FRESH PROMISE FOODS, INC.

Our operating expenses are primarily comprised of compensation and benefits, professional fees and other general and administrative costs. The increase in operating expenses was due to the timing of professional fees incurred in relation to our annual audit. We expect our operating expenses to increase proportionally to our business activities as we begin to execute upon our business plan in future periods.

The Company has issued various convertible notes to help finance its operations, some of which have embedded derivative features. The value of these instruments will fluctuate as the trading price of our common stock changes. During the three months ended March 31, 2020, recorded an unrealized gain of $113,585 from the decrease in value of these derivative features, compared to an unrealized loss of $2,438,651 from the change in the value of these derivative features during the three months ended March 31, 2019.

During the three months ended March 31, 2020, we recorded interest expense related to the amortization of debt discounts totaling $0, compared to $5,541 during the three months ended March 31, 2019. During the three months ended March 31, 2020, we accrued interest expense on convertible notes or $55,412, compared to interest expense of $38,719 during the three months ended March 31, 2019.

During the three months ended March 31, 2020, net cash provided by operating activities was $50, compared to $33,573 of cash used in operating activities for the three months ended March 31, 2019. During the three months ended March 31, 2020, net cash provided by financing activities was $0 compared, to $38,000 of cash provided by financing activities for the three months ended March 31, 2019.

We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. Except as set forth above, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.