What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-04-15 compared with 2020-05-14 · 1374 added, 1692 removed, 475 unchanged (87% of the section changed)

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meeting of the stockholders and until their successors are duly elected and qualified.

Executive Officer (resigned February 28, 2020) and Director

Financial Officer (resigned February 28, 2020)

Executive Officer and Interim Chief Financial Officer

Chermak, 61, has been a director and Chief Executive Officer of the Company since September 2016.

From 2012 to the present Mr.

Chermak has served as the Managing Director of Makena Investment Advisers, LLC.

From June 2011 to the present he has served as

president of MD Capital Advisors, Inc., a business advisory firm.

Previously, he was the founder and CEO of Healthdemographics,

Inc., a company in the healthcare predictive data and decision support business.

He sold the company in 1997 to Medirisk.

he was the co-founder and Chairman of Medibuy.com, an Internet healthcare supply vendor.

From 2005 to 2008, he was the Chairman

and Chief Executive Officer of Bridgetech Holdings International (OTC:

BGTH) which focused on introducing western medicine into

He has served on the Board of Directors and as an Audit Committee member of Beijing Origin Seed (NASDAQ:

SEED) from 2005

Chermak graduated from the University of New Mexico, Anderson School of Management.

Chermak resigned as the Company’s

CEO on February 28, 2020.

Hollander, 63, served as the Company’s Chief Financial Officer from April 13, 2018 to February 28, 2020.

has nearly 40 years of business experience including 25 years as Chief Financial Officer of private and public companies.

Since May 2017, Mr.

Hollander has been the Chief Executive Officer and Chief Financial Officer of Blockchain Solutions, Inc.

(“BLCS”

and f/k/a Cabinet Grow, Inc.), a publicly traded company.

From May 2014 to November 2015 Mr.

served as the CFO of BLCS and from January 2016 to May 2016 was the CEO and CFO of BLCS.

From May 2011 to September 2015, Mr.

Hollander was the Chief Financial Officer of Agritek Holdings, Inc.

(“Agritek”), a publicly traded company,

formerly known as MediSwipe, Inc.

Agritek provides real estate management and health and wellness product lines for the

medicinal marijuana industry.

Hollander founded Venture Equity, LLC, a Florida limited liability corporation

that offers financial and business consulting services.

Hollander began his career in 1981 in the accounting department

of Macgregor Sporting Goods, and became part of the executive management team.

Over his career, Mr.

Hollander contributed to

acquisitions, mergers assisting company’s preparing to go public and public reporting responsibilities, thereafter.

Hollander has a BS degree in Accounting from Fairleigh Dickinson University.

Hollander resigned as the Company’s

CFO on February 28, 2020.

Conway, the Chief Executive Officer and Interim Chief Financial Officer brings 20 years of proven success in marketing and

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ownership and changes in ownership on Forms 3, 4 and 5 with the SEC, and to furnish the Company with copies of the forms.

solely on its review of the forms it received, or written representations from reporting persons, the Company believes that all

of its directors, executive officers and greater than 10% beneficial owners complied with all such filing requirements during

Company does not believe that all of its directors, executive officers and greater than 10% beneficial owners complied with all

such filing requirements during 2020.

EXECUTIVE COMPENSATION

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following table sets forth information regarding compensation earned in or with respect to our fiscal years 2020 and 2019:

principal executive officer or other individual serving in a similar capacity during the fiscal year 2019 and 2018;

principal executive officer or other individual serving in a similar capacity during the fiscal years 2020, and 2019;

two most highly compensated executive officers other than our principal executive officers who were serving as executive officers

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Compensation information is shown for the fiscal years ended December 31, 2020,

Razvodovskij (1)

Hollander (4)

Effective April 13, 2018, Mr.

Razvodovskij resigned as the Company’s Chief Executive Officer, Chief Financial Officer, Secretary,

and then sole director.

On April 13, 2018, Mr.

Chermak was appointed as the Company’s Chief Executive Officer and member of the Board.

resigned his Chief Executive Officer role on February 28, 2020, and from his position as a member of the Company’s board

on April 28 2020.

On October 1, 2018, Salman J.

Chaudhry resigned from his position as Chief Operating Officer and further resigned from his position

as a member of the Company’s Board and from all positions with the Company on March 4, 2019.

On April 13, 2018, Mr.

Hollander was appointed as the Company’s Chief Financial Officer.

Hollander resigned February

On March 4, 2019, Eric Siu resigned from his position as a member of the Company’s Board.

On February 28, 2020, Mr.

Conway was appointed as the Company’s Chief Executive Officer.

Chis has been the CEO 0f PCTI since 2018.

OPTION GRANTS

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EMPLOYMENT AGREEMENTS

October 1, 2018, the Company entered into a Consulting Agreement (the “Agreement”) with Thomas J.

McLeer, pursuant

to which the Company agreed to engage Mr.

McLeer as the Company’s Chief Operating Officer and Mr.

McLeer agreed to provide

the Company with services typically provided by a Chief Operating Officer.

The term of the Agreement is for three (3) months and

pursuant to the Agreement the Company agreed to negotiate an employment agreement with Mr.

McLeer by December 31, 2018, with such

employment agreement planned to contain standard industry terms and conditions.

However, no employment agreement has been entered

Pursuant to the Agreement, the Company agreed to pay Mr.

McLeer $15,000 per month to be accrued monthly and to be paid upon

a successful closing of a minimum of $1,000,000 in a private placement fundraising by the Company.

McLeer resigned in October

February 28, 2020, the Company and Mr.

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Conway 1,333 shares of Series D Preferred Stock and 500 shares of Series E Preferred Stock.

The shares of Series D and E were

issued to Mr.

Conway on August 28, 2020.

than the foregoing, at this time, we do not have any written employment agreement or other formal compensation agreements with

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

following table shows the beneficial ownership of the Company’s shares as of May 11 2020, (unless otherwise noted) by (i)

each person known by the Company to own beneficially more than 5% of the outstanding shares, (ii) each director and director nominee

of the Company, (iii) each executive officer of the Company named in the Summary Compensation Table (the “Named Executive

Officers”

following table shows the beneficial ownership of the Company’s shares as of April 14, 2021, (unless otherwise noted) by

(i) each person known by the Company to own beneficially more than 5% of the outstanding shares, (ii) each director and director

nominee of the Company, (iii) each executive officer of the Company named in the Summary Compensation Table (the “Named

Executive Officers”

or “NEOs”), and (iv) all executive officers and directors of the Company as a group.

The table includes

shares that may be acquired within 60 days of May 11, 2020, upon the exercise of stock options by employees or outside directors

and shares of restricted stock.

table includes shares that may be acquired within 60 days of April 14, 2021, upon the exercise of stock options by employees or

outside directors and shares of restricted stock.

otherwise indicated, each of the persons or entities listed below exercises sole voting and dispositive power over the shares

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and representations of the stockholders.

Name and Title:

beneficial ownership

Officers and Directors:

Chermak (2), former Chief Executive Officer and Director

Clematis Street, Suite 714

Palm Beach FL 33401

Hollander (3), former Chief Financial Officer

Clematis Street, Suite 714 West Palm Beach, FL 33401

Conway (4), Chief Executive Officer and Director

Sandfort Lane Warwick, NY 10990

C Preferred Stock

directors and executive officers as a group (1 person)

C Preferred Stock

Percentages are based on 257,026,917 shares of the Company’s common stock and 2,500 shares of Series C Preferred Stock issued

and outstanding as of May 11, 2020.

The voting rights associated with the Series C Preferred Stock are each share of Preferred

Stock shall entitle the holder thereof to have voting rights equal to two times the sum of all the number of shares of other classes

of Company capital stock eligible to vote on all matters submitted to a vote of the stockholders of the Company, divided by the

number of shares of Preferred Stock issued and outstanding at the time of voting.

Chermak resigned as CEO on February 28, 2020 and resigned as a Director on April 28, 2020.

The 1,000 shares are in the name of Venture Equity, LLC, which is owned and controlled by Mr.

Hollander resigned

as CFO on February 28, 2020.

Conway was named CEO on February 28, 2020 and as a Director on April 28, 2020.

Includes 2,500 shares of Series C Preferred Stock that is convertible into 2,500 shares of common stock.

Percentages are based upon 771,078,591 shares of common stock, consisting of 257,026,917 shares of common stock issued and outstanding

and 514,052,394 voting shares of common stock based upon the 2,500 shares of Series C Preferred Stock issued and outstanding as

of May 11, 2020.

Executive Officers and Directors:

Brian P Conway, CEO and Director (2)

Series C Preferred Stock

Series D Preferred Stock

Catherine Chis, 5% shareholder (3)

12,467,289,639

Series C Preferred Stock

Series D Preferred Stock

Percentages are based on 4,452,523,933 shares of the Company’s common stock, 50,000 shares of Series C Preferred Stock and

20,000 shares of Series D Preferred stock issued and outstanding as of April 14, 2021.

The voting rights associated with the Series

C Preferred Stock in the aggregate are equal to 67% of the total vote.

Series C Preferred Stock has no conversion rights.

D Preferred Stock has no voting rights and has conversion rights equal to in the aggregate three (3) times the issued and outstanding

shares of common stock on the date of conversion.

The holders as a group may, at any time convert all of the issued and outstanding

shares of the Series D Preferred Stock.

Includes 1,333 shares of Series D Preferred Stock convertible into 890,282,160 shares of common stock.

Includes 18,667 shares of Series D Preferred Stock that is convertible into 12,467,289,639 shares of common stock.

Certain Relationships and Related Transactions

the years ended December 31, 2019, and 2018, the Company recorded expenses to its former officers in the following amounts:

ended December 31,

CEO, subsidiary

of December 31, 2019, and 2018, included in accounts payable and accrued expenses, related party is $470,886 and $542,982, respectively,

for the following amounts owed the Company’s former officers:

CEO, subsidiary

the years ended December 31, 2020, and 2019, the Company recorded expenses to its officers in the following amounts:

President, subsidiary

of December 31, 2020, and 2019, included in related party payable is $9,120 and $27,909, respectively, for the amounts owed the

Principal Accountant Fees and Services

following table presents fees for professional services rendered by Paritz & Company, P.A.

for the audit of the Company’s

annual financial statements for the fiscal years ended December 31, 2019, and December 31, 2018, as well as fees billed for other

services rendered by Paritz & Company, P.A.

during those periods.

Audit-Related

Fees are fees paid for professional services rendered for the audit of the Company’s annual consolidated financial statements,

reviews of the Company’s interim consolidated financial statements and statutory audit requirements at certain non-U.S.

Fees are fees paid for an international expansion review, transfer pricing studies, compliance services and tax consultation.

following table presents fees for professional services rendered by Prager Metis CPAs, LLC for the audit of the Company’s

annual financial statements for the fiscal years ended December 31, 2019, and 2018 (following the reverse merger) as well as fees

billed for other services rendered by Prager Metis CPAs, LLC during those periods.

Audit-Related

following is a summary of the fees billed to us by Prager Metis CPAs LLC, our independent registered public accounting firm, for

professional services rendered for the fiscal years ended December 31, 2020, and 2019.

Fees are fees paid for professional services rendered for the audit of the Company’s annual consolidated financial statements,

reviews of the Company’s interim consolidated financial statements and statutory audit requirements at certain non-U.S.

Fees are fees paid for an international expansion review, transfer pricing studies, compliance services and tax consultation.

Exhibits, Financial Statement Schedules

financial statements and Report of Independent Registered Public Accounting Firm are

listed in the “Index to Financial Statements and Schedules”

on page F-1 and

included on pages F-2 to F-21.

financial statements and Reports of Independent Registered Public Accounting Firms are listed in the “Index to Financial

Statements and Schedules”

on page F-1 and included on pages F-2 to F-30.

Statement Schedules

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(including those incorporated by reference).

following documents are filed as part of this report:

Share Exchange Agreement dated April 5, 2018 by and among Newmarkt Corp., the shareholders of Ozop Surgical, Inc., Ozop Surgical, Inc.

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to be signed on its behalf by the undersigned, thereunto duly authorized.

Surgical Corp.

Energy Solutions, Inc.

Executive Officer

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and Chief Executive Officer (principal executive officer)

SURGICAL CORP.

of Independent Registered Public Accounting Firm

Sheets as of December 31, 2019 and 2018

ENERGY SOLUTIONS, INC.

Reports of Independent Registered Public Accounting Firms

Balance Sheets as of December 31, 2020 and 2019

Statements of Comprehensive Loss for the years ended December 31, 2020 and 2019

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the Board of Directors and Stockholders of

Surgical Corp.

Energy Solutions, Inc.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Ozop Surgical Corp.

(the Company) as of December 31, 2019 and 2018,

and the related consolidated statements of comprehensive loss, stockholders’

deficit, and cash flows for each of two years

in the periods ending December 31, 2019, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the

period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

have audited the accompanying consolidated balance sheets of Ozop Energy Solutions, Inc.

(formerly known as Ozop Surgical Corp).

(the Company) as of December 31, 2020, and the related consolidated statements of comprehensive loss, stockholders’

(deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the consolidated financial

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position

of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020,

in conformity with accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 2 to the consolidated financial statements, 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.

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

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 regarding the Company’s ability to continue as a going concern.

Management’s

plans in regard to these matters are also described in Note 2 to the accompanying financial statements.

The accompanying financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

in Note 2 to the consolidated financial statements, As of December 31, 2020, the Company

had an accumulated deficit of $21,793,375 and a working capital deficit of $4,604,189.

In addition, the Company has generated

losses since inception .

These factors, among others, raise substantial doubt regarding the Company’s ability to continue

as a going concern.

Management’s plans in regard to these matters are also described in Note 2 to the accompanying financial

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

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have served as the Company’s auditor since 2018

Surgical, Corp

Report of Indepen dent

Registered Public Accounting Firm

the Board of Directors and

of Power Conversion Technologies, Inc.

on the Financial Statements

have audited the accompanying balance sheets of Power Conversion Technologies, Inc.

(an S-Corporation) as of December 31, 2019,

and the related statements of operations and retained earnings (deficit) and cash flows for the year then ended.

In our opinion,

these financial statements present fairly, in all material respects, the financial position of Power Conversion Technologies,

as of December 31, 2019, and the results of its operations and its cash flows for the year then ended, in conformity with

accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 2 to the financial statements, the Company has incurred net losses for several consecutive years, and as of December 31,

2019 they have a stockholder’s deficit of $1,233,433, and a working capital deficit of $1,248,632.

These conditions raise

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

The financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on these

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (“PCAOB”) and are required to be independent with respect to Power Conversion Technologies,

in accordance with the U.S.

federal securities laws and applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

Power Conversion Technologies, Inc.

is not required to have, nor were we engaged to perform, an audit of its internal

control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial

reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over

financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

supporting the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

have served as the Company’s auditor since 2020.

Backa Alfera and Company, LLC

ENERGY SOLUTIONS, INC.

(formerly known as Ozop Surgical Corp.)

BALANCE SHEET

Current Assets

and equipment, net

Rights, net of accumulated amortization

AND STOCKHOLDERS’

payable and accrued expenses

payable and accrued expenses, related parties

for common stock payable

notes payable, net of discounts

portion of notes payable

portion of license fee payable

Prepaid assets

Accounts receivable

Total Current Assets

Operating lease right-of-use asset, net

Property and equipment, net

LIABILITIES AND STOCKHOLDERS’

Current Liabilities

Term Liabilities

option payable

Accounts payable and accrued expenses

Related party liabilities

Convertible notes payable, net of discounts

Current portion of notes payable, net of discounts

Customer deposits

Deferred liability

Current portion of deferred revenues

Derivative liabilities

Operating lease liability, current portion

Total Current Liabilities

Long Term Liabilities

Note payable, net of discount

Operating lease liability, net of current portion

Deferred revenue, net of current portion

TOTAL LIABILITIES

Stockholders’

stock (10,000,000 shares authorized, par value $0.001, no shares issued and outstanding) Series C Preferred Stock (50,000

shares authorized and issued and outstanding, par value $0.001, December 31, 2019)

stock (4,990,000,000 shares authorized par value $0.001;

219,035 and 29,068 shares issued and outstanding December 31, 2019,

and 2018, respectively)

stock compensation

stock to be issued (1,350 shares issuable December 31, 2019)

paid in capital

Preferred stock (10,000,000 shares authorized, par value $0.001)

Series C Preferred Stock (50,000 shares authorized and 50,000 (2020) and 47,500

(2019) issued and outstanding, par value $0.001)

Series D Preferred Stock (20,000 shares authorized and 20,000 (2020) and 18,667

(2019) issued and outstanding, par value $0.001)

Series E Preferred Stock (3,000 shares authorized and 1,000 (2020) and 500 (2019)

issued and outstanding, par value $0.001)

Common stock (4,990,000,000 shares authorized par value $0.001;

3,397,958,292

subscription receivable

comprehensive gain

Stockholders’

LIABILITIES AND STOCKHOLDERS’

(2020) and -0- (2019) shares issued and outstanding)

Additional paid in capital

Accumulated Deficit

(21,793,375 )

Accumulated comprehensive gain

Total Stockholders’

Equity (Deficit)

TOTAL LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

notes to consolidated financial statements.

Surgical, Corp

ENERGY SOLUTIONS, INC.

(formerly known as Ozop Surgical Corp.)

STATEMENT OF COMPREHENSIVE LOSS

the Year Ended December 31,

Cost of goods

and administrative, related parties

and administrative, other

and development

For the Year Ended December 31,

Cost of goods sold

Gross profit (loss)

Operating expenses:

(income) expenses:

on change in fair value of derivatives

General and administrative, related parties

General and administrative, other

Impairment of intangible assets

Total operating expenses

Loss from operations

(17,578,353 )

Other (income) expenses:

Interest expense

Loss on change in fair value of derivatives

Gain on extinguishment of debt

Other Expenses

before provision for income taxes

tax provision

Total Other Expenses

Loss before income taxes

(20,482,953 )

Income tax provision

$ (20,482,953 )

comprehensive income (loss):

currency translation adjustment

Comprehensive

Other comprehensive loss:

Foreign currency translation adjustment

Comprehensive loss

$ (20,482,960 )

Loss per share basic and fully diluted

Weighted average shares outstanding

Basic and diluted

2,432,659,418

Loss per share

Weighted average

shares outstanding

notes to consolidated financial statements.

SURGICAL CORP

ENERGY SOLUTIONS, INC.

(formerly known as Ozop Surgical Corp.)

STATEMENT OF CHANGES IN STOCKHOLDERS’

EQUITY (DEFICIT)

ENDED DECEMBER 31, 2020

C Preferred Stock

D Preferred Stock

E Preferred Stock

comprehensive

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$ (1,310,422 )

$ (1,233,433 )

merger transaction

1,851,930,729

issued for conversions of note and interest payable

issued and to be issued for services

of deferred stock compensation

issued in private placement

of Series B Preferred Stock issued

of Series C Preferred Stock issued and Series B Preferred Stock cancelled

issued for acquisition

1,411,815,206

issued in connection of issuance of debt

issued upon cashless exercise of warrants

issued pursuant to CEO contract

currency translation adjustment

loss for the year ended December 31, 2019

(20,482,953 )

December 31, 2020

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$ (21,793,375 )

SURGICAL CORP

$ (5,007,942 )

ENERGY SOLUTIONS, INC.

(formerly known as Ozop Surgical Corp.)

STATEMENT OF CHANGES IN STOCKHOLDERS’

EQUITY (DEFICIT)

ENDED DECEMBER 31, 2019

stock to be issued

B Preferred Stock

C Preferred Stock

D Preferred Stock

E Preferred Stock

comprehensive

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January 1, 2019

$ (1,578,042 )

7,600 shares for subscription agreements

600 shares of common stock

5,000 shares for Spinus acquisition

of reverse merger

forgiveness from former CEO

issued for conversions of note and interest payable

issued in private placement

issued for services

off derivative liability for conversions

of deferred stock compensation

gain on foreign translation

loss for the year ended December 31, 2018

December 31, 2019

$ (1,310,422 )

$ (1,233,433 )

notes to consolidated financial statements.

SURGICAL, CORP

ENERGY SOLUTIONS, INC.

(formerly known as Ozop Surgical Corp.)

STATEMENT OF CASH FLOWS

the Year Ended December 31,

flows from operating activities:

$ (6,140,158 )

For the Year Ended December 31,

Cash flows from operating activities:

Net loss from continuing operations

$ (20,482,953 )

to reconcile net loss to net cash used in operations

interest expense

and depreciation

on fair value change of derivatives

Adjustments to reconcile net loss to net cash used in operations

Non-cash interest expense

Amortization and depreciation

Impairment of intangible assets

Loss on fair value change of derivatives

Gain on extinguishment of debt

compensation expense

in operating assets and liabilities:

payable and accrued expenses

payable and accrued expenses, related parties

cash used in operating activities

flows from investing activities:

paid for acquisition

acquired in acquisitions

of office and computer equipment

for extensions of patents

cash used in investing activities

flows from financing activities:

of common stock

from sale of common stock

from issuances of convertible notes payable

from issuances of notes payable

of principal of convertible note payable and notes payable

cash provided by financing activities

of exchange rate on cash

decrease in cash

Beginning of year

disclosure of cash flow information:

paid for interest

paid for income taxes

of non-cash Investing or Financing Activity:

issue discount included in convertible notes payable

of common stock upon convertible note and accrued interest conversion

of Spinal Resources, Inc.

of Common stock as consideration

of note as consideration

stock to be issued

value of option to buy SRI

of Spinus, LLC

of Common stock as consideration

Stock compensation expense

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses

Accounts payable and accrued expenses

Related party liabilities

Operating lease liabilities

Customer deposits

Net cash used in operating activities

Cash flows from investing activities:

Cash acquired in acquisition

Advances from affiliate

Purchase of office and computer equipment

Proceeds received on deferred liability

Net cash provided by investing activities

Cash flows from financing activities:

Proceeds from issuances of convertible notes payable

Proceeds from issuances of notes payable

Proceeds from Payroll Protection Program

Proceeds from Economic Disaster Loan

Proceeds from shareholders

Payments to shareholders

Payments of principal of convertible note payable and

notes payable

Net cash provided by financing activities

Effects of exchange rate on cash

Net increase (decrease) in cash

Cash, Beginning of period

Cash, End of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for income taxes

Schedule of non-cash Investing or Financing Activity:

Original issue discount included in convertible notes

Issuance of common stock upon convertible note and accrued

interest conversion

Operating lease right-of-use assets and liabilities

Acquisition of Ozop Surgical Corp

Fair value of equity consideration in acquisition

Liabilities assumed

Assets acquired

Intangible assets

(11,201,145 )

Cash acquired

notes to consolidated financial statements.

SURGICAL CORP

ENERGY SOLUTIONS, INC.

(formerly known as Ozop Surgical Corp.)

to Consolidated Financial Statements

1 - ORGANIZATION

Surgical Corp.

Energy Solutions, Inc.

Company,”

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as Newmarkt Corp.

on July 17, 2015, under the laws of the State of Nevada, for the purpose of the renting different kind of Segways

and bicycles, dual wheels self-balancing electric scooters and related safety equipment.

Following the acquisition of OZOP Surgical,

(“Ozop”) as discussed below, we have been engaged in the business of inventing, designing, developing, manufacturing

and distributing innovative endoscopic instruments, surgical implants, instrumentation, devices and related technologies, focused

on spine, neurological and pain management procedures and specialties.

January 21, 2020, the Company filed an amendment to its Certificate of Incorporation, with the Nevada Secretary of State, for

1-for-1,000 reverse stock split of our common stock (the “Reverse Stock Split”) effective February 10, 2020.

of shares of common stock subject to outstanding options, warrants and convertible securities were also reduced by a factor of

one- thousand and no fractional shares were issued.

All historical share in this report have been adjusted to reflect the Reverse

Stock Split (see Note 13).

There were no changes to the authorized number of shares and the par value of our common stock.

August 23, 2019, the Company entered into an Exclusive License Agreement (the “Agreement”) with Spinal Resources,

(“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.

In accordance with ASC 805, the Company has determined

to account for the Agreement as a business combination.

As consideration for the Agreement, the Company agreed to pay license

fees equal to $1,500,000, over the eighteen- month term of the Agreement.

The Company recorded the liability at its present value

of $1,234,089.

Additionally, the Company has agreed to issue 6,000 shares of restricted common stock on a quarterly basis, pursuant

to the terms of the Agreement, of which 1,000 shares were issued on August 23, 2019.

The Company valued the shares issued at $49,000

(based on the market price of the common stock) and included the $49,000 as part of the consideration of the transaction.

remaining 5,000 shares to be issued has been recorded as a $245,000 liability to be paid in common stock and was included in the

total consideration issued in the transaction.

The Company also issued a Promissory Note (the “Note”) to SRI for $723,524

for the purchase of the inventory of the Products (as defined in the Agreement).

The Note has a stated interest rate of six percent

(6%) and payment terms of the Note are in eighteen equal installments, beginning on October 1, 2019.

Either party may terminate

the Agreement upon written notice if the other party has failed to remedy a material breach within 30 days (or 15 days in the

case of a breach of a payment obligation).

SRI also granted the Company an option to purchase the Company on or before the termination

date of the license for a minimum of $5,500,000 which can increase based on the revenue rate at the time the option is exercised.

If the Company does not elect to exercise their option to purchase SRI, SRI can “put”

the Acquisition to the Company.

Any payments made for the license, the Note and other liabilities assumed by the Company can be net against the option to buy

The Company calculated the net minimum purchase price to be $3,093,604 and recorded the liability at its present value

of $2,834,692.

The difference of $258,912 will be charged to interest expense over the option period.

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:

Price Allocation

value of consideration issued

purchase price

Property/Technology

total purchase price of $5,810,692 has been allocated on a preliminary basis to the tangible and intangible assets acquired and

liabilities assumed based on preliminary estimated fair values as of the completion of the transaction.

These allocations reflect

various preliminary estimates that are currently available and are subject to change upon the valuation being finalized within

the measurement period.

The Company will record amortization expense assuming a straight-line basis over the expected life of

the finite lived intangible assets, which approximates expected future cash flows.

represents the amount by which the estimated consideration transferred exceeds the fair value of the assets the Company acquired

and the liabilities the Company assumed.

The Company will not amortize the goodwill, but will instead test the goodwill for impairment

at least annually and whenever events or circumstances have occurred that may indicate a possible impairment.

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 pay the January 6.

2020 license payment (See Note 9) nor cure the default payment.

Based on the termination of the Agreement, as of December 31, 2019, the Company recorded an impairment of $274,854.

The impairment

was calculated based on the balance of the assets acquired and the liabilities assumed as December 31, 2019.

See Note 13 for more

detailed discussion.

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

the shareholders of OZOP (the “OZOP Shareholders”) and Denis Razvodovskij, the then holder of 2,000 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 newly issued shares of our common stock (the “Share Exchange”).

After giving effect to the redemption of 2,000 shares of our common stock pursuant to the Redemption Agreement discussed below

and the issuance of 25,000 shares of our common stock pursuant to the Share Exchange Agreement, we had 25,798 shares of common

stock issued and outstanding, with the OZOP Shareholders, as a group, owning 96.9% of such shares.

Currently, our executive officers

and directors, as a group, own 6,374 of our shares representing 21.81 % of our issued and outstanding shares of common stock.

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 Company’s 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 U.S.

Securities and

Exchange Commission (the “SEC”).

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

Razvodovskij 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 (who resigned

March 4, 2019) and Eric Siu (who resigned March 5, 2019) were named as directors of the Company.

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

as Series B Preferred Stock.

The Series B Preferred Stock is not convertible into common stock, nor does the Series B Preferred

Stock have any right to dividends and any liquidation preference.

The Series B Preferred Stock entitles its holder to a number

of votes per share equal to 50 votes.

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

Company’s CEO and Director.

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-related parties.

September 18, 2019, the Company filed a Certificate of Designation with the Secretary of State of Nevada to designate 50,000 shares

as Series C Preferred Stock.

Each share of Series C Preferred Stock shall be convertible, at the option of the holder thereof,

at any time after the date of issuance, into one share of fully paid and non-assessable share of common stock.

Each share of Series

C Preferred Stock shall entitle the holder thereof to ten thousand (10,000) votes on all matters submitted to a vote of the stockholders

of the Company.

On September 19, 2019, the Company issued 50,000 shares of its Series C Preferred Stock to the Company’s

CEO 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.

October 29, 2019, the Company amended its’

Articles of Incorporation to increase the authorized shares of capital stock

to 2,500,000,000 shares, of which 2,490,000,000 have been designated as common stock, par value $0.001 and 10,000,000 shares have

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

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

of incorporation to effect a 1-for-1,000 reverse stock split of the Company’s common stock.

The reverse stock split became

effective on February 10, 2020.

The par values and the authorized shares of the Company’s common stock and convertible preferred

stock were not adjusted as a result of the reverse stock split.

All common stock, stock options and per share amounts in the financial

statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split.

December 30, 2019, the Company amended its’

Articles of Incorporation to increase the authorized shares of capital stock

to 5,000,000,000 shares, of which 4,990,000,000 have been designated as common stock, par value $0.001 and 10,000,000 shares have

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 former 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;

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”).

OZOP acquired Spinus to gain

control of a license rights agreement for exclusive rights to intellectual property related to minimally invasive spine surgery

The Assumed Debt of $250,000 was paid in November 2018.

following table summarizes the final valuation of the consideration issued and the purchase price allocation of the fair value

of assets acquired and liabilities assumed in the acquisition:

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.

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

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 U.S.

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.

Because 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

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 consideration issued

Liabilities assumed

Total purchase consideration

Fair value of OZOP equity consideration issued

Assets acquired

total purchase price of $528,779 has been allocated to the tangible and intangible assets acquired and liabilities assumed based

on estimated fair values as of the completion of the Acquisition.

These allocations reflect various estimates that are currently

The final fair value of Spinus’s identifiable intangible assets were determined primarily using the income approach

which requires an estimate or forecast of all the expected future cash flows, either through the use of the relief-from-royalty

method or the multi-period excess earnings method.

The Company will record amortization expense assuming a straight-line basis

over the expected life of the finite lived intangible assets, which approximates expected future cash flows.

represents the amount by which the estimated consideration transferred exceeds the historical costs of the assets the Company

acquired and the liabilities the Company assumed.

The Company will not amortize the goodwill, but will instead test the goodwill

for impairment at least annually and whenever events or circumstances have occurred that may indicate a possible impairment.

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

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

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

July 19, 2016, Mr.

Eric Siu (“Siu”), a former director 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 Kong.

GOING CONCERN AND MANAGEMENT’S PLANS

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.

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.

As of December 31, 2020, the Company had an accumulated deficit

of $21,793,375 and a working capital deficit of $4,604,189.

The Company has also generated losses since inception.

These factors, among

others, raise substantial doubt about the ability of the Company to continue as a going concern.

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

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.

Management’s

April 2018, OZOP entered into and completed a share exchange agreement with the Company (see Note 1), a publicly traded company.

As a public company, management believes it will be able to access the public equities market

for fund raising for product development and regulatory approvals, sales and marketing and as we expand our distribution in the

US market, we will need to meet increasing inventory requirements.

February 28, 2020, the Company entered into a Binding Letter of Intent (the “LOI”) with Power Conversion Technologies,

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

(“CEO”) and its sole shareholder.

Pursuant to the terms of the LOI, the Company will acquire 100% of the issued and

outstanding shares of PCTI (the “PCTI Shares”) from Chis (the “Acquisition”).

operates in the very high power niche of the power electronics market, designing and manufacturing leading edge equipment for

use in power conversion applications.

PCTI serves clients in several industries including energy storage, shore power, DEWs, microgrid,

telecommunications, military, transportation, renewable energy, aerospace and mission critical defense systems.

PCTI’s clients

include Fortune 500 companies, all branches of the US Department of Defense including the US Army and the US Air Force, NASA as

well as other global military organizations.

Pursuant to the LOI, the Acquisition is to close by June 30, 2020, and is in the

best interests of the Company and its’

shareholders.

accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability

and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the

Company to continue as a going concern.

a public company, management believes it will be able to access the public equities market for fund raising for product development,

sales and marketing and as we expand our distribution in the U.S.

market, we will need to meet increasing inventory requirements.

December 11, 2020, the Company formed Ozop Energy Systems, Inc.

(“OES”), a Nevada corporation and a wholly owned subsidiary

of the Company.

OES was formed to be a manufacturer and distributor of renewable energy products.

January 1, 2021, the Company has raised $12,000,000 for working capital purposes and to implement and carry out the following initiatives.

is actively engaged in the renewable, electric vehicle (“EV”), energy storage and energy resiliency sectors.

to its current East Coast location, the Company recently signed a letter of intent to a four- year lease of approximately xx SF in California.

We are engaged in multiple business lines that include Project Development as well as Equipment Distribution.

Our solar and energy storage

projects involve large-scale battery and solar photovoltaics (PV) installations.

The utility-scale storage business is based on an arbitrage

business model in which we install multiple 1+ megawatt batteries, charge them with off-peak grid electricity under contract with the

utility, then sell the power back during peak load hours at a premium, as dictated by prevailing electricity tariffs.

Our PV business model involves the design and construction of electrical generating PV systems that can resell power to the

utilities or be used for off grid use as part of our developing Neo-Grids solution.

The Neo-Grids proprietary program, patent/s pending,

was developed for the off-grid distribution of electricity to reduce the rates, fees and charges currently burdening the EV Charging

and residential carport sectors.

It will also reduce the lengthy permitting processes and streamline the installations.

Vehicle Chargers:

The Neo-Grids, patent pending, is comprised of the design engineering, installation, and operational methodologies

as well as the financial arbitrage of how we produce, capture and distribute electrical energy for the EV markets.

Neo-Grids will serve

both the private auto and the commercial sectors.

OES has license rights to the proprietary “flow”

that was filed with the

United States Patent and Trademark Office in March 2021.

The exponential growth of the EV industry has been accelerated by the recent

major commitments of most of the major car manufacturers.

Our Neo-Grids business model leverages this accelerated growth by offering

(1) charging locations that can be installed at a significant discount to utility-tied installations and (2) EV charger electricity that

is both renewable and less expensive than comparable grid supplied power as offered by local suppliers.

has developed a business plan for the Neo Grids distribution solution that is being executed now and will be coming out of Research &

Development for proof of concept in Q3 2021.

Having identified several manufacturers and established a supply line for EV chargers,

we have entered into agreements for EV charger installations as part of this proof of concept and plan to service them under multi-year

Building on that, OES has entered the component supply/distribution side of the renewable, resiliency and energy

storage industries distributing the core components associated with commercial solar PV systems as well as onsite battery storage and

power generation.

The components we are distributing include PV panels, solar inverters, solar mounting systems, stationary batteries,

onsite generators and other associated electrical equipment and components that are all manufactured by multiple companies, both domestic

and international.

These core products are sourced from management-developed relationships and are distributed through our existing network

and our in-house sales team.

management has decades of experience in the renewable, storage and resilient energy businesses and associated markets, which include

but are not limited to project finance, project development, equipment finance, construction, utility protocol, regulatory policy and

technology assessment.

under management:

sites are being negotiated under Letters of Intent for site control for potential implementation of in-front-of-the-meter battery

storage projects.

$4 million, 11 MW three-month supply agreement for solar components with a carport manufacturer.

It is anticipated that this agreement

will increase to $2-4 Million per month during the balance of 2021.

distribution of inverters, collectors, and racking systems.

charging stations, first installation paperwork being negotiated, and we will be filing for all applicable rebates, permits and approvals.

First site valuation is approximately $450,000 with 300 additional sites under review.

accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification

of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as

a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTING PRONOUNCEMENTS

of Presentation

accompanying consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles in the

United States of America (“US GAAP”).

The consolidated financial statements of the Company include

the consolidated accounts of the Company and Ozop and its’

wholly owned subsidiaries;

accompanying consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United

States of America (“US GAAP”).

The consolidated financial statements of the Company include the consolidated accounts of

the Company and PCTI and the Company’s other wholly owned subsidiaries;

Ozop LLC, Ozop HK and Spinus.

intercompany accounts and transactions have been eliminated in consolidation.

All intercompany accounts

and transactions have been eliminated in consolidation.

Growth Companies

1 unchanged sentence

under the 2012 JOBS Act.

Section 107 of the JOBS Act provides that

an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities

Act for complying with new or revised accounting standards.

As an emerging growth company, the Company can delay the adoption

of certain accounting standards until those standards would otherwise apply to private companies.

The Company has elected to take

advantage of the benefits of this extended transition period.

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

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures

of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses

during the reported period.

Section 107 of the JOBS Act provides that an emerging

growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying

with new or revised accounting standards.

As an emerging growth company, the Company can delay the adoption of certain accounting standards

until those standards would otherwise apply to private companies.

The Company has elected to take advantage of the benefits of this extended

transition period.

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

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent

assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period.

Actual results could differ from those estimates.

3 unchanged sentences

are carried at cost, which approximates fair value.

Cash and cash equivalent balances may, at certain times, exceed federally

insured limits

Cash and cash equivalent balances may, at certain times, exceed federally insured

The Company has no cash equivalents at December 31, 2020, and 2019.

Concentration and credit risk

is a summary of customers who accounted for more than ten percent (10%) of the Company’s revenues for the years ended December

31, 2019, and 2018, and their accounts receivable balances as of December 31, 2019, and 2018:

Sales % Year Ended

December 31, 2019

Sales % Year Ended

December 31, 2018

receivable balance

December 31, 2019

receivable balance

December 31, 2018

31, 2020, and 2019, and their accounts receivable balance as of December 31, 2020:

disclosed in the above table, PCTI, historically does not have year to year many recurring clients as the Company produces capital equipment

for its’

Company records accounts receivable at the time products and services are delivered.

An allowance for losses is established through

a provision for losses charged to expenses.

Receivables are charged against the allowance for losses when management believes

collectability is unlikely.

The allowance (if any) is an amount that management believes will be adequate to absorb estimated

losses on existing receivables, based on evaluation of the collectability of the accounts and prior loss experience.

the termination of the SRI Agreement, the Company recorded an allowance of $92,767 of accounts receivable as of December 31, 2019.

which consists of finished goods, is valued at the lower of cost or net realizable value.

Cost is determined using the first in

first out (FIFO) method.

Provision for potentially obsolete or slow-moving inventory is made based on management analysis or inventory

levels and future sales forecasts.

An allowance for losses is established through a

provision for losses charged to expenses.

Receivables are charged against the allowance for losses when management believes collectability

The allowance (if any) is an amount that management believes will be adequate to absorb estimated losses on existing receivables,

based on evaluation of the collectability of the accounts and prior loss experience.

are valued at the lower of cost or net realizable value, with cost determined on the first-in, first-out basis.

Inventory costs include

material, labor and manufacturing overhead.

In evaluating the net realizable value of inventory, management also considers, if applicable,

other factors, including known trends, market conditions, currency exchange rates and other such issues.

components of inventories at December 31, 2020, and 2019, are as follows:

Raw materials

Work in process

Finished goods

concentration

principal purchases by the Company are comprised of finished goods that the Company sells to its customers.

Following is a summary

of suppliers who accounted for more than ten percent (10%) of the Company’s purchases for the years ended December 31, 2019,

Purchase %, year ended

December 31, 2019

Purchase %, year ended

December 31, 2018

principal purchases by the Company are comprised of parts and raw materials that the Company assembles and manufactures and sells to

its customers.

There were no suppliers who accounted for more than ten percent (10%) of the Company’s purchases for the years ended

December 31, 2020, and 2019.

to the Company vary from period to period dependent upon our customer’s order specifications.

In any specific reporting period,

we may be relying on certain vendors, however these vendors will vary dependent on the parts and materials needed.

The Company believes

it is not reliant on any particular vendor for future needs.

plant and equipment

and equipment are stated at cost, and depreciation is provided by use of a straight-line method over the estimated useful lives

of the assets.

Company reviews property and equipment for potential impairment whenever events or changes in circumstances indicate that the

carrying amounts of assets may not be recoverable.

and equipment are stated at cost, and depreciation is provided by use of a straight-line method over the estimated useful lives of the

Company reviews property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying

amounts of assets may not be recoverable.

The estimated useful lives of property and equipment is as follows:

1 unchanged sentence

December 31, 2019

Spinal instruments

Office equipment

2 unchanged sentences

expense was $11,857 and $7,259 for the years ended December 31, 2020, and 2019, respectively.

In connection with the termination

of the Agreement with SRI (See Note 13), the Company has returned to the seller the spinal instruments as of January 16,

assets primarily represent purchased patent and license rights.

During the year ended December 31, 2019, the Company recorded

$2,810,000 of patent 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

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

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.

For the year ended December 31, 2019, the Company impaired $44,200

of tradenames as management has decided not to go forward with the use of the trade name Spinus.

the years ended December 31, 2019, and 2018, the Company recorded amortization expense of $126,820 and $36,458, respectively.

For the year ended December 31, 2020, the Company recorded amortization expense

For the year ended December 31, 2020, the Company impaired $130,207 of license rights as management has decided not to go

forward with the use of the license rights of Spinus.

In accordance with ASC 350, “Intangibles—Goodwill and Other,”

goodwill and other intangible assets with

indefinite lives are no longer subject to amortization but are tested for impairment annually or whenever events or changes in

circumstances indicate that the asset might be impaired.

is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and

liabilities assumed in a business acquisition.

During the year ended December 31, 2019, the Company recorded goodwill of $2,277,168

related to the SRI transaction.

goodwill and other intangible assets with indefinite lives are no longer subject to amortization but are tested for impairment annually

or whenever events or changes in circumstances indicate that the asset might be impaired.

is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and liabilities

assumed in a business acquisition.

The Company reviews the goodwill allocated to each of our reporting units for possible impairment

annually and whenever events or changes in circumstances indicate carrying amount may not be recoverable.

When assessing goodwill

for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or

circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its’

When assessing goodwill for

impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances

leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its’

carrying amount.

If, after assessing the totality of events or circumstances, the Company determines it is more likely than not

that the fair value of a reporting unit is less than its’

carrying amount, then the Company performs a two-step impairment

If the Company concludes otherwise, then no further action is taken.

The Company also has the option to bypass the qualitative

assessment and only perform a quantitative assessment, which is the first step of the two-step impairment test.

In the two-step

impairment test, the Company measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including

goodwill, to the estimated fair value of the reporting unit.

During the year ended December 31, 2019.

Company recorded an impairment of goodwill of $274,854, for the termination of the SRI License Agreement as of January 16, 2020,due

to no known future cash flows being provided by the assets.

See Note 13 for more detailed discussion.

assessing the qualitative factors, the Company assesses relevant events and circumstances that may impact the fair value and the

carrying amount of the reporting unit.

The identification of relevant events and circumstances, and how these may impact a reporting

unit’s fair value or carrying amount involve significant judgments and assumptions.

The judgment and assumptions include

the identification of macroeconomic conditions, industry, and market considerations, cost factors, overall financial performance

and share price trends, and making the assessment as to whether each relevant factor will impact the impairment test positively

or negatively and the magnitude of any such impact.

carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing

goodwill and other intangible assets, to the identified reporting units.

Where an acquisition benefits only one reporting unit,

the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit.

Where the Company has had an acquisition that benefited more than one reporting unit, The Company has assigned the goodwill to

our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value

of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets

acquired and liabilities assumed that are assigned to the reporting unit.

the carrying amount of a reporting unit is in excess of its fair value, an impairment may exist, and the Company must perform

the second step of the impairment analysis to measure the amount of the impairment loss, by allocating the reporting unit’s

fair value to its assets and liabilities other than goodwill, comparing the carrying amount of the goodwill to the resulting implied

fair value of the goodwill, and recording an impairment charge for any excess.

is tested annually for impairment on December 31, and at any time upon occurrence of certain events or changes in circumstances.

the qualitative factors, the Company assesses relevant events and circumstances that may impact the fair value and the carrying amount

of the reporting unit.

The identification of relevant events and circumstances, and how these may impact a reporting unit’s fair

value or carrying amount involve significant judgments and assumptions.

The judgment and assumptions include the identification of macroeconomic

conditions, industry, and market considerations, cost factors, overall financial performance and share price trends, and making the assessment

as to whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.

carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing goodwill

and other intangible assets, to the identified reporting units.

Where an acquisition benefits only one reporting unit, the Company allocates,

as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit.

Where the Company has had an acquisition

that benefited more than one reporting unit, The Company has assigned the goodwill to our reporting units as of the acquisition date

such that the goodwill assigned to a reporting unit is the excess of the fair value of the acquired business, or portion thereof, to

be included in that reporting unit over the fair value of the individual assets acquired and liabilities assumed that are assigned to

the reporting unit.

transaction with PCTI resulted in recognizing goodwill of $11,201,145 (see Note 1).

January 1, 2018, the Company adopted ASC 606 —

Revenue from Contracts with Customers.

Under ASC 606, the Company recognizes

revenue from the commercial sales of products by:

Under ASC 606, the Company recognizes revenue

from the commercial sales of products by:

(1) identify the contract (if any) with a customer;

(2) identify the performance

obligations in the contract (if any);

(2) identify the performance obligations

in the contract (if any);

(3) determine the transaction price;

(4) allocate the transaction price to each performance

obligation in the contract (if any);

(4) allocate the transaction price to each performance obligation in the

contract (if any);

and (5) recognize revenue when each performance obligation is satisfied.

Under ASC 606, revenue

is recognized when the following criteria are met:

Under ASC 606, revenue is recognized when

the following criteria are met:

(1) persuasive evidence of an arrangement exists;

(2) the performance of service

has been rendered to a customer or delivery has occurred;

(2) the performance of service has been rendered to

a customer or delivery has occurred;

(3) the amount of fee to be paid by a customer is fixed and determinable;

and (4) the collectability of the fee is reasonably assured.

The Company has no outstanding contracts with any of its’

Revenues from Spinus were $49,123 and $107,851 for the years ended December 31, 2019, and 2018 (from February 17, 2018, the date

of the acquisition of Spinus), respectively, are recognized as an agent and are recorded at net.

There was no impact on the Company’s

financial statements as a result of adopting Topic 606 for the years ended December 31, 2019 and 2018.

and (4) the collectability

of the fee is reasonably assured.

Other than The Company has no outstanding contracts with any of its’

The Company recognizes

revenue when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product and

is based on the applicable shipping terms.

contracts with customers, ownership of the goods and associated revenue are transferred to customers at a point in time, generally upon

shipment of a product to the customer or receipt of the product by the customer and without significant judgments.

Advance payments are

typically required for commercial customers and are recorded as current liability until revenue is recognized.

Advance payments are not

required for government customers.

The majority of contracts typically require payment within 30 to 60 days after transfer of ownership

to the customer.

the periods covered herein, we did not have post shipment obligations such as training or installation, customer acceptance provisions,

credits and discounts, rebates and price protection, or other similar privileges.

was no impact on the Company’s financial statements as a result of adopting Topic 606 for the years ended December 31, 2020, and

and Marketing Expenses

4 unchanged sentences

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.

Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives

and Hedging Activities.

For the years ended December

31, 2020, and 2019, the Company did not record any research and development expenses.

Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and

Hedging Activities.

GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative

financial instruments according to certain criteria.

The criteria include circumstances in which (a) the economic characteristics

and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks

of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is

not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate

instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The criteria include circumstances in which (a) the economic characteristics and

risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at

fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same

terms as the embedded derivative instrument would be considered a derivative instrument.

Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated

from their host instruments) as follows:

The Company records, when necessary, discounts to convertible notes for the intrinsic

value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common

stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

Debt discounts under

these arrangements are amortized over the term of the related debt to their stated date of redemption.

The Company records, when necessary, discounts to convertible notes for the intrinsic value

of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at

the commitment date of this note transaction and the effective conversion price embedded in this note.

Debt discounts under these arrangements

are amortized over the term of the related debt to their stated date of redemption.

Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment

The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at

their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting

The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current

fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

Value of Financial Instruments

Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance

on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability,

as the case may be, in an orderly transaction between market participants.

As such, fair value may be based on assumptions that

market participants would use in pricing an asset or liability.

The authoritative guidance on fair value measurements establishes

a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation

techniques, are assigned a hierarchical level.

Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair

value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the

case may be, in an orderly transaction between market participants.

As such, fair value may be based on assumptions that market participants

would use in pricing an asset or liability.

The authoritative guidance on fair value measurements establishes a consistent framework

for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical

following are the hierarchical levels of inputs to measure fair value:

1 unchanged sentence

2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active;

quoted prices for similar

assets or liabilities in active markets;

quoted prices for similar assets

or liabilities in active markets;

inputs other than quoted prices that are observable for the assets or liabilities;

or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

3 - Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine

or inputs that

are derived principally from or corroborated by observable market data by correlation or other means.

3 - Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value.

These assumptions are required to be consistent with market participant assumptions that are reasonably available.

carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets,

accounts payable and accrued expenses, certain notes payable and notes payable - related party, approximate their fair values

because of the short maturity of these instruments.

following table represents the Company’s derivative instruments that are measured at fair value on a recurring basis as

of December 31, 2019, and 2018, for each fair value hierarchy level:

December 31, 2019

carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts

payable and accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short

maturity of these instruments.

following table represents the Company’s derivative instruments that are measured at fair value on a recurring basis as of December

31, 2020, for each fair value hierarchy level:

December 31, 2020

Company accounts for leases under ASU 2016-02 (see Note 14), applying the package of practical expedients to leases that commenced before

the effective date whereby the Company elected to not reassess the following:

(i) whether any expired or existing contracts contain leases;

(ii) the lease classification for any expired or existing leases;

and (iii) initial direct costs for any existing leases.

For contracts

entered into on or after the effective date, at the inception of a contract the Company assess whether the contract is, or contains,

Our assessment is based on:

(1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain

the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether we have the right

to direct the use of the asset.

We allocate the consideration in the contract to each lease component based on its relative stand-alone

price to determine the lease payments.

lease ROU assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based

on the present value of the future minimum lease payments over the lease term at commencement date.

As most leases do not provide an

implicit rate, the Company use an incremental borrowing rate of 7.5%, based on the information available at the adoption date in determining

the present value of future payments.

Operating lease expense is recognized pursuant to on a straight-line basis over the lease term

and is included in rent in the condensed consolidated statements of operations.

taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future

tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities

and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured

using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to

be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in

the period that includes the enactment date.

A valuation allowance on deferred tax assets is established when management considers

it is more likely than not that some portion or all of the deferred tax assets will not be realized.

benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained

on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial

statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of

being realized upon ultimate resolution.

Interest and penalties related to unrecognized tax benefits are recorded as incurred

as a component of income tax expense.

The Company has not recognized any tax benefits from uncertain tax positions for any of

the reporting periods presented.

Deferred tax assets and liabilities are recognized for the future tax consequences

attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective

tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected

to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred

tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the

deferred tax assets will not be realized.

benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on

examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements

from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon

ultimate resolution.

Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax

The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented.

Currency Translation

accounts of the Company’s Hong Kong subsidiary are maintained in Hong Kong dollars and the accounts of the U.S.

are maintained in USD.

The accounts of the Hong Kong subsidiary were translated into USD in accordance with Accounting Standards

Codification (“ASC”) Topic 830, Foreign Currency Matters.

According to Topic 830, all assets and liabilities were

translated at the exchange rate on the balance sheet date;

companies are maintained

The accounts of the Hong Kong subsidiary were translated into USD in accordance with Accounting Standards Codification (“ASC”)

Topic 830, Foreign Currency Matters.

According to Topic 830, all assets and liabilities were translated at the exchange rate on the balance

stockholders’

equity is translated at historical rates and statement

of comprehensive income items are translated at the weighted average exchange rate for the period.

The resulting translation adjustments

are reported under other comprehensive income in accordance with ASC Topic 220, Comprehensive Income.

Gains and losses resulting

from the foreign currency transactions are reflected in the statements of comprehensive income.

exchange rates used in the preparation of the consolidated financial statements are as follows for the periods ended December

31, 2019, and 2018, (Hong Kong dollar per one U.S.

rate for statements of operations and comprehensive loss

equity is translated at historical rates and statement of comprehensive income items are translated at

the weighted average exchange rate for the period.

The resulting translation adjustments are reported under other comprehensive income

in accordance with ASC Topic 220, Comprehensive Income.

Gains and losses resulting from the foreign currency transactions are reflected

in the statements of comprehensive income.

exchange rates used in the preparation of the consolidated financial statements are as follows for the period ended December 31, 2020,

(Hong Kong dollar per one U.S.

Balance sheet date

Average rate for statements of operations and comprehensive loss

(Loss) Per Share

Company reports earnings (loss) per share in accordance with ASC 260, “Earnings per Share.”

Basic earnings (loss)

per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during

Diluted earnings per share is computed by dividing net loss by the weighted-average number of shares of common stock,

common stock equivalents and other potentially dilutive securities outstanding during the period.

As of December 31, 2019, and

2018, the Company’s dilutive securities are convertible into approximately 2,847,777 and 2,045 shares of common stock, respectively.

Basic earnings (loss) per share

is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during each period.

earnings per share is computed by dividing net loss by the weighted-average number of shares of common stock, common stock equivalents

and other potentially dilutive securities outstanding during the period.

As of December 31, 2020, the Company’s dilutive securities

are convertible into approximately 10,563,963,782 shares of common stock.

There were no dilutive securities as of December 31, 2019.

This amount is not included in the computation of dilutive loss per share because their impact is antidilutive.

The following

table represents the classes of dilutive securities as of December 31, 2019, and 2018:

December 31, 2019

December 31, 2018

The following table represents

the classes of dilutive securities as of December 31, 2020:

Common stock to be issued

Convertible preferred stock

10,193,874,867

Convertible notes payable

10,563,963,782

Accounting Pronouncements

January 2017, the FASB issued ASU 2017-01, “

Business Combinations (Topic 805) Clarifying the Definition of a Business ”

(“ASU 2017-01”).

The Amendments in this Update clarify the definition of a business with the objective of adding guidance

to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwill, and consolidation.

The guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those periods.

Early adoption of this standard is permitted.

The Company adopted ASU 2017-01 on January 1, 2018, with no significant impact on

the consolidated financial statements.

the exception of the new standard discussed above, there have been no other recent accounting pronouncements or changes in accounting

pronouncements during the year ended December 31, 2019, that are of significance or potential significance to the Company.

INTANGIBLE ASSETS

as of December 31, 2019, and 2018, consist of the following:

and license rights

carrying amount

expense for the years ended December 31, 2019, and 2018, was $126,820 and $36,458, respectively.

In connection with the termination

of the Agreement with SRI (See Note 13), the Company no longer owns the license rights of $xxx, net, related to the SRI Agreement.

See Note 13.be using the spinal instruments as of January 16, 2020.

than the above there have no recent accounting pronouncements or changes in accounting pronouncements during the period ended December

31, 2020, that are of significance or potential significance to the Company.

4 - CONVERTIBLE NOTES PAYABLE

the year ended December 31, 2017, OZOP issued 19 convertible promissory notes (the “2017 Notes”), in amounts of $10,000

OZOP received proceeds of $710,000 in the aggregate.

The 2017 Notes matured on their one- year anniversary and bear

interest at ten percent (10%).

The initial conversion feature allowed the holders to convert the note and any unpaid interest

due, into shares of the Company’s common stock on the 15 th business day that the Company becomes listed, at conversion

prices equal to discounts of 35%-50% of the average of the three lowest closing prices of the common stock.

In August 2018, the

Company offered any noteholder to convert their principal and interest into shares of common stock at $0.50 per share.

issued $25,500 of convertible notes for consulting fees.

During the year ended December 31, 2018, the Company issued a $50,000

convertible promissory note (the “March 2018 Note”) and received proceeds of $50,000.

Company determined that the conversion feature of the 2017 Notes and the March 2018 Note (together, the “Notes”) did

not meet the criteria of an embedded derivative and therefore the conversion feature was not bi-furcated and accounted for as

a derivative because the Company was a private company, there was no quoted price and no active market for the Company’s

common stock.

April 13, 2018, the Company determined the conversion feature of the Notes represented an embedded derivative since the Notes

were convertible into a variable number of shares upon conversion.

Accordingly, on April 13, 2018, the Notes were not considered

to be conventional debt under ASC 815 and the embedded conversion feature was bifurcated from the debt host and accounted for

as a derivative liability.

Accordingly, the fair value of the derivative instruments of the Notes that occurred prior to April

13, 2018, were recorded as a liability on April 13, 2018, with the corresponding amount recorded as a discount to the Note.

discount was amortized from the date of issuance to the maturity dates of the Notes.

The change in the fair value of the liability

for derivative contracts are recorded in other income or expenses in the reporting period, with the offset to the derivative liability

on the balance sheet.

The embedded feature included in the Notes resulted in an initial debt discount of $620,075, interest expense

of $14,000 and initial derivative liability of $634,075.

On August 29, 2019, pursuant to a Debt Purchase Agreement, one investor

sold the principal balance of $15,000, accrued and unpaid interest of $2,624 and a repayment balance of $5,250 to third party

investor, for a total purchase price of $22,874 (see below).

Also, on August 29, 2019, pursuant to a Debt Purchase Agreement,

a second investor sold the principal balance of $25,000, accrued and unpaid interest of $4,248 and a repayment balance of $8,750

to third party investor, for a total purchase price of $37,998 (see below).

As of December 31, 2019, and 2018, the outstanding

principal balance of the 2017 Notes was $175,000 and $215,000, respectively.

April 13, 2018, we issued a convertible promissory note in the principal amount of $442,175 (the “Note”), pursuant

to a Securities Purchase Agreement we entered into with an investor dated April 1, 2018.

The Note bears interest at the rate of

12% per annum and is due and payable on April 13, 2019.

The note is convertible at any time following the funding of the note

into a variable number of the Company’s common stock, based on a conversion ratio of 55% of the average of the lowest trading

price for the 25 days prior to conversion.

The note was funded on April 13, 2018, when the Company received proceeds of $350,000,

after OID of $57,675, and disbursements for the lender’s transaction costs, fees and expenses of $34,500, of which $25,000

were recorded as discounts against the debt to be amortized into interest expense through maturity.

Periodic payments are due

by us on the Note at the rate of $850 per day (the “Repayment Amount”) via direct withdrawal from our bank account,

beginning on April 27, 2018 and to last for a 30-day period.

Following this period, the Repayment Amount increased to $1,100 per

day until the Note is satisfied in full.

On June 28, 2018, the Note was amended to increase the Repayment Amount to $1,750 per

On August 29, 2018, the parties agreed to stop the Repayment Amount, and on November 20, 2018, the parties agreed to restart

the Repayment Amount at $1,000 per day.

From time to time the investor waives any Repayment Amount for a period of time as agreed

During the year ended December 31, 2019, principal payments of $50,000 were made.

The embedded conversion feature included

in the note resulted in an initial debt discount of $359,500 interest expense of $150,730 and an initial derivative liability

For the year ended December 31, 2019, amortization of the debt discounts of $53,896 was charged to interest expense.

During the year ended December 31, 2019, the investor sold $30,000 of the note to another investor (see below).

The Note is in

default and the Company recorded interest expense of $26,188 and added that amount to the principal amount outstanding.

December 31, 2019, and December 31, 2018, the outstanding principal balance of the note was $78,563 and $132,375, respectively,

with a carrying value as of December 31, 2019, and 2018, of $78,563 and $78,479, net of unamortized discounts of $53,896 as of

December 31, 2018.

connection with our obligations under the Note, our executive officers at the time, and the Company entered into a Pledge Agreement

(the “Pledge Agreement”) whereby they pledged as collateral for the Note an aggregate of 19,900 shares of our common

stock and we pledged the shares of our subsidiary OZOP Surgical, Inc.

(collectively, the “Collateral”).

Upon a default

under the terms of the Note, the investor may, among other things, collect or take possession of the Collateral, proceed

with the foreclosure of the security interest in the Collateral or sell, lease or dispose of the Collateral.

August 29, 2018, we issued a convertible promissory note in the principal amount of $339,250 (the “Note”), pursuant

to a Securities Purchase Agreement we entered into with the investor.

The Note bears interest at the rate of 12% per annum and

is due and payable on August 29, 2019.

The note is convertible at any time following the funding of the note into a variable number

of the Company’s common stock, based on a conversion ratio of 55% of the average of the lowest trading price for the 25

days prior to conversion.

The note was funded on August 29, 2018, when the Company received proceeds of $280,000, after OID of

$44,250, and disbursements for the lender’s transaction costs, fees and expenses of $15,000, which were recorded as discounts

against the debt to be amortized into interest expense through maturity.

Periodic payments are due by us on the Note at the rate

of $1,000 per day (the “Repayment Amount”) via direct withdrawal from our bank account, beginning on August 30, 2018,

until the Note is satisfied in full.

From time to time the investor waives any Repayment Amount for a period of time as agreed

During the year ended December 31, 2019, principal payments of $50,000 were made.

The embedded conversion feature included

in the note resulted in an initial debt discount of $280,000 interest expense of $112,403 and an initial derivative liability

For the year December 31, 2019, amortization of the debt discounts of $222,397 was charged to interest expense.

the year ended December 31, 2019, the investor converted a total of $111.509 of the face value and $32,910 of accrued interest

into 40,302 shares of common stock.

The Note is in default and the Company recorded interest expense of $87,390 and added that

amount to the principal amount outstanding.

As of December 31, 2019, and 2018, the outstanding principal balance of the note was

$187,130 and $261,250, respectively, with a carrying value as of December 31, 2019, and 2018, of $187,130 and $38,853, net of

unamortized discounts of $222,397 as of December 31, 2018.

August 29, 2018, we issued a convertible promissory note in the principal amount of $55,000 (the “Note”), pursuant

to a Securities Purchase Agreement we entered into with the investor.

The Note bears interest at the rate of 12% per annum and

is due and payable on March 1, 2019.

The note is convertible at any time following the funding of the note into a variable number

of the Company’s common stock, based on a conversion ratio of 58% of the average of the lowest trading price for the 20

days prior to conversion.

The note was funded on August 29, 2018, when the Company received proceeds of $50,000, after disbursements

for the lender’s transaction costs, fees and expenses of $5,000, which were recorded as discounts against the debt to be

amortized into interest expense through maturity.

The embedded conversion feature included in the note resulted in an initial

debt discount of $50,000 interest expense of $5,272 and an initial derivative liability of $55,272.

For the year ended December

31, 2019, amortization of the debt discounts of $17,112 was charged to interest expense.

For the year ended December 31, 2019,

the investor converted a total of $55,000 of the face value and $5,323 of accrued interest into 7,473 shares of common stock.

As of December 31, 2019, and 2018, the outstanding principal balance of the note was $-0- and $55,000, respectively with a carrying

value as of December 31, 2018, of $37,888, net of unamortized discounts of $17,112 as of December 31, 2018.

October 19, 2018, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $78,000,

pursuant to a Securities Purchase Agreement we entered into with the investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 65% multiplied by the average of the lowest two trading prices during the 15-

trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

funded on October 22, 2018, when the Company received proceeds of $75,000 after disbursements for the lender’s transaction

costs, fees and expenses of $3,000, which were recorded as discounts against the debt to be amortized into interest expense through

The embedded conversion feature included in the note resulted in an initial debt discount and derivative liability of

For the year ended December 31, 2019, the investor converted a total of $26,960 of the face value into 2,327 shares of

common stock.

For the year ended December 31, 2019, amortization of the debt discounts of $47,783 was charged to interest expense.

On June 7, 2019, pursuant to a Note Assignment Agreement, the investor sold the remaining principal balance of $51,040, accrued

and unpaid interest of $5,546 and a repayment balance of $20,414 to third party investor, for a total purchase price of $77,000.

As of December 31, 2019, and 2018, the outstanding principal balance to the initial noteholder of the note was $-0- and $78,000,

respectively with a carrying value as of December 31, 2018, of $30,217, net of unamortized discounts of $47,783.

November 15, 2018, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $500,000,

pursuant to a Securities Purchase Agreement we entered into with the investor.

The Note matures November 15, 2019.

convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance date of

the Note, at a conversion price equal to the lesser of (1) the lowest trading price during the previous 20 trading day period

ending on the last completed trading date prior to the date of the Note and (2) 65% multiplied by the average of the 3 lowest

trading prices of the Company’s common stock during the 20 day trading period ending on the latest completed trading day

of the common stock prior to the date of conversion of the Note.

Pursuant to the Note, the Company agreed to include on its next

registration statement filed with the Securities and Exchange Commission, all shares issuable upon conversion of the Note.

to the Security Agreement, all of the obligations under the Note are secured by a first security interest in and to all of the

Company’s rights, title and interests in, to and under all assets and all personal property of the Company.

Agreement includes customary representations, warranties and covenants by the Company.

The note was funded on November 19, 2018,

when the Company received proceeds of $458,500 after OID of $37,500, and disbursements for the lender’s transaction costs,

fees and expenses of $4,000, which were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature included in the note resulted in an initial debt discount and derivative liability of $363,806.

For the year ended December 31, 2019, amortization of the debt discounts of $353,006 was charged to interest expense.

year ended December 31, 2019, the investor converted a total of $54,640 of the face value and $61,943 of accrued interest and

fees into 73,886 shares of common stock.

As of December 31, 2019, and 2018, the outstanding principal balance of the note was

$445,360 and $500,000, respectively, with a carrying value as of December 31, 2019, and 2018, of $445,360 and $146,994, respectively,

net of unamortized discounts as of December 31, 2018, of $353,006.

December 5, 2018, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $63,000,

pursuant to a Securities Purchase Agreement we entered into with the investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 65% multiplied by the average of the lowest two trading prices during the 15-

trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

funded on December 10, 2018, when the Company received proceeds of $60,000 after disbursements for the lender’s transaction

costs, fees and expenses of $3,000, which were recorded as discounts against the debt to be amortized into interest expense through

The embedded conversion feature included in the note resulted in an initial debt discount and derivative liability of

On June 5, 2019, pursuant to a Note Assignment Agreement, the investor sold the principal balance of $63,000, accrued

and unpaid interest of $3,708 and a repayment balance of $26,683 to third party investor, for a total purchase price of $93,391

For the year ended December 31, 2019, amortization of the debt discounts of $46,330 was charged to interest expense.

As of December 31, 2019, and 2018, the outstanding principal balance to the initial noteholder of the note was $-0- and $63,000,

respectively, with a carrying value as of December 31, 2018, of $16,670, net of unamortized discounts of $46,330.

January 7, 2019, the Company issued an 8% convertible promissory note, (the “Note”) in the principal amount of $150,000,

pursuant to a Securities Purchase Agreement we entered into with the investor.

The Note matures January 7, 2020.

The Note is convertible

into shares of the Company’s common stock beginning on the date which is 180 days from the issuance date of the Note, at

a conversion price equal to the lesser of (1) the lowest trading price during the previous 20 trading day period ending on the

last completed trading date prior to the date of the Note and (2) 65% multiplied by the average of the 3 lowest trading prices

of the Company’s common stock during the 20 day trading period ending on the latest completed trading day of the common

stock prior to the date of conversion of the Note.

The note was funded on January 9, 2019, when the Company received proceeds

of $133,250 after OID of $14,000, and disbursements for the lender’s transaction costs, fees and expenses of $2,750, which

were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature

included in the note resulted in an initial debt discount and derivative liability of $111,500.

For the year ended December 31,

2019, amortization of the debt discounts of $125,834 was charged to interest expense.

The transaction with PCTI 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.

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.

July 10, 2020, PCTI (the accounting acquirer) assumed the $2,086 balance of a past-due 15% convertible note issued by the Company on

August 18, 2017, and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement, dated February 18,

This note, as amended, is convertible into common stock at a conversion price equal to a 70% discount to the lowest closing prices

of the common stock for the thirty prior trading days including the day upon which a notice of conversion is received.

During the year

ended December 31, 2020, the Company paid the lender $2,086.

As of December 31, 2020, the outstanding principal balance of assigned note

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a past-due 15% convertible note issued by the Company on September

As of December 31, 2020, and July 10, 2020, the outstanding principal balance of this note was $25,000.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible note issued by the Company on February 26, 2020,

pursuant to a Securities Purchase Agreement.

The SPA includes customary representations, warranties and covenants by the Company and

customary closing conditions.

In conjunction with this note, the Company issued a warrant to purchase 2,212,500 shares of common stock

at an exercise price of $0.03, subject to adjustments and expiring on the five-year anniversary of the Issuance Date.

As of July 10,

2020, the outstanding principal balance of this note was $132,750 with a carrying value of $66,176, net of unamortized discounts of $66,574.

For the period from July 11, 2020 to December 31, 2020, amortization of the debt discounts of $66,574 was charged to interest expense.

For the period from July 11, 2020 to December 31, 2020, the investor converted a total of $132,750 of the face value and $23,693 of accrued

interest and fees into 83,214,457 shares of common stock at an average conversion price of $0.0019.

As of December 31, 2020, the outstanding

principal balance of the note was $150,000 with a carrying value of $147,584, net of unamortized discounts of $2,416.

2020, the Note was sold to another third- party investor.

February 5, 2019, the Company issued an 8% convertible promissory note (the “Master Note”) in the aggregate principal

amount of up to $165,000 in exchange for an aggregate purchase price of up to $148,500 with an original issue discount of $16,500

to cover the Investor’s accounting fees, due diligence fees, monitoring and other transactional costs incurred in connection

with the purchase and sale of the Master Note, which is included in the principal balance of the Note.

On February 8, 2019, the

Investor funded the first tranche under the Master Note, with a maturity date of February 8, 2020, and the Company received $49,500

($47,500 after payment of $2,000 of the Investor’s legal fees) for this first tranche of $55,000 under the Master Note and

on the same date, the Company issued the Note to the Investor.

The Note is convertible into shares of the Company’s common

stock, beginning on the date which is 180 days from the issuance date of the Master Note, at a conversion price equal to the lesser

of (1) the lowest trading price during the previous 20 trading day period ending on the last completed trading date prior to the

date of conversion of the Master Note and (2) 65% multiplied by the average of the 3 lowest trading prices of the Company’s

common stock during the 20 day trading period ending on the latest completed trading day of the common stock prior to the date

of conversion of the Master Note.

The embedded conversion feature included in the Master Note resulted in an initial debt discount

and derivative liability of $38,502.

For the year ended December 31, 2019, amortization of the debt discounts of $41,506 was charged

to interest expense.

For the year ended December 31, 2019, the investor converted a total of $45,360 of the face value and $3,000

of fees into 25,050 shares of common stock.

As of December 31, 2019, the outstanding principal balance of the Master Note was

$11,640 with a carrying value as of December 31, 2019, of $7,144, net of unamortized discounts of $4,496.

The balance of the Note

was converted during 2020.

In connection with the issuance of this Note, the Company issued warrants to acquire 36,666 shares

of common stock, for a three-year period with an exercise price of $1,50 per share.

February 21, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $53,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 61% multiplied by the average of the lowest two trading prices during the 15-

trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

funded on February 22, 2019, when the Company received proceeds of $50,000 after disbursements for the lender’s transaction

costs, fees and expenses of $3,000, which were recorded as discounts against the debt to be amortized into interest expense through

The embedded conversion feature included in the note resulted in an initial debt discount and derivative liability of

For the year ended December 31, 2019, amortization of the debt discounts of $47,331 was charged to interest expense.

For the year ended December 31, 2019, the investor converted a total of $53,000 of the face value and $3,180 of accrued interest

into 9,180 shares of common stock.

As of December 31, 2019, the outstanding principal balance of the note was $-0-.

March 7, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $85,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock, at a conversion price equal to 58% of the average of

the two lowest trading prices of the Company’s common stock for the previous 20 trading day period ending on the date the

notice of conversion of the Note is received by the Company.

The note was funded on March 11, 2019, when the Company received

proceeds of $77,900 after OID of $3,000, and disbursements for the lender’s transaction costs, fees and expenses of $4,100,

which were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion

feature included in the note resulted in an initial debt discount and derivative liability of $77,394.

For the year ended December

31, 2019, amortization of the debt discounts of $68,780 was charged to interest expense.

For the year ended December 31, 2019,

the investor converted a total of $53,200 of the face value and $3,896 of accrued interest into 22,886 shares of common stock.

As of December 31, 2019, the outstanding principal balance of the note was $31,800 with a carrying value as of December 31, 2019,

of $16,086, net of unamortized discounts of $15,714.

May 3, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $58,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 61% multiplied by the average of the lowest two trading prices during the 15-

trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

funded on May 6, 2019, when the Company received proceeds of $55,000 after disbursements for the lender’s transaction costs,

fees and expenses of $3,000, which were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature included in the note resulted in an initial debt discount and derivative liability of $46,492.

For the year ended December 31, 2019, amortization of the debt discounts of $49,492 was charged to interest expense.

29, 2019, the Company paid $82,822 in full settlement of the Note.

As of December 31, 2019, the outstanding principal balance

of the note was $-0-.

May 7, 2019, the Company issued to a third-party investor a convertible redeemable promissory note (the “Note”) with

a face value of $52,500, including an original issue discount of $2,500.

The note matures on February 7, 2020, has a stated interest

of 12% and is convertible into a variable number of the Company’s common stock, based on a conversion ratio of 58% of the

average of the two lowest trading prices for the 20 days prior to conversion.

The note was funded on May 8, 2019, when the Company

received proceeds of $47,500, after disbursements for the lender’s transaction costs, fees and expenses of $5,000, which

were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature

included in the note resulted in an initial debt discount and derivative liability of $46,157.

For the year ended December 31,

2019, amortization of the debt discounts of $51,157 was charged to interest expense.

On November 1, 2019, the Company paid $77,837

in full settlement of the convertible promissory note dated May 7, 2019.

As of December 31, 2019, the outstanding principal balance

of the note was $-0-.

Company received the funding of the second tranche on May 10, 2019, in an amount of $23,500 (the “Second Tranche”)

under the $165,000 Master Note issued by the Company on February 5, 2019, after disbursements for the lender’s transaction

costs, fees and expenses of $4,000, which were recorded as discounts against the debt to be amortized into interest expense through

The Company also issued a warrant (the “Warrant”) to purchase 18,333 shares of the Company’s common

stock at an exercise price of $1.50 for a term of three (3) years to the Master Noteholder.

The embedded conversion feature included

in the note resulted in an initial debt discount and derivative liability of $18,262.

For the year ended September 30, 2019, amortization

of the debt discounts of $22,262 was charged to interest expense.

On November 1, 2019, the Company paid $41,580 in full settlement

of the Second Tranche.

As of December 31, 2019, the outstanding principal balance of the Second Tranche was $-0-.

May 29, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $80,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock, at a conversion price equal to 58% of the average of

the two lowest trading prices of the Company’s common stock for the previous 20 trading day period ending on the date the

notice of conversion of the Note is received by the Company.

The note was funded on March 29, 2019, when the Company received

proceeds of $73,300 after OID of $2,800, and disbursements for the lender’s transaction costs, fees and expenses of $3,900,

which were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion

feature included in the note resulted in an initial debt discount and derivative liability of $70,418.

For the year ended December

principal balance of this note was $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible note issued by the Company on February 26, 2020,

and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement, dated March 3, 2020 with a maturity

date of February 26, 2021.

This note, as amended, is convertible into common stock at a conversion price equal to a 70% discount to the

lowest closing prices of the common stock for thirty prior trading days including the day upon which a notice of conversion is received.

As of July 10, 2020, the outstanding principal balance of assigned note was $798,750.

For the period from July 11, 2020 to December 31,

2020, the investor converted a total of $798,750 of the face value and $122,049 of accrued interest and fees into 496,756,528 shares

of common stock at an average conversion price of $0.0019.

As of December 31, 2020, the outstanding principal balance of this note was

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible note issued by the Company on August 21, 2019,

and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement, with a maturity date of August 21,

This note, as amended, is convertible into common stock at a conversion price equal to a 70% discount to the lowest closing prices

of the common stock for thirty prior trading days including the day upon which a notice of conversion is received.

As of July 10, 2020,

the outstanding principal balance of assigned note was $155,632.

For the period from July 11, 2020 to December 31, 2020, the investor

converted a total of $155,632 of the face value and $50,305 of accrued interest and fees into 219,963,737 shares of common stock at an

average conversion price of $0.0009.

As of December 31, 2020, the outstanding principal balance of this note was $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible promissory note issued by the Company on March

9, 2020, (the “Issuance Date”) to an investor.

This note matures 6 months after the Issuance Date.

This note is convertible

into shares of the Company’s common stock beginning on the Issuance Date at $.25 for the first three months after the Issuance

After the first three months after the Issuance Date, the conversion price shall be equal to the lower of (i) $.25 or 50% of the

lowest trading price for the thirty trading days prior to the conversion.

As of July 10, 2020, the outstanding principal balance of this

note was $80,000 with a carrying value of $53,333, net of unamortized discounts of $26,667.

For the period from July 11, 2020 to December

31, 2020, amortization of the debt discounts of $26,667 was charged to interest expense.

As of December 31, 2019, the outstanding

principal balance of the note was $80,000 with a carrying value of $47,979, net of unamortized discounts of $32,021.

June 5, 2019, an investor (the “Purchaser”) pursuant to an Assignment Agreement, purchased a convertible note issued

by the Company on December 5, 2018 (see above).

The Purchaser paid $93,391 to acquire the note.

The Note matures 12 months after

the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180

days from the issuance date of the Note, at a conversion price equal to 65% multiplied by the average of the lowest two trading

prices during the 15- trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

The embedded conversion feature pursuant to the Assignment Agreement resulted in an initial debt discount and derivative liability

For the year ended December 31, 2019, amortization of the debt discounts of $59,909 was charged to interest expense.

As of December 31, 2019, the outstanding principal balance of assigned note was $93,391.

June 7, 2019, an investor (the “Purchaser”) pursuant to an Assignment Agreement, purchased a convertible note issued

by the Company on October 19, 2018 (see above).

The Purchaser paid $77,000 to acquire the note.

The Note matures 12 months after

the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180

days from the issuance date of the Note, at a conversion price equal to 65% multiplied by the average of the lowest two trading

prices during the 15- trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

The embedded conversion feature pursuant to the Assignment Agreement resulted in an initial debt discount and derivative liability

For the year ended December 31, 2019, amortization of the debt discounts of $49,335 was charged to interest expense.

For the period from July 11, 2020 to December

31, 2020, the investor converted a total of $80,000 of the face value and $23,720 of accrued interest and fees into 47,599,845 shares

of common stock at an average conversion price of $0.0022.

As of December 31, 2020, the outstanding principal balance of this note was

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a past-due 22% convertible note issued by the Company on December

5, 2018, and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement on April 17, 2020.

as amended, is convertible into common stock at a conversion price equal to a 70% discount to the lowest closing prices of the common

stock for thirty prior trading days including the day upon which a notice of conversion is received.

As of July 10, 2020, the outstanding

principal balance of assigned note was $352,695.

For the period from July 11, 2020 to December 31, 2020, the investor converted a total

of $352,695 of the face value and $43,357 of accrued interest into 235,297,000 shares of common stock at an average conversion price

As of December 31, 2020, the outstanding principal balance of this note was $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of $67 of a past-due 22% convertible note issued by the Company on

October 19, 2018, and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement on April 24, 2020.

This note, as amended, is convertible into common stock at a conversion price equal to a 70% discount to the lowest closing prices of

the common stock for thirty prior trading days including the day upon which a notice of conversion is received.

During the year ended

December 31, 2020, the Company paid the lender $67.

As of December 31, 2020, the outstanding principal balance of assigned note was $-0-.

July 22, 2019, the Company issued a 10% convertible promissory note, (the “Note”) in the principal amount of $38,900,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock, at a conversion price equal to 60% of the lowest closing

bid price of the Company’s common stock for the previous 20 trading day period ending on the date the notice of conversion

of the Note is received by the Company.

The note was funded on July 24, 2019, when the Company received proceeds of $30,000 after

OID of $3,900, and disbursements for the lender’s transaction costs, fees and expenses of $5,000, which were recorded as

discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature included in

the note resulted in an initial debt discount and derivative liability of $31.452.

For the year ended December 31, 2019, amortization

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 15% convertible promissory note issued by the Company on April

27, 2020, (the “Issuance Date”) to an investor.

This note matures on April 27, 2021 and is convertible into shares of common

stock at a conversion price equal to 50% of the lowest traded price for the twenty-five prior trading days including the day upon which

a conversion notice is received by the Company.

As of July 10, 2020, the outstanding principal balance of this note was $60,000 with

a carrying value of $11,500, net of unamortized discounts of $48,500.

For the period from July 11, 2020 to December 31, 2020, amortization

of the debt discounts of $48,500 was charged to interest expense.

During the year ended December 31, 2020, the investor exchanged this

note to be part of a new promissory note (see Note 7).

As of December 31, 2020, the outstanding principal balance of this note is $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance $14,831 of a convertible note issued by the Company on August 23, 2019,

with a maturity date of May 23, 2020, and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement

on April 28, 2020.

This note, as amended, is convertible into common stock at a conversion price equal to a 70% discount to the lowest

closing prices of the common stock for thirty prior trading days including the day upon which a notice of conversion is received.

the year ended December 31, 2020, the Company paid the lender $14,831.

As of December 31, 2020, the outstanding principal balance of

the note was $38,900 with a carrying value of $16,313, net of unamortized discounts of $22,587.

August 2, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $157,500,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 60% multiplied by the average of the lowest two trading prices during the 20

trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

funded on August 2, 2019, when the Company received proceeds of $150,000 after disbursements for the lender’s transaction

costs, fees and expenses of $7,500, which were recorded as discounts against the debt to be amortized into interest expense through

The embedded conversion feature included in the note resulted in an initial debt discount and derivative liability of

For the year ended December 31, 2019, amortization of the debt discounts of $55,638 was charged to interest expense.

As of December 31, 2019, the outstanding principal balance of the note was $157,500 with a carrying value of $79,656, net of unamortized

discounts of $77,844.

August 21, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $55,125,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 58% multiplied by the average of the lowest two trading prices during the 20-

trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

funded on August 21, 2019, when the Company received proceeds of $50,000 after OID of $2,625, and disbursements for the lender’s

transaction costs, fees and expenses of $2,500, which were recorded as discounts against the debt to be amortized into interest

expense through maturity.

The embedded conversion feature included in the note resulted in an initial debt discount and derivative

liability of $47,117.

For the year ended December 31, 2019, amortization of the debt discounts of $18,763 was charged to interest

As of December 31, 2019, the outstanding principal balance of the note was $55,125 with a carrying value of $21,646,

net of unamortized discounts of $33,479.

August 19, 2019, the Company issued an 8% convertible promissory note, (the “Note”) in the principal amount of $85,000,

pursuant to a Securities Purchase Agreement we entered into with the investor.

The Note matures May 19, 2020.

The Note is convertible

into shares of the Company’s common stock beginning on the date which is 180 days from the issuance date of the Note, at

a conversion price equal to the lesser of (1) the lowest trading price during the previous 20 trading day period ending on the

last completed trading date prior to the date of the Note and (2) 65% multiplied by the average of the 3 lowest trading prices

of the Company’s common stock during the 20 day trading period ending on the latest completed trading day of the common

stock prior to the date of conversion of the Note.

The note was funded on August 22, 2019, when the Company received proceeds

of $75,000 after OID of $7,250, and disbursements for the lender’s transaction costs, fees and expenses of $2,750, which

were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature

included in the note resulted in an initial debt discount and derivative liability of $54,802.

For the year ended December 31,

2019, amortization of the debt discounts of $31,146 was charged to interest expense.

assigned note was $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible promissory note issued by the Company on April

28, 2020, (the “Issuance Date”) to an investor.

This note matures 12 months after the date of issuance.

This note is convertible

into shares of the Company’s common stock beginning on the date which is 180 days from the issuance date of this note, at a conversion

price equal to 58% multiplied by the lowest closing bid price during the 20- trading day period ending on the last completed trading

date in the OTC Markets prior to the date of conversion.

As of July 10, 2020, the outstanding principal balance of this note was $53,000

with a carrying value of $10,158, net of unamortized discounts of $42,842.

For the period from July 11, 2020 to December 31, 2020, amortization

of the debt discounts of $42,842 was charged to interest expense.

For the period from July 11, 2020 to December 31, 2020, the investor

converted a total of $53,000 of the face value and $3,180 of accrued interest into 16,051,428 shares of common stock at an average conversion

price of $0.0035.

As of December 31, 2020, the outstanding principal balance of this note was $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible promissory note issued by the Company on May 4,

2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 12 months after

the date of issuance.

This note is convertible into shares of the Company’s common stock beginning on the date which is 180 days

from the issuance date of this note, at a conversion price equal to the lower of $0.50 or 58% multiplied by the average of the two lowest

closing trading price or bid price during the 20- trading day period ending on the last completed trading date in the OTC Markets prior

to the date of conversion.

In conjunction with this note, the Company issued a warrant to purchase 3,666,666 shares of common stock at

an exercise price of $0.015, subject to adjustments and expiring on the five-year anniversary of the Issuance Date.

As of July 10, 2020,

the outstanding principal balance of this note was $110,000 with a carrying value of $18,860, net of unamortized discounts of $91,140.

For the period from July 11, 2020 to December 31, 2020, amortization of the debt discounts of $91,140 was charged to interest expense.

For the period from July 11, 2020 to December 31, 2020, the investor converted a total of $110,000 of the face value and $22,548 of accrued

interest and fees into 59,706,711 shares of common stock at an average conversion price of $0.0022.

As of December 31, 2020, the outstanding

principal balance of the note was $85,000 with a carrying value of $51,344, net of unamortized discounts of $33.656.

August 23, 2019, the Company issued to a third-party investor a convertible redeemable promissory note (the “Note”)

with a face value of $37,800, including an original issue discount of $1,800.

The note matures on May 23, 2020, has a stated interest

of 10% and is convertible into a variable number of the Company’s common stock, based on a conversion ratio of 58% of the

average of the two lowest trading prices for the 20 days prior to conversion.

The note was funded on August 26, 2019, when the

Company received proceeds of $33,500, after disbursements for the lender’s transaction costs, fees and expenses of $2,500,

which were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion

feature included in the note resulted in an initial debt discount and derivative liability of $32,229.

For the year ended December

principal balance of this note was $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible promissory note issued by the Company on May 5,

2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 6 months after

the Issuance Date.

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $03 for

the first three months after the Issuance Date.

After the first three months after the Issuance Date, the conversion price shall be equal

to the lower of (i) $.03 or 50% of the lowest trading price for the thirty-five trading days prior to the conversion.

As of July 10,

2020, the outstanding principal balance of this note was $162,000 with a carrying value of $62,100, net of unamortized discounts of $99,900.

In conjunction with this note, the Company issued a warrant to purchase 4,325,000 shares of common stock at an exercise price of $0.02,

subject to adjustments and expiring on the five-year anniversary of the Issuance Date.

For the period from July 11, 2020 to December

31, 2020, amortization of the debt discounts of $99,900 was charged to interest expense.

For the period from July 11, 2020 to December

31, 2020, the investor converted a total of $162,000 of the face value and $27,816 of accrued interest and fees into 88,340,657 shares

of common stock at an average conversion price of $0.0022.

As of December 31, 2020, the outstanding principal balance of this note was

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible promissory note issued by the Company on May 7,

2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures on May 7, 2021

and is convertible into shares of common stock at a conversion price equal to 50% of the lowest traded price for the twenty-five prior

trading days including the day upon which a conversion notice is received by the Company.

As of July 10, 2020, the outstanding principal

balance of this note was $30,000 with a carrying value of $5,000, net of unamortized discounts of $25,000.

For the period from July 11,

2020 to September 30, 2020, amortization of the debt discounts of $25,000 was charged to interest expense.

During the year ended December

31, 2020, the investor exchanged this note to be part of a new promissory note (see Note 7).

As of December 31, 2020, the outstanding

principal balance of the note was $37,800 with a carrying value of $18,561, net of unamortized discounts of $19,239.

August 29, 2019, the Company issued a 10% convertible promissory note, (the “Note”) in the principal amount of $45,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 60% multiplied by the average of the lowest two trading prices during the 20

trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

funded on September 4, 2019, when the Company received proceeds of $40,000 after disbursements for the lender’s transaction

costs, fees and expenses of $5,000, which were recorded as discounts against the debt to be amortized into interest expense through

The embedded conversion feature included in the note resulted in an initial debt discount and derivative liability of

For the year ended December 31, 2019, amortization of the debt discounts of $14,228 was charged to interest expense.

As of December 31, 2019, the outstanding principal balance of the note was $45,000 with a carrying value of $18,434, net of unamortized

principal balance of this note is $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a convertible note issued by the Company on January 8, 2020, with

a maturity date of January 8, 2021, and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement

on May 15, 2020.

This note, as amended, is convertible into common stock at a conversion price equal to a 70% discount to the lowest

closing prices of the common stock for thirty prior trading days including the day upon which a notice of conversion is received.

of July 10, 2020, the outstanding principal balance of assigned note was $115,500, with a carrying value of $56,306, net of unamortized

discounts of $59,194.

August 29, 2019, an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement, purchased a convertible note

issued by the Company on September 1, 2017 (see above).

The Purchaser paid $22,874 to acquire the note.

The Note, as amended,

is convertible into common stock at a conversion price equal to a 35% discount to the average of the 3 lowest closing prices of

the common stock for fifteen prior trading days including the day upon which a notice of conversion is received.

conversion feature pursuant to the Assignment Agreement resulted in an initial debt discount and derivative liability of 13,793.

For the year ended December 31, 2019, amortization of the debt discounts of $13,793 was charged to interest expense.

ended December 31, 2019, the investor converted a total of $7,000 of the face value into 4,039 shares of common stock.

As of December

31, 2019, the outstanding principal balance of assigned note was $15,874.

August 29, 2019, an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement, purchased a convertible note

issued by the Company on October 2, 2017 (see above).

The Purchaser paid $37,998 to acquire the note.

The Note, as amended, is

convertible into common stock at a conversion price equal to a 35% discount to the average of the 3 lowest closing prices of the

common stock for fifteen prior trading days including the day upon which a notice of conversion is received.

The embedded conversion

feature pursuant to the Assignment Agreement resulted in an initial debt discount and derivative liability of $22,953.

year ended December 31, 2019, amortization of the debt discounts of $22,953 was charged to interest expense.

As of December 31,

2019, the outstanding principal balance of assigned note was $37,998.

October 1, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $68,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 61% multiplied by the lowest closing bid price during the 20- trading day period

ending on the last completed trading date in the OTC Markets prior to the date of conversion.

The note was funded on October 2,

2019, when the Company received proceeds of $65,000 after disbursements for the lender’s transaction costs, fees and expenses

of $3,000, which were recorded as discounts against the debt to be amortized into interest expense through maturity.

conversion feature included in the note resulted in an initial debt discount and derivative liability of $52,457.

ended December 31, 2019, amortization of the debt discounts of $13,873 was charged to interest expense.

For the period from July 11, 2020 to December 31, 2020, amortization of the debt discounts of $59,194 was charged

to interest expense.

For the period from July 11, 2020 to December 31, 2020, the investor converted a total of $115,067 of the face value

and $4,408 of accrued interest and fees into 88,500,000 shares of common stock at an average conversion price of $0.00133.

year ended December 31, 2020, the Company paid the investor $433.

As of December 31, 2020, the outstanding principal balance of this

note is $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a convertible note issued by the Company on November 27, 2019, with

a maturity date of November 27, 2020, and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement

on May 15, 2020.

This note, as amended, is convertible into common stock at a conversion price equal to a 70% discount to the lowest

closing prices of the common stock for thirty prior trading days including the day upon which a notice of conversion is received.

the year ended December 31, 2020, the Company paid the investor $433.

As of December 31, 2020, the outstanding principal balance of this

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a $60,000, 15% convertible promissory note issued by the Company

on May 28, 2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures on

May 28, 2021 and is convertible into shares of common stock at a conversion price equal to 50% of the lowest traded price for the twenty-five

prior trading days including the day upon which a conversion notice is received by the Company.

As of July 10, 2020, the outstanding

principal balance of this note was $30,000 with a carrying value of $3,250, net of unamortized discounts of $26,750.

For the period from

July 11, 2020 to December 31, 2020, amortization of the debt discounts of $26,750 was charged to interest expense.

During the year

ended December 31, 2020, the investor exchanged this note to be part of a new promissory note (see Note 7).

As of December 31, 2020,

the outstanding principal balance of the note was $68,000 with a carrying value of $26,416, net of unamortized discounts of $41,584.

October 8, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $66,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock, at a conversion price equal to 60% of the average of

the two lowest trading prices of the Company’s common stock for the previous 20 trading day period ending on the date the

notice of conversion of the Note is received by the Company.

The note was funded on October 10, 2019, when the Company received

proceeds of $57,000 after OID of $6,000, and disbursements for the lender’s transaction costs, fees and expenses of $2,300,

which were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion

feature included in the note resulted in an initial debt discount and derivative liability of $52,281.

the outstanding principal balance of this note is $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a past-due convertible note issued by the Company on May 29, 2019,

with a maturity date of May 29, 2020, and purchased by an investor (the “Purchaser”) pursuant to a Debt Purchase Agreement

on May 28, 2020.

This note, as amended, is convertible into common stock at a conversion price equal to a 70% discount to the lowest

closing prices of the common stock for thirty prior trading days including the day upon which a notice of conversion is received.

of July 10, 2020, the outstanding principal balance of assigned note was $31,043.

For the period from July 11, 2020 to December 31, 2020,

the investor converted a total of $31,043 of the face value and $54,357 of accrued interest and fees into 86,262,262 shares of common

stock at an average conversion price of $0.001.

As of December 31, 2020, the note balance is $-0-.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible promissory note issued by the Company on June

1, 2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 6 months after

the Issuance Date.

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $0.025

for the first three months after the Issuance Date.

After the first three months after the Issuance Date, the conversion price shall

be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five trading days prior to the conversion.

July 10, 2020, the outstanding principal balance of this note was $127,500 with a carrying value of $27,625, net of unamortized discounts

For the period from July 11, 2020 to December 31, 2020, amortization of the debt discounts of $99,875 was charged to interest

As of December 31, 2020, the outstanding principal balance of this note is $127,500.

In conjunction with this note, the Company

issued a warrant to purchase 6,375,000 shares of common stock at an exercise price of $0.02, subject to adjustments and expiring on the

five-year anniversary of the Issuance Date.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 12% convertible promissory note issued by the Company on June

11, 2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 12 months

after the date of issuance.

This note is convertible into shares of the Company’s common stock beginning on the date which is 180

days from the issuance date of this note, at a conversion price equal to 58% multiplied by the lowest closing bid price during the twenty-

trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

As of July 10, 2020,

the outstanding principal balance of this note was $53,000 with a carrying value of $4,417, net of unamortized discounts of $48,583.

For the period from July 11, 2020 to December 31, 2020, amortization of the debt discounts of $48,583 was charged to interest expense.

For the period from July 11, 2020 to December 31, 2020, the investor converted a total of $53,000 of the face value and $3,180 of accrued

interest into 18,122,581 shares of common stock at an average conversion price of $0.0031.

As of December 31, 2020, the note balance

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 15% convertible promissory note issued by the Company on June

30, 2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 6 months after

the Issuance Date.

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $0.025

for the first three months after the Issuance Date.

After the first three months after the Issuance Date, the conversion price shall

be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five trading days prior to the conversion.

July 10, 2020, the outstanding principal balance of this note was $129,500 with a carrying value of $8,375, net of unamortized discounts

For the period from July 11, 2020 to December 31, 2020, amortization of the debt discounts of $121,125 was charged to interest

As of December 31, 2020, the outstanding principal balance of this note is $129,500.

In conjunction with this note, the Company

issued a warrant to purchase 6,375,000 shares of common stock at an exercise price of $0.02, subject to adjustments and expiring on the

five-year anniversary of the Issuance Date.

July 10, 2020, PCTI (the accounting acquirer) assumed the balance of a 15% convertible promissory note issued by the Company on July

8, 2020, (the “Issuance Date”) to an investor, pursuant to a Securities Purchase Agreement.

This note matures 6 months after

the Issuance Date.

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $0.025

for the first three months after the Issuance Date.

After the first three months after the Issuance Date, the conversion price shall

be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five trading days prior to the conversion.

In conjunction

with this note, the Company issued a warrant to purchase 12,500,000 shares of common stock at an exercise price of $0.02, subject to

adjustments and expiring on the five-year anniversary of the Issuance Date.

of July 10, 2020, the outstanding principal balance of this note was $250,000 with a carrying value of $-0-, net of unamortized discounts

For the period from July 11, 2020 to December 31, 2020, amortization of the debt discounts of $239,583 was charged to interest

As of December 31, 2020, the outstanding principal balance of this note is $250,000 with a carrying value of $239,583 net of

unamortized discounts of $10,417

February 26, 2020, (the “Issuance Date”) PCTI issued a 12% Convertible Promissory Note (the “Note”), in the principal

amount of $106,950, to an investor.

This note matures 12 months after the Issuance Date.

This note is convertible into shares of the

Company’s common stock beginning on the Issuance Date at 55% of the lowest trading price for the twenty-five trading days prior

to the conversion.

If the trading price cannot be calculated for such security on such date, the trading price shall be the fair market

value as mutually determined by the Company and the investor for which the calculation of the trading price is required in order to determine

the conversion price.

PCTI received proceeds of $85,000 on February 26, 2020, and the Note included an original issue discount of $13,950

and lender costs of $8,000.

This note proceeds will be used by the Company for general working capital purposes.

The Note also requires

a daily payment via ACH of $400.

On June 25, 2020, the Note was amended to add $111,225 of additional principal to the outstanding balance.

Pursuant to the PCTI transaction with Ozop, on July 10, 2020, the conversion price is equal to 45% multiplied by the lowest closing bid

price during the twenty-five-trading day period ending on the last completed trading date in the OTC Markets prior to the date of conversion.

Accordingly, the Company determined the conversion feature of the Notes represented an embedded derivative since the note is convertible

into a variable number of shares upon conversion, as the note was not considered to be conventional debt under ASC 815 and the embedded

conversion feature was bifurcated from the debt host and accounted for as a derivative liability.

The embedded feature included in the

note resulted in an initial debt discount of $85,000, interest expense of $135,786 and initial derivative liability of $220,786.

the year ended December 31, 2020, amortization of the debt discounts of $81.896 was charged to interest expense.

For the year ended December

31, 2019, amortization of the debt discounts of $13,733 was charged to interest expense.

31, 2020, principal payments of $56,400 were paid.

As of December 31, 2020, the outstanding principal balance of this note was $161,775

with a carrying value of $141.038, net of unamortized discounts of $17,737.

July 15, 2020, (the “Issuance Date”) the Company issued a 15% convertible promissory note, in the principal amount of $127,500,

to an investor.

This note matures 6 months after the Issuance Date.

This note is convertible into shares of the Company’s common

stock beginning on the Issuance Date at $0.011 for the first three months after the Issuance Date.

After the first three months after

the Issuance Date, the conversion price shall be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five

trading days prior to the conversion.

The Company received proceeds of $102,000 on July 22, 2020, and this note included an original

issue discount of $25,500.

This note proceeds will be used by the Company for general working capital purposes.

In conjunction with this

note, the Company issued a warrant to purchase 6,375,000 shares of common stock at an exercise price of $0.02, subject to adjustments

and expiring on the five-year anniversary of the Issuance Date.

The Company allocated the proceeds to the debt of $82,068 and to the

warrant $19,932 based on the relative fair value.

The embedded conversion feature included in this note resulted in an initial derivative

liability of $207,699, a debt discount of $82,068 with the excess of $125,541 charged to interest expense of $125,541.

For the year ended

December 31, 2020, amortization of the debt discounts of $116,875 was charged to interest expense.

As of December 31, 2020, the outstanding

principal balance of the note was $66,000 with a carrying value of $18,452, net of unamortized discounts of $47,548.

October 24, 2019, the Company issued a convertible promissory note in the principal amount of $248,400 (the “Note”),

pursuant to a Securities Purchase Agreement we entered into with the investor.

The Note bears interest at the rate of 12% per

annum and matures 12 months after the date of issuance.

The note is convertible at any time following the funding of the note

into a variable number of the Company’s common stock, based on a conversion ratio of 60% of the lowest trading price for

the 25 days prior to conversion.

The note was funded on October 28, 2019, when the Company received proceeds of $200,000, after

OID of $32,400, and disbursements for the lender’s transaction costs, fees and expenses of $16,000, which were recorded

as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature included

in the note resulted in an initial debt discount and derivative liability of $203,637.

For the year December 31, 2019, amortization

principal balance of this note was $127,500 with a carrying value of $116,708, net of unamortized discounts of $10,792.

July 29, 2020, (the “Issuance Date”) the Company issued a 15% convertible promissory note, in the principal amount of $127,500,

to an investor.

This note matures 6 months after the Issuance Date.

This note is convertible into shares of the Company’s common

stock beginning on the Issuance Date at $0.011 for the first three months after the Issuance Date.

After the first three months after

the Issuance Date, the conversion price shall be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five

trading days prior to the conversion.

The Company received proceeds of $100,000 on August 3, 2020, and this note included an original

issue discount of $25,500.

This note proceeds will be used by the Company for general working capital purposes.

In conjunction with this

note, the Company issued a warrant to purchase 12,750,000 shares of common stock at an exercise price of $0.01, subject to adjustments

and expiring on the five-year anniversary of the Issuance Date.

The Company allocated the proceeds to the debt $61,733 and warrant $40,267

based on the relative fair value.

The embedded conversion feature included in this note resulted in an initial derivative liability of

$198,239, a debt discount of $61,733 with the excess of $136,506 charged to interest expense.

For the year ended December 31, 2020, amortization

of the debt discounts of $106,250 was charged to interest expense.

As of December 31, 2019, the outstanding principal balance of

the note was $248,400, with a carrying value of $26,717, net of unamortized discounts of $221,683.

October 24, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $225,000,

pursuant to a Securities Purchase Agreement we entered into with the investor.

The Note matures October 24, 2020.

convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance date of

the Note, at a conversion price equal to the lesser of (1) $0.05 and (2) 58% multiplied by the average of the 2 lowest trading

prices of the Company’s common stock during the 20 day trading period ending on the latest completed trading day of the

common stock prior to the date of conversion of the Note.

The note was funded on October 31, 2019, when the Company received proceeds

of $202,250 after OID of $20,000, and disbursements for the lender’s transaction costs, fees and expenses of $2,750, which

were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature

included in the note resulted in an initial debt discount and derivative liability of $144,302.

For the year ended December 31,

2019, amortization of the debt discounts of $19,263 was charged to interest expense.

As of December 31, 2019, the outstanding

principal balance of the note was $225,000 with a carrying value of $77,311, net of unamortized discounts of $147,689.

October 25, 2019, the Company issued a convertible promissory note in the principal amount of $36,750 (the “Note”),

pursuant to a Securities Purchase Agreement we entered into with the investor.

The Note bears interest at the rate of 12% per

annum and matures 12 months after the date of issuance.

The note is convertible at any time following the funding of the note

into a variable number of the Company’s common stock, based on a conversion ratio of 58% of the average of the two lowest

closing bid prices for the 20 days prior to conversion.

The note was funded on October 25, 2019, when the Company received proceeds

of $33,000, after OID of $1,750, and disbursements for the lender’s transaction costs, fees and expenses of $2,000, which

were recorded as discounts against the debt to be amortized into interest expense through maturity.

As of December 31, 2020, the outstanding principal balance of this

note was $127,500 with a carrying value of $105,917, net of unamortized discounts of $21,583.

November 16, 2020, (the “Issuance Date”) the Company issued a promissory note, in the principal amount of $250,000, to an

The note carries a guaranteed interest payment of 15%, which is added to the principal on the Issuance Date.

Principal payments

shall be made in six instalments of $57,500 commencing May 21, 2021, and continuing each 30 days thereafter for 4 months.

shall have the right from time to time, and at any time following an event of default, as defined on the agreement, to convert all or

any part of the outstanding and unpaid principal, interest and any other amounts due into fully paid and non-assessable shares of common

stock of the Company.

This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $0.01

for the first three months after the Issuance Date.

After the first three months after the Issuance Date, the conversion price shall

be equal to the lower of (i) $.01 or the volume weighted average price of the common stock during the five (5) Trading Day period ending

on the day prior to conversion.

The Company received proceeds of $200,000 on November 19, 2020, and this note included an original issue

discount of $50,000.

This note proceeds will be used by the Company for general working capital purposes.

The embedded conversion feature

included in the note resulted in an initial debt discount and derivative liability of $31,316.

For the year December 31, 2019,

amortization of the debt discounts of $3,960 was charged to interest expense.

As of December 31, 2019, the outstanding principal

balance of the note was $36,750, with a carrying value of $5,644, net of unamortized discounts of $31,106.

November 27, 2019, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $53,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 56% multiplied by the lowest closing bid price during the 20- trading day period

ending on the last completed trading date in the OTC Markets prior to the date of conversion.

The note was funded on December

2, 2019, when the Company received proceeds of $50,000 after disbursements for the lender’s transaction costs, fees and

expenses of $3,000, which were recorded as discounts against the debt to be amortized into interest expense through maturity.

The embedded conversion feature included in the note resulted in an initial debt discount and derivative liability of $49,808.

For the year ended December 31, 2019, amortization of the debt discounts of $4,434 was charged to interest expense.

As of December

31, 2019, the outstanding principal balance of the note was $53,000 with a carrying value of $4,626, net of unamortized discounts

summary of the convertible note balance as of December 31, 2019, and 2018, is as follows:

included in this note resulted in an initial derivative liability of $14,750 and a debt discount of $50,000.

In conjunction with this

note, the Company issued a warrant to purchase 35,000,000 shares of common stock at an exercise price of $0.25, subject to adjustments

and expiring on the five-year anniversary of the Issuance Date.

The warrants issued resulted in a debt discount of $3,050, with the offset

to additional paid in capital.

For the year ended December 31, 2020, amortization of the debt discounts of $8,094 was charged to interest

As of December 31, 2020, the outstanding principal balance of this note was $250,000 with a carrying value of $190,736, net

of unamortized discounts of $59,264.

summary of the convertible note balance as of December 31, 2020, is as follows:

December 31, 2020

Principal balance

Unamortized discount

Ending balance, net

DERIVATIVE LIABILITIES

Company determined the conversion feature of the Notes, which contain a variable conversion rate, represented an embedded derivative

since the Notes were convertible into a variable number of shares upon conversion.

Accordingly, the Notes are not considered to

be conventional debt under ASC 815 and the embedded conversion feature was bifurcated from the debt host and accounted for as

a derivative liability.

Company valued the derivative liabilities at December 31, 2019, and 2018, at $2,462,940 and $1,199,514, respectively.

used the Monte Carlo simulation valuation model with the following assumptions as of December 31, 2019, risk-free interest rates

from 1.57% to 1.77% and volatility of 31% to 36%, and as of December 31, 2018;

risk-free interest rates from 2.56% to 2.62% and

volatility of 61% to 65%.

The initial derivative liabilities for convertible notes issued during the year ended December 31, 2019,

used the following assumptions;

risk-free interest rates from 1.59% to 2.58% and volatility of 28% to 63%.

summary of the activity related to derivative liabilities for the years ended December 31, 2019, and 2018, is as follows:

January 1, 2018

Issued during

in fair value recognized in operations

Company determined the conversion feature of the convertible notes, which all contain variable conversion rates, represented an embedded

derivative since the notes were convertible into a variable number of shares upon conversion.

Accordingly, the notes are not considered

to be conventional debt under ASC 815 and the embedded conversion feature was bifurcated from the debt host and accounted for as a derivative

Company valued the derivative liabilities at December 31, 2020, at $1,238,378.

The Company used the Monte Carlo simulation valuation

model with the following assumptions as of December 31, 2020, risk free interest rates at 0.09%, and volatility of 48% to 61%.

derivative liabilities for convertible notes issued from July 11, 2020 to December 31, 2020, used the following assumptions;

interest rates from 0.12% to 0.17% and volatility of 83% to 106%.

summary of the activity related to derivative liabilities for the period from July 10, 2020 to December 31, 2020, is as follows:

Balance- July 10, 2020, assumed pursuant to PCTI transaction

Issued during period

Converted or paid

Change in fair value recognized in operations

Balance- December 31, 2020

during the period

in fair value recognized in operations

December 31, 2019

NOTES PAYABLE

2 unchanged sentences

December 31, 2019

Note payable, interest at 8%, matured September 6, 2018, in default

Note payable, interest at 6%, matures February 26, 2021

Bank line of credit, interest at 5.83%, matures November 13, 2019

Equity line of credit, interest at 5.5%, matures August 5, 2022

Notes payable, interest at 8%, matures January 5, 2020, currently in default

Note payable bank, interest at 7.75%, matures December 26,2021

Note payable bank, interest at 6.5%, matures December 26, 2021

Economic Injury Disaster Loan

Paycheck Protection Program loan

Notes payable, interest at 8%, matured January 5, 2020, currently in default

Other, due on demand, interest at 6%

Total notes payable

Less long-term portion

Current portion

Note payable $203,000 face value, interest at 12%, matures June 25, 2021, net of discount of $13,185

Note payable $750,000 face value, interest at 12%, matures August 24, 2021, net of discount of $360,573

Note payable $389,423 face value, interest at 18%, matures November 6, 2023

Note payable $1,000,000 face value, interest at 12%, matures November 13, 2021, net of discount of $431,700

Sub- total notes payable

Less long-term portion, net of discount

Current portion of notes payable, net of discount

November 13, 2020, the Company entered into a 12%, $1,000,000 face value promissory note with a third-party due November 13, 2021.

payments shall be made in six instalments of $166,667 commencing 180 days from the issue date and continuing each 30 days thereafter

for 5 months and the final payment of principal and interest due on the maturity date.

The Company received proceeds of $890,000 on November

20, 2020, and the Company reimbursed the investor for expenses for legal fees and due diligence of $110,000.

For the year ended December

31, 2020, amortization of the costs of $13,750 was charged to interest expense.

In conjunction with this note, the Company issued 2 common

stock purchase warrants;

each warrant entitles the Holder to purchase 125,000,000 shares of common stock at an exercise price of $0.008,

subject to adjustments and expires on the five-year anniversary of the issue date.

The warrants issued resulted in a debt discount of

$383,371, with the offset to additional paid in capital.

For the year ended December 31, 2020, amortization of the debt discount of $47,921

was charged to interest expense.

As of December 31, 2020, the outstanding principal balance of this note was $1,000,000 with a carrying

value of $568,300, net of unamortized discounts of $431,700.

November 6, 2020, the Company entered into a Settlement Agreement with the holder of $120,000 of convertible notes with accrued

and unpaid interest of $8,716 and a $210,000 Promissory Noted dated June 23, 2020 with accrued and unpaid interest of $15,707.

The Company issued a new 12% Promissory Note with a face value of $389,423 and a maturity date of November 6, 2023.

In conjunction

with this settlement, the Company issued a warrant to purchase 60,000,000 shares of common stock at an exercise price of $0.0075,

subject to adjustments and expires on the five-year anniversary of the issue date.

The Company analyzed the transaction and

concluded that this was a mofication to the existing debt.

October 26, 2016, PCTI entered into a $210,000 note payable with a bank.

On July 24, 2020, due to defaults with the terms of the note,

the note was amended with the outstanding balance due December 26, 2020 and the interest rate changed to 7.75%.

Borrowings are collateralized

by substantially all of the assets of PCTI and the personal guarantee of PCTI’s President.

At December 31, 2020 and 2019, $151,469

and $174,444, respectively, was outstanding on the note payable.

On March 15, 2021, the maturity date of this note was extended to December

September 25, 2019, PCTI renewed their $350,000 promissory note with a bank that provides for borrowings of up to $350,000.

is due monthly and the principal was due on April 12, 2020, however, on July 24, 2020, due to PCTI being in default with agreement was

amended with a change in the maturity date to December 26, 2020, and the interest rate changed to the prime rate plus 3.25% (6.5% at

September 30, 2020).

Borrowings are collateralized by substantially all of the assets of PCTI and the personal guarantee of PCTI’s

At December 31, 2020 and 2019, $345,211 and $349,962, respectively, was outstanding on the promissory note.

On March 15, 2021,

the maturity date of this note was extended to December 26, 2021.

August 24, 2020 (the “Issue Date”), the Company entered into a 12%, $750,000 face value promissory note with a third-party

(the “Holder”) due August 24, 2021 (the “Maturity Date”).

Principal payments shall be made in six instalments

of $125,000 commencing 180 days from the Issue Date and continuing each 30 days thereafter for 5 months and the final payment of principal

and interest due on the Maturity Date.

The Holder shall have the right from time to time, and at any time following an event of default,

as defined on the agreement, to convert all or any part of the outstanding and unpaid principal, interest and any other amounts due into

fully paid and non-assessable shares of common stock of the Company, at the lower of i) the Trading Price (as defined in the agreement)

during the previous five trading days prior to the Issuance Date or ii) the volume weighted average price during the five trading days

ending on the day preceding the conversion date.

The Company received proceeds of $663,000 on August 25, 2020, and the Company reimbursed

the investor for expenses for legal fees and due diligence of $87,000.

For the year ended December 31, 2020, amortization of the costs

of $30,813 was charged to interest expense.

In conjunction with this Note, the Company issued 2 common stock purchase warrants;

warrant entitles the Holder to purchase 122,950,819 shares of common stock at an exercise price of $0.0061, subject to adjustments and

expires on the five-year anniversary of the Issue Date.

The warrants issued resulted in a debt discount of $471,307, with the offset

to additional paid in capital.

For the year ended December 31, 2020, amortization of the debt discount of $166,921 was charged to interest

As of December 31, 2020, the outstanding principal balance of this note was $750,000 with a carrying value of $389,427, net

of unamortized discounts of $360,573.

April 20, 2020, PCTI was granted a loan from a bank in the amount of $100,400, pursuant to the Paycheck Protection Program (“PPP”)

under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The loan matures on April 20, 2022 and bears interest at

a rate of 1.0% per annum, payable monthly beginning on November 20, 2020.

The loan may be prepaid at any time prior to maturity with

no prepayment penalties.

Under the terms of the loan, a portion or all of the loan is forgivable to the extent the loan proceeds are

used to fund qualifying payroll, rent and utilities during a designated twenty-four-week period.

Payments are deferred until the SBA

determines the amount to be forgiven.

The Company intends to utilize the proceeds of the PPP loan in a manner which will enable qualification

as a forgivable loan.

However, no assurance can be provided that all or any portion of the PPP loan will be forgiven.

The balance on

this PPP loan was $10,400 as of September 30, 2020 and has been classified as a long-term liability in notes payable.

July 14, 2020, PCTI received $10,000 grant under the Economic Injury Disaster Loan (“EIDL”) program.

Up to $10,000 of the

EIDL can be forgiven as long as such funds were utilized to provide working capital.

The first payment due is deferred one year.

entirety of the loan as of September 30, 2020 and has been classified as a long-term liability in notes payable.

following notes were assumed on July 10, 2020, pursuant to the PCTI transaction:

June 23, 2020, the Company entered into a Loan and Securities Purchase Agreement with a third- party lender.

Pursuant to the agreement

in exchange for a $210,000 Promissory Note, inclusive of an original issue discount of $35,000 the Company received proceeds of $175,000

from the lender.

The note carries an interest rate of 18% and a maturity date of June 23, 2022.

During the year ended December 31, 2020,

amortization of $35,000 was charged to interest expense.

This note was exchanged for the promissory note issued November 6, 2020 (see

June 25, 2020, the Company entered into a 12%, $203,000 face value promissory note with a third-party lender with a maturity date of

June 25, 2021.

Principal payments shall be made in six instalments of $33,333 commencing 180 days from the issue date and continuing

each 30 days thereafter for 5 months and the final payment of principal and interest due on the maturity date.

The Holder shall have

the right from time to time, and at any time following an event of default, as defined on the agreement, to convert all or any part of

the outstanding and unpaid principal, interest and any other amounts due into fully paid and non-assessable shares of common stock of

the Company, at the lower of i) the Trading Price (as defined in the agreement) during the previous five trading days prior to the issuance

date or ii) the volume weighted average price during the five trading days ending on the day preceding the conversion date.

received proceeds of $176,000 on June 26, 2020, and the Company reimbursed the investor for expenses for legal fees and due diligence

For the year ended December 31, 2020, amortization of the costs of $13,815 was charged to interest expense.

In conjunction

with this Note, the Company issued 2 common stock purchase warrants;

each warrant entitles the Holder to purchase 10,000,000 shares of

common stock at an exercise price of $0.02, subject to adjustments and expires on the five-year anniversary of the Issue Date.

DEFERRED LIABILITY

September 2, 2020, PCTI entered into an agreement with a third- party.

Pursuant to the terms of the agreement, in exchange for

$750,000, PCTI agreed to pay the third-party a perpetual three percent (3%) payment of revenues, as defined in the agreement.

Payments are due ninety (90) days after each calendar quarter, with the first payment due on or before March 31, 2021, for revenues

for the quarter ending December 31, 2020.

The Company has recorded the $750,000 as deferred liability on the December 31, 2020,

consolidated balance sheet.

No payments have been made and the Company is in default of the agreement.

On February 26,

2021, the agreement was assigned to Ozop and on March 4, 2021, the note was amended, whereby in exchange for 175,000,000 shares

of common stock, the royalty percentage was amended to 1.8%.

DEFERRED REVENUE

the year ended December 31, 2020, the Company received $64,353 form a customer for a payment of a three- year extended warranty.

extended warranty period is from, March 2021 through February 2024, and accordingly the Company will recognize the revenue over such

Of this amount, $17,876 will be recognized in 2021 and the balance of $46,477 is included as a long- term liability on the consolidated

financial statements.

RELATED PARTY TRANSACTIONS

July 10, 2020, pursuant to the PCTI transaction, the Company assumed an employment contract entered into on February 28, 2020, between

the Company and Mr.

Conway (the “Employment Agreement”).

Pursuant to the terms of the Employment Agreement, Mr.

to receive an annual salary of $120,000, for his position of CEO of the Company, payable monthly.

Conway was issued 2,500 shares

of Series C Preferred Stock.

The Company valued the shares at $5,000.

On August 28, 2020, Mr.

Conway was issued 1,333 shares of Series

D Preferred stock and 500 shares of series E Preferred Stock.

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 and recognized as compensation on the accompanying unaudited condensed consolidated Statement of Comprehensive

Fees and related party payables

the years ended December 31, 2019, and 2018, the Company recorded expenses to its former officers in the following amounts:

CEO, Subsidiary

of December 31, 2019, and 2018, included in accounts payable and accrued expenses, related party is $470,886 and $552,806, respectively,

for the following amounts owed the Company’s former officers for accrued fees, accounts payable and loans made.

have no terms of repayment.

CEO, parent (1)

CEO, subsidiary (2)

COO and CCO (3)

former CEO, parent resigned February 28, 2020, pursuant to the LOI with PCTI.

The former CEO, subsidiary resigned on March 4, 2019.

The Former COO and CCO resigned from those positions on October 1, 2018, and March 4, 2019, respectively.

The former COO resigned on October 23, 2019.

The former CFO resigned effective February 28, 2020, pursuant to the LOI with PCTI.

February 9, 2018, the Company recorded a stock subscription receivable from its officers and directors of $7,600 related to the

issuance of 7,600,000 shares of common stock.

April 1, 2019, the Company issued 1,000,000 shares of Series B Preferred Stock to the Company’s CEO at the time.

were valued at $337,454 of which $25,000 was applied to accrued liabilities-related and $312,454 was recorded as stock-based compensation

expense-related parties.

On September 19, 2019, the Company issued 50,000 shares of its Series C Preferred Stock (see Note 11)

to the Company’s CEO and Director at the time, in consideration of the cancellation and return of 1,000,000 shares of the

Company’s Series B Preferred Stock.

the years ended December 31, 2020, and 2019, the Company recorded expenses to its officers in the following amounts:

President, subsidiary

of December 31, 2020, and 2019, included in related party payable is $9,120 and $27,909, respectively, for the amounts owed the CEO of

COMMITMENTS AND CONTINGENCIES

February 1, 2018, Spinus entered into an Intellectual Property Licensing Agreement (the “Licensing Agreement”).

Company assumed the obligations under the Licensing Agreement and pledged the assets of Spinus as security.

Pursuant to the terms

of the Licensing Agreement, in consideration of $250,000 Spinus has the exclusive rights to certain patents and the non-exclusive

rights to other patents.

The patents surround mechanical or inflatable expandable interbody implant products.

The Company paid

the $250,000 on November 20, 2018.

The Company also will pay a royalty of 7% of net sales on any product sold utilizing any of

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 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.

As consideration for

the rights under the Agreement, the Company agreed to pay fees equal to $1,500,000, over the eighteen- month term of the Agreement.

Additionally, the Company has agreed to issue 6,000 shares of restricted common stock on a quarterly basis, pursuant to the terms

of the Agreement.

The Company also issued a Promissory Note (the “Note”) to SRI for $768,844 (subject to adjustments)

for the purchase of the inventory of the Products (as defined in the Agreement).

The Note has a stated interest rate of six percent

(6%) and payment terms of the Note are in eighteen equal installments, beginning on October 1, 2019.

Either party may terminate

the Agreement upon written notice if the other party has failed to remedy a material breach within 30 days (or 15 days in the

case of a breach of a payment obligation).

During the year ended December 31, 2019, the Company paid $200,000 of the Acquisition.

The balance of $1,300,000 is due as follows:

April 1, 2020

January 16, 2020, the Company received via email from SRI notice that the Agreement between SRI and the Company has been revoked,

as the Company did not pay the January 6, 2020, payment and did not cure the payment default within the cure period.

effective January 16, 2020, the Acquisition and Agreement are no longer in effect.

August 31, 2018, we entered into an investor relations consulting agreement with Kingdom Building, Inc.

(“Kingdom”)

whereby Kingdom agreed to provide us with investor relations, public relations and financial media relations consulting services.

The term of the agreement is for a period of 12 months.

We may terminate the agreement after the initial six months on 60 days’

We agreed to pay Kingdom $8,500 per month which amount is deferred until we complete a financing transaction with a minimum

raise of $1,500,000 in gross proceeds.

In addition, we issued Kingdom 650 shares of our unregistered common stock and reimburse

them for certain out of pocket expenses.

The Company valued the common stock at $325,000, based on the market price of the common

stock on the date of the agreement, to be amortized over the one-year term.

For the years ended December 31, 2019, and 2018, the

Company expensed $216,667 and $108,333, respectively, as stock- based compensation expense.

October 19, 2018, the Company entered into a consulting agreement (the “Consulting Agreement”) with Draper Inc., a

Nevada corporation (“Draper”).

Pursuant to the Consulting Agreement the Company engaged Draper as an independent consultant

and Draper agreed to provide the Company with consulting services.

In exchange for the services to be provided by Draper pursuant

to the Consulting Agreement, the Company agreed to issue Draper a total of 1,800 unregistered shares of the Company’s $0.001

par value per share, common stock, with 450 shares issued upon execution of the Consulting Agreement, and with 150 shares be issued

and delivered each month at the beginning of the fourth month to the beginning of the twelve month, until the total amount of

shares is issued.

Either party can terminate the Consulting Agreement by giving 30 days written notice to the other party.

Company valued the initial 450 shares at $225,000, based on the market price of the common stock on the date of the agreement,

to be amortized over the first three months of the contract.

For the years ended December 31, 2019, and 2018, the Company expensed

$52,500 and $172,500 as stock-based compensation expense.

For the year ended December 31, 2019, the Company recorded 1,350 shares

of common stock to be issued, and valued the shares at $410,370, based on the market price of the common stock on the date of

the shares being earned.

For the years ended December 31, 2019, the company expensed the $410,370 as stock-based compensation

February 27, 2019, the Company entered into a Mutual Agreement of Understanding (the “Agreement”) with Eric Siu pursuant

to which the Company agreed to approve and ratify all of Mr.

Sui’s and his related parties’

efforts at pursuing medical

device sales and manufacturing in greater China.

Additionally, pursuant to the Agreement, the Company and Mr.

Siu agreed to confirm

and settle amounts owed to Mr.

Siu and related parties by the Company upon the completion of the audit of the Company as of December

On March 5, 2019, Eric Sui resigned from his position as a member of the Board.

October 25, 2019, PCTI executed a non-cancellable lease of office and industrial space totaling 11,800 square feet in Zelienople, PA.,

which began December 1, 2019 and expires on November 30, 2022.

The lease terms include a monthly rent of $7,000 (see Note 12).

also pays $3,400 on a month to month basis for its corporate office in Warwick, New York.

March 4, 2019, the Company entered into a Separation Agreement (the “Separation Agreement”) with Salman J.

pursuant to which Mr.

Chaudry resigned immediately from his positions as the CCO and Secretary of the Company and as a member

of the Board and from all positions with the Company effective immediately and pursuant to which the Company agreed to pay Mr.

Chaudry $227,200 (the “Outstanding Fees”) in certain increments as set forth in the Separation Agreement.

Chaudry’s

resignation was not the result of any disagreement with the Company on any matter relating

to the Company’s operations, policies or practices.

During the year ended December 31, 2019, the Company paid Mr.

$65,115, and the balance owed is $162,085, which is included in accounts payable and accrued expenses- related party.

March 24, 2019, the Company and Newbridge Securities Corporation (“Newbridge”) entered into an Investment Banking

Engagement Agreement (the “Agreement”).

Under the terms of the Agreement, Newbridge will provide investment banking

and financial advisory services to the Company, including, but not limited to assisting the Company with an up-listing process

to a national exchange in the United States, introducing the Company to other investment banking firms focused on servicing emerging

growth companies;

rendering advice related to capital structures, capital market opportunities, evaluating potential capital raise

transactions and assisting the Company to develop growth optimization strategies.

The term of the Agreement is 12 months from

the date of the Agreement, however either party may terminate the Agreement anytime upon 15 days written notice.

As compensation

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

Agreement contains customary terms relating to payment of expenses, indemnification and other matters.

The Agreement also includes

customary representations, warranties and covenants by the Company.

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.

As of December 31, 2019, there remains $17,783

of deferred stock compensation on the consolidated balance sheet, to be amortized over the remaining term of the agreement.

September 2, 2019, the Company entered Consulting Agreement (the “Agreement”) with a consultant to act as the Company’s

Executive Vice President, Sales and Marketing (the “EVP”) through December 31, 2019, and to provide the Company with

customary services of an EVP.

The Company has agreed to compensate the consultant $10,000 per month.

Either party may terminate

the Agreement in its sole and absolute discretion.

The parties have agreed that they will negotiate follow up agreement with terms

and conditions to include salary, commission, bonuses and stock and or option grants or awards, to be consistent with industry

standards for like size companies prior to the termination of the Agreement.

For the year ended December 31, 2019, the Company

has expensed $30,000, included in general and administrative, other.

As of December 31, 2019, the Company owes the EVP $10,000,

included in accounts payable and accrued expenses.

September 3, 2019, the Company entered into an Investor Relations Agreement (the “Agreement”) with a consultant.

the terms of the Agreement, the consultant will provide consulting services to the Company, including, but not limited to assisting

the Company in the conception and implementation of the Company’s corporate and business development plan.

The term of the

Agreement is 6 months from the date of the Agreement.

As compensation for its services under the Agreement, the consultant received

1,250 shares of the Company’s common stock.

The Agreement contains customary terms relating to payment of expenses, indemnification

and other matters.

The Agreement also includes customary representations, warranties and covenants by 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 contract.

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

As of December 31, 2019, there remains $15,625 of deferred stock compensation on the consolidated balance sheet, to be amortized

over the remaining term of the Agreement.

September 3, 2019, the Company entered into a Consulting Agreement (the “Agreement”) with a consultant.

terms of the Agreement, the consultant will provide consulting services to the Company, including, but not limited to assisting

the Company in its general strategy for corporate communications.

The term of the Agreement is 6 months from the date of the Agreement.

As compensation for its services under the Agreement, the consultant received 1,250 shares of the Company’s common stock.

The Agreement contains customary terms relating to payment of expenses, indemnification and other matters.

The Agreement also

includes customary representations, warranties and covenants by the Company.

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 contract.

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

As of December 31, 2019, there remains

$15,626 of deferred stock compensation on the consolidated balance sheet, to be amortized over the remaining term of the Agreement.

10 - INCOME TAXES

Company was incorporated in the United States and has operations in two tax jurisdictions - the United States and Hong Kong.

Company’s HK subsidiary is subject to a 16.5% profit tax based on its taxable net profit.

The Company’s U.S.

are subject to income tax according to U.S.

reconciliation of the provision for income taxes determined at the U.S.

statutory rate to the Company’s effective income

tax rate is as follows:

$ (6.140,158 )

$ (2,490,705 )

federal corporate income tax rate

income tax credit

rate difference between U.S.

and foreign operations

of valuation allowance

Company had deferred tax assets as follows:

operating losses carried forward

Valuation allowance

deferred tax assets

of December 31, 2019, the Company has approximately $4,399,000 and $595,000 net operating loss carryforwards available in the

United States and Hong Kong, respectively, to reduce future taxable income.

The net operating loss from Hong Kong operations can

be carried forward with no time limit from the year of the initial loss pursuant to relevant Hong Kong tax laws and regulations.

purposes the NOL deduction for a tax year is equal to the lesser of (1) the aggregate

of the NOL carryovers to such year, plus the NOL carry-backs to such year, or (2) 80% of taxable income (determined without regard

to the deduction).

Generally, NOLs can no longer be carried back but are allowed to be carried forward indefinitely.

extended carryback provisions are generally repealed, except for certain farming and insurance company losses.

The amendments

incorporating the 80% limitation apply to losses arising in tax years beginning after Dec.

It is more likely

than not that the deferred tax assets cannot be utilized in the future because there will not be significant future earnings from

the entity which generated the net operating loss.

Therefore, the Company recorded a full valuation allowance on its deferred

of December 31, 2019, and 2018, the Company has no material unrecognized tax benefits which would favorably affect the effective

income tax rate in future periods, and does not believe that there will be any significant increases or decreases of unrecognized

tax benefits within the next twelve months.

No interest or penalties relating to income tax matters have been imposed on the Company

during the years ended December 31, 2019, and 2018, and no provision for interest and penalties is deemed necessary as of December

31, 2019, and 2018.

Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017 and introduces significant changes to U.S.

income tax law.

Effective in 2018, the Tax Act reduces the U.S.

statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced

earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base

erosion tax, respectively.

The Tax Act requires the Company to pay U.S.

income taxes on accumulated foreign subsidiary earnings

not previously subject to U.S.

income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets

and 8% on the remaining earnings.

Due to the timing of the enactment and the complexity involved in applying the provisions of

the Tax Act, the Company has not recorded any adjustments according to Tax Act.

As the Company collects and prepares necessary

data, and interprets the Tax Act and any additional guidance issued by the U.S.

Treasury Department, the IRS, and other standard-setting

bodies, the Company may make adjustments to the provisional amounts.

the Company’s foreign subsidiaries have not generated income since inception, the Company believes that Tax Act will not

have significant impact on the Company’s consolidated financial statements.

Chaudhry, pursuant

to which the Company agreed to pay Mr.

Chaudry $227,200 (the “Outstanding Fees”) in certain increments as set forth in the

Separation Agreement.

As of December 31, 2020, and December 31, 2019, the balance owed Mr.

Chaudhry is $162,085.

July 10, 2020, PCTI assumed a contract entered into by the Company on June 5, 2020, for media relations services with a third-party.

Pursuant to the Agreement, the Company will pay the consultants $10,000 per month for the development and execution of a comprehensive

media relations plan.

July 24, 2020, PCTI, the Company’s wholly owned subsidiary, entered into a three- month consulting agreement with a third-party.

Pursuant to the agreement, the Company will pay the consultant $10,000 per month and the consultant will provide services, including,

but not limited to, identifying PCTI’s best path forward into the renewable energy and energy storage industries as well as advance

their presence in the maritime/transportation industry.

July 29, 2020, PCTI entered into a three-month Performance Solutions Agreement (the “PSA”), with automatic monthly renewals,

until terminated either arty on a thirty (30) day written notice to the other party.

Pursuant to the PSA, the Company will pay a monthly

fee of $5,000 for services including social media and search engine optimization.

September 2, 2020, PCTI entered into an Agreement with a third- party.

Pursuant to the terms of the agreement, in exchange for $750,000,

PCTI agreed to pay the third-party a perpetual three percent (3%) payment of revenues, as defined in the agreement (see Note 7).

March 4, 2021 a Complaint and Demand for Jury Trial (the “Complaint”) was filed by a plaintiff (the “Plaintiff”)

in the United States District Court for the Southern District of New York.

The Complaint named Ozop Energy Solutions, Inc.

(“OZOP”)

and Brian Conway, Ozop’s Chief Executive Officer, (the “CEO”).

OZOP and the CEO are collectively referred to

herein as “Defendants”.

The Complaint alleges that the Plaintiff’s purchase and sale of OZOP’s securities,

and damages caused by OZOP and its CEO, were violations of federal and state securities law and common laws.

This securities fraud

complaint is based on two (2) press releases issued by OZOP:

the first dated January 12, 2021, which the complainant alleges contained

materially false and misleading information about the execution of a Master Supply Agreement, and the second dated February 5,

2021, that retracted the press release it issued on January 12, 2021.

In reliance on OZOP’s January 12, 2021 press release

(which was retracted and corrected by OZOP’s February 5, 2021 press release), on the same date, Plaintiff sold all of his

4,370,180 OZOP shares on the public market.

The Plaintiff alleges that the February 5, 2021 corrective press release (which retracted

the January 12, 2021 press release and corrected the material misrepresentations provided therein) caused a dramatic increase

in the price of OZOP’s shares, significantly in excess of the price at which Plaintiff sold his OZOP shares on January 12,

2021 (in reliance on the January 12, 2021 press release), causing Plaintiff to suffer significant losses, in excess of two Million

Dollars, as a direct and proximate result of Defendants’

material misrepresentations.

The Company disputes the allegations

in the Complaint has engaged counsel to vigorously defend the Company and the CEO.

November 12, 2020, a former employee of PCTI filed a Charge of Discrimination against PCTI, for wrongful discharge based on sex

and retaliation with the Equal Employment Opportunity Commission (“EEOC”) and the Pennsylvania Human Relations Commission

for events occurring on or before June 3, 2020.

The matter is currently under investigation with the EEOC.

STOCKHOLDERS’

January 21, 2020, the Company filed an amendment to its Certificate of Incorporation, with the Nevada Secretary of State, for

1-for-1,000 reverse stock split of our common stock (the “Reverse Stock Split”) effective February 10, 2020.

of shares of common stock subject to outstanding options, warrants and convertible securities were also reduced by a factor of

one- thousand and no fractional shares were issued.

All historical share in this report have been adjusted to reflect the Reverse

Stock Split (see Note 1).

There were no changes to the authorized number of shares and the par value of our common stock.

July 5, 2019, the Company entered into an Equity Financing Agreement (the “Equity Agreement”) with GHS Investments,

LLC, a Nevada limited liability company (the “Investor”), with the Investor committing to purchase up to $7,000,000

of the Company’s common stock in tranches of up to $400,000, following an effective registration of the shares and subject

to restrictions regarding the timing of each sale and total percentage stock ownership held by the Investor.

The purchase price

for the shares will be 85% of the lowest closing price during the 10-day period prior to each sale, and with each sale, the Investor

will receive an issuance premium of 5% to cover the Investor’s transaction costs associated with selling the shares and

payable by the Company to the Investor in registered shares.

The obligation of the Investor to purchase shares pursuant to the

Equity Agreement is subject to several conditions, including (i) that the Company has filed a registration statement (the “Registration

Statement”) with the United States Securities and Exchange Commission (the “SEC”) registering the shares to

be sold to the Investor within 30 calendar days from the date of the Equity Agreement, with the Registration Statement being declared

effective prior to sale of any shares to the Investor;

and (ii) that the purchase of shares by the Investor pursuant to the Equity

Agreement shall not cause the Investor to own more than 4.99% of the outstanding shares of the Company’s common stock.

connection with the Equity Agreement, on July 5, 2019, the Company also entered into a Registration Rights Agreement with

the Investor (the “Registration Rights Agreement”).

On October 1, 2019, the SEC issued a Notice of Effectiveness of

the Company’s Registration Statement.

October 13, 2018, the Board of Directors of the Company authorized a Private Placement Memorandum (the “October PPM”)

offering of a minimum of $50,000 and up to $3,000,000 of up to 6,000 units (a “Unit”), for a price of $500 per Unit

(the “Purchase Price”) with each Unit consisting of one (1) share of Common Stock and a warrant (a “Warrant”)

to purchase one (1) share of Common Stock, with each Warrant having a three year term and an exercise price of $1.00 per share

of Common Stock.

During the year ended December 31, 2019, we sold 200 Units pursuant to the October PPM at $500 per Unit, issued

200 shares of our common stock and received proceeds of $100,000.

the year ended December 31, 2019, holders of an aggregate of $434,670 in principal and $110,253 of accrued interest and fees of

convertible notes issued by the Company, converted their debt into 185,296 shares of our common stock at an average conversion

price of $2.94 per share.

March 24, 2019, the Company recorded the issuance of 172 shares of common stock for consulting services.

The shares were valued

at $450 per share (the market price on the date of the agreement) and $77,130 was recorded as deferred stock-based compensation.

June 14, 2019, the Company recorded the issuance of 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.

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

The shares were valued

at $450 per share (the market price on the date of the agreement) and $4,500 was recorded as stock-based compensation expense.

August 26, 2019, the Company issued 1,000 shares pursuant to the Agreement (see Note 1).

The shares were valued at $30 per share

(the market price on the date of the agreement) and $30,000 was recorded as stock-based compensation expense.

September 3, 2019, the Company issued in the aggregate 2,500 shares of common stock for consulting services to third parties,

each receiving 1,250 shares (see Note 9).

The shares were valued at $20 per share (the market price on the date of the agreement)

and $50,000 was recorded deferred stock-based compensation.

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.

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

The shares were valued at $14.20 per

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

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

The shares were valued at $9.00 per

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

the period from July 11, 2020 to December 31, 2020, holders of an aggregate of $2,043,937 in principal and $378,613 of accrued interest

and fees of convertible notes issued by the Company and assumed by PCTI on July 10, 2020, converted their debt into 1,411,815,206 shares

of our common stock at an average conversion price of $0.0017 per share.

The Company also issued 134,212,357 shares of common stock upon

the cashless exercise of common stock purchase warrants.

of December 31, 2020, the Company has 4,990,000,000 shares of $0.001 par value common stock authorized and there are 3,397,958,292 shares

of common stock issued and outstanding.

stock to be issued

October 19, 2018, the Company entered into a consulting agreement Draper (see Note 9).

Pursuant to the consulting agreement the

Company engaged Draper as an independent consultant and Draper agreed to provide the Company with consulting services.

for the services to be provided by Draper pursuant to the consulting agreement, the Company agreed to issue Draper a total of

1,800 unregistered shares of the Company’s $0.001 par value per share, common stock, with 450 shares issued upon execution

of the Consulting Agreement, and with 150 shares be issued and delivered each month at the beginning of the fourth month to the

beginning of the twelve month, until the total amount of shares is issued.

Either party can terminate the Consulting Agreement

by giving 30 days written notice to the other party.

For the year ended December 31, 2019, the Company recorded 1,350 shares of

common stock to be issued, and valued the shares at $410,370, based on the market price of the common stock on the date of the

shares being earned.

For the year ended December 31, 2019, the company amortized $462,870 as stock-based compensation expense.

As of December 31, 2019, there are 1,350 shares of common stock to be issued.

of December 31, 2020, 10,000,000 shares have been authorized as preferred stock, par value $0.001 (the “Preferred Stock”),

which such 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.

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

as Series B Preferred Stock.

The Series B Preferred Stock is not convertible into common stock, nor does the Series B Preferred

Stock have any right to dividends and any liquidation preference.

The Series B Preferred Stock entitles its holder to a number

of votes per share equal to 50 votes.

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

Company’s CEO at the time.

This resulted in a change in control of the Company.

September 18, 2019, the Company filed a Certificate of Designation with the Secretary of State of Nevada to designate 50,000 shares

as Series C Preferred Stock.

Each share of Series C Preferred Stock shall be convertible, at the option of the holder thereof,

at any time after the date of issuance, into one share of fully paid and non-assessable share of common stock.

Each share of Series

C Preferred Stock shall entitle the holder thereof to ten thousand (10,000) votes on all matters submitted to a vote of the stockholders

of the Company.

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

at the time, 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.

As of December 31, 2019, there are 50,000 shares of Series C Preferred Stock

outstanding and no shares of Series B Preferred Stock outstanding.

February 4, 2020, the Company filed an Amended and Restated Certificate of Designation with the State of Nevada of the Company’s

Series C Preferred Stock.

The voting rights associated with the Series C Preferred Stock were amended whereby each share of Series

C Preferred Stock shall entitle the holder thereof to have voting rights equal to two times the sum of all the number of shares

of other classes of Company capital stock eligible to vote on all matters submitted to a vote of the stockholders of the Company,

divided by the number of shares of Preferred Stock issued and outstanding at the time of voting.

subscription receivable

February 9, 2018, the Company recorded a stock subscription receivable from its officers and directors of $7,600 related to the

issuance of 7,600 shares of common stock.

SEGMENT REPORTING, GEOGRAPHICAL INFORMATION

the year ended December 31, 2019, the Company operated only in the United States.

For the year ended December 31, 2018, the Company

operated in two geographic segments, the United States and Hong Kong.

Set out below are the revenues, gross profits and total

assets for each segment.

ended December 31, 2018

which such 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

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.

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.

Accordingly, Mr.

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.

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

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

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

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.

At any 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,

Pursuant to Mr.

Conway’s employment agreement, the Company issued 500 shares of Series E Preferred Stock to Mr.

of December 31, 2020, there were 1,000 shares of Series E Preferred Stock issued and outstanding.

12 - OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES

October 25, 2019, PCTI executed a non-cancellable lease for office and industrial space which began December 1, 2019 and expires on November

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the

lease commencement date.

The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 7.5%,

as the interest rate implicit in most of our leases is not readily determinable.

Prior to July 10, 2020, PCTI recorded monthly lease

expense pursuant to the lease agreement and effective July 10, 2020, pursuant to the PCTI transaction, operating lease expense is recognized

pursuant to ASC Topic 842.

Leases (Topic 842) over the lease term.

During the years ended December 31, 2020, and 2019, the Company recorded

$84,278 and $100,946 respectively, for rent expense.

adopting Topic 842, the Company has elected the ‘package of practical expedients’, which permit it not to reassess under

the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

The Company did not

elect the use-of-hindsight or the practical expedient pertaining to land easements;

the latter is not applicable to the Company.

the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less.

During the nine months ended September

30, 2019, upon adoption of ASC Topic 842, the Company recorded right-of-use assets and lease liabilities of $185,139.

use assets are summarized below:

December 31, 2020

Office and warehouse lease

Less accumulated amortization

Right-of-us assets, net

lease liabilities are summarized as follows:

December 31, 2020

Lease liability

Less current portion

Long term portion

of lease liabilities are as follows:

For the year ending December 31, 2021

For the eleven months ending November 30, 2022

present value discount

Lease liability

SUBSEQUENT EVENTS

December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China.

While initially the outbreak

was largely concentrated in China and caused significant disruptions to its economy, it has now spread to most other countries

and infections have been reported globally.

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.

From January 1, 2020, through the date of

this report the Company has issued 243,562,612 shares of common stock upon the conversion of $1,168,383 of principal

and $195,437 of accrued interest and fees of convertible notes.

The Company also issued 13,244,492 shares of common

stock upon the exercise of warrants.

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 make the required January 6, 2020, license payment nor cure the default.

on the termination of the Agreement, the Company recorded an impairment charge to goodwill of $274,854 as of December 31, 2019.

The impairment charge was calculated as the difference of the carrying values of the assets acquired compared to the consideration

and liabilities assumed in the transaction as follows:

assets as of December 31, 2019

Consideration

issued and liabilities assumed

Stock payable

and Instrument note

consideration and liabilities assumed balances

recorded December 31, 2019

January 8, 2020, the Company entered into a securities purchase agreement (the “SPA”) with an investor (the “Investor”),

pursuant to which the Company agreed to issue to the Investor a 12% Convertible Promissory Note, (the “Note”) in the

principal amount of $38,000 in exchange for a purchase price of $35,000.

The Note was funded by the Investor on January 13, 2020,

and on such date pursuant to the SPA, the Company reimbursed the Investor for expenses for legal fees and due diligence of $3,000.

The Note proceeds will be used by the Company for general working capital purposes.

The SPA includes customary representations,

warranties and covenants by the Company and customary closing conditions.

February 4, 2020, the Company filed an Amended and Restated Certificate of Designation with the State of Nevada of the Company’s

Series C Preferred Stock (the “Preferred Stock”).

The voting rights associated with the Preferred Stock were amended

whereby each share of Preferred Stock shall entitle the holder thereof to have voting rights equal to two times the sum of all

the number of shares of other classes of Company capital stock eligible to vote on all matters submitted to a vote of the stockholders

of the Company, divided by the number of shares of Preferred Stock issued and outstanding at the time of voting.

February 7, 2020, the Financial Industry Regulatory Authority (“FINRA”) announced the Company’s 1:1,000 reverse

stock split of the Company’s common stock.

The reverse stock split took effect on February 10, 2020.

The Company filed a

Certificate of Amendment –

Certificate to Accompany Amended and Restated Articles of Incorporation with the State

of Nevada, adding a paragraph to registrant’s Articles of Incorporation to effect the reverse stock split.

February 26, 2020, the Company entered into a securities purchase agreement (the “SPA”) with an investor (the “Investor”),

pursuant to which the Company agreed to issue to the Investor a 12% secured convertible promissory note (the “Note”)

in the aggregate principal amount of $132,750 in exchange for a purchase price of $117,750.

Pursuant to the SPA, the Company agreed

to pay the Investor $15,000 to cover the Investor’s due diligence expenses incurred in connection with the SPA and Note,

which is to be offset against the proceeds of the Note.

The Note was funded by the Investor on February 26, 2020, and on such

date pursuant to the SPA, the Company reimbursed the Investor for expenses for legal fees and due diligence of $2,750.

proceeds will be used by the Company for general working capital purposes.

The SPA includes customary representations, warranties

and covenants by the Company and customary closing conditions.

The proceeds will be used by the Company for general corporate

The SPA includes customary representations, warranties and covenants by the Company and customary closing conditions.

February 28, 2020, the Company entered into a Binding Letter of Intent (the “LOI”) with Power Conversion Technologies,

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

(“CEO”) and its sole shareholder.

Pursuant to the terms of the LOI, the Company will acquire 100% of the issued and

outstanding shares of PCTI (the “PCTI Shares”) from Chis (the “Acquisition”).

operates in the very high power niche of the power electronics market, designing and manufacturing leading edge equipment for

use in power conversion applications.

PCTI serves clients in several industries including energy storage, shore power, DEWs, microgrid,

telecommunications, military, transportation, renewable energy, aerospace and mission critical defense systems.

PCTI’s clients

include Fortune 500 companies, all branches of the US Department of Defense including the US Army and the US Air Force, NASA as

well as other global military organizations.

The Company believes the Acquisition will close by June 30, 2020, and is in the best

interests of the Company and its’

shareholders.

In conjunction with the LOI, Michael Chermak and Barry Hollander

resigned as Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), respectively, and Brian

Conway was named CEO and Interim CFO.

Also, on February 28, 2020, in connection with entering

into the LOI, the Company agreed to purchase and redeem 50,000 shares of the Company’s Series C Preferred Stock from Mr.

Chermak for a total purchase price of $100,000 pursuant to a Redemption Agreement (the “Redemption Agreement”) requiring

aggregate redemption payments of $100,000, of which $50,000 was paid upon the signing of the Redemption Agreement and $50,000

was paid on April 28, 2020, On April 28 2020 Mr.

Conway was appointed to the Board of the Company, and Mr.

Chermak resigned from

Conway is the sole officer and director of the Company.

February 28, 2020, the Company and Mr.

Conway entered into an employment agreement (the “Employment Agreement”).

to the terms of the Employment Agreement, Mr.

Conway is to receive an annual salary of $120,000, for his position of CEO of the

Company, payable monthly.

March 9, 2020, (the “Issuance Date”) the Company issued a 12% convertible promissory note, (the “Note”)

in the principal amount of $80,000, to an investor.

The Note matures 6 months after the Issuance Date.

The Note is convertible

into shares of the Company’s common stock beginning on the Issuance Date at $.25 for the first three months after the Issuance

After the first three months after the Issuance Date, the conversion price shall be equal to the lower of (i) $.25 or 50%

of the lowest trading price for the thirty trading days prior to the conversion.

April 28, 2020, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $53,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to 58% multiplied by the lowest closing bid price during the 20- trading day period

ending on the last completed trading date in the OTC Markets prior to the date of conversion.

May 4, 2020, the Company issued a 12% convertible promissory note, (the “Note”) in the principal amount of $110,000,

pursuant to a Securities Purchase Agreement we entered into with an investor.

The Note matures 12 months after the date of issuance.

The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the issuance

date of the Note, at a conversion price equal to the lower of $0.50 or 58% multiplied by the average of the two lowest closing

trading price or bid price during the 20- trading day period ending on the last completed trading date in the OTC Markets prior

to the date of conversion.

January 1, 2021, through April 14, 2021, the Company has issued 428,747,654 shares of common stock upon the conversion

of $873,155 of principal, accrued interest and fees of convertible notes.

The Company has also issued 330,797,987

shares of common stock upon the cashless exercise of warrants.

January 2, 2021, the Company entered into a ten (10) year lease for a 6-bay garage storage facility of approximately 2,500 square feet.

Pursuant to the lease the Company agreed to issue 100,000,000 shares of restricted common stock.

The shares were certificated on March

8, 2021, with an effective date of January 2, 2021.

January 6, 2021, the Company entered into a consulting agreement with Ezra Green to begin on February 8, 2021.

The Company agreed to

issue 10,000,000 shares of restricted common stock to Mr.

Green and to a monthly fee of $2,500.

January 14, 2021, the Company entered into a Consulting Agreement with Mr.

Pursuant to the agreement, Mr.

Sosis will provide

services as the Director of Business Development for the Company’s wholly owned subsidiary OES .

Sosis has over 20 years

in solar and renewable energy, ranging from all aspects of engineering, procurement, and construction on both the residential and commercial

sides of the business and includes business development in creating sales infrastructure from financing to technology development.

Sosis is a key part of the OES team as it strides to become a global leader of supply chain solutions within the renewable energy market.

Pursuant to the agreement, as amended, the Company will pay Mr.

Sosis a monthly fee of $15,000 and an additional $1,000 in benefits.

The Company also agreed to issue Mr.

Sosis 5,000,000 shares of restricted common stock.

January 22, 2021, the Company issued 10,000,000 shares of restricted common stock for legal services performed in 2020 and approved

by the BOD of the Company on December 1, 2020.

February 4, 2021, the Company entered into a Consulting Services Agreement with Energy Elements Works, LLC and Mr.

to the agreement, Mr.

Graham will provide services as a Consulting Engineer for the Company’s wholly owned subsidiary OES.

Company has agreed to compensate Mr.

Graham $100 per hour for his services.

February 9, 2021, the Company entered into a 12% promissory note with a third- party lender with a maturity date of February 9, 2022.

In exchange for the issuance of the $2,200,000 note, inclusive of an original issue discount of $200,000 the Company received proceeds

of $2,000,000 on February 16, 2021, from the lender.

In conjunction with the note, the Company issued a warrant to purchase 50,000,000

shares of common stock at $0.15 per share (subject to adjustments) with an expiry date on the three- year anniversary of the note.

February 19, 2021, the Company entered into a Joint Business Alliance agreement with Grid and Energy Master Planning, LLC (“GEMM”).

GEMM will provide advisory, financing and implementation solutions for behind-the-meter customers in the areas of energy efficiency,

solar, EV charging, and battery storage for OES.

The GEMM services allows OES to provide one-stop-shopping in these emerging and maturing

February 24, 2021, the Company entered into a consulting agreement with Christopher Ruppel.

Pursuant to the agreement Mr.

join the Ozop Advisory Board.

The Company issued 10,000,000 shares of restricted common stock to Mr.

Ruppel and agreed to a monthly fee

February 26, 2021, the agreement entered into on September 2, 2020 (see note 7) with PCTI was assigned to Ozop and

on March 4, 2021, the note was amended, whereby in exchange for 175,000,000 shares of common stock, the royalty percentage was

amended to 1.8%.

March 2, 2021, the BOD authorized the issuance of 1,800 shares of Series E Preferred Stock to Mr.

Conway and 200 shares of Series E Preferred

Stock to Venture Equity, LLC.

The issuances were for services performed.

As of March 2, 2021, there were 3,000 shares of Series E Preferred

Stock issued and outstanding.

On March 24, 2021, the Company redeemed 3,000 shares of Series E Preferred Stock outstanding on that date.

March 9, 2021, Mr.

Green filed a provisional patent with the USPTO.

The provisional patent covers proprietary methods and procedures

that, will allow the expansion of OES into the EV charging and support industry.

The provisional patent relates to the more efficient

production, distribution, and delivery of energy, particularly renewable energy, to the EV end consumer and enables OES to build the

support systems for such.

March 11, 2021, OES, the Company’s wholly owned subsidiary executed a 25-year lease on a property to build its first lithium-ion

battery storage and power facility.

Pursuant to the lease OES will pay $100,000 annually to rent the facility located in Brooklyn, New

March 15, 2021, the Company entered into a consulting agreement with Aurora Enterprises (“Aurora”).

Steven Martello

is a principal of Aurora.

Pursuant to the agreement Mr.

Martello will provide strategic analysis regarding existing markets and

revenue streams as well as the development of new lines of revenue.

The Company agreed to a monthly retainer fee of $10,000 and

to issue to Aurora or their designee 5,000,000 shares of restricted common stock.

March 17, 2021, the Company entered into a 12% promissory note with a third- party lender with a maturity date of March 17, 2022.

exchange for the issuance of the $11,110,000 note, inclusive of an original issue discount of $1,000,000 and lender costs of $110,000

the Company received proceeds of $10,000,000 on March 23, 2021, from the lender.

March 30, 2021, OES hired 2 individuals as Co-Directors of Sales.

The Company agreed to an annual salary of $130,000 with a signing bonus

of $20,000 for each and to issue each 2,500,000 shares of restricted common stock after 90 days of employment and every 90 days thereafter

for the first year as long as the employee is still employed.

Company has evaluated subsequent events through the date the financial statements were issued.

The Company has determined that

there are no other such events that warrant disclosure or recognition in the financial statements, except as stated herein.

The Company has determined that there

are no other such events that warrant disclosure or recognition in the financial statements, except as stated herein.

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 9A. Controls and Procedures