What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2021-04-15 compared with 2020-05-14 · 307 added, 273 removed, 148 unchanged (80% of the section changed)

1 unchanged sentence

Company’s common stock began trading on May 8, 2017, and currently trades on the OTC Pink Market under the symbol “OZSC.”

The closing price of our common stock on May 11, 2020 was $0.0121

The closing price of our common stock on April 14, 2021, was $0.081

of December 31, 2020, the Company had 3,397,958,292 shares of our common stock issued and outstanding held by 96 holders of record.

Sales of Unregistered Securities

following table are all shares issued during the quarter ended December 31, 2020:

November 4, 2020, the Company issued 7,142,857 shares of common stock to an accredited investor upon the conversion of $25,000

of principal of their convertible promissory note dated April 28, 2020.

November 4, 2020, the Company issued 8,908,571 shares of common stock to an accredited investor upon the conversion of $28,000

of principal and $3,180 of accrued interest of their convertible promissory note dated April 28, 2020.

November 10, 2020, the Company issued 59,706,711 shares of common stock to an accredited investor upon the conversion of $110,000

of principal and $22,549 of accrued interest of their convertible promissory note dated May 4, 2020.

November 16, 2020, the Company issued 47,599,845 shares of common stock to an accredited investor upon the conversion of $80,000

of principal and $24,720 of accrued interest of their convertible promissory note dated March 9, 2020.

November 27, 2020, the Company issued 27,683,884 shares of common stock to an accredited investor upon the cashless exercise of

their warrant dated May 4, 2020.

November 30, 2020, the Company issued 88,340,657 shares of common stock to an accredited investor upon the conversion of $162,000

of principal and $27,816 of accrued interest of their convertible promissory note dated May 14, 2020.

December 1, 2020, the Company issued 10,000,000 shares to its legal counsel for past legal services performed.

December 14, 2020, the Company issued 8,064,516 shares of common stock to an accredited investor upon the conversion of $25,000

of principal of their convertible promissory note dated June 11, 2020.

December 14, 2020, the Company issued 10,058,065 shares of common stock to an accredited investor upon the conversion of $28,000

of principal and $3,180 of accrued interest of their convertible promissory note dated June 11, 2020.

Company issued the foregoing securities in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities

Act of 1933, as amended, and/or Rule 506(b) promulgated thereunder, as there was no general solicitation to the investors and

the transactions did not involve a public offering.

have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the

4 unchanged sentences

There are no contractual restrictions on our ability to declare or pay dividends.

authorized for issuance under equity compensation plan s

SALES OF UNREGISTERED SECURITIES

than as previously disclosed on our Current Reports on Form 8-K or Quarterly Reports on Form 10-Q filed with the SEC, we did not

issue any unregistered equity securities during the twelve months ended December 31, 2019.

authorized for issuance under equity compensation plans

of Equity Securities by the Issuer and Affiliated Purchasers

24 unchanged sentences

We undertake no obligation to update these forward-looking

independent auditors’

reports on our financial statements for the years ended December 31, 2019 and 2018 includes a “going

concern”

explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.

Management’s

plans in regard to the factors prompting the explanatory paragraph are discussed below and also in Note 12 to the consolidated

financial statements filed herein.

our financial statements are presented on the basis that we are a going concern, which contemplates the realization of assets

1 unchanged sentence

a substantial doubt about our ability to continue as a going concern.

Surgical Corp.

Energy Solutions, Inc.

(the “Company,”

3 unchanged sentences

as Newmarkt Corp.

on July 17, 2015, under the laws of the State of Nevada, for the purpose of renting out Segways and bicycles.

Following the acquisition of OZOP Surgical, Inc.

as discussed below, we have been engaged in the business of inventing, designing,

developing, manufacturing and globally distributing innovative endoscopic instruments, surgical implants, instrumentation, devices

and related technologies, focused on spine, neurological and pain management procedures and specialties.

April 13, 2018, we entered into and completed a share exchange agreement (the “Share Exchange Agreement”) with OZOP

Surgical, Inc.

(“OZOP”), the shareholders of OZOP (the “OZOP Shareholders”) and Denis Razvodovskij, the

then holder of 2,000,000 shares of our common stock.

Pursuant to the terms of the Share Exchange Agreement, the OZOP Shareholders

transferred and exchanged 100% of the capital stock of OZOP in exchange for an aggregate of 25,000,000 newly issued shares of

our common stock (the “Share Exchange”).

After giving effect to the redemption of 2,000,000 shares of our common stock

pursuant to the Redemption Agreement discussed below and the issuance of 25,000,000 shares of our common stock pursuant to the

Share Exchange Agreement, we had 25,797,500 shares of common stock issued and outstanding, with the OZOP Shareholders, as a group,

owning 96.9% of such shares.

The merger was accounted for as a reverse merger, whereby OZOP was considered the accounting acquirer

and became a wholly-owned subsidiary of the Company.

In accordance with the accounting treatment for a “reverse merger”

or a “reverse acquisition,”

the historical financial statements prior to the reverse merger were and will be replaced

with the historical financial statements of OZOP prior to the reverse merger, in all future filings with the SEC.

The consolidated

financial statements after completion of the reverse merger have and will include the assets, liabilities and results of operations

of the combined company from and after the closing date of the reverse merger.

connection with the acquisition of OZOP, we purchased and redeemed 2,000,000 shares of our common stock from Mr.

for a total purchase price of $350,000 pursuant to a Share Redemption Agreement (the “Redemption Agreement”).

to the terms of the Share Exchange Agreement, effective April 13, 2018, Mr.

Razvodovskij resigned as the Company’s Chief

Executive Officer, Chief Financial Officer, Secretary, and sole director, and Michael Chermak, Salman J.

Chaudhry and Eric Siu

were named as directors of the Company.

On March 3, 2019, Mr.

Thomas McLeer was named a director.

Chaudhry resigned from our

board of directors on March 4, 2019, and Mr.

Siu resigned from the board on March 5, 2019.

on July 17, 2015, under the laws of the State of Nevada.

October 29, 2020, the Company formed a new wholly owned subsidiary, Ozop Surgical Name Change Subsidiary, Inc., a Nevada corporation

(“Merger Sub”).

The Merger Sub was formed under the Nevada Revised Statutes for the sole purpose and effect of changing

the Company’s name to “Ozop Energy Solutions, Inc.”

That same day the Company entered into an Agreement and

Plan of Merger (the “Merger Agreement”) with the Merger Sub and filed Articles of Merger (the “Articles of Merger”)

with the Nevada Secretary of State, merging the Merger Sub into the Company, which were stamped effective as of November 3, 2020.

As permitted by the Section 92.A.180 of the Nevada Revised Statutes, the sole purpose and effect of the filing of Articles of

Merger was to change the name of the Company from Ozop Surgical Corp.

to “Ozop Energy Solutions, Inc.”

Purchase Agreement

July 10, 2020, the Company entered into a Stock Purchase Agreement (the “SPA”) with Power Conversion Technologies,

Inc., a Pennsylvania corporation (“PCTI”), and Catherine Chis (“Chis”), PCTI’s Chief Executive Officer

(“CEO”) and its sole shareholder.

Under the terms of the SPA, the Company acquired one thousand (1,000) shares of

PCTI, which represents all of the outstanding shares of PCTI, from Chis in exchange for the issuance of 47,500 shares of the Company’s

Series C Preferred Stock, 18,667 shares of the Company’s Series D Preferred Stock, and 500 shares of the Company’s

Series E Preferred Stock to Chis.

The Acquisition is being accounted for as a business combination and was treated as a reverse

acquisition for accounting purposes with PCTI as the accounting acquirer in accordance with Financial Accounting Standards Board

Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”).

In accordance with the accounting

treatment for a reverse acquisition, the Company’s historical financial statements prior to the reverse merger were and

will be replaced with the historical financial statements of PCTI prior to the reverse merger, in all future filings with the

Securities and Exchange Commission (the “SEC”).

The consolidated financial statements after completion of the

reverse merger have and will include the assets, liabilities and results of operations of the combined company from and after

the closing date of the reverse merger.

designs, develops, manufactures and distributes standard and custom power electronic solutions.

PCTI serves clients in several

industries including energy storage, shore power, DEWs, microgrid, telecommunications, military, transportation, renewable energy,

aerospace and mission critical defense systems.

Customers include the United States military, other global military organizations

and many of the world’s largest industrial manufacturers.

All of its products are manufactured in the United States.

of the Company’s product scope and the high-power niche that their products occupy, the Company is aggressively targeting

the rapidly growing renewable and energy storage markets.

The Company’s mission is to be a global leader for high power

electronics with a standard of continued innovation.

Company utilized the Option Pricing Method (the “OPM”) to value the transaction.

The OPM method treats all equity

linked instruments as call options on the enterprise value, with exercise prices and liquidation preferences based on the terms

of the various common, preferred, options, warrants, and convertible debt.

Under this method, the common stock only has value

if the funds available for distribution to the shareholders exceed the liquidation preferences of the preferred stock and face

value of the convertible debt.

The timing of a liquidity event is required to utilize this method.

The OPM considers the various

terms of the stockholder agreements—including the level of seniority among the securities, dividend policy, conversion ratios,

and cash allocations—upon liquidation of the enterprise.

In addition, the method implicitly considers the effect of the

liquidation preference as of the future liquidation date, not as of the valuation date.

A feature of the OPM is that it explicitly

recognizes the option-like payoffs of the various share classes utilizing information in the underlying asset (that is, estimated

volatility) and the risk-free rate to adjust for risk by adjusting the probabilities of future payoffs.

The following table summarizes

the preliminary value of the consideration issued and the preliminary purchase price allocation of the fair value of assets acquired

and liabilities assumed in the transaction.

Purchase Price Allocation

Fair value of OZOP equity consideration issued

Assets acquired

Liabilities assumed

(11,612,618 )

Company reviews the goodwill allocated to each of our reporting units for possible impairment annually and whenever events or

changes in circumstances indicate the carrying amount may not be recoverable.

Pursuant to that review, management has determined

that the goodwill arising from the above transaction has been impaired and accordingly $11,201,145 has been recorded as an impairment

expense for the year ended December 31, 2020.

in the audited Consolidated Statements of Comprehensive Loss for the year ended December 31, 2020, are the results of Ozop, the

accounting acquiree, of revenues of $-0- and a loss before income taxes of $7,782,364.The following table provides unaudited pro

forma results of operations for the years ended December 31, 2020, and 2019, as if the acquisition had been consummated as of

the beginning of that period presented.

The pro forma results include the effect of certain purchase accounting adjustments, such

as the estimated changes in depreciation and amortization expense on the acquired intangible assets.

However, pro forma results

do not include any anticipated cost savings (if any) of the combined companies.

Accordingly, such amounts are not necessarily

indicative of the results if the acquisition has occurred on the date indicated, or which may occur in the future.

Unaudited pro forma results year ended December 31, 2020

Unaudited pro forma results year ended December 31, 2019

Loss before income taxes

(51,779,499 )

Basic and fully diluted loss per share

March 28, 2019, the Company filed a Certificate of Designation with the Secretary of State of Nevada to designate 1,000,000 shares

5 unchanged sentences

On April 1, 2019, the Company issued 1,000,000 shares of Series B Preferred Stock to the

Company’s CEO (resigned February 28, 2020) and Director.

Company’s former CEO and Director (resigned February 28, 2020).

The shares were valued at $68,000 of which $25,000 was applied

7 unchanged sentences

of the Company.

September 19, 2019, the Company issued 50,000 shares of its Series C Preferred Stock to the Company’s CEO (resigned February

28, 2020) and Director, in consideration of the cancellation and return of 1,000,000 shares of the Company’s Series B Preferred

On September 20, 2019, the Company filed a Certificate of Withdrawal of Certificate

of Designation (the “Certificate of Withdrawal”) for the Company’s Series B Preferred Stock, pursuant to which

the prior designation of the Company’s Series B Stock was cancelled.

September 19, 2019, the Company issued 50,000 shares of its Series C Preferred Stock to the Company’s former CEO (resigned

February 28, 2020) and Director, in consideration of the cancellation and return of 1,000,000 shares of the Company’s Series

B Preferred Stock.

On September 20, 2019, the Company filed a Certificate of Withdrawal

of Certificate of Designation (the “Certificate of Withdrawal”) for the Company’s Series B Preferred Stock,

pursuant to which the prior designation of the Company’s Series B Stock was cancelled.

October 29, 2019, the Company amended its’

2 unchanged sentences

been designated as Preferred Stock, par value $0.001.

The Preferred Stock shall

be issuable in such series, and with such designations, rights and preferences

as the Board of Directors may determine from time

The Preferred Stock shall be issuable in such series, and with such designations,

rights and preferences as the Board of Directors may determine from time to time.

December 26, 2019, the Company’s Board of Directors approved an amendment to the Company’s amended and restated certificate

10 unchanged sentences

been designated as Preferred Stock, par value $0.001.

The Preferred Stock shall

be issuable in such series, and with such designations, rights and preferences

as the Board of Directors may determine from time

was originally incorporated in Switzerland on November 28, 1998 under the name Perma Consultants Holding AG (“Perma”).

On July 19, 2016, Mr.

Eric Siu (“Siu”), one of our directors purchased 100% of the outstanding capital stock of Perma

and changed the name from Perma to Ozop Surgical AG (“Ozop AG”).

On February 1, 2018, Ozop AG was re-domiciled as

a Delaware corporation and changed its name to Ozop Surgical, Inc.

On July 28, 2016, Ozop formed as the sole member, Ozop Surgical,

LLC (“Ozop LLC”), a Wyoming limited liability company.

On October 28, 2016, Ozop acquired 100% of Ozop Surgical Limited

(“Ozop HK”), from Siu, the sole shareholder of Ozop HK.

Ozop HK, is a private limited company incorporated in Hong

February 16, 2018, OZOP acquired the 100% membership interest (the “Membership Interest”) in Spinus, LLC, a Texas

limited liability company (“Spinus ”

), from RWO Medical Consulting LLC (“RWO”), a Texas limited

liability company (the “Acquisition”).

OZOP purchased the Membership Interest from RWO in exchange for;

(i) 5,000,000

shares OZOP’s common stock and ii) the assumption of all liabilities of Spinus, including an obligation of $250,000 pursuant

to a license agreement by and between Spinus and a third party (the “Assumed Debt”).

The Assumed Debt was paid in

November 2018.

There have not been any sales of the licensed products and accordingly, no royalties have been incurred.

August 23, 2019, the Company entered into the Agreement (see Note 1) with SRI.

Pursuant to the Agreement, SRI granted to the Company

an exclusive license, for products, as defined in the Agreement, and utilized in spine and related surgical procedures.

the Agreement, SRI continued to market the Swedge platform along with the existing portfolio to existing US and International

Ozop purchased all existing inventory of SRI instruments and implants and utilized SRI as a distributor.

Company began recognizing revenues for the sales of SRI product in September 2019.

To optimize sales potential under the Agreement,

the Company, on September 2, 2019, engaged an industry experienced consultant, with distributor relationships, performing the

services of EVP Sales and Marketing.

On January 16, 2020, the Company received via email from SRI notice that the Agreement dated

August 23, 2019, between SRI and the Company has been revoked, as the Company did not cure a payment default within the cure period.

The Preferred Stock shall be issuable in such series, and with such designations,

rights and preferences as the Board of Directors may determine from time to time.

July 7, 2020, the Company filed an Amended and Restated Certificate of Designation with the State of Nevada of the Company’s

Series C Preferred Stock.

Under the terms of the Amendment to Certificate of Designation of Series C Preferred Stock, 50,000 shares

of the Company’s preferred remain designated as Series C Preferred Stock.

The holders of Series C Preferred Stock have no

conversion rights and no dividend rights.

For so long as any shares of the Series C Preferred Stock remain issued and outstanding,

the Holder thereof, voting separately as a class, shall have the right to vote on all shareholder matters equal to sixty-seven

(67%) percent of the total vote.

On July 10, 2020, pursuant to the SPA with PCTI, the Company issued 47,500 shares of Series C

preferred Stock to Chis.

As of December 31, 2020, there were 50,000 shares of Series C Preferred Stock issued and outstanding,

of which 2,500 are issued to Mr.

July 7, 2020, the Company filed a Certificate of Designation with the State of Nevada of the Company’s Series D Preferred

Under the terms of the Certificate of Designation of Series D Preferred Stock, 20,000 shares of the Company’s preferred

stock have been designated as Series D Convertible Preferred Stock.

The holders of the Series D Convertible Preferred Stock shall

not be entitled to receive dividends.

The holders as a group may, at any time convert all of the shares of Series D Convertible

Preferred Stock into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued

and outstanding shares of common stock of the Company on the date of conversion, by 3.

Except as provided in the Certificate of

Designation or as otherwise required by law, no holder of the Series D Convertible Preferred Stock shall be entitled to vote on

any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.

The Series D Convertible

Preferred Stock shall not bear any liquidation rights.

On July 10, 2020, pursuant to the SPA with PCTI, the Company issued 18,667

shares of Series D preferred Stock to Chis, and on August 28, 2020.

Pursuant to Mr.

Conway’s employment agreement, the Company

issued 1,333 shares of Series D Preferred Stock to Mr.

As of December 31, 2020, there were 20,000 shares of Series D Preferred

Stock issued and outstanding.

July 7, 2020, the Company filed a Certificate of Designation with the State of Nevada of the Company’s Series E Preferred

Under the terms of the Certificate of Designation of Series E Preferred Stock, 3,000 shares of the Company’s preferred

stock have been designated as Series E Preferred Stock.

The holders of the Series E Convertible Preferred Stock shall not be entitled

to receive dividends.

No holder of the Series E Preferred Stock shall be entitled to vote on any matter submitted to the shareholders

of the Corporation for their vote, waiver, release or other action, except as may be otherwise expressly required by law.

time, the Corporation may redeem for cash out of funds legally available therefor, any or all of the outstanding Preferred Stock

(“Optional Redemption”) at $1,000 (one thousand dollars) per share.

The shares of Series E Preferred Stock have not

been registered under the Securities Act of 1933 or the laws of any state of the United States and may not be transferred without

such registration or an exemption from registration.

On July 10, 2020, pursuant to the SPA with PCTI, the Company issued 500 shares

of Series E preferred Stock to Chis, and on August 28, 2020.

Pursuant to Mr.

Conway’s employment agreement, the Company

issued 500 shares of Series E Preferred Stock to Mr.

As of December 31, 2020, there were 1,000 shares of Series E Preferred

Stock issued and outstanding.

of Operations for the years ended December 31, 2020 and 2019:

following discussion relates to the historical financial statements of PCTI for 2019, and through July 10, 2020.

July 11, 2020 the consolidated financial statements include the assets, liabilities and results of operations of PCTI and Ozop,

(the combined company from and after the closing date of the reverse merger).

the year ended December 31, 2020, the Company generated revenue of $1,411,432, compared to $492,128 for the year ended December

The revenues are from the sale of spine surgery products and endoscopes.

Revenues of $267,742 for the year ended December

31, 2019, were pursuant to the Agreement with SRI, while revenues of $49,123 and $107,851 for the years ended December 31, 2019,

and 2018, respectively, where from Spinus, were recognized as an agent and were recorded at net.

Additionally, revenues from 2018

of $49,607 were derived from Ozop HK.

The increase in revenues is a result of a delay in 2019, by a customer in making a substantial change to the specification

and issuing a modification after the purchase order was released for production.

The project with revenues of approximately $578,000

was subsequently shipped in 2020.

operating expenses for the years ended December 31, 2020, and 2019, were $17,585,427 and $552,381, respectively.

1 unchanged sentence

expenses were comprised of:

ended December 31,

and consulting fees

and development

and administrative.

period Management fees consist of monthly fees to our CEO (resigned February 28, 2020), COO (resigned October 2019) and CFO (resigned

February 28,2020) of $15,000, $15,000 and $10,000, respectively.

The 2018 period included monthly fees of $10,000 for the same

positions as well as $10,000 per month to the former CEO of Ozop HK (resigned in March 2019).

Effective February 28, 2020, the

Company entered into an employment agreement with Brian Conway as CEO.

Conway’s compensation is $120,000 annually.

based compensation for the year ended December 31, 2019, is comprised of:

of $216,667 related to a one-year consulting agreement effective on August 31, 2018, pursuant to the issuance of 650 shares

of common stock.

The Company valued the shares at $500 per share (the price the Company was selling shares of common stock

on the date of the agreement).

October 19, 2018, the company recorded the issuance of 450 shares of common stock, as the first tranche of a one- year consulting

agreement requiring a total of 1,800 shares.

The Company valued the shares issued at $500 per share (the price the Company

was selling shares of common stock on the date of the agreement).

The Company recorded $225,000 as deferred stock compensation

to be amortized over the first three months of the agreement, and accordingly has included $52,500 in stock-based compensation

for the year ended December 31, 2019.

the year ended December 31, 2019, the Company recorded 1,350 shares of common stock to be issued pursuant to the one-year

agreement above to issue 1,800 shares.

The 1,350 shares were valued at $410,370, based on the market price of the common stock

on their respective date of issuances, and the Company expensed $410,370 as stock-based compensation for the year ended December

March 24, 2019, the Company signed a one-year consulting agreement with Newbridge.

As compensation for its services under

the Agreement, Newbridge and its assignees received 172 shares of the Company’s common stock.

The Company valued the

shares at $77,130, based on the market price of the common stock on the date of the agreement, to be amortized over the one-year

term of the contract.

For the year ended December 31, 2019, the Company amortized $59,347 as stock-based compensation expense,

respectively.

April 1, 2019, the Company issued 1,000,000 shares of Series B Preferred Stock to the Company’s CEO (resigned February

The shares were valued at $68,000 of which $25,000 was applied to accrued liabilities-related and $43,000 was recorded

as stock-based compensation expense for the year ended December 31, 2019.

June 14, 2019, the Company issued 100 shares of common stock for consulting services.

The shares were valued at $275 per share

(the market price on the date of the agreement) and $27,500 was recorded as stock-based compensation expense for the year

ended December 31, 2019.

June 27, 2019, the Company issued 100 shares of common stock for consulting services.

The shares were valued at $120 per share

(the market price on the date of the agreement) and $12,000 was recorded as stock-based compensation expense for the year

ended December 31, 2019, respectively.

September 3, 2019, the Company signed a six- month consulting agreement with a consultant.

As compensation for its services

under the Agreement, the consultant received 1,250 shares of the Company’s common stock.

The Company valued the shares

at $46,875, based on the market price of the common stock on the date of the agreement, to be amortized over the term of the

For the year ended December 31, 2019, the Company amortized $31,250 as stock-based compensation expense.

September 3, 2019, the Company signed a six- month consulting agreement with a consultant.

As compensation for its services

under the Agreement, the consultant received 1,250 shares of the Company’s common stock.

The Company valued the shares

at $46,875, based on the market price of the common stock on the date of the agreement, to be amortized over the term of the

For the year ended December 31, 2019, the Company amortized $31,250 as stock-based compensation expense.

September 3, 2019, the Company issued 200 shares of common stock for web-site development services.

The shares were valued

at $20 per share (the market price on the date of the agreement) and $4,000 was recorded as stock-based compensation expense

for the year ended December 31, 2019.

September 20, 2019, the Company issued 100 shares of common stock for consulting services.

The shares were valued at $14.2

per share (the market price on the date of the agreement) and $1,420 was recorded as stock-based compensation expense for

the year ended December 31, 2019.

September 25, 2019, the Company issued 300 shares of common stock for consulting services.

The shares were valued at $9 per

share (the market price on the date of the agreement) and $2,700 was recorded as stock-based compensation expense for the

Year ended December 31,

based compensation expense for the year ended December 31, 2018 was comprised of:

July 1, 2018, the Company recorded the issuance of 30 of common stock for legal services.

The Company valued the shares at

$500 per share (the price the Company was selling shares of common stock on the date of the agreement), pursuant to the April

PPM and recorded $15,000 of stock- based compensation expense for the year ended December 31, 2018.

August 31, 2018, the company recorded the issuance of 650 shares of common stock pursuant to a one-year consulting agreement.

The Company valued the shares at $500 per share (the price the Company was selling shares of common stock on the date of the

agreement), pursuant to the April PPM.

The Company recorded $325,000 as deferred stock compensation to be amortized over the

term of the agreement, and accordingly has included $108,333 in stock-based compensation for the year ended December 31, 2018.

October 19, 2018, the company recorded the issuance of 450,000 shares of common stock, as the first tranche of a one- year

consulting agreement requiring a total of 1,800,000 shares.

The Company valued the shares issued at $0.50 per share (the price

the Company was selling shares of common stock on the date of the agreement), pursuant to the October PPM.

The Company recorded

$225,000 as deferred stock compensation to be amortized over the first three months of the agreement, and accordingly has

included $172,500 in stock-based compensation for the year ended December 31, 2018.

October 24, 2018, the company recorded the issuance of 20,000 shares of common stock pursuant to a consulting agreement.

Company valued the shares at $0.50 per share (the price the Company was selling shares of common stock on the date of the

agreement), pursuant to the October PPM and recorded $10,000 of stock- based compensation expense.

November 21, 2018, the company recorded the issuance of 57,000 shares of common stock for services provided to the Company.

The Company valued the shares at $0.50 per share (the price the Company was selling shares of common stock on the date of

the agreement), pursuant to the October PPM and recorded $28,500 of stock- based compensation expense.

and development costs were $75,434 and $88,572 for the years ended December 31, 2019, and 2018, respectively, were all costs related

to development of new product.

expenses for the year ended December 31, 2019, consisted of:

Company impaired $44,200 of tradenames as management has decided not to go forward with the use of the trade name Spinus.

Company recorded an impairment of $274,854, for the termination of the SRI Agreement.

Company recorded a charge of $45,320 to inventory.

and administrative expenses, other

general and administrative expenses, other, were $633,228 and $349,954 for the years ended December 31, 2019, and 2018, respectively,

and were comprised of:

ended December 31,

and marketing

and entertainment

and amortization

Management fees, related parties

Stock-based compensation

Salaries, taxes and benefits

Professional and consulting fees

Advertising and marketing

Rent and office expenses

General and administrative.

of the above amounts include expenses incurred by PCTI for the years ended December 31, 2020, and 2019, respectively, and expenses

incurred by Ozop for the period July 11, 2020 through December 31, 2020.

and management fees- related parties, includes compensation paid to our CEO and to the President of PCTI, our wholly-owned subsidiary.

Beginning on July 10, 2020, the President of PCTI is compensated $13,000 per month and the Company’s CEO monthly base compensation

Both the CEO and President are eligible for additional bonuses as approved by the Board of Directors of the Company.

For the year ended December 31, 2020, the Company’s CEO’s total compensation was $377,804 and PCTI’s President

was compensated $83,500.

based compensation for the year ended December 31, 2020, of $4,286,648, is related to 1,333 shares of Series D Preferred Stock issued

Conway on August 28, 2020, pursuant to

his employment agreement.

The Series D Preferred Stock is convertible in the aggregate into three times the number of shares of common

stock outstanding at the time of conversion.

Conway owns 6.67% of the issued and outstanding Series D Preferred Stock, and based

on the 3,107,037,634 shares outstanding on August 28, 2020, Mr.

Conway’s Preferred Stock is convertible into 621,253,401 shares

of common stock.

Based on the share price of the common stock on that date of $0.0065, the shares were valued at $4,286,648.

taxes and benefits increased for the year ended December 31, 2020, compared to the same period in 2019.

The increase was a result

of increased sales and administrative personnel at PCTI, in support of the increased revenues as well as personnel hired for additional

customer recruitment.

and consulting increased for the year ended December 31, 2020, compared to December 31, 2019.

The increase was due to accounting

and auditing expenses of PCTI, necessary in preparation of the transaction with Ozop, as well as expenses incurred beginning July

11, 2020, by Ozop for their public company filing requirements.

and marketing expenses increased for the year ended December 31, 2020, compared to December

The increase was related to marketing programs during 2020, including brand awareness programs for both PCTI

and office expense (including supplies, utilities and internet costs) increased for the year ended December 31, 2010 compared

to the year ended December 31, 2019.

The increase was the result of including in the current year, rent and office expense of

approximately$44,000 for Ozop beginning in July 2020, and an increase of approximately $39,000 for PCTI for the year ended December

2020, compared to December 31, 2019.

the year ended December 31, 2020, the Company had the following expenses charged to impairment:

● $11,201,145

for the impairment of goodwill related to the transaction between PCTI and Ozop.

impairment was calculated based on the balance of the assets acquired and the liabilities

assumed as of December 31, 2020.

for the impairment of license rights as management

has decided not to go forward with the use of the license rights of Spinus.

for the impairment of goodwill related to the transaction between Ozop and Spinus.

Income (Expenses)

expenses, net, for the years ended December 31, 2020, and 2019, was $2,904,600 and $56,591, respectively, and were as follows.

of debt discount

on change in fair value of derivatives

(gain) on extinguishment of debt

other expense, net

Interest expense

Amortization of debt discount

Loss on change in fair value of derivatives

Loss (gain) on extinguishment of debt

Total other expense, net

increase in other expense is primarily a result of amortization of debt discounts and losses on changes in fair values of derivatives

and interest expense on the convertible notes assumed by PCTI on July 10, 2020.

net loss for the year ended December 31, 2020, was $20,482,953, compared to $571,595 for the year ended December 31, 2019.

increases are a result of the changes discussed above.

increases were primarily a result of impairment expenses of $11,526,303, stock compensation expense of $4,286,648, an increase in other

expenses of $2,847,909 as well as the operating results discussed above.

and Capital Resources

we have limited operating capital.

The Company anticipates that it will require a minimum of $1,000,000 of working capital to

complete substantially all of its desired business activity for the next twelve months, including bringing new products to market.

The Company has achieved only limited revenues from its business operations.

Our current capital and our other existing resources

will be sufficient only to provide a limited amount of working capital, and, to date, the revenues generated from our business

operations have not been sufficient to fund our operations or planned growth.

As noted above, we will require additional capital

to continue to operate our business, and to further expand our business.

We may be unable to obtain the additional capital required.

Our inability to generate capital or raise additional funds when required will have a negative impact on our operations, business

development and financial results.

the year ended December 31, 2019, we primarily funded our business operations with $1,497,700 of proceeds from the issuances of

convertible note financings as well as $100,000 from the sale of 200 shares of common stock at $500 per share.

Of the proceeds

$200,000 was used for the first license payment due, $410,825 was used to make principal and interest payments on convertible

debt and for working capital.

We may continue to rely on the issuance of convertible promissory notes to fund our business operations.

Currently, we have limited operating capital.

Our current capital and our other existing resources will be sufficient to provide the working capital needed for our current

business, however, additional capital will be required to meet our debt obligations, and to further expand our business.

be unable to obtain the additional capital required.

Our inability to generate capital or raise additional funds when required

will have a negative impact on our business development and financial results.

These conditions raise substantial doubt about

our ability to continue as a going concern as well as our recurring losses from operations, deficit in equity, and the need to

raise additional capital to fund operations.

This “going concern”

could impair our ability to finance our operations

through the sale of debt or equity securities.

Management’s plans in regard to these factors are discussed below and also

in Note 2 to the consolidated financial statements filed herein.

the year ended December 31, 2020, we primarily funded our business operations with $750,000 of proceeds received pursuant to an

agreement to provide future perpetual payments of 1.8% (as amended) of revenues, $1,553,000 of proceeds from the issuances of

$1,750,000 of promissory notes, $489,000 of proceeds from the issuances of $723,175 of convertible notes, $100,400 from the PPP

loan, $400,000 advance from affiliate and $42,420 received from shareholders.

Of the proceeds, $101,864 was used for repayment

of convertible notes and notes payable and $74,470 was paid back to shareholders.

of December 31, 2020, we had cash of $1,808,476 as compared to $27,382 at December 31, 2019.

As of December 31, 2020, we had current

liabilities of $7,872,764 (including $2,462,940 of non-cash derivative liabilities), compared to current assets of $397,343, which

resulted in a working capital deficit of $7,475,421.

The current liabilities are comprised of accounts payable, accrued expenses,

convertible debt, derivative liabilities, license fees payable and notes payable.

accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization

of assets and the satisfaction of liabilities in the normal course of business.

January 16, 2020, the Company received via email from SRI notice that the Agreement dated August 23, 2019, between SRI and the

Company has been revoked, as the Company did not cure a payment default within the cure period.

of December 31, 2019, the Company had a stockholders’

deficit of $5,167,116 and a working capital deficit of $7,475,421.

In addition, the Company has generated losses since inception.

These factors, among others, raise substantial doubt about the

ability of the Company to continue as a going concern.

liabilities of $6,885,845 (including $1,283,378 of non-cash derivative liabilities), compared to current assets of $2,177,792,

which resulted in a working capital deficit of $4,708,053.

The current liabilities are comprised of accounts payable, accrued

expenses, convertible debt, derivative liabilities and notes payable.

December 2019, a novel strain of coronavirus (COVID-19) emerged.

Because COVID-19 infections have been reported throughout

the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or

directives aimed at minimizing the spread of COVID-19.

The ultimate impact of the COVID-19 pandemic on the Company’s

operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence,

including the duration of the COVID-19 outbreak , new information which may emerge concerning the severity of the COVID-19

pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result

in an extended period of continued business disruption, and reduced operations.

Any resulting financial impact cannot be reasonably

estimated at this time but it may have a material adverse impact on our business, financial condition and results of operations.

Management expects that its business will be impacted to some degree, but the significance of the impact of the COVID-19 outbreak

on the Company’s business and the duration for which it may have an impact cannot be determined at this time.

the year ended December 31, 2020, net cash used in operating activities was $1,811,816 compared to $94,084 for the year ended

December 31, 2019.

For the year ended December 31, 2019, our net cash used in operating activities was primarily attributable

to the net loss of $6,140,158, adjusted for the loss of $653,551 on the change in fair value of derivative liabilities, loss of

$861,238 in extinguishment of debt, non-cash expenses of interest and amortization and depreciation of $2,018,556, stock-based

compensation of $892,004 and impairment charges of $364,374.

Net changes of $216,779 in operating assets and liabilities reduced

the cash used in operating activities.

For the year ended December 31, 2018, our net cash used in operating activities was primarily

attributable to the net loss of $2,490,705 and a gain of $661,853 in extinguishment of debt, adjusted by the non-cash expenses

of interest and amortization and depreciation of $1,582,786, stock based compensation of $333,334 and loss on the change in fair

value of derivatives of $33,787.

Net changes of $366,274 in operating assets and liabilities reduced the cash used in operating

the year ended December 31, 2019, investing activities were comprised of $200,000 paid pursuant to the Agreement with SRI.

the year ended December 31, 2018, cash used investing activities of $236,066 was comprised of the cash acquired in the Spinus

acquisition of $21,580, offset by the purchase of office equipment of $7,646 and payment of $250,000 under the Spinus license

the year ended December 31, 2019, the net cash provided by financing activities was $1,201,875, compared to $1,011,188 for the

For the year ended December 31, 2020, our net cash used in operating activities was primarily attributable to the

net loss of $20,482,953, adjusted by impairment charges of $11,526,303, stock-based compensation of $4,286,648, the non-cash expenses

of interest and amortization and depreciation of $2,498,966 and losses on the fair value changes in derivatives of $176,050.

of $378,723 in operating assets and liabilities and a gain on extinguishment of debt of $195,553 reduced the cash used in operating activities.

the year ended December 31, 2019, net cash used in operating activities of $94,084 was primarily attributable to the net loss

of $571,595, adjusted non-cash expenses of depreciation of $7,259, and net changes of $470,252 in operating assets and liabilities

reduced the cash used in operating activities.

the year ended December 31, 2020, the net cash provided by investing activities was $1,574,431, compared to $-0- for the

year ended December 31, 2019.

During the year ended December 31, 2019, we received $1,497,700 of proceeds from the issuances of

convertible note financings, as well as $100,000 from the sale of 200 shares of common stock at $500 per share and $15,000 received

on the issuance of a note payable.

The Company made payments on convertible debt and notes payable of $410,825.

For the year ended December 31, 2020, the Company received proceeds of $750,000 pursuant to an obligation

to pay a perpetual 1.8% (as amended) fee of revenues, acquired $470,849 cash and $400,000 advance from affiliate.

During the year

ended December 31, 2018, we received $1,333,000 of proceeds from the issuance of a note payable ($230,000) and convertible note

financings ($1,527,425) as well as $300,000 from the sale of 600 shares of common stock at $500 per share.

Payments of $350,000

was used to redeem 2,000 shares of common stock from our former CEO and we also made payments on convertible debt of $201,800

and notes payable of $270,012.

ended December 31, 2020, the Company purchased $46,418 of office furniture and equipment.

and repaid $74,470 to shareholders.

the year ended December 31, 2020, the net cash provided by financing activities was $2,018,486, compared to $73,912 for

the year ended December 31, 2019.

During the year ended December 31, 2020, we received $489,000 of proceeds from the issuances of convertible

note financings, $1,553,000 from the issuances of promissory notes, $100,400 from the Payroll Protection Program and $42,420

from shareholders.

During the year ended December 31, 2020, the Company repaid $101,864 of principal of convertible notes and notes

payable and $74,470 to shareholders.

the year ended December 31, 2019, the Company received $83,437 from shareholders and $1,409 from issuances of notes payable

and made payments on notes payable of $6,152 and paid $4,782 to shareholders.

Accounting Policies

7 unchanged sentences

The consolidated financial statements of the Company include

the consolidated accounts of the Company and Ozop and its’

the consolidated accounts of the Company and its’

wholly owned subsidiaries;

Ozop LLC, Ozop HK and Spinus.

intercompany accounts and transactions have been eliminated in consolidation.

PCTI, Ozop LLC, Ozop HK and Spinus.

All intercompany

accounts and transactions have been eliminated in consolidation.

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

3 unchanged sentences

Actual results could differ from those estimates.

assets primarily represent purchased patent and license rights.

The Company amortizes these costs over the shorter of the legal

life of the patent or its estimated economic life using the straight-line method.

The Company evaluates long-lived assets for

impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability

of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted cash flows

to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured as the

amount by which the carrying amount of the assets exceeds the fair value of the assets.

January 1, 2018, the Company adopted ASC 606 —

19 unchanged sentences

December 31, 2020, and 2019.

and Development

and expenses that can be clearly identified as research and development are charged to expense as incurred.

For the years ended

December 31, 2019, and 2018, the Company recorded $75,434 and $88,572 of research and development expenses, respectively.

(Loss) Per Share

20 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity