MESO NUMISMATICS, INC. - FORM 10-Q

Attached files

file	filename
EX-32.1 - CERTIFICATIONS - MESO NUMISMATICS, INC.	f10q2020ex32-1_mesonumisma.htm
EX-31.2 - CERTIFICATIONS - MESO NUMISMATICS, INC.	f10q2020ex31-2_mesonumisma.htm
EX-31.1 - CERTIFICATIONS - MESO NUMISMATICS, INC.	f10q2020ex31-1_mesonumisma.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: September 30, 2020

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

For the transition period from __________ to __________

Commission File Number: 000-56010

MESO NUMISMATICS, INC.

(Exact name of registrant as specified in its charter)

Nevada

88-0492191

(State or other jurisdiction

of incorporation)

(IRS Employer

Identification No.)

433 Plaza Real Suite 275

Boca Raton, Florida 33432

(Address of principal executive offices)

(800) 889-9509

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller Reporting Company	☒
Emerging growth company	☐

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

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		None		None

As of February 19, 2021, there were 10,869,596 shares outstanding of the registrant’s common stock.

MESO NUMISMATICS, INC.

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019	1
	Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2020 and 2019 (unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Deficit for the Three Months and Nine Months Ended September 30, 2020 and 2019 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	34

Page i

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

MESO NUMISMATICS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2020			2019
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	59,473		$	23,379
Prepaid expenses and other current assets		175,000			-
Total current assets		234,473			23,379
Property and equipment, net		2,400			3,000
Total assets	$	236,873		$	26,379

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	363,975		$	423,209
Convertible notes payable, net		2,470,152			1,274,959
Accrued interest		751,810			537,225
Derivative liability		15,083,745			4,730,990
Total current liabilities		18,669,682			6,966,383

Long term liabilities
Convertible notes payable, net		14,639			54
Notes payable-related parties		7,800			7,800
Notes payable		395,745			324,268
Total liabilities	$	19,087,866		$	7,298,505

Preferred stock, $0.001 par value; 1,000 shares authorized as Series CC; 1,000 shares issued and outstanding for the quarter ended September 30, 2020 and the year ended December 31, 2019, respectively		83,731			83,731
Stockholders' deficit
Preferred stock, $0.001 par value 1,050,000 shares authorized as Series AA; 1,000,000 shares issued and outstanding for the year ended December 31, 2019		-			1,000
Preferred stock, $0.001 par value; 1,000,000 shares authorized as Series BB; 559,815 shares issued and 279,146 shares outstanding for the quarter ended September 30, 2020 and the year ended December 31, 2019, respectively		279			279
Common stock, $0.001 par value; 6,500,000,000 shares authorized; 11,680,806 and 9,562,352 shares issued and 10,078,492 and 7,960,038 shares outstanding for the quarter ended September 30, 2020 and the year ended December 31, 2019, respectively		10,080			7,961
Additional paid in capital		20,423,127			20,524,380
Stock payable		166,795			-
Accumulated deficit		(39,535,005	)		(27,889,477	)
Total stockholders' deficit		(18,934,724	)		(7,355,857	)
Total liabilities and stockholders' deficit	$	236,873		$	26,379

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

Page 1 of 35

MESO NUMISMATICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue	$	12,280		$	6,222		$	52,387		$	25,326
Cost of revenue		10,420			22,039			41,443			52,717
Gross profit		1,860			(15,817	)		10,944			(27,391	)

Operating expenses
Advertising and marketing		72			54,580			154			55,115
Professional fees		32,494			33,892			62,481			157,643
Officer compensation		10,000			15,098			257,336			52,154
Depreciation expense		200			200			600			600
Investor relations		4,180			2,672			8,423			17,167
General and administrative		3,557			2,312			21,418			9,952
Total operating expenses		50,503			108,754			350,412			292,631

Other income (expense)
Interest expense		(549,067	)		(123,316	)		(1,461,616	)		(325,202	)
Loss on conversion of debt		-			(8,099	)		(7,629	)		(10,612	)
Derivative financial instruments		(6,811,021	)		(1,478,954	)		(9,836,815	)		(820,884	)
Net income (loss)	$	(7,408,731	)	$	(1,734,940	)	$	(11,645,528	)	$	(1,476,720	)

Net loss per common share, basic and diluted	$	(0.75	)	$	(0.34	)	$	(1.29	)	$	(0.30	)

Weighted average number of common shares outstanding, basic and diluted		9,930,786			5,083,542			9,005,129			4,971,232

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

Page 2 of 35

MESO NUMISMATICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

For the Nine Months Ended September 30, 2020

(Unaudited)

	Series CC Preferred Stock				Series AA Preferred Stock						Series BB Preferred Stock				Common Stock				Additional Paid In			Stock		Accumulated
	Shares		Amount		Shares			Amount			Shares		Amount		Shares		Amount		Capital			Payable		Deficit			Total
Balance, December 31, 2019		1,000	$	83,731		1,000,0000		$	1,000			279,146	$	279		7,960,038	$	7,961	$	20,524,380		$	-	$	(27,889,477	)	$	(7,355,857	)
Conversion of convertible debt		-		-		-			-			-		-		2,118,454		2,119		7,876			-		-			9,995
Repurchase of Preferred Series AA		-		-		(1,000,000	)		(1,000	)		-		-		-		-		(159,000	)		-		-			(160,000	)
Granted of Preferred Series AA for service		-		-		-			-			-		-		-		-		-			166,795		-			166,795
Imputed interest on debt		-		-		-			-			-		-		-		-		25,782			-		-			25,782
Loss on conversion of debt		-		-		-			-			-		-		-		-		7,629			-		-			7,629
Derivative settlement		-		-		-			-			-		-		-		-		16,460			-		-			16,460
Net loss		-		-		-			-			-		-				-		-			-		(11,645,528	)		(11,645,528	)
Balance, September 30, 2020		1,000	$	83,731		-		$	-			279,146	$	279		10,078,492	$	10,080	$	20,423,127		$	166,795	$	(39,535,005	)	$	(18,934,724	)

For the Three Months Ended September 30, 2020

(Unaudited)

	Series CC Preferred Stock				Series AA Preferred Stock				Series BB Preferred Stock				Common Stock				Additional Paid In		Stock		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Payable		Deficit			Total
Balance, July 1, 2020		1,000	$	83,731		-	$	-		279,146	$	279		9,172,563	$	9,174	$	20,405,066	$	166,195	$	(32,126,274	)	$	(11,544,960	)
Conversion of convertible debt		-		-		-		-		-		-		905,929		906		3,216		-		-			4,122
Imputed interest on debt		-		-		-		-		-		-		-		-		8,657		-		-			8,657
Derivative settlement		-		-		-		-		-		-		-		-		6,188		-		-			6,188
Net loss		-		-		-		-		-		-				-		-		-		(7,408,731	)		(7,408,731	)
Balance, September 30, 2020		1,000	$	83,731		-	$	-		279,146	$	279		10,078,492	$	10,080	$	20,423,127	$	166,795	$	(39,535,005	)	$	(18,934,724	)

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

Page 3 of 35

MESO NUMISMATICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

For the Nine Months Ended September 30, 2019

(Unaudited)

	Series CC Preferred Stock				Series AA Preferred Stock				Series BB Preferred Stock						Common Stock				Additional Paid In			Stock		Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount			Shares		Amount		Capital			Payable		Deficit			Total
Balance, December 31, 2018		-	$	-		1,000,0000	$	1,000		444,135		$	444			4,901,024	$	4,900	$	20,835,425		$	-	$	(25,380,333	)	$	(4,538,564	)
Conversion of convertible debt		-		-		-		-		-			-			400,731		401		12,042			-		-			12,443
Conversion of Preferred Series BB		-		-		-		-		(3,010	)		(3	)		34,422		35		(32	)		-		-			-
Loss on conversion of debt		-		-		-		-		-			-			-		-		10,612			-		-			10,612
Derivative settlement		-		-		-		-		-			-			-		-		15,492								15,492
Net loss		-		-		-		-		-			-					-		-			-		(1,476,720	)		(1,476,720	)
Balance, September 30, 2019		-	$	-		1,000,000	$	1,000		441,125		$	441			5,336,177	$	5,336	$	20,873,539		$	-	$	(26,857,053	)	$	(5,976,737	)

For the Three Months Ended September 30, 2019

(Unaudited)

	Series CC Preferred Stock				Series AA Preferred Stock				Series BB Preferred Stock				Common Stock				Additional Paid In		Stock		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Payable		Deficit			Total
Balance, July 1, 2018		-	$	-		1,000,0000	$	1,000		441,125	$	441		4,935,446	$	4,935	$	20,837,906	$	-	$	(25,122,113	)	$	(4,277,831	)
Conversion of convertible debt		-		-		-		-		-		-		400,731		401		12,042		-		-			12,443
Loss on conversion of debt		-		-		-		-		-		-		-		-		8,099		-		-			8,099
Derivative settlement																		15,492							15,492
Net loss		-		-		-		-		-		-				-		-		-		(1,734,940	)		(1,734,940	)
Balance, September 30, 2019		-	$	-		1,000,000	$	1,000		441,125	$	441		5,336,177	$	5,336	$	20,873,539	$	-	$	(26,857,053	)	$	(5,976,737	)

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

Page 4 of 35

MESO NUMISMATICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended September 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss	$	(11,645,528	)	$	(1,476,720	)
Non-cash adjustments to reconcile net loss to net cash:
Amortization of debt discount		1,217,759			257,916
Depreciation and amortization expense		600			600
Change in derivative liabilities		9,836,815			820,884
Preferred shares issued for services		166,795			-
Loss on conversion of debt		7,629			10,612
Imputed interest on debt		25,782			-
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		164,342			72,833
CASH USED BY OPERATING ACTIVITIES		(225,806	)		(313,875	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for deposit on acquisition		(175,000	)		-
CASH USED BY INVESTING ACTIVITIES		(175,000	)		-

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of debt		596,900			283,069
Repurchase of preferred stock		(160,000	)		-
CASH PROVIDED BY FINANCING ACTIVITIES		436,900			283,069
Net decrease in cash		36,094			(30,806	)
Cash, beginning of year		23,379			30,834

Cash, end of year	$	59,473		$	28

NON-CASH FINANCING ACTIVITIES:
Discount issued on convertible debt	$	532,400		$	297,850
Settlement of derivative discounts	$	16,460		$	15,492
Conversion of convertible debt	$	9,995		$	-
Conversion of preferred stock to common stock	$	-		$	34
Debt settlement with stock	$	-		$	12,443

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

Page 5 of 35

MESO NUMISMATICS, INC.

NOTES TO CONSOLDIATED FINANCIAL STATEMENTS

September 30, 2020

(Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Nature of Business

Meso Numismatics, Inc. (the “Company”) was originally organized under the laws of Washington State in 1999, as Spectrum Ventures, LLC to develop market and sell VOIP (Voice over Internet Protocol) services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc.

On November 16, 2016, the Company entered into an Agreement and Plan of Merger between the Company and Meso Numismatics Corp. (“Meso”). The acquisition of Meso is to support the Company’s overall mission of specializing in ventures related to Central America and the Latin countries of the Caribbean; not limited to tourism. Meso is a small but scalable numismatics operation that the Company can leverage for low cost revenues and product marketing.

Meso Numismatics maintains an online store with eBay (www.mesocoins.com) and participates in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions and Lyn Knight Auctions.

The acquisition was complete on August 4, 2017 following the Company issuance of 25,000 shares of Series BB preferred stock to Meso to acquire one hundred (100%) percent of Meso’s common stock. The Company accounted for the acquisition as common control, as Melvin Pereira, the CEO and principal shareholder of the Company controlled, operated and owned both companies. On November 16, 2016, the date of the Merger Agreement and June 30, 2017, the date of the Debt Settlement Agreement, Melvin Pereira, CEO of Pure Hospitality Solutions, owned 100% of the stock of Meso Numismatics. Pure Hospitality Solutions, Inc. and Meso Numismatics first came under common control on June 30, 2017.

On September 4, 2017, the Company decided to suspend its booking operations, Oveedia, to focus on continuing to build its numismatic business, Meso Numismatics. The Company did, however, use its footprint within the Latin American region to expand Meso Numismatics at a much quicker rate.

In September 2018, the Company changed its name to Meso Numismatics, Inc. and FINRA provided a market effective date and on September 26, 2018, the new ticker symbol MSSV became effective on October 16, 2018.

On July 2, 2018, the Board of Directors authorized and shareholders approved a 1-for-1,000 reverse stock split of its issued and outstanding shares of common stock held by the holders of record. The prior year financials have been changed to reflect the 1-for-1,000 reverse stock split.

On November 27, 2019, Meso Numismatics Inc. entered into an Assignment and Assumption Agreement with Lans Holdings Inc., whereby Lans Holdings Inc. assigned all of its rights to, obligations and interest in a Binding Letter of Intent entered into on May 23, 2019 with Global Stem Cells Group Inc. and Benito Nova, setting forth the principal terms pursuant to which the Company will acquire 50,000,000 shares of common stock of Global Stem Cells Group Inc.

Page 6 of 35

In consideration for the Assignment, Meso Numismatics Inc. shall:

	●	Assume certain Convertible Redeemable Notes issued by Lans Holdings Inc. to a lender, pursuant to the Assignment and Assumption Agreement and subject to any pre-existing defaults under the Notes, Meso Numismatics Inc. reissued an aggregate of $1,079,626 of Convertible Redeemable Notes to the lender which bear interest at a rate varying from ten (10%) to fifteen (15%) percent, and have a one (1) year maturity date.

●

Issue to Lans Holdings Inc. 1,000 shares of its Series CC Convertible Preferred Stock valued at $83,731 calculated based on conversion provision of the Company’s Articles of Incorporation filed with the Secretary of State in Nevada on November 26, 2019. Shareholders of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

The consideration for the assignment of $1,163,357, consisting of an aggregate of $1,079,626 of Convertible Redeemable Notes assumed from Lans Holdings Inc and. 1,000 shares of its Series CC Convertible Preferred Stock valued at $83,731 issued to Lans Holdings Inc was recorded as compensation expense.

On November 27, 2019, and in connection with the execution of the Assignment, the Company’s Board of Directors appointed Mr. David Christensen, former director and CEO of LAHO, to serve as director and president of the Company.

On December 23, 2019, Meso Numismatics Inc. entered into the Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., whereby the Original Agreement is amended to extend the deadline to enter into the New LOI to 120 days from the execution of the Post Closing Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 120 days from the execution of the Post Closing Amendment.

On April 22, 2020, Meso Numismatics Inc. entered into a Second Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., which Assignment was first amended pursuant to the Post Closing Amendment to the Assignment and Assumption Agreement entered into on December 23, 2019. The Original Agreement is amended to extend the deadline to enter into the New LOI to 150 days from the execution of the Second Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 150 days from the execution of the Second Amendment.

On June 25, 2020, Mr. Martin Chuah submitted his resignation as Director of the Company, effective June 26, 2020. There are no disagreements between Mr. Chuah and Meso Numismatics Inc. on any matter relating to its operations, policies or practices.

On June 26, 2020, Meso Numismatics Inc. completed the repurchase of 1,000,000 shares of its Series AA (“Series AA”) Super Voting Preferred Stock, representing all of the Series AA shares held by E-Network de Costa Rica S.A. and S&M Chuah Enterprises Ltd., respectively.

On June 26, 2020, Mr. Melvin Pereira submitted his resignation as Chief Executive Officer, Chief Financial Officer, Secretary and Director of Meso Numismatics Inc., effective June 26, 2020. There are no disagreements between Mr. Pereira and Meso Numismatics Inc. on any matter relating to its operations, policies or practices.

On June 26, 2020, due to Mr. Pereira’s resignation, Meso Numismatics Inc.’s Board of Directors appointed Mr. David Christensen, current Director and President of the Company, to serve as Chief Executive Officer, Chief Financial Officer and Secretary, effective June 27, 2020 and granted 50,000 shares of Series AA to Mr. David Christensen.

Page 7 of 35

On September 16, 2020, Meso Numismatics Inc. entered into a Third Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., which Assignment was first amended pursuant to the Post Closing Amendment to the Assignment and Assumption Agreement entered into on December 23, 2019. The Original Agreement is amended to extend the deadline to enter into the New LOI to 180 days from the execution of the Third Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 180 days from the execution of the Third Amendment.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The audited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Pure Hospitality Solutions, Inc. and Meso Numismatics Corp. All intercompany transactions have been eliminated.

Use of Estimates in Financial Statement Presentation

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts for the prior year have been revised or reclassified to conform to the current year presentation.

On September 26, 2018, a 1:1000 reverse stock split was approved by the Financial Industry Regulatory Authority (“FINRA”) for shareholders of record as of September 26, 2018. All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split, including the financial statements and notes thereto.

Cash and Cash Equivalents

The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents. At September 30, 2020 and December 31, 2019, all of the Company’s cash was deposited in major banking institutions. There were no cash equivalents as of September 30, 2020 and December 31, 2019.

Inventory

The Company’s inventory is comprised of roughly 50% coins and medals and 50% paper money. The Company has a meticulous process for the acquisition and sales process for each coin item. The Company specializes in coins from the Meso region, but also acquires coins and medals from elsewhere around the world

As of September 30, 2020, the Company is working on an inventory tracking system by serial number. Until such time as an inventory tracking system exists, the inventory costs cannot be properly confirmed and written-off to cost of revenue.

Derivative Instruments

The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Binomial option pricing model to value the derivative instruments.

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sale of products by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

Page 8 of 35

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the period ended September 30 2020 and December 31, 2019.

The Company’s revenue stream is acquiring rare coins and banknotes from Latin America at reduced costs, which it then sends to Numismatic Guaranty Corporation and Paper Money Guaranty for authentication and grading. Once graded, the inventory is transferred to Meso’s Florida-based location and then sent around the world to the Company’s many customers, with sales recorded net of fees. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company receives in exchange for those products.

Income Taxes

The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities, given the provisions of currently enacted tax laws.

The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of the tax uncertainty occurs if the recognition threshold has been met.

Net Earnings (Losses) Per Common Share

The Company computes earnings (loss) per share by dividing net earnings (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the year. Dilutive common stock equivalents may consist of shares issuable upon conversion of convertible preferred shares and convertible notes payable (calculated using the treasury stock method). Common stock issuable is considered outstanding as of the original approval date for purposes of earnings per share computations. As of September 30, 2020 the conversion of convertible notes would result in an additional 455,297,705 shares of common stock.

Fair Value of Financial Instruments

The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies is as follows:

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

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Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

At September 30, 2020 and December 31, 2019, the carrying amounts of the Company’s financial instruments, including cash, account payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.

At September 30, 2020 and December 31, 2019, the Company does not have any assets or liabilities except for derivative liabilities and convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.

The following presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on non-recurring basis as of September 30, 2020 and December 31, 2019:

	Level 1		Level 2		Level 3		Total
September 30, 2020
Convertible Notes Payable, net of discount	$	-	$	2,484,791	$	-	$	2,484,791
Derivative Liability		-		-		15,083,745		15,083,745
Total	$	-	$	2,484,791	$	15,083,745	$	17,568,536

December 31, 2019
Convertible Notes Payable, net of discount	$	-	$	1,275,013	$	-	$	1,275,013
Derivative Liability		-		-		4,730,990		4,730,990
Total	$	-	$	1,275,013	$	4,730,990	$	6,006,003

Comprehensive Income

The Company records comprehensive income as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. As of September 30, 2020 and December 31, 2019, the Company had no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

Stock Based Compensation

Stock based compensation costs are measured at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The Company determines the fair value of awards using the Black - Scholes valuation model.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. The Company follows paragraph 606 of the FASB Accounting Standards Codification for revenue recognition and ASU 2014-09, adopting the pronouncements on January 1, 2018. The company considers revenue realized or realizable and earned when the products are delivered. Since the Company was already recognizing revenue in a manner consistent with paragraph 606 of the FASB Accounting Standards Codification, there was no material impact on prior year results.

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In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has no physical office space only a month to month online virtual office lease that doesn’t required implementation of ASU 842 in the year ended December 31, 2019 to assets and liabilities.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The Company has adopted ASU 2018-07 in the first quarter of 2019. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income (loss). The ASU is effective for public entities for fiscal years beginning after December 15, 2019. The Company has not historically had any transfers between Level 1 and Level 2 or assets or liabilities measured at fair value under Level 3. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements

Going Concern

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $39,535,005 and negative working capital of $18,435,209 as of September 30, 2020 and future losses are anticipated. These factors, among others, generally tend to raise substantial doubt as to its ability to obtain additional long-term debt or equity financing in order to have the necessary resources to further design, develop and launch the website and market the Company’s new service.

In order to continue as a going concern, the Company needs to develop a reliable source of revenues, and achieve a profitable level of operations in the future and/or to obtain the necessary financing to meet its obligations arising from normal business operations when they come due.

To fund basic operations for the next twelve months, the Company projects a need for $750,000 that will have to be raised through debt or equity. In addition to the estimated $300,000 for operating expenses the Company is budgeting $180,000 for advertising and marketing and $90,000 for new technology. To attract more customers to Meso Numismatics, the Company plans on hiring an advertising firm and placing more ads on sites such as NGC and PMG. Along with the advertising program the Company plans on investing in upgrading and expanding the Meso App. To continue expanding sales the Company plans to invest $90,000 to acquire additional inventory along with exploring possible acquisitions, which the Company estimates it will need approximately $100,000.

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Accordingly, the audited financial statements are accounted for as if the Company is a going concern and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or other adjustments that might be necessary should be Company be unable to continue as a going concern.

NOTE 3 – REVENUE RECOGNITION

On January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”), the Company recognizes revenue from the sales of products, by applying the following steps:

(1)

Identify the contract with a customer

(2)

Identify the performance obligations in the contract

(3)

Determine the transaction price

(4)

Allocate the transaction price to each performance obligation in the contract

(5)

Recognize revenue when each performance obligation is satisfied

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the period ended September 30, 2020 and December 31, 2019.

The Company’s only revenue stream is acquiring rare coins and banknotes from Latin America at reduced costs, which it then sends to Numismatic Guaranty Corporation and Paper Money Guaranty for authentication and grading. Once graded, the inventory is transferred to Meso’s Florida-based location and then sent around the world to the Company’s many customers, with sales recorded net of fees. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company receives in exchange for those products.

NOTE 4 – NOTES PAYABLE

Convertible Notes Payable

During 2015, the Company entered into Convertible Debentures with Digital Arts Media Network and Ajene Watson, LLC. The promissory note agreements bear interest from eight (8%) percent to ten (10%) and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the investors’ sole discretion, into shares of common stock at variable conversion prices. As of September 30, 2020 and December 31, 2019, Digital Arts Media Network and Ajene Watson, LLC had an outstanding balance of $148,247.

From 2016 to 2018, the Company entered into several Convertible Debentures with a lender which bear interest at eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the leaders’ sole discretion, into shares of common stock at variable conversion prices. The lender had an outstanding balance at September 30, 2020 and December 31, 2019 of $848,212.

During 2019, the Company entered into an aggregate of $387,980 Convertible Debentures with two lenders which bear interest from eight (8%) percent to fifteen (15%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. During 2019, the two lenders had advanced a total of $354,870, net of discount and attorney fees, in the amount of $33,110 to the Company.

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On November 25, 2019, Meso Numismatics Inc. pursuant to the certificate of designation of the Series BB, elected to exchange the preferred shares for other indebtedness calculated at a price per share equal to $1.20. Upon the Company’s mailing of the Exchange Agreement, the shareholder shall have the option, within 30 days of such mailing date and subject to the execution of this Agreement to receive the Indebtedness in the form of a convertible note. Should the shareholder not give the Meso Numismatics Inc. notice the Indebtedness shall automatically be issued in the form of a promissory note.

The convertible note agreements bear no interest and have a four (4) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the investors’ sole discretion, into shares of common stock at conversion price equal to the lowest bid price of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange for the three prior trading days including the day upon which a Notice of Conversion is received by the Company. As of September 30, 2020 and December 31, 2019, 81,043 Preferred Series BB shares were exchange for an aggregate of $97,252 convertible notes of which 78,620 were cancelled and 2,423 are still outstanding

Pursuant to the Assignment and Assumption Agreement and subject to any pre-existing defaults under the Notes, Meso Numismatics Inc. reissued the below Notes to a lender upon the following terms:

Original Date of Note	Note Date	Maturity Date	Principal Face Amount of Note		Interest Rate
12/12/2016	11/27/2019	11/27/2020	$	239,196.00		10	%
12/15/2016	11/27/2019	11/27/2020		291,930.00		12	%
5/16/2019	11/27/2019	11/27/2020		83,000.00		15	%
6/28/2019	11/27/2019	11/27/2020		191,000.00		15	%
7/15/2019	11/27/2019	11/27/2020		84,500.00		15	%
8/2/2019	11/27/2019	11/27/2020		98,000.00		15	%
9/17/2019	11/27/2019	11/27/2020		92,000.00		15	%
			$	1,079,626.00

During the period ended March 31, 2020 and December 31, 2019, the lender converted $4,676 of principal into common stock resulting into a balance of $1,074,950 at September 30, 2020.

From January 28, 2020 to March 30, 2020, the Company entered into an aggregate of $58,410 of Convertible Debentures with a lender which bear interest of eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $52,600, net of discount and attorney fees, in the amount of $5,810 to the Company.

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From April 30, 2020 to June 24, 2020, the Company entered into an aggregate of $109,020 of Convertible Debentures with a lender which bear interest at eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $93,300, net of discount in the amount of $15,720 to the Company.

From May 4, 2020 to June 1, 2020, the Company entered into an aggregate of $146,200 of Convertible Debentures with a lender which bear interest at fifteen (15%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $132,000, net of discount in the amount of $14,200 to the Company.

On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041: a loss of $3,378 was recorded.

On June 25, 2020, the Company entered into a Convertible Debentures with a lender in the amount of $60,000 which bear interest at fifteen (15%) percent and have a one (1) year maturity date. The note may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory note. The note is convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $54,000, net of discount in the amount of $6,000 to the Company.

On July 15, 2020, the Company issued 905,929 shares of common stock in conversion of $4,122 convertible notes payable at conversion price of $0.00455: no loss was recorded.

On July 17, 2020, the Company entered into a Convertible Debentures with a lender in the amount of $238,095 which bear interest at eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $195,000, net of discount in the amount of $43,095 to the Company.

These debentures are convertible, at the investors’ sole option, into common shares at the following terms:

	●	a 50 percent discount to the lowest closing bid price during the 10 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange

	●	a 50 percent discount to the average of the lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP;

	●	a 50 percent discount to the lowest closing bid price during the 25 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange

	●	a 40 percent discount to the average of the three lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP; or

●

either (i) a 40 percent discount to the 10 days average daily trading price immediately preceding the conversion date, or (ii) at a fixed conversion price of $0.001 per share during any time whereby the current day market price is at or less than $0.075.

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The balance of outstanding convertible notes as of September 30, 2020 and December 31, 2019 is as follows:

	September 30, 2020		December 31, 2019
Convertible notes payable	$	3,168,366	$	2,563,145
Less: Discount		683,575		1,288,132
Convertible notes payable, net	$	2,484,791	$	1,275,013

During the periods ending September 30, 2020 and December 31, 2019 the Company received $526,900 and $387,980, respectively, from funding on new convertible notes.

During 2019, the Company assumed an aggregate of $1,079,626 certain Convertible Redeemable Notes issued by Lans Holdings Inc. to lenders pursuant to the Assignment and Assumption Agreement and, pursuant to the company’s exchange of debt for Series BB Preferred Stock, exchanged 78,620 shares of the Company’s Series BB preferred stock for an aggregate of $97,252 in Convertible Notes.

During the periods ending September 30, 2020 and 2019, the Company incurred $7,629 and $2,513 losses on the conversion of convertible notes, respectively. In connection with the convertible notes, the Company recorded $232,010 and $42,109, respectively of interest expense and $1,216,282 and $159,778, respectively of debt discount amortization expense. As of September 30, 2020 and December 31, 2019, the Company had approximately $748,620 and $537,225, respectively of accrued interest.

During the periods ending September 30, 2020 and December 31, 2019, the Company made no payments on the outstanding convertible notes, and converted $9,995 and $30,251, respectively, of principal and interest into 2,118,454 and 1,893,595 shares of common stock. As of September 30, 2020 and December 31, 2019, the principal balance of outstanding convertible notes payable was $3,168,366 and $2,563,145, respectively.

Promissory Notes Payable

The promissory note agreements bear no interest and have a four (4) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. As of December 31, 2019, 270,223 Preferred Series BB shares were exchange for an aggregate of $324,268 promissory notes.

On December 3, 2019, Melvin Pereira, the CEO, converted 18,500 shares of the 25,000 shares of Series BB preferred stock to acquire one hundred (100%) percent of Meso’s common stock into 250,999 shares of the Company’s common stock and elected to exchange the remaining 6,500 shares of Series BB preferred stock for a promissory note of $7,800.

On July 15, 2020, the Company entered into a Promissory Debentures with a lender in the amount of $84,000 which bear interest at eighteen (18%) percent and have a two (2) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. The lender had advanced a total of $70,000, net of discount in the amount of $14,000 to the Company.

During the periods ending September 30, 2020 and 2019, the Company made no payments on the outstanding promissory notes, and recorded $3,190 and $0.00, respectively of interest expense and $1,477 and $0.00, respectively of debt discount amortization expense. As of September 30, 2020 and December 31, 2019, the Company had approximately $3,190 and $0.00, respectively of accrued interest. As of September 30, 2020 and December 31, 2019, the principal balance of outstanding promissory notes payable was $403,545 and $332,068, respectively.

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Derivatives Liabilities

The Company determined that the convertible notes outstanding as of September 30, 2020 and December 31, 2019 contained an embedded derivative instrument as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40.

The Company determined the fair values of the embedded convertible notes derivatives and tainted convertible notes using the lattice valuation model with the following assumptions:

	September 30,			December 31,
	2020			2019
Common stock issuable		455,297,705			266,447,568
Market value of common stock on measurement date	$	0.0340		$	0.0196
Adjusted exercise price	$	0.00005-$0.0074		$	0.00005-$0.0187
Risk free interest rate		0.23	%		1.60	%
Instrument lives in years		1.00	Year		1.00	Years
Expected volatility		508	%		575	%
Expected dividend yields		None			None

The balance of the fair value of the derivative liability as of September 30, 2020 and December 31, 2019 is as follows:

Balance at December 31, 2018	$	2,938,317
Additions		1,541,248
Fair value loss		295,863
Conversions		(44,438	)
Balance at December 31, 2019		4,730,990
Additions		532,400
Fair value loss		9,836,815
Conversions		(16,460	)
Balance at September 30, 2020	$	15,083,745

NOTE 5 – CONVERTIBLE PREFERRED STOCK

Designation of Series CC Convertible Preferred Stock

On November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing one thousand (1,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series CC Convertible Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

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At any time prior to November 25, 2022 (“Automatic Conversion Date”) the Company may redeem for cash out of funds legally available therefor, any or all of the outstanding Series CC Convertible Preferred Stock at a price equal to $1,000 per share. If not converted prior, on the Automatic Conversion Date, any and all remaining issued and outstanding shares of Series CC Convertible Preferred Stock shall automatically convert at the Conversion Price, which is a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

Each holder of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert prior to the Automatic Conversion Date, convert part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

The holders of the Series CC Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

The holders of the Series CC Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.

On November 27, 2019, Meso Numismatics Inc. entered into an Assignment and Assumption Agreement with Global Stem Cells Group Inc., a corporation duly formed under the laws of the State of Florida, Benito Novas and Lans Holdings Inc. a Nevada Corporation whose securities ceased to be registered as of September 18, 2019, whereby LAHO assigned all of its rights, obligations and interest in, the Letter of Intent it previously entered into with Global Stem Cells Group Inc. and Benito Novas.

In consideration for the Assignment, Meso Numismatics Inc. issued to Lans Holdings Inc. 1,000 shares of its Series CC Convertible Preferred Stock valued at $83,731 calculated based on conversion provision of the Company’s Articles of Incorporation filed with the Secretary of State in Nevada on November 26, 2019. Shareholders of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

The Convertible Series CC Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional obligation that the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation is based on a fixed monetary amount known at inception. The Company has recorded $83,731 which represents 1,000 Series CC Convertible Preferred Stock at $83.73 per share, issued and outstanding as of September 30, 2020 and December 31, 2019, outside of permanent equity and liabilities.

NOTE 6 – STOCKHOLDERS EQUITY

Common Shares

The Board of Directors was required to increase the number of authorized shares of common stock from (a) 200,000,000 to 500,000,000 during June 2015, (b) 500,000,000 to 1,500,000,000 during July 2015, and (c) 1,500,000,000 to 6,500,000,000 during March 2016, to adhere to the Company’s contractual obligation to maintain the required reserve share amount for debtholders.

On July 2, 2018, the Board of Directors authorized and shareholders approved a 1 for 1,000 reverse stock splits of its issued and outstanding shares of common stock held by the holders of record, June 30, 2018. The below transactions have been changed to reflect the 1 for 1,000 reverse stock split.

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2019 Transactions

On April 22, 2019, 3,010 shares of the Company’s Series BB preferred stock were converted to 34,422 shares of the Company’s common stock. The shares were converted within the terms of their original issue terms or agreement; therefore a gain or loss was not recorded.

On August 27, 2019, the Company issued 400,731 shares of common stock in conversion of $12,443 convertible notes payable at conversion price of $0.03105: a loss of $8,099 was recorded.

On October 23, 2019, the Company issued 478,481 shares of common stock in conversion of $5,287 convertible notes payable at conversion price of $0.01105: a loss of $1,882 was recorded.

On December 2, 2019, the Company issued 299,000 shares of common stock in conversion of $2,093 convertible notes payable at conversion price of $0.007: a loss of $1,950 was recorded.

On December 3, 2019, an aggregate of 83,359 shares of the Company’s Series BB preferred stock were converted to 1,130,997 shares of the Company’s common stock. The shares were converted within the terms of their original issue terms or agreement; therefore a gain or loss was not recorded.

On December 10, 2019, the Company issued 715,383 shares of common stock in conversion of $5,723 convertible notes payable at conversion price of $0.008: a loss of $1,262 was recorded.

The above debt conversions resulted in a total loss on conversions of $13,193, included under additional paid in capital.

2020 Transactions

On January 8, 2020, the Company issued 410,000 shares of common stock in conversion of $2,583 convertible notes payable at conversion price of $0.0063: a loss of $4,251 was recorded.

On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041: a loss of $3,378 was recorded.

On July 15, 2020, the Company issued 905,929 shares of common stock in conversion of $4,122 convertible notes payable at conversion price of $0.00455: no loss was recorded.

As of September 30, 2020 and December 31, 2019, the Company has 10,078,492 and 7,960,038 common shares issued and outstanding, respectively.

Designation of Series AA Super Voting Preferred Stock

On June 30, 2014, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing the issuance of up to eleven million (11,000,000) of preferred stock, par value $0.001 per share.

On May 2, 2014, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series AA Super Voting Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

Each holder of outstanding shares of Series AA Super Voting Preferred Stock shall be entitled to ten thousand (10,000) votes for each share of Series AA Super Voting Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company.

The holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

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Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

The shares of the Series AA Super Voting Preferred Stock will not be convertible into the shares of the Company’s common stock.

During 2014, the Company and S & M Chuah Enterprises Ltd, agreed to an exchange of 900,000,000 common shares previously issued to S & M Chuah Enterprises Ltd, entity controlled by Ken Chua, CEO & board member for 500,000 shares of Series AA Preferred Stock of the Corporation, par value $0.001 per share. The 900,000,000 common shares were returned to the Company’s transfer agent for cancellation. The shares were valued on the date of the agreement using the par value of $0.001, since the shares were non-convertible, non-tradable super voting only.

During 2014, the Company and E-Network de Costa Rica S.A., entity controlled by Melvin Pereira mutually agreed upon amount of 500,000 shares of Series AA Preferred Stock of the Corporation, par value $0.001 per share, as a compensation for becoming the new CEO of Pure Hospitality Solutions Inc. The shares were valued on the date of the agreement and are non-convertible, non-tradable super voting only.

On June 26, 2020, Meso Numismatics Inc. completed the repurchase of 1,000,000 shares of its Series AA (“Series AA”) Super Voting Preferred Stock for an aggregate total purchase price equal to $160,000, representing all of the Series AA shares held by E-Network de Costa Rica S.A. and S&M Chuah Enterprises Ltd., respectively.

As of September 30, 2020, the Company had no preferred shares of Series AA Preferred Stock issued and outstanding. As of December 31, 2019, the Company had 1,000,000 preferred shares of Series AA Preferred Stock issued and outstanding.

Designation of Series BB Preferred Stock

On March 29, 2017, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series BB Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert on a 1 for 1 basis into shares of the Company’s common stock, any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

The holders of the Series BB Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

The Series BB Preferred Stock has a liquidation value of $1.00. Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series BB Preferred Stock shall be entitled to share equally and ratably in proportion to the preferred stock owned by the holder to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

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2019 Transactions

As of September 30, 2020 and December 31, 2019, the Company had 279,146 preferred shares of Series BB Preferred Stock issued and outstanding.

Designation of Series DD Convertible Preferred Stock

On November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing ten thousand (10,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series DD Convertible Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

Each holder of outstanding shares of Series DD Convertible Preferred Stock shall be entitled to its shares of Series DD Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares of common stock of the Company on the date of conversion by 3.17 conversion price.

The holders of the Series DD Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

The holders of the Series DD Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.

As of September 30, 2020 and December 31, 2019, the Company had no preferred shares of Series DD Convertible Preferred Stock issued and outstanding.

Stock Payable

The $166,795 value of the Series AA Super Voting Preferred Stock is based on the 10,000 votes per preferred share to one vote per common share. Valuation based on definition of control premium is defined as the price to which a willing buyer and willing seller would agree in any arms-length transaction to acquire control of the Company. The premium paid above the market value of the company is real economic benefit to controlling the Company. Historically, the average control premium applied in M&A transactions averages approximately 30%, which represents the value of control.

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NOTE 7 – RELATED PARTY TRANSACTIONS

On March 31, 2018, the Company changed its corporate registered offices to 433 Plaza Real Suite, 275, Boca Raton, Florida 33432. The online virtual office lease is for a month to month term at $53.10 per month. Prior to March 31, 2018, the Company shared its corporate registered offices with Ajene Watson LLC at 3265 Johnson Avenue, Suite 213, Riverdale, NY 10463. The lease is for a year-to-year term. During the year ended December 31, 2019 and the year ended December 31, 2018, the Company incurred no material rent expenses. The Company has no physical office leases that required implementation of ASU 842 in the year ended December 31, 2019 to assets and liabilities.

On November 27, 2019, and in connection with the execution of the Assignment and the LOI, the Company’s Board of Directors appointed Mr. David Christensen former director and CEO of Lans Holdings, Inc., to serve as director and president of the Company (see Note 1).

NOTE 8 – COMMITMENTS AND CONTINGENCIES

On May 12, 2015, the Company issued a convertible promissory Note (the “Note”) in the principal amount of $25,000 to Tarpon Bay Partners, LLC (“Tarpon Bay”), whose principal at the time, is now known as a “Bad Actor” under SEC rules. On or about January 23, 2017, Tarpon Bay elected to convert principal and interest under the Note into shares of the Company’s common stock. On or about June 6, 2017 the Note was assigned to J.P. Carey Enterprises, Inc. (“J.P.”). On or about June 7, 2017, J.P. elected to convert principal and interest under the Note into shares of the Company’s common stock. Joseph Canouse, a principal at J.P. initiated a lawsuit against the Company in Fulton County Court, in Georgia for, amongst other things, breach of contract. A default judgment was entered into against the Company for failure to respond to these claims. The court then issued an Order of Judgement against the Company in the amount of $282,500 which was recorded in accounts payable as of December 31, 2017. The Company appealed the Courts’ decision and in November 2018, and the Court of Appeals vacated the award of the entire judgment amount and remanded the case back to the trial court with instructions. The trial court proceeded to hear oral arguments on the Company’s previously filed Motion to Set Aside Default Judgment on February 3, 2021. The Court has since indicated that it is inclined to grant the Company’s Motion to Set Aside Default Judgment and requested that the Company submit a proposed order for the Court’s review. The Company’s counsel submitted the Proposed Order granting the motion on February 23, 2021. If entered, which is expected, the default judgment will be set aside, and the Company will file its Answer and a Motion to Dismiss for lack of personal jurisdiction.”

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NOTE 9 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	September 30, 2020			December 31, 2019
Computer and office equipment (5 year useful life)	$	4,000		$	4,000
Less: accumulated depreciation		(1,600	)		(1,000	)
Total property and equipment, net	$	2,400		$	3,000

Depreciation expense for the nine months ended September 30, 2020 and the year ended December 31, 2019 was $600 and $1,000 respectively.

NOTE 10 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

On April 22, 2020, the Company entered into a Second Post Closing Amendment to the Assignment, which extended the deadline to enter into the New LOI to 150 days from the execution of the Second Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 150 days from the execution of the Second Amendment.

In addition, the Company shall pay an advance amount equal to $225,000 to Global Stem Cells Group Inc, which shall be paid as follows:

	●	An amount equal to $50,000 within 20 business days of the execution of this herein Second Amendment;

	●	An amount equal to $75,000 within 60 business days from the initial $50,000 payment above and;

●

The remaining balance to be paid in full at the latest upon execution of the Definitive Agreement or at such other date as shall be specified by the Parties.

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In addition, the Company shall pay the remaining balance equal to $100,000 to Global Stem Cells Group Inc, which shall be paid as follows:

	●	An amount equal to $50,000 upon the execution of the Third Amendment;

●

The remaining balance to be paid in full at the latest upon execution of the Definitive Agreement or at such other date as shall be specified by the Parties.

On May 7, 2020, July 24, 2020 and September 17, 2020, the Company made advance payments in the amount of $175,000 to Global Stem Cells Group Inc, which was recorded as a prepaid expense and other current asset as of September 30, 2020.

NOTE 11 – SUBSEQUENT EVENTS

On November 12, 2020, the Company filed with the Secretary of State in Nevada the amendment to Certificate of Designation authorizing the increase from 1,000 to 8,000,000 shares of the Series CC Convertible Preferred Stock.

On November 16, 2020, Meso Numismatics Inc. and Lans Holdings Inc. confirmed that an option has been granted to Lans Holdings Inc. to increase the Series CC Convertible Preferred Stock from 1,000 to 8,000,000 shares.

On November 30, 2020, the Company issued 791,104 shares of common stock in conversion of $4,747 convertible notes payable at conversion price of $0.0070: a loss of $2,034 was recorded.

On December 7, 2020, we signed Debt Restructure Agreements to restructure the debt obligations with three separate lenders. The three lenders all had outstanding convertible promissory notes with our company in the aggregate principal amount plus accrued but unpaid interest of $5,379,624, and the parties have agreed to terminate the old convertible promissory notes in favor of new secured promissory notes and warrants to purchase shares of our common stock. We agreed to the new notes and warrants over the prior convertible notes because the old notes were in default and contained unfavorable terms on conversions. The new notes extended the maturity date, are not convertible into our common shares, but instead secure the debt obligations with our assets. The new notes have a maturity date of December 7, 2023 and an aggregate principal amount of $5,379,624 and, as an incentive; we have issued cashless warrants to purchase 15,000,000 shares of our common stock at an exercise price of $0.03 per share in connection with the restructuring.

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, cybersecurity, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Overview

We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements.

The Company was originally founded in 1999 as Spectrum Ventures LLC, a private company, registered in Tacoma, WA, for the purpose of developing, marketing and selling voice over IP products and services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc. During 2014, the Board of Directors of the Company deemed it in the best interests of the Company and its shareholders to switch directions and become involved in the business of numismatics, specifically the collection and ultimately the sale of coins, paper currency, bullion and medals.

Meso Numismatics, Inc., has established a growing numismatics operation Meso Numismatics focuses on the Central American Caribbean region with a concentration of products surrounding Mesoamerica (Mexico to Panama).

Having locations in Costa Rica and Florida for the purposes of conveniently shipping products, the Company has the ability to export its inventory of coins, paper currency, bullion and medals from Costa Rica, to be sold in the U.S. and around the world. Likewise, the Company also imports such products back to Costa Rica, to be sold throughout the local markets.

The Company adheres to strict processes related to acquisition and sale of its products. It begins by selecting the best inventory, be it a rare coin from Latin America, or a banknote with an error from the United States. Inventory is carefully screened by management, is then sent to be graded by the proper grading authority. For all coins, medals and bullion, the Company’s inventory is sent to the Numismatic Guaranty Company for authentication and grading. For all banknotes, the Company utilizes the services of Paper Money Guaranty, LLC for authentication and grading, both Florida-based companies. Once graded, the inventory is sent to the Company’s Florida-based location prior to being sent to one of the Company’s many customers around the world.

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We maintain an online store with eBay (www.mesocoins.com) and participate in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions, Lyn Knight Auctions and Sedwick Coins for the sale of its coins, paper currency, bullion and medals. The Company also launched a new application technology available on the Google Play Store, as well as the Apple App Store. The Application is a banknote scanner which instantly identifies key characteristics of a banknote. This includes the catalog reference number of the note, the value, which entity it was issued by, the country of origin and the printer that printed the note. A picture of each note from our database of more than 61,000 banknotes from a combined 750 countries and regions will also be included with the information. For the numismatic industry in particular, this application eliminates the need for reference books, as well as the hours of time it takes to reference all the information about banknotes. With a simple snap of a picture, information is provided to the end-user almost instantaneously.

Meso continues to acquire rare inventory at market rates, from throughout the Meso Region (including Central America and the Caribbean). The inventory is then sent for authentication and grading, followed by said items being sold throughout Meso’s sales outlets. This includes an eBay store with up to, but not limited to, $50,000 in items for sale at any one time. For some of the Company’s rarer inventory, items are sent to major auction houses around the world for sale.

Results of Operations

Results of Operations for the Three Months Ended September 30, 2020 and 2019

Below is a summary of the results of operations for the three months ended September 30, 2020 and 2019.

	For the Three Months Ended September 30,
	2020			2019			$ Change			% Change
Revenue	$	12,280		$	6,222		$	6,058			97.36	%
Cost of revenue		10,420			22,039			(11,619	)		-52.72	%
Gross profit		1,860			(15,817	)		17,677			-111.76	%

Operating expenses
Advertising and marketing		72			54,580			(54,508	)		-99.87	%
Professional fees		32,494			33,892			(1,398	)		-4.12	%
Officer compensation		10,000			15,098			(5,098	)		-33.77	%
Depreciation expense		200			200			-			0.00	%
Investor relations		4,180			2,672			1,508			56.44	%
General and administrative		3,557			2,312			1,245			53.85	%
Total operating expenses		50,503			108,754			(58,251	)		-53.56	%

Other income (expense)
Interest expense		(549,067	)		(123,316	)		(425,751	)		345.25	%
Loss on conversion of debt		-			(8,099	)		8,099			-100.00	%
Derivative financial instruments		(6,811,021	)		(1,478,954	)		(5,332,067	)		360.53	%
Net income (loss)	$	(7,408,731	)	$	(1,734,940	)	$	(5,673,791	)		327.03	%

Revenue is affected by the grade assigned to each coin or banknote. Once an item has been acquired it is sent for grading and authentication. Grading is the process of determining the grade or condition of the coin and banknote, which is the key factor in determining its value. Management carefully evaluates the grades assigned to each piece of merchandise and then decides which items will be sold through its eBay store, which items will be sold at live auction and which items will be traded for other items. Grade assigned will ultimately determine the sales price of the coin or banknote.

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Gross profit

Revenue from the sale of coins, metals and paper money for the three months ended September 30, 2020 was $12,280, compared to $6,222 of revenue for the same period in 2019. As a result of the write-off of inventory the company generated a positive 15% gross profit of $1,860 for the three months ended September 30, 2020 compared to a negative 254% gross profit of ($15,817) for the same period in 2019. The key reason for the increase in gross profit was a result of the decreased amount of inventory written-off in 2020 vs 2019.

Operating expenses

Operating expenses decreased by 53.56% in the amount of $58,251 for the three months ended September 30, 2020, compared to the same period in 2019. Listed below are the major changes to operating expenses:

Advertising and marketing decreased by $54,508 for the three months ended September 30, 2020, compared to the same period in 2019, primarily due to the company engaging in 2019 a consulting company to assist in development of a marketing and communications strategy to increase sales and visibility of the Company’s products and services.

Other income (expense)

Other income (expense) increased by $5,749,719 for the three months ended September 30, 2020, compared to the same period in 2019, primarily as a result of the change in fair market value of the convertible notes in 2020.

Results of Operations for the Nine Months Ended September 30, 2020 and 2019

Below is a summary of the results of operations for the nine months ended September 30, 2020 and 2019.

	For the Nine Months Ended September 30,
	2020			2019			$ Change			% Change
Revenue	$	52,387		$	25,326		$	27,061			106.85	%
Cost of revenue		41,443			52,717			(11,274	)		-21.39	%
Gross profit		10,944			(27,391	)		38,335			-139.95	%

Operating expenses
Advertising and marketing		154			55,115			(54,961	)		-99.72	%
Professional fees		62,481			157,643			(95,162	)		-60.37	%
Officer compensation		257,336			52,154			205,182			393.42	%
Depreciation expense		600			600			-			0.00	%
Investor relations		8,423			17,167			(8,744	)		-50.93	%
General and administrative		21,418			9,952			11,466			115.21	%
Total operating expenses		350,412			292,631			57,781			19.75	%

Other income (expense)
Interest expense		(1,461,616	)		(325,202	)		(1,136,414	)		349.45	%
Loss on conversion of debt		(7,629	)		(10,612	)		2,983			-28.11	%
Derivative financial instruments		(9,836,815	)		(820,884	)		(9,015,931	)		1098.32	%
Net income (loss)	$	(11,645,528	)	$	(1,476,720	)	$	(10,168,808	)		688.61	%

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Gross profit

Revenue from the sale of coins, metals and paper money for the nine months ended September 30, 2020 was $52,387, compared to $25,326 of revenue for the same period in 2019. As a result of the write-off of inventory the company generated a positive 21% gross profit of $10,944 for the nine months ended September 30, 2020 compared to a negative 108% gross profit of ($27,391) for the same period in 2019. The key reason for the increase in gross profit was a result of the decreased amount of inventory written-off in 2020 vs 2019.

Operating expenses

Operating expenses increased by 19.75% in the amount of $57,781 for the nine months ended September 30, 2020, compared to the same period in 2019. Listed below are the major changes to operating expenses:

Advertising and marketing decreased by $54,961 for the nine months ended September 30, 2020, compared to the same period in 2019, primarily due to the company engaging in 2019 a consulting company to assist in development of a marketing and communications strategy to increase sales and visibility of the Company’s products and services.

Professional fees decreased by $95,162 for the nine months ended September 30, 2020, compared to the same period in 2019, primarily due to audit and accounting expenses.

Officer compensation increased by $205,182 for the nine months ended September 30, 2020, compared to the same period in 2019, primarily due to the appointment of Mr. David Christensen as Director and President of the Company along with 50,000 shares of Series AA Preferred stock valued as $166,795.

Investor relations expenses decreased by $8,744 for the nine months ended September 30, 2020, compared to the same period in 2019, primarily due to amounts associated with filings.

Other income (expense)

Other income (expense) increased by $10,149,362 for the nine months ended September 30, 2020, compared to the same period in 2019, primarily as a result of the change in fair market value of the convertible notes in 2020.

Liquidity and Capital Resources

Since inception, the Company has financed its operations through private placements and convertible notes. The following is a summary of the cash and cash equivalents as of September 30, 2020 and December 31, 2019.

		September 30, 2020				December 31, 2019				$ Change				% Change
Cash and cash equivalents		$	59,473			$	23,379			$	36,094				154.39	%

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Summary of Cash Flows

Below is a summary of the Company’s cash flows for the nine months ended September 30, 2020 and 2019.

	For the Nine Months Ended September 30,
	2020			2019
Net cash (used) in operating activities	$	(225,806	)	$	(313,875	)
Net cash (used) by investing activities		(175,000	)		-
Net cash provided by financing activities		436,900			283,069
Net increase (decrease) in cash and cash equivalents	$	36,094		$	(30,806	)

Operating activities

Net cash used in operating activities was $225,806 during the nine months ended September 30, 2020 and consisted of a net loss of $11,645,528, which was offset by a net change in operating assets and liabilities of $164,341 and non-cash items of $11,255,380. The primary non-cash items for the nine months ended September 30, 2020, consisted of amortization of debt discount of $1,217,759, preferred shares issued for services of $166,795 and by change in derivative liabilities of $9,836,815. The significant change in operating assets and liabilities was an increase in accounts payable and accrued liabilities.

Net cash used in operating activities was $313,875 during the nine months ended September 30, 2019 and consisted of a net loss of $1,476,720, which was offset by a net change in operating assets and liabilities of $72,833 and non-cash items of $1,090,012. The primary non-cash items for the nine months ended September 30, 2019, consisted of amortization of debt discount of $257,916 and by a change in derivative liabilities of $820,884. The significant change in operating assets and liabilities was an increase in accounts payable and accrued liabilities.

Investing activities

Net cash used by investing activities was $175,000 consisted of cash paid for deposit on acquisition for the nine months ended September 30, 2020.

Financing activities

Net cash provided by financing activities was $436,900 consisted of proceeds received from the issuance of convertible notes was approximately $596,900 offset by repurchase of preferred stock in the amount of $160,000 for the nine months ended September 30, 2020, as compared to net cash provided by financing activities of $283,069 during the same period in 2019.

Going Concern

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The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.

The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

As of September 30, 2020, the Company had no off-balance sheet arrangements.

Critical Accounting Policies

Our critical accounting policies have not materially changed during the nine months ended September 30, 2020. Furthermore, the preparation of our financial statements is in conformity with generally accepted accounting principles in the United States of America, or GAAP. The preparation of our financial statements requires management to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Our management believes that we consistently apply these judgments and estimates, and the financial statements fairly represent all periods presented. However, any differences between these judgments and estimates and actual results could have a material impact on our statements of income and financial position.

Derivative Instruments

Stock Based Compensation

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. The Company follows paragraph 606 of the FASB Accounting Standards Codification for revenue recognition and ASU 2014-09, adopting the pronouncements on January 1, 2018. The company considers revenue realized or realizable and earned when the products are delivered. Since the Company was already recognizing revenue in a manner consistent with paragraph 606 of the FASB Accounting Standards Codification, there was no material impact on prior year results.

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Revenue Recognition

On January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”), the Company recognizes revenue from the sales of products, by applying the following steps:

(1)

Identify the contract with a customer

(2)

Identify the performance obligations in the contract

(3)

Determine the transaction price

(4)

Allocate the transaction price to each performance obligation in the contract

(5)

Recognize revenue when each performance obligation is satisfied

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the period ended September 30, 2020 and December 31, 2019.

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Use of Estimates

Fair Value of Financial Instruments

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are not required to provide the information required by this Item because we are a smaller reporting company.

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Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As required by the SEC Rules 13a-15(b) and 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the three and nine months ended September 30, 2020. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

We do not have sufficient resources in our accounting function, which restricts the Company’s ability to gather, analyze and properly review information related to financial reporting in a timely manner. In addition, due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

	3.	We have inadequate controls to ensure that information necessary to properly record transactions is adequately communicated on a timely basis from non-financial personnel to those responsible for financial reporting. Management evaluated the impact of the lack of timely communication between non–financial personnel and financial personnel on our assessment of our reporting controls and procedures and has concluded that the control deficiency represented a material weakness.

	4.	Certain control procedures were unable to be verified due to performance not being sufficiently documented. As an example, some procedures requiring review of certain reports could not be verified due to there being no written documentation of such review. Management evaluated the impact of its failure to maintain proper documentation of the review process on its assessment of its reporting controls and procedures and has concluded deficiencies represented a material weakness.

	5.	The Company has no formal control process related to the identification and approval of related party transactions.

To address these material weaknesses, management engaged financial consultants, performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. We have not remedied the material weaknesses as of September 30, 2020. The Company plans to take remedial action to address these weaknesses during the fiscal year ended 2021.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the quarter ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except the implementation of the controls identified above.

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PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

Other than described below, to the Company’s knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

On May 12, 2015, the Company issued a convertible promissory Note (the “Note”) in the principal amount of $25,000 to Tarpon Bay Partners, LLC (“Tarpon Bay”), whose principal at the time, is now known as a “Bad Actor” under SEC rules. On or about January 23, 2017, Tarpon Bay elected to convert principal and interest under the Note into shares of the Company’s common stock. On or about June 6, 2017 the Note was assigned to J.P. Carey Enterprises, Inc. (“J.P.”). On or about June 7, 2017, J.P. elected to convert principal and interest under the Note into shares of the Company’s common stock. Joseph Canouse, a principal at J.P. initiated a lawsuit against the Company in Fulton County Court, in Georgia for, amongst other things, breach of contract. A default judgment was entered into against the Company for failure to response to these claims. The court then issued an Order of Judgement against the Company in the amount of $282,500 which was recorded in accounts payable as of December 31, 2017. The Company appealed the Courts’ decision and in November 2018, while the Court of Appeals affirmed liability under the judgment, the Court of Appeals vacated the award of the entire judgment amount and remanded the case back to the trial court with instructions. The case is awaiting a trial date.

Item 1A.

Risk Factors

See risk factors included in our Annual Report on Form 10-K for 2019.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041.

On July 15, 2020, the Company issued 905,929 shares of common stock in conversion of $4,122 convertible notes payable at conversion price of $0.0046: a loss was not recorded.

On November 30, 2020, the Company issued 791,104 shares of common stock in conversion of $4,747 convertible notes payable at conversion price of $0.0070: a loss of $2,034 was recorded.

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These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

N/A

Item 5.

Other Information

None.

Item 6.

Exhibits

Exhibit Number		Description of Exhibit
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 formatted in Extensible Business Reporting Language (XBRL).

** Provided herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

Dated February 24, 2021	MESO NUMISMATICS, INC.

	By:	/s/ David Christensen
		David Christensen
		President, Chief Executive Officer, Chief Financial Officer, Secretary and Director (Principal Executive Officer) (Principal Financial Officer) (Principal Accounting Officer)

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MESO NUMISMATICS, INC. - FORM 10-Q - February 24, 2021

Attached files

MESO NUMISMATICS, INC. Reports