. Because the patent positions of pharmaceutical and biotechnology companies are highly uncertain and involve complex legal and factual questions, the patents may not be granted on our applications, and any future patents owned and licensed by us may not prevent other companies from developing competing products or ensure that others will not be issued patents that may prevent the sale of our products or require licensing and the payment of significant fees or royalties. Furthermore, to the extent that: (i) any of our future products or methods are not patentable; (ii) such products or methods infringe upon the patents of third parties; or (iii) our patents or future patents fail to give us an exclusive position in the subject matter to which such patents relate, our business will be adversely affected. We may be unable to avoid infringement of third-party patents and may have to obtain a license, or defend an infringement action and challenge the validity of such patents in court. A license may be unavailable on terms and conditions acceptable to us, if at all. Patent litigation is costly and time consuming, and we may be unable to prevail in any such patent litigation or devote sufficient resources to even pursue such litigation. If we do not obtain a license under such patents, are found liable for infringement and are not able to have such patents declared invalid, we may be liable for significant monetary damages, encounter significant delays in bringing products to market or may be precluded from participating in the manufacture, use or sale of products or methods of treatment requiring such licenses.
 
 
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We may also rely on trademarks, trade secrets and contract law to protect certain of our proprietary technology. There can be no assurance that any trademarks will be approved, that such contract will not be breached, or that if breached, we will have adequate remedies. Furthermore, there can be no assurance that any of our trade secrets will not become known or independently discovered by third parties.
 
Additionally, we may, from time to time, support and collaborate in research conducted by universities and governmental research organizations. There can be no assurance that we will have or be able to acquire title or exclusive rights to the inventions or technical information derived from such collaborations, or that disputes will not arise with respect to rights in derivative or related research programs conducted by us or such collaborators.
 
Our future growth may be inhibited by the failure to implement new technologies.
 
Our future growth is partially tied to our ability to improve our knowledge and implementation of medical and pharmaceutical technologies. The inability to successfully implement commercially viable medical and pharmaceutical technologies in response to market conditions in a manner that is responsive to our customers’ requirements could have a material adverse effect on our business.
 
We do not own certain of our technologies, they are owned by, and licensed from, entities that are under the control of the Chairman of our Board of Directors.
 
We do not currently own the certain technologies necessary to conduct our operations. The patents necessary to pursue our intended business plan are under the control of our Chairman of the Board of Directors. As consideration for the two licenses, we agreed to (i) pay a royalty of five percent (5%) of any sales of products using the technology, with no minimum royalty and (ii) reimburse the licensor for any costs incurred in pursuing its proprietary rights in the licensed technology and pay any costs incurred for maintaining or obtaining the licensors’ proprietary rights in the licensed technology in the U.S. and in extending the intellectual property to other countries around the world. The licensor has the sole discretion to select other countries into which exclusive rights in the licensed technology may be pursued, and if we decline to pay those expenses, then the licensor may pay said expenses and our licensed rights in those countries will revert to the licensor. The license agreements contain provisions that require us to indemnify thelicensor for any claims, including costs of litigation, brought against them related to the licenses, and require us to maintain insurance that may be burdensome. In the event of a breach of our obligations under the license agreements, the licensors are entitled to various damages and remedies, up to and including termination of said license agreements. The licensors are entities under the control of Dr. Mitchell S. Felder, the Chairman of our Board of Directors. While Dr. Felder is one of our Company’s founders and the Chairman of our Board of Directors, there can be no assurance that he will extend the offer to license these technologies to us in the future as currently contemplated.
 
We do not intend to take our Feldetrex® product candidate past the development stage, but instead intend to enter into collaboration agreements with collaboration partners. If we are unable to enter into an agreement with collaboration partners, our Feldetrex® product candidate cannot be marketed, and it will not generate revenue for us.
 
We do not intend to conduct clinical trials on our Feldetrex® product candidate. We instead intend to enter into one or more collaboration agreements with third parties to do so. However, we have not entered into any such agreements, or discussions for any such agreements, and we cannot guarantee that we will be successful in doing so. If we do not find a collaboration partner, the Feldetrex® product candidate cannot be marketed, and it will not generate any revenue for us.
 
 
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The failure to generate revenue from our Feldetrex® product candidate will have a materially adverse effect on our overall revenues, profitability.
 
Risks Related To Our Common stock
 
The market price of our common stock may be volatile and may be affected by market conditions beyond our control.
 
The market price of our common stock is subject to significant fluctuations in response to, among other factors:
 
variations in our operating results and market conditions specific to Biomedical Industry companies;
changes in financial estimates or recommendations by securities analysts;
announcements of innovations or new products or services by us or our competitors;
the emergence of new competitors;
operating and market price performance of other companies that investors deem comparable;
changes in our board or management;
sales or purchases of our common stock by insiders;
commencement of, or involvement in, litigation;
changes in governmental regulations; and
general economic conditions and slow or negative growth of related markets.
 
In addition, if the market for stocks in our industry or the stock market in general, experiences a loss of investor confidence, the market price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause the price of our common stock to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to the board of directors and management.
 
If we default on our convertible notes and are unable to repay the notes, we will not have the funds we need to operate our business and may lose access to additional financing.
 
We are currently in default on the Note issued on August 8, 2017 because the Maturity Date has passed. Per the terms of the Notes, the Selling Shareholders have the option to demand payment of 130% of the outstanding principal amount of a Note and any accrued and unpaid interest thereon. We are currently unable to pay these amounts in full. If the Selling Shareholders elect to exercise this right rather than convert the Notes, we could possibly face litigation. If we repay the Notes or any part thereof, we may not be able to satisfy the obligations we have to other business partners and may be forced to cease our business operations. Any action by the Selling Shareholders would adversely affect our financial position and ability to operate.
 
If we are unable to pay the costs associated with being a public, reporting company, we may be forced to discontinue operations.
 
We expect to have significant costs associated with being a public, reporting company, which may raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern will depend on positive cash flow, if any, from future operations and on our ability to raise additional funds through equity or debt financing. If we are unable to achieve the necessary product sales or raise or obtain needed funding to cover the costs of operating as a public, reporting company, we may be forced to discontinue operations.
 
 
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If we do not continue to meet the eligibility requirements of the Pink Sheets Current tier, our common stock may be removed from Pink Sheets Current and moved for quotation on a lower tier of the marketplace maintained by OTC Markets Group, Inc., which may make it more difficult for investors to resell their shares due to suitability requirements.
 
Our common stock is currently quoted on the Pink Sheets Current tier of the marketplace maintained by OTC Markets Group, Inc. The Pink Sheets Current tier does not require a minimum bid price. If we are removed from the Pink Sheets Current tier, our stock will be quoted on a lower tier. Broker-dealers often decline to trade in over-the-counter stocks that are quoted on the OTC Pink tier, or a lower tier, given the market for such securities are often limited, the stocks are more volatile, and the risk to investors is greater. These factors may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of their shares. This could cause our stock price to decline.
 
If we move down from the OTC Pink Current tier, we may be unable to restore eligibility for quotation of our common stock on the Pink Sheets Current tier or the OTCQB tier, and this will have a negative impact on our market price. The lower tiers maintained by OTC Markets, Inc. does not provide as much liquidity as the Pink Sheets Current tier or the OTCQB tier. Many broker-dealers will not trade or recommend OTC Pink stocks for their clients. 
 
Our principal shareholders have the ability to exert significant control in matters requiring shareholder approval and could delay, deter, or prevent a change in control of our company.
 
William A. Hartman and Dr. Mitchell S. Felder collectively own 157,031 shares of our outstanding common stock, 2,000,000 shares of our Series A Convertible Preferred Stock (which is convertible into an aggregate of 2,000,000 shares of our common stock), and through the exercise of warrants could acquire another 1,782,040 shares of our common stock. The shares of our preferred stock have 100 votes per share, giving these two shareholders approximately 51% of our current voting securities. As a result, they have the ability to influence matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because they control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. Because the influence by these shareholders could result in management making decisions that are in the best interest of those shareholders and not in the best interest of the investors, you may lose some or all of the value of your investment in our common stock. Investors who purchase our common stock should be willing to entrust all aspects of operational control to our current management team.
 
We do not intend to pay dividends in the foreseeable future.
 
We do not intend to pay any dividends in the foreseeable future. We do not plan on making any cash distributions in the manner of a dividend or otherwise. Our Board presently intends to follow a policy of retaining earnings, if any.
 
 
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We have the right to issue additional common stock and preferred stock without consent of shareholders. This would have the effect of diluting investors’ ownership and could decrease the value of their investment.
 
Following an amendment to our articles of incorporation, which has already been approved by our shareholders and is anticipated to take effect on or about December 19, 2019, we will be authorized to issue up to 2,000,000,000 shares of common stock, of which there were 186,961,480 shares issued and outstanding as of November 12, 2019. An additional 3,570,600 shares may be issued and outstanding if all of our currently outstanding preferred stock and warrants were exercised and converted into common stock. Our outstanding convertible notes require a reserve of approximately 220 million shares.
 
In addition, our certificate of incorporation authorizes the issuance of shares of preferred stock, the rights, preferences, designations and limitations of which may be set by the Board of Directors. Our certificate of incorporation has authorized the issuance of up to 10,000,000 shares of preferred stock in the discretion of our Board. The shares of authorized but undesignated preferred stock may be issued upon filing of an amended certificate of incorporation and the payment of required fees; no further shareholder action is required. If issued, therights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation. We have designated a series of convertible preferred stock, the Series A Convertible Preferred Stock. Each share of Series A Preferred Stock is convertible, at the option of the holder thereof, at any time after the issuance of such shareinto one (1) fully paid and non-assessable share of Common Stock. Each outstanding share of Series A Preferred Stock is entitled to one hundred (100) votes per share on all matters to which the shareholders of the Corporation are entitled or required to vote. As of the date hereof, there were 2,000,000 shares of Series A Convertible Preferred Stock issued and outstanding.
 
Our officers and directors can sell some of their stock, which may have a negative effect on our stock price and ability to raise additional capital, and may make it difficult for investors to sell their stock at any price.
 
Our officers and directors, as a group, are the owners of 169,845 shares of our common stock, and with convertible preferred stock, options and warrants to acquire another 3,570,600 shares of our common stock, representing approximately 2% of our total issued and outstanding shares of common stock. Each individual officer and director may be able to sell up to 1% of our outstanding common stock (currently approximately 1.8 million shares) every ninety (90) days in the open market pursuant to Rule 144, which may have a negative effect on our stock price and may prevent us from obtaining additional capital. In addition, if our officers and directors are selling their stock into the open market, it may make it difficult or impossible for investors to sell their stock at any price.
 
Our common stock is governed under The Securities Enforcement and Penny Stock Reform Act of 1990.
 
The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Such exceptions include any equity security listed on NASDAQ and any equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operation for three years; (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years; or (iii) average annual revenue of at least $6,000,000, if such issuer has been in continuous operation for less than three years. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith.
 
 
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SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
 
We have made forward-looking statements in this Annual Report, including the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation, and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are only predictions and involve known and unknown risks and uncertainties, including the risks outlined under “Risk Factors” and elsewhere in this Annual Report.
 
Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, events, levels of activity, performance or achievement. We are not under any duty to update any of the forward-looking statements after the date of this annual report to conform these statements to actual results, unless required by law.
 
 
 
 
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USE OF PROCEEDS
 
This Prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will not receive any proceeds from the sale of shares of common stock by the selling stockholders in this offering. We will pay for expenses of this offering, except that the selling stockholders will pay any broker discounts or commissions or equivalent expenses applicable to the sale of their shares.
 
However, we will receive up to $5,000,000 from the sale of common stock to Green Coast Capital International SA under the Equity Purchase Agreement. These proceeds would be received from time-to-time as Put Notices are delivered to Green Coast, and we will use these proceeds for working capital needs.
 
Our allocation of proceeds represents our best estimate based upon the expected requirements of our proposed business and marketing plan. If any of these factors change, we may reallocate some of the net proceeds. The portion of any net proceeds not immediately required will be invested in certificates of deposit or similar short-term interest bearing instruments.
 
INVESTMENT AGREEMENT
 
On October 4, 2019, we entered into the Equity Purchase Agreement and a Registration Rights Agreement with Green Coast Capital International SA in order to establish a possible source of funding for us.
 
Under the Equity Purchase Agreement, Green Coast has agreed to provide us with up to $5,000,000 of funding upon effectiveness of this prospectus; for which 1,000,000,000 shares of our common stock are being registered pursuant to this prospectus. During this period, we can deliver a put under the Equity Purchase Agreement by selling shares of our common stock to Green Coast and Green Coast will be obligated to purchase the shares. A put transaction must close before we can deliver another put notice to Green Coast.
 
We may request a put by sending a put notice to Green Coast, stating the amount of the put. During the five trading days following a notice, we will calculate the amount of shares we will sell to Green Coast and the purchase price per share. The number of shares of Common Stock that Green Coast shall purchase pursuant to each put notice shall be determined by dividing the amount of the put by the purchase price.
 
The purchase price per share of common stock will be set at ninety percent (90%) of the lowest closing bid price of the common stock during the five consecutive trading days immediately following the Clearing Date associated with our Put Notice.
 
There is no minimum amount we can put to Green Coast at any one time. Upon effectiveness of the Registration Statement, the Company shall deliver instructions to its transfer agent to issue shares of Common Stock to Green Coast free of restrictive legends on or before each closing date.
 
Pursuant to the Equity Purchase Agreement, Green Coast and its affiliates shall not be issued shares of our common stock that would result in its beneficial ownership equaling more than 4.99% of our outstanding common stock.
 
 
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Green Coast will not enter into any short selling or any other hedging activities during the pricing period. On October 4, 2019, we entered into a Registration Rights Agreement with Green Coast requiring, among other things, that we prepare and file with the SEC a Registration Statement on Form S-1 covering the shares issuable to Green Coast under the Equity Purchase Agreement. As per the Equity Purchase Agreement, none of Green Coast’s obligations thereunder are transferrable and may not be assigned to a third party.
 
SELLING SECURITY HOLDERS
 
The Selling Shareholder is Green Coast Capital International SA, a Panama corporation and an underwriter in this offering. Kevin Bobryk, President, has the sole voting and dispositive power with respect to shares of stock beneficially owned by Green Coast. Pursuant to the terms of an Equity Purchase Agreement, at our election we may sell to Green Coast up to $5,000,000 worth of our common stock at a price equal to ninety percent (90%) of the lowest closing bid price of the common stock during the five consecutive trading days immediately following the date of our notice to Green Coast of our election to put shares pursuant to the Equity Purchase Agreement.
 
In connection with the Equity Purchase Agreement, we (i) issued to Green Coast a convertible promissory note in the principal amount of $150,000, for which they paid $25,000, and (ii) will pay to Green Coast a cash fee of $10,000 out of the proceeds from the first Put Notice.
 
As of the date of this Prospectus, assuming a closing bid price of $0.75 per share, our sales price to Green Coast would be $0.5625 per share and we would have to issue approximately 8,888,888 shares of our common stock to receive all $5,000,000.
 
As of the date of this Prospectus, there are approximately 186 million shares of our common stock held by or currently issuable to non-affiliates, representing approximately 99% of the outstanding common stock prior to any sales to Green Coast. The 1,000,000,000 shares we are registering for resale by Green Coast represents approximately 50% of the total authorized common stock.
 
We cannot sell shares to Green Coast if such shares would cause Green Coast to own more than 4.99% of our common stock. As a result, as of the date of this Prospectus, Green Coast cannot own more than approximately 95 million shares after giving effect to that issuance to Green Coast. If our total number of outstanding shares of common stock increases, as it will as we sell shares to Green Coast under the Equity Purchase Agreement, then we would be able to sell more shares to Green Coast before reaching the 4.99% threshold. In the event gross proceeds reach $5,000,000 from the sale of less than 1,000,000,000 shares, the offering will end with no further shares sold. Our limited trading volume and price volatility is likely to inhibit Green Coast’s ability to resell shares we sell to them, which will negatively impact our ability to sell more shares to them. It is also likely that each sale will decrease our stock price which means subsequent sale may provide less proceeds per share that the previous sale. In addition, we have only registered 1,000,000,000 shares for resale by Green Coast.
 
Green Coast intends to sell up to 1,000,000,000 shares and is an “underwriter” within the meaning of the Securities Act of 1933, as amended, in connection with the resale of our common stock under the Equity Purchase Agreement. As of date of this Prospectus, Green Coast or its affiliates owns zero shares of our common stock prior to the offering. After the offering is completed, unless they have sold some or all of the shares held as of the date hereof, Green Coast will continue to own zero shares of our common stock.
 
All of the shares held by the selling stockholders are restricted securities as that term is defined in Rule 144 promulgated under the Securities Act of 1933.
  
 
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PLAN OF DISTRIBUTION
 
The Selling Shareholder of the common stock and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on the principal trading market on which our common stock trades or any other stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Shareholder may use any one or more of the following methods when selling shares:
 
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
 
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
 
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
 
privately negotiated transactions;
 
broker-dealers may agree with the Selling Shareholder to sell a specified number of such shares at a stipulated price per share;
 
a combination of any such methods of sale; or
 
any other method permitted pursuant to applicable law.
 
The Selling Shareholder may also sell shares under Rule 144 under the Securities Act of 1933, as amended, if available, rather than under this Prospectus.
 
Broker-dealers engaged by the Selling Shareholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Shareholder (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.
 
The Selling Shareholder is an underwriter within the meaning of the Securities Act and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Selling Shareholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the Common Stock. Pursuant to a requirement by the Financial Industry Regulatory Authority, or FINRA, the maximum commission or discount to be received by any FINRA member or independent broker/dealer may not be greater than eight percent (8%) of the gross proceeds received by us for the sale of any securities being registered pursuant to SEC Rule 415 under the Securities Act.
 
 
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Discounts, concessions, commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by the Selling Shareholder.  The Selling Shareholder may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on that person under the Securities Act.
 
We will pay all expenses in connection with the registration and sale of the common stock by the Selling Shareholder. The estimated expenses of issuance and distribution are set forth below:
 
Registration Fees
Approximately
 $13
Transfer Agent Fees
Approximately
  1,000 
Costs of Printing and Engraving
Approximately
  1,000 
Legal Fees
Approximately
  15,000 
Accounting and Audit Fees
Approximately
  5,000 
   Total
 
 $22,013
 
We will not receive any proceeds from the resale of any of the shares of our common stock by the Selling Shareholder.  We may, however, receive proceeds from the sale of our common stock under the Equity Purchase Agreement.  Neither the Equity Purchase Agreement, nor any rights of the parties thereunder, may be assigned or delegated to any other person.
 
Because the Selling Shareholder is an “underwriter” within the meaning of the Securities Act, it will be subject to the Prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this Prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this Prospectus. There is no underwriter or coordinating broker acting in connection with the proposed sale of the resale shares by the Selling Shareholder.
 
We agreed to keep this Prospectus effective until all the shares covered by the registration statement of which this Prospectus is a part (i) have been sold, thereunder or pursuant to Rule 144, or (ii) (A) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and (B) (I) may be sold without the requirement for us to be in compliance with the current public information requirement under Rule 144 or (II) we are in compliance with the current public information requirement under Rule 144, or (iii) the commitment period under the Committed Equity Facility Agreement has expired and no registrable securities are then held of record by the Selling Shareholder that are subject to any resale restriction under Rule 144, as determined by our counsel in a written opinion letter to such effect, addressed and acceptable to the transfer agent and the affected Selling Shareholder. The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
 
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Shareholder will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of the common stock by the Selling Shareholder or any other person. We will make copies of this Prospectus available to the Selling Shareholder and have informed them of the need to deliver a copy of this Prospectus to each purchaser at or prior to the time of the sale.
 
The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Such exceptions include any equity security listed on NASDAQ and any equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operation for three years, (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years, or (iii) average annual revenue of at least $6,000,000, if such issuer has been in continuous operation for less than three years. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith.
 
 
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DESCRIPTION OF SECURITIES
 
Our authorized capital stock consists of 2,000,000,000 shares of common stock, par value $0.00001, and 10,000,000 shares of preferred stock, par value $0.001. As of November 12, 2019, there were 186,961,480 shares of our common stock issued and outstanding, and 2,000,000 shares of Series A Convertible Preferred Stock issued and outstanding.
 
Common Stock. Each shareholder of our common stock is entitled to a pro rata share of cash distributions made to shareholders, including dividend payments. The holders of our common stock are entitled to one vote for each share of record on all matters to be voted on by shareholders. There is no cumulative voting with respect to the election of our directors or any other matter. Therefore, the holders of more than 50% of the shares voted for the election of those directors can elect all of the directors. The holders of our common stock are entitled to receive dividends when and if declared by our Board of Directors from funds legally available therefore. Cash dividends are at the sole discretion of our Board of Directors. In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment of our liabilities and after provision has been made for each class of stock, if any, having any preference in relation to our common shareholders of shares of our common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to our common stock.
 
On June 26, 2018, we conducted a reverse split of our common stock at a ratio of 1-for-250 (the “Reverse Split”). All share numbers in this prospectus reflect the effect of the reverse stock split of our common stock on June 26, 2018.
 
Preferred Stock. We are authorized to issue 10,000,000 shares of preferred stock, par value $0.001 per share, of which 2,000,000 shares of Series A Convertible Preferred stock have been authorized and issued. The Preferred Stock is convertible, at the option of the holder, into one share of common stock for each share of Preferred Stock converted. The holders of our Preferred Stock also have 100 votes per share of Preferred Stock that they hold, to be voted as a group along with the common shareholders on all matters on which the shareholders are entitled to vote. Other than these votes, the holders of our Preferred Stock have no specific rights, as a group, to elect directors. The holders of our preferred stock are not entitled to a dividend preference over the common stock, but are entitled to a liquidation preference in the amount of $1.25 per share. The preferred stock is not redeemable. Finally, the holders of the preferred stock are entitled to protective provisions as follows:
 
The Company may not take any of the following actions without the approval of a majority of the holders of the outstanding Series A Convertible Preferred Stock: (i) effect a sale of all or substantially all of the Company’s assets or which results in the holders of the Company’s capital stock prior to the transaction owning less than fifty percent (50%) of the voting power of the Company’s capital stock after the transaction; (ii) alter or change the rights, preferences, or privileges of the Series A Convertible Preferred Stock; (iii) increase or decrease the number of authorized shares of Series A Convertible Preferred Stock; (iv) authorize the issuance of securities having a preference over or on par with the Series A Convertible Preferred Stock; or (v) effectuate a forward or reverse stock split or dividend of the Company’s common stock.
 
  An increase in our authorized common stock has been approved by our shareholders and is anticipated to be effective on or about December 19, 2019.
 
 
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The voting rights of the Series A Convertible Preferred Stock were not affected by the Reverse Split, and as a result, the Series A Convertible Preferred stockholders now have voting control of over 51% of our voting stock.
 
Dividend Policy. We have not declared or paid a cash dividend on our capital stock in our last two fiscal years and we do not expect to pay cash dividends on our common stock in the foreseeable future. We currently intend to retain our earnings, if any, for use in our business. Any dividends declared in the future will be at the discretion of our Board of Directors and subject to any restrictions that may be imposed by our lenders.
 
Options and Warrants.
 
Mitchell S. Felder owns outstanding warrants to acquire a total of 12,000 shares of our common stock at $0.0025 per share.
 
There are outstanding warrants to acquire 11,760 shares of our common stock at $362.50 per share. Of these warrants, William A. Hartman and Dr. Mitchell S. Felder each hold 620, Heidi Carl holds 480, John S. Borza holds 4,480 and Jay Rosen holds 200. The remaining 4,880 warrants are held equally by Ramon D. Foltz, Scott Barnes and Richard T. Najarian, former members of our Board of Directors.
 
There are outstanding warrants to acquire 44,800 shares of our common stock at $62.50 per share. Of these warrants, William A. Hartman and Dr. Mitchell S. Felder each hold 6,400, Heidi Carl holds 5,600, John S. Borza holds 4,800, Dr. Patricio Reyes holds 2,800, Jay Rosen holds 1,600, and three (3) investors own 17,200.
 
There are outstanding warrants to acquire 2,000 shares of our common stock at $50 per share held by one (1) investor.
 
There are outstanding warrants to acquire 2,000 shares of our common stock at $25 per share held by one (1) investor.
 
There are outstanding warrants to acquire 22,200 shares of our common stock at $12.50 per share. Of these warrants, William A. Hartman and Dr. Mitchell S. Felder each holds 4,000, Heidi Carl holds 3,000, John S. Borza holds 2,400, Dr. Patricio Reyes holds 1,400, Jay Rosen holds 800 and six (6) investors hold 6,600.
 
There are outstanding 121,215 Series A Warrants to acquire shares of our common stock at $7.5 per share and 121,215 Series B Warrants to acquire shares of our common stock at $12.50 per share held by three (3) investors.
 
There are outstanding warrants to acquire 163,000 shares of our common stock at $1.25 per share. Of these warrants, William A. Hartman and Dr. Mitchell S. Felder each holds 34,000, Heidi Carl holds 24,000, John S. Borza holds 29,000, Dr. Patricio Reyes holds 16,000, Jay Rosen holds 4,000, John Pauly holds 8,000, and three (3) investors hold 14,000.
 
Other than as set forth above, as of the date of this prospectus, we do not have any outstanding options, warrants, or other convertible securities.
 
INTEREST OF NAMED EXPERTS AND COUNSEL
 
Clyde Snow & Sessions, PC serves as our legal counsel in connection with this offering. Clyde Snow & Sessions does not directly, nor do any of its attorneys, own any shares of our common stock.
 
 
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DESCRIPTION OF BUSINESS
 
Corporate Information
 
We were incorporated on May 10, 2010 in the State of Nevada. We have two wholly-owned subsidiaries, Premier Biomedical Pain Relief Meds, LLC, a Nevada limited liability company organized on September 14, 2017, and Health Stations, LLC, a Nevada limited liability company organized on August 28, 2019.
 
Our corporate headquarters are located in Jackson Center, PA. Our mailing address is P.O. Box 25, Jackson Center, PA 16133, and our telephone number is (724) 633-7033. We have offices virtually in the homes of our management team who reside in Pennsylvania, Michigan and various other states. Our websites are www.premierbiomedical.com and www.painreliefmeds.com. Information contained on our website is not incorporated into, and does not constitute any part of, this Annual Report.
 
Overview
 
We were strictly a research-based company that intended to discover cures for PTSD, cancer and various other diseases. In order to fund on-going research and development in these areas, we developed a line of topical hemp oil pain relief products. We began selling these pain relief products in January of 2017 with a single product and currently have nine topical pain relief products.
 
Through our continued development and expansion of proprietary drugs and treatments, we have reorganized the company into six technology centers: (1) extra-corporeal treatment of disease, (2) PTSD treatment, (3) anti-breast cancer drugs, (4) hemp oil/CBD pain relief products, (5) anti-aging treatments, and (6) chemical and alcohol addiction treatment.
 
In the first quarter of 2017, initial sales of our pain management products were made through a joint venture. In the third quarter of 2017, the joint venture was terminated and we began sales of our pain management products directly from the Company.
 
Nature’s Pain Relief
 
We have not yet launched our latest brand, Nature’s Pain Relief, which will be marketing 12 hemp oil products, including a 96-hour anti-pain patch, three roll-on topical products, two sprays, two ointments, two tincture drop products, a help oil capsule, and a “doggie” pet product. All of these products will be available through a new website at www.naturespainrelief.com.
 
Pain Management Products
 
We have developed and are now marketing all-natural, hemp-oil based products that are pesticide and solvent free. These products provide generalized, neuropathic and localized topical pain relief.
 
 
26
 
 
We offer alternatives to dangerous and addictive opioid pain killers. In the past year we have rapidly expanded our product offerings, and we now offer nine pain relief products that are leaders in the pain-relief field:
 
1.
96-hour pain relief patch with 50 mg of hemp oil extract, the highest level of pain relief ingredient available in the industry;
 
2.
120 mg/ 10 ml water-based roll-on applicator;
 
3.
150 mg/ 10 ml oil-based roll-on applicator;
 
4.
150 mg/ 30 ml oil-based pump spray applicator;
 
5.
150 mg/ 2 oz. ointment;
 
6.
200 mg/10 ml oil-based roll-on applicator;
 
7.
500 mg/ 30 ml oil-based pump spray applicator; and
 
8.
500 mg/ 1 oz. ointment.
 
We believe that this nine-product array positions us favorably in the topical pain relief marketplace. The topical pain relief market is expected to grow rapidly in the next few years, due to the focus on reduction of opioid pain medication use, and we intend to be a major player in that expanding market.
 
Now that we have completed the product design and development phase, we are aggressively embarking on the product distribution and sales phase by:
 
1.
Expanding our online sales beyond our web site at: www.painreliefmeds.com;
 
2.
Securing the services of a social media coordinator to ensure that we optimize that promotional tool;
 
3.
Recruiting a National Sales Director to coordinate our growing field of sales representatives and distributors;
 
4.
Securing the services of a sales organization with expertise in marketing to the government and senior care facilities;
 
5.
Engaging an investor relations firm to facilitate television appearances designed to gain optimum exposure for our company and its products;
 
6.
Appearing in radio and television broadcasts, and podcasts, via Uptick Newswire periodically to ensure that our story gets out to the public; and
 
7.
Retaining the services of marketing firms to promote the Company and its products through social media.
 
8.
Establishing relationships with major distributors who will blanket specialized sales outlets such as pharmacies, doctors’ offices, convenience stores, long-term care facilities, large retail facilities, etc.
 
 
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In addition, we are in the process of seeking potential partnerships outside the United States to manufacture and market our products worldwide. We anticipate that these partnerships will make new markets available to us and allow us to rapidly increase our sales and profitability through favorable manufacturing arrangements.
 
Customers indicate that they were able to achieve pain relief from our products and stop the use of opioid painkillers. Public awareness of the harmful side effects of opioid painkillers has grown significantly, and many states have initiated litigation against drug makers claiming they misrepresented the risks of opioid painkillers. As patients seek to cut back their use of opioid painkillers and look for alternatives, we believe demand for our products will see an increase. We intend to petition national insurance agencies to urge them to consider covering the use of our all-natural pain relief products as a safe alternative to opioid painkillers.
 
Sales of our pain management products began on February 1, 2017 through our former joint venture. Upon termination of the joint venture, we began selling our products via our website at www.painreliefmeds.com and through various distributors. To date, three pharmacies and three chiropractic clinics have approved our products for sale and are distributing our products. We anticipate that our products will eventually be placed in several large pharmacy chains and sold in several states.
 
Research and Development
 
We intend to continue to discover and develop medical treatments for humans, specifically targeting the pain management industry and the treatment of:
 
 -
Cancer
 -
Fibromyalgia
 -
Multiple Sclerosis (MS)
 -
Traumatic Brain Injury (TBI)
 -
Neuropathic Pain
 -
Alzheimer’s Disease (AD)
 -
Amyotrophic Lateral Sclerosis
(ALS/Lou Gehrig’s Disease)
 -
Blood Sepsis and Viremia
 
To target cancer, Alzheimer’s disease, ALS, blood sepsis, leukemia, and other life-threatening cancers, we intend to develop our proprietary Sequential-Dialysis Technique. The methodology involved in this technique is largely unexplored and has been described by scientists as the “wild west” of modern medicine. Consequently, our first entry into the therapeutics market for medications that work against cancer, multiple sclerosis, infectious diseases, Alzheimer’s disease, strokes and traumatic brain injury carries significant obstacles before reaching the opportunities of a $700 billion industry.
 
Feldetrex®
 
We also are in the process of developing our proprietary drug candidate Feldetrex™, a potential treatment for multiple sclerosis, fibromyalgia, neuropathic pain and traumatic brain injury. The formulation used in the current Feldetrex® will be individually tailored to the various illnesses we intend to target, with each formulation being given a unique proprietary brand name. The annual market size of multiple sclerosis treatment is $500 million and the annual market size for all proposed Feldetrex® market segments is $16 billion.
 
To overcome the significant obstacles inherent to the development of our Sequential-Dialysis Technique and Feldetrex® candidate drug, we are seeking to partner with prestigious institutions and pharmaceutical companies with the substantial infrastructure and resource capacity to perform experimentation and to engage in product development in an inexpensive and efficient manner.
 
 
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Innovation by our research and development operations is very important to our success. Our goal is to discover, develop and bring to market innovative products and treatments that address major unmet medical needs, including initially, multiple sclerosis, septicemia, and cancer. We expect this goal to be supported by substantial research and development investments.
 
We plan on conducting research internally and may also research through contracts with third parties, through collaborations with universities and biotechnology companies, and in cooperation with pharmaceutical firms. We may also seek out promising compounds and innovative technologies developed by third parties to incorporate into our discovery or development methods and procedures or projects, as well as our future product lines, through acquisition, licensing or other arrangements.
 
In addition to discovering and developing new products, methods and procedures of treatment and treatments, we expect our research operations to add value to our existing products and methods and procedures of treatment in development by improving their effectiveness and by discovering new uses for them.
 
Sequential-Dialysis Technique
 
Our proprietary Sequential-Dialysis Technique is a methodology for the removal of those molecules which are harmful and responsible for causing diseases. A significant disappointment in the practice of modern medicine is that the capabilities do exist to eliminate the presence of most illnesses, including life-threatening diseases such as AIDS and cancer, but with a caveat that the process of treatment comes with catastrophic side effects that can and often do kill the patient.
 
Our development is that the innovative Sequential-Dialysis Methodology is done extracorporeally (outside the body). This is a truly unique and innovative method for alleviating disease.
 
We believe that this methodology can be used for the prevention of cancer metastasis, for directly attacking the causation of intractable seizures, for preventing the death of anterior motor neurons in ALS, for preventing the cause of the neuropathological changes in Alzheimer’s disease and traumatic brain injury and for eradicating the causations of infectious diseases, and our intention is that the effectiveness of this technique will be demonstrated and supported in future clinical studies.
 
Through our Sequential-Dialysis Technique, we ultimately hope to provide a cure for cancer if not only to dramatically extend the lives of suffering patients. Our initial focus is on lab and animal tests. Clinical trials, as required, will be undertaken subsequently.
 
Feldetrex™
 
Although a combination of generic medications, we have a U.S. Patent (No. 8,865,733) on our Feldetrex® candidate drug. In this way, Feldetrex® is similar to Viagra®, which was a proprietary cardiac drug prior to its current use and ownership by Pfizer. Consequently, we have one pending patent application for our Feldetrex® candidate drug—intending to increase our Feldetrex® related patent applications to three in the near future.
 
Feldetrex® may serve as an additional medication utilized by physicians for the treatment of multiple sclerosis, fibromyalgia, or traumatic brain injury, and is designed to decrease symptomatology in those conditions. Feldetrex® will not compete against our proprietary Sequential-Dialysis Technique in the market to treat traumatic brain injury, but rather the two will work conjunctively.
 
 
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Feldetrex® utilizes a low dosage of Naltrexone which has been shown in multiple medical articles in the medical literature to increase endogenous enkephalins4 (endogenous enkephalins are pain-relieving pentapeptides produced in the body, located in the pituitary gland, brain, and GI tract. Axon terminals that release enkephalins are concentrated in the posterior horn of the gray matter of the spinal cord, in the central part of the thalamus, and inthe amygdala of the limbic system of the cerebrum. Endogenous Enkephalins function as neurotransmitters that inhibit neurotransmitters in the pathway for pain perception, thereby reducing the emotional as well as the physical impact of pain). We have not independently conducted medical or laboratory tests to show the mechanism of action of this medication. While Naltrexone in high dosages acts as an opioid antagonist, it inhibits opiate receptors. Naltrexone in low dosages causes a compensatory upregulation (increase in the number of receptors) of native endorphins and enkephalins, which last beyond the effects of the Naltrexone itself. We believe that this means, paradoxically, that a daily dose of low dose Naltrexone can be used to chronically increase endorphin and enkephalin levels. We believe that by utilizing a low dosage, Naltrexone has a unique ability to increase enkephalins and other neurotransmitters in the brainstem of patients.
 
Marketing
 
Currently, we manage our marketing responsibilities internally. Sales of our pain management products are made primarily online through our website: www.painreliefmeds.com. We intend to seek a partnership with and/or sale of our product candidates/technologies to large pharmaceutical and/or medical devices firms. These firms have the ability to effectively promote our product candidates to healthcare providers and patients. Through their marketing organizations, they can explain the approved uses, benefits and risks of our product candidates to healthcare providers such as doctors, nurse practitioners, physician assistants, pharmacists, hospitals, Pharmacy Benefit Managers (PBMs), Managed Care Organizations (MCOs), employers and government agencies. They also market directly to consumers in the U.S. through direct-to-consumer advertising that communicates the approved uses, benefits, and risks of our product candidates while continuing to motivate people to have meaningful conversations with their doctors. In addition, they sponsor general advertising to educate the public on disease awareness, important public health issues, and patient assistance programs.
 
4
A.
Bowling, Allen C.. "Low-dose naltrexone (LDN) The "411" on LDN" National Multiple Sclerosis Society. http://www.nationalmssociety.org/multimedia-library/momentum-magazine/back-issues/momentum-spring-09/index.aspx. Retrieved 6 July 2011.
B.
Bourdette, Dennis. "Spotlight on Low Dose Naltrexone (LDN)". US Department of Veteran Affairs. http://www.va.gov/MS/articles/Spotlight_on_Low_Dose_Naltrexone_LDN.asp. Retrieved 5 July 2011.
C.
Giesser, Barbara S. (2010). Primer on Multiple Sclerosis. New York: Oxford University Press US. pp. 377. ISBN 978-0-19-536928-1.
D.
Moore, Elaine A. 1948. The promise of low dose naltrexone therapy: potential benefits in cancer, autoimmune, neurological and infectious disorders. Elaine A. Moore and Samantha Wilkinson. ISBN 978-0-7864-3715-3.
E.
Crain SM, Shen K-F (1995). Ultra-low concentrations of naloxone selectively antagonize excitatory effects of morphine on sensory neurons, thereby increasing its antinociceptive potency and attenuating tolerance/dependence during chronic cotreatment. Proc Natl Acad Sci USA 92: 10540–10544.
F.
Powell KJ, Abul-Husn NS, Jhamandas A, Olmstead MC, Beninger RJ, et al. (2002). Paradoxical effects of the opioid antagonist naltrexone on morphine analgesia, tolerance, and reward in rats. J Pharmacol Exp Ther 300: 588–596.
G.
Wang H-Y, Friedman E, Olmstead MC, Burns LH (2005). Ultra-low-dose naloxone suppresses opioid tolerance, dependence and associated changes in Mu opioid receptor-G protein coupling and Gbc signaling; Neuroscience 135: 247–261.
 
 
30
 
 
The large pharmaceutical/medical devices firms principally sell their products to wholesalers, but they also sell directly to retailers, hospitals, clinics, government agencies and pharmacies and also work with MCOs, PBMs, employers and other appropriate healthcare providers to assist them with disease management, patient education and other tools that help their medical treatment routines.
 
Patents and Intellectual Property Rights
 
We have licensed three U.S. patents: Sequential Extracorporeal Treatment of Bodily Fluids, U.S. Patent No. 9,216,386 and Utilization of Stents for the Treatment of Blood Borne Carcinomas, U.S. Patent No. 8,758,287 (both from Marv Enterprises, LLC), and Medication and Treatment for Disease, U.S. Patent No. 8,865,733 (from Altman Enterprises, LLC), in the areas of cancer, sepsis, and multiple sclerosis. We expect these patents to cover the medical treatments discussed above for multiple sclerosis, blood sepsis, and cancer and be effective until 2029. Marv and Altman have licensed these technologies to us pursuant to the terms of license agreements. Because our license agreements cover the patents and “all applications of the United States and foreign countries that claim priority to the above PCT applications, including any non-provisionals, continuations, continuations-in-part, divisions, reissues, re-examinations or extensions thereof,” we anticipate that other technologies that derive from these patents will also belong to us and are covered by the license agreements.
 
Patents extend for twenty years from the date of patent filing. The actual protection afforded by a patent, which can vary from country to country, depends upon the type of patent, the scope of its coverage and the availability of legal remedies in the country.
 
Dr. Felder is the owner of the Feldetrex mark, and has also licensed this to us pursuant to the terms of a license agreement.
 
We expect our patent and related rights to be of material importance to our business.
 
Competition
 
Our business is conducted in an intensely competitive and often highly regulated market. Our treatments face competition in the form of branded drugs, generic drugs and the currently practiced treatments for multiple sclerosis, blood sepsis, and cancer. The principal forms of competition include efficacy, safety, ease of use, and cost effectiveness. Where possible, companies compete on the basis of the unique features of their products, such as greater efficacy, better patient ease of use or fewer side effects. A lower overall cost of therapy is also an important factor. Products that demonstrate fewer therapeutic advantages must compete for inclusion based primarily on price. Though the means of competition vary among product categories, demonstrating the value of our medications and procedures will be a critical factor for our success.
 
Our competitors include large worldwide research-based drug companies, smaller research companies with more limited therapeutic focus, and generic drug manufacturers. We compete with other companies that manufacture and sell products that treat similar diseases as our major medications and procedures.
 
 
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Environment
 
Our business may be subject to a variety of federal, state and local environmental protection measures. We intend to comply in all material respects with applicable environmental laws and regulations.
 
Regulation
 
Pain Management Products
 
A major obstacle to our growth is the public perception that hemp and marijuana are the same thing. This perception drives much of the regulation of hemp products. Although hemp and marijuana are both part of the cannabis family, they differ in cultivation, function, and application. Despite the use of marijuana becoming more widely legalized, it is viewed by many regulators and many others as an illegal product. Hemp, on the other hand, is used in a variety of other ways that include clothing, skin products, pet products, dietary supplements (the use of CBD oil), and thousands of other applications. Hemp may be legally sold, however the inability of many to understand the difference between hemp and marijuana often causes burdensome regulation and confusion among potential customers. Therefore, we are affected by laws related to cannabis and marijuana, even though our products are not the direct targets of these laws.
 
Cannabis is currently a Schedule I controlled substance under the Controlled Substance Act (“CSA”) and is, therefore, illegal under federal law. Even in those states in which the use of cannabis has been legalized pursuant to state law, its use, possession and/or cultivation remains a violation of federal law. A Schedule I controlled substance is defined as one that has no currently accepted medical use in the United States, a lack of safety for use under medical supervision and a high potential for abuse. The U.S. Department of Justice (the “DOJ”) describes Schedule I controlled substances as “the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence.” If the federal government decides to enforce the CSA in the states, persons that are charged with distributing, possessing with intent to distribute or growing cannabis could be subject to fines and/or terms of imprisonment, the maximum being life imprisonment and a $50 million fine.
 
Notwithstanding the CSA, 29 U.S. states, the District of Columbia and the U.S. territories of Guam and Puerto Rico allow their residents to use medical cannabis. The states of Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont (effective July 1, 2018) and Washington, and the District of Columbia, allow cannabis for adult recreational use. Such state and territorial laws are in conflict with the federal CSA, which makes cannabis use and possession illegal at the federal level.
 
In light of such conflict between federal laws and state laws regarding cannabis, the previous administration under President Obama had effectively stated that it was not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical cannabis. For example, the prior DOJ Deputy Attorney General of the Obama administration, James M. Cole, issued a memorandum (the “Cole Memo”) to all United States Attorneys providing updated guidance to federal prosecutors concerning cannabis enforcement under the CSA. In addition, the Financial Crimes Enforcement Network (“FinCEN”) provided guidelines (the “FinCEN Guidelines”) on February 14, 2014, regarding how financial institutions can provide services to cannabis-related businesses consistent with their Bank Secrecy Act (“BSA”) obligations.
 
 
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Additional existing and pending legislation provides, or seeks to provide, protection to persons acting in violation of federal law but in compliance with state laws regarding cannabis. The Rohrabacher-Blumenauer Amendment (formerly known as the Rohrbacher-Farr Amendment) to the Commerce, Justice, Science and Related Agencies Appropriations Bill, which funds the DOJ, since 2014 has prohibited the DOJ from using funds to prevent states with laws authorizing the use, distribution, possession or cultivation of medical cannabis from implementing such laws. On August 2016, the Ninth Circuit Court of Appeals ruled in United States v. McIntosh that the Amendment bars the DOJ from spending funds on the prosecution of conduct that is allowed by state medical cannabis laws, provided that such conduct is in strict compliance with applicable state law. The Rohrabacher-Blumenauer Amendment is currently effective through September 30, 2018, but as an amendment to an appropriations bill, it must be renewed annually.
 
These developments previously were met with a certain amount of optimism in the cannabis industry, but (i) neither the CARERS Act nor the Respect State Marijuana Laws Act of 2017 have yet been adopted, (ii) the Rohrabacher-Blumenauer Amendment, being an amendment to an appropriations bill that must be renewed annually, has not currently been renewed beyond September 30, 2018, and (iii) the ruling in United States v. McIntosh is only applicable precedent in the Ninth Circuit.
 
Because of the discrepancy between the laws in some states, which permit the distribution and sale of medical and recreational cannabis, from federal law that prohibits any such activities, DOJ Deputy Attorney General James M. Cole issued the Cole Memo concerning cannabis enforcement under the CSA.
 
At the time of its issuance, the Cole Memo reiterated Congress’s determination that cannabis is a dangerous drug and that the illegal distribution and sale of cannabis is a serious crime that provides a significant source of revenue to large-scale criminal enterprises, gangs, and cartels. The Cole Memo noted that the DOJ was committed to enforcement of the CSA consistent with those determinations. It also noted that the DOJ was committed to using its investigative and prosecutorial resources to address the most significant threats in the most effective, consistent, and rational way. In furtherance of those objectives, the Cole Memo provided guidance to DOJ attorneys and law enforcement to focus their enforcement resources on persons or organizations whose conduct interferes with any one or more of the following important priorities (the “Enforcement Priorities”) in preventing:
 
the distribution of cannabis to minors;
 
revenue from the sale of cannabis from going to criminal enterprises, gangs, and cartels;
 
the diversion of cannabis from states where it is legal under state law in some form to other states;
 
state-authorized cannabis activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
 
violence and the use of firearms in the cultivation and distribution of cannabis;
 
drugged driving and the exacerbation of other adverse public health consequences associated with cannabis use;
 
the growing of cannabis on public lands and the attendant public safety and environmental dangers posed by cannabis production on public lands; and
 
cannabis possession or use on federal property.
 
 
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However, on January 4, 2018, the U.S. Attorney General, Jeff Sessions, issued a memorandum for all U.S. Attorneys (the “Sessions Memo”) stating that the Cole Memo was rescinded effective immediately. In particular, Mr. Sessions stated that “prosecutors should follow the well-established principles that govern all federal prosecutions,” which require “federal prosecutors deciding which cases to prosecute to weigh all relevant considerations, including federal law enforcement priorities set by the Attorney General, the seriousness of the crime, the deterrent effect of criminal prosecution, and the cumulative impact of particular crimes on the community.” The Sessions Memo went on to state that given the DOJ’s well-established general principles, “previous nationwide guidance specific to marijuana is unnecessary and is rescinded, effective immediately.”
 
It is unclear at this time whether the Sessions Memo indicates that the Trump administration will strongly enforce the federal laws applicable to cannabis or what types of activities will be targeted for enforcement. However, a significant change in the federal government’s enforcement policy with respect to current federal laws applicable to cannabis could cause significant financial damage to us. We do not currently cultivate, distribute or sell cannabis, but our hemp oil products are closely tied to the cannabis industry.
 
Although the Sessions Memo has rescinded the Cole Memo and it is unclear at this time what the ultimate impact of that rescission will have on our business, if any, we intend to continue to conduct rigorous due diligence to verify the legality of all activities that we engage in and ensure that our activities do not interfere with any of the Enforcement Priorities set forth in the Cole Memo.
 
On March 26, 2018, Senate Majority Leader Mitch McConnell, R-Kentucky, announced plans to introduce The Hemp Farming Act of 2018 to exclude hemp from the CSA. The proposed bill would legalize hemp as an agricultural commodity and remove it from the list of controlled substances. This would greatly reduce the uncertainty we face with respect to regulation of hemp products. However, Congress has not yet taken formal action to pass the bill.
 
Other Medical Products
 
The development of proprietary drugs and medications is subject to varying degrees of governmental regulation in the United States and any other countries in which our operations are conducted. In the United States, regulation by various federal and state agencies has long been focused primarily on product safety, efficacy, manufacturing, advertising, labeling and safety reporting. The exercise of broad regulatory powers by the U.S. Federal Drug Administration (“FDA”) continues to result in increases in the amounts of testing and documentation required for FDA clearance of new drugs and devices and a corresponding increase in the expense of product introduction. Likewise, the approval process with the FDA is estimated to take approximately seven (7) years from the time it is started. Similar trends are also evident in major markets outside of the United States.
 
Clinical trials are a set of procedures in medical research conducted to allow safety (or more specifically, information about adverse drug reactions and adverse effects of other treatments) and efficacy data to be collected for health interventions (e.g., drugs, diagnostics, devices, therapy protocols). These trials can take place only after satisfactory information has been gathered on the quality of the non-clinical safety, and Health Authority/Ethics Committee approval is granted in the country where the trial is taking place.
 
 
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Depending on the type of product and the stage of its development, investigators enroll healthy volunteers and/or patients into small pilot studies initially, followed by larger scale studies in patients that often compare the new product with the currently prescribed treatment. As positive safety and efficacy data are gathered, the number of patients is typically increased. Clinical trials can vary in size from a single center in one country to multicenter trials in multiple countries.
 
Due to the sizable cost a full series of clinical trials may incur, the burden of paying for all the necessary people and services is usually borne by the sponsor who may be a governmental organization, a pharmaceutical, or biotechnology company. Since the diversity of roles may exceed resources of the sponsor, often a clinical trial is managed by an outsourced partner such as a contract research organization or a clinical trials unit in the academic sector.
 
The regulatory agencies under whose purview we intend to operate have administrative powers that may subject us to such actions as product withdrawals, recalls, seizure of products and other civil and criminal sanctions.
 
Because we intend to seek a partnership with and/or sale of our product candidates/technologies to large pharmaceutical and/or medical devices firms, we anticipate that a larger pharmaceutical company will undertake to navigate the regulatory pathway, including conducting clinical trials, for a product such as Feldetrex™.
 
Employees
 
As of the date hereof, we do not have any employees other than our officers and directors. Our officers and directors will continue to work for us for the foreseeable future. We anticipate hiring appropriate personnel on an as-needed basis, and utilizing the services of independent contractors as needed.
 
DESCRIPTION OF PROPERTY
 
We do not currently lease or use any office space. We have not paid any amounts to Mr. Hartman for the use of his personal office or for reimbursement of personal office expenses incurred by him.
 
LEGAL PROCEEDINGS
 
We are not a party to or otherwise involved in any legal proceedings.
 
In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.
 
 
35
 
 
SELECTED FINANCIAL DATA
 
 
 
As of and for the Nine Months ended September 30,
 
 
As of and for the Year Ended December 31,
 
 
As of and for the Year Ended December 31,
 
Premier Biomedical, Inc.
 
2019
(unaudited)
 
 
2018
(audited)
 
 
2017
(audited)
 
 
 
 
 
 
 
 
 
 
 
Statement of Operations Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 $12,975 
 $39,795 
 $39,761 
Net operating income (loss)
 $(219,688)
 $(692,842)
 $(1,289,838)
Net income (loss)
 $(340,171)
 $(398,886)
 $(3,763,558)
 
    
    
    
 
    
    
    
Balance Sheet Data:
    
    
    
 
    
    
    
Cash
 $117,209 
 $86,827 
 $83,704 
Current assets
 $177,582 
 $159,787 
 $203,603 
Total assets
 $185,500 
 $164,990 
 $209,081 
 
    
    
    
Current liabilities
 $2,303,710 
 $2,312,382 
 $2,819,807 
Total liabilities
 $2,303,710 
 $2,312,382 
 $2,819,807 
Accumulated deficit
 $(17,067,869)
 $(16,727,698)
 $(16,328,812)
 
    
    
    
Net loss per common share – basic and diluted
 $(0.02)
 $(0.11)
 $(0.92)
 
Our cash and total current assets remained relatively steady as we continued to sustain losses funded by the sale of convertible notes. Our total current liabilities decreased primarily due to the reduction of our accounts payable of $66,718 and the conversion of outstanding convertible notes of $177,423, offset by a net increase in accrued interest of $27,049 and the change in the value of our derivative liabilities of $148,348, along with $338,300 of additional debt financing, net of debt discounts of $278,228. Our stockholders’ deficit decreased by $29,182 to ($2,118,210).
 
 
36
 
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
Disclaimer Regarding Forward Looking Statements
 
You should read the following discussion in conjunction with our financial statements and the related notes and other financial information included in this Form S-1. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form S-1, particularly in the Section titled Risk Factors.
 
Although the forward-looking statements in this registration statement reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
 
The following discussion and analysis of financial condition and results of operations of the Company is based upon, and should be read in conjunction with, its audited and unaudited financial statements and related notes elsewhere in this Form S-1, which have been prepared in accordance with accounting principles generally accepted in the United States.
 
Summary Overview
 
We were strictly a research-based company that intended to discover cures for PTSD, cancer and various other diseases. In order to fund on-going research and development in these areas, we developed a line of topical hemp oil pain relief products. We began selling these pain relief products in January of 2017 with a single product and currently have nine topical pain relief products.
 
Through our continued development and expansion of proprietary drugs and treatments, we have reorganized the company into six technology centers: (1) extra-corporeal treatment of disease, (2) PTSD treatment, (3) anti-breast cancer drugs, (4) hemp oil/CBD pain relief products, (5) anti-aging treatments, and (6) chemical and alcohol addiction treatment.
 
Pain Management Products
 
We have developed and are now marketing all-natural, hemp-oil based products that are pesticide and solvent free. These products provide generalized, neuropathic and localized topical pain relief.
 
 
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We offer alternatives to dangerous and addictive opioid pain killers. In the past year we have rapidly expanded our product offerings, and we now offer nine pain relief products that are leaders in the pain-relief field:
 
1.
96-hour pain relief patch with 50 mg of hemp oil extract, the highest level of pain relief ingredient available in the industry;
 
2.
120 mg/ 10 ml water-based roll-on applicator;
 
3.
150 mg/ 10 ml oil-based roll-on applicator;
 
4.
150 mg/ 30 ml oil-based pump spray applicator;
 
5.
150 mg/ 2 oz. ointment;
 
6.
200 mg/10 ml oil-based roll-on applicator;
 
7.
500 mg/ 30 ml oil-based pump spray applicator; and
 
8.
500 mg/ 1 oz. ointment.
 
We believe that this eight-product array positions us favorably in the topical pain relief marketplace. The topical pain relief market is expected to grow rapidly in the next few years, due to the focus on reduction of opioid pain medication use, and we intend to be a major player in that expanding market.
 
Now that we have completed the product design and development phase, we are aggressively embarking on the product distribution and sales phase by:
 
1.
Expanding our online sales beyond our web site at: www.painreliefmeds.com;
 
2.
Securing the services of a social media coordinator to ensure that we optimize that promotional tool;
 
3.
Recruiting a National Sales Director to coordinate our growing field of sales representatives and distributors;
 
4.
Securing the services of a sales organization with expertise in marketing to the government and senior care facilities;
 
5.
Engaging an investor relations firm to facilitate television appearances designed to gain optimum exposure for our company and its products;
 
6.
Appearing in radio and television broadcasts, and podcasts, via Uptick Newswire periodically to ensure that our story gets out to the public; and
 
7.
Retaining the services of marketing firms to promote the Company and its products through social media.
 
8.
Establishing relationships with major distributors who will blanket specialized sales outlets such as pharmacies, doctors’ offices, convenience stores, long-term care facilities, large retail facilities, etc.
 
 
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In addition, we are in the process of seeking potential partnerships outside the United States to manufacture and market our products worldwide. We anticipate that these partnerships will make new markets available to us and allow us to rapidly increase our sales and profitability through favorable manufacturing arrangements.
 
Customers indicate that they were able to achieve pain relief from our products and stop the use of opioid painkillers. Public awareness of the harmful side effects of opioid painkillers has grown significantly, and many states have initiated litigation against drug makers claiming they misrepresented the risks of opioid painkillers. As patients seek to cut back their use of opioid painkillers and look for alternatives, we believe demand for our products will see an increase. We intend to petition national insurance agencies to urge them to consider covering the use of our all-natural pain relief products as a safe alternative to opioid painkillers.
 
Financing
 
In the past, as we worked through the development of our products, we have relied heavily on financing through various issuances of common stock, warrants and convertible debt. As our sales grow, we expect to find financing solutions in the future that help us expand our operations, avoid dilution to our shareholders, and ultimately increase our company valuation.
 
Through the remainder of 2019, we will continue to market our pain management products and seek a wider distribution network through the negotiation of distribution agreements with large pharmacy chains, military branches, government agencies, senior care facilities and international partners.
 
Through our reorganization into six technology centers, we are positioned to take advantage of opportunities to individually sell, license or commercialize the technologies produced within each of these centers to suitable investment partners, without dilutive equity issuances. In the long run, we believe that this will be most beneficial to our investors.
 
Going Concern
 
As a result of our current financial condition, we have received a report from our independent registered public accounting firm for our financial statements for the years ended December 31, 2018 and 2017 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern. In order to continue as a going concern, we must effectively balance many factors and generate more revenue so that we can fund our operations from our sales and revenues. If we are not able to do this, we may not be able to continue as an operating company. During the nine months ended September 30, 2019, we completed the sale of convertible notes to raise $ 308,400 of net proceeds from several investors. We cannot be sure that sources of capital will be available to us for the remainder of 2019 and into 2020. However, without additional capital in the short term, we may not be able to push forward in the production and marketing of our new pain management products. Until we are able to grow revenues sufficient to meet our operating expenses, we must continue to raise capital by issuing debt or through the sale of our stock. There is no assurance that our cash flow will be adequate to satisfy our operating expenses and capital requirements.
 
 
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Results of Operations for the Three and Nine Months Ended September 30, 2019 and 2018
 
Introduction
 
We had revenues of $3,465 and $12,975 for the three and nine months ended September 30, 2019, respectively, compared to $8,225 and $30,709 for the three and nine months ended September 30, 2018, respectively. This was a decrease of $9,510, or 73%, for the three months ended September 30, 2019 compared to 2018, and $22,484, or 73%, for the nine months ended September 30, 2019 compared to 2018.
 
Our operating expenses were $66,366 and $227,193 for the three and nine months ended September 30, 2019, respectively, compared to $85,185 and $240,834 for the three and nine months ended September 30, 2018, respectively. This was a decrease of $18,819, or 22%, for the three months ended September 30, 2019 compared 2018, and a decrease of $13,641, or 6%, for the nine months ended September 30, 2019 compared to 2018.
 
Our results of operations for the three and nine months ended September 30, 2019 and 2018 were as follows:
 
 
 
Three Months
 
 
Three Months
 
 
Nine Months
 
 
Nine Months
 
 
 
September 30,
 
 
September 30,
 
 
September 30,
 
 
September 30,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 $3,465 
 $8,225 
 $12,975 
 $30,709 
Cost of goods sold
  1,653 
  4,373 
  5,470 
  20,577 
Gross profit
  1,812 
  3,852 
  7,505 
  10,132 
 
    
    
    
    
Operating expenses:
    
    
    
    
General and administrative
  36,757 
  65,572 
  138,589 
  139,881 
Professional fees
  29,609 
  22,613 
  88,604 
  100,953 
Total operating expenses
  66,366 
  85,185 
  227,193 
  240,834 
 
    
    
    
    
Net operating loss
  (64,554)
  (81,333)
  (219,688)
  (230,702)
Other income (expense)
  (117,080)
  (282,202)
  (120,483)
  333,485 
 
    
    
    
    
Net income (loss)
 $(181,634)
 $(363,535)
 $(340,171)
 $102,783 
 
Revenues
 
The Company was established on May 10, 2010, and began to generate revenues during the third quarter of 2017 from the sale of pain patches made with CBD oils. Our sales are comprised of both website sales to individual consumers and brick and mortar pharmacies, and we have expanded from patches to oils, sprays, and roll-ons. Our cost of goods sold primarily consists of the products and the packaging. The decrease in our revenues for the three and nine months ended September 30, 2019, compared to three and nine months ended September 30, 2018, while significant in percentage terms, was not material in absolute terms and reflects the timing of product sales.
 
 
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Cost of Goods Sold
 
Cost of goods sold for the three and nine months ended September 30, 2019 were $1,653, or 48% of sales, and $5,470, or 42% of sales, compared to $4,373, or 53% of sales, and $20,577, or 67% of sales, for the three and nine months ended September 30, 2018. Cost of sales consists primarily of product materials and packaging supplies. Our cost of goods sold as a percentage of sales was reduced because of lower prices in the marketplace and slightly higher volume pricing.
 
General and Administrative
 
General and administrative expenses were $36,757 and $138,589, respectively, for the three and nine months ended September 30, 2019, compared to $62,572 and $139,881, respectively, for the three and nine months ended September 30, 2018, a decrease of $25,815 and $1,292, or 41% and less than 1%, respectively. The decrease was primarily due to decreased investor relations and advertising expenses.
 
Professional Fees
 
Professional fees expense was $29,609 and $88,604, respectively, for the three and nine months ended September 30, 2019, compared to $22,613 and $100,953, respectively, for the three and nine months ended September 30, 2018, an increase of $6,996 and a decrease of $12,349, or 31% and 12%, respectively. Professional fees consist primarily of legal and, accounting and auditing services.
 
Net Operating Loss
 
Net operating loss was $64,554 and $219,688, respectively, for the three and nine months ended September 30, 2019, compared to $81,333 and $230,702, respectively, for the three and nine months ended September 30, 2018, a decrease of $16,779 and $11,014, or 21% and 5%, respectively. The net operating loss decreased during the nine months ended September 30, 2019 because of decreased operating expenses as previously described.
 
Other Income/Expense
 
Other income (expense) was ($117,080) and ($120,483), respectively, for the three and nine months ended September 30, 2019, compared to ($282,202) and $333,485, respectively, for the three and nine months ended September 30, 2018, a decrease in expenses of $165,122 and $453,968, respectively. Other expense for the nine months ended September 30, 2019 consisted of interest expense of $101,793 and a change in derivative liabilities of $18,690. Other expense for the nine months ended September 30, 2018 consisted of interest expense of $322,323 offset by a gain of $655,808 in market value of derivative liabilities.
 
Net Income (Loss)
 
Net income (loss) for the three and nine months ended September 30, 2019, was ($181,634) or ($0.01) per share, and ($340,171) or ($0.02) per share, respectively, compared to ($363,535) or ($0.11) per share, and $102,783 or $0.03 per share, respectively, for the three and nine months ended September 30, 2018. Net loss changes, as set forth above, were primarily due to the change in derivative liabilities.
 
 
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Liquidity and Capital Resources as of and for the nine months ended September 30, 2019 and the year ended December 31, 2018.
 
Introduction
 
During the three and nine months ended September 30, 2019, we had negative operating cash flows. Our cash on hand as of September 30, 2019 was $117,209, which was derived from the sale of convertible promissory notes to investors. Our monthly cash flow burn rate for the first nine months of 2018 was approximately $35,000, and our monthly burn rate through the nine months ended September 30, 2019 was approximately $30,000. Although we have moderate short term cash needs, as our operating expenses increase as we ramp up production and sales of our new products we will face strong medium to long term cash needs. We anticipate that these needs will be satisfied through the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs.
 
Our cash, current assets, total assets, current liabilities, and total liabilities as of September 30, 2019 and December 31, 2018, respectively, are as follows:
 
 
 
September 30,
 
 
December 31,
 
 
 
 
 
 
2019
 
 
2018
 
 
Change
 
 
 
 
 
 
 
 
 
 
 
Cash
 $117,209 
 $86,827 
 $30,382 
Total Current Assets
  177,582 
  159,787 
  17,795 
Total Assets
  185,500 
  164,990 
  20,510 
Total Current Liabilities
  2,303,710 
  2,312,382 
  (8,672)
Total Liabilities
 $2,303,710 
 $2,312,382 
 $(8,672)
 
Our cash and total current assets remained relatively steady as we continued to sustain losses funded by the sale of convertible notes. Our total current liabilities decreased primarily due to the reduction of our accounts payable of $66,718 and the conversion of outstanding convertible notes of $177,423, offset by a net increase in accrued interest of $27,049 and the change in the value of our derivative liabilities of $148,348, along with $338,300 of additional debt financing, net of debt discounts of $278,228. Our stockholders’ deficit decreased by $29,182 to ($2,118,210).
 
In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.
 
Cash Requirements
 
Our cash on hand as of September 30, 2019 was $117,209. Based on our minimal revenues and current monthly burn rate of approximately $30,000 per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.
 
Sources and Uses of Cash
 
Operations
 
We had net cash used in operating activities of ($273,168) for the nine months ended September 30, 2019, compared to ($318,471) for the nine months ended September 30, 2018. This decrease in net cash used in operating activities was a result of an increase in the fair market value of derivative liabilities of $674,498 and an increase in inventory of $39,861, offset by a decrease in amortization of debt discounts of $246,886.
 
 
42
 
 
Investments
 
We had $4,850 net cash used in investing activities for the nine months ended September 30, 2019, and $2,029 net cash used in investing activities for the nine months ended September 30, 2018. We outsource the manufacturing of our products, so our investment expenses are minimal.
 
Financing
 
Our net cash provided by financing activities for the nine months ended September 30, 2019 was $308,400, which consisted of the proceeds from the sale of convertible notes. For the nine months ended September 30, 2018, net cash provided by financing activities was $300,000, which consisted of the proceeds from the sale of convertible notes.
 
Results of Operations for the Years Ended December 31, 2018 and 2017
 
Introduction
 
We had revenues of $39,795 and $39,761 for the years ended December 31, 2018 and 2017, respectively. Our operating expenses were $618,910 for the year ended December 31, 2018 compared to $1,304,160 for the year ended December 31, 2017, an increase of $685,250, or 53%. Our operating expenses consisted of research and development costs, general and administrative expenses, and professional fees, including $296,944 and $783,404 of stock-based compensation for the years ended December 31, 2018 and 2017, respectively.
 
Revenues and Net Operating Loss
 
Our revenues, operating expenses, and net operating loss for the years ended December 31, 2018 and 2017 were as follows:
 
 
 
Year Ended
 
 
Year Ended
 
 
 
 
 
 
December 31,
 
 
December 31,
 
 
Increase /
 
 
 
2018
 
 
2017
 
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
 
Revenue
 $39,795 
 $39,761 
 $34 
Cost of goods sold
  113,727 
  25,439 
  88,288 
Gross profit (loss)
  (73,932)
  14,322 
  (88,254)
 
    
    
    
Operating expenses:
    
    
    
Research and development
  - 
  184,315 
  (184,315)
General and administrative
  189,285 
  196,670 
  (7,385)
Professional fees
  429,625 
  923,175 
  (493,550)
Total operating expenses
  618,910 
  1,304,160 
  (685,250)
 
    
    
    
Net operating loss
  (692,842)
  (1,289,838)
  (596,996)
Other income (expense)
  293,956 
  (2,473,720)
  2,767,676 
 
    
    
    
Net loss
 $(398,886)
 $(3,763,558)
 $(3,364,672)
 
 
43
 
 
Revenues
 
The Company was established on May 10, 2010, and began initial sales of our pain management products during the year ended December 31, 2017.
 
Research and Development
 
Research and development expenses were $-0- for the year ended December 31, 2018 compared to $184,315 for the year ended December 31, 2017, an increase of $184,315. The expenses decreased due to final invoices from the University of Texas at El Paso. We plan to continue to reduce our research and development activities as we focus on our pain management products.
 
General and Administrative
 
General and administrative expenses were $189,285 for the year ended December 31, 2018 as compared to $196,670 for the year ended December 31, 2017, a decrease of $7,385, or 4%.
 
Professional Fees
 
Professional fees expense was $429,625 for the year ended December 31, 2018, compared to $923,175 for the year ended December 31, 2017, a decrease of $493,550, or 53%. The decrease was primarily due to the decrease of stock-based compensation issued to debt holders, directors and consultants for services rendered. A total of $296,944 of stock-based compensation was awarded during the year ended December 31, 2018, compared to $783,404 of stock-based compensation during the year ended December 31, 2017, a decrease of $486,460 from 2017 to 2018. The decrease in stock-based compensation was the result of $671,424 of shares of common stock that were awarded to note holders during 2017.
 
Net Operating Loss
 
Net operating loss for the year ended December 31, 2018 was $692,842, compared to a net operating loss of $1,289,838 for the year ended December 31, 2017, a decrease of $596,996, or 46%. Net operating loss decreased, as set forth above, primarily due to a decrease in stock-based compensation issued to note holders for services rendered.
 
Other Income (Expense)
 
Other income (expense) for the year ended December 31, 2018 was $293,956, compared to ($2,473,720) for the year ended December 31, 2017, a net increase of $2,767,676, or 112%. Other income (expense) consisted of interest and finance charges on debt and equity financing, gain on early extinguishment of debt, and a change in the fair value of derivative liabilities during the year ended December 31, 2018. Other income (expense) consisted of interest and finance charges on debt and equity financing, a change in the fair value of derivative liabilities, as well as a net loss on our joint venture during the year ended December 31, 2017. The net increase was primarily due to an increase of approximately $2,818,479 in the value of derivative liabilities related to significant decreased convertible debt financing during the year ended December 31, 2018, compared to the year ended December 31, 2017.
 
 
44
 
 
Net Loss
 
Net loss for the year ended December 31, 2018 was $398,886, or $(0.11) per share, compared to a net loss of $3,763,558, or $(1.92) per share, for the year ended December 31, 2017, a decrease of $3,364,672, or 89%. Net loss decreased, as set forth above, primarily due to an increase of approximately $2,818,479 in the value of derivative liabilities and decreased stock-based compensation issued to note holders for services rendered.
 
Liquidity and Capital Resources as of and for the Nine Months ended September 30, 2019 and 2017
 
Introduction
 
During the three and nine months ended September 30, 2019, we had negative operating cash flows. Our cash on hand as of September 30, 2019 was $117,209, which was derived from the sale of convertible promissory notes to investors. Our monthly cash flow burn rate for the first nine months of 2018 was approximately $35,000, and our monthly burn rate through the nine months ended September 30, 2019 was approximately $30,000. Although we have moderate short term cash needs, as our operating expenses increase as we ramp up production and sales of our new products we will face strong medium to long term cash needs. We anticipate that these needs will be satisfied through the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs.
 
Our cash, current assets, total assets, current liabilities, and total liabilities as of September 30, 2019 and December 31, 2018, respectively, are as follows:
 
 
 
September 30,
 
 
December 31,
 
 
 
 
 
 
2019
 
 
2018
 
 
Change
 
 
 
 
 
 
 
 
 
 
 
Cash
 $117,209 
 $86,827 
 $30,382 
Total Current Assets
  177,582 
  159,787 
  17,795 
Total Assets
  185,500 
  164,990 
  20,510 
Total Current Liabilities
  2,303,710 
  2,312,382 
  (8,672)
Total Liabilities
 $2,303,710 
 $2,312,382 
 $(8,672)
 
Our cash and total current assets remained relatively steady as we continued to sustain losses funded by the sale of convertible notes. Our total current liabilities decreased primarily due to the reduction of our accounts payable of $71,855 and the conversion of outstanding convertible notes of $95,075, offset by an increase in accrued interest of $27,049 and the value of our derivative liabilities of $148,348. Our stockholders’ deficit decreased by $29,182 to ($2,118,210).
 
In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.
 
Cash Requirements
 
Our cash on hand as of September 30, 2019 was $117,209. Based on our minimal revenues and current monthly burn rate of approximately $30,000 per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.
 
 
45
 
 
Sources and Uses of Cash
 
Operations
 
We had net cash used in operating activities of ($273,168) for the nine months ended September 30, 2019, compared to ($318,471) for the nine months ended September 30, 2018. This decrease in net cash used in operating activities was a result of an increase in the fair market value of derivative liabilities of $674,498 and an increase in inventory of $39,861, offset by a decrease in amortization of debt discounts of $246,886.
 
Investments
 
We had $4,850 net cash used in investing activities for the nine months ended September 30, 2019, and $2,029 net cash used in investing activities for the nine months ended September 30, 2018. We outsource the manufacturing of our products, so our investment expenses are minimal.
 
Financing
 
Our net cash provided by financing activities for the nine months ended September 30, 2019 was $308,400, which consisted of the proceeds from the sale of convertible notes. For the nine months ended September 30, 2018, net cash provided by financing activities was $300,000, which consisted of the proceeds from the sale of convertible notes.
 
Liquidity and Capital Resources as of and for the Years ended December 31, 2018 and 2018
 
Introduction
 
During the year ended December 31, 2018, because we did not generate any revenues, we had negative operating cash flows. Our cash on hand as of December 31, 2018 was $86,827, which was derived from the sale of convertible promissory notes to investors. Our monthly cash flow burn rate has increased from approximately $37,000 in 2018 to approximately $42,500 in 2017. Although we have moderate short-term cash needs, as our operating expenses increase we will face strong medium to long-term cash needs. We anticipate that these needs will be satisfied through the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs.
 
Our cash, current assets, total assets, current liabilities, and total liabilities as of December 31, 2018 and December 31, 2017, respectively, are as follows:
 
 
 
December 31,
2018
 
 
December 31,
2017
 
 
Change
 
 
 
 
 
 
 
 
 
 
 
Cash
 $86,827 
 $83,704 
 $3,123 
Total Current Assets
  159,787 
  203,603 
  (43,816)
Total Assets
  164,990 
  209,081 
  (44,091)
Total Current Liabilities
  2,312,382 
  2,819,807 
  (507,425)
Total Liabilities
 $2,312,382 
 $2,819,807 
 $(507,425)
 
Our cash increased by $3,123 as of December 31, 2018, compared to December 31, 2017. Our total current assets decreased by $43,816 primarily because we recognized an $87,650 allowance for inventory obsolescence in 2018. Our total assets decreased by $44,091 primarily for the same reasons.
 
 
46
 
 
Our current liabilities decreased by $507,425 as of December 31, 2018, compared to December 31, 2017, primarily due to decreases in accounts payable of $97,854 and derivative liabilities of $565,477. Our total liabilities decreased by the same amount for the same reasons as we do not have long term liabilities.
 
In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.
 
Cash Requirements
 
Our cash on hand as of December 31, 2018 was $86,827, which was derived from the sale of convertible promissory notes and common stock. Our monthly cash flow burn rate is approximately $37,000. Although we have moderate short-term cash needs, as our operating expenses increase we will face strong medium to long term cash needs. We anticipate that these needs will be satisfied through the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs.
 
Sources and Uses of Cash
 
Operations
 
Our net cash used in operating activities for the years ended December 31, 2018 and 2017 was $444,878 and $507,116, respectively, a decrease of $62,238, or 12%. The primary uses of our cash were purchasing inventory and operating our pain management business, along with the public company compliance costs.
 
Investments
 
Our net cash used in investing activities for the years ended December 31, 2018 and 2017 was $2,029 and $2,694, respectively, a decrease of $665. The slight decrease reflected a lack of purchases of property and equipment in 2018 compared to 2017.
 
Financing
 
Our net cash provided by financing activities for the years ended December 31, 2018 and 2017 was $450,030 and $573,393, respectively, a decrease of $123,363, or 22%. The decrease was primarily a result of a decrease in proceeds from the sale of stock of $135,000 in 2018, compared to $285,000 of proceeds from the sale of stock in 2017 and a decrease in repayments of convertible notes payable from $30,000 to zero. This was offset by a decrease in the proceeds from the sale of stock on equity line of credit from $18,323 to $-0-.
 
Securities Purchase Agreement
 
On March 30, 2017, we entered into a Securities Purchase Agreement with three investors and raised $300,000 through the sale of stock and warrants. These same investors purchased $150,000 of common stock and warrants in the second tranche on May 30, 2017.On August 8, 2017, we exchanged convertible notes with the investors for the warrants issued in the first tranche and the common stock issued in the second tranche. We also amended the Securities Purchase Agreement on that date, and on October 30, 2017, the investors purchased an additional $150,000 of our convertible notes. We expect these investments, our growing revenues and sales of common stock, warrants and convertible notes will finance our operations for the next several months as we seek to expand revenues from our new pain management products.
 
 
47
 
 
Sale of Convertible Notes
 
On March 1, 2018, we received $60,000 from two investors from the sale of convertible notes. These investors have also committed to provide an additional $240,000 in the near future. The investors purchased convertible notes at the signing of a Securities Purchase Agreement for an aggregate amount of $60,000. The investors will buy additional convertible notes for an aggregate of $60,000 within five trading days of our filing a registration statement to cover the investors’ shares of common stock issuable upon conversion of the convertible notes. Within five trading days of the registration statement being declared effective, the investors will buy additional convertible notes for an aggregate of $180,000. For further details, see our Form 8-K filed on March 5, 2018 and copies of the agreements filed herewith as Exhibits 10.60, 10.61 and 10.62.
 
Critical Accounting Policies and Estimates
 
See Note 1 to the Financial Statements for the year ended December 31, 2018 on page F-6 which is incorporated herein by reference.
 
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
We have no disclosure required by this item.
 
 
48
 
 
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
 
The following table sets forth the names, ages, and biographical information of each of our current directors and executive officers, and the positions with the Company held by each person, and the date such person became a director or executive officer of the Company. Our executive officers are elected annually by the Board of Directors. The directors serve one-year terms until their successors are elected. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. Family relationships among any of the directors and officers are described below.
 
Name
 
Age
 
Position(s)
 
 
 
 
 
William A. Hartman
 
77
 
President, Chief Executive Officer, and Director (June 2010)
 
 
 
 
 
Dr. Mitchell S. Felder
 
65
 
Chairman of the Board of Directors and the Scientific Advisory Board (June 2010)
 
 
 
 
 
Heidi H. Carl
 
49
 
Chief Financial Officer, Secretary, Treasurer and Director (June 2010)
 
 
 
 
 
Dr. Patricio F. Reyes
 
72
 
Chief Technology Officer and Director (August 2016)
 
 
 
 
 
John S. Borza
 
65
 
Vice President and Director (August 2012)
 
 
 
 
 
Jay Rosen
 
65
 
Director (June 2010)
 
 
 
 
 
John Pauly
 
58
 
Director (December 2017)
 
William A. Hartman, age 77, is our President and Chief Executive Officer and a member of our Board of Directors. From March 2008 until June 2010, Mr. Hartman was not directly employed but was planning the formation of Premier Biomedical, Inc. From October 2006 to March 2008, Mr. Hartman was the Chief Operating Officer of Nanologix, Inc. From July 1991 to July 2000, Mr. Hartman was a Director at TRW Automotive. From 1984 to 1991, Mr. Hartman was Chief Engineer at TRW Automotive and from 1979 to 1984 he was Division Quality Compliance Manager at Ford Motor Company. At TRW Automotive, Mr. Hartman was one of the auto industry pioneers of the concept of grouping related components into systems and modules and shipping just-in-time to the vehicle assembly plants. He founded and headed a separate business group within TRW Automotive with plants in the U.S., Mexico and Europe with combined annual sales of $1.3 Billion. Academic credentials include a BSME degree from Youngstown State University and a MSIA degree (Industrial Administration/Management) from the University of Michigan.
 
Dr. Mitchell S. Felder, age 65, is our Chairman of the Board of Directors and our Scientific Advisory Board. Dr. Felder is a practicing Board Certified Neurologist. Dr. Felder acquired a B.A. Degree from the University of Pennsylvania in 1975 and an M.D. Degree from the University of Rome, Faculty of Medicine in 1983. He has been Board Certified by both the American Academy of Clinical Neurology and the American Board of Psychiatry and Neurology. Dr. Felder has authored or co-authored six publications, three studies, and has 18 issued patents. Dr. Felder is the former President, Chairman, and founder of Infectech/Nanologix (from its founding in 1989 through March 2007)—growing the company from startup to a $100 million market cap. During the past five years, Dr. Felder has had as his principal occupation and employment work as an attending neurologist. Dr. Felder is presently an attending neurologist at the William Beaumont Army Medical Center in El Paso, Texas. Dr. Felder has more than 20 years of management experience.
 
 
49
 
 
Heidi H. Carl, age 49, is our Chief Financial Officer, Secretary, Treasurer, and a member of our Board of Directors. From May 2009 until June 2010, Ms. Carl was not directly employed but was working with Mr. Hartman in planning the formation of Premier Biomedical, Inc. From June 2007 to May 2009, Ms. Carl was the Product Development Specialist at General Motors Corporation. From May 2006 to May 2007, Ms. Carl was the Associate Marketing Manager at General Motors Corporation. From May 2003 to May 2006, Ms. Carl was the Marketing Specialist at General Motors Corporation and from May 1999 to May 2003, Ms. Carl was the District Area Parts Manager at General Motors Corporation. Academic credentials include a BSBA degree from Madonna University and an ASBA degree from Oakland Community College.
 
Dr. Patricio F. Reyes, MD, FAAN, age 72, is a board certified neurologist and neuropathologist, has served as the Chief Medical Officer and Board Member of the Retired National Football League Players Association since 2013. Dr. Reyes has been a board member of the Association of Ringside Physicians since 2008 and was previously its Chair of the Education Committee and 2009 Distinguished Educator. Dr. Reyes has worked as a neurologist and neuropathologist for the Phoenix VA Hospital since 2014. Dr. Reyes is the co-founder, Chief Medical Officer and Chair of the Scientific Advisory Board of Yuma Therapeutics, Inc. where he has worked since 2012. He is a Fellow of the American Academy of Neurology and was former Professor of Neurology and Neuropathology at Thomas Jefferson Medical School in Philadelphia, Pennsylvania, and Professor of Neurology, Pathology and Psychiatry at Creighton University School of Medicine in Omaha, Nebraska.
 
John S. Borza, PE, AVS, age 65, is our Vice President and was appointed to our Board of Directors on August 17, 2012. Mr. Borza is currently the President and Chief Executive Officer of Value Innovation, LLC, a consulting firm focused on value engineering and creative problem solving, where he has served since August 2009. Prior to Value Innovation, Mr. Borza was a Specialist with TRW Automotive from September 2007 to September 2009, and a Director at TRW Automotive from May 1999 to September 2007. Earlier in his career, Mr. Borza worked in R&D for 12 years on a variety of products and technologies in various capacities ranging from Engineer to Chief Engineer, before moving into launch and production support roles. Mr. Borza is an Altshuller Institute certified TRIZ Practitioner, and a SAVE International certified Associate Value Specialist. He is active in the local chapter of SAVE International and currently serves as the chapter Past-President. Mr. Borza holds a BS degree in Electrical Engineering and an MBA from the University of Michigan.
 
Jay Rosen, age 65, has been a member of our Board of Directors since our inception in June 2010. Mr. Rosen has been a partner at Rosen Associates, a real estate holding and management company, since 1971. He is also a partner at Midway Industrial Terminal, a real estate holding and management company, and has been since 2005. Mr. Rosen privately owns and manages the Rosen Farm, cellular towers and various other real estate properties, is the President of XintCorp, a small start-up company for developing intellectual property, and is a former member of the NY Mercantile Exchange and the New York Futures Exchange. Mr. Rosen studied economics and finance at New York University and Columbia University.
 
John Pauly, age 58, has served as Executive Vice President at HealthWarehouse.com, Inc., an online Verified Internet Pharmacy Practice Site (VIPPS), since October 2017. From January 2017 through March 2017, Mr. Pauly served as the interim Chief Executive Officer of HealthWarehouse.com. From January 2016 until his time at HealthWarehouse.com, he was the Chief Operating Officer of Specialty Medical Drug Store, also a VIPPS accredited online pharmacy business.
 
 
50
 
 
Since January 2014, Mr. Pauly has been an independent consultant and investor to businesses in the pharmaceutical industry. From August 2013 through December 2013, he was Vice President at Acton Pharmaceuticals where he was responsible for the strategy and operations to commercialize its first FDA approved product, handling all implementation activities through outsourced third-parties.
 
From January 2013 through August 2013, Mr. Pauly was a consultant to the Chief Executive Officer of Crown Laboratories, Inc., a fully integrated specialty pharmaceutical company. There he assisted in creating and implementing corporate strategy, and OTC and Rx drug development, manufacturing and commercialization.
 
Prior to his time at Crown Laboratories, Mr. Pauly was at Merz Pharmaceuticals, LLC, a specialty healthcare company and subsidiary of Merz Pharmaceuticals GmbH, where he served as Vice President of Commercial Operations from May 2011 to June 2012 and Executive Director of OCG Strategy and Operations from March 2009 to April 2011. His duties at Merz included management of a unit of 98 people covering a wide-range of business functions. He played a major role in corporate strategy and evaluating licensing and M&A opportunities.
 
Mr. Pauly has also served in a variety of management positions within the healthcare and pharmaceutical industries since 1990 and brings a wide range of skills and expertise to the Board of Directors.
 
Family Relationships
 
Heidi H. Carl is the daughter of William A. Hartman.
 
Other Directorships; Director Independence
 
Other than as set forth above, none of our officers and directors is a director of any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940.
 
For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). Neither the OTC Pink Tier on which shares of common stock are quoted, nor the Pink Sheets Current tier, has any director independence requirements. The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. According to the NASDAQ definition, only Mr. Rosen and Mr. Pauly are an independent directors.
 
Board Committees
 
Our Board of Directors does not maintain a separate audit, nominating or compensation committee. Functions customarily performed by such committees are performed by its Board of Directors as a whole. We are not required to maintain such committees under the applicable rules of the OTC Markets. We do not currently have an “audit committee financial expert” since we currently do not have an audit committee in place. We intend to create board committees, including an independent audit committee, in the near future. We have a Scientific Advisory Board that serves an advisory role to management and the Board of Directors.
 
 
51
 
 
We do not currently have a process for security holders to send communications to the Board.
 
During the fiscal years ended December 31, 2018 and 2017, the Board of Directors met approximately on a bi-weekly basis. Only Mr. Rosen attended fewer than 75 percent of the meetings. We have no policy with regard to attendance at meetings of the Board of Directors.
 
Involvement in Certain Legal Proceedings
 
None of our officers or directors has, in the past ten years, filed bankruptcy, been convicted in a criminal proceeding or named in a pending criminal proceeding, been the subject of any order, judgment, or decree of any court permanently or temporarily enjoining him or her from any securities activities, or any other disclosable event required by Item 401(f) of Regulation S-K.
 
Code of Ethics
 
We have not adopted a written code of ethics, primarily because we believe and understand that our officers and directors adhere to and follow ethical standards without the necessity of a written policy.
 
Scientific Advisory Board
 
Our Board of Directors has established a Scientific Advisory Board that assists management and the Board of Directors on an advisory basis with respect to the research, development, clinical, regulatory and commercial plans and activities relating to research, manufacture, use and sale of our pain management products and drug candidates. The Scientific Advisory Board meets on an ad hoc basis and may attend meetings of the Board at the Board’s request. Its current members are Mitchell S. Felder, MD, Patricio F. Reyes, MD, FAAN, Carl E. Meyer, DO, MBA, and Kathryn Meyer, DO. All members of the Scientific Advisory Board are doctors and have extensive knowledge, experience and training in the fields of medicine relevant to our business.
 
Scientific Advisory Board members are not entitled to receive compensation, but warrants or other benefits may be awarded at the discretion of the Board of Directors. We granted warrants, to purchase 2,000 shares of our common stock at an exercise price of $1.25 over seven (7) years from the grant date on December 22, 2017, to each of Carl Meyer and Katherine Meyer for their services on the Scientific Advisory Board.
 
EXECUTIVE COMPENSATION
 
Narrative Disclosure of Executive Compensation
 
Effective on September 28, 2012, we entered into employment agreements with our President and Chief Executive Officer, William A. Hartman, and our Chairman of the Board of Directors and Chairman of the Scientific Advisory Board, Dr. Mitchell S. Felder. In December 2012, the Company and Dr. Felder agreed to terminate his employment agreement, effective as of its date of inception.
 
 
52
 
 
Pursuant to the employment agreement with Hartman, he will be compensated in the amount of $150,000 per year for the duration of the agreement. Pursuant to the agreement, Hartman has waived the salary and the accrual thereof in exchange for being issued a Common Stock Purchase Warrant whereby Hartman may purchase a maximum of 105,000 shares of our common stock at a purchase price of $1.45 per share. The agreement has a one-year term and provides for two (2) years of severance at his then-current salary in the event Hartman is terminated due to death, disability or without cause. Mr. Hartman is still employed under the terms of the agreement.
 
We do not currently have a written employment agreement with our other executives. All other executives are at-will employees or consultants whose compensation is set forth in the Summary Compensation Table below.
 
Summary Compensation Table
 
The following table sets forth information with respect to compensation earned by our Chief Executive Officer, President, and Chief Financial Officer for the years ended December 31, 2018 and 2017.
 
Name and Principal Position
 
Year
 
 
Salary
($)
 
 
Bonus
($)
 
 
Stock
Awards
($)
 
 
Option Awards
($)
 
 
Non-Equity Incentive Plan Compensation ($)
 
 
Nonqualified Deferred Compensation ($)
 
 
All Other
Compensation
($)
 
 
 
 
Total
($)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
William A. Hartman,
 2018
  -0-
 
  -0-
 
  -0-
 
  68,146(2)
  -0-
 
  -0-
 
  -0-
 
  68,146
 
Chief Executive Officer (1)
 2017
  -0-
 
  -0-
 
  -0-
 
  23,358(3)
  -0-
 
  -0-
 
  -0-
 
  23,358
 
 
    
    
    
    
    
    
    
    
Heidi H. Carl,
 2018
    
    
    
    
    
    
    
    
Chief Financial Officer(4)
 2017
  -0- 
  -0-
 
  -0-
 
  16,488(4)
  -0-
 
  -0-
 
  -0-
 
  16,488
 
 
(1) 
Mr. Hartman does not receive a salary for his services as Chief Executive Officer.
(2) 
Option awards consist of warrants to purchase 842,000 shares of our common stock at an exercise price of $0.05 over seven (7) years from the grant date on December 15, 2018.
(3) 
Option awards consist of warrants to purchase 34,000 shares of our common stock at an exercise price of $1.25 over seven (7) years from the grant date on December 22, 2017.
(4) 
Ms. Carl does not receive a salary for her services as Secretary and Treasurer.
(5) 
Option awards consist of warrants to purchase 500,000 shares of our common stock at an exercise price of $0.09 over seven (7) years from the grant date on December 15, 2018.
(6) 
Option awards consist of warrants to purchase 24,000 shares of our common stock at an exercise price of $1.25 over seven (7) years from the grant date on December 22, 2017.
 
Officer and Director Compensation
 
On December 20, 2018, we issued warrants to the following officers and directors, which will allow them to purchase shares of our common stock in the amounts indicated: William Hartman (842,000 shares); Mitchell Felder (842,000 shares), Heidi Carl (500,000 shares), John Borza (579,000 shares), Patricio Reyes (500,000 shares), John Pauly (52,500 shares) and Jay Rosen (52,500 shares). We also issued warrants to purchase shares of our common stock to three members of our Scientific Advisory Board in the amounts indicated: Heleno Souza (131,000 shares), Carl Meyer (26,000 shares) and Katherine Meyer (26,000 shares). The exercise price of the foregoing warrants is Nine Cents ($0.09) per share. The warrants also have a cashless exercise option.
 
 
53
 
 
The warrants were issued with respect to services provided in 2018 and vested immediately upon issuance. The issuance of the warrants was fully approved by our Board of Directors on December 20, 2018, the date a fully executed resolution authorizing the issuance was delivered to us.
 
On December 22, 2017, we issued warrants to the following officers and directors, which will allow them to purchase shares of our common stock in the amounts indicated: William Hartman (8,500,000 shares); Mitchell Felder (8,500,000 shares), Heidi Carl (6,000,000 shares), John Borza (7,250,000 shares), Patricio Reyes (4,000,000 shares) and Jay Rosen (1,000,000 shares). We also issued warrants to purchase shares of our common stock to three members of our Scientific Advisory Board in the amounts indicated: Heleno Souza (2,500,000 shares), Carl Meyer (500,000 shares) and Katherine Meyer (500,000 shares). The exercise price of the foregoing warrants is One Half Cent ($0.005) per share. The warrants also have a cashless exercise option.
 
The warrants were issued with respect to services provided in 2017 and vested immediately upon issuance. The issuance of the warrants was fully approved by our Board of Directors on December 22, 2017, the date a fully executed resolution authorizing the issuance was delivered to us.
 
Also on December 22, 2017, we issued a warrant to John Pauly as an initial incentive award following his appointment to the Board of Directors, which will allow him to purchase 2,000,000 shares of our common stock. The terms of this warrant are the same as those in the warrants issued to the other directors on this date, having an exercise price of One Half Cent ($0.005) and a cashless exercise option.
 
We do not currently have an established policy to provide compensation to members of our Board of Directors for their services in that capacity. We intend to develop such a policy in the near future.
 
Outstanding Equity Awards at Fiscal Year-End
 
We do not currently have a stock option or grant plan.
 
 
54
 
 
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
 
The following table sets forth, as of November 7, 2019, certain information with respect to the Company’s equity securities owned of record or beneficially by (i) each Officer and Director of the Company; (ii) each person who owns beneficially more than 5% of each class of the Company’s outstanding equity securities; and (iii) all Directors and Executive Officers as a group.
 
 
 
Name and Address (1)
 
 
Common Stock Ownership
 
 
Percentage of Common Stock Ownership (2)
 
 
Series A Preferred Stock Ownership
 
 
Percentage of Series A Preferred Stock Ownership (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
William A. Hartman (4)(10)
  971,020(8)
  1.50%
  1,000,000 
  50.0%
 
    
    
    
    
Dr. Mitchell S. Felder (4) (5)
  968,051(9)
  1.50%
  1,000,000 
  50.0%
 
    
    
    
    
Heidi H. Carl (4)(10)
  537,080(12)
  * 
  - 
  - 
 
    
    
    
    
Jay Rosen (4)
  63,120(13)
  * 
  - 
  - 
 
    
    
    
    
John S. Borza (4)
  619,934(11)
  * 
  - 
  - 
 
    
    
    
    
John Pauly(4) (6)
  60,500(15)
  * 
  - 
  - 
 
    
    
    
    
Dr. Patricio Reyes(4) (7)
  520,680(14)
  * 
  - 
  - 
 
    
    
    
    
All Officers and Directors as a Group (7 Persons)
  3,740,445(8)(9)(11)(12)(13)(14)(15)
  5.56%
  2,000,000 
  100.0%
 
Less than 1%
(1) 
Unless otherwise indicated, the address of the shareholder is c/o Premier Biomedical, Inc.
(2) 
Unless otherwise indicated, based on 63,723,186 shares of common stock issued and outstanding. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person or group holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any other person.
(3) 
Unless otherwise indicated, based on 2,000,000 shares of Series A Convertible Preferred Stock issued and outstanding.
(4) 
Indicates one of our officers or directors.
(5)            
Dr. Felder’s address is P.O. Box 1332, Hermitage, PA 16148.
(6) 
Mr. Pauly’s address is 900 Squire Oaks Drive, Villa Hills, KY 41017.
(7) 
Dr. Reyes’ address is 10618 North Eleventh Place, Phoenix, AZ 85020.
(8) 
Includes 4,000 shares of common stock that may be acquired upon the conversion of 1,000,000 shares of Series A Convertible Preferred Stock, 200 shares of common stock that may be acquired at $362.50 per share, 420 shares of common stock that may be acquired at $362.50 per share if the Company’s common stock reaches a closing bid price of $750.00 per share and remains at or above $750.00 per share for thirty (30) consecutive trading days on any and all markets or exchanges on which the Company’s common stock is traded, 6,400 shares of common stock that may be acquired upon the exercise of warrants at $62.50 per share, 4,000 shares of common stock that may be acquired upon the exercise of warrants at $12.50 per share, 34,000 shares of common stock that may be acquired upon the exercise of warrants at $1.25 per share, and 842,000 shares of common stock that may be acquired upon the exercise of warrants at $0.09 per share.
(9) 
Includes 12,000 shares of common stock that may be acquired upon the exercise of warrants at $0.0025 per share, 4,000 shares of common stock that may be acquired upon the conversion of 1,000,000 shares of Series A Convertible Preferred Stock, 200 shares of common stock that may be acquired at $362.50 per share, 420 shares of common stock that may be acquired at $362.50 per share if the Company’s common stock reaches a closing bid price of $750.00 per share and remains at or above $750.00 per share for thirty (30) consecutive trading days on any and all markets or exchanges on which the Company’s common stock is traded, 6,400 shares of common stock that may be acquired upon the exercise of warrants at $62.50 per share, 4,000 shares of common stock that may be acquired upon the exercise of warrants at $12.50 per share, 34,000 shares of common stock that may be acquired upon the exercise of warrants at $1.25 per share, and 579,000 shares of common stock that may be acquired upon the exercise of warrants at $0.09 per share.
(10) 
William A. Hartman is the father of Heidi H. Carl. Mr. Hartman disclaims ownership of shares held by his daughter.
(11) 
Includes 110 shares of common stock owned members of Mr. Borza’s household, 4,200 shares of common stock that may be acquired by Mr. Borza at $362.50 per share upon the exercise of warrants, 280 shares of common stock that may be acquired at $362.50 per share upon the exercise of warrants if the Company’s common stock reaches a closing bid price of $750.00 per share and remains at or above $750.00 per share for thirty (30) consecutive trading days on any and all markets or exchanges on which the Company’s common stock is traded, 4,800 shares of common stock that may be acquired upon the exercise of warrants at $62.50 per share, 2,400 shares of common stock that may be acquired upon the exercise of warrants at $12.50 per share, 29,000 shares of common stock that may be acquired upon the exercise of warrants at $1.25 per share, and 579,000 shares of common stock that may be acquired upon the exercise of warrants at $0.09 per share.
(12) 
Includes 200 shares of common stock that may be acquired upon the exercise of warrants at $362.50 per share, 280 shares of common stock that can be acquired at $362.50 per share if the Company’s common stock reaches a closing bid price of $750.00 per share and remains at or above $750.00 per share for thirty (30) consecutive trading days on any and all markets or exchanges on which the Company’s common stock is traded, 5,600 shares of common stock that may be acquired upon the exercise of warrants at $62.50 per share, 3,000 shares of common stock that may be acquired upon the exercise of warrants at $12.50 per share, 24,000 shares of common stock that may be acquired upon the exercise of warrants at $1.25 per share, and 500,000 shares of common stock that may be acquired upon the exercise of warrants at $0.09 per share.
(13) 
Includes 200 shares of common stock that may be acquired upon the exercise of warrants at $362.50 per share, 1,600 shares of common stock that may be acquired upon the exercise of warrants at $62.50 per share, 800 shares of common stock that may be acquired upon the exercise of warrants at $12.50 per share, 4,000 shares of common stock that may be acquired upon the exercise of warrants at $1.25 per share, and 52,500 shares of common stock that may be acquired upon the exercise of warrants at $0.09 per share.
(14) 
Includes 2,800 shares or the Company’s common stock that may be acquired upon the exercise of warrants at $62.50 per share, 1,400 per share, 16,000 shares of common stock that may be acquired upon the exercise of warrants at $1.25 per share, and 500,000 shares of common stock that may be acquired upon the exercise of warrants at $0.09 per share.
(15) 
Consists of 8,000 shares of common stock that may be acquired upon the exercise of warrants at $1.25 per share, and 52,500 shares of common stock that may be acquired upon the exercise of warrants at $0.09 per share.
 
Other than as set forth above, the issuer is not aware of any person who owns of record, or is known to own beneficially, five percent (5%) or more of the outstanding securities of any class of the issuer.
 
There are no current arrangements which will result in a change in control.
 
 
55
 
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
Joint Venture
 
On September 13, 2016, we entered into an operating agreement to form a pain management joint venture company with Advanced Technologies Solutions (ATS), a company owned by Ronald T. La Borde, a member of our Board of Directors. The joint venture company, Premier Biomedical Pain Management Solutions, LLC, a Nevada limited liability company (PBPMS), was formed to develop and market natural and cannabis-based generalized, neuropathic, and localized pain relief treatment products. We owned 50% of PBPMS and ATS owned the other 50%, with 89% of the profits allocated to us and the remaining 11% of profits allocated to ATS.
 
The PBPMS operating agreement called for ATS to enter into a licensing agreement with PBPMS. Upon entering into the license agreement, Mr. La Borde was to receive 5,000 warrants to purchase our common stock at an exercise price of $12.50 per share.
 
However, the license agreement was never entered into, the joint venture was terminated, and PBPMS was dissolved on September 19, 2017.
 
License Agreements
 
On May 12, 2010, we entered into two separate license agreements. One license agreement was entered into with Altman Enterprises, LLC, wherein we obtained certain exclusive rights in (i) proprietary technology that is the subject of one pending PCT patent application relating to the treatment of auto-immune diseases, and (ii) the Feldetrex® trademark. The other license agreement was entered into with Marv Enterprises, LLC, wherein we obtained certain exclusive rights in proprietary technology that is the subject of two PCT patent applications relating to the treatment of blood borne carcinomas and sequential extracorporeal treatment of blood. Authority to execute the license agreements on behalf of Altman and Marv is vested in Dr. Mitchell S. Felder, the Chairman of our Board of Directors. Because the licensors are controlled by one of our directors, there may exist a conflict of interest in decisions made by the Company with respect to the licenses.
 
As consideration for the two licenses, we agreed to (i) pay a royalty of five percent (5%) of any sales of products using the technology, with no minimum royalty, and (ii) reimburse the licensor for any costs already incurred in pursuing its proprietary rights in the licensed technology and pay any costs incurred for maintaining or obtaining the licensors’ proprietary rights in the licensed technology in the U.S. and in extending the intellectual property to other countries around the world. Licensor shall have sole discretion to select other countries into which exclusive rights in the licensed technology may be pursued, and if we decline to pay those expenses, then licensor may pay said expenses and our licensed rights in those countries will revert to the licensor.
 
As of December 31, 2018, we have not sold any products using the licensed technology and thus have not paid any license fees. We have, however, reimbursed expenses associated with the technology we have licensed, and owe them an additional $46,016.
 
 
56
 
 
Stock Issuances
 
Preferred Stock
 
On January 2, 2016, two of our officers and directors, William A. Hartman and Mitchell Felder, each exercised warrants to acquire one million (1,000,000) shares of Series A Convertible Preferred Stock each. Each share of Series A Convertible Preferred Stock is convertible, at the election of the holder thereof, into 0.004 of a share of our common stock, and has one hundred (100) votes per share. We issued the warrants on June 21, 2010 and they had an exercise price of $0.001 per share.
 
The Preferred Stock also contains protective provisions as follows:
 
The Company may not take any of the following actions without the approval of a majority of the holders of the outstanding Series A Convertible Preferred Stock: (i) effect a sale of all or substantially all of the Company’s assets or which results in the holders of the Company’s capital stock prior to the transaction owning less than fifty percent (50%) of the voting power of the Company’s capital stock after the transaction, (ii) alter or change the rights, preferences, or privileges of the Series A Convertible Preferred Stock, (iii) increase or decrease the number of authorized shares of Series A Convertible Preferred Stock, (iv) authorize the issuance of securities having a preference over or on par with the Series A Convertible Preferred Stock, or (v) effectuate a forward or reverse stock split or dividend of the Company’s common stock.
 
Warrant Exercise
 
On November 22, 2017, we issued 28,000 shares of common stock, restricted in accordance with Rule 144, to William Hartman, an officer and director of the Company, upon the exercise of warrants at $0.63 per share.
 
On December 20, 2016, we issued 24,000 shares of common stock, restricted in accordance with Rule 144, to each of William Hartman and Mitchell Felder, officers and directors of the Company, upon the exercise of warrants at $0.63 per share.
 
On August 19, 2016, we issued 16,000 shares of common stock, restricted in accordance with Rule 144, to each of William Hartman and Mitchell Felder, officers and directors of the Company, upon the exercise of warrants at $0.63 per share.
 
 
57
 
 
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
 
Article 9 of our Articles of Incorporation provides that, the personal liability of the directors of the corporation is hereby eliminated to the fullest extent permitted by paragraph 1 of Section 78.037 of the General Corporation Law of the State of Nevada, as the same may be amended and supplemented. Paragraph 1 of Section 78.037 states that the articles of incorporation of a Nevada corporation may contain any provision, not contrary to the laws of the State of Nevada, for the management of the business and for the conduct of the affairs of the corporation.
 
Article 10 of our Articles of Incorporation provides that, the corporation shall, to the fullest extent permitted by Section 78.751 of the General Corporation Law of the State of Nevada, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all expenses, liabilities, or other matters referred to in or covered by said section. Section 78.751 states that the articles of incorporation of a Nevada corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition. It further states that indemnification does not exclude any other rights that an officer or director may have pursuant to the articles, bylaws, shareholders agreement or otherwise, and that it continues for a person who has ceased to be a director, officer, or employee of the company.
 
Article V of our Bylaws further addresses indemnification, including procedures for indemnification claims. Indemnification applies to any person that is made a party to, or threatened to be made a party to, any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she was an officer or director of the company.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
 
 
58
 
 
WHERE YOU CAN FIND MORE INFORMATION
 
We have filed with the Securities and Exchange Commission a registration statement on Form S-1, together with all amendments and exhibits thereto, under the Securities Act of 1933 with respect to the common stock offered hereby. This Prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. You should refer to the registration statement and its exhibits and schedules for further information. Statements contained in this Prospectus as to the contents of any contract or other document referred to are not necessarily complete and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.
 
Copies of documents we file with the Commission, including this prospectus, the registration of which it is a part and the related exhibits, may be read and copies at the Commission’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the Commission are also available through the Commission’s website at the following address: http://www.sec.gov.
 
We are subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, and, in accordance therewith, file periodic reports, proxy statements and other information with the Commission. Such periodic reports, proxy statements and other information are available for inspection and copying at the Public Reference Room and website of the SEC referred to above. We also furnish our shareholders with annual reports containing our financial statements audited by an independent registered public accounting firm and quarterly reports containing our unaudited financial information. We maintain a website at www.premierbiomedical.com. You may access our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act with the Commission free of charge at our website as soon as reasonably practicable after this material is electronically filed with, or furnished to, the Commission. The reference to our website or web address does not constitute incorporation by reference of the information contained at that site.
 
INCORPORATION BY REFERENCE
 
We “incorporate by reference” information from other documents that we file with the SEC into this prospectus, which means that we disclose important information to you by referring you to those documents. The information incorporated by reference is deemed to be part of this prospectus except for any information that is superseded by information included directly in this prospectus, and the information that we file later with the SEC will automatically supersede this information. Any statement contained in this prospectus or any prospectus supplement or a document incorporated by reference in this prospectus or in any prospectus supplement will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any other subsequently filed document that is incorporated by reference in this prospectus modifies or superseded the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus. You should not assume that the information in this prospectus is current as of the date other than the date on the cover page of this prospectus.
 
 
59
 
 
We are incorporating by reference into this prospectus any additional documents that we may file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the effective date of the registration statement and prior to the termination of the offering.
 
You may request a copy of any document incorporated by reference in this prospectus and any exhibit specifically incorporated by reference in those documents, at no cost, by writing or telephoning us at the following address or phone number:
 
Premier Biomedical, Inc.
P.O. Box 25
Jackson Center, PA 16133
Attn: Investor Relations
(724) 633-7033
 
EXPERTS
 
The audited financial statements of Premier Biomedical, Inc. as of December 31, 2018 and 2017 appearing in this prospectus which is part of a registration statement have been so included in reliance on the report of M&K CPAS, PLLC, given on the authority of such firm as experts in accounting and auditing.
 
 
60
 
 
INDEX TO FINANCIAL STATEMENTS
 
For the Three and Nine Months ended September 30, 2019 and 2018
 
Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 (Unaudited)
F-1
 
 
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 (Unaudited)
F-2
 
 
Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the nine months ended September 30, 2019 and 2018 (Unaudited)
F-3
 
 
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (Unaudited)
F-4
 
 
Notes to Condensed Consolidated Financial Statements 
F-5 to F-20
 
For the Years ended December 31, 2018 and 2017
 
Report of Independent Registered Public Accounting Firm 
F-21
 
 
Balance Sheets as of December 31, 2018 and 2017 (Audited) 
F-22
 
 
Statements of Operations for the years ended December 31, 2018 and 2017 (Audited)
F-23
 
 
Statement of Stockholders’ Equity (Deficit) for the years ended December 31, 2018 and 2017 (Audited)
F-24
 
 
Statements of Cash Flows for the years ended December 31, 2018 and 2017 (Audited)
F-25
 
 
Notes to Financial Statements 
F-26 to F-44
 
 
 
61
 
 
PREMIER BIOMEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
September 30,
 
 
December 31,
 
 
 
2019
 
 
2018
 
ASSETS
 
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash
 $117,209 
 $86,827 
Accounts receivable
  3,387 
  3,092 
Inventory
  20,516 
  25,985 
Other current assets
  36,470 
  43,883 
Total current assets
  177,582 
  159,787 
 
    
    
Property and equipment, net
  7,918 
  5,203 
 
    
    
Total assets
 $185,500 
 $164,990 
 
    
    
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
    
    
 
    
    
Current liabilities:
    
    
Accounts payable
 $192,543 
 $264,398 
Accounts payable, related parties
  31,081 
  25,944 
Accrued interest
  49,148 
  22,099 
Convertible notes payable, net of discounts of $278,228 and $-0- at September 30, 2019
    
    
and December 31, 2018, respectively, including $139,614 currently in default
  192,286 
  309,637 
Derivative liabilities
  1,838,652 
  1,690,304 
Total current liabilities
  2,303,710 
  2,312,382 
 
    
    
Total liabilities
  2,303,710 
  2,312,382 
 
    
    
Commitments and contingencies
  - 
  - 
 
    
    
Stockholders' equity (deficit):
    
    
Series A convertible preferred stock, $0.001 par value, 10,000,000 shares authorized, 2,000,000 shares designated, issued and outstanding at September 30, 2019 and December 31, 2018, respectively
  2,000 
  2,000 
Series B convertible preferred stock, $0.001 par value, 1,000,000 shares designated, 133,780 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
  134 
  150 
Common stock, $0.00001 par value, 1,000,000,000 shares authorized, 49,216,810 and 5,652,410 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
  492 
  57 
Additional paid in capital
  14,947,033 
  14,572,754 
Subscriptions payable, consisting of 276,960 shares at December 31, 2018
  - 
  5,345 
Accumulated deficit
  (17,067,869)
  (16,727,698)
Total stockholders' equity (deficit)
  (2,118,210)
  (2,147,392)
 
    
    
Total liabilities and stockholders' equity (deficit)
 $185,500 
 $164,990 
 
See accompanying notes to financial statements.
 
 
F-1
 
 
PREMIER BIOMEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
For the Three Months
 
 
For the Nine Months
 
 
 
Ended September 30,
 
 
Ended September 30,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 $3,465 
 $8,225 
 $12,975 
 $30,709 
Cost of goods sold
  1,653 
  4,373 
  5,470 
  20,577 
Gross profit
  1,812 
  3,852 
  7,505 
  10,132 
 
    
    
    
    
Operating expenses:
    
    
    
    
General and administrative
  36,757 
  62,572 
  138,589 
  139,881 
Professional fees
  29,609 
  22,613 
  88,604 
  100,953 
Total operating expenses
  66,366 
  85,185 
  227,193 
  240,834 
 
    
    
    
    
Net operating loss
  (64,554)
  (81,333)
  (219,688)
  (230,702)
 
    
    
    
    
Other income (expense):
    
    
    
    
Interest expense
  (56,002)
  (184,624)
  (101,793)
  (322,323)
Change in derivative liabilities
  (61,078)
  (97,578)
  (18,690)
  655,808 
Total other income (expense)
  (117,080)
  (282,202)
  (120,483)
  333,485 
 
    
    
    
    
Net income (loss)
 $(181,634)
 $(363,535)
 $(340,171)
 $102,783 
 
    
    
    
    
Weighted average number of common shares outstanding - basic
  26,817,415 
  3,306,069 
  14,837,666 
  3,058,442 
Weighted average number of common shares outstanding - fully diluted
  26,817,415 
  3,306,069 
  14,837,666 
  3,070,392 
 
    
    
    
    
Net income (loss) per share - basic
 $(0.01)
 $(0.11)
 $(0.02)
 $0.03 
Net income (loss) per share - fully diluted
 $(0.01)
 $(0.11)
 $(0.02)
 $0.03 
 
See accompanying notes to financial statements.
 
 
F-2
 
 
PREMIER BIOMEDICAL, INC.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)