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 ~~March~~June 3130, 2020

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

For the transition period from ______________

Commission File Number: 1-9927

ADVANZEON SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware		95-2594724
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2901 W. Busch Blvd. Suite 701

Tampa, FL

33618

(Address of principal executive offices)

(Zip Code)

813-517-8484

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such fling 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 a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions 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 ☒

As of ~~May~~August 1910, 2020, the Registrant had outstanding 71117,~~661~~516,~~656~~838 shares of its $0.01 par value Common Stock.

ADVANZEON SOLUTIONS, INC.

TABLE OF CONTENTS

		Pages
PART I.	Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019	1 - 2
	Consolidated Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019	3
	Consolidated Statements of Operations for the Three Month Periods Ended March 31, 2020 and 2019 (unaudited)	3
	Consolidated Statements of Operations for the Three and Six-Month Periods Ended June 30, 2020 and 2019 (unaudited)	4
	Consolidated Statement of Stockholders’ Deficiency For the Three Month Period Ended March 31, 2020 (unaudited) and at December 31, 2019	4
	Consolidated Statement of Stockholders' Deficiency For the Three and Six-Month Periods Ended June 30, 2020 and 2019 (unaudited)	5
	Consolidated Statements of Cash Flows for the Three Month Periods Ended March 31, 2020 and 2019 (unaudited)	5
	Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 2020 and 2019 (unaudited)	6
	Notes to Consolidated Financial Statements	~~6 - 14~~7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~15 - 20~~17
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	2123
Item 4.	Controls and Procedures	~~21 - 22~~23
PART II.	Other Information
Item 1.	Legal Proceedings	2325
Item 1A.	Risk Factors	2325
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2325
Item 3.	Exhibits	2330

~~- i -~~2

ADVANZEON SOLUTIONS, INC.

PART I – FINANCIAL INFORMATION

ITEM 1. Consolidated Financial Statements

ADVANZEON SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

~~March 31~~June 30, 2020 (unaudited) and December 31, 2019

ASSETS
	June 30, 2020			December 31,
	March 31, 2020			December 31,
	(unaudited)			2019
ASSETS
CURRENT ASSETS
Cash	$	14145,~~874~~915		$	69,327
Accounts receivable		47,340			29,769
Restricted cash		845,340			—
Current portion of right of use asset		94,410			113,911
Accounts receivable		40,990			29,769
Other current assets		667,082			826,597
Current portion of right of use asset		136,230			113,911
Total current assets		823,706			1,039,604
Other current assets		657,025			826,597
Total current assets		1,825,500			1,039,604
PROPERTY, PLANT, AND EQUIPMENT
Property and equipment, net		5,~~995~~683			1,239
Total property, plant, and equipment		5,995			1,239
Leasehold improvements, net		—			—
RIGHT OF USE ASSET, NET OF CURRENT PORTION		121,322			146,880
Total property, plant, and equipment		5,683			1,239
TOTAL ASSETS	$	951,023		$	1,187,723
RIGHT OF USE ASSET, NET OF CURRENT PORTION		179,221			146,880
TOTAL ASSETS	$	2,010,404		$	1,187,723
CURRENT LIABILITIES
Related party loans payable	$	102,229		$	342,670
Account payable		403,265			99,441
Debt		10,416,176			12,352,189
Contingent liability		642,659			642,659
Current portion of lease liability		136,230			113,911
Other accrued expenses		13,742,192			15,891,787
Total current liabilities		25,442,751			29,442,657
LEASE LIABILITY, NET OF CURRENT PORTION		179,221			146,880
TOTAL LIABILITIES		25,621,972			29,589,537
STOCKHOLDERS' DEFICIENCY
Preferred stock, $.001 par value; 1,000,000 shares authorized as of June 30, 2020 and December 31, 2019		—			—
Series C Convertible Preferred; $.001 par value; 14,400 shares authorized; 10,434 shares issued and outstanding as of June 30, 2020 and December 31, 2019		10			10
Series D Convertible Preferred; $.001 par value; 7,000 shares authorized; 250 shares issued and outstanding as of June 30, 2020 and December 31, 2019		—			—
Remaining Preferred stock; $.001 par value; 978,600 shares authorized as of June 30, 2020 and December 31, 2019		—			—
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 13,201,582 shares reserved; 116,751,439 and 71,661,656 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		1,167,514			716,617
Additional paid in capital		35,361,980			28,719,246
Accumulated deficit		(60,141,072	)		(57,837,687	)
Total stockholders' deficiency		(23,611,568	)		(28,401,814	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	2,010,404		$	1,187,723

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

~~- 1 -~~3

ADVANZEON SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS (CONTINUED)

March 31, 2020 (unaudited) and December 31, 2019

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
	March 31, 2020			December 31,
	(unaudited)			2019
CURRENT LIABILITIES
Related party loans payable	$	257,729		$	342,670
Account payable		309,003			99,441
Debt		12,534,189			12,352,189
Contingent liability		642,659			642,659
Current portion of lease liability		94,410			113,911
Other accrued expenses		16,321,871			15,891,787
Total current liabilities		30,159,861			29,442,657
LEASE LIABILITY, NET OF CURRENT PORTION		121,322			146,880
TOTAL LIABILITIES		30,281,183			29,589,537
STOCKHOLDERS’ DEFICIENCY
Preferred stock, $.001 par value; 1,000,000 shares authorized, as of March 31, 2020 and December 31, 2019		-			-
Series C Convertible Preferred; $.001 par value; 14,400 shares authorized; 10,434 shares issued and outstanding as of March 31, 2020 and December 31, 2019		10			10
Series D Convertible Preferred; $.001 par value; 7,000 shares authorized; 250 shares issued issued and outstanding as of March 31, 2020 and December 31, 2019		-			-
Remaining Preferred stock; $.001 par value; 978,600 shares as of March 31, 2020 and December 31, 2019		-			-
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 71,661,656 shares issued and outstanding as of March 31, 2020 and December 31, 2019		716,617			716,617
Additional paid in capital		28,719,246			28,719,246
Accumulated deficit		(58,766,033	)		(57,837,687	)
Total stockholders’ deficiency		(29,330,160	)		(28,401,814	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	951,023		$	1,187,723

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

- 2 -

ADVANZEON SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six-Month Periods Ended ~~March 31~~June 30, 2020 and 2019 (unaudited)

	Three-Month Period Ended						Six-Month Period Ended
	March 31,
	June 30,						June 30,
	2020			2019			2020			2019
Revenues:
Obstructive sleep apnea (OSA)	$	~~127~~103,~~548~~444		$	6790,~~923~~453		$	230,992			158,376
Total revenues		~~127~~103,~~548~~444			6790,~~923~~453			230,992			158,376
Costs and expenses:
Costs of revenues		6465,~~909~~000			4166,~~660~~157			129,909			107,817
General and administrative		~~596~~715,~~065~~397			~~425~~416,~~804~~039			1,311,462			841,843
Depreciation and amortization		~~311~~312			~~205~~235			623			440
Total costs and expenses		~~661~~780,~~285~~709			~~467~~482,~~669~~431			1,441,994			950,100
Loss from operations		(~~533~~677,~~737~~265	)		(~~399~~391,~~746~~978	)		(1,211,002	)		(791,724	)
Other income (expense):
Interest expense		(~~394~~707,~~629~~774	)		(~~328~~341,~~015~~178	)		(1,102,403	)		(669,193	)
Interest income		20—			-5,994			20			5,994
Total other income (expense)		(394,609	)		(328,015	)
Legal settlement		—			112,172			—			112,172
Income taxes		-			-
Forgivable SBA EIBL loan advance		10,000			—			10,000			—
Net loss	$	(928,346	)	$	(727,761	)
Total other expense		(697,774	)		(223,012	)		(1,092,383	)		(551,027	)
PER SHARE INFORMATION
Net loss	$	(1,375,039	)	$	(614,990	)	$	(2,303,385	)	$	(1,342,751	)
Net Loss Per Common Share	$	(0.01	)	$	(0.01	)
PER SHARE INFORMATION
Weighted Average Number of Common Shares Outstanding		71,661,656			69,690,545
Net Loss Per Common Share	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Weighted Average Number of Common
Shares Outstanding		79,534,495			67,361,656			75,598,076			67,027,954

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

~~- 3 -~~4

ADVANZEON SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY

For the Three Month Period Ended March 31, 2020 (unaudited) and at December 31, 2019

	Series C convertible Preferred Stock Number of Shares		Series C Convertible Preferred Stock Amount		Common Stock Number of Shares		Common Stock Amount		Additional Paid - in Capital		Accumulated Deficit			Total
Balance at December 31, 2018		10,434	$	10		66,661,656	$	666,617	$	28,012,007	$	(54,581,873	)	$	(25,903,239	)
Stock Issued for Services		—		—		200,000		2,000		14,000		—			16,000
Sale of Stock		—		—		500,000		5,000		10,000		—			15,000
Net Loss		—		—		—		—		—		(727,761	)		(727,761	)
Balance at March 31, 2019		10,434		10		67,361,656		673,617		28,036,007		(55,309,634	)		(26,600,000	)
Stock Issued for Services		—		—		—		—		—		—			—
Sale of Stock		—		—		—		—		—		—			—
Net Loss		—		—		—		—		—		(614,990	)		(614,990	)
Balance at June 30, 2019		10,434		10		67,361,656		673,617		28,036,007		(55,924,624	)		(27,214,990	)
Stock Issued for Services		—		—		—		—		—		—			—
Sale of Stock		—		—		—		—		—		—			—
Net Loss		—		—		—		—		—		(747,801	)		(747,801	)
Balance at September 30, 2019		10,434		10		67,361,656		673,617		28,036,007		(56,672,425	)		(27,962,791	)
Stock Issued for Services		—		—		4,300,000		43,000		430,000		—			473,000
Sale of Warrants		—		—		—		—		253,239		—			253,239
Sale of Stock		—		—		—		—		—		—			—
Net Loss		—		—		—		—		—		(1,165,262	)		(1,165,262	)
Balance at December 31, 2019		10,434		10		71,661,656		716,617		28,719,246		(57,837,687	)		(28,401,814	)
Stock Issued for Services		—		—		—		—		—		—			—
Sale of Warrants		—		—		—		—		—		—			—
Sale of Stock		—		—		—		—		—		—			—
Net Loss		—		—		—		—		—		(928,346	)		(928,346	)
Balance at March 31, 2020		10,434		10		71,661,656		716,617		28,719,246		(58,766,033	)		(29,330,160	)
Stock Issued for Services		—		—		—		—		—		—			—
Sale of Warrants		—		—		—		—		18,251		—			18,251
Sale of Stock		—		—		45,089,783		450,897		6,624,483		—			7,075,380
Net Loss		—		—		—				—		(1,375,039	)		(1,375,039	)
Balance at June 30, 2020		10,434		10		116,751,439		1,167,514		35,361,980		(60,141,072	)		(23,611,568	)

	Series C		Series C
	Convertible		Convertible		Common
	Preferred		Preferred		Stock		Common		Additional
	Stock Number		Stock		Stock Number		Stock		Paid-in		Accumulated
	of Shares		Amount		of Shares		Amount		Capital		Deficit			Total
Balance at December 31, 2019		10,434	$	10		71,661,656	$	716,617	$	28,719,246	$	(57,837,687	)	$	(28,401,814	)
Net loss		-		-		-		-		-		(928,346	)		(928,346	)
Balance at March 31, 2020		10,434	$	10		71,661,656	$	716,617	$	28,719,246	$	(58,766,033	)	$	(29,330,160	)

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

~~- 4 -~~5

ADVANZEON SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the ~~Three~~ Six-Month Periods Ended ~~March 31~~June 30, 2020 and 2019 (unaudited)

	Three Month Periods Ended
	Six-Month Periods Ended
	March 31,
	June 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(~~928~~2,~~346~~303,385	)	$	(~~727~~1,~~761~~342,751	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		~~311~~623			~~205~~440
Stock issued for services		-—			16,000
Amortization of right of use assets		4554,~~059~~660			1225,~~087~~579
Net changes in assets and liabilities:
Accounts receivable		(1711,~~571~~221	)		3(2,~~251~~756	)
Other current assets		~~159~~169,~~515~~572			(~~172~~712,~~296~~065	)
Payments on lease liabilities		(4554,~~059~~660	)		(1225,~~087~~579	)
Accounts payable		~~124~~51,~~621~~383			~~138~~210,~~528~~951
Other accrued expenses		~~430~~1,~~084~~215,572			~~363~~742,~~948~~356
Net cash used in operating activities		(~~231~~877,~~386~~456	)		(~~378~~1,~~125~~087,825	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant, and equipment		(5,067	)		(1,549	)
Net cash used in investing activities		(5,067	)		(1,549	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from promissory notes		~~182~~559,~~000~~360			~~355~~1,~~000~~070,250
Sale of stock		-			15,000
Proceeds from PPP loan		1,243,840			—
Net cash provided by financing activities		182,000			370,000
Payments on debt		(17,000	)		—
Net decrease in cash		(54,453	)		(9,674	)
Sale of stock		18,251			15,000
Net cash provided by financing activities		1,804,451			1,085,250
Net increase (decrease) in cash		921,928			(4,124	)
CASH - Beginning of Year		69,327			25,036
CASH - END OF PERIOD	$	14,874		$	15,362
CASH AND RESTRICTED CASH - END OF PERIOD	$	991,255		$	20,912
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	-—		$	-—
Income taxes	$	-—		$	-—
Recording of right of use assets under lease agreements (ASU 2016-02)	$	-		$	119,640
Recording of right of use assets under
lease agreements (ASU 2016-02)	$	135,075		$	119,640
Schedule of non-cash investing transactions:
Convertible promissory note and accrued interest
converted to common stock	$	7,075,380		$	—

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

~~- 5 -~~6

ADVANZEON SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF THE COMPANY’S BUSINESS AND BASIS OF PRESENTATION

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

In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Company’'s financial position as of December 31, 2019, the changes therein for the three and six-month periods then ended and the results of operations for the three and six-month periods ended ~~March~~June 3130, 2020 and 2019.

The financial statements included in the Form 10-Q are presented in accordance with the requirements of the Form and do not include all of the disclosures required by accounting principles general accepted in the United States of America. For additional information, reference is made to the Company’'s annual report on Form 10-K for the fiscal year ended December 31, 2019, filed April 9, 2020. The results of operations for the three and six-month periods ended ~~March~~June 3130, 2020 and 2019 are not necessarily indicative of operating results for the full year.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

Use of Estimates - The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts. Actual results could differ from these estimates. Estimates involved in the determination of an allowance for doubtful accounts receivable are considered by management as particularly susceptible to material change in the next year. Other significant estimates relate to stock-based compensation, warrants and beneficial conversion features.

- 6 -

ADVANZEON SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Revenue Recognition- In accordance with FASB ASC Topic 606, "Revenue from contracts with customers", the Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Generally, this occurs upon shipment of the CPAP to their customer or when the test is performed.7

~~Property~~Revenue Recognition ~~and~~- ~~Equipment~~In -accordance ~~Property and~~with ~~equipment,~~Financial asAccounting ~~described~~Standards inBoard ~~Note~~(FASB) 4Accounting Standards Codification (ASC) Topic 606, is"Revenue ~~stated~~from atContracts ~~cost~~with ~~less~~Customers", ~~accumulated~~the ~~depreciation.~~Company ~~Depreciation~~recognizes isrevenue ~~computed~~when ~~using~~obligations under the ~~straight-line~~terms ~~method~~of ~~over~~a contract with the ~~estimated~~customer ~~useful~~are ~~lives~~satisfied. ~~ranging~~Generally, ~~from~~this 2occurs upon shipment of the CPAP to 12their ~~years~~customer or when the test is performed.

~~Leasehold~~Property and ~~Improvement~~Equipment - ~~Leasehold improvement,~~Property asand ~~described~~equipment in (Note 5,4) is stated at cost less accumulated ~~amortization~~depreciation. ~~Leasehold~~Depreciation ~~improvements~~and amortization are ~~amortized~~computed ~~over~~ using the ~~shorter~~straight-line ofmethod over the ~~lease~~estimated ~~term~~useful orlives ~~the~~ranging ~~asset’s~~from ~~useful~~2 ~~life~~to 12 years.

Leasehold Improvement - Leasehold improvement (Note 5) is stated at cost less accumulated amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives ranging from 2 to 12 years. Leasehold improvements are amortized over the shorter of the lease term or the asset’s useful life.

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

The carrying amounts of long-term debt and estimated fair values of the attached warrants at ~~March~~June 3130, 2020 and December 31, 2019 are as follows:

	March 31, 2020				December 31, 2019
	June 30, 2020				December 31, 2019
			Estimated				Estimated
			Fair Value of				Fair Value of
	Carrying		Attached		Carrying		Attached
	Amount		Warrants		Amount		Warrants
Convertible promissory notes	$	75,~~746~~956,~~173~~533	$	-—	$	7,564,173	$	-—
Short term notes payable		43,~~788~~215,~~016~~803		-—		4,788,016		-—
Loan payable related party		~~257~~102,~~729~~229		-—		342,670		-—
	$	12,791,918	$	-	$	12,694,859	$	-
PPP Loan		1,243,840		—		—		—
	$	10,518,405	$	—	$	12,694,859	$	—

During the ~~three~~ six-month period ended ~~March 31~~June 30, 2020, there have been 410 additional convertible notes issued totaling $~~182~~547,~~000~~360. During the six-month period ended June 30, 2020, 53 convertible notes totaling $3,727,213 plus accrued interest was converted to stock.

-Cost of 7Revenues - Costs of services consist of supplies and operating expenses. Supplies are recognized in the period in which a patient receives the supplies.

ADVANZEON SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Right of Use Assets and Lease Liabilities - During the quarter ended March 31, 2019, the Company implemented Accounting Standards Update 2016-02, Leases. Under the new guidance, a lessee must record a liability for lease payments (referred to as the lease liability) and an asset for the right to use the leased asset during the lease term (referred to at the right of use asset) for all leases, regardless of whether they are designated as finance or operating leases. This election requires the lessee to recognize lease expense on a straight-line basis over the lease term. The right of use assets and corresponding right of use liabilities have been recorded using the present value of the leases. See Notes 10 and 11 within the financial statement for additional disclosure on leases.

Income Taxes - We are subject to the income tax jurisdictions of the U.S. and multiple state tax jurisdictions. However, our provisions for income taxes for 2020 and 2019 include only state income taxes.

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

Concentration of Credit Risk - The Company maintains its cash and cash equivalents with a financial institution which management believes to be of high credit quality. Their accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 in coverage. The Company had an uninsured cash balance of $595,340 as of June 30, 2020 and no uninsured cash balances as of December 31, 2019.

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

3. ~~OTHER~~ CURRENT ASSETS

~~Other~~Cash and ~~current~~Restricted ~~assets~~Cash ~~consists~~- On April 23, 2020, the Company’s wholly owned subsidiary, Pharmacy Value Management Solutions, Inc. (‘PVMS”) received a loan in the principal amount of $1,243,840 from Mechanics Bank (the ~~following~~“Bank”) pursuant atto ~~March~~the 31Paycheck Protection Program “PPP”. On May 22, 2020, the Bank notified PVMS that the loan was in default as a result of false statements made in the loan application. PVMS disputes the Bank’s claim and ~~December~~believes 31that it made no false statements in it's PPP loan application. The statements relate to the number of employees and the monthly payroll amounts. As a result, ~~2019:~~PVMS’ account with Mechanics Bank has been frozen with a balance of $845,340. Both PVMS and the Bank are seeking guidance from the Small Business Administration as to how to resolve this dispute. Until resolved, it is likely that this account will remain frozen.

	March 31, 2020		December 31, 2019
Loans to others	$	34,406	$	42,676
Security and lease deposits		3,500		3,500
Capitalized portion of lease		1,523		1,808
Prepaid expenses		301,319		452,953
Miscellaneous receivable		326,334		325,660
Other current asset	$	667,082	$	826,597

Cash and restricted cash consists of the following at June 30, 2020 and December 31, 2019:

- 8 -

	June 30, 2020		December 31, 2019

Cash	$	145,915	$	69,327
Restricted Cash		845,340		—

Total cash and restricted cash shown in the
consolidated statement of cash flows	$	991,255	$	69,327

~~ADVANZEON~~Other ~~SOLUTIONS~~current assets consists of the following at June 30, ~~INC.~~2020 and December 31, 2019:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	June 30, 2020		December 31, 2019

Loans to others	$	34,406	$	42,676
Security and lease deposits		3,500		3,500
Capitalized portion of lease		1,237		1,808
Prepaid expenses		288,487		452,953
Miscellaneous receivable		329,395		325,660

Other current asset	$	657,025	$	826,597

PROPERTY AND EQUIPMENT

Property and equipment, net, consists of the following at ~~March~~June 3130, 2020 and December 31, 2019:

	March 31, 2020			December 31, 2019
	June 30, 2020			December 31, 2019
Property and equipment	$	6,616		$	1,549
Less accumulated depreciation		(~~621~~933	)		(310	)
Property and equipment - net	$	5,~~995~~683		$	1,239

Depreciation expense for the ~~three~~ six-month periods ended ~~March~~June 3130, 2020 and 2019 is $~~311~~623 and $56141, respectively. A laptop was acquired in January of 2020.

LEASEHOLD IMPROVEMENT

Leasehold improvement, net, consists of the following at ~~March 31~~June 30, 2020 and December 31, 2019:

	March 31, 2020			December 31, 2019
	June 30, 2020			December 31, 2019
Leasehold improvements	$	2,992		$	2,992
Less accumulated amortization		(2,992	)		(2,992	)
Leasehold improvements - net	$	-—		$	-—

Amortization expense for the ~~three~~ six-month periods ended ~~March~~June 3130, 2020 and 2019 is $0 and $~~149~~299, respectively.

RELATED PARTY LOANS PAYABLE

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

As of ~~March~~June 3130, 2020 and December 31, 2019, there are the following related party notes payable:

	March 31, 2020		December 31, 2019
	June 30, 2020		December 31, 2019
Related party loans payable	$	~~257~~102,~~729~~229	$	342,670

- 9 -

ADVANZEON SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DEBT

As of ~~March~~June 3130, 2020 and December 31, 2019, the balance was as follows:

	March 31, 2020		December 31, 2019
	June 30, 2020		December 31, 2019
Notes payable	$	1210,~~534~~416,~~189~~176	$	12,352,189

During the ~~three~~ six-month period ended ~~March 31~~June 30, 2020, there have been 410 additional convertible-promissory notes totaling $~~182~~547,~~000~~360. There have been 53 convertible-promissory notes totaling $3,727,213 converted to 39,652,283 shares of common stock.

On April 23, 2020, the Company’s wholly owned subsidiary, Pharmacy Value Management Solutions, Inc. (‘PVMS”) received a loan in the principal amount of $1,243,840 from Mechanics Bank (the “Bank”) pursuant to the PPP. On May 22, 2020, the Bank notified PVMS that the loan was in default as a result of false statements made in the loan application. PVMS disputes the Bank’s claim and believes that it made no false statements in its PPP loan application. The statements relate to the number of employees and the monthly payroll amounts. As a result, PVMS’ account with Mechanics Bank has been frozen with a balance of $845,340. Both PVMS and the Bank are seeking guidance from the Small Business Administration as to how to resolve this dispute. Until resolved, it is likely that this account will remain frozen.

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

	March 31, 2020		December 31, 2019
	June 30, 2020		December 31, 2019
Advanzeon parent	$	53,~~010~~381,~~016~~163	$	5,010,016
PVMS		7,~~524~~035,~~173~~013		7,342,173
	$	1210,~~534~~416,~~189~~176	$	12,352,189

At Advanzeon, the total notes issued year-to-date and their dollar values were as follows:

	June 30, 2020		December 31, 2019

Number of notes issued		2		—

Dollar value	$	165,360	$	—

All debts issued during the six-month period ended June 30, 2020 are short-term in nature and have a stated interest rate of 10%.

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

	March 31, 2020		December 31, 2019
	June 30, 2020		December 31, 2019
Number of notes issued		48		51
Dollar value	$	~~182~~382,000	$	2,289,250

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

CONTINGENT LIABILITY

Contingent liability consisted of 3 items:

1. A lawsuit against the Company for $450,000 from the son of a deceased promissory note holder. This matter has been dismissed twice by the judge but is ongoing due to appeals. ~~This~~The case ishas ~~anticipated~~been todormant ~~expire~~over ina ~~June~~year. orThe ~~July~~Court has not dismissed it for lack of prosecution yet. The Court does this on its own motion and because of COVID, it is not doing this at this time.

Interest payable in the amount of $171,247 to the same person listed in (1). This interest is related to the lawsuit referenced in (1).

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

~~- 10 -~~11

~~ADVANZEON~~As ~~SOLUTIONS~~of June 30, ~~INC.~~2020 and December 31, 2019, the balance of this indebtedness is as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	June 30, 2020		December 31, 2019

Disputed note payable	$	450,000	$	450,000
Disputed interest payable		171,247		171,247
Pending attorney fees		21,412		21,412

Total contingent liability	$	642,659	$	642,659

As of March 31, 2020 and December 31, 2019, the balance of this indebtedness is as follows:

	March 31, 2020		December 31, 2019
Disputed note payable	$	450,000	$	450,000
Disputed interest payable		171,247		171,247
Pending attorney fees		21,412		21,412
Total contingent liability	$	642,659	$	642,659

OTHER ACCRUED LIABILITIES

As of ~~March~~June 3130, 2020 and December 31, 2019, the balance of other accrued liabilities is as follows:

	March 31, 2020		December 31, 2019
	June 30, 2020		December 31, 2019
Management compensation	$	8,~~873~~907,~~802~~258	$	8,873,802
Accrued interest non-related party		64,~~347~~760,~~826~~728		5,956,368
Board of Director fees		137,~~087,~~500		1,050,000
State fees		-—		2,800
Payroll liabilities		314,~~803~~047		-—
Other accrued liabilities		822,~~940~~659		8,817
Total other accrued debt	$	1613,~~321~~742,~~871~~192	$	15,891,787

10.

RIGHT OF USE ASSETS

The Company entered into two leases , one for office space and one for an automobile lease that are classified as right of use assets and lease liabilities. The Company pays the lease payments on a residential unit in California that is used as an office/residential unit for certain of its marketing personnel. The lease is on a month-to month basis. The Company has occupied this unit for the past approximately 1-1/2 year period and intends to do so for the foreseeable future. The lease for the Company’s office space ~~spaces~~ expire in ~~April 2020 and~~ June 2022. The lease for the automobile expires in June 2021. As the implicit interest rate is not readily identifiable in the leases, the Company calculated the present value of the leases using the average commercial real estate interest rate of 5.50% at the commencement of the office leases and the interest ~~rate~~ of 2.99% for the automobile lease. Applying the commercial rate, the Company calculated the present value of $~~294~~339,~~203~~ 833 for the office leases and $29,037 for the automobile leasing, that are being amortized over the life of the leases.

~~- 11 -~~12

~~ADVANZEON~~As ~~SOLUTIONS~~of June 30, ~~INC.~~2020, the right of use assets associated with future operating leases are as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total present value of right of use assets
under lease agreements	$	368,870

Amortization of right of use assets		(53,419	)

Total right of use assets as of June 30, 2020	$	315,451

AsTotal amortization ofexpense ~~March~~related ~~31,~~to ~~2020,~~ the right of use assets ~~associated~~under ~~with~~the ~~future~~lease ~~operating~~agreements ~~leases~~was ~~are~~$54,660 asand ~~follows:~~$25,579 for the six-month periods ended June 30, 2020 and 2019, respectively.

Total present value of right of use assets under lease agreements	$	323,240
Amortization of right of use assets		(107,508	)
Total right of use assets as of March 31, 2020	$	215,732

Total amortization expense related to the right of use assets under the lease agreements was $45,059 and $12,087 for the three month periods ended March 31, 2020 and 2019, respectively.

11.

RIGHT OF USE LEASE LIABILITIES

As disclosed in Note 10, the Company entered into two leases for office space ~~and~~prior ~~automobile~~to ~~lease~~the quarter ended June 30, 2020 that are classified as right of use assets and lease liabilities.

As of ~~March~~June 3130, 2020, the lease liabilities associated with future payments due under the leases are as follows:

Total present value of future lease payments	$	~~323~~368,~~240~~870
Principal payments made as of the quarter ended March 31, 2020		(107,508	)
Principal payments made as of the six month period ended June 30, 2020		(53,419	)
Total right of use lease liabilities as of March 31, 2020	$	215,732
Total right of use lease liabilities as of June 30, 2020	$	315,451

The following is a schedule of future minimum lease payments under the right of use lease agreements together with the present value of the net minimum lease payments as of ~~March~~ 31June 30, 2020:

Total future minimum lease payments	$	~~229~~336,~~376~~671
Less present value discount		1321,~~644~~220
Total right of use lease liabilities as of March 31, 2020		215,732
Total right of use lease liabilities as of June 30, 2020		315,451
Less current portion due within one year		94136,~~410~~230
Long-term right of use liabilities	$	~~121~~179,~~322~~221

~~- 12 -~~13

~~ADVANZEON~~Total ~~SOLUTIONS~~maturities of lease liabilities as of June 30, ~~INC.~~2020 are as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Total future
	minimum lease		Present value		Right of use
	payments		discount		lease liabilities
2021	$	150,103	$	13,873	$	136,230
2022		146,568		6,358		140,210
2023		40,000		989		39,011
	$	336,671	$	21,220	$	315,451

Total maturities of lease liabilities as of March 31, 2020 are as follows:

	Total future
	minimum lease		Present value		Right of use
	payments		discount		lease liabilities
2020	$	103,639	$	9,229	$	94,410
2021		101,095		4,191		96,904
2022		24,642		224		24,418
	$	229,376	$	13,644	$	215,732

12.

COMMON STOCK

During the ~~three~~ six-month period ended ~~March 31~~June 30, 2020, the Company ~~has not~~ issued ~~any~~45,089,783 shares. of its common stock as follows:

~~During the three month period ended March~~On 31April 01, ~~2019~~2020, the Company issued ~~700~~3,~~000~~262,500 shares of its common stock asto ~~follows:~~a board of director member who elected to convert director’s fees and salary totaling $652,500. The stock was issued at $0.20 per share.

On April 01, 2020, the Company issued 1,087,500 shares of its common stock to a board of director member who elected to convert director’s fees and salary totaling $217,500. The stock was issued at $0.20 per share.

On April 21, 2020, the Company issued 14,584,350 shares of its common stock to existing note holders who elected to convert promissory notes plus accrued and unpaid interest totaling $2,916,869. The stock was issued at $0.20 per share.

On April 21, 2020, the Company issued 1,327,252 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $265,450. The stock was issued at $0.20 per share.

On April 21, 2020, the Company issued 2,156,515 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $431,303. The stock was issued at $0.20 per share.

On May 15, 2020, the Company issued 1,263,745 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $139,012. The stock was issued at $0.11 per share.

On May 15, 2020, the Company issued 4,284,565 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $471,302. The stock was issued at $0.11 per share.

On May 15, 2020, the Company issued 7,210,168 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $793,118. The stock was issued at $0.11 per share.

On May 18, 2020, the Company issued 700,751 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $77,083. The stock was issued at $0.11 per share.

On May 21, 2020, the Company issued 502,434 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $55,268. The stock was issued at $0.11 per share.

On May 25, 2020, the Company issued 319,627 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $35,159. The stock was issued at $0.11 per share.

On May 25, 2020, the Company issued 333,824 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $36,721. The stock was issued at $0.11 per share.

On May 26, 2020, the Company issued 781,206 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $85,933. The stock was issued at $0.11 per share.

On May 28, 2020, the Company issued 884,555 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $97,301. The stock was issued at $0.11 per share.

On May 29, 2020, the Company issued 937,116 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $103,083. The stock was issued at $0.11 per share.

On June 1, 2020, the Company issued 1,024,189 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $112,661. The stocks was issued at $0.11 per share.

On June 05, 2020, the Company issued 668,797 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $73,568. The stock was issued at $0.11 per share.

On June 05, 2020, the Company issued 603,987 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $66,439. The stock was issued at $0.11 per share.

On June 12, 2020, the Company issued 1,564,245 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $172,067. The stock was issued at $0.11 per share.

On June 18, 2020, the Company issued 504,957 shares of its common stock to an existing note holder who elected to convert promissory notes plus accrued and unpaid interest totaling $55,545. The stock was issued at $0.11 per share.

During the six-month period ended June 30, 2019, the Company issued 700,000 shares of its common stock as follows:

On March 21, 2019, the Company issued 200,000 shares of its common stock to its Securities Exchange Commission counsel, who elected to take common stock in the Company as partial payment of its legal fees. The total value shares were valued at $0.08 per share on the total value of $16,000.

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

13.

LEGAL PROCEEDINGS

The Company previously reported that the litigation between Rotech Healthcare, Inc. and Pharmacy Value Management Solutions, Inc. settled. The Company rejected the draft settlement terms and continues to aggressively defend this litigation.

Except as disclosed above and in Item 1, all of the legal proceedings for the ~~three~~ six-month period ended ~~March~~June 3130, 2020, are disclosed in our annual report on Form10-K ~~for the year ended December 31, 2019,~~ filed on April 9, 2020.

~~- 13 -~~15

ADVANZEON SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.

SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, the Company evaluated subsequent events through ~~May~~August 19, 2020, the date these financial statements were available to be issued. During its evaluation, the following subsequent events were identified:

Issuance of debt and warrants

Subsequent to the balance sheet date, the Company has issued $~~109~~56,180 of convertible-promissory notes. All of the debt matures in 2021 and has a stated interest rate of 10 22% and is unsecured. Concurrent with the issuance of debt, the Company has issued ~~196~~300,~~058~~000 warrants at an average exercise price of $0.2325. At the time of issuance, all warrants had a three or five year term.

~~On April 27, 2020, the Company filed a~~Stock ~~report~~issued onfor ~~Form~~conversion ~~8-K~~of ~~regarding~~debt ~~our entry into a material definitive agreement~~ and ~~the~~accrued ~~creation of a direct financial obligation which report is hereby incorporated herein by reference.~~interest

~~Agreements~~ The Company issued 765,399 shares of common stock for the conversion of debt and accrued interest. The total debt and accrued interest converted was $84,194 or $0.11 per share.

On May 13, 2020, we entered into an Exchange Agreement (the “Agreement”) with certain holders of our 10% Senior Debt Due April 15, 2012 (collectively, the “Noteholders”). The Agreement provides that the Noteholders with Notes, totaling $2,916,869 of principal and accrued but unpaid interest, exchange their Notes for 14,584,350 shares of the Company’s Common Stock and 5,121,105 Common Stock purchase warrants. The exchange rate was $0.20 per share, which was the market price of the Common Stock as of April 21, 2020. The warrants are for a term of five years and the exercise price is $0.25 per share. The Agreement further provides that the Noteholders lock-up their acquired shares until the earlier of (a) one year from the date of the Agreement, or (b) the average daily trading volume of the Company’s Common Stock is no less than 500,000 shares for 30 consecutive trading days (collectively, the “Lock-up Period”). Following the Lock-up Period and for a period of 18 months from the date of the Agreement, if the Noteholders intend to sell more than 200,000 shares on any single trading day, the Noteholders shall give the Company prior notice of the amount of shares they intend to sell and the Company shall have a right to purchase all, but not less than all, of the offered shares at the closing bid price of the Common Stock on the date of the notice. The Agreement is in further implementation of the Company’s strategy to position the Company for the relisting of its securities on a national stock exchange such as the New York Exchange, the American Exchange or NASDAQ.16

-ITEM 2. 14MANAGEMENT’S -DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~ADVANZEON SOLUTIONS, INC.~~General

~~ITEM~~The following 2.information ~~MANAGEMENT~~should be read in conjunction with the financial statements and notes thereto and in conjunction with Managements’S Discussion ~~DISCUSSION~~and ~~AND~~Analysis ~~ANALYSIS~~of OFFinancial ~~FINANCIAL~~Condition ~~CONDITION~~and ~~AND~~Results ~~RESULTS~~of OFOperations ~~OPERATIONS~~in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

~~General~~This report includes forward-looking statements, the realization of which may be affected by certain important factors discussed previously above under Item 1A, “Risk Factors.”

The following information should be read in conjunction with the financial statements and notes thereto and in conjunction with Managements’ Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.Overview

~~This~~The Company ~~report~~through ~~includes~~its ~~forward-looking~~wholly ~~statements~~owned subsidiary Pharmacy Value Management Solutions, Inc. administers and operates a medically driven sleep apnea program branded SleepMaster Solutions™ (“SMS”). Management believes that SMS is the ~~realization~~largest provider of ~~which~~these ~~may~~combined beservices ~~affected~~in bythe ~~certain~~nation. ~~important~~We ~~factors~~are ~~discussed~~in ~~previously~~all ~~above~~50 ~~under~~states ~~Item~~and 1Aprovide a turnkey solution designed to effectively keep drivers on the road with no down time, ~~“Risk~~compliant ~~Factors~~with DOT regulations, improve their health, and significantly decrease legal liability risk for the employer. We are vertically integrated, and we provide a “Program” of services that addresses all the needs of a corporate transportation system, union or other driver-related organizations. We believe we are the only company capable of providing the full range of needed services in a timely manner.

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

SMS constructed its model based upon the foregoing principles. The ~~Company~~SMS ~~through~~Program ~~its~~includes ~~wholly~~all ~~owned~~processes ~~subsidiary Pharmacy~~attended ~~Value~~in ~~Management~~sleep ~~Solutions~~apnea screening, testing, ~~Inc.~~treatment, ~~administers~~monitoring and ~~operates~~overall amanagement ~~medically~~of ~~driven~~commercial ~~sleep~~drivers’ ~~apnea~~as ~~program~~well ~~branded~~as ~~SleepMaster~~their ~~Solutions™~~employers’ needs. We have successfully established relationships with national health care clinic providers, all with certified medical examiner (“~~SMS~~CME”) status. ~~Management~~These ~~believes~~clinics ~~that~~total ~~SMS~~almost is1,000 throughout the ~~largest~~U.S. ~~provider~~We ofalso ~~these~~have ~~combined~~both ~~services~~formal inand ~~the~~informal ~~nation.~~relationships Wewith ~~are~~employers; municipalities; ina ~~all 50~~significant ~~states~~veteran’s group; union and ~~provide~~non-union adriving ~~turnkey~~organizations; ~~solution~~suppliers ~~designed~~of tohome ~~effectively~~sleep ~~keep~~testing equipment ~~drivers~~and ona ~~the~~variety ~~road~~of ~~with~~OSA notreatment ~~down~~devices; ~~time~~and, ~~compliant~~a ~~with~~national ~~DOT regulations,~~network ~~improve~~of ~~their~~telemedicine ~~health,~~sleep ~~and~~specialists ~~significantly~~covering ~~decrease~~all ~~legal~~50 ~~liability~~states. We ~~risk~~have ~~for~~an ~~the~~internal ~~employer.~~medical Weteam ~~are~~for ~~vertically~~governance ~~integrated,~~ and weprotocol ~~provide~~purposes and a ~~“Program”~~customer ofservice ~~services~~department that ~~addresses~~interfaces ~~all~~directly with ~~the~~our ~~needs~~drivers. ofWe also have a ~~corporate~~marketing ~~transportation~~team ~~system,~~that ~~union~~regularly orinterfaces with our existing accounts and markets our services ~~other~~to ~~driver-related~~potential ~~organizations~~new accounts. WeOur ~~believe~~services we are ~~the~~performed ~~only~~utilizing ~~company~~a ~~capable~~best ofmedical ~~providing~~practices model and an efficient, cost-effective delivery system. We obtain the ~~full~~required ~~range~~equipment ofon ~~needed~~a ~~services~~per in order basis from a ~~timely~~durable ~~manner~~medical equipment distributor.

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

PVMS constructed its model based upon the foregoing principles. The SMS Program includes all processes attended in sleep apnea screening, testing, treatment, monitoring and overall management of commercial drivers’ as well as their employers’ needs. We have successfully established relationships with national health care clinic providers, all with certified medical examiner (“CME”) status. These clinics total almost 1,000 throughout the U.S. We also have both formal and informal relationships with employers; municipalities; a significant veteran’s group; union and non-union driving organizations; suppliers of home sleep testing equipment and a variety of OSA treatment devices; and, a national network of telemedicine sleep specialists covering all 50 states. We have an internal medical team for governance and protocol purposes and a customer service department that interfaces directly with our drivers. We also have a marketing team that regularly interfaces with our existing accounts and markets our services to potential new accounts. Our services are performed utilizing a best medical practices model and an efficient, cost-effective delivery system. We obtain the required equipment on a per order basis from a durable medical equipment distributor.17

During the three-month 15period ending June 30, 2020, the majority of our revenue was received from patient referrals from only certain of the clinics operated by Concentra Health Services. During this period and as a result of the Coronavirus pandemic, the Department of Transportation (DOT), which had previously suspended the requirement that interstate commercial drivers have a prescribed DOT medical exam from a DOT certified medical examiner, extended the DOT medical exam suspension to expire September 30, 2020. This action by the DOT, coupled with the effect of the pandemic, caused a significant number of clinics that we rely upon for referrals to either continue to be closed, close anew or operate with reduced staffing and reduced capacity. All of the foregoing resulted in fewer patients. Additionally, many commercial drivers, who, but for the aforesaid medical exam suspension, would have gone to the Concentra clinics for their required DOT medical exam, elected to wait until the suspension expires. All of those events materially reduced our referral resources. We did continue to receive revenue from certain Concentra referrals, other clinic referrals and some of our in-house account, such as PG&E, the Veteran’s organization with whom we contract, and others, but this patient flow was materially reduced, as well. Our recently announced launch of our CoreChoice account (April 29, 2020), scheduled to launch this period, did not launch as a result of the pandemic. During this period, we successfully added new accounts which, principally due to the pandemic, have not yet launched. However, they are in the process of preparing to do so. As clinics reopen and staff returns, management expects to see revenue from these new accounts. We continue to experience the effect of these closures/reduced staffing and cannot predict when either our referral sources or our own operation will begin to normalize, resulting in more positive financial results. However, we continue to aggressively seek new accounts and work with our existing accounts to achieve increased patient flow.

~~ADVANZEON SOLUTIONS,~~Sources ~~INC.~~of Revenue

~~Revenue is recognized when billed, which~~Three-month isperiods ~~approximately~~ended ~~when~~June ~~the testing service is performed~~30, or2020 ~~CPAP~~and ~~machine is shipped.~~2019

~~The first quarter of 2020 saw the beginnings~~A ofquantitative asummary ~~dramatic shift in the economic business structure~~ of ~~the~~our ~~U.S.,~~revenues ~~ultimately~~by ~~resulting~~source incategory ~~substantial~~for ~~nationwide business closures and employee layoffs/furloughs. Unemployment went from a low of 3.6% to over 14% in April 2020 – an almost overnight shift. All of this was a result of~~ the ~~rapid spread of COVID~~three-~~19.~~month ~~Caught~~periods upended inJune ~~the business closures during a national “stay at home” directive~~30, ~~were~~2020 a significant number of Concentra clinics. During this same period, the federal government, specifically the Department of Transportation (“DOT”), suspended the need for interstate commercial drivers to report for previously mandated DOT physical exams and lifted the commercial drivers’ driving time restrictions. While the Company is substantially dependent upon the commercial drivers’ need for these physical exams, their attendance at various Concentra clinics for these exams and the referral of the drivers by these clinics to the Company when sleep apnea is suspected, these closures and the suspension of the DOT physical exams did not adversely impact on the Company as much as might have been anticipated. The company was well positioned to withstand these events and had established itself securely enough with both the still open Concentra clinics and new business accounts to maintain its referral momentum, albeit not at the same pace.2019:

The Company’s sales in January 2020 were up 74% compared to its sales in January 2019. The Company’s sales in February 2020 increased 101% over its sales in February 2019. The Company’s overall sales during the first quarter of 2020 increased over 88%. This increase resulted largely from the Company’s senior management’s positioning with senior management of Concentra, its sales reps’ strategic restarting of their regional contacts with Concentra clinic managers and the hiring of additional customer service representatives, adding depth to an already solid rep force. The Company’s growth over 2019 has continued into the second quarter of 2020 with current sales being up an additional 7% over last year’s comparable period. It is also notable that during the first quarter of 2020, approximately 7% of the Company’s increased sales over the comparable period of 2019 were occasioned by relationships established by the Company at the end of 2019 with new third-party payers such as The Pacific Gas & Electric Company (PG&E); the United States Postal Service in Indianapolis, Indiana; a West Coast-based Workers’ Compensation organization with substantial national accounts; and the Transit Authority in Baltimore, Maryland. We expect our growth pattern to continue in 2020 as the Company spends more time encouraging these new accounts to utilize the Company’s services, exclusively, and as relationships established by the Company with labor in the latter part of 2019 and into 2020 mature and strengthen.

		2020		2019		Change

OSA- related	$	103,444	$	90,453	$	12,991

~~Additionally, the Company would note that~~Results ~~while its staff was offered the choice~~ of working from home or at the Company’s offices, 100% of the Company’s employees elected to work from the Company’s offices. Thus, notwithstanding the fact that many of the Company’s accounts were not reachable, either personally or by phone, during the first quarter of 2020, the Company’s staff diligently pursued those contacts and new accounts in a coordinated effort to maintain and increase the Company’s business.Operations

-OSA services 16increased -to $103,444 in 2020 from $90,453 in 2019. The increase was primarily the result of the Concentra account. Last year, on May 14, 2019, we reached an agreement with Concentra whereby Concentra engaged the Company, and the Company accepted the engagement, to serve as one of Concentra’s preferred national sleep apnea services provider. The launch was initiated during the fourth quarter of 2019.

~~ADVANZEON~~While there ~~SOLUTIONS~~was an increase in OSA services, the increase would have been greater without the clinics having to shut down due to the ~~INC~~COVID-19 pandemic. As demonstrated in the first quarter of 2020, OSA services increased by $59,625 than in the comparable period of 2019. With the clinics having to be closed during the three months period ended June 30, 2020 due to the COVID-19 pandemic, there was only an increase of $12,990.

~~While~~Cost ~~a number~~ of ~~labor-related programs~~ ~~were~~revenues ~~put~~decreased onto ~~hold~~$65,000 ~~during~~in ~~the~~2020 ~~first~~from ~~quarter of 2020~~$66,157 ~~the Company elected to engage~~ in ~~a modified launch of its program with CoreChoice~~2019. In ~~March of 2020~~2019, the ~~Company~~cost ~~prepared~~allocation ~~for~~was ~~this~~changed ~~launch~~ to areflect ~~limited~~the ~~number~~cost ofand ~~CoreChoice~~sales in ~~facilities~~the ~~(350~~same ~~clinics)~~month. This ~~launch occurred~~caused intwo ~~late~~months’ ~~April~~worth ~~2020,~~of ~~and~~charges ~~while~~in ~~revenues~~the ~~have~~month ~~not~~of ~~yet~~April ~~commenced~~2019. ~~from~~April ~~these clinics~~1, ~~management~~2019 ~~fully~~and ~~expects~~April ~~same to occur within the next~~ 30, ~~– 45 days as the CoreChoice clinics reopen.~~2019

~~In addition, the Company hired two senior~~General ~~labor consultants whose directive is to enhance our sales revenue from the Western Teamsters Welfare Trust Fund, a long-standing Company account,~~ and ~~increase~~administrative ~~the Company’s revenue through new accounts from the labor/union market.~~expense

~~Additionally, the Company accelerated the~~General ~~development of its CPAP sanitizing device~~ and ~~daily~~administrative ~~sanitizing~~expense ~~wipes~~in ~~product~~total ~~line (see our announcement of April 13, 2020). In April 2020, we commenced taking orders~~ for ~~this product line and first deliveries to our customers are expected to occur by~~ the ~~end~~ ofthree ~~May.~~month ~~The~~periods ~~Company’s~~ended ~~sales~~June ~~reps~~30, ~~market~~2020 ~~our sanitizer~~ and ~~sanitizing~~2019 ~~wipes~~was ~~products~~as ~~in tandem with sales of the Company’s CPAP device.~~follows:

The Company believes that its sales activities will shortly place the Company in a position to move forward with its expressed intent to relist the Company on NASDAQ. In the first quarter of 2020, the Company commenced activities aimed at reducing Company debt, much of which existed with the Company for decades. In the second quarter of 2020, the Company successfully negotiated with debt holders holding debt against the Company of approximately $2.9 million to convert that debt into Common Stock of the Company (equity). Additionally, the Company has received commitments to convert another approximately $7 million of debt into equity of the Company. The Company intends to pursue these efforts with the goal of ultimately converting much, if not all, of the Company’s long-standing debt (as opposed to continuing operation expenses) into equity in the Company, bringing it one step closer to its “up-listing” goal.

2020	$	715,397
2019		416,039
Change	$	299,358
Percentage Change		71.95	%

~~Sources of Revenue~~18

AWe evaluate ~~quantitative~~expenses ~~summary~~at ofthe Parent company level as well as at our ~~revenues~~PVMS subsidiary. Expenses at the Parent company level include byoverhead ~~source~~and ~~category~~the cost of being a public entity. Expenses at PVMS are solely related to the OSA services segment. A breakdown of these expenses for the three month periods ended ~~March~~June 3130, 2020 and 2019 is as follows:

	~~2020~~	2020		~~2019~~	2019		~~Change~~	Change		Percent Change
OSA- related	$	127,548		$	67,923		$	59,625
Parent		$	296,036		$	156,686		$	139,350		88.94	%
PVMS			419,361			259,353			160,008		61.70	%
Total		$	715,397		$	416,039		$	299,358		71.95	%

~~Results~~Parent Company ~~of Operations~~Level

OSA services increased to $127,548 in 2020 from $67,923 in 2019. The increase was primarily the result of the timing of the Concentra launch. Last year, on May 14, 2019, we reached an agreement with Concentra whereby Concentra engaged the Company, and the Company accepted the engagement, to serve as Concentra’s preferred national sleep apnea services provider. The launch by Concentra of this program included notifying all of the Concentra clinics of same. The launch was delayed but was initiated during the fourth quarter of 2019.

	2020			2019		Change			Percent Change

Professional fees	$	243,494		$	86,804	$	156,690			180.51	%
Travel expense		—			815		(815	)		-100.00	%
Board of Directors fees		57,500			37,500		20,000			53.33	%
Office supplies		417			287		130			45.30	%
Rent expense		(23,181	)		25,448		(48,629	)		-191.09	%
Other		17,806			5,832		11,974			205.33	%

Total G & A	$	296,036		$	156,686	$	139,350			88.94	%

~~Cost~~ Explanations of ~~revenues~~variations ~~increased~~by toline ~~$64,909~~item ~~in 2020 from $41,660 in 2019 due to an increase in sales.~~follow:

-Professional fees 17increased by $156,690. The increase is mainly due to new consulting service expenses in the total of $118,250 and an increase of $43,827 in legal fees in the three-month period ended June 30, 2020 compared to the three month period ended June 30, 2019.

~~ADVANZEON~~Travel expense ~~SOLUTIONS,~~decreased by $815 due to due to the COVID-19 pandemic. Many clinics have been closed and those that are open have reduced ~~INC~~staffs and we have been requested to not conduct any in person visits.

~~General~~Board of ~~and~~Directors ~~administrative~~fees ~~expense~~increased by $20,000 due to an additional $20,000 paid to a Board of director member.

~~General~~Rent expense ~~and~~decreased ~~administrative~~by ~~expense~~48,629 indue ~~total for~~to ~~the~~office ~~three~~lease ~~month~~moving ~~periods~~to ~~ended~~subsidiary ~~March~~level 31as of January 01, 2020. ~~and~~The ~~2019~~same ~~was~~will show as ~~follows:~~an increase on the subsidiary level.

2020	$	596,065
2019		425,804
Change	$	170,261
Percentage Change		39.99	%

Other general and administrative expense increased by $11,974. This increase was due to a new D&O Insurance expense of $14,205 while other miscellaneous items decreased by $1,421.

We evaluate expenses at the Parent company level as well as at our PVMS subsidiary. Expenses at the Parent company level include overhead and the cost of being a public entity. Expenses at PVMS are solely related to the OSA services segment. A breakdown of these expenses for the three month periods ended March 31, 2020 and 2019 is as follows:19

							Percent
	2020		2019		Change		Change
Parent	$	243,222	$	196,135	$	47,087		24.01	%
PVMS		352,843		229,669		123,174		53.63	%
Total	$	596,065	$	425,804	$	170,261		39.99	%

PVMS Subsidiary Level

Parent Company Level

	2020		2019		Change			Percent Change

Payroll related	$	243,871	$	110,167	$	133,704			121.36	%
Travel and related expense		9,059		51,897		(42,838	)		-82.54	%
Professional fees		57,265		39,250		18,015			45.90	%
Marketing costs		17,758		9,729		8,029			82.53	%
Dues and subscriptions		27		200		(173	)		-86.50	%
Office supplies		1,135		8,718		(7,583	)		-86.98	%
Rent expense		54,096		12,452		41,644			334.44	%
Other		36,150		26,940		9,210			34.19	%

Total G & A	$	419,361	$	259,353	$	160,008			61.70	%

								Percent
	2020		2019		Change			Change
Professional fees	$	166,376	$	124,461	$	41,915			33.68	%
Travel expense		67		3,000		(2,933	)		-97.77	%
Board of Directors fees		37,500		37,500		-			0.00	%
Rent expense		23,181		25,829		(2,648	)		-10.25	%
Other		16,098		5,345		10,753			201.18	%
Total general and administrative	$	243,222	$	196,135	$	47,087			24.01	%

Explanations of variations by line item follow:

~~Explanations~~Payroll related expenses increased $133,704. The company hired 4 employees in the three months ended June 30, 2020 that were not included in the comparable period in 2019. The Company paid our CEO $32,699 and accrued wages in the amount of ~~variations~~$33,456 byduring ~~line~~the ~~item~~three ~~follow:~~months ended June 30, 2020.

Travel expense decreased by $242,~~933~~838 due to ~~main~~due ~~operations~~to ~~moving~~the COVID-19 pandemic. Many clinics have been closed and those that are open have reduced staffs and we have been requested to ~~the~~not ~~subsidiary~~conduct ~~level~~any in person visits.

Professional Fees ~~fees~~ increased by $4118,~~915~~015. ~~There~~ ~~was~~The increase is mainly due to aan ~~new~~increase ~~consulting service expenses~~ in ~~the~~accounting ~~total~~fees ofby $~~118~~25,000 ~~and~~due anto ~~increase~~services offor ~~$11,197~~special projects. There was a decrease in legal fees ~~in the~~by ~~three~~$13,485. ~~month~~The ~~period~~Company ~~ended~~no ~~March~~longer ~~31,~~used ~~2020~~a ~~compared~~law tofirm in the three ~~month~~months ~~period~~ ended ~~March 31, 2019. Audit fees decreased by $63,550~~June ~~and accounting fees decreased by $19~~30,~~832~~ ~~due~~2020 tothat ~~the~~were ~~fact~~used ~~that~~in the ~~2019~~comparable ~~10-K~~period ~~was filed~~ in ~~April 2020~~2019.

~~Rent~~Marketing costs ~~expense~~increased ~~has~~by ~~stayed~~$8,029. ~~relatively~~The company hired an advertising firm in the 3rd quarter of 2019 to work on the company's website and ~~same~~other marketing responsibilities and is still with the company as of June 30, 2020.

~~Other general and administrative expense~~Office ~~increased~~supplies decreased by $107,~~753.~~583 ~~This increase was~~ due to aoffice ~~new~~supplies ~~D&O~~were ~~Insurance~~fully ~~expense~~stocked ofgoing ~~$12,780~~into ~~while~~the ~~other~~new ~~miscellaneous~~year ~~items~~of ~~decreased by $2,000~~2020.

-Rent expense 18increased -by $41,644 due a decrease on to rent expense moving from parent level to subsidiary level as of January 01, 2020. The same will show as a decrease on the parent level.

~~ADVANZEON~~Other general ~~SOLUTIONS~~and administrative expense increased by $9,210. The increase is mainly due to a fraudulent charge of $9,500 and an increase ~~INC~~in payroll taxes of $13,371 due to an increase in wages. There is a decrease in automobile expenses of $4,912 due to the COVID-19 pandemic.

~~PVMS Subsidiary Level~~Interest expense

								Percent
	2020		2019		Change			Change
Payroll related	$	175,872	$	102,145	$	73,727			72.18	%
Travel and related expense		66,165		39,427		26,738			67.82	%
Professional fees		51,792		42,497		9,295			21.87	%
Marketing costs		16,834		7,500		9,334			124.45	%
Automobile expense		7,394		5,561		1,833			32.96	%
Office supplies		2,942		8,859		(5,917	)		-66.79	%
Rent expense		11,837		10,549		1,288			12.21	%
Other		20,007		13,131		6,876			52.36	%
Total general and administrative	$	352,843	$	229,669	$	123,174			53.63	%

Interest expense in total for the three-month periods ended June 30, 2020 and 2019 was as follows:

Explanations of variations by line item follow:

2020	$	707,774
2019		341,178
Change	$	366,596
Percentage Change		107.45	%

~~Payroll related expenses increased $73,727. There are 5 additional subcontractors in the three months ended March 31, 2020 that were used in the comparable period in 2019.~~20

~~Travel~~A breakdown ~~expense~~of ~~increased~~the byinterest ~~26,738~~expense ~~due to~~for the ~~company’s~~three-month ~~increased~~periods ~~travel~~ended ~~between~~June ~~states.~~30, 2020 and 2019 is as follows:

Professional Fees increase by $9,295. The company hired 5 new consultants to bring in additional revenue.

	2020		2019		Change

Parent	$	492,340	$	163,093	$	329,247
PVMS		215,434		178,085		37,349

Total	$	707,774	$	341,178	$	366,596

~~Marketing costs increased by $9,334. In~~Sources ~~August~~of ~~2019, the company hired a new advertising firm to work on the company’s website.~~Revenue

~~Office~~Six-month periods ~~supplies~~ended ~~decreased~~June ~~by $5~~30,~~917~~ ~~due to~~2020 ~~office~~and ~~supplies were fully stocked going into the new year of 2020.~~2019

~~Rent~~A quantitative ~~expense~~summary ~~stayed~~of ~~relatively~~our revenues by source category for the ~~same.~~six-month periods ended June 30, 2020 and 2019:

Other general and administrative expense increased by $6,876. This is due to revamp of website, employee benefits, and printing and postage for a conference.

		2020		2019		Change

OSA- related	$	230,992	$	158,376	$	72,616

-Results of ~~19 -~~Operations

~~ADVANZEON~~OSA services ~~SOLUTIONS~~increased to $230,992 in 2020 from $158,376 in 2019. The increase was primarily the result of the Concentra account. ~~INC~~Last year, on May 14, 2019, we reached an agreement with Concentra whereby Concentra engaged the Company, and the Company accepted the engagement, to serve as one of Concentra’s preferred national sleep apnea services provider. The launch was initiated during the fourth quarter of 2019.

~~Interest~~While there ~~expense~~was an increase in OSA services, the increase would have been greater without the clinics having to shut down due to the COVID-19 pandemic. As demonstrated in the first quarter of 2020, OSA services increased by $59,625 than in the comparable period of 2019. With the clinics having to be closed during the three months period ended June 30, 2020 due to the COVID-19 pandemic, there was only an additional increase of $12,990.

~~Interest~~Cost of ~~expense~~revenues inincreased ~~total~~to ~~for~~$129,909 ~~the~~in ~~three month~~2020 ~~periods~~from ~~ended~~$107,817 ~~March~~in ~~31,~~2019 ~~2020~~due ~~and~~to ~~2019~~an ~~was~~increase asin ~~follows:~~sales.

2020	$	394,629
2019		328,015
Change	$	66,614
Percentage Change		20.31	%

General and administrative expense

AGeneral and ~~breakdown~~administrative ofexpense ~~the~~in ~~interest~~total ~~expense~~ for the ~~three~~ six-month periods ended ~~March~~June 3130, 2020 and 2019 iswas as follows:

2020	~~2020~~	$	1,311,462		~~2019~~		~~Change~~
Parent	$	144,113			$	163,092	$	(18,979	)
2019			841,843
PVMS		250,516				164,923		85,593
Change		$	469,619
Total	$	394,629			$	328,015	$	66,614
Percentage Change			55.78	%

-We evaluate 20expenses -at the Parent company level as well as at our PVMS subsidiary. Expenses at the Parent company level include overhead and the cost of being a public entity. Expenses at PVMS are solely related to the OSA services segment. A breakdown of these expenses as June 30, 2020 and 2019 is as follows:

ADVANZEON SOLUTIONS, INC.

	2020		2019		Change		Percent Change

Parent	$	539,259	$	352,821	$	186,438		52.84	%
PVMS		772,203		489,022		283,181		57.91	%

Total	$	1,311,462	$	841,843	$	469,619		55.78	%

~~Financial~~Parent Company ~~Condition~~Level

Liquidity and Capital Resources

								Percent
	2020		2019		Change			Change

Professional fees	$	409,870	$	211,265	$	198,605			94.01	%
Travel expense		67		3,815		(3,748	)		-98.24	%
Board of Directors fees		95,000		75,000		20,000			26.67	%
Office supplies		495		351		144			41.03	%
Rent expense		—		51,277		(51,277	)		-100.00	%
Other		33,827		11,113		22,714			204.40	%

Total general and administrative	$	539,259	$	352,821	$	186,438			52.84	%

~~During the three month period ended March~~Explanations ~~31,~~of ~~2020,~~variations weby ~~funded~~line ~~our~~item operations from revenues and $182,000 in private borrowings. We will continue to fund our operations from these sources until we are able to produce operating revenue sufficient to cover our cost structure. In the event we are not able to secure such funding, our operations will be adversely affected.follow:

~~Short~~Professional fees ~~Term:~~increased We$198,605. ~~funded~~The ~~our~~increase ~~operations~~is ~~with~~mainly due to new consulting service expenses in the total of $236,500 and an increase ~~revenues~~of ~~from~~$55,023 ~~sales~~in legal fees in the six-month period ended June 30, 2020 compared to the six-month period ended June 30, 2019. Audit fees decreased by $66,300 and ~~private~~accounting ~~borrowings~~fees decreased by $22,957 due to the fact that the 2015 - 2017 10-K was filed in January 2019.

~~Subsequent~~Travel expense ~~Events~~decreased $3,748 due to due to the COVID-19 pandemic. Many clinics have been closed and those that are open have reduced staffs and we have been requested to not conduct any in person visits.

~~Subsequent~~Board of toDirectors ~~March~~fees ~~31,~~increased ~~2020~~$20,000 wedue ~~issued a~~to ~~convertible~~an ~~promissory~~additional ~~note in the principal amount of~~ $~~109~~20,~~180.~~000 ~~The~~paid ~~term~~to ofa ~~the~~Board ~~note~~of isdirector ~~12 months and the interest rate is 10% per annum~~member.

OnRent expense ~~April~~decreased 27$51,277 ~~2020,~~due weto ~~filed~~rent aexpense ~~report~~moving ~~on Form~~from ~~8-K~~parent ~~regarding~~level ~~our~~to ~~entry~~subsidiary ~~into~~level aas ~~material definitive agreement and the creation~~ of aJanuary ~~direct~~01, ~~financial~~2020. ~~obligation~~The ~~which~~same ~~report~~will isshow ~~hereby~~as ~~incorporated~~an ~~herein~~increase byon ~~reference~~the subsidiary level.

~~Agreements~~Other general and administrative expense increased by $22,714. This increase was due to a new D&O Insurance expense of $26,174 while other miscellaneous items decreased $3,463.

~~Item~~PVMS Subsidiary ~~3. Quantitative and Qualitative Disclosures about Market Risk:~~Level

As a smaller reporting company, we are not required to make any disclosure.

								Percent
	2020		2019		Change			Change

Payroll related	$	419,743	$	212,312	$	207,431			97.70	%
Travel and related expense		75,224		91,324		(16,100	)		-17.63	%
Professional fees		109,057		81,747		27,310			33.41	%
Marketing costs		34,592		17,229		17,363			100.78	%
Dues and subscriptions		208		640		(432	)		-67.50	%
Office supplies		4,077		17,577		(13,500	)		-76.80	%
Rent expense		65,933		23,001		42,932			186.65	%
Other		63,369		45,192		18,177			40.22	%

Total general and administrative	$	772,203	$	489,022	$	283,181			57.91	%

~~Item~~Explanations of 4.variations ~~Controls~~by ~~and~~line ~~Procedures~~item follow:

~~Our~~Payroll related ~~management~~expenses isincreased ~~responsible~~$207,431. ~~for~~The ~~establishing and~~Company ~~maintaining~~hired ~~adequate~~4 ~~internal~~employees ~~control~~during ~~over~~the ~~our~~six ~~financial~~months ~~reporting.~~ended ~~Internal~~June ~~control~~30, ~~over~~2020 ~~financial~~that ~~reporting~~were isnot ~~a process~~included ~~designed~~in tothe ~~provide~~comparable ~~reasonable~~period ~~assurance~~in to2019. ~~our~~The ~~management~~Company ~~and~~paid ~~board~~our ofCEO ~~directors~~$32,699 ~~regarding~~and ~~the~~accrued ~~reliability~~wages ofin ~~financial reporting and~~ the ~~preparation~~amount of ~~financial~~$33,456 ~~statements~~during ~~for~~the ~~external~~six ~~purposes~~months ended inJune ~~accordance~~30, ~~with U~~2020.~~S. generally accepted accounting principles.~~

~~Our internal control over financial reporting~~Travel ~~includes~~expense ~~those~~decreased ~~policies~~$16,100 ~~and~~due ~~procedures that (i) pertain~~ to the ~~maintenance~~COVID-19 ofpandemic. ~~records~~Many ~~that~~clinics inhave ~~reasonable~~been ~~detail~~closed ~~accurately~~ and ~~fairly~~ ~~reflect~~those ~~our transactions; (ii) provide reasonable assurance~~ that ~~transactions~~ are ~~recorded~~open ashave ~~necessary~~reduced ~~for preparation~~staffs ~~of our financial statements; (iii) provide reasonable assurance that receipts~~ and ~~expenditures~~we ~~of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of company assets that could~~ have abeen ~~material~~requested ~~effect~~to onnot ~~our~~conduct ~~financial~~any ~~statements~~in ~~would~~person ~~be prevented or detected on a timely basis~~visits.

~~Because~~Professional Fees ofincreased ~~its~~$27,310. ~~inherent~~There ~~limitations,~~is ~~internal control~~an ~~over~~increase ~~financial~~in ~~reporting~~accounting ~~may~~fees ~~not~~by ~~prevent~~$25,000 ordue ~~detect~~to ~~misstatements~~services for special projects. ~~Also~~Consulting fees increased $33,750 ~~projections~~because ofthe ~~any~~company ~~evaluation~~hired of5 ~~effectiveness~~ new consultants to ~~future~~bring ~~periods~~in ~~are~~additional ~~subject~~revenue. toThere ~~the~~was ~~risk~~a ~~that~~decrease ~~controls~~in ~~may~~legal ~~become~~fees by ~~inadequate~~$23,657. ~~because~~The ~~changes~~Company inno ~~conditions~~longer ~~may~~used ~~occur~~a orlaw firm in the ~~degree of~~six ~~compliance~~months ~~with~~ended ~~the~~June ~~policies~~30, or2020 ~~procedures~~that ~~may~~was ~~deteriorate~~used in the comparable period in 2019.

~~Our management assessed the effectiveness~~Marketing ofcosts ~~our~~increased ~~internal~~by ~~control over financial reporting as of March 31~~$17, ~~2020~~363. ~~This~~The ~~evaluation~~company ~~was~~hired ~~based~~an onadvertising ~~criteria~~firm ~~set~~in ~~forth by~~ the ~~Committee of~~3rd ~~Sponsoring~~quarter ~~Organizations~~ of ~~the~~2019 ~~Treadway~~to ~~Commission,~~work oron ~~COSO,~~the ~~Internal~~company's ~~Control-Integrated~~website and ~~Framework.~~other ~~Based~~marketing ~~upon~~responsibilities ~~such~~and ~~assessment, our~~is ~~CFO~~still ~~concluded~~with ~~that,~~the company as of ~~March~~June 3130, 2020~~, our internal controls over financial reporting were not optimally effective in the specific areas described in the paragraphs below~~.

-Office supplies 21decreased -by $13,500 due to office supplies were fully stocked going into the new year of 2020.

~~ADVANZEON~~Rent expense ~~SOLUTIONS~~increased $42,932 due to rent expense moving from parent level to subsidiary level as of January 01, 2020. The same will ~~INC~~show as a decrease on the parent level.

AsOther general and administrative expense increased by $18,180 due to a fraudulent charge of ~~March~~$9,500 31and an increase in payroll taxes of $10,764 ~~2020~~because of an increase in wages. Other miscellaneous items increased by $6,876 ~~our~~due ~~CFO~~to ~~identified~~revamp of website, employee benefits, and printing and postage for a conference. Automobile expenses decreased $3,078 due to the ~~following~~COVID-19 ~~specific~~pandemic. ~~material~~Bad ~~weaknesses~~debt expense decreased $3,510 due to a decrease in bad debt in the ~~Company’s~~six ~~internal~~months ~~controls~~ended ~~over~~June ~~its~~30, ~~financial~~2020 ~~reporting~~than ~~processes:~~in the comparable period in 2019.

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

●Interest expense ~~Representative~~in ~~with~~total ~~Financial~~for ~~Expertise~~the ~~– For three~~ six-month ~~period~~periods ended ~~March~~June 3130, 2020, ~~the Company did not continuously have an employee with the requisite knowledge~~ and ~~expertise~~2019 towas ~~review~~as the financial statements and disclosures at a sufficient level to monitor the financial statements and disclosures to the Company. Failure to have, continuously, an employee with such knowledge and expertise amounts to a material weakness to the Company’s internal controls over its financial reporting processes.follows:

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

2020	$	1,102,403
2019		669,193
Change	$	433,210
Percentage Change		64.74	%

~~● All billing invoices prepared by the billing department are sent to the Outside Accountant for review and approval before sending out to the customer.~~22

●A breakdown ~~Copies~~ of ~~all incoming payable invoices are sent to~~ the ~~Outside~~interest ~~Accountant~~expense for ~~review, approval and data entry into~~ the ~~accounting~~six-month ~~system.~~periods ~~That~~ended ~~way~~June Corporate Office has the originals and the outside accountants have duplicate copies. Accounts Payable Aging Report is sent once a week from the Outside Accountants to the Corporate office. The Corporate office30, ~~along~~2020 ~~with Outside Accountants, decide on which bills to pay weekly. Electronic payments have a duel control approval system (one person is initiating the payment~~ and ~~another~~2019 ~~person~~ is ~~approving~~as ~~the payment). We also appointed the principle from our Outside Accountants to be our Chief Accounting Officer.~~follows:

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

	2020		2019		Change

Parent	$	636,453	$	326,185	$	310,268
PVMS		465,950		343,008		122,942

Total	$	1,102,403	$	669,193	$	433,210

~~● All bank accounts are reconciled monthly.~~Financial Condition

~~● Financial Statements are prepared~~ Liquidity and ~~reviewed~~Capital ~~monthly.~~Resources

~~The~~During the ~~Company~~six-month ~~plans~~period toended ~~further~~June ~~augment~~30, ~~its~~2020, we funded our operations from revenues and $547,360 in private borrowings. As a result ~~addressing~~of the coronavirus pandemic some of ~~material~~our ~~weaknesses,~~traditional sources of private borrowing have not been accessible. We have had to obtain private borrowing on anterms ~~as-needed~~less ~~basis,~~favorable bythan ~~hiring~~we ~~additional~~were ~~accounting~~able ~~personnel~~to ~~once~~prior ~~its~~to ~~initial~~the ~~corrective~~pandemic. We will continue to fund our operations ~~steps~~from ~~have~~these ~~been~~sources ~~fully~~until ~~implemented,~~we ~~tested~~are ~~and~~able ~~found~~to produce operating revenue sufficient to cover our cost structure. In the event we are not able to secure such funding, our operations will be ~~effective~~adversely affected.

-Short Term: 22We -funded our operations with revenues from sales and private borrowings.

~~ADVANZEON~~On April ~~SOLUTIONS~~23, ~~INC~~2020, the Company’s wholly owned subsidiary, Pharmacy Value Management Solutions, Inc. (‘PVMS”) received a loan in the principal amount of $1,243,840 from Mechanics Bank (the “Bank”) pursuant to the Paycheck Protection Program. On May 22, 2020, the Bank notified PVMS that the loan was in default as a result of false statements made in the loan application. PVMS disputes the Bank’s claim and believes that it made no false statements in its PPP loan application. The statements relate to the number of employees and the monthly payroll amounts. As a result, PVMS’ account with Mechanics Bank has been frozen with a balance of $845,340. Both PVMS and the Bank are seeking guidance from the Small Business Administration as to how to resolve this dispute. Until resolved, it is likely that this account will remain frozen.

~~PART~~During the IIperiod we continued toward our goal to be able to uplist our Common Stock to another trading platform. Among the actions is our attempt to reduce our stockholder’s deficiency by, among, other things, being able to convert a large portion of our corporate debt to equity. For the six months ended June 30, 2020, $3,727,213 of debt plus accrued interest was converted into 39,652,283 shares of Common Stock. All of the holders of the converted debt agreed, subject to several different conditions, to a one year lock-~~OTHER~~up ~~INFORMATION~~from publicly offering the shares. The primary condition being to not publicly sell the shares until the earlier of (i) one year from the date of the exchange, or (ii) until the shares are tradable on the NASDAQ or comparable national exchange. The other condition for a block of 14,584,350 shares received in an exchange has the lock-up as the earlier of one year or such time as our Common Stock has an average trading volume of no less than 500,000 shares for 30 consecutive trading days.

~~Item 1. Legal Proceedings~~Subsequent Events

~~With~~Subsequent to ~~the~~June ~~exception~~30, ~~of the matter set forth below~~2020, ~~all~~we ofissued ~~the~~a ~~legal~~convertible ~~proceedings~~promissory ~~for~~note in the ~~three~~principal ~~month~~amount ~~period~~of ~~ended March 31~~$56,180. ~~2020,~~The ~~are~~term ~~disclosed~~of inthe ~~our~~note ~~annual~~is ~~report~~12 ~~on Form~~months ~~10-K~~and ~~for~~ the ~~year~~interest ~~ended~~rate ~~December~~is ~~31,~~10% ~~2019,~~per ~~filed on April 9, 2020~~annum.

~~Item~~In August 1Awe announced that we will start using a disposable home sleep test device known as the WatchPAT™ ONE which utilizes cloud-based technology for the immediate upload of testing data. ~~Risk~~This ~~Factors~~feature will streamline the Company's receipt of test data and its ability to render faster obstructive sleep apnea (“OSA”) test results - critical, in light of the increased OSA testing reasonably to be anticipated when DOT-required medical exams resume. With the WatchPAT™ ONE, we can measure the patient's PAT® signal, heart rate, oximetry, actigraphy, body position, snoring, and chest motion. As discussed, in March of this year, the Federal Motor Carrier Safety Association (FMCSA) suspended the commercial driver's required annual/biennial medical exams. This suspension was a reaction to the COVID-19 pandemic, and the nation's need to keep its commercial drivers on the road delivering essential supplies. The suspension is currently scheduled to expire on September 30, 2020. We anticipate that almost seven months of drivers will need to schedule and complete their required medical exams shortly after September 30th. Thus, whenever the suspension is lifted, it is anticipated that there will be an increased number of drivers all needing completion of their medical exams including OSA testing (when indicated).. These drivers would be in addition to our new patient accounts acquired during the past four-month period. With our implementation of this new technology, we expect to not only be more efficient in our testing process, but to greatly enable our clinic partners to process the OSA portion of their drivers' DOT medical exams faster and more efficiently. While there is an additional cost to the Company for the WatchPAT™ ONE process, we have elected to not pass this cost on to the clinic, the driver or the driver's employer.

~~The risk factors included in our Annual~~Item ~~Report~~3. onQuantitative ~~Form~~and ~~10-K~~Qualitative ~~for~~Disclosures ~~the~~about ~~year~~Market ~~ended~~Risk: ~~December 31, 2019 have not materially changed.~~

~~Item~~As a 2.smaller ~~Unregistered~~reporting ~~Sales~~company, ofwe ~~Equity~~are ~~Securities~~not ~~and~~required ~~Use~~to ofmake ~~Proceeds~~any disclosure.

~~With the exception of the matter set forth~~Item ~~below,~~4. ~~the~~Controls ~~sale~~and ~~of unregistered securities for the three month period ended March 31, 2020 were disclosed in our annual report on Form 10-K for the year ended December 31, 2019, filed on April 9, 2020.~~Procedures

OnOur management ~~March~~is ~~22,~~responsible ~~2020,~~for weestablishing ~~issued~~and ~~50,000~~maintaining ~~warrants~~adequate internal control over our financial reporting. Internal control toover financial reporting is a ~~member~~process ofdesigned ~~our~~to ~~Medical~~provide ~~Advisory~~reasonable ~~Board,~~assurance anto ~~accredited~~our ~~investor.~~management ~~The~~and ~~warrants~~board ~~have~~of adirectors ~~term~~regarding the reliability of ~~three~~financial ~~years~~reporting and anthe ~~exercise~~preparation ~~price~~ of $0financial statements for external purposes in accordance with U.25S. generally ~~per~~accepted ~~warrant~~accounting principles.

~~On March 31, 2020, we issued 169,551 warrants to our Chief Executive Officer in lieu of 2020 first quarter salary. The warrants have a term of five years and an exercise price of $0.39 per warrant.~~23

WeOur internal ~~relied~~control onover ~~Section~~financial 4reporting includes those policies and procedures that (2i) ofpertain to the ~~Securities Act~~maintenance of ~~1933,~~records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as ~~amended~~necessary for preparation of our financial statements; (iii) provide reasonable assurance that receipts and orexpenditures of ~~Section~~company ~~501~~assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of ~~Regulation~~company Dassets ~~promulgated~~that ~~under~~could ~~said~~have ~~Act~~a asmaterial ~~the~~effect ~~exemption~~on ~~from~~our ~~registration~~financial ~~under~~statements would be prevented ~~the~~or ~~Act~~detected on a timely basis.

~~Item~~Because of 3its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. ~~Exhibits~~Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.

~~Documents~~Our management ~~filed~~assessed the effectiveness of our internal control over financial reporting as ~~part~~of June 30, 2020. This evaluation was based on criteria set forth by the Committee of ~~this~~Sponsoring ~~Report~~Organizations of the Treadway Commission, or COSO, Internal Control-Integrated Framework. Based upon such assessment, our CFO concluded that, as of June 30, 2020, our internal controls over financial reporting were not optimally effective in the specific areas described in the paragraphs below.

~~Exhibit~~As of ~~31.1~~June ~~Certification~~30, of2020, ~~Clark~~our A.CFO ~~Marcus~~identified ~~pursuant~~the tofollowing ~~Section~~specific ~~302~~material ofweaknesses in the ~~Sarbanes-Oxley~~Company’s ~~Act~~internal ofcontrols ~~2002~~over its financial reporting processes:

~~Exhibit~~• ~~31.2~~Policies ~~Certification~~and Procedures for the Financial Close and Reporting Process – During the period of ~~Lloyd~~this Kreport, the Company’s policies or procedures did not clearly define the roles in the financial reporting process. ~~Marcus~~The ~~pursuant~~various roles and responsibilities related to ~~Section~~this ~~302~~process ofshould be defined, documented, updated and communicated. Not having clear policies and procedures in place amounts to a material weakness in the ~~Sarbanes-Oxley~~Company’s ~~Act~~internal ofcontrols ~~2002~~over its financial reporting processes.

~~Exhibit~~• ~~32.1~~Representative ~~Certification~~with ~~Pursuant~~Financial Expertise – For six-month period ended June 30, 2020, the Company did not continuously have an employee with the requisite knowledge and expertise to 18review Uthe financial statements and disclosures at a sufficient level to monitor the financial statements and disclosures to the Company.~~S.C.~~ ~~Section~~Failure ~~1350~~to have, ascontinuously, ~~Adopted~~an ~~Pursuant~~employee with such knowledge and expertise amounts to ~~Section~~a ~~906~~material ofweakness to the ~~Sarbanes-Oxley~~Company’s ~~Act~~internal ofcontrols ~~2002~~over its financial reporting processes.

~~Exhibit~~As a ~~32.2~~result ~~Certification~~of ~~Pursuant~~our toretaining 18the ~~U.S.C.~~services ~~Section~~of ~~1350,~~an asOutside ~~Adopted~~Accountant ~~Pursuant~~in January 2018 and appointing an internal Company employee to interface ~~Section~~with ~~906~~the ofOutside Accountant, we have instituted the ~~Sarbanes-Oxley~~following ~~Act~~policies ofand ~~2002~~procedures designed to address the material weaknesses cited above.

~~Exhibit~~• ~~10.0~~All ~~Current~~billing ~~Report~~invoices onprepared ~~Form~~by ~~8-K~~the ~~dated~~billing ~~April~~department ~~27,~~are ~~2020~~sent to the Outside Accountant for review and approval before sending out to the customer.

-• 23Copies -of all incoming payable invoices are sent to the Outside Accountant for review, approval and data entry into the accounting system. That way Corporate Office has the originals and the outside accountants have duplicate copies. Accounts Payable Aging Report is sent once a week from the Outside Accountants to the Corporate office. The Corporate office, along with Outside Accountants, decide on which bills to pay weekly. Electronic payments have a duel control approval system (one person is initiating the payment and another person is approving the payment).

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

~~Pursuant~~• toAll ~~the~~bank ~~requirements~~accounts ofare ~~the~~reconciled ~~Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized~~monthly.

	Advanzeon Solutions, Inc.
	Registrant
Date: May 19, 2020	By:	/s/ Clark A. Marcus
		Clark A. Marcus,
		Chief Executive Officer
Date: May 19, 2020	By:	/s/ Lloyd K. Marcus
		Lloyd K. Marcus,
		Chief Accounting Officer

•

Financial Statements are prepared and reviewed monthly.

-The Company 24plans to further augment its addressing of material weaknesses, on an as-needed basis, by hiring additional accounting personnel once its initial corrective steps have been fully implemented, tested and found to be effective.

PART II-OTHER INFORMATION

Item 1. Legal Proceedings

With the exception of the matter set forth below, all of the legal proceedings for the six-month period ended June 30, 2020, are disclosed in our annual report on Form 10-K filed on April 9, 2020.

Item 1A. Risk Factors

In addition to the risk factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, we include the following:

Effect of the Coronavirus Pandemic

The coronavirus pandemic is adversely affecting and is expected to continue to adversely affect our business, financial condition and results of operations. We are unable to predict the extent or nature these effects will have on our business at this time.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

With the exception of the matter set forth below, the sale of unregistered securities for the six-month period ended June 30, 2020 were disclosed in our annual report on Form 10-K filed on April 9, 2020.

On April 15, 2020, we issued a convertible promissory note (the "Note”) in the principle amount of $109,180 with an original issue discount of $6,180. The Note matures on October 15, 2021, and the interest rate is 10%. This Note may not be prepaid in whole or in part except as follows. Should the Note be prepaid within the first ninety days from the date of issuance, the prepayment percentage is one hundred and twenty-five (125%) per cent of the outstanding principal and any accrued and unpaid interest. For the next ninety days the Note may be prepaid and the prepayment percentage is one hundred thirty (130%) per cent of the outstanding principal and any accrued and unpaid interest. Thereafter, the Note may not be prepaid.

On April 21, 2020, we issued a total of 14,584,350 shares of our common stock in exchange for $2,916,869 of our Senior Debt and accrued interest to seven holders of the Debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On April 21, 2020, we issued a total of 1,327,252 shares of our common stock in exchange for $265,450 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On April 21, 2020, we issued a total of 2,156,515 shares of our common stock in exchange for $431,303 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

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

On May 15, 2020, we issued a total 1,263,745 shares of our common stock in exchange for $139,012 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 15, 2020, we issued a total 4,284,565 shares of our common stock in exchange for $471,302 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 15, 2020, we issued a total 7,210,168 shares of our common stock in exchange for $793,118 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 18, 2020, we issued a total 700,751 shares of our common stock in exchange for $77,083 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 21, 2020, we issued a total 502,434 shares of our common stock in exchange for $55,268 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 22, 2020, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On May 25, 2020, we issued a total 319,627 shares of our common stock in exchange for $35,159 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 25, 2020, we issued a total 333,824 shares of our common stock in exchange for $36,721 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 26, 2020, we issued a convertible promissory note in the principle amount of $100,000 to an accredited investor. The interest rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

On May 26, 2020, we issued a total 781,206 shares of our common stock in exchange for $85,933 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 28, 2020, we issued a total 884,555 shares of our common stock in exchange for $97,301 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On May 29, 2020, we issued a total 937,116 shares of our common stock in exchange for $103,083 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On June 1, 2020, we issued a convertible promissory note (the "Note”)in the principle amount of $56,180 with an original issue discount of $3,180. The Note matures on June 1, 2021, and the interest rate is 10%. This Note may not be prepaid in whole or in part except as follows. Should the Note be prepaid within the first ninety days from the date of issuance, the prepayment percentage is one hundred and twenty-five (125%) per cent of the outstanding principal and any accrued and unpaid interest. For the next ninety days the Note may be prepaid and the prepayment percentage is one hundred thirty (130%) per cent of the outstanding principal and any accrued and unpaid interest. Thereafter, the Note may not be prepaid.

On June 1, 2020, we issued a total 1,024,189 shares of our common stock in exchange for $112,661 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On June 5, 2020, we issued a total 668,797 shares of our common stock in exchange for $73,568 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On June 5, 2020, we issued a total 603,987 shares of our common stock in exchange for $66,438 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On June 12, 2020, we issued a total 1,564,245 shares of our common stock in exchange for $172,067 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On June 18, 2020, we issued a total 504,957 shares of our common stock in exchange for $55,545 of our convertible debt and accrued interest to the holder of the debt. We relied on Section 3(a) (9) of the Securities Act of 1933, as amended.

On June 21, 2020, we issued a convertible promissory note in the principle amount of $25,000 to an accredited investor. The interest rate was 12%. The Holder of the note has the right to convert all or a portion of the principle and any accrued interest into shares of our common stock at a per share price equal to the lesser of (i) 15% below the average daily closing price of our common stock for the immediately preceding twenty (20) business days or (ii) $0.11. The principal amount and any accrued but unpaid interest under the note shall be due and payable on the earliest to occur (i) the date which is twelve months from the effective date of the note or (ii) the receipt by the Company of payment on its account receivable owed to it by Universal Health Care, Inc. and Universal Health Care Insurance Company, which accounts receivable is currently being processed in the matter of The Receivership of Universal Health Care, Inc., a Florida corporation and The Receivership of Universal Health Care Insurance Company, Inc., a Florida corporation under case numbers 2013-CA and 2013-CA, respectively. The Company also granted to the purchaser a five-year warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.15 per share.

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

On March 22, 2020, we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On March 31, 2020, we issued 169,551 warrants to our Chief Executive Officer in lieu of 2020 first quarter salary. The warrants have a term of five years and an exercise price of $0.39 per warrant.

On April 14, 2020, we issued 96,058 warrants to a promissory note holder, an accredited investor, in lieu of interest. The warrants have a term of five years and an exercise price of $0.19 per warrant. The warrant has a cashless feature.

On April 19, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On April 21, 2020, we issued 101,599 warrants to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a term of five years and an exercise price of $0.25 per warrant.

On April 21, 2020, we issued 230,630 warrants to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a term of five years and an exercise price of $0.25 per warrant.

On April 21, 2020, we issued 146,811 warrants to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a term of five years and an exercise price of $0.25 per warrant.

On April 21, 2020, we issued 1,589,044 warrants to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a term of five years and an exercise price of $0.25 per warrant.

On April 21, 2020, we issued 368,804 warrants to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a term of five years and an exercise price of $0.25 per warrant.

On April 21, 2020, we issued 1,095,253 warrants to a promissory note holder in exchange of their notes, principal amount plus accrued and unpaid interest. The warrants have a term of five years and an exercise price of $0.25 per warrant.

On April 25, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On May 1, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On May 10, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

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

On May 19, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 3, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 6, 2020 we issued 50,000 warrants to a member of our Dental Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 8, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 10, 2020, we issued 200,000 warrants to our consultant. The warrants have a term of three years and an exercise price of $0.35 per warrant.

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

On June 14, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 20, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 22, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 24, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 27, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

On June 30, 2020 we issued 50,000 warrants to a member of our Medical Advisory Board, an accredited investor. The warrants have a term of three years and an exercise price of $0.25 per warrant.

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

Item 3. Exhibits

Documents filed as part of this Report.

Exhibit 31.1 Advanzeon Solutions, Inc. CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 Advanzeon Solutions, Inc. CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1 Advanzeon Solutions, Inc. CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2 Advanzeon Solutions, Inc. CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Advanzeon Solutions, Inc.
		Registrant

Date: August 19, 2020	By:	/s/ Clark A. Marcus
		Clark A. Marcus,
		Chief Executive Officer

Date: August 19, 2020	By:	/s/ Arnold B. Finestone
		Arnold B. Finestone,
		Chief Financial Officer

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