UNITED
STATES SECURITIES AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K/A-2



| | ☒ | Annual
                                         Report Pursuant under Section 13 or 15(d) of the Securities Act of 1934.
| | - | ------------------------------------------------------------------------------------------------------------------------

For
the year ended December 31, 2019



☐       Transition
report under section 13 or 15(d) of the Securities Act of 1934.

For
the Transition period from _______ to ________.





Commission
File Number: 1-9927



ADVANZEON
SOLUTIONS, INC.

(Exact
name of registrant as specified in its charter)



|Delaware                                                                                                           |  | 95-2594724                                                                           
|------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------
|(State
                                    or other jurisdiction of
        incorporation
        or organization) |  | (IRS
                                    Employer
        Identification
        No.)
|                                                                                                                   |  |                                                                                      
|2901
                                    W. Busch Blvd.
        Suite
        701
        Tampa,
        FL        |  | 33618                                                                                
|(Address
    of Principal Executive Offices)                                                                       |  | (Zip
    Code)                                                                       



813-517-8484

(Registrant’s
telephone number including area code)



Securities
to be registered pursuant to Section 12(b) of the Exchange Act:





Securities
registered or to be registered pursuant to Section 12(g) of the Exchange Act:

(Title
of class)



Common
Stock, Par Value $0.01 per share



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐
Yes ☒ No



Indicate
by check mark if the registrant is not required to file reports pursuant to section 13 or Section 15 (d) of the Act.

☐
Yes ☒ No



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



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



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





|Large accelerated filer | ☐ | Accelerated filer         | ☐
|----------------------- | - | ------------------------- | -
|Non-accelerated filer   | ☐ | Smaller reporting company | ☒



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(s) of the Exchange Act. ☐



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



The
aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant computed by reference to the
price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second fiscal quarter was $12,735,287. This calculation does not reflect a
determination that certain persons are affiliates of the registrant for any other purposes.



The
number of shares of the registrant’s common stock outstanding on April 9, 2020 was 71,661,656.





Explanatory
Note



The
purpose of this amendment to Advanzeon Solutions Inc. Annual Report on Form 10-K for the year ended December 31, 2019 is to add
the Master Distributor contract and to place in correct order Exhibits 31 and 32.



No
other changes have been made to the Form 10-K/A. This amendment to the Form 10-K is presented as of the filing date of the Form
10-K/A and does not modify or update in any way the disclosures made in the Form 10-K/A.



Pursuant
to Rule 12b-15 under the Securities and Exchange Act of 1934, as amended, this Form 10-K/A-2 includes new certifications by our
principal executive officer and principal financial officer under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Except
for the items noted above no other information included in the Company’s original Form 10-K is being amended by this Form
10-K/A-2.









DOCUMENTS
INCORPORATED BY REFERENCE

None.



1









TABLE
OF CONTENTS

|             |          |  |                                                                                                                  |  |     
|------------ | -------- |  | ---------------------------------------------------------------------------------------------------------------- |  | ----
|             |          |  |                                                                                                                  |  | Page
|PART
    I   |          | 
|             |          | 
|             | Item 1.  |  | Business                                                                                                         |  | 3   
|             | Item 1A. |  | Risk
    Factors                                                                                                 |  | 11  
|             | Item 1B. |  | Unresolved
    Staff Comments                                                                                    |  | 13  
|             | Item 2.  |  | Properties                                                                                                       |  | 13  
|             | Item 3.  |  | Legal
    Proceedings                                                                                            |  | 14  
|             | Item 4.  |  | Mine
    Safety Disclosures                                                                                      |  | 15  
|             |          |  |                                                                                                                 
|PART
    II  |          | 
|             |          | 
|             | Item 5.  |  | Market
    for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 16  
|             | Item 6.  |  | Selected
    Financial Data                                                                                      |  | 34  
|             | Item 7.  |  | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations                        |  | 34  
|             | Item 7A. |  | Quantitative
    and Qualitative Disclosures About Market Risk                                                   |  | 41  
|             | Item 8.  |  | Consolidated
    Financial Statements                                                                            |  | 41  
|             | Item 9.  |  | Changes
    in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 41  
|             | Item 9A. |  | Controls
    and Procedures                                                                                      |  | 41  
|             |          |  |                                                                                                                 
|PART
    III |          | 
|             |          | 
|             | Item 10. |  | Directors,
    Executive Officers and Corporate Governance                                                       |  | 44  
|             | Item 11. |  | Executive
    Compensation                                                                                       |  | 48  
|             | Item 12. |  | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 51  
|             | Item 13. |  | Certain
    Relationships and Related Transactions, and Director Independence                                    |  | 53  
|             | Item 14. |  | Principal
    Accountants’ Fees and Services                                                                     |  | 54  
|             |          |  |                                                                                                                 
|PART
    IV  |          | 
|             |          | 
|             | Item 15. |  | Exhibits                                                                                                         |  | 55  
|             | Item 16. |  | Form
    10-K Summary                                                                                            |  | 60  
|             |          |  | Signatures                                                                                                       |  | 61  



2







PART
I



ITEM
1. BUSINESS



CAUTIONARY
STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:
Certain information included in this Annual Report on Form 10-K and in our other reports, Securities and Exchange Commission (“SEC”)
filings, statements, and presentations is forward looking within the meaning of the Private Securities Litigation Reform Act of
1995, including, but not limited to, our anticipated operating results, financial resources, increases in revenues, increased
profitability, growth and expansion. And our ability to enter into new contracts. Such forward-looking information involves important
risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed
herein and in our other reports, SEC filings, statements, and presentations. These risks and uncertainties include, among others,
changes in local, regional, and national economic and political conditions, the effect of governmental regulation, competitive
market conditions, varying trends in member utilization, our ability to manage our operating expenses, our ability to obtain additional
financing, our ability to renegotiate or extend expiring debt instruments, and other risks detailed in Item 1A in this Annual
Report.



OVERVIEW



Established
in 1969, Advanzeon Solutions, Inc., (formerly Comprehensive Care Corp.) (“Advanzeon”, “we”, “Parent”,
or the “Company”), through its wholly-owned subsidiary Pharmacy Value Management Solutions, Inc., (“PVMS”)
and its wholly-owned subsidiaries during 2015, and partly in 2016, provided managed care services by acting as the administrator
for certain administrative service agreements in the behavioral health and substance abuse fields. We primarily offered these
services to commercial, Medicare, Medicaid, Children’s Health Insurance Program (“CHIP”) health plans, as well
as self-insured companies. Our managed care operations consisted solely of servicing administrative service agreements. Starting
in July of 2015, we implemented our comprehensive sleep apnea program, called “SleepMaster Solutions” TM. SleepMaster
Solutions (“SMS”) utilizes an administrative system for the convenient identification/testing and therapy of Obstructive
Sleep Apnea (“OSA”). We partnered with a national health care provider by initiating a sleep apnea wellness program
whereby we screened, tested and when needed, offered a treatment programs for treating this disorder. We also contracted with
a union to treat its driver members. Beginning in 2017, our only business was our SMS sleep apnea program.



3







OBSTRUCTIVE
SLEEP APENA



In
2014, the Department of Transportation (“DOT”) overhauled its system such that regulations now require commercial
drivers, that is drivers with a commercial driver’s license (‘CDL”) must be specifically examined with respect
to whether or not they have a respiratory dysfunction which is defined to include Obstructive Sleep Apnea (“OSA”).
OSA is a breathing disorder that causes the airway in a person’s throat to close during sleep for ten seconds or more. This
loss of breathing function can occur as many as 400 times during the night, and those who have the disorder wake up multiple times,
which can lead to exhaustion during the day. Although OSA is diagnosed across a wide demographic, there are certain factors that
increase the risk of a person developing this disorder:



| | · | Obesity                                                               
| | - | ----------------------------------------------------------------------
| | · | Smoking
                                         and drinking alcohol 
| | · | Family
                                         history               
| | · | Small
                                         airway                 
| | · | Recessed
                                         chin, large overbite
| | · | Ethnicity                                                             



The
troubling aspect of OSA as it relates to CDL drivers is that it causes intense fatigue often causing a driver to struggle with
focusing and remaining alert while driving. Sleep apnea is one of the major contributing factors in truck accidents.

SOURCES
OF REVENUE

For
the years ended December 31, 2019 and 2018, all of our revenue was earned from our sleep apnea business.

OUR
BUSINESS

The
Company through its wholly-owned subsidiary Pharmacy Value Management Solutions, Inc. administers and operates a medically-driven
sleep apnea program branded SleepMaster SolutionsTM (“SMS”). Management believes that SMS is the largest provider
of these combined services in the nation. We are in all 50 states and provide a turnkey solution designed to effectively keep
drivers on the road with no down time and compliant with DOT regulations, improve their health, and significantly decrease legal
liability risk for the employer. We are vertically integrated, and we provide a “Program” of services that addresses
all the needs of a corporate transportation system, union or other driver-related organizations. We believe we are the only company
capable of providing the full range of needed services in a timely manner.

Our
services start with the identification of the target population and the potential risk the client currently has. We can do this
through our SMS Program, which includes the ability to screen every driver to identify if signs and symptoms of sleep apnea are
present. We can then take this data and provide the employer with a list of those drivers that should be tested and the statistical
likelihood of the percentage of those drivers who will test positive for obstructive sleep apnea (OSA). Together with the employer/union,
SMS provides a realistic time frame, actual total cost, and process for testing all drivers who need to be tested. For those drivers
testing positive for OSA, we then provide the appropriate treatment such that the driver will meet the DOT requirements and remain
on the road. We monitor 365 days per year driver’s usage of the treatment device according to DOT standards and we report
that usage to all stakeholders as required/permitted. We utilize mathematical algorithms to determine if the driver is predicatively
meeting the annual DOT requirements for usage. Using those predictive algorithms, we reach out to those drivers to provide case
management and encouragement designed to solve problems such that the driver increases usage, if necessary, and remains compliant.

4







SMS
constructed its model based upon the foregoing principles. The SMS Program includes all processes attended in sleep apnea screening,
testing, treatment, monitoring and overall management of commercial drivers’ as well as their employers’ needs. We
have successfully established relationships with national health care clinic providers, all with certified medical examiner (“CME”)
status. These clinics total almost 1,000 throughout the U.S. We also have both formal and informal relationships with employers;
municipalities; a significant veteran’s group; union and non-union driving organizations; suppliers of home sleep testing
equipment and a variety of OSA treatment devices; and, a national network of telemedicine sleep specialists covering all 50 states.
We have an internal medical team for governance and protocol purposes and a customer service department that interfaces directly
with our drivers. We also have a marketing team that regularly interfaces with our existing accounts and markets our services
to potential new accounts. Our services are performed utilizing a best medical practices model and an efficient, cost-effective
delivery system. We obtain the required equipment on a per order basis from a durable medical equipment distributor.

Revenue
is recognized when billed, which is approximately when the testing service is performed or CPAP machine is shipped. For the fiscal
year ended December 31, 2019, two contractual relationships accounted for ten percent or more of our total revenues; the U.S.
Healthworks account generated $132,518 in revenue representing 44% of our total revenue and Concentra accounted for $113,223 in
revenue representing 38% of the total revenue. During the year U.S. Healthworks merged into Concentra. With these accounts the
patients are invoiced individually and make their own payments but are referred through Concentra and US Healthworks.

In
the past, the commercial transportation industry, and industry in general, did not fully appreciate OSA as a health/liability
issue. Today, more and more companies have begun to identify OSA as a major health and liability concern. Part of this realization
has been occasioned by the number of successful lawsuits initiated on account of drivers accused of having accidents caused, in
part, by their having OSA (sleep apnea). Several years ago, the Company identified this health problem and an industry trend toward
more attention being devoted to issues involving OSA. We took steps to address what we saw as a national healthcare epidemic,
and in the process, we constructed a nationwide virtual system for the screening, testing and treatment of OSA. We believe we
are the only nationwide, medically-driven company that actively engages and promotes to industry a national screening, testing
and treatment program targeting OSA.

The
United States government has provided impetus to certain employers and unions to start paying more attention to OSA by passing
legislation requiring that commercial interstate drivers (including truckers, airline pilots and railway conductors) be examined
for a respiratory dysfunction (sleep apnea) as a condition of their maintaining their commercial license. That, notwithstanding,
however, the challenge we faced, and continue to face, is getting employers, associations, municipalities and unions (collectively,
“employers”) to fully realize the health and economic value to them for actively promoting an internal OSA program
to their employees and/or members (collectively, “employees”) which consists of providing our services to their employees
on an employer-paid basis – no cost to the employee. Therefore, once we have made our initial contact with an employer who
is willing to pay for all or a part of our SMS services, our job is to then assist them in implementing a comprehensive OSA program
and, either directly or indirectly, promoting same to their employees.

5







We
have found that while many companies wholeheartedly embrace the need to address OSA from a management perspective, others, while
recognizing the problem, are not yet ready to actually promote such a program, internally, from a cost perspective. They are oftentimes
not willing to enter into a formal contract for our services, preferring an informal relationship whereby they agree that while
they will pay for the services we rendered to their employees, they will not engage in the active promotion of the program. The
result is that unless we convince the employers to make their employees aware of such coverage, the employees often remain unaware
of the fact that their employer is providing them with such a benefit. It is, therefore, our responsibility, and our cost, to
work with each such employer, generally through their human resources staff to provide the design and necessary materials needed
to implement and monitor an effective OSA benefit program. This requires an active marketing effort on our part both before the
relationship is solidified, and consistently thereafter. As a result of our limited financial resources, while we have now successfully
established a significant number of these relationships, there still remains the task of continuing our marketing efforts to fully
realize the economic benefit of those relationships. We are confident that our continued efforts will ultimately provide a meaningful
revenue stream in tandem with the growth of our patient population.

Our
Home Sleep Test (HST) Process:

After
a driver has been diagnosed as at risk for OSA, the next step is for the driver to be evaluated with a Home Sleep Test ("HST”).
The HST is a testing device used overnight by the driver. The device takes readings of the sleep interruptions, oxygen levels
and other related data. SMS contacts the driver and coordinates where to send the Home Seep Test. The driver is advised what will
come in the box and when the box will arrive. SMS then ships the test along with a return shipping box. When the test is completed,
the driver places the device in the return box. The driver then calls USPS for a free pickup or drops off the box at a USPS location.
The test is then returned to SMS where the test is downloaded, results evaluated by a certified sleep specialist, and a report
generated. We coordinate with our supplier and provide the HST and related services to the driver for a fee.

CPAP
Therapy:

Once
the HST Is returned and results evaluated, the driver falls into one of two categories. If sleep apnea is ruled out, the driver
and all relevant stakeholders are provided with a “Certificate of Compliance” which is used by the certified medical
examiner (CME) to certify the driver’s medical card. If sleep apnea is confirmed, the driver and all relevant stakeholders
are advised, and a medically correct and regulatory compliant treatment plan is recommended. This plan is most often Continuous
Positive Air Pressure ("CPAP”) therapy. SMS will provide the driver with an auto-regulating CPAP machine and deliver
same to the driver’s home, office, or wherever he/she prefers to receive it. The driver is instructed on how to use the
CPAP machine and preferences for mask type, fitting size, etc. are customized for the driver. SMS employs staff who is skilled
at walking a driver through the process. SMS also utilizes a “hotline” that a driver may call with any questions.

Monitoring:

SMS
provides monitoring of drivers for compliance as required by the DOT. There are two phases of monitoring. For those drivers determined
to require CPAP therapy, an initial thirty day report is required to demonstrate that the driver is using the CPAP machine at
least 70% of the time. SMS not only monitors the driver, but actively intervenes with the driver to encourage compliance. SMS
utilizes an algorithm based on current usage to predict if the driver will meet compliance guidelines. If our monitoring indicates
the driver is not meeting guidelines, we alert them and offer suggestions and encouragement to help them meet compliance. At the
conclusion of the thirty day period, SMS provides a DOT appropriate report documenting compliance performance. SMS also provides
ongoing monitoring via a WIFI-based model to monitor the driver’s usage 24/365. We provide the same case management function
of encouraging compliance and offering solutions to keep the driver healthy, safe, compliant and on the road.

6







The
following diagram shows how we deliver our services.









7







The
Master Distributor Agreement:

During
2019, the Company entered into a supplemental agreement (the “Agreement”) with its durable medical equipment supplier
(“Supplier”). The purpose of the Agreement was to provide the Company with increased back-office support in anticipation
of growing business volume occurring in the latter part of 2019 and continuing into 2020. The Company’s primary concerns
were that it would need (i) additional customer services reps and telephone sales personnel; (ii) additional support equipment
for such expansion; (iii) additional space to house such SMS Personnel; and, (iv) an increased supply of home sleep testing and
treatment equipment.



The
Company’s Agreement with its Supplier provides, in material part, that Supplier would serve as the Company’s master
distributor for purposes of obtaining and distributing testing and treatment equipment necessary to service the Company’s
patients. In exchange for this appointment, the Supplier agreed to provide the Company, at no cost to the Company (i) sufficient
dedicated space at the Supplier’s facility (“SMS Utah Facility) to accommodate at least fifteen (15) customer service
and sales personnel; (ii) hire and train fifteen (15) customer service and sales personnel; and, (iii) at the Company’s
request, hire and train an additional five (5) customer service and sales personnel to work offsite for the Company (collectively,
“SMS Personnel”). The SMS Personnel were to be exclusively dedicated to servicing the Company’s sales and customer
service needs. Compensation for all SMS Personnel at the SMS Utah Facility was the sole responsibility of Supplier.



Additionally,
Supplier agreed that it would be responsible for providing SMS Personnel with appropriate local hardware, telephone system, telephones
and computers. The Supplier also agreed that if additional SMS Personnel were needed, as determined in the Company’s sole
discretion, the Supplier would pay 45% of the compensation costs of such additional personnel.



As
compensation for the Supplier performing its contractual obligations, the Company granted the Supplier a three-year warrant to
purchase one-million (1,000,000) shares of the Company’s common stock at an exercise price of $0.11 per share (the “Warrant”).
The Warrant vests in equal quarterly amounts over a period of time commencing June 2019 through March 2020, provided that vesting
is conditioned upon the Agreement being in full force and effect and not the subject of litigation, mediation or arbitration at
the time of each vesting. The term of the Company’s Agreement with Supplier is five years, ending in June 2024 and includes
a fifteen-day termination clause, with or without cause.



OUR
ADVISORY BOARDS



Medical
Advisory Board



Our
SMS program is a medically-driven program dedicated to the concept that by attacking and containing root causes of various ailments
affecting our population, we can dramatically reduce the cost of healthcare; increase workplace productivity; decrease and, in
many cases, eliminate unnecessary expenses; and, provide for a healthier population, both in and out of the workplace. The primary
focus of our Medical Advisory Board panel in regard to the foregoing is sleep apnea.



The
Medical Advisory Board consists of 33 members at present and is composed of members with specialties and sub-specialties specifically
selected so that it can address all of the various sleep-disorder breathing co-morbidities. Some of the practices represented
on the Board include cardiovascular, pathology and diabetes The Board meets at least twice a year, and more often as needed. Management
consults with individual members on an as needed basis. The Medical Advisory Board furthers the SMS program mission to perform
its services utilizing a best medical practices model and an efficient, cost-effective delivery system.



8









Dental
Advisory Board



The
Dental Advisory Board meets jointly with the Medicinal Advisory Board. With the expansion of dental practice into the areas of
detection and treatment of OSA the Board advises management on advances and new solutions for the treatment of OSA. It presently
has three members.



MARKETING
AND SALES



Our
marketing and sales efforts are led by our management. In addition, we utilized independent sales agents for direct sales to commercial,
CHIP health plans, health care providers as well as self-insured companies and unions. We enter into written agreements with these
sales agents whereby we pay a base amount of compensation plus a commission amount. In September,2019, we hired a national manager
of sales and marketing. In December 2019, we hired a chief marketing officer. We currently have five such agents. Our customer
service operations and telemarketing efforts are handles by independent contractors. We pay these contractors a set amount of
compensation. We currently have seven such contractors.



COMPETITION



We
operate in a very competitive but highly fractured health care environment. There are traditional sleep test centers that have
operated for a long time and are well established. The services provide by such centers are most often covered by insurance. Our
services are not generally covered by insurance as we are not presently credentialed to be able to accept insurance. Once a person
has been diagnosed with OSA there are a number of ways that equipment may be obtained. Again, insurance may cover the purchase
of such equipment. Equipment for the treatment of OSA is readily obtainable from many sources including the internet. In addition,
there are a number of devices advertised that claim to treat OSA without the need for CPAP equipment. We believe that our SMS
Program is the only medically driven comprehensive program that provides the customer/employer with a turnkey solution from initial
screening through testing, when required, treatment and ongoing compliance monitoring.



GOVERNMENT
REGULATION



We
are subject to the requirements of the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”).
One of the purposes of HIPAA is to improve the efficiency and effectiveness of the healthcare system through standardization of
the electronic data interchange of certain administrative and financial transactions and, also, to protect the security and privacy
of protected health information. Entities subject to HIPAA include some healthcare providers and all healthcare plans.



MANAGEMENT
INFORMATION SYSTEMS



All
of our OSA information technology and systems operate on a single platform. This approach avoids the costs associated with maintaining
multiple systems and improves productivity. The open architecture of the systems gives us the ability to transfer data from other
systems thereby facilitating the integration of new health plan business. We use our information system for customer processing,
utilization management, reporting, cost trending, planning, and analysis. The system also supports customer and provider service
functions.



9









We
significantly enhanced our network by installing a storage area network and virtualizing our computer servers. This implementation
brought in the current best practices approach and permitted a major overhaul of our information technology infrastructure. The
technology centralizes storage management, increases the utilization of equipment, improves redundancy of the servers, reduces
the overall hardware requirements, and facilitates growth, while driving down the total cost of ownership.



ADMINISTRATION
AND EMPLOYEES



Our
executive and administrative offices are located in Tampa, Florida, where we maintain operations, business development, accounting,
reporting and information systems, and provider and customer service functions. As of December 31, 2019, we employed two people
and contracted for ten others.



AVAILABLE
INFORMATION



Our
investors’ website can be found at www.advanzeonshareholders.com. We make available free of charge, through a link to the
SEC internet site, our annual, quarterly, and current reports, and any amendments to these reports, as well as any beneficial
ownership reports of officers and directors filed electronically on Forms 3, 4, and 5. Information contained on our website or
linked through our website is not part of this Annual Report on Form 10-K. The public may read and copy any materials we file
with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an internet
site that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC, which can be found at http://www.sec.gov.

Our
Board of Directors has two committees, an audit committee and a compensation and stock option committee. Each of these committees
has a formal charter which was filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2009. Any
references to our stockholder website and the SEC’s website above are intended to be inactive textual references only, and
the contents of those Web sites are not incorporated by reference herein.

In
addition, you may request a copy of the foregoing charters at no cost by writing us at the following address or telephoning us
at the following telephone number:

Advanzeon
Solutions, Inc.

P.O.
Box 271485

Tampa,
FL 33688

Attention:
Investor Relations

Tel:
(813) 517-8484



10







ITEM
1A. RISK FACTORS



You
should carefully consider and evaluate all of the information in this Annual Report on Form 10-K, including the risk factors listed
below. Risks and uncertainties in addition to those we describe below, that may not be presently known to us, or that we currently
believe are immaterial, may also harm our business and operations in the future. If any of these risks occur, our business, and
its future financial condition, results of operations and cash flows could be harmed, the price of shares of our common stock
could decline, and future events and circumstances could differ significantly from those expected that are set forth in or underlie
the forward-looking statements contained in this report.



Dependence
on our Chief Executive Officer



We
are dependent on the services of Mr. Clark A. Marcus, our Chief Executive Officer. The loss of his services would have a materially
adverse effect on the performance and growth of our business for some period of time. We do not have any “Key Man”
insurance for Mr. Marcus.



Our
inability to renew, extend or replace expiring or terminated contracts in the near term could adversely affect our liquidity,
profitability and financial condition.

Many
of the contracts we service could be terminated immediately either for cause or without cause by the client upon notice of a specified
time (typically between 30 and 60 days). The loss of one of these contracts could materially reduce our net revenue and have a
material adverse effect on our liquidity, profitability and financial condition.



A
compromise of our information systems or unauthorized access to confidential information or our customers personal information
could materially harm our business and/or our reputation.



An
effective and secure information system, available at all times, is vital to our individual and corporate customers. We collect
and store confidential medical and personal from our customers. Certain of the information we collect is Personnel Health Information
as that term is defined under HIPPA. We depend on our computer systems for significant service and management functions, such
as providing membership monitoring, utilization, processing customer information, and providing regulatory data and other client
and managerial reports. Although our computer and communications hardware is protected by physical and software safeguards and
other internal controls, it is still vulnerable to computer hacking which if successful, could cause such information to be misappropriated.
We could be subject to liability for failure to comply with HIPPA or other privacy laws. Any compromise of our systems or data
could disrupt our operations, damage our reputation, and expose us to claims from customers. This could have an adverse effect
on our business, financial condition and results of operations. We do not have 100% redundancy for all of our computer operations.



We
are subject to intense competition that may prevent us from gaining new customers or pricing our contracts at levels sufficient
to achieve gross margins to ensure profitability.



We
are continually pursuing new business. Many of our competitors are significantly larger and better capitalized than we are. Our
smaller size and weak financial condition have been a deterrent to some prospective customers. One of the general ways in which
testing is presently done for OSA is a “sleep center”. These facilities are able to accept insurance. We are not presently
credentialed to accept insurance. As a result, we may not be able to successfully compete in our industry in some respects.



11







Failure
to adequately comply with HIPAA may result in penalties.



Our
industry is subject to the security and privacy requirements of HIPAA relative to patients’ health information. Although
we believe we are fully compliant with all HIPAA regulations, any assertions of lack of compliance with HIPAA regulations could
result in penalties and have a material adverse effect on our ability to retain our customers or to gain new business.



We
may require additional funding, and we cannot guarantee that we will find adequate sources of capital at acceptable terms in the
future.



Our
available revenue from operations is not currently sufficient to fund our business. If we are unable to increase our revenue from
operations, we may need to seek new financing, possibly in the form of additional debt or equity (which could dilute current stockholders’
ownership interests). We cannot provide assurance that such additional funding will be available on acceptable terms.



Risks
related to our common and preferred stock.



Our
Series C Convertible Preferred stockholders have significant rights and preferences over the holders of our common stock and may
be deemed to operate as an anti-takeover device.



Our
Series C Convertible Preferred stockholders are entitled to receive dividends when declared by our Board of Directors before dividends
are paid on our common stock and also have a claim against our assets senior to the claim of the holders of our common stock in
the event of our liquidation, dissolution or winding-up. The aggregate amount of that senior claim is currently $2,608,500. In
addition, each Series C Convertible Preferred stockholder is entitled to vote together with the holders of our common stock on
an “as converted” basis, and, voting together as a separate class, all holders have the right to elect five of our
nine directors to our Board of Directors. The holders by their ability to control a majority of our Directors may be deemed to
be an anti-takeover device.



The
holders of our Series C Convertible Preferred Stock have other rights and preferences as detailed elsewhere in this report. These
rights and preferences could adversely affect our ability to finance future operations, satisfy capital needs or engage in other
business activities that may be in our interest.



Our
Series D Convertible Preferred stockholders have significant rights and preferences over the holders of our common stock and may
be deemed to operate as an anti-takeover device.



We
also have a class of convertible preferred stock, Series D, for which 7,000 shares are authorized and 250 shares have been issued.
On August 26, 2019, the Board of Directors changed the vesting date of the Series D from January 4, 2022, to August 27, 2019.
Each share is convertible into 100,000 shares of common stock. Prior to conversion, each Series D convertible preferred share
is entitled to all voting, dividend, liquidation and other rights accorded a share of Series D convertible preferred stock. If
a dividend is declared on the common stock, each share of Series D stock is entitled to receive a dividend equal to 50% of the
dividend declared for the common stock as if the Series D stock had been converted. Despite their nonvested status, voting rights
of each share nevertheless consist of the right to cast the number of votes equal to those of 500,000 shares of common stock.
Unless otherwise required by applicable law, holders of shares of Series D have the right to vote together with holders of common
stock as a single class on all matters submitted to a vote of our stockholders. The holders by virtue of their superior voting
rights may be deemed to operate as an anti-takeover device.



12









We
may raise additional funds in the future through issuances of securities and such additional funding may be dilutive to stockholders
or impose operational restrictions.



To
fund our operations, repay our existing debt and grow our business we may raise additional capital in the future through sales
of shares of our common stock or securities convertible into shares of our common stock or through debt. Such additional financing
may be dilutive to our stockholders, and debt financing, if available, may involve significant interest costs and/or restrictive
covenants which may limit our operating flexibility.



Applicable
SEC rules governing the trading of “penny stocks” may limit the trading and liquidity of our common stock which, along
with our small public capitalization may affect the trading price of our common stock and may subject us to securities litigation.



Our
common stock is a “penny stock” as defined under Rule 3a51-1 of the Exchange Act and is accordingly subject to SEC
rules and regulations that impose limitations upon the manner in which our common stock may be publicly traded. These regulations
require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market
and the associated risks. Under these regulations, certain brokers who recommend such securities to persons other than established
customers or certain accredited investors must make a special written suitability determination regarding such a purchaser and
receive such purchaser’s written agreement to a transaction prior to sale. These regulations may have the effect of limiting
the trading activity of our common stock and reducing the liquidity of an investment in our common stock. In addition, the size
of our public market capitalization is relatively small, resulting in highly limited trading volume in, and high volatility in
the price of, our common stock.



ITEM
1B. UNRESOLVED STAFF COMMENTS



Not
applicable.





ITEM
2. PROPERTIES



We
leased our Tampa corporate office and paid annual rent of $97,850 in 2019. The term of the lease is on a month to month basis.
We currently lease approximately 3,133 square feet and pay approximately $8,229 per month. We consider the condition of our leased
property to be average and adequate for our current needs. In our Tampa office, we maintain clinical operations, business development,
accounting, financial and regulatory reporting and other management information symptoms information systems, and provider and
member service functions. During 2019, the Company renegotiated the Tampa office lease and verbally agreed to a three-year extension
of the lease with no increase in payments.

We
leased our Huntington Beach office and paid annual rent of $46,800 in 2019. The term of the lease is for 1 year beginning April
18, 2018 and ending April 30, 2019 at a monthly rent of $3,700 per month. The lease has been extended on a month to month basis.
We currently pay a monthly rent of $4,000. We consider the condition of our leased property to be average and adequate for our
current needs.

13







ITEM
3. LEGAL PROCEEDINGS



Advanzeon
is a party to litigation in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, Case
No. 12-CA-2570, arising from an alleged breach of a Term Sheet. On March 8, 2017 the Court determined that Advanzeon breached
the Term Sheet and entered a Final Judgment in the amount of $866,052 bearing interest at the statutory rate. In February 2018,
a final judgment awarding attorney’s in the amount of $167,960 was entered in favor of the Plaintiff, Katzman. In June 2018,
as part of the execution of judgment process, in a motion for proceedings supplementary, pursuant to agreement of the parties
the court entered an order appointing  a special master to review the financial condition of Advanzeon to determine
if the foregoing judgment could be paid and if so from what assets. Advanzeon has objected to paying the Final Judgment amount
and the Parties have been ordered to Mediation to take place in 2020.



The
Company has filed a claim for money it maintains is owed by Universal Health Care Insurance Company. In re: The Receivership of
Universal Health Care Insurance Company. Case number 2013-CA-00358 and Case number 2013-CA-00375 in the Second Judicial Circuit
Court, Leon County, FL. The objection to the claim by the receivership was heard April 4, 2018 and on May 15, 2018 the court entered
an Order awarding Company $139,344 and $130,406, representing a portion of monies claimed by the Company owed it by Universal.
The Company agrees it is owed the $269,750.10 and filed for a rehearing as to that portion of the Order specific to the additional
monies owed to it. The rehearing was denied. On July 20, 2018 Company filed an appeal with the First District Court of Appeals
with respect the denial by the court.  The Company filed the appeal from the court denial of the additional monies owed
to the Company by Universal Health Care Insurance Company. The additional monies the Company believes are owed to it are in excess
of $900,000, but less than $1,000,000.



In
Michael Ross et. al v. Advanzeon Solutions, Inc., Plaintiff is suing the Company for money it claims is owed pursuant to a promissory
note. Plaintiff has not proceeded with any action and maybe subject to a motion to dismiss for failure to prosecute. If any further
action is taken by the Plaintiff the Company will file a motion for summary judgment. Case Number 16-CA-005737, Thirteenth Judicial Circuit Court Hillsborough County,
FL. Filed April 7, 2015. This is the third attempt by the Plaintiff on the same note. The prior two actions were dismissed. The
Company will continue to vigorously defend its position.



In
Advanzeon Solutions, Inc. v. Mayer Hoffman et. al., Case Number 16-CA-005737 Filed June 17, 2016 Thirteenth Judicial Circuit Court
Hillsborough County, FL., the Company sued Defendants for damages for breach of audit services contract. The Judge ruled in favor
of Defendants motion for summary judgment, but no judgment was entered. The Company will file for a rehearing of the summary judgment
and or an appeal in the event the Court enters a judgment in favor of Defendants.



14









In
a matter entitled Pharmacy Value Management Solutions, Inc. vs. Young & Son Tax and Accounting, LLC, Charles Young Sr., Charles
Young Jr. and Jay Jacques, the Company sued for breach of accounting service contract, mandatory injunction, return of documents
and conversion of accounting funds held in the accountants’ trust account. The case is in the initial discovery stage. Case
Number 18-CA-000960 Thirteenth Judicial Circuit, Hillsborough County, FL. Filed March 31, 2018. The Company will aggressively
pursue recovery of monies owed to it.



In
a matter entitled Advanzeon Solutions, Inc. v. Cook Children’s Health Plan and Intervenors Cook Children’s medical
center and Cook Children Physician Network, file 4/20/18 Company filed an action contesting the validity of a final foreign judgment
(Texas) which judgment was filed in the records of Hillsborough County. The Company has objected to collection activities
in Hillsborough County on the judgment based upon the Texas action filed by the Company contesting the judgment.



In
a matter entitled Pharmacy Value Management Solutions, Inc., d/b/a SleepMaster SolutionsTM vs. Kristi Staite filed 5/7/2018
Thirteenth Judicial Circuit, PVMS brought suit against Staite for damages based upon fraud in the non performance of services
Ms. Staite owed to Company in reference to obtaining insurance qualification. The case is in the beginning stages of response
and discovery. The Company will aggressively pursue recovery of the monies paid to Ms. Staite for services not rendered.



In
a matter entitled Rotech Healthcare, Inc. vs. Pharmacy Value Management Solutions, Inc. case no. 18-CA – 4218 Thirteenth
Judicial Circuit Court – Tampa, the Plaintiff is suing the Company for breach of contract and open account for
money owed in the amount of $160,355 for services and supplies. Company disputes the charges were permitted under the contract
and disputes the claimed amounts. Previously, the Company incorrectly reported that the matter had been settled. In fact, the
Company did not execute the draft settlement agreement and the matter remains in litigation. The Company is aggressively defending
against the claims asserted by Plaintiff.



In
the matter Oceans Healthcare, LLC, et al, v. Comprehensive Behavior Care, Inc., et al, 19th JDC No. 59633, Div. D, the Company
is aware of a claim Oceans Healthcare seeks to assert against the Company arising from services rendered by a former subsidiary.
Plaintiff is attempting to serve the Company and the Company disputes service. The amount at issue is unknown at this time. In
the event the Company is served at a later date, it will aggressively defend against this claim.



ITEM
4. MINE SAFETY DISCLOSURES



Not
applicable.



15







PART
II



ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES



| | (a) | Market
                                         Information - Our common stock is traded on the OTCBB under the symbol CHCR. The
                                         following table sets forth the range of high and low bid quotations for the common stock,
                                         as reported by the OTCBB, for the fiscal quarters indicated. The market quotations reflect
                                         inter-dealer prices without retail mark-up, mark-down or commissions and may not necessarily
                                         represent actual transactions.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
below quotations, as determined through a query of Bloomberg LLP, reflect inter-dealer prices, without retail mark-up, mark-down
or commission and may not necessarily represent actual transactions:





| |                                                                                | High |  | Low
| | ------------------------------------------------------------------------------ | ---- |  | ---
| |                                                                                |      |  |    
| | Year
                                         ended December 31, 2019          |      |  |    
| | 4th
                                         quarter, ended December 31, 2019  |      |  | $  
| | 3rd
                                         quarter, ended September 30, 2019 |      |  | $  
| | 2nd
                                         quarter, ended June 30, 2019      |      |  | $  
| | 1st
                                         quarter, ended March 31, 2019     |      |  | $  







| | (b) | Holders– As of April 9, 2020, we had 412 holders of record of our common stock.
| | --- | -------------------------------------------------------------------------------

| | (c) | Dividends- We did not pay any cash dividends on our common stock during the year ended December
                                         31, 2019 and do not contemplate the initiation of payment of any cash dividends in the
                                         foreseeable future. In the event that we do pay dividends, the holders of record of our
                                         Series C Convertible Preferred Stock and Series D Convertible Preferred Stock are entitled
                                         to receive such dividends in preference to the holders of our common stock, when and
                                         if declared by our Board of Directors. If declared, holders of our Series C Convertible
                                         Preferred Stock will receive dividends in an amount equal to the amount that would have
                                         been payable had the Series C Convertible Preferred Stock been converted into shares
                                         of our common stock immediately prior to the declaration of such dividend. Holders of
                                         our Series D Convertible Preferred Stock will receive dividends in an amount equal to
                                         50% of the amount that would have been payable had the Series D Convertible Preferred
                                         Stock been converted into shares of our common stock. No dividends shall be authorized,
                                         declared, paid or set apart for payment on any class or series of our stock ranking,
                                         as to dividends, on a parity with or junior to the Series C Convertible Preferred Stock
                                         for any period unless full cumulative dividends have been, or contemporaneously are authorized,
                                         declared, paid or set apart in trust for such payment on the Series C Convertible Preferred
                                         Stock. In addition, as long as a majority of the 10,434 shares of our Series C Convertible
                                         Preferred Stock are outstanding, we cannot declare or pay any dividend or other distribution
                                         with respect to any equity securities without the affirmative vote of holders of at least
                                         50% of the outstanding shares of Series C Convertible Preferred Stock.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16







RECENT
SALES OF UNREGISTERED SECURITIES

With
the exception of the transactions set forth below, the sale of unregistered securities for the year ended December 31, 2019 were
disclosed in our Annual Report on the December 31, 2018 Form 10-K filed on May 24, 2019.

On
May 1, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
May 8, 2019, we issued a convertible promissory note in the principle amount of $50,250 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 105,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
May 21, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

17





On
May 22, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
May 22, 2019, we issued a convertible promissory note in the principle amount of $15,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 30,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
May 30, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
May 31, 2019, we issued a convertible promissory note in the principle amount of $150,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 300,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

18





On
June 12, 2019, we issued a convertible promissory note in the principle amount of $100,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
June 19, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
June 24, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

19





On
June 27, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 1, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 1, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

20





On
July 1, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 2, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 2, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 2, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

21





On
July 2, 2019, we issued a convertible promissory note in the principle amount of $125,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 250,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 2, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 3, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 3, 2019, we issued a convertible promissory note in the principle amount of $100,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

22





On
July 5, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 5, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

23





On
July 8, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 10, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 10, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

24





On
July 11, 2019, we issued a convertible promissory note in the principle amount of $30,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 60,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 11, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 12, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
July 17, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

25





On
August 19, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
August 24, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
August 24, 2019, we issued a convertible promissory note in the principle amount of $200,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 400,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

26





On
October 02, 2019, we issued a convertible promissory note in the principle amount of $100,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
October 11, 2019, we issued a convertible promissory note in the principle amount of $14,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 28,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
October 16, 2019, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

27





On
December 11, 2019, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

All
of the convertible promissory notes listed above were issued to accredited investors, as that term is defined under the Section
501 of Regulation D, promulgated under the Securities Act of 1933, as amended. The warrants issued in connection with the promissory
notes all have a cashless exercise feature.

We
issued common stock purchase warrants separate from the warrants issued in connection with the issuance of the above-mentioned
convertible promissory notes during the year ended December 31, 2019. With the exceptions of the transactions set forth below
all of issuances of our warrants were disclosed in our Annual Report on the December 31, 2018 Form 10-K filed on May 24, 2019.

On
May 1, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
May 1, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
May 10, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
May 11, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
May 19, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
May 22, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
May 28, 2019, we issued 3,000,000 warrants to our Chief Accounting Officer. The warrants have a term of five years and an exercise
price of $0.0650 per warrant.

On
May 30, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

28





On
May 31, 2019, we issued 638,888 warrants to our Chief Executive Officer in lieu of 2019 first quarter salary. The warrants have
a term of five years and an exercise price of $0.09 per warrant.

On
May 31, 2019, we issued 347,222 warrants to our President in lieu of 2019 first quarter salary. The warrants have a term of five
years and an exercise price of $0.09 per warrant.

On
June 03, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 06, 2019, we issued 50,000 warrants to a member of our Dental Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
June 08, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 08, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 11, 2019, we issued 50,000 warrants to a member of our Dental Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
June 12, 2019, we issued 1,000,000 warrants to a member of our contracted supplier. The warrants have a term of five years and
an exercise price of $0.11 per warrant.

On
June 14, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 20, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 22, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 24, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 24, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

29





On
June 25, 2019, we issued 718,750 warrants to our Chief Executive Officer in lieu of 2019 second quarter salary. The warrants have
a term of five years and an exercise price of $0.08 per warrant.

On
June 25, 2019, we issued 390,625 warrants to our consultant in lieu of 2019 second quarter salary. The warrants have a term of
five years and an exercise price of $0.08 per warrant.

On
June 27, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 30, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
June 30, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
July 1, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
July 1, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
July 1, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
July 1, 2019, we issued 50,000 warrants to a member of our Dental Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
July 6, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
July 11, 2019, we issued 50,000 warrants to a member of our Dental Advisory Board, an accredited investor. The warrants have a
term of three years and an exercise price of $0.25 per warrant.

On
July 25, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

30





On
August 19, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
August 31, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
September 25, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants
have a term of three years and an exercise price of $0.25 per warrant.

On
September 30, 2019, we issued 136,905 warrants to our Chief Executive Officer in lieu of 2019 third quarter salary. The warrants
have a term of five years and an exercise price of $0.42 per warrant.

On
September 30, 2019, we issued 62,500 warrants to our consultant in lieu of 2019 third quarter salary. The warrants have a term
of five years and an exercise price of $0.42 per warrant.

On
October 03, 2019, we issued 700,000 warrants to our consultant. The warrants have a term of three years and an exercise price
of $0.11 per warrant.

On
October 03, 2019, we issued 2,000,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants
have a term of three years and an exercise price of $0.11 per warrant.

On
October 03, 2019, we issued 1,000,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants
have a term of three years and an exercise price of $0.11 per warrant.

On
October 12, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
October 15, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
November 03, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
November 30, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

31





On
December 09, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
December 22, 2019, we issued 50,000 warrants to a member of our Dental Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
December 28, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
December 30, 2019, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
December 31, 2019, we issued 133,721 warrants to our Chief Executive Officer in lieu of 2019 fourth quarter salary. The warrants
have a term of five years and an exercise price of $0.43 per warrant.

On
December 31, 2019, we issued 72,674 warrants to our consultant in lieu of 2019 fourth quarter salary. The warrants have a term
of five years and an exercise price of $0.43 per warrant.

We
relied on Section 4 (a) (2) of the Securities Act of 1933, as amended and or Section 501 of Regulation D promulgated under said
Act as the exemption from registration under the Act.

We
recognized no compensation costs during 2019 due to the issuance of the warrants.

We
have not issued any shares of our common stock subsequent to December 31, 2019.

Subsequent
to December 31, 2019, we issued the following convertible promissory notes and warrants:

On
January 3, 2020, we issued a convertible promissory note in the principle amount of $32,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 64,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

32





On
January 6, 2020, we issued a convertible promissory note in the principle amount of $75,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 150,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
February 13, 2020, we issued a convertible promissory note in the principle amount of $50,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On
March 9, 2020, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest
rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into
shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common
stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest
under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of
the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and
Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership
of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a
Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year
warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

33





All
of the convertible promissory notes listed above were issued to accredited investors, as that term is defined under the Section
501 of Regulation D, promulgated under the Securities Act of 1933, as amended. The warrants issued in connection with the promissory
notes all have a cashless exercise feature.

On
January 11, 2020, we issued 50,000 warrants to a member of our Dental Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
February 12, 2020, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
February 16, 2020, we issued 50,000 warrants to a member of our Dental Advisory Board, an accredited investor. The warrants have
a term of three years and an exercise price of $0.25 per warrant.

On
February 26, 2020, we issued 1,000,000 warrants to our consultant. The warrants have a term of three years and an exercise price
of $0.25 per warrant.

On
February 26, 2020, we issued 600,000 warrants to our consultant. The warrants have a term of three years and an exercise price
of $0.25 per warrant.

On
February 26, 2020, we issued 1,000,000 warrants to our consultant. The warrants have a term of three years and an exercise price
of $0.25 per warrant.

We
relied on Section 4 (a) (2) of the Securities Act of 1933, as amended and or Section 501 of Regulation D promulgated under said
Act as the exemption from registration under the Act.

We
recognized no compensation costs in connection with the issuance of the warrants.

ITEM
6. SELECTED FINANCIAL DATA – SMALLER REPORTING ENTITY

As
a smaller reporting entity under SEC Regulations, we are not required to furnish selected financial data.

ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking
Information

The
Company may from time to time make written or oral “forward-looking statements” including statements contained in
this report and in other communications by the Company, which are made in good faith pursuant to the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on our beliefs as well as assumptions
made by and information currently available to us. When used in this document, words like “may,” “might,”
“will,” “except,” “anticipate,” “believe,” “potential,” and similar
expressions are intended to identify forward-looking statements. Actual results could differ materially from our current expectations.

34





Forward-looking
statements in this report, including without limitation, statements related to the Company’s plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including,
without limitation, the following: (i) changes in the Company’s plans, strategies, objectives, expectations and intentions,
which may be made at any time at the discretion of the Company; (ii) the impact of uncertainties in global economic conditions,
including the impact on the Company’s suppliers and customers; (iii) changes in client needs and consumer spending habits;
(iv) the impact of competition and technological changes on the Company; (v) the Company’s ability to manage its growth
effectively, including its ability to successfully integrate any business it might acquire; (vi) currency fluctuations; (vii)
increases in the cost of borrowings resulting from rising interest rates; (viii) international trade policies and their impact
on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates;
and (ix) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange
Commission. For a more detailed discussion of these and other factors affecting the Company, see the Risk Factors set forth above
in Item 1A of this Annual Report on Form 10-K.

OVERVIEW

Throughout
the year ended December 31, 2019, the Company continued its marketing and sales efforts with respect to agreements and relationships
established during the first three quarters of 2019. It focused on establishing additional relationships within its existing market
(referrals from occupational healthcare clinics) and establishing a foothold in other markets, such as national labor unions and
third-party payor accounts.

The
Company’s revenue, however, in 2019, decreased from its revenue in 2018. This decrease occurred primarily as a result of
the acquisition of the Company’s largest account by another account with whom the Company also had a contract, but had not
yet had time to implement. In 2018, the Company had existing contracts with two of the nation’s largest clinic chains servicing
the interstate commercial trucking industry -- Concentra and U.S. Healthworks (USHW). Although the Company had contractual relationships
with both accounts, at the time of the acquisition of USHW by Concentra, the Company’s principal relationship from a revenue
perspective was with USHW. Prior to the acquisition, the Company’s national account representatives would regularly visit
select USHW clinic facilities. In 2019, we were asked to suspend our visit activities so as to not disrupt Concentra’s efforts
to integrate the two corporate cultures into one. The Company immediately ceased these visits and turned its attention to diversifying
its client base, focusing more heavily on national labor unions and other third-party payors. The Company’s intent was to
broaden its client base while still retaining its existing client base with a now much larger Concentra.

During
2019, and into 2020, the Company successfully materially expanded its customer base. In October 2019, we entered into an exclusive
three-year contract with Pinnacle National, a leading Third Party Administrator servicing approximately 1.2 million union employees
and their dependents. All costs will be borne by Pinnacle National. We expect the program to launch in the first half of 2020.

In
February 2020, we entered into an exclusive three-year agreement with CoreChoice, a third party payor who added our sleep apnea
detection and treatment program to their portfolio of covered programs. CoreChoice has approximately 1 million union members who,
along with their dependents, total approximately 2.5 million covered lives. We begin servicing this account in March 2020.

35





In
the first part of 2020, we entered into a three-year, exclusive, worldwide cooperation agreement with Sleep Cycle AB (Sleep Cycle).
The Sleep Cycle app is devoted to the single issue of sleep -- how one sleeps, the best time to wake up, snoring, etc. It claims
to be the single largest selling app in the world with over 25 million active users. We began working with Sleep Cycle during
the latter part of 2019. In January 2020, we began beta testing in select U.S. market areas to determine how to effectively incorporate
our SleepMaster SolutionsTM program into their database such that we could most accurately identify which of their app users,
if tested, would most likely test positive for obstructive sleep apnea (OSA). Although the Beta testing is still in the early
stages, 100% of all app users tested so far have tested positive.

We
have also now established relations with the United States Postal Service in Indianapolis, Indiana; The Pacific Gas & Electric
Power Company (PG&E) in California; a West Coast-based Workers’ Compensation organization with substantial national
accounts; and, a significant number of third party payor labor organizations servicing both active and retired union members.
Patient referrals have commenced from all but one of these new accounts.

Additionally,
the Company believes that the integration of USHW into Concentra is essentially complete, and the Company’s revenue from
this account has shown a material increase. In the first quarter of 2020, we had an overall increase in sales in January 2020
of almost 74% compared to sales in January 2019; and comparative sales in February 2020 to February 2019 increased over 101%.
Overall sales for the period of January-February 2020 compared to 2019 are up an aggregate of 86.41%. This was primarily due to
increased patient flow from Concentra clinics. We expect that our relationship with Concentra coupled with the new business relationships
established primarily during the third and fourth quarters of 2019 and the first quarter of 2020, and particularly our relationships
with certain third-party, union-based payors, will result in a material increase in revenue to the Company in 2020 without a concomitant
increase in expenses. The Company believes it has adequately prepared for the anticipated increase in its business and the systems
and staffing burden this may place on the Company.

SOURCES
OF REVENUE

A
quantitative summary of our revenues by source category for 2019 and 2018 as follows:



| |             | 2019 |  | 2018 |         | Change
| | ----------- | ---- |  | ---- | ------- | ------
| |             |      |  |      |         |       
| | OSA-related |      |  | $    | 300,098 |       





Results
of Operations

2019
vs. 2018

Revenues
and Costs of Goods sold

Revenues
For the year ended December 31, 2019, were $300,098 compared to revenues of $524,172 for the comparable period ending December
31, 2018.

OSA-related

OSA
services decreased to $300,098 in 2019 from $524,172 in 2018. The Company's sales in 2019 decreased from 2018 while the Company
worked on new contracts that will take effect in 2020

36





Cost
of revenues decreased to $145,254 from $261,170. The difference in amounts is a result of the sales decreasing. The cost of revenue
decreased at the same percentage rate as the sales decrease.

Selling,
general and administrative expense

Selling,
general and administrative expense in total was as follows:

| | 2019                                                       |  |  | $ | 2,092,806 |  
| | ---------------------------------------------------------- |  |  | - | --------- | -
| | 2018                                                       |  |  |   | 1,745,094 |  
| | Change                                                     |  |  | $ | 347,712   |  
| | Percentage
                                         Change |  |  |   | 19.93     | %





We
evaluate selling, general and administrative expenses at the Parent company level as well as at our PVMS subsidiary. Selling,
general, and administrative expenses at the Parent company level include overhead and the cost of being a public entity. Selling,
general, and administrative expenses at PVMS are solely related to the OSA services segment. A breakdown of these expenses is
as follows:





|                                              |  | 2019 |           | 2018 |  | Change
|--------------------------------------------- |  | ---- | --------- | ---- |  | ------
|                                              |  |      |           |      |  |       
|Parent                                        |  |      | 870,305   |      |  |       
|PVMS                                          |  |      | 1,222,501 |      |  |       
|                                              |  |      |           |      |  |       
|Total
    selling, general and administrative |  | $    | 2,092,806 |      |  | $     





|Parent
    Company level                     
|---------------------------------------------
|                                             
|                                             
|                                             
|Travel
    expense                           
|Professional fees                            
|Board of Directors
    fees                  
|Rent expense                                 
|Other                                        
|                                             
|Total
    selling, general and administrative









Explanations
of variations by line item follow:

Travel
expense increased by $4,406. Travel was relatively the same between 2018 and 2019.

Professional
Fees increased by $342,892. Part of the increase was attributable to an increase of $135,442 in legal fees and an increase
of $71,757 in audit-related fees. Legal fees increased in order to continue with various lawsuits.

Board
of Directors Fees accrue at the rate of $150,000 each year

37







|PVMS
    Subsidiary                           
|----------------------------------------------
|                                              
|                                              
|                                              
|Executive
    compensation and payroll related
|Travel expense                                
|Professional fees                             
|Advertising                                   
|Other                                         
|                                              
|Total
    selling, general and administrative 



Payroll
related expensesdecreased by $29,734. The company had 1 less commissioned sales person for part of the year.

Travel
expensewas $4,180 lower. Travel expense was relatively the same from 2018 to 2019.

Professional
Fees increased $53,843. In February 2018, PVMS hired an outside accountant for the Company as a whole whom we pay $7,000 per
month. We also pay the outside accountant additional fees for special projects. In 2019, the outside accountant was paid for the
full year. In 2019 we hired a consultant to help bring in additional business. Legal fees increased by approximately $22,000 due
to increased litigation expenses.

Advertisingdecreased $249. Advertising expense was relatively the same from 2018 to 2019.

Other
Expense decreased by $8,340. Other expense was relatively the same from 2018 to 2019

Interest
Expense

Interest
expense between 2019 and 2018 was as follows



| | 2019                                                       |  |  | $ | 1,428,671 |   
| | ---------------------------------------------------------- |  |  | - | --------- | --
| | 2018                                                       |  |  |   | 1,436,974 |   
| | Change                                                     |  |  | $ | (8,303    | ) 
| | Percentage
                                         change |  |  |   | (0.58     | )%





A
breakdown of the interest expense for the years ended December 31, 2019 and 2018 is as follows:



| |        | 2019 |  | 2018 |           | Change
| | ------ | ---- |  | ---- | --------- | ------
| |        |      |  |      |           |       
| | Parent |      |  | $    | 648,879   |       
| | PVMS   |      |  |      | 779,792   |       
| |        |      |  |      |           |       
| | Total  |      |  | $    | 1,428,671 |       







38







Interest
expense stayed consistent with the interest expense in 2018.



Liquidity
and Capital Resources

During
the year ended December 31, 2019, we funded our operations from revenues and private borrowings. We will continue to fund our
operations from these sources until we are able to produce operating revenue sufficient to cover our cost structure. In the event
we are not able to secure such funding, our operations will be adversely affected.

Short
Term: We funded our operations with revenues from sales and private borrowings.

Subsequent
to 2019, we issued $182,000 of promissory notes through April 9, 2020.

ACCOUNTING
POLICIES AND ESTIMATES

Preparation
of our consolidated financial statements requires us to make significant estimates and judgments to develop the amounts reflected
and disclosed in the consolidated financial statements. On an on-going basis, we evaluate the appropriateness of our estimates
and we maintain a thorough process to review the application of our accounting policies. We base our estimates on historical experience
and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions.

Revenue
recognition. The Company is on an accrual basis and revenue is recognized when billed, which is approximately when the testing
service is performed or CPAP machine is shipped.

Income
taxes.Computing our provision for income taxes involves significant judgment and estimates particularly in relation to the
determination of a valuation allowance for deferred tax assets (primarily from net operating loss carryforwards). See Note 16
to the consolidated financial statements.

Stock-based
compensation. We issue various stock-based compensation awards to our employees and members of our Board of Directors. We
account for the awards in accordance with ASC 718 “Compensation – Stock Compensation” and measure compensation
cost for stock options at fair value on the grant date and recognize compensation cost on a straight-line basis over the service
period for those options expected to vest. We use the Black-Scholes option pricing model, which requires us to use certain variable
assumptions for input, to calculate the fair value of a stock award on the grant date. These assumptions, which are set forth
in Note 2 to our consolidated financial statements variables include the expected volatility of our stock price, award exercise
behaviors, the risk-free interest rate, and expected dividends. We use significant judgment in estimating expected volatility
of the stock, exercise behavior and forfeiture rates developing our assumptions as follows:

Expected
Volatility

We
estimate the volatility of the share price by using historical data of our traded stock in combination with our expectation of
the extent of fluctuation in future stock prices. We believe our historical volatility is more representative of future stock
price volatility and as such it has been given greater weight in estimating future volatility.

39





Expected
Term

A
variety of factors are considered in determining the expected term of options granted. Options granted are grouped by their homogeneity
based on the optionees’ position, whether managerial or clerical, and length of service and turnover rate. Where possible,
we analyze exercise and post-vesting termination behavior. For any group without sufficient information, we estimate the expected
term of the options granted by averaging the vesting term and the contractual term of the options.

Expected
Forfeiture Rate

We
generally separate our option awards into two groups: employee and non-employee awards. The historical data of each group are
analyzed independently to estimate the forfeiture rate of options at the time of grant. These estimates are revised in subsequent
periods if actual forfeitures differ from estimated forfeitures.

Risk-free
Interest Rate

We
estimate the risk-free interest rate by reference to the interest rate for a U.S. Treasury constant maturity security with the
same estimated term as the stock-based award being issued.

Expected
Dividends

No
dividends are expected to be paid for the expected life of the instruments; therefore, we assume a dividend rate of zero.

RECENT
ACCOUNTING PRONOUNCEMENTS

Recent
Accounting Standards Update - Recently various new ASUs were issued by the Financial Accounting Standards Board (FASB). Management
has determined based on their review that the following ASU issued will be applicable to the Company. As new ASU are released,
Management will assess if they are applicable and, if they are applicable, the effect will be included in the notes to the consolidated
financial statements.

In
February 2016, the FASB issued ASU 2016-02, “Leases,” which significantly changes the accounting for a lessee. Under
previous guidance, lessees did not have to record a lease it designated as operating on its balance sheet. Under the new guidance,
a lessee must record a liability for lease payments (referred to as the lease liability) and an asset for the right to use the
leased asset during the lease term (referred to as the right of use asset) for all leases, regardless of whether they are designated
as finance or operating leases. If a lessee has a lease with a term of 12 months of less, it may make an accounting policy election
(by leased asset class) not to recognize lease assets or lease liabilities. This election generally requires the lessee to recognize
lease expense on a straight-line basis over the lease term. ASU 2016-02 is effective for interim and annual periods beginning
after December 15, 2018 for public entities, not-for-profit entities that have issued (including conduit bond obligors) securities
that are traded, listed, or quoted on an exchange or an over-the-counter market, and employee benefit plans that file financial
statements with the United States Securities and Exchange Commission (SEC). All other entities must apply the ASU to annual periods
beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Any entity may early adopt the ASU.
Management has determined this ASU will have an impact on the Company and has implemented this ASU.

40







ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We
have no material exposure to changing interest rates as the interest rates on our short term and long-term debt are fixed. Additionally,
we do not use derivative financial instruments for investment or trading purposes and our investments are generally limited to
cash deposits.

ITEM
8. CONSOLIDATED FINANCIAL STATEMENTS

Our
audited financial statements may be found beginning on Page 63, appearing elsewhere in this report.

ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM
9A. CONTROLS AND PROCEDURES

Disclosure
Controls and Procedures



Management
of Advanzeon Solutions, Inc. is responsible for maintaining disclosure controls and procedures that are designed to ensure that
information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934
(the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities
and Exchange Commission’s rules and forms. In addition, the disclosure controls and procedures must ensure that such information
is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required financial and other required disclosures.



At
the end of the period covered by this report, an evaluation of the effectiveness of our disclosure controls and procedures (as
defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was carried
out under the supervision of our Chief Financial Officer (“CFO”). Based upon this evaluation of our disclosure controls
and procedures, it was concluded that during the period covered by this report, such disclosure controls and procedures were not
optimally effective. This was due to our limited resources, including the absence of a financial staff with accounting and financial
expertise and deficiencies in the design or operation of our internal control over financial reporting that adversely affected
our disclosure controls and that may be considered to be “material weaknesses.”



To
address these weaknesses, management plans to hire and designate an individual responsible for identifying reportable developments
and to implement procedures designed to remedy material weaknesses by focusing additional attention and resources in our internal
accounting functions. However, the material weaknesses will not be considered remedied until applicable controls have operated
for a sufficient period of time and management has concluded that these controls are operating effectively.



Our
CFO, who is also a member of our Board of Directors, was appointed CFO in April 2018. He will directly oversee our efforts to
remedy material weaknesses. Additionally, in January 2018, we retained the services of an outside accounting firm (“Outside
Accountant”) to work with our CFO in the implementation of the remedial process. Our CFO does not maintain an office in
the Company, and we do not compensate him for his services.



41







Management’s
Annual Report on Internal Control over Financial Reporting



Our
management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control
over financial reporting is a process designed to provide reasonable assurance to our management and Board of Directors regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.
generally accepted accounting principles.



Our
internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions
are recorded as necessary for preparation of our financial statements; (iii) provide reasonable assurance that receipts and expenditures
of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized
acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented
or detected on a timely basis.



Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes
in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.



Our
management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. This evaluation
was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, Internal Control-Integrated
Framework. Based upon such assessment, our CFO concluded that, as of December 31, 2019, our internal controls over financial reporting
were not optimally effective in the specific areas described in the paragraphs below.



As
of December 31, 2019, our current CFO identified the following specific material weaknesses in the Company’s internal controls
over its financial reporting processes:



| | • | Policies
                                         and Procedures for the Financial Close and Reporting Process – During the period
                                         of this report, the Company’s policies or procedures did not clearly define the
                                         roles in the financial reporting process. The various roles and responsibilities related
                                         to this process should be defined, documented, updated and communicated. Not having clear
                                         policies and procedures in place amounts to a material weakness in the Company’s
                                         internal controls over its financial reporting processes.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Representative
                                         with Financial Expertise – For the years prior to the year ended December 31, 2018,
                                         the Company did not continuously have an employee with the requisite knowledge and expertise
                                         to review the financial statements and disclosures at a sufficient level to monitor the
                                         financial statements and disclosures to the Company. Failure to have, continuously, an
                                         employee with such knowledge and expertise amounts to a material weakness to the Company’s
                                         internal controls over its financial reporting processes.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





42







As
a result of our retaining the services of an Outside Accountant in January 2018 and appointing an internal Company employee to
interface with the Outside Accountant, in May 2019, we appointed the principal of the Outside Accountant as our Chief Accounting
Officer, we have instituted the following policies and procedures designed to address the material weaknesses cited above.



•                 
All billing invoices prepared by the billing department are sent to the Outside Accountant for review and approval before sending
out to the customer.



•                 
Copies of all incoming payable invoices are sent to the Outside Accountant for review, approval and data entry into the accounting
system. That way Corporate Office has the originals and the outside accountants have duplicate copies. Accounts Payable Aging
Report is sent once a week from the Outside Accountants to the Corporate office. The Corporate office, along with Outside Accountants,
decide on which bills to pay weekly. Electronic payments have a duel control approval system (one person is initiating the payment
and another person is approving the payment).



•                 
Paperwork on all customer invoices, credit card payments and check payments received at Corporate are copied and forwarded to
Outside Accountants. Customer invoices are recorded daily. Customer payments received are recorded daily. Customer payments are
reconciled with the bank on a daily basis. Aged Accounts Receivable Reports are sent to Corporate by the Outside Accountants with
suggestions on a regular basis.



•                 
All bank accounts are reconciled monthly.



•                 
Financial Statements are prepared and reviewed monthly.



The
Company plans to further augment its addressing of material weaknesses, on an as-needed basis, by hiring additional accounting
personnel once its initial corrective steps have been fully implemented, tested and found to be effective.





ITEM
9B. OTHER INFORMATION



Not
applicable.



43







PART
III



ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE



The
following table lists our executive officers and directors as of December 31, 2019. Each director is serving a term that will
expire at our next shareholder meeting. There are no family relationships among any of our directors or executive officers.





|Name                           |    | Age |                                                                                                                               | Position                                                                                  
|------------------------------ | -- | --- | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------
|                               |    |     |                                                                                                                               |                                                                                           
|Clark A. Marcus                |    | 78  |                                                                                                                               | Chairman of the
    Board, Chief Executive Officer and Director                           
|Mark T. Heidt                  |    | 67  |                                                                                                                               | Director                                                                                  
|James L. Koenig                |    | 73  |                                                                                                                               | Director                                                                                  
|Arnold
    B. Finestone, Ph.D. | 90 |     | President, Chief
    Financial Officer, Director, Audit Committee Chairman and Compensation and Stock Option Committee Member
|Sharon Kay Ray                 |    | 62  |                                                                                                                               | Director, Audit Committee Member, and Compensation
    and Stock Option Committee         
|Arthur K. Yeap                 |    | 64  |                                                                                                                               | Director, Audit
    Committee Member, and Compensation and Stock Option Committee Chairman
|Stephen M. Kreitzer            |    | 74  |                                                                                                                               | Director, Medical
    Director                                                            



CLARK
A. MARCUS

Clark
A. Marcus was appointed as our Co-Chief Executive Officer, a director and Chairman of the Board on May 11, 2009. In September
2010, he assumed the position of sole Chief Executive Officer. Mr. Marcus was formerly Chairman and Chief Executive Officer of
Core from September 2008 to January 2009. Prior to that, he was a founder, Chairman and Chief Executive Officer at The Amacore
Group, Inc., a public company and marketer of healthcare related memberships, from September 1993 to August 2008. Mr. Marcus has
been a practicing attorney since 1968 and was a senior partner in the New York law firms of Victor & Marcus and Marcus &
Marcus. He is a Board member of America’s Agenda Health Care for All. He previously served as a member of the American Academy
of Ophthalmology's Corporate Advisory Council. He has participated as a guest lecturer at various national healthcare conferences
and has authored numerous healthcare related articles published in various national healthcare publications such as “Managed
Care Weekly” and “Managing Employee Health Benefits”. .Mr. Marcus contributes to the Board of Directors through
his unique expertise in the healthcare industry, legal expertise, decades of experience in building and operating companies as
well as proven leadership skills in guiding public companies.

ARNOLD
B FINESTONE, Ph.D.

Arnold
B. Finestone was appointed to our Board of Directors on January 21, 2009. He is a business management consultant and formerly
served on the Board of Directors of The Amacore Group, Inc., a public company and marketer of healthcare related memberships.
He has served on the Boards of public companies and start-up business ventures since 1985. From 1982 to 1985, he was President
of Dartco, Inc., a subsidiary of Dart & Kraft Inc., which was engaged in marketing and manufacturing of high-performance engineering
plastics for consumer, industrial, and military uses. From 1970 to 1982, he served as Executive Vice President of the Chemical–Plastics
Group of Dart Industries and Dart & Kraft, Inc. From 1957 to 1970, he was Vice President and Director of Planning, Development
and Marketing for Foster Grant, Inc. Dr. Finestone’s qualifications to sit on our Board of Directors include his financial
expertise, which qualify him as our “Audit Committee Chairman and “financial expert,” and his extensive governance
and executive experience, including executive level roles in complex organizations. In April 2018, Dr. Finestone was appointed
as our Chief Financial Officer. We do not compensate Dr. Finestone for his services as our CFO and in May of 2019, he was assigned
the responsibilities of our former President.. He does not work full time for the Company and he does not maintain an office at
the Company.

44





SHARON
KAY RAY

Sharon
Kay Ray was appointed to our Board of Directors on January 21, 2009. Since March 1989, she has served as a regional marketing
representative for Novo Nordisk, a multi-national pharmaceutical company, and as a special marketing consultant for a number of
public and non-public corporations. Within the last five years, Ms. Ray served on the Board of Directors of The Amacore Group,
Inc. a public company and marketer of healthcare related memberships. Ms. Ray brings to the Board of Directors a unique marketing
perspective that provides strategic insight into the promotion of our healthcare related consumer products.

ARTHUR
K. YEAP

Arthur
K. Yeap joined our Board of Directors on January 21, 2009. Since 1983, Mr. Yeap has served as Chief Executive Officer of Novo
Group, consultants and manufacturers in the USA and Asia of audio, green lighting and LED Display products for professional use.
He also has been a principal investigator on the staff of the University of California at Berkeley, engaged in research in perception
and hearing for advanced military and consumer uses of the Internet. From 1996 to 1999, he was Director of Marketing, Consumer
Products, for ITV Corporation. From 1995 to 1996 Mr. Yeap was Chief Engineer for WYSIWYG Networks. Mr. Yeap was a member of the
Board of Directors of the Golden Gate Regional Center, which provides services and state funding for the mentally handicapped
from 1992-1996 and served as its Chairperson from 1996-1997. He served on the Board of Trustees of Grace Cathedral in San Francisco
and is currently on the Board of Clausen House in Oakland, a nonprofit agency serving individuals with special needs. Mr. Yeap
provides valuable managerial knowledge to the Board of Directors as well as experience in strategic product development and operations,
with a focus on information technology and systems.

STEPHEN
M. KREITZER, M.D.

Dr.
Stephen M. Kreitzer joined our Board in March 2018. He is a graduate of the Albert Einstein College of Medicine of the Yeshiva
University and completed his fellowship training at the Harvard Medical School. He is Board Certified in Internal Medicine, Pulmonary
Medicine and Sleep Medicine and has been in practice for over 30 years in Tampa, Florida. Dr. Kreitzer currently serves as the
Medical Director of the Sleep Laboratory at Memorial Hospital of Tampa, as well as the Chief of Pulmonary Medicine. He has previously
been Chief of Pulmonary Medicine at St. Joseph’s Hospital in Tampa. He chairs the Medical Ethics Committee at Memorial Hospital
and previously served on the Board of Censors of the Hillsborough County Medical Association. He also served as a Major in the
United States Air Force and has conducted over 100 clinical FDA approved trials besides authoring numerous articles in his field.
Dr. Kreitzer has been voted “Top Doctor” by his peers in both sleep medicine and pulmonary medicine in the Tampa-St.
Petersburg-Clearwater Florida area for 2016 and 2017. Dr. Kreitzer brings to the Board of Directors his considerable knowledge
and experience in the treatment of sleep apnea. Dr. Kreitzer also services as our Medical Director

45





MARK
T. HEIDT

Mr.
Heidt joined our Board of Directors in September 2014. Prior to his appointment, he served as a consultant to the Company since
January 2014. Prior to that time, he was the owner and manager of BEC Worldwide, LLC, a national advertising, marketing and management
company. Mr. Heidt contributes to the Board with over thirty years of experience in mass marketing, media placement and advertising
placement with a specialty in infomercial design. In May 2019, Mr. Heidt resigned as President of the Company. He continues to
serve as a consultant.

Section
16(a) Beneficial Ownership Reporting Compliance

Under
Section 16(a) of the Securities Exchange Act of 1934, as amended, an officer, director or greater than 10% stockholder of our
outstanding common stock must file with the SEC initial reports of ownership and reports of changes in ownership of our equity
securities. Such persons are required by SEC regulations to furnish us with copies of all such reports they file. Based solely
upon a review of Section 16(a) reports furnished to us, we believe all such entities or persons subject to the Section 16(a) reporting
requirements have complied with applicable filing requirements during 2014, with the exception of the following: Dr. Stephen Kreitzer,
a Director filed one late report involving one transaction; Mr. Mark Heidt, a Director, filed three late reports involving four
transactions; Mr. Clark A. Marcus, our CEO and a Director filed two late reports involving four transactions; Mr. Arnold B. Finestone,
a Director, filed one report involving one transaction; Ms. Sharon Kay Ray , a Director filed one late report involving one transaction;
Mr. Arthur Yeap filed one late report involving one transaction.

Board
Leadership Structure

Our
Board is led by its Chairman, Mr. Clark A. Marcus, who is also CEO of the Company. We believe that having our CEO serve as Chairman
of the Board provides us with unified leadership and direction and strengthens the ability of the CEO to develop and implement
strategic initiatives and respond efficiently to various situations. The Board is aware of the potential conflicts that may arise
when an insider chairs the Board but believes any such conflicts are offset by the fact that independent directors comprise a
majority of the Board and each of its committees. The committees facilitate deeper analysis of various matters and promote regular
monitoring of our activities in their advisory role to the Board. At present, the Board believes that its current structure effectively
maintains independent oversight of management and that having an independent director as Chair is unnecessary. The Board has the
ability to quickly adjust its leadership structure should business or managerial conditions change.

Governance
and Nominating Committee

Our
Board does not utilize a separate Governance and Nominating Committee. Instead, our full Board performs the functions that are
normally the responsibility of a Governance and Nominating Committee. In considering candidates for open Board positions, diversity
of background and personal experience is considered by the Board in assembling a group of individuals that will work well together
in overseeing our affairs. Although we do not have a formal diversity policy, the Board considers, among other things, diverse
business experiences, the candidate’s range of experiences with public companies, and racial and gender diversity in evaluating
Board candidates. While diversity in background in directors is important, it does not necessarily outweigh other attributes or
factors the Board may consider in evaluating any particular candidate.

46





Code
of Ethics

We
have adopted a code of ethics applicable to all of our employees, including our principal executive officer, principal financial
and accounting officer and persons performing similar functions. The text of this code of ethics can be found on our website at
www.Advanzeon.com. We intend to post notice on our website of any waiver from, or amendment to, any provision of our code
of ethics.

Audit
Committee

Although
we are not required to have an Audit Committee, we maintain one whose primary function is to assist the Board of Directors (“the
Board”) in the oversight of the integrity of our financial statements, the effectiveness of our internal control over financial
reporting, the identification and management of risk, and in evaluation of the performance of our independent auditor. As of December
31, 2018, the Audit Committee of our Board consisted of Arnold B. Finestone (Chairman) and Arthur K. Yeap. The Board of Directors
has determined that, although not applicable in our case, all members of the Committee nevertheless were independent as defined
in Section303A of the New York Stock Exchange’s listing standards and SEC Rule 10A-3, and that Dr. Finestone qualifies as
a “financial expert,” as defined by Item407(d)(5) of Regulation S-K.

Compensation
and Stock Option Committee

The
purpose of the Compensation and Stock Option Committee is to determine, or recommend to the Board for determination, the direct
and indirect compensation of the CEO and all other officers and to administer any incentive compensation plans from which stock
options and other stock based awards may be granted. The Compensation and Stock Option Committee of our Board consisted of Arthur
K. Yeap (Chairman), Sharon Kay Ray, and Arnold B. Finestone.

Compensation
Consultants

We
did not use any compensation consultants during 2019.

47





ITEM
11. EXECUTIVE COMPENSATION

Summary
Compensation Table

The
following table sets forth the cash and non-cash compensation for our named executive officers for 2019:



|                                |  |      |      |                |  |               |           |                |  |   |   |                |  |                      |         | Changes in Pension     |  |                      |    |              
|------------------------------- |  | ---- | ---- | -------------- |  | ------------- | --------- | -------------- |  | - | - | -------------- |  | -------------------- | ------- | ---------------------- |  | -------------------- | -- | -------------
|                                |  |      |      |                |  |               |           |                |  |   |   |                |  | Non- Equity          |         | Value and Nonqualified |  |                      |    |              
|                                |  |      |      |                |  |               |           | Stock          |  |   |   | Option         |  | Incentive Plan       |         | Deferred Compensation  |  | All Other            |    |              
|Principal
    Position          |  | Year |      | Salary
    ($) |  | Bonus
    ($) |           | Awards
    ($) |  |   |   | Awards
    ($) |  | Compensation
    ($) |         | and
    Earnings ($)   |  | Compensation
    ($) |    | Total
    ($)
|                                |  |      |      |                |  |               |           |                |  |   |   |                |  |                      |         |                        |  |                      |    |              
|Clark A.
    Marcus             |  |      | 2019 |                |  | $             | —         |                |  | $ | — |                |  | $                    | 100,041 |                        |  |                      | (4 | )(5)         
|Chairman of the Board
    and   |  |      | 2018 |                |  | $             | —         |                |  | $ | — |                |  | $                    | —       |                        |  |                      |    |              
|Chief Executive Officer         |  |      | 2017 |                |  | $             | 1,892,013 | (1)            |  | $ | — |                |  | $                    | —       |                        |  |                      |    |              
|                                |  |      |      |                |  |               |           |                |  |   |   |                |  |                      |         |                        |  |                      |    |              
|Mark T. Heidt                   |  |      | 2019 |                |  | $             | —         |                |  | $ | — |                |  | $                    | —       |                        |  |                      |    |              
|President                       |  |      | 2018 |                |  | $             | —         |                |  | $ | — |                |  | $                    | —       |                        |  |                      |    |              
|                                |  |      | 2017 |                |  | $             | 300,000   | (1)            |  | $ | — |                |  | $                    | —       |                        |  |                      |    |              
|                                |  |      |      |                |  |               |           |                |  |   |   |                |  |                      |         |                        |  |                      |    |              
|Arnold B. Finestone,
    P.h.D. |  |      | 2019 |                |  | $             | —         |                |  | $ | — |                |  | $                    | 50,000  |                        |  |                      | (5 | )            
|President and                   |  |      | 2018 |                |  | $             | —         |                |  | $ | — |                |  | $                    | —       |                        |  |                      |    |              
|Chief Finanicial Officer        |  |      | 2017 |                |  | $             | —         |                |  | $ | — |                |  | $                    | —       |                        |  |                      |    |              
|                                |  |      |      |                |  |               |           |                |  |   |   |                |  |                      |         |                        |  |                      |    |              
|James L. Koenig                 |  |      | 2017 |                |  | $             | —         |                |  | $ | — |                |  | $                    | —       |                        |  |                      |    |              
|Chief Financial Officer         |  |      |      |                |  |               |           |                |  |   |   |                |  |                      |         |                        |  |                      |    |              



(1)
Clark A. Marcus and Mark T. Heidt's 2017 salaries were not paid out but accrued.

(2)
In July 2018, Mr. Marcus and Mr. Heidt both agreed to reduce their annual base compensation and to accept common stock purchase
warrants in lieu of their respective cash compensation for 2018 and again in 2019. Mr. Marcus agreed to reduce his 2019 base compensation
to $200,000 while his annual increases remain in effect. Mr. Heidt agreed to an annual base compensation of $125,000. The warrants
have a term of five years and an exercise price that is fifty percent above the closing bid price as of the Company’s Common
Stock as of July 11, 2018. We do not recognize any compensation costs related to the issuance of warrants to Messrs. Marcus and
Heidt. In May 2019, Mr. Heidt resigned as President. He presently serves as a consultant and continues to receive his same compensation
rate.

(3)
Arnold B. Finestone's compensation was for his services as a director. The compensation was not paid out but accrued.

(4)
In April 2019, the Board of Directors voted to issue 4,100 shares of Series C Preferred Stock to Clark A. Marcus as a bonus.

(5)
The Board of Directors on August 26, 2019, changed the vesting date of the Issuer’s Series D Preferred Stock from January
4, 2022, to August 27, 2019. Each share of the Series D Preferred Stock converts into 100,000 shares of the Issuer’s
Common Stock. Included in the stock awards for Clark A. Marcus of $100,041 is $100,000 and $50,000 for Arnold B. Finestone from
the change in the vesting date.



Executive
Employment Agreements

Chairman
and Chief Executive Officer

On
May 11, 2009, we executed an employment agreement with our Chairman of the Board and CEO, Clark A. Marcus. Mr. Marcus’ employment
contract has a term of three years and includes an initial base salary of $700,000 per annum. As of December 31, 2017, the base
salary for Mr. Marcus was $2,141,316. This compensation may, at our election, be accrued, in whole or in part, until such time
as we receive financing and/or generate sufficient cash flows with which to pay Mr. Marcus his stated compensation, after the
payment of our operating expenses.

48





Upon
execution of the agreement in 2009, Mr. Marcus was paid an $80,000 signing bonus. In addition, Mr. Marcus is entitled to receive
a special annual bonus in an amount equal to one percent of our pre-tax profits from the preceding year (as determined by the
application of generally accepted accounting principles), up to the first $1,000,000 of such profits; plus, an additional sum
equal to two percent of our pre-tax profits for all sums over $1,000,000.Mr. Marcus may also receive a bonus determined at the
discretion of the Board of Directors.

In
November 2011, the Compensation and Stock Option Committee modified Mr. Marcus’ employment agreement to state that it will
not be deemed to have begun until all outstanding, deferred salary and bonus amounts have been paid, at which time the employment
agreement will then proceed for a term of five years. In addition, Mr. Marcus will receive an annual increase on January 1stof each year the contract is effective, with such increase equal to the greater of 15% or the percentage change in the Consumer
Price Index for the Tampa Bay metropolitan area for the preceding year. Furthermore, the Company will continue to pay the premiums
on Mr. Marcus’ life insurance policies existing and following the termination of his employment through his 81st
birthday.

In
the event Mr. Marcus’ employment is terminated without cause, or Mr. Marcus terminates his employment within 12 months from
a change in control, we will pay to Mr. Marcus a lump sum amount equal to the aggregate of (i) accrued unpaid salary, if any;
(ii) accrued but unpaid expenses, if any; (iii) accrued but unpaid bonuses, if any; (iv) unissued warrants, if any; and (v) the
total compensation which would have been paid to Mr. Marcus through five full years of compensation from the date of termination.
In July 2018, Mr. Marcus agreed to reduce his annual base compensation to $200,000. He also agreed to accept 833,333 common stock
purchase warrants in lieu of his 2018 compensation. At December 31, 2018, we had accrued approximately $7,883,802 of compensation
and bonuses to Mr. Marcus.

Director
of Compensation

The
following table provides information regarding compensation earned by certain of our non-employee directors during the year ended
December 31, 2019.





|                               |  | Year |      | Fees
    Earned (1)
|------------------------------ |  | ---- | ---- | -------------------
|                               |  |      |      |                    
|Arnold
    B. Finestone, Ph.D. |  |      | 2019 |                    
|                               |  |      |      |                    
|Sharon Kay Ray                 |  |      | 2019 |                    
|                               |  |      |      |                    
|Arthur K. Yeap                 |  |      | 2019 |                    







|(1) | Amounts represent
    fees earned for service as a director on our Board of Directors and as a member of one or more Board committees. Three of
    our directors are paid a monthly fee. Dr. Finestone is paid $7,500 per month; Ms. Ray is paid $2,500 per month and Mr. Yeap
    is paid $2,500 per month. Each of the above-named persons agreed in October 2013 to waive off on payments by the Company of
    any existing accrued fees and/or future fees until further notice. As of December 31, 2019, the total amount of accrued compensation
    for all of the named individuals was $1,050,000.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





49







Members
of the Board of Directors who are also executive officers or employees of the Company receive no compensation for serving as directors.
Outstanding stock option and warrant awards for each non-employee director as of December 31, 2019 are as follows:





|                           |           | Number
    of shares underlying unexercised options, warrants
|-------------------------- | --------- | -------------------------------------------------------------
|                           |          
|Name                       |           | Options
    (#)                                              
|                           |           |                                                              
|Arnold B. Finestone, Ph.D. | 1,000,000 |                                                              
|Sharon Kay Ray             |           | 775,000                                                      
|Arthur Yeap                |           | 775,000                                                      







50







ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



Security
Ownership of Certain Beneficial Owners



The
following table sets forth, as of December 31, 2019, the name, address, stock ownership and voting power of each person or group
of persons known by us who is not a director or a named executive officer of the Company to own beneficially more than five percent
of the outstanding shares of our common stock. Unless otherwise indicated, each of the stockholders has sole voting and investment
power with respect to shares beneficially owned.





|Name
    and Address of Beneficial Owner |  | Common
    stock owned directly |            | Common
    stock acquirable (1) |  | Total
    common stock beneficially owned |            |  |  | Percent
    of Voting Common Stock Outstanding
|---------------------------------------- |  | ------------------------------- | ---------- | ------------------------------- |  | ----------------------------------------- | ---------- |  |  | ----------------------------------------------
|                                         |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Howard
    Jenkins                       |  |                                 | 26,885,714 |                                 |  |                                           | 9,000,000  |  |  |                                               
|c/o Advanzeon Solutions,
    Inc.        |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|2901 W. Busch Blvd.,
    Suite 701       |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Tampa, Florida 33618                     |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|                                         |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Bernard C. Sherman                       |  |                                 | 0          |                                 |  |                                           | 14,712,500 |  |  |                                               
|150 Signet Dr.                           |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Weston, Ontario Canada
    M9L 1T9       |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|                                         |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Lloyd I. Miller                          |  |                                 | 602,100    |                                 |  |                                           | 5,121,100  |  |  |                                               
|222 Lakeview Ave.,
    Suite 100-365     |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|West Palm Beach, Florida
    33401       |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|                                         |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Benjamin B. West                         |  |                                 | 4,000,000  |                                 |  |                                           | 50,000     |  |  |                                               
|c/o Advanzeon Solutions,
    Inc.        |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|2901 W. Busch Blvd,
    Suite 701        |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Tampa, Florida 33618                     |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|                                         |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Joshua I. Smith                          |  |                                 | 1,922,829  |                                 |  |                                           | 2,525,000  |  |  |                                               
|c/o Advanzeon Solutions,
    Inc.        |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|2901 W. Busch Blvd,
    Suite 701        |  |                                 |            |                                 |  |                                           |            |  |  |                                               
|Tampa, Florida 33618                     |  |                                 |            |                                 |  |                                           |            |  |  |                                               







51







| | (1) | Includes
                                         common stock acquirable through the conversion of equity instruments convertible into
                                         common stock and the exercise of options and warrants to acquire common stock.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Information
                                         obtained from Form 13D/A dated June 4, 2010, filed on July 29, 2010 and Company records.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Information
                                         obtained from Form 13G/A dated November 14, 2011, filed on December 9, 2011 and Company
                                         records.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Information
                                         obtained from Form 13G/A dated February 5, 2015, filed on February 5, 2015. Of the 5,162,600
                                         shares beneficially owned, Mr. miller has sole voting and investment power over 4,790,808
                                         shares and shared voting and investment power over 371,792 shares.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Information
                                         obtained from Form 13G/A dated December 31, 2011, filed on February 14, 2012.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------

| | (6) | Information
                                         obtained from Company records. Does not include 5,000,000 shares obtainable from the
                                         conversion of the 50 shares of the Series D Convertible Preferred Stock. The Series D
                                         Convertible Preferred Stock vests in 10 years from the date of grant. Early vesting can
                                         occur if (a) the Grantee’s service as a member of the Board of Directors is terminated
                                         by the Company, or (b) by mutual agreement between the Company and the Grantee, or (c)
                                         by the Grantee for Good Reason, which is defined to mean without the Grantee’s
                                         express written consent, a material breach of any material provision of any agreement
                                         between the Company or a successor and the Grantee which breach is not cured within 30
                                         days after notice, or (d) due to the Grantee’s death or disability before the vesting
                                         date.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Security
Ownership of Management



The
following table sets forth, as of December 31, 2019, information concerning the beneficial ownership of our common stock by each
director of the Company and the named executive officers and all directors and executive officers as a group. According to rules
adopted by the SEC, a person is the “beneficial owner” of securities if he or she has, or shares, the power to vote
such securities or to direct their investment. Unless otherwise indicated, each of the stockholders has sole voting and investment
power with respect to shares beneficially owned.





|Name
    of Beneficial Owner                                          |  | Shares
    Beneficially Owned |            | Percent
    of Common Stock Outstanding
|--------------------------------------------------------------------- |  | ----------------------------- | ---------- | ---------------------------------------
|                                                                      |  |                               |            |                                        
|Clark
    A. Marcus (1)(6)                                            |  |                               | 29,330,145 |                                        
|Arnold
    B. Finestone, Ph.D. (2)(6)                                 |  |                               | 6,577,171  |                                        
|Sharon
    Kay Ray (3)(6)                                             |  |                               | 3,675,000  |                                        
|Arthur
    K. Yeap (3)(6)                                             |  |                               | 3,675,000  |                                        
|Mark
    T. Heidt (4)                                                 |  |                               | 2,002,979  |                                        
|James
    L. Koenig (4)                                               |  |                               | 1,600,000  |                                        
|Stephen
    M. Kreitzer, M.D. (5)                                     |  |                               | 3,337,000  |                                        
|                                                                      |  |                               |            |                                        
|All
    directors and named executive officers as a group (7 persons) |  |                               | 50,197,295 |                                        







52









| | (1) | Includes
                                         121,800 shares of common stock held directly, 1,000,000 shares subject to options that
                                         are presently exercisable, 16,911,597 shares acquirable with warrants that are presently
                                         exercisable, 10,000,000 shares of common stock acquirable upon the conversions of 100
                                         shares of the Series D Convertible Preferred Stock and 1,296,748 shares of common stock
                                         acquirable upon the conversions of 4,100 shares of the Series C Convertible Preferred
                                         Stock. .
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes
                                         1,000,000 shares subject to options that are presently exercisable, 500,000 shares acquirable
                                         with a warrant that is presently exercisable, and 77,171 shares obtainable from the conversion
                                         of 244 Series C Convertible Preferred Stock shares that are presently convertible and
                                         5,000,000 shares obtainable from the conversion of 50 shares of the Series D Convertible
                                         Preferred Stock.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Includes
                                         322,829 shares of common stock held directly, 775,000 shares subject to options that
                                         are presently exercisable, and 77,171 shares obtainable from the conversion of 244 Series
                                         C Convertible Preferred Stock shares that are presently convertible and 2,500,000 shares
                                         obtainable from the conversion of 25 shares of the Series D Convertible Preferred Stock.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Represents
                                         warrants to purchase common stock.
| | --- | --------------------------------------------------------------------------------------

| | (5) | Includes
                                         97,000 shares of common stock and 3,240,000 warrants to purchase common stock. Does not
                                         include a convertible promissory note in the principle amount of $100,000. At the option
                                         of the holder all or any part of the principle and any unpaid interest may be converted
                                         into shares of our common stock. The conversion rate shall be the lessor of (i) 15% below
                                         the average daily closing bid price of our common stock for the immediately preceding
                                         twenty business days or (ii) $0.11.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | On
                                         August 26, 2019, the Board of Directors changed the vesting date of the Series D convertible
                                         Preferred Stock from January 4, 2023, to August 27, 2019.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE



Transactions
with Related Persons



In
connection with an employment agreement with our Chairman and CEO, Clark A. Marcus, we have accrued compensation and bonuses payable
to Mr. Marcus of approximately $7,883,802 as of December 31, 2019.



One
of our independent sales agents is the son of our Chief Executive Officer. He is paid a monthly amount and is entitled to earn
a commission on certain sales. In 2019, his total compensation was $83,280. We also pay for the California lease payments on a
residential unit that we use as an office for our account managers, sales and marketing staff as a temporary residence for the
son of our Chief Executive Officer. The total lease payments in 2019, were $47,453. We use the services of the daughter of our
Chief Executive Officer for marketing purposes. In 2019, her total compensation was $27,500. In January 2018, we began using the
services of an accounting firm owned by the brother of our Chief Executive Officer. In 2019, the firm was paid a total of $140,953.
We presently pay the firm $7,000 per month for routine services and additional fees for special projects. We lease a vehicle for
our Chief Executive Officer. The term of the lease is 3 years beginning July 9, 2018 and ending July 9, 2021. We currently pay
a monthly rate of $893.

53







Director
Independence



Although
we are not listed on the New York Stock Exchange, and therefore not subject to its requirements, we nevertheless have used the
definition of “independent” set forth in Section 303A of the New York Stock Exchange listing standards for the purpose
of determining the independence of our directors and members of a committee of our Board of Directors. Such standards define an
independent director, generally, as one who has no material relationship with us, has not been employed by us within the last
three years, has not received compensation from us in excess of $120,000 other than director and committee fees, is not related
to a person who is a partner or employee of our external auditor, is not related to any of our officers, and is not an officer
or owner of a business having transactions with us that exceed the greater of $1 million or 2% of our consolidated gross revenues.



The
following is a list of individuals that served as a director at any point during the period covered by this Annual Report on Form
10-K and that were considered independent:



Sharon
Kay Ray

Arthur
K. Yeap



There
were no transactions, relationships, or arrangements considered by the Board of Directors in determining that a director is independent
other than those described immediately above under the caption “Transactions with Related Persons".



ITEM
14. PRINCIPAL ACCOUNTANTS’ FEES AND SERVICES



Audit
and Related Fees



The
firm of Louis Plung & Company, LLP (“Louis Plung”) currently serves as our independent registered public accounting
firm to perform audits and to prepare our income tax returns. The Audit Committee approved 100% of the services described below
for audit fees.



Audit
Fees. The aggregate fees billed by Louis Plung for services relative to audits of our annual consolidated financial statements
conducted for 2019 were $37,500.



Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors



The
Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent registered
public accounting firm and assure that the provision of such services does not impair the firm’s independence. These services
may include audit services, audit-related services, tax services and other services. Management is required to periodically report
to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance
with this pre-approval, and the fees for the services performed to date.



54







PART
IV



ITEM
15. EXHIBITS and FINANCIAL STATEMENT SCHEDULES



|    |    |                                                                                                        |   
|--- | -- | ------------------------------------------------------------------------------------------------------ | --
|(a) | 1. | Consolidated
    Financial Statements - Included in Part II of this report:                            |   
|    |    | Report
    of Independent Registered Public Accounting Firm                                            | 64
|    |    | Consolidated
    Balance Sheets as of December 31, 2019 and 2018                                       | 65
|    |    | Consolidated
    Statements of Operations for the years ended December 31, 2019 and 2018               | 66
|    |    | Consolidated
    Statements of Stockholders’ Deficiency for the years ended December 31, 2019 and 2018 | 67
|    |    | Consolidated
    Statements of Cash Flows for the years ended December 31, 2019 and 2018               | 68
|    |    | Notes
    to Consolidated Financial Statements                                                         | 69
|    |    |                                                                                                        |   
|    | 2. | Consolidated
    Financial Statement Schedules: None.                                                  |   
|    |    |                                                                                                        |   
|    | 3. | Exhibits:                                                                                              |   



The
exhibits listed below are filed as part of this Annual Report on Form 10-K. Certain of the exhibits, as indicated, have been previously
filed and are incorporated by reference.



|ExhibitNumber |  | Description
    and Reference                                                                                     
|------------- |  | ------------------------------------------------------------------------------------------------------------------
|              |  |                                                                                                                   
|3.0(i)        |  | Certificate
    of Correction (1)                                                                                 
|              |  |                                                                                                                   
|3.1           |  | Amended
    and Restated Bylaws, as amended July 20, 2000.(4)                                                     
|              |  |                                                                                                                   
|3.2           |  | Amendment
    to Amended and Restated Bylaws, effective June 14, 2005.(3)                                         
|              |  |                                                                                                                   
|3.3           |  | Amendment
    to Amended and Restated Bylaws, effective October 28, 2005.(8)                                      
|              |  |                                                                                                                   
|3.4           |  | Amendment
    to Amended and Restated Bylaws, effective January 12, 2007.(13)                                     
|              |  |                                                                                                                   
|3.5           |  | Certificate
    of Designation, Rights and Preferences of Series D Convertible Preferred Stock of the Company.(34)
|              |  |                                                                                                                   
|3.6           |  | Amendment
    to Amended and Restated Bylaws, effective May 11, 2009.(15)                                         
|              |  |                                                                                                                   
|3.7           |  | Certificate
    of Designation, Rights and Preferences of Series C Convertible Preferred Stock.(34)               
|              |  |                                                                                                                   
|4.1           |  | Form
    of Common Stock Certificate.(7)                                                                          
|              |  |                                                                                                                   
|4.2           |  | Subscription
    Agreement dated February 23, 2009 between the Company and Howard M. Jenkins (18)                 





55









|4.3  |  | Subscription
    Agreement dated February 26, 2009 between the Company and Harry Ross (20)                                      
|---- |  | --------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                 
|4.4  |  | Form
    of warrant to purchase Series D Preferred Stock issued by the Company on March 31, 2009 (14)                           
|     |  |                                                                                                                                 
|4.5  |  | Form
    of warrant to purchase Series D Preferred Stock issued by the Company on May 13, 2009 (15)                             
|     |  |                                                                                                                                 
|4.6  |  | Form
    of 10% Senior Promissory Note issued by the Company to Lloyd I. Miller, III (22)                                       
|     | 
|4.7  |  | Warrant
    to purchase Common Stock dated April 30, 2010 issued by the Company to Lloyd I. Miller, III (22)                    
|     | 
|4.8  |  | Subscription
    Agreement dated April 14, 2010 between the Company and Howard Jenkins (23)                                     
|     | 
|4.9  |  | Convertible
    promissory note dated June 4, 2010 issued by the Company to Howard Jenkins (23)                                 
|     | 
|4.10 |  | Warrant
    to purchase Common Stock dated June 4, 2010 issued by the Company to Howard Jenkins (23)                            
|     | 
|4.11 |  | Form
    of 10% Senior Promissory Note issued by the Company to the James A. & Rosemary L. Meyer Trust (24)                     
|     | 
|4.12 |  | Form
    of warrant to purchase Common Stock issued by the Company to the James A. & Rosemary L. Meyer Trust (24)               
|     | 
|4.13 |  | Form
    of 10% Senior Promissory Note issued by the Company to the Schwarting Revocable Trust (24)                             
|     | 
|4.14 |  | Form
    of warrant to purchase Common Stock issued by the Company to the Schwarting Revocable Trust (24)                       
|     | 
|4.15 |  | Form
    of 10% Senior Promissory Note issued by the Company to the Linda S. Vogt Indenture Trust (25)                          
|     | 
|4.16 |  | Form
    of warrant to purchase Common Stock issued by the Company to the Linda S. Vogt Indenture Trust (25)                    
|     | 
|4.17 |  | Subscription
    Agreement dated July 27, 2010 between the Company and Howard Jenkins (26)                                      
|     | 
|4.18 |  | Form
    of warrant to purchase Common Stock dated June 30, 2010 issued by the Company to Clark Marcus and Giuseppe Crisafi (27)
|     | 
|4.19 |  | Form
    of warrant to purchase Common Stock dated September 18, 2010 issued by the Company to MSO of Puerto Rico, Inc. (27)    
|4.20 |  | Form
    of Subscription Agreement dated August 30, 2011 between the Company and Sherfam Inc. and two individuals. (30)         
|     | 
|4.21 |  | Form
    of Convertible Promissory Note dated August 30, 2011 issued by the Company to Sherfam Inc. and two individuals. (30)   





56









|4.22  |  | Form
    of Addendum to Promissory Note dated August 30, 2011 issued by the Company to Sherfam Inc. and two individuals. (30)                                     
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|4.23  |  | Form
    of Warrant to Purchase Shares of Common Stock of the Company issued by the Company to Sherfam Inc. and two individuals. (30)                             
|      | 
|4.24  |  | Loan
    Extension Agreement dated March 15, 2013 between the Company and Sherfam Inc. (33)                                                                       
|      | 
|10.1  |  | Form
    of Stock Option Agreement. *(1)                                                                                                                          
|      | 
|10.2  |  | Advanzeon
    Solutions, Inc. 1995 Incentive Plan, as amended on November 17, 1998. (5)                                                                           
|      | 
|10.3  |  | Amended
    and Restated Non-Employee Directors’ Stock Option Plan. *(2)                                                                                          
|      | 
|10.4  |  | Amendment
    No. 1 to Advanzeon Solutions, Inc. Amended and Restated Non-Employee Directors’ Stock Option Plan, effective as of March
    23, 2006. *(9)         
|      | 
|10.5  |  | Advanzeon
    Solutions, Inc. 2002 Incentive Plan as amended. *(6)                                                                                                
|      | 
|10.6  |  | Lease
    Agreement between Comprehensive Behavioral Care, Inc. and Highwoods/Florida Holdings, L.P., dated November 12, 2008.
    (11)                           
|      | 
|10.7  |  | Merger
    Agreement, dated as of January20, 2009, among Advanzeon Solutions, Inc., Advanzeon Acquisition, Inc. and Core Corporate Consulting
    Group, Inc. (12)
|      | 
|10.8  |  | Employment
    Agreement dated March 5, 2009 between the Company and Robert J. Landis. *(13)                                                                      
|      | 
|10.9  |  | Employment
    Agreement dated May 11, 2009 between the Company and Clark A. Marcus. *(15)                                                                        
|      | 
|10.10 |  | Callable
    Convertible Promissory Note dated June 24, 2009 between Advanzeon Solutions, Inc. and Howard Jenkins (19)                                            
|      | 
|10.11 |  | Advanzeon
    Solutions, Inc. 2009 Equity Compensation Plan*(17)                                                                                                  
|      | 
|10.12 |  | Agreement
    of Exchange and Issuance of Senior Notes and Warrants dated April 30, 2010 between the Company and Lloyd I. Miller, III (22)                        
|      | 
|10.13 |  | Agreement
    of Exchange and Issuance of Senior Notes and Warrants dated June 14, 2010 between the Company and the James A. & Rosemary
    L. Meyer Trust (24)   



57









|10.14 |  | Agreement
    of Exchange and Issuance of Senior Notes and Warrants dated June 14, 2010 between the Company and the Schwarting Revocable
    Trust (24)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.15 |  | Agreement
    of Exchange and Issuance of Senior Notes and Warrants dated June 17, 2010 between the Company and the Linda S. Vogt Indenture
    Trust (25)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      | 
|10.16 |  | Agreement
    for the Provision of Services dated September 18, 2010 between Advanzeon de Puerto Rico, Inc. and MMM Healthcare, Inc. and
    PMC Medicare Choice, Inc. (29)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      | 
|10.17 |  | Amendment
    effective May 10, 2011 to the Agreement for the Provision of Services dated September 18, 2010 between Advanzeon de Puerto
    Rico, Inc. and MMM Healthcare, Inc. and PMC Medicare Choice, Inc. (33)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.18 |  | Second
    Amendment to the Agreement for the Provision of Services with an effective date of March 1, 2012, by and between Advanzeon
    de Puerto Rico, Inc. and MSO of Puerto Rico, Inc. (31)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.19 |  | Third
    Amendment to the Agreement for the Provision of Services with an effective date of May 1, 2012, by and between Advanzeon de
    Puerto Rico, Inc. and MSO of Puerto Rico, Inc. (32)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.20 |  | Lease
    between Twin Lakes Office Park and Advanzeon Solutions, Inc. dated May 23, 2014 (35)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.21 |  | Supplemental
    Agreement Between Pharmacy Value Management Solutions, inc. And [     ], dated June 12, 2019 (filed herewith)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|14.1  |  | Code
    of Business Conduct and Ethics (Revised). (10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|16    |  | Letter
    dated November 19, 2010 from Kirkland, Russ, Murphy & Tapp. PA (“KRMT”) to the U.S. Securities and Exchange
    Commission stating its agreement with the Company’s statements made concerning KRMT in the Company’s Form 8-K
    disclosure under Item 4.01 “Changes in Registrant’s Certifying Accountant.” (28)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|21.1  |  | List
    of the Company’s active subsidiaries (Previously filed)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|23.1  |  | Consent
    of Louis Plung & Company (Previously filed).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|31.1  |  | Advanzeon Solutions, Inc. CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|31.2  |  | Advanzeon Solutions, Inc. CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|32.1  |  | Advanzeon Solutions, Inc. CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|32.2  |  | Advanzeon
    Solutions, Inc. CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002 (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|99.1  |  | Audit
    Committee Charter (33)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|99.2  |  | Compensation
    and Stock Option Committee Charter (33)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|101   |  | The
    following materials from Advanzeon Solutions, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019
    formatted in extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements
    of Operations, (iii) Consolidated Statements of Stockholder’s Equity Deficiency, (iv) Consolidated Statements of Cash
    Flows, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text. Pursuant to Rule 406T of Regulation S-T,
    the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for
    purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section18 of
    the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.



58







| | *    | Management
                                         contract or compensatory plan or arrangement with one or more directors or executive
                                         officers. 
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                             
| | (1)  | Filed
                                         as an exhibit to the Company’s Form 10-K for the years ended December 31, 2015,
                                         2016 and 2017.      
| |      |                                                                                                                                                                                             
| | (2)  | Filed
                                         as an exhibit to the Company’s Form 8-K dated November 9, 1995.                                                                              
| |      |                                                                                                                                                                                             
| | (3)  | Filed
                                         as an exhibit to the Company’s Form 8-K dated June 14, 2005.                                                                                 
| |      |                                                                                                                                                                                             
| | (4)  | Filed
                                         as an exhibit to the Company’s Form 10-K for the year ended May 31, 2000.                                                                    
| |      |                                                                                                                                                                                             
| | (5)  | Filed
                                         as an exhibit to the Company’s Form 8-K dated November 25, 1998.                                                                             
| |      |                                                                                                                                                                                             
| | (6)  | Filed
                                         as Appendix A to the Company’s definitive proxy statement on Schedule 14A filed
                                         on January 28, 2005.
| |      |                                                                                                                                                                                             
| | (7)  | Filed
                                         as an exhibit to Form S-8 (File No. 333-108561) filed on September 5, 2003.                                                                  
| |      |                                                                                                                                                                                             
| | (8)  | Filed
                                         as an exhibit to the Company’s Form 8-K, dated November 3, 2005.                                                                             
| |      |                                                                                                                                                                                             
| | (9)  | Filed
                                         as an exhibit to the Company’s Form 10-K for the fiscal year ended May 31, 2006.                                                             
| |      |                                                                                                                                                                                             
| | (10) | Filed
                                         as an exhibit to the Company’s Form 10-K for the year ended December 31, 2007.                                                               
| |      |                                                                                                                                                                                             
| | (11) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated November 12, 2008.                                                                            
| |      |                                                                                                                                                                                             
| | (12) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated January 16, 2009.                                                                             
| |      |                                                                                                                                                                                             
| | (13) | Filed
                                         as an exhibit to the Company’s Form 10-K for the year ended December 31, 2008.                                                               
| |      |                                                                                                                                                                                             
| | (14) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated March 31, 2009.                                                                               
| |      |                                                                                                                                                                                             
| | (15) | Filed
                                         as an exhibit to the Company’s Form 10-Q for the quarterly period ended March 31,
                                         2009.             
| |      |                                                                                                                                                                                             
| | (16) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated June 17, 2009.                                                                                
| |      |                                                                                                                                                                                             
| | (17) | Filed
                                         as an exhibit to the Company’s Form 10-Q for the quarterly period ended September
                                         30, 2009.         
| |      |                                                                                                                                                                                             
| | (18) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated February 25, 2009.                                                                            
| |      |                                                                                                                                                                                             
| | (19) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated June 24, 2009.                                                                                
| |      |                                                                                                                                                                                             
| | (20) | Filed
                                         as an exhibit to the Company’s Form 8-K/A, dated January 16, 2009 and filed April
                                         6, 2009.          
| |      |                                                                                                                                                                                             
| | (21) | Filed
                                         as an exhibit to the Company’s Form 10-K for the year ended December 31, 2009.                                                               
| |      |                                                                                                                                                                                             
| | (22) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated May 6, 2010.                                                                                  
| |      |                                                                                                                                                                                             
| | (23) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated June 10, 2010.                                                                                



59







| | (24) | Filed
                                         as an exhibit to the Company’s Form 10-K for the year ended December 31, 2009.                                                                        
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                      
| | (25) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated May 6, 2010.                                                                                           
| |      |                                                                                                                                                                                                      
| | (26) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated June 10, 2010.                                                                                         
| |      |                                                                                                                                                                                                      
| | (27) | Filed
                                         as an exhibit to the Company’s Form 10-Q for the quarterly period ended June 30,
                                         2010.                       
| |      |                                                                                                                                                                                                      
| | (28) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated November 19, 2010.                                                                                     
| |      |                                                                                                                                                                                                      
| | (29) | Filed
                                         as an exhibit to the Company’s Form 10-Q/A for the quarterly period ended September
                                         30, 2010.                
| |      |                                                                                                                                                                                                      
| | (30) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated August 30, 2011.                                                                                       
| |      |                                                                                                                                                                                                      
| | (31) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated March 5, 2012.                                                                                         
| |      |                                                                                                                                                                                                      
| | (32) | Filed
                                         as an exhibit to the Company’s Form 8-K, dated June 25, 2012.                                                                                         
| |      |                                                                                                                                                                                                      
| | (33) | Filed
                                         as an exhibit to the Company’s Form 10-K for the year ended December 31, 2012.                                                                        
| |      |                                                                                                                                                                                                      
| | (34) | Filed
                                         as an exhibit to the Company’s Form 10-K for the years ended December 31, 2013
                                         and 2014.                     
| |      |                                                                                                                                                                                                      
| | (35) | Filed
                                         as an exhibit to the Company Annual Report on Form 10-K for the years ended December
                                         31, 2015, 2016 and 2017.



ITEM
16. FORM 10-K SUMMARY

Not
applicable.

60







SIGNATURES



Pursuant
to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, July 28, 2020.



| |     |  |  | ADVANZEON
    SOLUTIONS, INC.                                                                                          | 
| | --- |  |  | ---------------------------------------------------------------------------------------------------------------------- | 
| |     |  |  |                                                                                                                        | 
| | By: |  |  | /s/
    CLARK A. MARCUS                                                                                                | 
| |     |  |  | Chief
                                    Executive Officer and Chairman
        (Principal
        Executive Officer) | 
| |     |  |  |                                                                                                                        | 
| |     |  |  |                                                                                                                        | 
| |     |  |  |                                                                                                                        | 



61









Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the Company and in the capacities indicated as of July 28, 2020.



|SIGNATURE                                                                                            |  | TITLE                                                                                                                       |  | 
|---------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | 
|                                                                                                     |  |                                                                                                                            
|/s/
    CLARK A. MARCUS                                                                              |  | Chief
                                         Executive Officer and Chairman
        (Principal
        Executive Officer) | 
|Clark
    A. Marcus                                                                                  |  |                                                                                                                             | 
|                                                                                                     |  | Director,
    and Chief Financial Officer                                                                                   | 
|/s/
    ARNOLD B. FINESTONE, Ph.D.                                                                   |  | (Principal
    Financial Officer)                                                                                           | 
|Arnold B. Finestone,
    Ph.D.                                                                       |  |                                                                                                                            
|                                                                                                     |  |                                                                                                                             | 
|/s/
    LLOYD K. MARCUS                                                                              |  | Chief
                                         Accounting Officer

(Principal
 Accounting Officer)                          | 
|Lloyd
                                         K. Marcus
        
        /s/
        ARTHUR K. YEAP |  | Director                                                                                                                    | 
|Arthur
    K. Yeap                                                                                   |  |                                                                                                                             | 
|                                                                                                     |  |                                                                                                                             | 
|/s/
        SHARON KAY RAY                                                                           |  | Director                                                                                                                    | 
|Sharon
    Kay Ray                                                                                   |  |                                                                                                                             | 
|                                                                                                     |  |                                                                                                                             | 
|/s/
        JAMES L. KOENIG                                                                          |  | Director                                                                                                                    | 
|James
    L. Koenig                                                                                  |  |                                                                                                                             | 
|                                                                                                     |  |                                                                                                                             | 
|/s/
        MARK T. HEIDT                                                                            |  | Director                                                                                                                    | 
|Mark
    T. Heidt                                                                                    |  |                                                                                                                             | 
|                                                                                                     |  |                                                                                                                             | 
|/s/
        STEPHEN M. KREITZER, MD.                                                                 |  | Director                                                                                                                    | 
|Stephen
    M. Kreitzer, M.D.                                                                        |  |                                                                                                                             | 
|                                                                                                     |  |                                                                                                                             | 







62







ADVANZEON
SOLUTIONS, INC.



FINANCIAL
STATEMENTS AND

INDEPENDENT
AUDITORS’ REPORT

December
31, 2019 and 2018













63







REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and
Stockholders of Advanzeon Solutions, Inc.

Opinion
on the Financial Statements

We
have audited the accompanying consolidated balance sheets of Advanzeon Solutions, Inc. (the Company) as of December 31, 2019 and
2018, and the related consolidated statements of operations, stockholders’ deficiency, and cash flows for each of the years
in the two year period ended December 31, 2019, and the related notes (collectively referred to as the 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 years in the two
year period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Emphasis
of Matter



In early 2020,
an outbreak of a novel strain of coronavirus was identified and infections have been found in a number of countries around the
world, including the United States. The coronavirus and its impact on trade including customer demand, travel, employee productivity,
supply chain, and other economic activities has had, and may continue to have, a significant effect on financial markets and business
activity. The extent of the impact of the coronavirus on our operational and financial performance is currently uncertain and
cannot be predicted.



Basis
for Opinion

These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s consolidated financial statements based on our audits. 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 the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.

We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether
due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits, 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.

Our
audits 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
regarding the amounts and disclosures in the consolidated 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.

/s/
Louis Plung & Company

We
have served as the Company’s auditor since 2018.

Pittsburgh,
Pennsylvania

April
9, 2020

64





ADVANZEON
SOLUTIONS, INC.





CONSOLIDATED
BALANCE SHEETS

For
the Years Ended December 31, 2019 and 2018









|                                                                                                                                                      |  | 2019 |             | 2018
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | ----
|ASSETS                                                                                                                                                |  |      |             |     
|                                                                                                                                                      |  |      |             |     
|CURRENT ASSETS                                                                                                                                        |  |      |             |     
|Cash                                                                                                                                                  |  | $    | 69,327      |     
|Accounts
    receivable                                                                                                                               |  |      | 29,769      |     
|Current
    portion of right of use asset                                                                                                             |  |      | 113,911     |     
|Other
    current assets                                                                                                                              |  |      | 826,597     |     
|Total
    current assets                                                                                                                              |  |      | 1,039,604   |     
|                                                                                                                                                      |  |      |             |     
|PROPERTY, PLANT, AND
    EQUIPMENT                                                                                                                    |  |      |             |     
|Property
    and equipment, net                                                                                                                       |  |      | 1,239       |     
|Leasehold
    improvements, net                                                                                                                       |  |      | —           |     
|Total property, plant,
    and equipment                                                                                                              |  |      | 1,239       |     
|                                                                                                                                                      |  |      |             |     
|RIGHT
    OF USE ASSET, NET OF CURRENT PORTION                                                                                                        |  |      | 146,880     |     
|                                                                                                                                                      |  |      |             |     
|TOTAL
    ASSETS                                                                                                                                      |  | $    | 1,187,723   |     
|                                                                                                                                                      |  |      |             |     
|LIABILITIES
    AND STOCKHOLDERS' DEFICIENCY                                                                                                          |  |      |             |     
|                                                                                                                                                      |  |      |             |     
|CURRENT LIABILITIES                                                                                                                                   |  |      |             |     
|Related
    party loans payable                                                                                                                       |  | $    | 342,670     |     
|Account
    payable                                                                                                                                   |  |      | 99,441      |     
|Debt                                                                                                                                                  |  |      | 12,352,189  |     
|Contingent
    liability                                                                                                                              |  |      | 642,659     |     
|Current
    portion of lease liability                                                                                                                |  |      | 113,911     |     
|Other
    accrued expenses                                                                                                                            |  |      | 15,891,787  |     
|Total current liabilities                                                                                                                             |  |      | 29,442,657  |     
|                                                                                                                                                      |  |      |             |     
|LEASE
    LIABILITY, NET OF CURRENT PORTION                                                                                                           |  |      | 146,880     |     
|                                                                                                                                                      |  |      |             |     
|TOTAL
    LIABILITIES                                                                                                                                 |  |      | 29,589,537  |     
|                                                                                                                                                      |  |      |             |     
|STOCKHOLDERS' DEFICIENCY                                                                                                                              |  |      |             |     
|Preferred stock,
    $0.001 par value; 1,000,000 shares authorized, as of December 31, 2019 and 2018                                                  |  |      | —           |     
|Series C Convertible
    Preferred, $0.001 par value; 14,400 shares authorized; 10,434 shares issued and outstanding as of December 31, 2019 and 2018 |  |      | 10          |     
|Series D Convertible
    Preferred, $0.001 par value; 7,000 shares authorized; 250 shares issued and outstanding as of December 31, 2019 and 2018     |  |      | —           |     
|Remaining Preferred
    stock, $0.001 par value; 978,600 shares as of December 31, 2019 and 2018                                                      |  |      | —           |     
|Common
    stock, $0.01 par value; 1,000,000,000 shares authorized; 71,661,656 and 66,661,656 shares issued and outstanding                           |  |      | 716,617     |     
|Additional
    paid in capital                                                                                                                        |  |      | 28,719,246  |     
|Accumulated
    deficit                                                                                                                               |  |      | (57,837,687 | )   
|Total
    stockholders' deficiency                                                                                                                    |  |      | (28,401,814 | )   
|                                                                                                                                                      |  |      |             |     
|TOTAL
    LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                                                                    |  | $    | 1,187,723   |     





The
accompanying notes are an integral part of these consolidated financial statements



65





ADVANZEON
SOLUTIONS, INC.





CONSOLIDATED
STATEMENTS OF OPERATIONS

For
the Years Ended December 31, 2019 and 2018





|                                              |  | 2019 |            | 2018
|--------------------------------------------- |  | ---- | ---------- | ----
|                                              |  |      |            |     
|Revenues:                                     |  |      |            |     
|Obstructive
    sleep apnea (OSA) - related   |  | $    | 300,098    |     
|Total revenues                                |  |      | 300,098    |     
|                                              |  |      |            |     
|Costs and expenses:                           |  |      |            |     
|Costs of revenues                             |  |      | 145,254    |     
|Selling,
    general and administrative       |  |      | 2,092,806  |     
|Depreciation
    and amortization             |  |      | 609        |     
|Total costs and expenses                      |  |      | 2,238,669  |     
|                                              |  |      |            |     
|Operating loss                                |  |      | (1,938,571 | )   
|                                              |  |      |            |     
|Other income (expense):                       |  |      |            |     
|Interest
    expense                          |  |      | (1,428,671 | )   
|Legal
    settlement (See Note 15)            |  |      | 112,172    |     
|Settlement
    of prior accounting services   |  |      | —          |     
|Extinguishment
    of loan due to shareholder |  |      | —          |     
|Tax
    penalty                               |  |      | (6,794     | )   
|Interest
    income                           |  |      | 6,050      |     
|Other
    income                              |  |      | —          |     
|Total
    other income (expense)              |  |      | (1,317,243 | )   
|                                              |  |      |            |     
|Net
    income (loss)                         |  | $    | (3,255,814 | )   
|                                              |  |      |            |     
|PER SHARE INFORMATION                         |  |      |            |     
|Basic                                         |  | $    | (0.05      | )   
|                                              |  |      |            |     
|Weighted average number of                    |  |      |            |     
|common
    shares outstanding                 |  |      | 69,161,656 |     



The
accompanying notes are an integral part of these consolidated financial statements





66







ADVANZEON
SOLUTIONS, INC.



CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ DEFICIENCY

For
the Years Ended December 31, 2019 and 2018





|                                   |  | Series
    C Convertible Preferred Stock Number of Shares |        | Series
    C Convertible Preferred Stock Amount |  | Common
    Stock Number of Shares |          | Common
    Stock Amount |  | Additional
    Paid-in Capital |            | Accumulated
    Deficit |  | Total
|---------------------------------- |  | --------------------------------------------------------- | ------ | ----------------------------------------------- |  | --------------------------------- | -------- | ----------------------- |  | ------------------------------ | ---------- | ----------------------- |  | -----
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Balance at December 31, 2017       |  |                                                           | 10,434 |                                                 |  | $                                 | 521,700  |                         |  |                                | 63,063,685 |                         |  | $    
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Stock issued for settlement        |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|of accounting services             |  |                                                           | —      |                                                 |  |                                   | —        |                         |  |                                | 2,000,000  |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Issuance of stock options          |  |                                                           | —      |                                                 |  |                                   | —        |                         |  |                                | 1,597,971  |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Par value adjustment to Series     |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|C Convertible
    Perferred Stock* |  |                                                           | —      |                                                 |  |                                   | (521,690 | )                       |  |                                | —          |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Net
    income                     |  |                                                           | —      |                                                 |  |                                   | —        |                         |  |                                | —          |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Balance at December 31, 2018       |  |                                                           | 10,434 |                                                 |  |                                   | 10       |                         |  |                                | 66,661,656 |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Stock issued for services          |  |                                                           | —      |                                                 |  |                                   | —        |                         |  |                                | 4,500,000  |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Sale of warrants                   |  |                                                           | —      |                                                 |  |                                   | —        |                         |  |                                | —          |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Sale of stock                      |  |                                                           | —      |                                                 |  |                                   | —        |                         |  |                                | 500,000    |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Net
    loss                       |  |                                                           | —      |                                                 |  |                                   | —        |                         |  |                                | —          |                         |  |      
|                                   |  |                                                           |        |                                                 |  |                                   |          |                         |  |                                |            |                         |  |      
|Balance at December
    31, 2019   |  |                                                           | 10,434 |                                                 |  | $                                 | 10       |                         |  |                                | 71,661,656 |                         |  | $    





The
accompanying notes are an integral part of these consolidated financial statements





67







ADVANZEON
SOLUTIONS, INC.



CONSOLIDATED
STATEMENTS OF CASH FLOWS

For
the Years Ended December 31, 2019 and 2018





|                                                                                        |  | 2019 |            | 2018
|--------------------------------------------------------------------------------------- |  | ---- | ---------- | ----
|                                                                                        |  |      |            |     
|CASH FLOWS FROM OPERATING
    ACTIVITIES                                                |  |      |            |     
|Net income
    (loss)                                                                   |  | $    | (3,255,814 | )   
|Adjustments to reconcile
    net income (loss) to net cash used in operating activities |  |      |            |     
|Depreciation
    and amortization expense                                               |  |      | 609        |     
|Stock
    issued for settlement of accounting services                                  |  |      | —          |     
|Extinguishment
    of loan due to shareholder and interest                              |  |      | —          |     
|Stock
    issued for services                                                           |  |      | 489,000    |     
|Amortization
    of right of use asset                                                  |  |      | 97,690     |     
|Changes in assets and
    liabilities:                                                  |  |      |            |     
|Accounts
    receivable                                                                 |  |      | (4,879     | )   
|Other
    current assets                                                                |  |      | (470,389   | )   
|Accounts
    payable                                                                    |  |      | (522,191   | )   
|Payments
    on lease liabilities                                                       |  |      | (97,690    | )   
|Contingent
    liability                                                                |  |      | —          |     
|Accrued
    interest-related party                                                      |  |      | —          |     
|Other
    accrued expense                                                               |  |      | 1,277,015  |     
|Net cash used in operating
    activities                                               |  |      | (2,486,649 | )   
|                                                                                        |  |      |            |     
|CASH FLOWS FROM INVESTING
    ACTIVITIES                                                |  |      |            |     
|Purchase
    of property, plant, and equipment                                          |  |      | (1,549     | )   
|Net cash used in investing
    activities                                               |  |      | (1,549     | )   
|                                                                                        |  |      |            |     
|CASH FLOWS FROM FINANCING
    ACTIVITIES                                                |  |      |            |     
|Proceeds
    from promissory notes                                                      |  |      | 2,289,250  |     
|Repayment of notes                                                                      |  |      | (25,000    | )   
|Sale
    of stock                                                                       |  |      | 268,239    |     
|Net cash provided by
    financing activities                                           |  |      | 2,532,489  |     
|                                                                                        |  |      |            |     
|Net increase in cash                                                                    |  |      | 44,291     |     
|                                                                                        |  |      |            |     
|Cash
    - Beginning of Year                                                            |  |      | 25,036     |     
|                                                                                        |  |      |            |     
|CASH
    - END OF YEAR                                                                  |  | $    | 69,327     |     
|                                                                                        |  |      |            |     
|Supplemental disclosures
    of cash flow information:                                  |  |      |            |     
|Cash
    paid during the year for:                                                      |  |      |            |     
|Interest                                                                                |  | $    | —          |     
|Income
    taxes                                                                        |  | $    | —          |     
|                                                                                        |  |      |            |     
|Schedule of non-cash
    inversting transactions                                        |  |      |            |     
|Convertible
    promissory note converted to common stock                               |  | $    | —          |     







The
accompanying notes are an integral part of these consolidated financial statements



68







ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE
1	DESCRIPTION OF THE COMPANY’S BUSINESS AND BASIS OF PRESENTATION

The
consolidated financial statements include the accounts of Advanzeon Solutions, Inc. and its wholly-owned subsidiaries, each with
their respective subsidiaries (collectively referred to herein as, the “Company”, “Advanzeon”, “we”,
“us”, or “our”).

Reclassification- Certain 2018 items have been reclassified to conform with the current year presentation.

NOTE
2	SUMMARY OF SIGNFICANT ACCOUNTING POLICIES

Established
in 1969, Advanzeon Solutions, Inc., (formerly Comprehensive Care Corp.) (“Advanzeon”, “we”, “Parent”,
or the “Company”), through its wholly-owned subsidiary Pharmacy Value Management Solutions, Inc., and its wholly-owned
subsidiaries during 2015, and partly in 2016, provided managed care services by acting as the administrator for certain administrative
service agreements in the behavioral health and substance abuse fields. We primarily offered these services to commercial, Medicare,
Medicaid, Children’s Health Insurance Program (“CHIP”) health plans, as well as self-insured companies. Our
managed care operations consisted solely of servicing administrative service agreements. Starting in July of 2015, we implemented
our comprehensive sleep apnea program, called “SleepMaster Solutions” TM. SleepMaster Solutions (“SMS”)
utilizes an administrative system for the convenient identification/testing and therapy of Obstructive Sleep Apnea (“OSA”).
We partnered with a national health care provider by initiating a sleep apnea wellness program whereby we screened, tested and
when needed, offered treatment programs for treating this disorder. We also contracted with a union to treat its driver members.
Beginning in 2017, our only business was our SMS sleep apnea program.

The
Company has elected to not adopt the option available under United States generally accepted accounting principles (“GAAP”)
to measure any eligible financial instruments or other items at fair market value at this time. Accordingly, the Company measures
all of its assets and liabilities on the historical cost basis of accounting, except as otherwise required by GAAP.

Inter-company
accounts and transactions have been eliminated in consolidation. Certain reclassifications of prior period amounts have been made
to conform to the current year presentation.

Use
of Estimates - The preparation of the consolidated financial statements in conformity with GAAP requires management to make
estimates that affect the reported amounts. Actual results could differ from these estimates. Estimates involved in the determination
of an allowance for doubtful accounts receivable and accrued claims payable, including incurred but not reported, are considered
by management as particularly susceptible to material change in the next year. Other significant estimates relate to stock-based
compensation, valuation of goodwill, warrants and beneficial conversion features.

Accounts
Receivable - Accounts and notes receivable are carried at estimated collectible value. Since customer credit is generally
extended on a short-term basis, accounts receivable does not bear interest and are uncollateralized. We manage credit risk and
determine necessary allowances by evaluating customers’ credit worthiness before extending credit and periodically for collectability,
based primarily on customers’ past credit history and current financial conditions and general economic conditions, results
of prior collection efforts, the relative strength of our relationship therewith and, in the event of a dispute, its legal position
and the estimated cost of proposed collection proceedings. Management has not established a policy for when to charge off uncollectible
accounts receivable or to use external collection agencies and makes such decisions on a case-by-case basis. The maximum losses
that the Company would incur if a customer failed to pay would be limited to the carrying value of the receivable after any related
allowances provided.

Property
and equipment – Property and equipment (Note 4) is stated at cost less accumulated depreciation. Depreciation is computed
using the straight-line method over the estimated useful lives ranging from 2 to 12 years.

Leasehold
Improvements - Leasehold improvement (Note 5) is stated at cost less accumulated amortization. Depreciation and amortization
are amortized over the shorter of the lease term or the asset’s useful life.

Fair
Value Measurements - The carrying amounts of cash, accounts receivable and accounts payable approximate their estimated fair
value due to the short-term nature of these instruments. Since our other financial liabilities are not traded in an open market,
we generally use a present value technique, which is a level 3 input, as defined in GAAP, to measure the estimated fair value
of these financial instruments, except for valuing stock options and warrants (see below). The rate used for discounting expected
cash flows is a risk-free rate adjusted for systematic and unsystematic risk.

The
carrying amounts and estimated fair values of long-term debt at December 31, 2019 and 2018 are as follows:



|                                 |  | 2019                |            | 2018                    
|-------------------------------- |  | ------------------- | ---------- | ------------------------
|                                 |  | Carrying
    Amount |            | Estimated
    Fair Value
|                                 |  |                     |            |                         
|Convertible
    promissory notes |  | $                   | 7,564,173  |                         
|Short term notes payable         |  |                     | 4,788,016  |                         
|Loans
    payable related party  |  |                     | 342,670    |                         
|                                 |  | $                   | 12,694,859 |                         





Revenue
Recognition- In accordance with FASB ASC Topic 606, “Revenue from contracts with customers”, the Company recognizes
revenue when obligations under the terms of a contract with the customer are satisfied. Generally, this occurs upon shipment of
the CPAP to their customer or when the test is performed.

Concentrations- The Company sold products to two customer contracts in 2019 that individually exceeded 10% of the total sales. During the
year ended December 31, 2019, total sales related to these customers were $245,741. Amounts receivable from these customers included
in accounts receivable at December 31, 2019 were $1,995.

69





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Cost
of Revenues - Costs of revenues consist of supplies and operating expense. Supplies are recognized in the period in which
a patient actually receives the supplies.

Right
of Use Assets and Lease Liabilities - During the quarter ended March 31, 2019, the Company implemented Accounting Standards
Update (ASU) 2016-02, Leases. Under the new guidance, a lessee must record a liability for lease payments (referred to as the
lease liability) and an asset for the right to use the leased asset during the lease term (referred to at the right of use asset)
for all leases, regardless of whether they are designated as finance or operating leases. This election requires the lessee to
recognize lease expense on a straight-line basis over the lease term. The right of use assets and corresponding right of use liabilities
have been recorded using the present value of the leases. See Notes 18 and 19 within the financial statement for additional disclosure
on leases.

Legal
Defense Costs - We accrue an estimate of incurred legal defense costs to be incurred in connection with pending disputes and
litigation matters as part of our estimated minimum probable losses (see Note 13).

Income
Taxes - We are subject to the income tax jurisdictions of the U.S. and multiple state tax jurisdictions. However, our provisions
for income taxes for 2019 and 2018 include only state income taxes (see Note 16).

Management
has evaluated our tax positions taken or to be taken on income tax returns that remain subject to examination (i.e., tax years
2017 and thereafter federally), and has concluded that there have been no uncertain tax positions (as defined in GAAP) taken that
require recognition or disclosure in the consolidated financial statements. In the event of any income tax-related interest or
penalties are incurred, they would be included in general and administrative expense.

Stock
Options and Warrants - We grant stock options and warrants (see Note 14) to our non-employee directors, note holders and certain
consultants and clients allowing them to purchase our common stock pursuant to approved terms. The estimated value of the warrants
issued with debt instruments is recorded as a discount on notes payable and amortized as interest expense over the term of the
notes using the effective interest method.

We
use a Black-Scholes valuation model to estimate the fair value of options and warrants on the measurement date and for determining
the allocation of the relative values of debt and warrants. In applying the model, we use level 3 inputs, as defined by GAAP,
consisting of historical data and management judgment to estimate the expected terms of the instruments. Expected volatility is
based on the historical volatility of our traded stock. We do not expect to pay dividends for the period of the expected life
of the instruments, and therefore we assume no expected dividend. The assumed risk-free rates used are based on the U.S. Treasury
yield curve with the same expected terms as those of the equity instruments at the time of grant.



70





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



The
following table lists the assumptions utilized in applying the Black-Scholes valuation model for options and warrants.



|                                            |  | Year
    ended December 31,
|------------------------------------------- |  | ---------------------------
|                                            |  | 2019                       
|                                            |  |                            
|Expected
    volatility                     |  |                            
|Expected life (in years)
    of options     |  |                            
|Expected life (in years)
    of warrants    |  |                            
|Risk-free interest
    rate range, options  |  |                            
|Risk-free interest
    rate range, warrants |  |                            
|Expected dividend yield                     |  |                            



PER
SHARE DATA

For
the periods presented, since losses would produce anti-dilution, no diluted loss per common share is presented.

The
following table sets forth the computation of basic loss per common share:



|                                        |  | Year
    ended December 31,
|--------------------------------------- |  | ---------------------------
|                                        |  | 2019                       
|Numerator:                              |  |                            
|Net
    income (loss)                   |  | $                          
|Denominator:                            |  |                            
|Weighted average common shares          |  |                            
|Basic income (loss) per share           |  |                            
|attributable
    to common stockholders |  | $                          





Recent
Accounting Standards Update – During 2019 and 2018, the Financial Accounting Standards Board (FASB) issued new Accounting
Standards Updates (ASUs) addressing the various accounting and reporting standards. Management has determined based on their review
that the ASUs issued during 2019 and 2018 will have no material effect on the Company’s consolidated financial statements.
As new ASUs are released, management will assess if they are applicable and if they are applicable, their effect will be included
in the notes to the financial statements.



71





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE
3	OTHER CURRENT ASSETS

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



|                                 |  | 2019 |         | 2018
|-------------------------------- |  | ---- | ------- | ----
|                                 |  |      |         |     
|Loans to
    others              |  |      | 42,676  |     
|Security and lease
    deposits  |  |      | 3,500   |     
|Prepaid expenses                 |  |      | 452,953 |     
|Miscellaneous receivable         |  |      | 325,660 |     
|Capitalized
    portion of lease |  |      | 1,808   |     
|                                 |  |      |         |     
|Other
    current asset          |  | $    | 826,597 |     





Loan
to others consist of mostly two consultants.

Prepaid
expenses contain $394,000 worth of stock issued to a consultant for one year of services.

Miscellaneous
receivable for 2019 consists of $24,617 owed to the Company for prepaid accounting fees paid to a previous accounting firm the
Company used and no longer uses. The remaining $301,043 is Legal Settlement (see Note 15)

NOTE
4	PROPERTY AND EQUIPMENT

Property
and equipment, net, consists of the following at December 31, 2019 and 2018:

|                                  |  | 2019 |       | 2018
|--------------------------------- |  | ---- | ----- | ----
|                                  |  |      |       |     
|Property
    and equipment        |  | $    | 1,549 |     
|Less
    accumulated depreciation |  |      | (310  | )   
|Property
    and equipment - net  |  | $    | 1,239 |     





Depreciation
expense for the years ended December 31, 2019 and 2018 is $310 and $0, respectively.

NOTE
5	LEASEHOLD IMPROVEMENTS

Leasehold
improvement, net, consists of the following at December 31, 2019 and 2018:

|                                  |  | 2019 |        | 2018
|--------------------------------- |  | ---- | ------ | ----
|                                  |  |      |        |     
|Leasehold
    improvement         |  | $    | 2,992  |     
|Less
    accumulated amortization |  |      | (2,992 | )   
|Leasehold
    improvement - net   |  | $    | —      |     





Amortization
expense for the years ended December 31, 2019 and 2018 is $299 and $599, respectively.

72





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE
6	RELATED PARTY AND SHAREHOLDER LOANS PAYABLE

The
Company has received financing from Management to the Company as well as from members of our Board of Directors. These individuals
are deemed to be related parties to the Company and their indebtedness must be disclosed separately.

As
of December 31, 2019 and 2018, balances were as follows:

|                                |  | 2019 |         | 2018
|------------------------------- |  | ---- | ------- | ----
|                                |  |      |         |     
|Loans
    payable related party |  | $    | 342,670 |     
|                                |  | $    | 342,670 |     





During
the first quarter of 2018, $910,010 was reclassified from accounts payable to loans payable related party. During the third quarter
of 2018, the Company wrote off the due to shareholder balance and accrued interest totaling $7,771,140 as disclosed in Note 12.

NOTE
7	DEBT

As
of December 31, 2019 and 2018, the balance was as follows:

|                  |  | 2019 |            | 2018
|----------------- |  | ---- | ---------- | ----
|                  |  |      |            |     
|Notes
    payable |  | $    | 12,352,189 |     



Break-out
of debt between the parent company and our subsidiary PVMS is as follows:

|                     |  | 2019 |            | 2018
|-------------------- |  | ---- | ---------- | ----
|                     |  |      |            |     
|Advanzeon
    parent |  | $    | 5,010,016  |     
|PVMS
    subsidiary  |  |      | 7,342,173  |     
|                     |  | $    | 12,352,189 |     





At
PVMS, the sum total of notes issued, and their dollar values were as follows:

|                           |  | 2019 |           | 2018
|-------------------------- |  | ---- | --------- | ----
|                           |  |      |           |     
|Number
    of notes issued |  |      | 51        |     
|                           |  |      |           |     
|Dollar value               |  | $    | 2,289,250 |     





All
notes are short-term in nature, one year maturity date. All debt issued has a stated interest rate of 12% per year.

One
$25,000 convertible promissory note was repaid with interest during the third quarter 2019.



73





ADVANZEON
SOLUTIONS, INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



At
PVMS, the sum total of notes converted to stock year-to-date and their dollar values were as follows:



|                              |  | 2019 |   | 2018
|----------------------------- |  | ---- | - | ----
|                              |  |      |   |     
|Number
    of notes converted |  |      | 0 |     
|                              |  |      |   |     
|Dollar value                  |  | $    | — |     







NOTE
8	COMMON STOCK

During
the year ended December 31, 2019, the Company issued 5,000,000 shares of common stock as follows: On March 21, 2019, the Company
issued 200,000 shares of its common stock to its Securities Exchange Commission counsel, who elected to take common stock in the
Company as partial payment of its legal fees. The total value shares were valued at $0.08 per share on the total value of $16,000.
On October 30, 2019, the Company issued 4,300,000 shares of its common stock as payment for consulting fees. The total value shares
were valued at $0.11 per share on the total value of $473,000.

Additionally,
on March 29, 2019, the Company issued 500,000 shares of its common stock to an existing shareholder and warrant holder, who elected
to exercise his warrants to purchase 500,000 shares of the Company's common stock for $15,000. The warrants were issued during
May of 2017 at $0.03 per share.

During
the year ended December 31, 2018, the Company issued 2,000,000 shares of common stock for a legal settlement. The shares were
issued at a value of $0.12 per share or for a total value of $240,000. In addition, the Company issued 1,597,971 shares for the
conversion of a promissory note of $50,000 and accrued interest of $1,231. The stock was issued at a value of $0.03 per share.
The Company relied on Section 4(a)(2) of the Securities Act of 1933, as amended, as the exemption from registration under the
Act.

NOTE
9	CONTINGENT LIABILITY

Contingent
liability consisted of the following items as of December 31, 2019 and 2018:

(1)
a lawsuit against the Company for $450,000 from the son of a deceased promissory note holder. This matter has been dismissed twice
by the judge but is ongoing due to appeals.

(2)
interest payable to the same person listed in (1) in the amount of $171,247.

(3)
Advanzeon won a decision on a court case against Universal Healthcare. The attorney's fees relating to this matter total $21,412.
This fee will be paid out of the proceeds of the case when collected.



74





ADVANZEON
SOLUTIONS, INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



As
of December 31, 2019 and 2018, the balance of this indebtedness is as follows:



|                          |  | 2019 |         | 2018
|------------------------- |  | ---- | ------- | ----
|                          |  |      |         |     
|Disputed
    note payable |  | $    | 450,000 |     
|Disputed interest payable |  |      | 171,247 |     
|Pending
    attorney fees |  |      | 21,412  |     
|                          |  |      |         |     
|Contingent
    liability  |  | $    | 642,659 |     





NOTE
10	ACCRUED INTEREST-RELATED PARTY

As
of December 31, 2019 and 2018, balances of accrued interest on this indebtedness were as follows:



|                                   |  |   | 2019 |  |  |   | 2018 | 
|---------------------------------- |  | - | ---- |  |  | - | ---- | 
|                                   |  |   |      |  |  |   |      | 
|Accrued
    interest-related party |  | $ | —    |  |  | $ | —    | 





During
the second quarter of 2018, a total of $4,771,140 was written off to extinguishment of loan due to shareholder. The remaining
balance of $246,568 was reclassified as accrued interest payable (non-related party).





NOTE
11	OTHER ACCRUED LIABILITIES

As
of December 31, 2019 and 2018, balances of other accrued liabilities were as follows:



|                                       |  | 2019 |            | 2018
|-------------------------------------- |  | ---- | ---------- | ----
|                                       |  |      |            |     
|Management
    compensation            |  | $    | 8,873,802  |     
|Accrued interest-non-related
    party |  |      | 5,956,368  |     
|Board of Director fees                 |  |      | 1,050,000  |     
|State fees                             |  |      | 2,800      |     
|Payroll tax liabilities                |  |      | —          |     
|Other                                  |  |      | 8,817      |     
|Total
    other accrued liabilities    |  | $    | 15,891,787 |     





75





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





In
2018, other accrued liabilities of $1,053,270 has been reclassified to its proper categories; $696,989 has been reclassified to
accrued interest-non-related party, $196,260 to loan payable related party, $150,000 to accrued board of directors fees, $10,021
was a reversal of the December 31, 2017 year-end accrual of wages, subcontractor fees, and commissions.



NOTE
12	EXTINGUISHMENT OF LOAN DUE TO SHAREHOLDER



During
2018 an expired promissory note and the accrued interest were written off to extinguishment of loan due to shareholder due in
accordance with Florida Law 95.11 (2)(b) on the expiration of debt. The principal amount of $3,000,000 and accrued interest of
$4,771,140 was written off.



NOTE
13	LEGAL PROCEEDINGS

Advanzeon
is a party to litigation in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, Case
No. 12-CA-2570, arising from an alleged breach of a Term Sheet. On March 8, 2017 the Court determined that Advanzeon breached
the Term Sheet and entered a Final Judgment in the amount of $866,052 bearing interest at the statutory rate. In February 2018,
a final judgment awarding attorney’s in the amount of $167,959.72 was entered in favor of the Plaintiff, Katzman. In June
2018, as part of the execution of judgment process, in a motion for proceedings supplementary, pursuant to agreement of the parties
the court entered an order appointing  a special master to review the financial condition of Advanzeon to determine
if the foregoing judgment could be paid and if so from what assets. Advanzeon has objected to paying the Final Judgment amount
and the Parties have been ordered to Mediation to take place in 2020.



The
Company has filed a claim for money it maintains is owed by Universal Health Care Insurance Company. In re: The Receivership of
Universal Health Care Insurance Company. Case number 2013-CA-00358 and Case number 2013-CA-00375 in the Second Judicial Circuit
Court, Leon County, FL. The objection to the claim by the receivership was heard April 4, 2018 and on May 15, 2018 the court entered
an Order awarding Company $139,344.04 and $130,406.06, representing a portion of monies claimed by the Company owed it by Universal.
The Company agrees it is owed the $269,750.10 and filed for a rehearing as to that portion of the Order specific to the additional
monies owed to it. The rehearing was denied. On July 20, 2018 Company filed an appeal with the First District Court of Appeals
with respect the denial by the court.  The Company filed the appeal from the court denial of the additional monies owed
to the Company by Universal Health Care Insurance Company. The additional monies the Company believes are owed to it are in excess
of $900,000, but less than $1,000,000.



76





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS







In
Michael Ross et. al v. Advanzeon Solutions, Inc., Plaintiff is suing the Company for money it claims is owed pursuant to a promissory
note. Plaintiff has not proceeded with any action and may be subject to a motion to dismiss for failure to prosecute. If any further
action is taken by the Plaintiff the Company will file a motion for summary judgment. Case Number 16-CA-005737, Thirteenth Judicial Circuit Court Hillsborough County,
FL. Filed April 7, 2015. This is the third attempt by the Plaintiff on the same note. The prior two actions were dismissed. The
Company will continue to vigorously defend its position.



In
Advanzeon Solutions, Inc. v. Mayer Hoffman et. al., Case Number 16-CA-005737 Filed June 17, 2016 Thirteenth Judicial Circuit Court
Hillsborough County, FL., the Company sued Defendants for damages for breach of audit services contract. The Judge ruled in favor
of Defendants motion for summary judgment, but no judgment was entered. The Company will file for a rehearing of the summary judgment
and or an appeal in the event the Court enters a judgment in favor of Defendants.



In
a matter entitled Pharmacy Value Management Solutions, Inc. vs. Young & Son Tax and Accounting, LLC, Charles Young Sr., Charles
Young Jr. and Jay Jacques, the Company sued for breach of accounting service contract, mandatory injunction, return of documents
and conversion of accounting funds held in the accountants’ trust account. The case is in the initial discovery stage. Case
Number 18-CA-000960 Thirteenth Judicial Circuit, Hillsborough County, FL. Filed March 31, 2018. The Company will aggressively
pursue recovery of monies owed to it.



In
a matter entitled Advanzeon Solutions, Inc. v. Cook Children’s Health Plan and Intervenors Cook Children’s Medical
Center and Cook Children Physician Network, file 4/20/18; the Company filed an action contesting the validity of a final foreign
judgment (Texas) which judgment was filed in the records of Hillsborough County. The Company has objected to collection
activities in Hillsborough County on the judgment based upon the Texas action filed by the Company contesting the judgment.



In
a matter entitled Pharmacy Value Management Solutions, Inc., d/b/a SleepMaster SolutionsTM vs. Kristi Staite filed 5/7/2018
Thirteenth Judicial Circuit, PVMS brought suit against Staite for damages based upon fraud in the non performance of services
Ms. Staite owed to the Company in reference to obtaining insurance qualification. The case is in the beginning stages of response
and discovery. The Company will aggressively pursue recovery of the monies paid to Ms. Staite for services not rendered.



In
a matter entitled Rotech Healthcare, Inc. vs. Pharmacy Value Management Solutions, Inc. case no. 18-CA – 4218 Thirteenth
Judicial Circuit Court – Tampa, the Plaintiff is suing the Company for breach of contract and open account for
money owed in the amount of $160,355 for services and supplies. The Company disputes the charges were not permitted under
the contract and disputes the claimed amounts. Previously, the Company incorrectly reported that the matter had been settled.
In fact, the Company did not execute the draft settlement agreement and the matter remains in litigation. The Company is aggressively
defending against the claims asserted by Plaintiff.



In
the matter Oceans Healthcare, LLC, et al, v. Comprehensive Behavior Care, Inc., et al, 19th JDC No. 59633, Div. D, the Company
is aware of a claim Oceans Healthcare seeks to assert against the Company arising from services rendered by a former subsidiary.
Plaintiff is attempting to serve the Company and the Company disputes the service. The amount at issue is unknown at this time.
In the event the Company is served at a later date, it will aggressively defend against this claim.



77





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS







NOTE
14	EQUITY INSTRUMENTS

Our
Series C preferred stock is currently convertible into common stock at the rate of 316.28 common shares for each share of Series
C preferred, adjustable for any dilutive issuances of common occurring in the future. Series C preferred shares vote with the
common stockholders on an as-converted basis. The shares are nonparticipating except that dividends, when declared by our Board
of Directors on the common stock, must be paid on the Series C stock on an as-converted basis before any dividends are paid on
our common stock. The Series C is also cumulative with respect to dividends on common stock and junior series of preferred stock.
Other significant rights and preferences of the Series C preferred include:

| | • | the
                                         right to vote as a separate class to appoint five directors of the Company, and
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | • | liquidation
                                         preferences, whereby the Series C holders have a claim against our assets senior to the
                                         claim of the holders of our common stock in the event of our liquidation, dissolution
                                         or winding-up (the value of the liquidation preference is $250 per share, or approximately
                                         $2,608,500 at December 31, 2019 and 2018).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We
also have a class of convertible preferred stock, Series D, for which 7,000 shares are authorized and 250 shares were outstanding
at December 31, 2019 and 2018. The shares, which were granted in January 2012, do not vest until the tenth anniversary of the
grant date. Such shares were issued in exchange for the cancellation of 120 previously granted warrants to purchase Series D shares.
Once vested, a Series D preferred share will be convertible at any time into 100,000 shares of common stock, subject to adjustment
in the event of any common stock dividend, split, combination thereof or other similar recapitalization, without additional consideration.
Prior to vesting and thereafter, each Series D convertible preferred share is entitled to all voting, dividend, liquidation and
other rights accorded a share of Series D convertible preferred stock. As to dividends, the Series D stock is noncumulative. If
a dividend is declared on the common stock, each share of Series D stock is entitled to receive a dividend equal to 50% of the
dividend declared for the common stock as if the Series D stock had been converted. Despite their nonvested status, voting rights
of each share nevertheless consist of the right to cast the number of votes equal to those of 500,000 shares of common stock.
Unless otherwise required by applicable law, holders of shares of Series D have the right to vote together with holders of common
stock as a single class on all matters submitted to a vote of our stockholders.

STOCK
INCENTIVE COMPENSATION PLANS

WARRANTS:

To
Purchase Common Stock

During
the year ended December 31, 2019, warrants were issued as parts of financing transactions to consultants and to members of our
Board of Directors.

78





ADVANZEON
SOLUTIONS, INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



The
status of outstanding warrants for the year ended December 31, 2019 is as follows:

|Warrants                            |  | Shares |            | Weighted-Average
    Exercise Price |  | Weighted-Average
    Remaining Contractual Term |      | Aggregate
    Intrinsic Value
|----------------------------------- |  | ------ | ---------- | ----------------------------------- |  | ----------------------------------------------- | ---- | -----------------------------
|                                    |  |        |            |                                     |  |                                                 |      |                              
|Outstanding at January 1,
    2019  |  |        | 32,468,588 |                                     |  |                                                 | 0.20 |                              
|Granted                             |  |        | 17,912,108 |                                     |  |                                                 |      |                              
|Forfeited, expired
    or cancelled |  |        | (620,000   | )                                   |  |                                                 |      |                              
|Exercisable at December 31, 2019    |  |        | 49,760,696 |                                     |  |                                                 | 0.20 |                              





We
recognized no compensation costs during the year ended December 31, 2019 and 2018 due to the issuance of these securities.

OPTIONS:

From
time-to-time, we grant stock options as compensation for services to our employees, non-employee directors and certain consultants
(“grantees”) allowing grantees to purchase our common stock pursuant to stockholder-approved stock option plans. We
currently have one active incentive qualified option plan, 2009 Equity Compensation Plan, that provides for the granting of stock
options, stock appreciation rights, limited stock appreciation rights, restricted preferred stock, and common stock grants to
grantees. Grants issued under the Plans may qualify as incentive stock options (“ISOs”) under Section422A of the Internal
Revenue Code of 1986, as amended. Options for ISOs may be granted for terms of up to ten years. For the 2009 Equity Compensation
Plan, the vesting period is determined by our Compensation and Stock Option Committee. The exercise price for ISOs must equal
or exceed the fair market value of the underlying shares on the date of grant. The Plan also provide for the full vesting of all
outstanding options under certain change of control events. The maximum number of common shares authorized for issuance under
the plan is 50,000,000. We did not issue any options during the year ended December 31, 2019. The information regarding the options
is set forth below.



79





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





|                                              |  | 2019 |            | 2018
|--------------------------------------------- |  | ---- | ---------- | ----
|                                              |  |      |            |     
|Shares available                              |  |      | 50,000,000 |     
|Options outstanding (Directors and employees) |  |      | 3,695,000  |     
|Options exercisable                           |  |      | 3,680,000  |     



In
addition, under our Non-employee Directors’ Stock Option Plan, we are authorized to issue non-qualified stock options to
our non-employee directors for up to 1,000,000 common shares. Each non-qualified stock option is exercisable at a price equal
to the average of the closing bid and asked prices of the common stock in the over-the-counter market for the most recent preceding
day there was a sale of the stock prior to the grant date. Grants of options vest in accordance with vesting schedules established
by our Board of Directors’ Compensation and Stock Option Committee. Upon joining our Board of Directors, directors receive
an initial grant of 25,000 options for common shares. As of December 31, 2019, there were 10,000,000 shares available for option
grants and 2,678,000 options for common shares outstanding under the non-qualified directors’ plan.

A
summary of activity for the year ended December 31, 2019 is as follows:



|Warrants                            |  | Shares |           | Weighted-Average
    Exercise Price |  | Weighted-Average
    Remaining Contractual Term |      | Aggregate
    Intrinsic Value
|----------------------------------- |  | ------ | --------- | ----------------------------------- |  | ----------------------------------------------- | ---- | -----------------------------
|                                    |  |        |           |                                     |  |                                                 |      |                              
|Outstanding at January 1,
    2019  |  |        | 6,407,500 |                                     |  |                                                 | 0.28 |                              
|Granted                             |  |        | —         |                                     |  |                                                 |      |                              
|Forfeited, expired
    or cancelled |  |        | —         |                                     |  |                                                 |      |                              
|Exercisable at December 31, 2019    |  |        | 6,407,500 |                                     |  |                                                 | 0.28 |                              









The
following table summarizes information about options granted and vested during the year ended December 31, 2019.



|                                               |  | 2019 |     | 2018
|---------------------------------------------- |  | ---- | --- | ----
|                                               |  |      |     |     
|Options
    granted                            |  |      | 0   |     
|Weighted-average grant-date
    fair value ($) |  |      | N/A |     
|Options vested                                 |  |      | 0   |     
|Fair value of vested options                   |  |      | N/A |     





During
2019, we granted no options for common shares to employees, non-employee directors and consultants.



80





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





A
summary of common stock options outstanding and exercisable as of December 31, 2019 follows:



|Options
    Outstanding |           | Exercise
    Price Range |  | Weighted-Average
    Exercise Price |      | Weighted-Average
    Remaining Contractual Term |  | Options
    Exercisable |           | Weight-Average
    Exercise Price of Exercisable Options
|----------------------- | --------- | ------------------------ |  | ----------------------------------- | ---- | ----------------------------------------------- |  | ----------------------- | --------- | --------------------------------------------------------
|                        |           |                          |  |                                     |      |                                                 |  |                         |           |                                                         
|                        | 6,407,500 |                          |  |                                     | 0.28 |                                                 |  |                         | 0.25-0.65 |                                                         



NOTE
15	LEGAL SETTLEMENTS

Legal
settlements were as follows:



|                                        |  | 2019 |         | 2018
|--------------------------------------- |  | ---- | ------- | ----
|                                        |  |      |         |     
|Universal
    Healthcare settlement (1) |  | $    | —       |     
|John Hartman settlement
    (1)(2)      |  |      | —       |     
|Rotech settlement (1)                   |  |      | 112,172 |     
|Katzman
    litigation                  |  |      | —       |     
|                                        |  |      |         |     
|Total
    legal settlement              |  | $    | 112,172 |     





(1)
See Note 13 Legal Proceedings

(2)
Of the $70,000 settlement, $29,858 was paid to the Company in April of 2018 and applied to the receivable balance that was recorded
for the settlement.

The
Company is currently pursuing repayment of prior accounting fees paid to a previous accounting firm. The Company has filed a complaint
and recorded a receivable of $24,617 for the fees paid.



NOTE
16	INCOME TAXES

The
Company did not provide for income taxes with respect to differences between financial loss and taxable loss arising from the
timing of when certain transactions are recorded for book purposes versus tax purpose. The Company has not filed federal or state
income tax returns since 2012. The financial statements do not reflect any fines or penalties that may or may result from not
filing the various income returns.



81





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





In
prior years the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition,
no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. For the 2019 tax year
the Company had net operating loss carryforwards of approximately $44,100,000 for tax purposes. The net operating loss carryforwards
prior to 2018 carryforward for 20 years. Realization of the deferred tax benefit related to the carryforward is dependent upon
the Company generating sufficient taxable income in the future, against which the loss can be offset, which is not guaranteed.

Deferred
income taxes reflect the net tax effect of temporary differences between carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes, as well as tax benefits of net operating loss carryforwards.
The significant components of the Company’s deferred tax assets and liabilities relate to the following:



|                                                          |  | 2019 |             | 2018
|--------------------------------------------------------- |  | ---- | ----------- | ----
|                                                          |  |      |             |     
|Net operating
    loss carryfoward                        |  | $    | 44,166,385  |     
|Depreciation                                              |  |      | —           |     
|Net deferred tax assts
    and before valuation allowance |  |      | 44,166,385  |     
|Less:
    Valuation allowance                             |  |      | (44,166,385 | )   
|                                                          |  |      |             |     
|Net
    deferred tax assets                               |  | $    | —           |     





For
financial reporting purposes, the Company has incurred losses in previous years. Based on the available objective evidence, including
the Company’s previous losses, management believes it is more likely than not that the net deferred tax assets will not
be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets as of
December 31, 2019 and 2018.

The
effective income tax rate varied from the statutory Federal tax rate as follows:



|                                   |  | 2019 |     | 2018
|---------------------------------- |  | ---- | --- | ----
|                                   |  |      |     |     
|Federal
    statutory rate         |  |      | 21  | %   
|Effect
    of net operating losses |  |      | (21 | )%  
|Effective
    income tax rate      |  |      | —   | %   





The
company’s effective tax rate is lower than what would be expected if the federal statutory rate were applied to income (loss)
before taxes, primarily due to net operating loss carryforwards.





82





ADVANZEON
SOLUTIONS, INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS







NOTE
17	OPERATING LEASES

We
leased our Tampa corporate office and paid annual rent of $97,860 and $99,485 for the years ended December 31, 2019 and 2018,
respectively. The term of the lease is on a month to month basis. We currently lease approximately 3,133 square feet and pay approximately
$8,229 per month. The lease was renegotiated in 2019 and verbally agreed to have a three-year extension with no rent increase.
We consider the condition of the leased property to be average and adequate for our current needs. In our Tampa office, we maintain
clinical operations, business development, accounting, financial and regulatory reporting and other management information symptoms
information systems, and provider and member service functions. Total lease expense during the year ended December 31, 2019 is
$97,860.

We
leased our Huntington Beach office. The term of the lease is for 1 year beginning April 18, 2018 and ending April 30, 2019 at
a monthly rent of $3,700 per month. The lease has been extended on a month to month basis. We currently pay a monthly rent of
$4,000. We pay the California lease payments on a residential unit that we use as an office for our account managers, sales and
marketing staff. The unit is also used as a temporary residence for one of our national account managers while developing the
West Coast market. We consider the condition of our leased property to be average and adequate for our current needs. Total lease
expense during the year ended December 31, 2019 and 2018 is $47,453 and $14,800, respectively.

We
lease a vehicle for our CEO. The term of the lease is 3 years, beginning July 9, 2018 and ending July 9, 2021. We currently pay
a monthly rate of $893.



NOTE
18	RIGHT OF USE ASSETS

The
Company entered into two leases for office space and one automobile lease prior to the end of the year ended December 31, 2019
that are classified as right of use assets and lease liabilities. The lease for the Company’s office spaces expire in April
2020 and June 2022. The lease for the automobile expires in June 2021. As the implicit interest rate is not readily identifiable
in the leases, the Company calculated the present a value of the leases using the average commercial real estate interest rate
of 5.50% at the commencement of the office leases and the interest of 2.99% for the automobile lease. Applying the commercial
rate, the Company calculated the present value of $361,223 for the office leases and $29,037 for the automobile leasing, that
are being amortized over the life of the leases.

83





ADVANZEON
SOLUTIONS, INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



As
of December 31, 2019 and 2018 , the right of use assets associated with future operating leases are as follows:

|                                                      |  | 2019 |          | 2018
|----------------------------------------------------- |  | ---- | -------- | ----
|Total present value
    of right of use assets        |  |      |          |     
|under
    lease agreements                            |  | $    | 390,260  |     
|                                                      |  |      |          |     
|Amortization
    of right of use assets               |  |      | (129,469 | )   
|                                                      |  |      |          |     
|Total right of
    use assets as of December 31, 2019 |  | $    | 260,791  |     



Total
amortization expense related to the right of use assets under the lease agreements was $97,690 and $31,779 for the years ended
December 31, 2019 and 2018, respectively.

NOTE
19	RIGHT OF USE LEASE LIABILITIES

As
disclosed in Note 17, the Company entered into two leases for office space and automobile for the year ended December 31, 2019
that are classified as right of use assets and lease liabilities.

As
of December 31, 2019 and 2018, the lease liabilities associated with future payments due under the leases are as follows:

|                                                 |  | 2019 |          | 2018
|------------------------------------------------ |  | ---- | -------- | ----
|Total present
    value of future lease payments |  | $    | 390,260  |     
|                                                 |  |      |          |     
|Principal payments
    made as of the year       |  |      |          |     
|ended                                            |  |      | (129,469 | )   
|                                                 |  |      |          |     
|Total right of
    use lease liabilities         |  | $    | 260,791  |     



The
following is a schedule of future minimum lease payments under the right of use lease agreements together with the present value
of the net minimum lease payments as of December 31, 2019:

|Total future
    minimum lease payments                          |  | $ | 278,038 | 
|---------------------------------------------------------------- |  | - | ------- | 
|                                                                 |  |   |         | 
|Less
    present value discount                                  |  |   | 17,247  | 
|                                                                 |  |   |         | 
|Total right of use lease liabilities as of December
    31, 2019 |  |   | 260,791 | 
|                                                                 |  |   |         | 
|Less
    current portion due within one year                     |  |   | 113,911 | 
|                                                                 |  |   |         | 
|Long-term
    right of use liabilities                           |  | $ | 146,880 | 



84





ADVANZEON
SOLUTIONS, INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



Total
maturities of lease liabilities as of December 31, 2019 are as follows:

| |      | Total
    future  |  |                   |         |                      
| | ---- | ----------------- |  | ----------------- | ------- | ---------------------
| |      | minimum
    lease |  | Present
    value |         | Right
    of use     
| |      | payments          |  | discount          |         | lease
    liabilities
| | 2020 |                   |  | $                 | 124,857 |                      
| | 2021 |                   |  |                   | 103,804 |                      
| | 2022 |                   |  |                   | 49,377  |                      
| |      |                   |  | $                 | 278,038 |                      



NOTE
20	OTHER MATTERS

During
the year ended December 31, 2019, we funded our operations from revenues and new debt issuances. We will continue to fund our
operations from these sources until we are able to produce operating revenue sufficient to cover our cost structure. In the event
we are not able to secure such funding, our operations will be adversely affected.

NOTE
21	SUBSEQUENT EVENTS



In
accordance with ASC Topic 855, “Subsequent Events”, the Company evaluated subsequent events through April 9,
2020, the date these financial statements were available to be issued. During their evaluation, the following subsequent events
were identified.

Issuance
of debt and warrants

Subsequent
to the balance sheet date, the Company has issued $182,000 of promissory notes. All of the debt matures in 2021 and has a stated
interest rate of 12% and is unsecured. Concurrent with the issuance of debt, the Company has issued 3,114,000 warrants at an average
exercise price of $0.21. At the time of issuance, all warrants had a three or five year term.

Issuance
of common stock

The
Company has not issued any shares subsequent to December 31, 2019.

Coronavirus
Outbreak

In
early 2020, an outbreak of a novel strain of coronavirus was identified and infections have been found in a number of countries
around the world, including the United States. The coronavirus and its impact on trade including customer demand, travel, employee
productivity, supply chain, and other economic activities has had, and may continue to have, a significant effect on financial
markets and business activity. The extent of the impact of the coronavirus on our operational and financial performance is currently
uncertain and cannot be predicted.



85