UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended:September 30, 2018March 31, 2019

OR

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

For the transition period from                   to                   

Commission File Number:

000-55465

MEDIFIRST SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:732-786-8044

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

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

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 filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T 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 definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b- 2 of the Exchange Act.

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 7(a)(2)(B) of the Securities 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 November 19, 2018,May 20, 2019, there were 2,889,8519,050,333 shares of Common Stock, $0.0001 par value, issued and outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MEDIFIRST SOLUTIONS, INC.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

INDEX TO FINANCIAL STATEMENTS

MEDIFIRST SOLUTIONS, INC.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

Medifirst Solutions, Inc.

Consolidated Balance Sheets

September 30, 2018March 31, 2019 and December 31, 20172018

Medifirst Solutions, Inc.

Consolidated Statements of Operations

For the NineThree Months Ended September 30,March 31, 2019 and 2018 (unaudited)

Medifirst Solutions, Inc.

Consolidated Statement of Stockholders’ Equity

For the Year Ended December 31, 2018 and 2017

(Unaudited)the three months ended March 31, 2019 (unaudited) 

Medifirst Solutions, Inc.

Consolidated Statement of Cash Flows

For the NineThree Months Ended September 30,March 31, 2019 and 2018 and 2017

(Unaudited)(unaudited)

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements
September 30, 2018

March 31, 2019 (unaudited)

Note 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Medifirst Solutions, Inc. (“MSI” or the “Company”) was incorporated in Nevada in November 2010. The Company has not generated significant sales to date. The Company intends to have a diverse product line of consumer products. Since inception, the Company has been engaged in business planning activities, including researching the industry, identifying target markets for the Company’s products, developing the Company’s models and financial forecasts, performing due diligence regarding potential geographic locations most suitable for establishing the Company’s offices and identifying future sources of capital. At the present time, the Company is building products and affiliations in and related to the cosmetic healthcare industry. The company has started to hire a salesforce and sign distribution agreements in anticipation of future sales.

In July 2016, Medifirst, in response to its Premarket Notification 510(k) submission for “The Time Machine” Series Laser, received clearance from the U.S. Food and Drug Administration (“FDA”) to market its infrared Time Machine TTML-8102000 Laser Thermal Therapeutic Device.The Company is actively putting together a sales and distribution team to offer our lasers in the US and foreign markets.

Pursuant to a sale and purchase agreement dated August 19, 2015 between the Company and the Company’s president, the Company acquired 100% of the equity interests in Medical Lasers Manufacturer, Inc. (“MLM”) with the total purchase price of 20,000 shares of the Company’s common stock at $0.001 per share (or $20). The fair value of the acquired entity was $20.

The transaction was considered as a business acquisition and accordingly the acquisition method of accounting has been applied. MLM had no assets at the date of the business combination.

On April 18, 2018, the Company incorporated Concierge Concepts Rx (CCRx), in the State of New Jersey, to be an 80% majority-owned subsidiary. In consideration for his contribution of know-how, CCRx’s co-founder, Walter Molokie, CCRx has agreed to issue a 20% minority interest in CCRx to Mr. Molokie and/or his designees.On July 1, 2018 the Company acquired 100% of the equity interest in Concierge Concepts Rx, Inc. (“CCRx”) with the total purchase price of $20. The fair value of the acquired entity was $20 since the entity was just recently formed and had no identifiable assets or liabilities.Theliabilities. The $20 cash payment is for the purchase of CCRx common stock upon acquisition. Medifirst launched Concierge Concepts Rx, a new division focused on the pharmaceutical industry.CCRx that provides unique specialty drug consulting and niche billing services to independent pharmacies and retail pharmacy chains. This division commenced operations in the quarter ended September 30, 2018 with limited activity and is included in the accompanying consolidated financial statements.

The Consolidated financial statements include the accounts of MSI and its wholly owned subsidiaries, MLM and CCRx. All material intercompany balances and transactions have been eliminated in consolidation.

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s current technology.

Basis of Presentation

The unaudited interim consolidated financial statements include the accounts of Medifirst Solutions Inc. and its wholly owned subsidiary (Medical Laser Manufactures, Inc., and Concierge Concepts Rx (CCRx) (collectively referred to as the “Company”). All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of September 30, 2018,March 31, 2019, the consolidated results of its operations for the three-month periods ended March 31, 2019 and 2018, the consolidated change in stockholders’ equity for the three-month period ended September 30, 2017 and 2018 and and nine-month period ended September 30, 2017March 31, 2019 and 2018 and the consolidated cash flows for the nine-monththree-month periods ended September 30,March 31, 2017 and 2018 ..2018. The results of operations for the three-month period ended September 30, 2018March 31, 2019 are not necessarily indicative of the operating results for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the year ended December 31, 20172018 included in the Company’s Annual Report on Form 10-K for the year then ended.

Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 2018

Effective July 23, 2018, the Company effected a 1-for-1,000 reverse stock split of its issued and outstanding common stock. The number of shares of common stock issued and outstanding post- reverse stock split is 1,404,073. All fractional shares have been rounded up to the next whole share. There is no reduction in the number of the Company’s shareholders of record. Unless otherwise noted, impacted amounts and share information included in the financial statements and notes thereto have been retroactively adjusted for the reverse stock split as if such reverse stock split occurred on the first day of the first period presented.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

Revenue Recognition

In general,The Company also derives consulting revenue from it’s CCRx division. Such revenue is recognized at the time services are performed.

The Company adopted the new accounting standard on revenue recognition, ASU No. 2014-09 (Topic 606) “Revenue from Contracts with Customers”, which became effective on January 1, 2018. Since the Company records revenue when persuasive evidence ofwas classified as an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:Emerging Growth Company under SEC rules, ASC 606 was not adopted until January 1, 2019.

Revenue is recognized at the time the product is delivered or services are performed. Provision for sales returns are estimated based on the Company’s historical return experience. Revenue is presented net of returns. The Company’s revenue recognition policy standards include the following elements under ASU No. 2014-09 (Topic 606):

Accounts Receivable

The Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining an allowance for potential credit losses. Accounts receivable is reported net of the allowance for doubtful accounts. The allowance is based on management’s estimate of the amount of receivables that will actually be collected. The Company has not recorded an allowance for doubtful accounts as of September 30, 2018March 31, 2019 or December 31, 2017. There are no customer account receivables as of September 30, 2018 or December 31, 2017.2018.

Inventory

Inventory consists of finished goods and is stated at the lower of cost (first-in, first-out) or market value. Finished goods inventory includes hand held laser devices, their carrying cases and goggles.

Equipment

Equipment, consisting of computer equipment, is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, of five years.

Long-Lived Assets

The Company reviews long-lived assets, such as equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds the estimated future cash flows, an impairment loss will be recorded by the amount the carrying value exceeds the fair value of the asset.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

Intangible Asset- Licensing Agreement

On March 8th 2016 (with an effective date of October 1, 2015), the company, through it’s sole wholly-owned subsidiary (“Licensee”), entered into a Product and Know-How License Agreement (“Agreement”) with a Florida Corporation (“Licensor”) which is owned by a related party - the son of the Company’s CEO. The license provides with respect to the Technology, Licensor hereby grants to Licensee an irrevocable, nontransferable, royalty-bearing license, with a right of sublicense (the “License”), throughout the Territory in the Field of Use, whether or not under the Licensed Patent, to:

-use or submit or deliver the Technology and/or any Product to any regulatory body throughout the Territory for purposes of obtaining approval to make, Sell, offer for Sale, import, export and distribute the Technology or Products; and

- use or copy the Technology and/or any Product; and

- market, make, have made, Sell, offer for Sale, import and distribute Products; and

- sublicense the Technology; and

- prepare, or have prepared on its behalf, modifications, enhancements and/or derivative works of the Technology.

In connection with the license granted, Licensor hereby grants to Licensee a license to the Licensed Patents, whether now existing or hereafter acquired.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 2018

The consideration for the licensing agreement consisted of the issuance of 25,000 Series B Preferred stock shares to the Licensor (at par) plus a $150,000 promissory note issued by the Company to the licensor. On September 15, 2017 the Note was amended to include provisions to allow coversionconversion of the Note into common stock of the Company. On September 25, 2017, $16,250 in principal on this note was satisfied by the conversion into 25,000,000 shares of the Company’s common stock. On January 31, 2018, $7,500 in principal on this note was satisfied by the conversion into 30,000,000 shares of the Company’s common stock. On March 2, 2018, another $7,500 in principal on this note was satisfied by the conversion into 30,000,000 shares of the Company’s common stock During the quarter ended June 30, 2018, the original noteholder assigned $20,000 in principal to an unrelated third-party. There were $32,550 in cash principal paydowns to the original noteholder during the year ended December 31, 2018. There were an additional $33,345 in conversions to common stock that took place on these two notes during the year ended December 31, 2018. During the quarter-ended March 31, 2019 there were $5,700 in principal paydowns to the original noteholder and $3,800 in conversions to common stock. The principal balance on this note as of September 30, 2018March 31, 2019 is $68,040$41,505 to the original noteholder and $17,900$16,650 in principal balance to the new unrelated third-party noteholder. Various principal paydowns and conversions to common stock took place on these two notes during the quarted ended September 30, 2018.

The last part of the consideration in this license agreement is the royalty payments which have not taken effect yet since they are based on sales for which the company has had only minimum thus far.

The licensing agreement is for a ten yearten-year period effective from October 1, 2015. The cost of the licensing agreement is being amortized over it’sits ten-year period and charged to income on a straight-line basis.

Product Warranty

We generally provide a one-year warranty on our products. Currently no material evaluations or studies have been performed to obtain warranty data since there are so few sold products outstanding. As sales increase, the Company will estimate future warranty costs from historical data and trends of product reliability and costs of repairing and replacing defective products.

Debt Issue Costs and Debt Discount

The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized over the life of the debt to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts are immediately expensed. Beginning in 2015, the Company adopted ASU 2015-03: Simplifying the Presentation of Debt Issuance Costs and has reflected the deferred financing costs as a direct reduction of the related debt (See table included in Note 5 to Consolidated Financial Statements).

Original Issue Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

Derivative Liabilities

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. The Company assessed its securities for purposes of determining the proper accounting treatment and valuation as set forth in the Statement of Financial Accounting Standard ASC 820–10–35–37Fair Value in Financial Instruments; Statement of Financial Accounting Standard ASC 815Accounting for Derivative Instruments and Hedging Activities; and Emerging Issues Task Force (“EITF”) Issue No. 00–19 and EITF 07–05.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

Once the derivative liabilities are determined, they are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the condensed consolidated balance sheets and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Financial Instruments

The carrying amounts reported in the balance sheets for cash, accounts receivable, accounts payable, and other accrued liabilities approximate their fair values.

Segment Information

The Company follows Accounting Standards Codification (“ASC”) 280, “Segment Reporting”. The Company currently operates in a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 2018

Net Income (Loss) Per Common Share

The Company calculates net income (loss) per share based on the authoritative guidance. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses, common stock equivalents, if any, are not considered, as their effect would be anti-dilutive. As described in Note 5 to the financial statements, as of September 30, 2018,March 31, 2019, convertible debt can be converted into approximately 768,59649,753,279 shares of common stock.

Income Taxes

The Company utilizes the accrual method of accounting for income taxes. Under the accrual method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities, and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.

The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount recognized in the financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. The Company did not have any unrecognized tax benefits as of September\ 30, 2018,March 31, 2019, and does not expect this to change significantly over the next 12 months.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value on the issuance date. The Company adopted the provisions of ASU 2018-07 in the quarter beginning January 1, 2019. The adoption of ASU 2018-07 did not have any impact on the Company’s financial statement presentation or disclosures. The Company did not have any equity instruments that required revaluation under this new standard. 

Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At June 30,December 31, 2018 and March 31, 2019, the Company had $77,714$83,382 and $275,705 in cash equivalents.equivalents respectively.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

Recent Pronouncements

The Company is no longer an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act.

In May 2014, FASBAugust 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles-Goodwill and IASB issuedOther-Internal-Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a new joint revenue recognition standardCloud Computing Arrangement That Is a Service Contract”, which align the requirements for capitalizing implementation costs incurred in a hosting arrangement that supersedes nearly all GAAP guidance on revenue recognition. The core principle ofis a service contract with the standard isrequirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that revenue recognition should depict the transfer of goods and services to customers ininclude an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new standardinternal use software license). ASU 2018-15 is effective for the Company to annual reporting periods beginning after December 15, 2017 (that is, a public organization is required to apply the new revenue standard beginning in the first interim period within the yearfiscal quarter of adoption). Additionally, the Board decided to permit public organizations to adopt the new revenue standard2022, with early but not before the original public organization effective date (that is, annual periods beginning after December 15, 2016). A public organization should apply the new revenue standard to all interim reporting periods within the year of adoption.The Company has evaluated the impact of this ASU on the consolidated financial statements and has determined, at this time, the ASU’s implementation would not have a material impact on revenue recognition. See below - Accounting Standards Update 2016-10 - Revenue from Contracts with Customers (Topic 606) Identifying Performance Obligations and Licensing

In June 2018, the FASB issued Accounting Standards Update 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Revenue from Contracts with Customers (Topic 606). ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company will adopt the provisions of ASU 2018-07 in the quarter beginning January 1, 2019. The adoption of ASU 2018-07 is not expected to have any impact on the Company’s financial statement presentation or disclosures.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 2018

In April 2016, the FASB issued Accounting Standards Update 2016-10 - Revenue from Contracts with Customers (Topic 606) Identifying Performance Obligations and Licensing. The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: 1. Identify the contract(s) with a customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when (or as) the entity satisfies a performance obligation. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The Company is currently evaluating the impact of this ASU on the consolidated financial statements.

In February 2018,June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220)Instruments,”. which amends the guidance on measuring credit losses on financial assets held at amortized cost. The objective ofamendment is intended to address the ASU isissue that the previous “incurred loss” methodology was restrictive for an entity’s ability to allowrecord credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected with a reclassification from accumulated comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users.valuation provision. This ASUupdate standard is effective for interim and annual reporting periodsfiscal years beginning after December 15, 2018, and early adoption is permitted.2019. The Company is currently evaluating the impact of this ASU on the consolidated financial statements.

Company is currently an “emerging growth company” as defined in Section 2(a)(19)In August 2018, the Securities and Exchange Commission (the “SEC”) issued a final rule that amends certain of the Securities ActSEC’s disclosure requirements, including requirements relating to disclosures about changes in stockholders’ equity. For Quarterly Reports on Form 10-Q, the final rule extends to interim periods the annual requirement in Rule 3-04 of Regulation S-X, to disclose (1) changes in stockholders’ equity and (2) the extended transitionamount of dividends per share for each class of shares (as opposed to common stock only, as previously required). Pursuant to the final rule, registrants must now analyze changes in stockholders’ equity, in the form of a reconciliation, for “the current and comparative year-to-date [interim] periods, with subtotals for each interim period, applies” i.e., a reconciliation covering each period for which an income statement is presented. Rule 3-04 of Regulation S-X permits the disclosure of changes in stockholders’ equity (including dividend-per-share amounts) to be made either in a separate financial statement or in the notes to the financial statements. The final rule is effective for all aforementioned ASUs, until such time asfilings made on or after November 5, 2018. SEC staff has indicated it would not object if a registrant’s first presentation of the changes in shareholders’ equity is included in its Form 10-Q for the quarter that begins after the effective date of the amendments. Therefore, the Company is no longer an “emerging growth company”.conformed to this rule in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.   

Note 2. PROPERTY, PLANT AND EQUIPMENT (NET)

Equipment is recorded at cost and consisted of the following at September 30, 2018March 31, 2019 and December 31, 2017:2018:

Depreciation expense was $480$159 and $480,$159, for the nine monthsquarters ended September 30,March 31, 2019 and 2018 and 2017 respectively.

Note 3. DUE TO RELATED PARTY

The Company was indebted to a related party through common management in the amount of $8,921 at September 30, 2018March 31, 2019 and December 31, 2017,2018, respectively. The loan bears no interest and is payable on demand. See Note 10 for additional related party transactions.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

Note 4. LOANS PAYABLE - STOCKHOLDERS

During the periodsquarter ended September 30,March 31, 2019 and the year ended December 31, 2018 and 2017 a stockholder of the Company advanced the Company $-0- and $-0- respectively. The loan has a balance of $8,955$6,375 at September 30, 2018March 31, 2019 and $8,375 at December 31, 2017,2018, respectively. The loan bears no interest and is payable on demand.

In December 2012, the Company issued a promissory note to a stockholder in the amount of $5,000 with interest at 10% per annum. Principal and interest were due and payable on June 2, 2013. In April 2014, the note was amended to provide the note holder with the option to convert the note to the Company’s common stock at $0.0001 per share. Subsequently, in 2014, in a private transactions,transaction, the note holder transferred $2,500 of note principal to third parties and the new holders converted their holdings into 2,500 shares of the Company’s common stock. During 2015, the original note holder transferred an additional $2,400 of note principal to third parties who converted their holdings into 2,400 shares of the Company’s common stock. At September 30, 2018March 31, 2019 and December 31, 2017,2018, the loan balance was $100 and $100, respectively.

At September 30, 2018March 31, 2019 and December 31, 2017,2018, the Company was indebted to a stockholder in the amount of $1,000 and $1,500,$1,000, respectively. The loan has an interest rate of 26.7%. In February 2017 the note was sold to another investor and that noteholder converted $500 in principal into 5,000 shares of common stock. Principal and accrued interest were due and payable on January 1, 2014.

In February 2016, the Company issued a promissory note to a stockholder in the amount of $7,000 with interest at the rate of 6% per annum. On September 6, 2016 the note holder converted the entire principal balance and accrued interest into common stock and therefore at September 30, 2018 there is no principal balance remaining on the note.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 2018

Note 5. CONVERTIBLE NOTES PAYABLE

Note Payable-BS

In March 2011, the Company issued $800 aggregate principal amount of 6% convertible notes due in January 2012. Interest on the notes accrue at the rate of 6% per annum and are payable when the notes mature. The notes matured prior to conversion but have not been repaid. Interest continues to accrue at the rate of 6% per annum.

The holder of one of the notes converted $110 of note principal into 1,100 shares of common stock as follows:

In August 2013, in a private transaction, the same note holder transferred $330 of the remaining note principal plus $55 in accrued interest to a third party.

In August 2013, in a private transaction, the new note holder transferred $5 of the remaining note principal to a third party who then converted the note into 50 shares of common stock.

In September 2013, the new note holder converted $100 of note principal into 1,000 shares of common stock.

In September 2013, in a private transaction, the new note holder transferred $35 of the remaining note principal to a third party who then converted the note into 350 shares of common stock.

In November and December 2013, the new note holder converted an additional $90 of note principal into 900,000 shares of common stock as follows:

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

In March and April 2014, the new note holder converted an additional $90 of note principal into 900,000 shares of common stock as follows:

Subsequent to these conversions there remains $125 in note principal outstanding at September 30, 2018.March 31, 2019.

Note Payable-SF

In July 2013, the holder of the second note converted $240 of note principal into 400 shares of the Company’s common stock at $0.0006 per share. At September 30, 2018March 31, 2019 and December 31, 2017,2018, the note had a remaining principal balance of $60 and $60, respectively.

At any time on or after the maturity date, the holders of the notes, have the option of converting any of the unpaid principal and interest into the Company’s common stock. The notes plus any accrued but unpaid interest are convertible at the rate of $0.0001 per share at the time of conversion up to a maximum of 9.99% of the then issued and outstanding common stock, or 246,242580,307 shares at September 30, 2018March 31, 2019 and 84,859347,936 shares at December 31, 2017.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 20182018.

Note Payable-RK

In May 2012, the Company issued a $25,000 6% per annum note that matured in November 2012. In December 2012 the note was amended to be a convertible note. Interest on the note accrues interest at 6% per annum and is payable when the note matures.

The holder of the $25,000 note had the option of converting it at any time prior to maturity. The note plus any accrued but unpaid interest were convertible at the rate of $0.001 per share at the time of conversion up to a maximum of 9.99% of the then issued and outstanding common stock.

The holder of the note converted $1,010 of note principal into 1,010 shares of common stock as follows:

In July 2013, the Company retired $14,000 of note principal in payment for consulting services provided to the note holder.

In July 2013, the note holder converted $300 of note principal into 300 shares of the Company’s common stock.

In July 2013, in a private transaction, the note holder transferred the remaining note principal balance of $9,690 to a third party (SeeNote Payable-NW below).

Note Payable-NW

After receiving the transfer of the principal balance of $9,690 in July 2013 in the private transaction noted inNote Payable-RKabove, in August 2013, in a private transaction, the new note holder of the aforementioned note transferred $4,475 of principal to a stockholder of the company.

In October 2013, the note holder converted $400 of note principal into 400 shares of the Company’s common stock at $0.001 per share.

In October 2014, the note holder converted $1,100 of note principal into 1,100 of the Company’s common stock.Thestock. The note holder has the option of converting the balance at any time with the approval of the Board of Directors. The note plus any accrued but unpaid interest are convertible at the rate of $0.001 per share at the time of conversion up to a maximum of 9.99% of the then issued and outstanding common stock, or 246,242 shares at September 30, 2018 and 84,858,757347,936 shares at December 31, 2017.2018 and 49,753,279 shares at March 31, 2019.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

In August 2016, the note holder converted $3,000 of note principal into 3,000,000 shares of the Company’s common stock. At September 30, 2018March 31, 2019 and December 31, 2017,2018, the remaining principal balance on this portion of the note is $715 and $715 respectively.

Note Payable-MC #2

In April 2015, the Company issued a $3,000 8% per annum note that matures in October 2015. The holder of the note has the right to convert the principal into shares of the Company’s common stock at any time 180 days after the closing date at $0.0001 per share. Interest on the note accrues interest at 8% per annum and is payable when the note matures. During January 2017, the current noteholder converted $1,100 in principal balance into 11,000 shares of common stock. During the same period, the current noteholder transferedtransferred $600 of the remaining principal balance to another investor who then converted the entire principal balance he received into 6,000 shares of common stock. During April 2017, the current notholdernoteholder converted $410 of remaining principal into 6,000 shares of common stock. There remains $890 in principal balance at September 30, 2018 with the current noteholderMarch 31, 2019 and $890 in principal balance with the original noteholder at December 31, 2017.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 20182018.

Convertible Note Payable-LGC (8%)

On January 7 2016, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Investor”) for the sale of convertible redeemable notes in aggregate principal amount of $251,803. On January 7, 2016, the Company and the Investor conducted the first closing under the Purchase Agreement, pursuant to which the Company issued to the Investor (i) a convertible redeemable note in principal amount of $105,000 containing an original issue discount of $20,000 (the “$105K Note”); and (ii) a convertible redeemable note in principal amount of $50,000 (the “$50K Note” and together with the $105K Note, the “Notes”). Under the Purchase Agreement, on March 15, 2016 and June 15, 2016, the Company and the Investor conducted additional closings for the sale and purchase of additional notes having the same terms as the Notes in principal amounts equal to $50,000 and $46, 803, respectively (seeConvertible Notes Payable-LGC (8%) BEN below). During the quarter ended March 31, 2017 the noteholder converted the entire principal balance into 62,068 shares of common stock and therefore there is no principle balance outstanding at September 30, 2018 and December 31, 2017.

Convertible Notes Payable-LGC (8%) BEN

In consideration for the issuance of the $105K Note, on January 13, 2016, the Company received net proceeds (after deducting the original issue discount and legal fees) in the amount of $75,697. In consideration for the issuance of the $50K Note, the Investor issued to the Company a $50,000 fully-collateralized secured promissory note (the “Investor Note”), pursuant to which the Investor agreed to pay the Company $50,000 on or before April 30, 2016. The Notes, which are due on January 7, 2017, bear interest at the rate of 8% per annum. Subject to a beneficial ownership limitation equal to 9.99%, principal and interest on the Notes is convertible into shares of the Company’s common stock (“Common Stock”) at a conversion price equal to 55% of the lowest trading price of Common Stock during the 20 trading day period prior to conversion.

In accordance with the terms of the Purchase Agreement, the investor and the Company closed on the two outstanding notes ($50,000 and $46,803) in May and June 2016 when the Company received the cash funding. During April 2017 the noteholder converted the entire principal balance of the $50,000 note into common stock of the Company. During June 2017 the noteholder converted $16,000 of the remaining principal of the $46,803 note into common stock of the Company. In July and September 2017 the noteholder converted the remaining $30,803 of the note’s principal balance into common stock. As a result, there is no principal balance remaining on either note as of September 30, 2018 and December 31, 2017.

Convertible Notes Payable-SO (8%)

On May 2, 2016, the Company issued to an Investor a convertible redeemable note in the principal amount of $57,750 (“the Note”). The Note, which matures on May 2, 2017, pays interest at the rate of 8% per annum. The note contains a 10% original issue discount. The holder of the note is entitled, at its option beginning on the 6 month anniversary, to convert all or any of the principal face amount of the Note then outstanding into shares of the Company’s common stock at the price equal to 55% of the lowest trading price for the twenty prior trading days including the date of conversion. During the quarter ended March 31, 2017 the noteholder converted $32,298 of the principle balance into 23,490 shares of common stock thereby leaving a principal balance of $25,452 on the note at December 31, 2017. During the first quarter of 2018, the noteholder converted $23,000 of the principle balance into 122,727 shares of common stock thereby leaving a principal balance of $2,452 on the note at June 30, 2018. During the quarter ended September 30, 2018, the noteholder converted the remaingremaining balance of the note into 148,316 shares on common leaving no balance due on the note as of September 30,December 31, 2018. There is $12,896 in accrued interest and penalty assessments on this note as of September 30,December 31, 2018 which is included in accrued expenses payable on the balance sheet,

Convertible Notes Payable-BBCG (9%)

On October 11, 2016,sheet. During the quarter-ended March 31, 2019 the Company issuedreached a settlement agreement with the noteholder where it paid in cash or through conversion all the outstanding interest and penalty and nothing is due to an Investorthe noteholder as of March 31, 2019. The noteholder converted $5,813 of interest and penalty into  398,859 shares of common stock of the Company and $9,815 was paid in cash to the noteholder by the Company thereby resulting in a convertible note inrecognized loss on the principal amountextinguishment of $157,895 (“the Note”). The Note, which matures on March 27, 2018, pays interest at the rate of 9% per annum. The note contains an original issue discountdebt in the amount of $7,895. The holder of the note is entitled, at its option beginning on the 6 month anniversary, to convert all or any of the principal face amount of the Note then outstanding into shares of the Company’s common stock at the price equal to 57.5% of the lowest trading price for the twenty prior trading days including the date of conversion. During April and June of 2017, the noteholder converted the entire remaining principal balance of the note into common stock of the Company. There is no principal balance remaining on the note as of September 30, 2018 and December 31, 2017.$2,732. 

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 2018

Convertible Notes Payable - Funding (8%)

On May 1, 2017, ,thethe Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Investor”) for the sale of 8 convertible redeemable notes in aggregate principal amount of $1,012,500. The back end-notes were all cancelled so only a total of $506,250 were actually funded. On May 1st, 2017 and June 2, 2017, the Company and the Investor conducted the first two closings under the Purchase Agreement, pursuant to which the Company issued to the Investor (i) a convertible redeemable note in principal amount of $131,250 (the “$131K Note”); and (ii) a convertible redeemable note in principal amount of $125,000 (the “$125K Note”). On July 10, 2017 and August 7, 2017, the Company and the Investor conducted the second two closings under the Purchase Agreement, pursuant to which the Company issued to the Investor two convertible redeemable notes each in the principal amount of $125,000; Under the Purchase Agreement, on January 1, 2018, February 2, 2018, March 10 ,2018 and April 7, 2018 the Company and the Investor expected to conduct additional closings for the sale and purchase of additional notes having the same terms as the Notes in principal amounts equal to $131,250, $125,000, $125,000 and $125,000 respectively (the “back-end notes”). However, all these “back-end notes” were cancelled in early 2018 and will not fund. Accordingly, all the “back-end” notes were removed from the books at December 31, 2017 along with the associated investor notes receivable. In addition, all previously accrued interest expense and interest income as been removed on these “back-end notes” for the period ended December 31, 2017.

In consideration for the issuance of the $131K Note and the $125K Note, on May 1, 2017 and June 2, 2017 and for the two $125k Notes on July 10, 2017 and August 7, 2017, the Company received net proceeds (after deducting $25,000 in legal fees) in the amount of $481,250. In consideration for the issuance of the $131K and the three $125k Notes, the Investor issued to the Company a $131,250 fully-collateralized secured promissory note and three $125,000 fully-collateralized secured promissory notes (the “Investor Notes”), pursuant to which the Investor agreed to pay the Company $131,250 and $375,000 on or before January 1, 2018, February 2, 2018, March 10, 2018 and April 7, 2018 respectively. These Notes (often referred to as “back-end Notes”), bear interest at the rate of 8% per annum. However, all these “back-end notes” were cancelled in early 2018 and will not fund. According, all the “back-end” notes were removed from the books at December 31, 2017 along with the associated investor notes receivable. In addition, all previously accrued interest expense and interest income as been removed on these “back-end notes” for the period ended December 31, 2017.

The two notes issued May 1,20171, 2017 ($131,250) and June 2, 2017 ($125,000) became convertible on October 28, 2017 and December 4, 2017 respectively and required derivative treatment at that time. The embedded derivative was bifurcated and accounted for separately along with the derivative discount. The derivative liability is marked-to-market each quarter with the resulting gain or loss valuation being reported in the statement of operations.

During the quarter ended December 31, 2017 (after the six-month waiting period) the holder of the original note in the principal amount of $131,250 converted $21,500 and $15,350 of the note’s principal balance into 35,058 and 39,714 shares of the Company’s common stock, respectively. The principal balance remaining on this convertible note is $94,400 as of December 31,2017. During the quarter ended March 31, 2018 the holder of the original note converted, through four separate conversion transactions, a total of $38,870 of the note’s principal balance into total of 193,384 shares of the Company’s common stock. During the quarter ended June 30, 2018 the holder of the original note converted $10,030 of the note’s principal balance into total of 62,015 shares of the Company’s common stock.Duringstock. During the quarter ended September 30, 2018 the holder of the original note converted $2,200 of the note’s principal balance into total of 69,439 shares of the Company’s common stock.Thestock. During the quarter ended December 31, 2018 the holder of the original note converted $10,640 of the note’s principal balance and $1,312 of accrued interest into total of 148,545 shares of the Company’s common stock. During the quarter-ended March 31, 2019 the noteholder converted $21,125 in principal and $2,977 in accrued interest into 1,249,684 shares of common stock. The principal balance remaining on this convertible note is $43,300$11,535 as of September 30,2018.March 31, 2019.

Convertible Notes Payable - JR (5%)

On August 2, 2017 the Company issued a convertible note payable (promissory note) to an investor in the principal amount of $50,000 .$50,000. The note matures on August 2, 2018 and bears interest at 5%. The note holder has has the right at any time on or after the day that is six months from August 2, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock at a fixed price of .003 per share. The entireembedded derivative on the note was valued and bifurcated effective October 1, 2018. During the quarter ended December 31, 2018, $4,500 in principal on this note was satisfied by the noteholder converting such amount into 150,000 shares of the Company’s common stock. During the quarter-ended March 31, 2019 the noteholder converted $3,300 in principal balance into 200,000 shares of $50,000the Company’s common stock. The remaining principal balance outstanding on the note is outstanding$42,200 as of September 30, 2018 and DecemberMarch 31, 20172019.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

Convertible Notes Payable - MLM (10%)

As more fulyfully described in Note 1 to the financial statements, on March 8th 2016 (with an effective date of October 1, 2015), the company, through it’s sole wholly-owned subsidiary (“Licensee”), entered into a Product and Know-How License Agreement (“Agreement”) with a Florida Corporation (“Licensor”) which is owned by a related party - the son of the Company’s CEO. The consideration for the licensing agreement consisted of the issuance of 25,000 Series B Preferred stock shares to the Licensor (at par) plus a $150,000 promissory note issued by the Company to the licensor. During the quarter-ended June 30, 2017, $18,986 in accrued interest was satisfied through the issuance of 17,273 shares of the Company’s common stock. On September 15, 2017 the Note was amended to include provisions to allow coversionconversion of the Note into common stock of the Company. At such time the Note was valued with it’s embedded derivative and discount. On September 25, 2017, $16,250 in principal on this note was satisfied by the conversion into 25,000 shares of the Company’s common stock leaving a balance on the note of $133,750 at December 31, 2017. During the quarter-ended Marchyear ended December 31, 2018 $15,000the Company made cash paydowns to the noteholder in the total amount of $32,550. In addition, $30,195 in principal balance on thisthe note was satisfied by the conversionconverted into 60,000495,000 shares of the Company’s common stock. During the quarter-ended June 30, 2018, $7,500 in principal on this note was converted into 30,000 shares of the company’s common stock. In addition, on May 26, 2018, the original note holder sold $20,000 in principal to an unrelated third-party investor with the sames terms as the original note thereby leaving a balance on the original note of $80,250 at June 30, 2018 and a balance of $20,000 to the new third-party noteholder. During the nine months-ended September 30, 2018 the Company made cash paydowns on the note in the amount of $11,550 and in addition, the noteholder converted $2,660 in principal balance into 140,000 shares of common stock. The ending principal balncebalance on this note at September 30,December 31, 2018 is $68,040$51,005 to the original noteholder. During the quarter-ended September 30,year-ended December 31, 2018 the unrelated third-party noteholder converted $2,100$3,350 in principal balance into 70,000120,000 shares of the Company’s common stock thereby leaving a principal balance to this unrealtedunrelated noteholder in the amount of $17.900.

Medifirst Solutions, Inc.
Notes$16,650. During the quarter-ended March 31, 2019 the Company made principal paydowns in the amount of $5,700 to Consolidated Financial Statements
September 30, 2018the original noteholder and the original noteholder converted $3,800 in principal balance into 200,000 shares of the Company’s common stock. The ending principal balance on this note at March 31, 2019 is $41,505 to the original noteholder and $16,650 to the unrelated third-party noteholder.

Convertible Notes Payable - LG (8%) (Notes 5 & 6)

On January 25, 2018 the Company issued a convertible note payable (promissory note) to an investor in the principal amount of $78,750. The note matures on January 25, 2019 and bears interest at 8%. The note holder has has the right at any time on or after the day that is six months from January 25, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $78,750 is outstanding as of September 30, 2018. The embedded derivative and related derivative discount on this convertible note, although not convertible during the six months ended June 30, 2018, has nonetheless been valued and recorded on the books as of April 1, 2018 in accordance with ASC 815.March 31, 2019.

On June 4, 2018 the Company issued a convertible note payable (promissory note) to an investor in the principal amount of $52,500. The note matures on June 4, 2019 and bears interest at 8%. The note holder has has the right at any time on or after the day that is six months from June 4, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $52,500 is outstanding as of September 30, 2018. The embedded derivative and related derivative discount on thisMarch 31, 2019.

Convertible Notes Payable - PULG (8%) (Notes 1 & 2)

On October 1, 2018 the Company issued a convertible note although not convertible duringpayable (convertible promissory note PULG (8%) Note 1) to an investor in the principal amount of $58,000. The note matures on April 1, 2020 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months ended June 30,from October 1, 2018 has nonetheless been valued and recorded onto convert any part or all of the booksoutstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $58,000 is outstanding as of JuneMarch 31, 2019.

On November 19, 2018 the Company issued a convertible note payable (convertible promissory note PULG (8%) Note 2) to an investor in the principal amount of $65,000. The note matures on May 19, 2020 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from November 19, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $65,000 is outstanding as of March 31, 2019.

Convertible Notes Payable - PULG (8%) (Notes 3, 4 & 5)

On January 24, 2019 the Company issued a convertible note payable (convertible promissory note PULG (12%) Note 3) to an investor in the principal amount of $43,000. The note matures on May 24, 2020 and bears interest at 12%. The note holder has the right at any time on or after the day that is six months from January 24, 2019 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $43,000 is outstanding as of March 31, 2019.

On February 4, 2019 the Company issued a convertible note payable (convertible promissory note PULG (12%) Note 4) to an investor in the principal amount of $38,000. The note matures on November 30, 2019 and bears interest at 12%. The note holder has the right at any time on or after the day that is six months from February 4, 2019, 2018 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $38,000 is outstanding as of March 31, 2019.

On March 26, 2019 the Company issued a convertible note payable (convertible promissory note PULG (8%) Note 5) to an investor in accordance with ASC 815.the principal amount of $43,000. The note matures on September 21, 2020 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from March 26, 2019 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $43,000 is outstanding as of March 31, 2019.

Convertible Notes Payable - BR (12%) (Note 1)

On February 25, 2019 the Company issued a convertible note payable (convertible promissory note BR (12%) Note 1) to an investor in the principal amount of $65,000. The note matures on February 25, 2020 and bears interest at 12%. The note holder has the right at any time on or after the day that is six months from February 25, 2019 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $65,000 is outstanding as of March 31, 2019.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

Convertible Notes Payable - CB (8%) (Note 1)

On February 27, 2019 the Company issued a convertible note payable (convertible promissory note CB (8%) Note 2) to an investor in the principal amount of $51,500. The note matures on August 20, 2020 and bears interest at 8%. The note holder has the right at any time on or after the day that is six months from February 27, 2019 to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $51,500 is outstanding as of March 31, 2019.

Convertible Notes Payable - GS (8%) (Note 1)

On February 20, 2019 the Company issued a convertible note payable (convertible promissory note GS (8%) Note 1) to an investor in the principal amount of $54,000. The note matures on August 20, 2020 and bears interest at 8%. The note holder has the right at any time after issuance to convert any part or all of the outstanding unpaid principal balance into shares of the Company’s common stock. The entire principal balance of $54,000 is outstanding as of March 31, 2019.

The Company’s convertible notes payable and the related derivative liabilities, derivative discount, deferred financing costs and original-issue discount are presented in the financial statements at September 30, 2018March 31, 2019 as follows:

As of September 30, 2018,March 31, 2019, the convertible notes payable can be converted into approximately 768,59649,753,279 shares of common stock.

Note 6. DERIVATIVES AND FAIR VALUE INSTRUMENTS

The Company applied paragraph 815-10-05-4 of the FASB Accounting Standards Codification to the 5% Convertible Notes Payable issued June 12th 2015 and the 8% Convertible Note payable issued June 25th 2015 and for the 8% Convertible Notes Payable issued January 7, 2016 and March 7, 2016, the 9% Convertible Note payable issued October 1, 2016 and the 8% Convertible Notes Payable issued January 25, 2018 and June 4, 2018.2018, the 8% convertible notes payable issued October 1, 2018 and November 19, 2018, the 8% convertible notes payable issued February 20, 2019 and February 27, 2019 and March 26, 2019 and to the 12% convertible notes payable issued January 28, 2019 and February 6, 2019 and February 25, 2019. Based on the guidance in paragraph 815-10-05-4 of the FASB Accounting Standards Codification the Company concluded these instruments were required to be accounted for as derivatives on issuance date. The Company records the fair value of the Convertible Notes Payable and certain warrants that are classified as derivatives on issuance date and the fair value changes on each reporting date reflected in the consolidated statements of operations as “Change in Fair Value - derivatives.” These derivative instruments are not designated as hedging instruments under paragraph 815-10-05-4 of the FASB Accounting Standards Codification and are disclosed on the balance sheet under Derivative Liabilities.

Medifirst Solutions, Inc.

Notes to Consolidated Financial Statements

March 31, 2019 (unaudited)

The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 2018

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepayments and other current assets, accounts payable, and accrued expenses, approximate their fair values because of the short maturity of these instruments.

The Company’s Level 3 financial liabilities consist of the 5% Convertible Notes Payable issued June 12th 2015 and the 8% Convertible Note payable issued June 25th 2015 and for the 8% Convertible Notes Payable issued January 7, 2016 and March 7, 2016 and May 1, 2017 and June 2, 2017 and July 10, 2017 and August 15, 2017, the 9% Convertible Note payable issued October 1, 2016, The 8% Convertible note payable issued January 25, 2018, and the 8% Convertible note payable issued June 4, 2018 and the 8% convertible notes payable issued October 1, 2018 and November 19, 2018, the 8% convertible notes payable issued February 20, 2019 and February 27, 2019 and March 26, 2019 and to the 12% convertible notes payable issued January 28, 2019 and February 6, 2019 and February 25, 2019 for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. We have valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, with the assistance of a valuation consultant, for which management understands the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of issuance and June 30, 2018.March 31, 2019. The primary assumptions include: projected annual volatility of 145%-240%296%-417%; the follow-on securities purchase option; the conversion feature as a percentage of Market; automatic/conditional conversions; market price trigger events.

As of September 30, 2018March 31, 2019 the Company’s derivative financial instruments included:

1) Embedded derivatives associated with certain of the Company’s unsecured convertible notes payable. The Company’s 5% convertible notes payable and 8% convertible notes payable and 9% convertible note payable issued to unrelated investors is a hybrid instrument, which warrants separate accounting as a derivative instrument. The embedded derivative feature has been bifurcated from the debt host contract, referred to as the Derivative Liability, which resulted in a reduction of the initial carrying amount (as unamortized discount) of the Convertible Notes Payable. The unamortized discount is amortized to interest expense using the effective interest method over the life of the Notes. The embedded derivative feature includes the conversion feature within the notes and an early redemption option. The compound embedded derivatives within the convertible notes have been recorded at fair value at the date of issuance; and are marked-to-market each reporting period with changes in fair value recorded to the Company’s statement of operations as Change in fair value of derivative liabilities.

The 5% Convertible Note Payable and the 8% Convertible Notes Payable, and the 9% convertible note payable and the 12% convertible notes payable are valued at September 30,2018.March 31,2019. The following assumptions were used for the valuation of the embedded derivative:

- The post reverse split (1,000:1) stock price of $0.40 increased

Medifirst Solutions, Inc.

Notes to $0.525 in this period (basis for the variable conversion price) would fluctuate with the Company projected volatility;Consolidated Financial Statements

March 31, 2019 (unaudited)

- An event of default for the Convertible Note would occur 0% of the time, increasing 1.00% per month to a maximum of 5.0%;

- Alternative financing for the Convertible Note would be initially available to redeem the note 0% of the time and increase monthly by 1% to a maximum of 10%;

- Capital raising events (a single financing at 1 month from the valuation date) are a factor for the VV Convertible Note. The full reset events projected to occur based on future stock issuance (single event) resulting in a reset exercise price.

- The monthly trading volume would average $478,108 (rounded) as of 9/30/2018 and would increase at 5% per month;ownership limits conversion across LG’s notes based on 4.99% with shares outstanding increasing monthly by 1%.

- The variable conversion price of 50% to 58% over 3 to 20 trading days would have effective rates of 41.52% to 56.23%;

- The Note Holders would automatically convert the notes early (and not hold to maturity) with variable conversion prices and full ratchet resets if the registration was effective and not in default;

- The projected annual volatility for each valuation period was based on the historical volatility of the company:

The foregoing assumptions are reviewed quarterly and are subject to change based primarily on management’s assessment of the probability of the events described occurring. Accordingly, changes to these assessments could materially affect the valuation.

Medifirst Solutions, Inc.
Notes to Consolidated Financial Statements
September 30, 2018

The Company’s derivative liabilities on convertible notes payable are presented at market value in the financial statements at September 30, 2018March 31, 2019 as follows: