GTX CORP

In 2015, the Company entered into an unsecured term loan agreement with a third party for an aggregate principal balance of $200,000 at an interest rate of 14% per annum, with the interest adjusted as of December 2019 to 8.5%. The term loan became due on April 14, 2017 and as such, currently past due. At December 31, 2020, balance of the term loan was $400. During the three months ended March 31, 2021, we settled the balance on the term loan for 6,000,000 shares of common stock to settle the balance. This was broken into two parts, 3,000,000 due immediately and the other 3,000,000 due 45 days thereafter. We issued the first 3,000,000 shares of common stock to convert $22,500 of interest on the term loan, resulting in a gain on the forgiveness of accrued interest of $65,700 and a loss on the conversion of $131,375. The Company also paid down in cash the principal balance by $400, which brought the principal balance outstanding on the term loan as of March 31, 2021 to be $0. The remaining $22,500 in accrued interest will be converted with the issuance of the second 3,000,000 common shares. As of March 31, 2021, there is $22,500 in accrued interest on this term loan.

The Company reached an agreement with the lender to apply sublet space the lender uses in the Company office and apply those payments against the term loan balance. The monthly credit of $585 has been applied to seven (7) months or a total of $4,095 of the loan through the three months ended March 31, 2021, and thus the principal balance outstanding on the note as of March 31, 2021 and December 31, 2020 was $45,905 and $50,000, respectively, and accrued interest of $3,165 as of March 31, 2021.

As the Company mapped out its 2021 post pandemic course, we started to focus on selling down our remaining PPE inventory and gearing up for our Cat M1 LTE SmartSole launch. With businesses opening back up and overall general travel picking back up we maintained relatively strong product sales throughout the first quarter, especially with our rapid antibody test kits, and saw a 445% increase in product revenues and a 138% increase in total revenue compared to Q1 2020 with only a slight 5% increase in expenses. We added approximately 1,500 new customers, saw continued demand for our new SmartSoles with close to 200 pre orders to date, and grew our shareholder base by approximately 60% during Q1 2021. We reduced our debt by $165K, eliminated all of our variable priced convertible debt leaving only fixed price, low interest rate debt on the balance sheet and took on no new debt.

Since we cannot accurately predict how long the PPE business will remain in demand, and based on the current events and sales trends, we expect to be transitioning out of many PPE products over the coming months and focus on the strong sellers while ramping up for the launch of the new SmartSoles, NFC Blockchain platform and other medical wearables such as our hearing health products. The continued demand for PPE during Q1 2021 did enable us to maintain our cash flow, continue to add new customers, and expand our brand visibility.

During the first quarter 2021, we began finalizing the design phase of our next generation miniaturized GPS tracking device, which will utilize a host of new technologies, including CatM1, NB-IoT, enhanced Wifi, and Bluetooth, for better accuracy, faster location requests and less power consumption and started working on testing, certification and ordering parts and components in order to prepare for our launch. We also started working on a new version of our tracking app and new website. We also expanded our product offering under our hearing health product line and began the integration of Amazon Echo voice assisted capabilities into our backend portal.

Health & Safety, Track & Trace are the big buzz words that came out of 2020. Everyone wants to be safe and know where someone or something has been. We are hearing from many of our B2B customers and international distributors that they want more tracking solutions. So, a big part of Q1 was focused around development and making sure we got back on track to develop and launch new products that will meet the global demand throughout 2021 and beyond. We are exploring new partnerships and allocating resources for renewed research and development initiatives.