INNERSCOPE HEARING TECHNOLOGIES, INC.

CIK:0001609139|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues:
Revenues, other	$ 47,331	$ 250,781	$ 144,318	$ 641,983
Revenues, related party				15,000
Total revenues	47,331	250,781	144,318	656,983
Cost of sales
Cost of sales, other	5,687	103,010	63,049	284,837
Total cost of sales	5,687	103,010	63,049	284,837
Gross profit	41,644	147,771	81,269	372,146
Operating Expenses:
Compensation and benefits (including stock-based fees of $0 for the three and nine months ended September 30, 2020 and $25,000 and $75,000 for the three and nine months ended September 30, 2019)	202,511	462,770	559,792	1,261,594
Advertising and promotion	3,703	197,733	19,775	575,050
Professional fees (including stock-based fees of $0 for the three and nine months ended September 30, 2020 and $171,500 and $479,791 for the three and nine months ended September 30, 2019 )	7,527	92,966	102,885	404,550
Rent, including related party (including related party rent of $36,000 and $108,000 for the three and nine months ended September 30, 2020 and 2019)	91,549	100,240	255,427	294,302
Investor relations		11,297	14,795	176,073
Depreciation and amortization expense	30,760		93,364
Other general and administrative	13,557	137,979	115,735	407,105
Total operating expenses	349,607	1,002,985	1,161,773	3,118,674
Loss from operations	(307,963)	(855,214)	(1,080,504)	(2,746,528)
Other Income (Expense):
Derivative income (loss)	126,561	501,977	(1,561,010)	159,617
Gain (loss) on equity investment	15,450	(9,245)	22,982	(4,429)
Amortization of debt discount	(184,552)		(1,143,973)
Gain/Loss on debt extinguishment				(44,393)
Interest expense and finance charges	(100,539)	(1,109,565)	(445,858)	(2,344,763)
Total other income (expense), net	(143,050)	(616,833)	(3,127,859)	(2,233,968)
Earnings Before Taxes (loss)	(451,013)	(1,472,047)	(4,208,363)	(4,980,496)
Income tax provision
Net Income (Loss)	$ (451,013)	$ (1,472,047)	$ (4,208,363)	$ (4,980,496)
Basic and diluted income (loss) per share	$ (0.00)	$ (0.01)	$ (0.00)	$ (0.03)
Weighted average number of common shares outstanding - Basic and diluted	3,456,123,614	190,804,118	2,501,258,405	160,489,585

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net Loss	$ (4,208,363)	$ (4,980,496)
Adjustments to reconcile net income (loss) to net cash used in operations:
(Gain) loss on fair value of derivatives	1,561,011	(159,617)
Amortization of debt discounts	1,143,973	2,183,394
Depreciation and amortization	93,364	317,388
Non cash interest expense		2,500
Penalties on convertible notes	58,117
(Gain) loss on investment in undivided interest in real estate	(9,543)	4,429
Loss on debt extinguishment		44,393
Stock based compensation		554,791
Changes in operating assets and liabilities:
Accounts receivable	36,699	(26,160)
Employee advances		(18,047)
Inventory	12,986	(42,651)
Prepaid assets	72,109	49,167
Related party receivable	12,594	(142,249)
Accounts payable and accrued expenses	456,331	86,920
Security deposit
Customer deposits	(8,184)	27,103
Related party advances	318,864
Operating lease liabilities	(1,284)	(182,902)
Net cash used in operating activities	(461,326)	(2,282,037)
Cash flows from investing activities:
Payment of security deposit		(23,481)
Purchase of office and computer equipment	(5,349)	(49,614)
Change in equity investment	(13,440)
Net cash used in investing activities	(18,789)	(73,095)
Cash flows from financing activities:
Proceeds from issuance of note payable	199,650	89,100
Bank overdraft	18,300
Proceeds from PPP loan	262,445
Payments/Proceeds from convertible notes payable		2,308,775
Repayments of note payable		(102,530)
Advances (repayments) to stockholder, net		(17,562)
Net cash provided by financing activities	480,395	2,277,783
Net increase (decrease) in cash and cash equivalents	280	(77,349)
Cash and cash equivalents, Beginning of period	4,459	87,826
Cash and cash equivalents, End of period	4,739	10,477
Supplemental disclosure of cash flow information:
Cash paid for interest		14,755
Schedule of non-cash Investing or Financing Activity:
Reclassification of derivative liabilities upon principal repayments of convertible notes	679,181	1,172,346
Conversion of notes payable and accrued interest in common stock	448,871	954,960
Common stock to be issued for settlement of accounts payable		25,000
Operating lease right-of-use assets and liabilities		$ 1,473,250

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 20, 2020	Dec. 31, 2019
Current Assets:
Cash	$ 4,736	$ 4,459
Accounts receivable, net of allowance for doubtful accounts	14,461	51,160
Employee advances	3,000	3,750
Prepaid assets	1,140	73,249
Inventory	5,795	18,781
Total current assets	29,132	151,399
Security deposits	12,752	12,752
Domain name	3,000	3,000
Intangible assets, net of accumulated amortization	800,000	879,336
Property and equipment, net of accumulated depreciation	63,562	72,241
Operating leases right-of-use assets, net	659,453	846,132
Investment in undivided interest in real estate	1,220,069	1,210,526
Total assets	2,787,968	3,175,386
Current Liabilities:
Bank overdraft	20,931	2,631
Accounts payable and accrued expenses	1,730,462	1,316,185
Accounts payable to related party	585,283	266,419
Notes payable - stockholder	95,800	95,800
Current portion of convertible notes payable, net of discounts	3,185,756	2,390,481
Note payable, other & related party	118,786	106,942
Customer deposits	13,321	21,505
Current portion of note payable - undivided interest in real estate	22,150	20,708
Derivative liabilities	4,596,530	3,515,055
Operating lease liabilities, current portion	345,949	299,794
Total current liabilities	10,714,968	8,035,520
Long term portion of note payable- undivided interest in real estate	938,002	952,884
Paycheck Protection Program loan	262,445
Operating lease liabilities, Less current portion	497,378	731,496
Total liabilities	12,412,793	9,719,900
Stockholders' Deficit:
Series A preferred stock, par value $0.0001, -0- (2020) and -0- (2019)
Common stock, $0.0001 par value; 14,975,000,000 and 490,000,000 shares authorized, respectively; 3,456,123,614 (2020) and 342,118,136 (2019) shares issued and outstanding, respectively	345,613	34,212
Common stock to be issued, $0.0001 par value, 2,412,671 (2020) and 2,412,671 (2019) shares	241	241
Additional paid-in capital	8,534,062	7,717,411
Accumulated deficit	(18,504,831)	(14,296,468)
Total stockholders' deficit	(9,624,825)	(6,544,514)
Total Liabilities and Shareholder Equity	$ 2,787,968	$ 3,175,386